Budget analysis: Infrastructure promises

Aaron Morby 9 months ago
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Many of the Chancellor’s spending pledges on transport and infrastructure amount to releasing targeted funding to drive forward major infrastructure development studies, making it a Budget for the consultants.

M62 Motorway
£161m will be spent to bring forward by two years M62 smart motorway work on junctions 10-12 and 20-25

But there were also hard cash pledges of £161m to bring forward by two years the upgrade of the M62 to a four-lane smart motorway between junction 10-12 south west of Manchester and junction 20-25 to the north east of the city. The south gets £151m to fund new river crossings at both Lowestoft and Ipswich.

This spending is being brought forward within the existing five-year plan rather than being new cash for infrastructure.

Richard Abadie, PwC transport and infrastructure partner, said: “There is still a long way to go on these projects and it would be misleading and premature for anyone to think they have either been approved or are proceeding.

“In recent years we’ve seen a growing trend towards complex transport mega-projects which are expensive to procure, difficult to manage and govern and limit the ability to transfer risk away from the taxpayer and user to the suppliers.

“This shift also disadvantages small and medium enterprises (SMEs) which struggle to participate in these kind of mega-projects.

“Properly managing the supply chain and affording proper competition is critical to broad-based wealth creation and economic growth.

“The long lead time on mega-projects also means announcements now don’t lead to job creation and economic growth any time soon, nor does the Treasury need to set aside substantial money to pay for the projects in the current parliament.

“So, in the round, what we have is a little money to further project assessments, but limited hard and fast commitment to delivering the projects nor any significant near term economic impact.”

Transport or infrastructure pledges

Northern rail improvements – Allocate £60m to develop options for High Speed 3 between Leeds and Manchester, as well as options for improving other major city rail links. The government will also allocate £4m to develop High Speed 2 Growth Strategies for Manchester Piccadilly, Manchester Airport and Leeds stations as part of an integrated long-term plan for High Speed 3.

Northern roads improvements – Accelerate the development of the Lofthouse and Simister Island junctions, capacity enhancements to the M1 at junctions 35a-39 Rotherham to Wakefield, and deliver on the commitment to begin upgrades to the M56 at junctions 6-8 south of Manchester in this Parliament.

Accelerating improvements to the M62 – Extra £161m to Highways England to accelerate by two years the delivery of two major projects to upgrade the M62 to a four-lane smart motorway between junction 10-12 Warrington to Eccles and junction 20-25 Rochdale to Brighouse.

Northern road studies – Allocate £75m to Highways England to further develop the case for a potential Trans-Pennine tunnel between Sheffield and Manchester, as well as options to enhance the A66, A69 and the north-west quadrant of the M60.

Large major transport projects – The government will provide £151m to fund new river crossings at both Lowestoft and Ipswich  – subject to final business case approval – and is now inviting further bids for the £475m Local Majors Fund announced at Autumn Statement and Spending Review 2015.

Crossrail 2 – Provide £80m which, together with a contribution from London, will allow Crossrail 2 to proceed to the next stage with the aim of depositing a Hybrid Bill within this Parliament.

Severn crossing tolls – After the existing concession on the Severn River Crossings ends in 2018, the government will, subject to consultation, halve tolls. The government will also evaluate the costs and benefits for developing a free-flow barrier-free tolling system.

South West rail resilience – The government will provide £5m for the development of options for improving the resilience of the rail line between Exeter and Newton Abbot (via Dawlish), once the current study by Network Rail concludes.

Pothole Action Fund – The government is setting out how the Pothole Action Fund will be allocated across England in 2016-17, with £50m allowing local authorities to fill nearly a million potholes.

Modernising rail stations – £16m funding to improve rail station facilities at Market Harborough, St Albans, Redhill, Newbury, High Wycombe, Exeter St Davids, Weston-Super-Mare, and Cheltenham Spa.

Midlands roads – The government will carry out feasibility work on four major roads in the Midlands in this Parliament: upgrades to the M1 to provide a continuous smart motorway from London to Yorkshire, improvements to the A46 Newark bypass and its junction with the A1, upgrading the single carriageway link on the A45 Stanwick to Thrapston and upgrading the
M42 and M5 around Birmingham to four lane smart motorway running.

Shaw Report into Network Rail – The government welcomes the recommendations of the Shaw Report into Network Rail and will respond in full later this year.

Financing London transport infrastructure via land value uplift – The government invites Transport for London to bring forward detailed proposals on how it could capture a proportion of future land value increases around proposed local infrastructure projects funded by the public sector, in order to provide a source of financing to support the construction of
such projects.

Outer London Infrastructure Fund – The government will provide £5m to establish a fund to support smaller local infrastructure projects in outer London boroughs in 2017/18.

New junction on the M4 – The government will provide £500,000 to South Gloucestershire council to fund a study into a new junction 18a on the M4 to link with the Avon ring road A4174.

National Infrastructure Delivery Plan – The government will shortly publish a National Infrastructure Delivery Plan, setting out details of over £100bn of public sector investment in infrastructure across this Parliament.

Growth corridors – The government has asked the National Infrastructure Commission to develop proposals for unlocking growth, housing and jobs in the Cambridge–Milton Keynes– Oxford corridor. The commission will produce a final report for Autumn Statement 2017.

5G – The government has asked the National Infrastructure Commission to consider by the end of 2016 what the UK needs to do to become a world leader in 5G infrastructure deployment, and to ensure that the UK can take early advantage of the potential benefits of 5G services.

Roads Investment Strategy 2 – The government is launching the process for setting the Second Roads Investment Strategy, which will determine road investment plans for the period from 2020-21 to 2024-25.

Highways England Innovation Strategy – The government and Highways England will:
• carry out trials of driverless cars on the Strategic Road Network by the end of 2017
• launch a consultation on reducing regulatory barriers in summer 2016
• establish a £15m ‘connected corridor’ from London to Dover to enable vehicles to communicate wirelessly with infrastructure
• trial truck-platooning on strategic roads
• start the first trials of comparative fuel price signs on the M5 between Bristol and Exeter by Spring 2016

Further Budget news: Flood defence work gets £700m Budget boost; Northern Powerhouse project start dates

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