Written evidence from the Greater Lincolnshire LEP (LTD0042)

From Richard Wills

Lead Board Member for Transport; (Executive Director, Lincolnshire County Council)

Bachelor of Science, Chartered Engineer, Fellow of the Institution of Civil Engineers

Member of the Chartered Institution of Highways & Transportation,

Former President of the County Surveyors' Society

I have been in local government all my professional life; in senior management for over 20 years and a director with Lincolnshire County Council for nearly 14 years

The Greater Lincolnshire Local Enterprise Partnership covers the administrative areas of North Lincolnshire Council, North East Lincolnshire Council and Lincolnshire County Council.  It serves over one million residents.

Greater Lincolnshire's economy is vital to the country

Summary of pre-hearing evidence

Business leaders in Lincolnshire cite transport and accessibility as a high priory for investment.

• Councils have taken local decisions on highways maintenance for over 120 years and continue to do so.
• Councils establish local priorities for new transport schemes, but increasingly see these in the context of wider investment for social, environmental and particularly economic outcomes.
• There is too little investment in the country's infrastructure including roads.
• Central Government therefore rations investment through various controls over funding.
• There is too much complexity in the present arrangements; BUT
• we need a means to give the business community a legitimate voice on transport priorities and  local enterprise partnerships are the best current means for that.

INTRODUCTION

Background

County councils have been highways authorities in their own right since they were formed under the Local Government Act 1888, when they took over powers from the Quarter Sessions.

Roads maintenance has thus been a matter for local decision taking for well over a century.  Large new road improvements and bypasses have generally had support from Central Government and various mechanisms have been adopted by successive governments to distribute capital funding.

For many decades most highways maintenance was funded directly from the revenue budgets of local highways authorities.  These budgets were derived from local sources (rates and council tax and similar schemes) and revenue support from Central Government.  As demands grew, some of this money was "capitalised" using loans repaid through the revenue account.  In the late 1990s there was a step change in capital maintenance and a consequent reduction in revenue expenditure.  In the first 5 years or so, it was possible to spend much more on roads maintenance at less annual cost.  By way of illustration:-

In the 1980s and 1990s Transport Policies and Programmes were the main mechanism for planning transport projects and road improvements and bidding for government money.  These were useful in setting out the aspirations for local areas but after a while became over optimistic as delivery documents. 

Since 2001 Councils have produced Local Transport Plans.  These were long term policy documents but were much more realistic with respect to delivery and thus more useful as bidding documents.

Transport Decisions

Transport investment decisions have generally been sub-divided into National (sometimes Regional) and Local.  Over the last 4 decades Government Departments in various guises have sought to promote investment in the national motorway and trunk road network.  These have included Regional Transport Units with Sub-units often running county councils as agents for the roads ministry.  Latterly such investment is largely undertaken through the Highways Agency.

Priorities for Local Roads and transport projects have usually been determined by local highway authorities often independently but sometimes in collaboration with neighbouring authorities.  Mostly these were also included in Local Plans, however the final investment decisions have generally been controlled by Central Government as financial investor, and in the 80s and 90s often through spending controls and credit approvals.

So, for most of my career, new roads and transport spending has been controlled ultimately by central government.

In a truly devolved system, localities would be able to determine the projects and the level of spending

INQUIRY QUESTIONS

Q1. What is the rationale for the Government’s proposals to devolve to a local level decision-making on transport expenditure? What are the advantages and disadvantages of the Government’s approach? Are there better models?

Road maintenance has been determined locally and remains so.

It is a ministerial and civil service decision to justify their approach to devolving decision taking.  I believe there is a genuine attempt by ministers to devolve decision taking to lowest appropriate level.  However, the machinery of government is centralising in nature, often citing accountability to Parliament as the reason for maintaining strict controls.

There is merit in trying to devolve decisions about local investment to local areas.  This has the advantage of releasing Whitehall civil servants from evaluating proposals that have already had some local analysis.  In a truly devolved system, accountability stops with localities where Central Government cannot be held responsible for prevarication or made a scape goat.

The disadvantage is that there is too little money in the total pot to distribute on a basis that is proportional to need or population.  Most localities would not receive sufficient funds to undertake anything of substance.

Alternative approach

In a recent e-mail exchange following some local publicity about the concept of extending the M11 to the Humber Bridge, one Greater Lincolnshire LEP Board Member wrote:

This statement makes two important points.

1. The primacy of democratically elected councils in decision taking; and
2. The legitimacy of the business voice through the LEP to be proactive in proposing change that will help the economy to grow.

This points the way forward for an approach to devolution of decision taking on transport investment.

Professionals and elected representatives in local government should be trusted and worthy of trust.  That is likely to be achieved when:

• Councils are seen to be working with each other and with other bodies in genuine partnerships;
• Decisions on transport investment are made in the context of the total requirement for investment for economic, social and environmental purposes[1].

Q2. Do local bodies (including local authorities, local enterprise partnerships, passenger transport executives, integrated transport authorities and local transport boards) have the capacity to assess, prioritise and deliver local transport schemes? What would the optimum delivery body look like?

Unequivocally yes.  Local highway authorities have the capability and capacity to undertake value for money assessments and can do this on behalf of Local Transport Boards or local enterprise partnerships (LEPs).

The main burden is the rigid assessment system required by The Treasury and spending departments, who cite accountability to Parliament (although we recognise the increasing likelihood of comparing transport schemes with very different investments in the Single Local Growth Fund will make assessments more complex.)

It should be possible to devolve genuine accountability to councils given that they have democratically elected councillors who can exercise political judgements based on sound professional advice.

The Greater Lincolnshire LEP has drawn on the capability and capacity of its local authority partners in order to assess the priorities for its area in the Strategic Economic Plan.  Transport is a major consideration.

Q3. What is the best way of dealing with major transport schemes that cross local authority boundaries or have wider regional impact?

Council and LEP collaboration is key.

Cross-boundary working is a particular problem for areas that have smaller unitary authorities following the break-up of the Metropolitan County Councils but larger county councils such as Lincolnshire have been able to work in collaboration with neighboring councils  largely successfully.

While City Regions may be one solution to this issue, more informal groups may also be able to achieve the same outcomes and the former Regional Assemblies worked successfully in the East Midlands.

Q4. How effectively do local bodies work with each other and with Government departments and national transport agencies?

Moderately well.  We believe there needs to be a formal willingness to work together by the highest governance bodies of different organisations.  However, to be really successful, there must be a culture of collaboration instilled throughout each organisation.  Lincolnshire County Council worked well with other East Midlands Councils, the former Government Office and the Highways Agency in determining priorities and on the A1073 Improvement, it worked with Peterborough City Council (in a different region) to deliver a scheme that benefited both areas.

Q5. Do the current funding streams for major local transport schemes meet the needs of local authorities? How do current funding streams compare with previous arrangements?

Current funding streams do not meet the needs.  The main problem is the proportion of national spending spent on investment in critical infrastructure is far too small.  Therefore when the total amount is devolved in proportion to population or road length for example, then the amounts are insufficient to build major schemes. 

By way of illustration, the Lincolnshire Local Transport Board has an allocation of £11.9 million for the period 2015/16 – 2018/19.  By contrast in the previous decade under a competitive bidding system the Department for Transport allocated the following:

Despite our relative success in a competitive arena, competing for funding is an expensive process that ultimately reduces the amount of money that can be spent of delivery of transport projects.  It is important not to make assessment and accountability systems over-complex for relatively small sums of money.  In cases where local authorities are the accountable bodies, it should be sufficient to rely on the usual procedures and audit and probity mechanisms that operate within councils

Q6. What impact will the devolution in 2015 of funding to Local Transport Bodies and the introduction of the Single Local Growth Fund have?

The outcome of the impact is uncertain.  As illustrated above the Local Transport Board will seek to match money allocated to itself to locally borrowed money and developer contributions however the expectations for the Single Local Growth Fund have changed since it was first announced.  Local Enterprise Partnerships were expecting a mix of funding allocations and competitive bidding.  Meetings with the relevant minister indicate that nearly all this round will now be distributed on a competitive project by project basis.  This in effect, takes control away from localities.

The intention for Local Transport Bodies is to ensure that there is a voice for the business community whilst retaining accountability for public money in the public sector.  However, the introduction of the Single Local Growth Fund means that future transport investment will probably have to compete with broad and varying types of projects, so a single focus LTB is unlikely to survive.  There are two valid models emerging:-

• Local authority boards that are accountable for decisions but are influenced strongly by LEPs' Strategic Economic Plans; or
• LEPs' Investment Boards (that already allocate Growing Places Fund and probably European Integration Funds soon) who consider bids from councils and others for transport and other investments.

Q7. How can local authorities attract greater investment from the private sector for the delivery and maintenance of local transport infrastructure? What scope is there for the use of alternative funding streams?

This would be achieved with difficulty.   The main source of private sector contributions is through developer contributions on new developments and permission is sought through Planning Development Control.  Over the past 5 years there has been a dearth of development in many areas.

Capital investment in roads and transport should be seen in the round with other calls on investment and whilst European structural funds may offer some addition revenue streams for the public sector, this is likely to be restricted.

Q8. How clear are the lines of accountability for local decision making on transport expenditure?

Resulting accountability lines will become less clear.

Previous lines of accountability were very clear.  Councils prepared their plans and were sometimes able to raise the necessary finance to fund schemes without intervention from Government and were accountable to their local electorate.  In other cases, councils bid for money from the Department for Transport, who allocated money to the projects that offered the best value for money.

We now have a plethora of interests and over-complexity with a number of different individual bodies having a legitimate input into prioritisation of schemes.

The Secretary of State still has accountability to Parliament for so-called devolved funds. Funds are allocated to Local Transport Boards, comprising a majority of councillors appointed by their authorities and business people appointed by their LEPs. Each LEP has a sum of money to facilitate the Local Transport Boards.  The LEPs do not have a direct line of accountability, though BIS and DCLG act as the conduits for accountability back to parliament; and councillors as a conduit back to their councils and the local electorate.

Conclusion

The Greater Lincolnshire LEP places a high value on transport as a facilitator for growth and prosperity.

Therefore a greater proportion of the total public expenditure should be allocated to transport investment.

It is feasible and desirable to devolve transport investment decisions to a local level, using local authorities as accountable bodies, or establishing appropriate structures and procedures within LEP Governance.

Money should not be wasted with over-complex assessment systems.

March 2014

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