Major transport schemes under threat after DfT suspends guidance, warns councils against investing resources

The future of many local authority major transport projects has been thrown into doubt after the Transport Secretary suspended the government’s guidance on the schemes and associated approval processes until further notice.

In a ministerial statement Philip Hammond said the Department for Transport would play a full part in the spending review which will be reporting in the autumn. “Only once the government’s spending review has been concluded will the Department be in a position to identify those major investments that can be supported,” he insisted.

The Transport Secretary warned that all schemes granted conditional approval or programme entry by the previous government would be reviewed as part of the spending review. “Until then, the government can give no assurances on funding support for any of these schemes,” he added.

The DfT has replaced the existing guidance with interim guidance, which also stated that “local authorities should not assume that schemes prioritised under the previous government’s regional funding allocations process will be funded to the previous published levels. They will wish to consider carefully whether investing further time and resources in developing such schemes is justified.”

The interim guidance added: “We should make it clear that all spend by local authorities and PTEs (passenger transport executives) on schemes that have not yet reached full approval is entirely at their own risk.”

The DfT said it did not accept any liability for development or preparatory costs incurred to date or which may be incurred going forward while funding remains uncertain.

Local authorities were strongly advised “to exercise caution in any further public communication about individual schemes, and to avoid unduly raising expectations, for example through public consultations and exhibitions”.

DfT officials “may” engage on a limited basis with local authorities on schemes that already have conditional approval and to identify schemes that have critical safety or lifeline issues. However, even here the Department will not accept bids for scheme approvals until further notice.

Hammond also said ministers will postpone decisions on scheme orders for schemes requiring Department for Transport funding, although consideration will be given to those that have access to alternative funding sources.

Public inquiries on schemes requiring DfT funding will generally be postponed and no further inquiries will be scheduled, again unless there are alternative funding sources.

The government said in its coalition agreement that it plans to reform the way funding decisions are made on which transport projects to prioritise.

The Transport Secretary said in the light of this and budgetary constraints, it was “inappropriate” for the DfT to continue to invest time and resources on development of schemes at the same rate as before.

One council that sought to get a key project away before the election was Liverpool City Council, according to the Liverpool Echo.

The paper said that documents to the first cabinet meeting of the new Labour administration revealed that a deal with building contractor Birse Civils for the Edge Lane widening project was signed by the local authority’s executive director of regeneration as an “urgent” item in May.

The Liverpool Echo reported that it was hoped that signing the agreement for the widening of the main route to the M62 would make it more difficult to axe the scheme. Tje DfT agreed in March to give the delayed scheme £19.3m funding.

What the effect of the Transport Secretary’s announcement yesterday will be on the scheme remains to be seen.