LEP reforms ‘could create transport funding gaps’

3 Jun 14
Plans to devolve funding for transport projects to local enterprise partnerships could mean that infrastructure in some parts of the England gets left behind, MPs have warned today.

By Richard Johnstone | 3 June 2014

Plans to devolve funding for transport projects to local enterprise partnerships could mean that infrastructure in some parts of the England gets left behind, MPs have warned today.

Examining plans for £6bn of Department for Transport funding to be included in the £10bn Local Growth Fund that will be bid for by England's 39 LEPs from next April, the transport select committee said the allocation risked exacerbating existing divides.

Committee chair Louise Ellman said the committee’s Local transport expenditure: who decides? report showed that far less money was spent on transport projects outside London than in the capital.

‘For example, [the Institute for Public Policy Research] says that transport infrastructure spending is £2,500 per head in London compared with £5 per head in the northeast. Even on the government’s figures, transport spending per head in London is more than twice that in the English regions.’

She said the introduction of a competitive process to allocate funds, as part of the single pot reforms recommended by Lord Michael Heseltine in his No Stone Unturned growth report, may not help regions get a fairer share of transport funding.

The bid process is intended to allow LEPs to demonstrate how the projects will promote growth by also allowing private sector funding to be used for schemes. But Ellman said that those LEPs that are well organised and resourced would have an advantage.

‘The government’s focus on using competition to bring in private sector funding for projects could disadvantage the regions, where there tends to be less private sector money available compared with London,’ she said.

Given that the fund is being allocated to LEPs in ‘growth deals’ with government, it was unclear whether the money the DfT is contributing will eventually be used for transport purposes.

‘DfT must also make sure that strategically significant schemes such as access to ports don’t get overlooked and that areas covered by a number of local enterprise partnerships do not miss out because of fragmentation,’ Ellman added.

Responding to the report, a Department for Transport spokesman said: ‘We have invested more than £6bn in 2011/12 alone in developing transport infrastructure outside London. Our plans for major schemes like HS2 and the £600m Northern Hub, which will transform rail in the north, as well as countless local road projects across England show how committed we are to delivering improvements that benefit all areas of England, not just the capital.

‘Local enterprise partnerships understand local issues and solutions best and their priorities will drive local transport funding decisions.’


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