The Road to Growth

The case for greater local influence over transport

Author: Daniel Crowe & Steven Howell, Localis   |   05/03/2013

Localis, in partnership with the LGA, has published an essay making the case for localising transport functions to promote growth. The report recommends the abolition of the Highways Agency, to be replaced by local arrangements that are better able to reflect local priorities and encourage private sector investment – a model which has been successfully rolled out in Germany and Spain.

Ahead of next month’s Budget, the report also calls for a reduction in the number of transport funding streams and the rolling of these into one pot to which councils can apply to invest in transport and infrastructure projects, in line with Lord Heseltine’s recommendedations for the creation of a single pot of local government funding to bring together the myriad of existing streams to avoid duplication and waste.

The report highlights the high return on investment that local schemes can deliver, with a National Audit Office analysis of local schemes found that more than a quarter had a ratio of 5:1. In particular, the report mentions locally-led schemes by Staffordshire County Council and Cornwall Council, where their local approach has resulted in new jobs and more efficient highways projects.

It also reflects how transport functions are organised elsewhere in Europe, where both Barcelona and Munich have seen national governments devolve funding to local authorities and give them greater autonomy to make decisions. This has reaped huge benefits, including greatly increased quality, integration and use of public transport, local economic growth and reduced pollution.

On top of the UK’s central funding is a wide range of other transport-related funding streams to which councils can apply, with the associated bureaucracy. Last year Lord Heseltine recommended the creation of a single pot of local government funding to bring together the myriad of existing streams to avoid duplication and waste.

‘The Road to Growth’, was launched at an LGA Town Hall debate with Norman Baker MP, Minister for Transport, hosted by Staffordshire County Council.

The Road to Growth’s key recommendations are for Government to:

• take a ‘single pot’ approach to infrastructure more broadly, but most specifically to join up the various local transport funding schemes at a local level
• take this opportunity to fully review and reconsider the future of the strategic road network, and hence the Highways Agency, along more localist lines with greater influence by local authorities, potentially via Local Transport Boards
• consider a core devolutionary offer of greater freedom and flexibility over funding for transport, housing and regeneration, in addition to an a la carte menu of locally tailored options
• allow other statutory bodies should be in a position to assume local and sub-regional control of rail franchising arrangements and control of stations, enabling them to integrate services with other transport modes
• consider our longstanding recommendation to reform how infrastructure is financed, including: creating a National Infrastructure Bank, to aid in financing transport infrastructure; ensuring that tax policy and regulations encourage, rather than discourage, councils to explore the use of bonds; and to expand the (currently limited) TIF scheme.

Alex Thomson, Chief Executive of Localis, said:

“The report highlights some of the alternatives to a centralised transport system, with Europe far in advance of the UK in this respect. On the continent, transport devolution is seen as a given. The current Government has been very positive in pursuing a localism agenda across a number of policy areas, and it is time they extended this approach to transport.

“With transport being an essential part of stimulating and maintaining thriving local economies, greater local influence over commissioning and new flexibilities around infrastructure finance are needed if the Government wants to empower local authorities to get Britain growing again.”

Cllr Peter Box, Chair of the LGA’s Economy and Transport Board, said:

“The Government’s taken some positive steps in devolving decision making on transport to local areas, but to harness the full potential of our national and local networks it needs to fully release the reins. At the moment, investment and innovation is being stifled by a burdensome top-down approach by the Department of Transport and Highways Agency and a confusing and wasteful myriad of different funding.

“Local authorities are already showing they can get far more bang for their buck with transport spending. They’re best placed to manage and invest in roads and integrate buses, trains, trams, cycling schemes and so on to suit the diverse needs of businesses and communities. As well as reducing congestion and pollution, good transport networks are essential to growth. They link people to jobs, supply businesses with what they need and are the lifeblood of domestic and international trade. In the short-term, investment also creates construction and supply jobs which would give a real shot in the arm to our flagging economy.”