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Autumn Statement and Spending Review 2015: government commits to improving ailing UK transport, says expert


The UK government has made a welcome financial commitment to improving the country's transport infrastructure, but looming changes to the way projects are commissioned, managed and funded mean it may take some time before industry feels the benefit, an expert has warned.

Jonathan Hart of Pinsent Masons, the law firm behind Out-Law.com, said that the UK chancellor had made only "fairly cautious commitments in relation to genuinely new projects" as part of his 2015 Autumn Statement and Comprehensive Spending Review. At the same time, civil service cost cuts could impact on the management and delivery of projects, he said.

"A 50% increase in transport spending to £61 billion signals a commitment to improving the UK's ailing transport infrastructure," he said. "But the circumstances in which any new money is going to be spent are far from straightforward, and infrastructure players should not assume that there are likely to be a wealth of opportunities any day soon."

"There are some major sea-changes on the horizon: Network Rail has been subjected to extensive criticisms in respect of the management of its programmes and remains firmly under the spotlight following the Shaw review. Highways England is going through major governance reform which will affect the way it is going to implement the Roads Investment Strategy. Those with new powers, such as the cities, are going to be taking first hesitant steps. Transport for the North is in its infancy," he said.

The government intends to invest £61 billion in transport infrastructure by the end of the decade; an increase of £20bn compared to the previous parliament. Included in this will be £46.7bn in capital expenditure by the Department for Transport (DfT) over the next five years, which will cover starting construction on High Speed 2 (HS2) and the planned £13.4bn Roads Investment Strategy; and investment in the Network Rail investment programme and Transport for the North (TfN).

New commitments include an additional £250 million to repair potholes on local roads as part of the previously-announced road maintenance package, as well as a £475m funding pot that local authorities will be able to bid for a share of to help with large local transport projects that would be too expensive for them to pay for by themselves. The government will also fund a £300m 'Transport Development Fund' over the next five years, which will provide development funding for "the next generation of transport infrastructure projects", according to the document.

Hart said that the way in which the Transport Development Fund was to be used would impact on the "rate of progress" on new transport projects over the next few years, including the proposed 'Crossrail 2' route across London and the south east of England. Heavy cuts to the DfT's budget could also inhibit capital spending, he said.

"To the extent that day-to-day budgets are being reduced, then it is essential that this does not affect the way in which capital spending takes place," he said. "Further time and skill are going to be needed to improve the delivery of projects and the way they are funded. Let's hope that the empty desks in Whitehall do not inhibit this."

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