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PTE/14/58 Cabinet 10 September 2014 Transport Capital Programme 2014/15 and 2015/16

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PTE/14/58 Cabinet 10 September 2014 Transport Capital Programme 2014/15 and 2015/16 PTE/14/58 Cabinet 10 September 2014 Transport Capital Programme 2014/15 and 2015/16 Report of the Head of Planning, Transportation and Environment Please note that the following recommendations are subject to consideration and determination by the Cabinet (and confirmation under the provisions of the Council’s Constitution) before taking effect. Recommendations: That (a) approval is given to enhance the Place 2014/15 capital programme by £1,485,914 from developer contributions; approval is also given to enhance the 2015/16 capital budget by £154,000 from developer contributions and £3,700,000 from external grants; (b) current approved budgets are allocated to the schemes set out in this report; (c) of the enhancements above, £1,177,000 is forward funded to enable schemes to proceed in advance of the funding being received. 1. Background Cabinet approved an updated transport capital programme for 2013/14 and 2014/15 at its meeting in July 2013. Since that time there have been a number of new funding announcements and changes to allocations, in addition to re-profiled funding requirements for some schemes. This report updates the proposed programme for 2014/15 and 2015/16 but excludes maintenance schemes which are reported on separately to Cabinet. 2014/15 is considered to be a watershed year in the funding of capital transport projects. The County Council has been particularly successful in securing funding for a wide range of schemes in the last 12 months through a number of specific Department for Transport (DfT) competitions, including Linking Communities (Cycling in National Parks) and the Local Pinchpoint Fund. It also played a pivotal role in helping to secure funding for Highways Agency Pinchpoint schemes at several locations on the trunk road network, including match funding in some cases. Funding has also been secured for several schemes through the Regional Growth Fund in partnership with the East of Exeter Growth Point team. The picture from 2015/16 onwards provides new and different challenges. The changes are linked to the Government’s Growth Deal process, which channels the majority of transport capital through Local Enterprise Partnerships (LEPs). Local authorities have to work closely with the LEPs to secure funding for individual schemes, which also have to satisfy Government priorities within the Growth Deal process that is focussed on generating growth through housing and employment. The level of flexible funding paid direct to local authorities through the Local Transport Plan Integrated Block has been cut by almost half from 2015/16 to help fund the Growth Deals. The DfT has indicated that all other non-maintenance transport capital funding from Government will be delivered through the Growth Deal process. It is very unlikely therefore that there will be more one-off Government funded competitions for the foreseeable future like the ones funding current schemes. There may however be other small scale opportunities such as the Coastal Communities Fund. The County Council has secured substantial funding for an initial phase of projects starting in 2015/16 subject to final approval of business cases through the Local Transport Board (LTB) and which will require match funding in future years. It is anticipated that proposals for the next stage of the Growth Deal up to 2021 will need to be submitted through the Heart of the South West LEP by November 2014. These will require significant on-going County Council investment in design and match funding from diminished resources. 2. Proposal The detail of the proposed programmes for 2014/15 and 2015/16 is shown in Appendix II. The proposed programme for 2014/15 is similar to that approved in July 2013 but with the confirmation of the Government funding for the Dartmoor Granite and Gears cycling project through the Linking Communities fund, the addition of some Section 106 (S106) funds, and some re-profiling of spend to match anticipated delivery. As noted above there are considerable pressures on the available funding for 2015/16. The Government has cut Devon’s Integrated Block allocation from 2015/16 to £3.601m per annum compared to the £6.159m in 2014/15, i.e. around 42% (though levels have varied in previous years). The £3.601m level has been confirmed for each year until 2017/18 when the data used to inform the formula will be updated. Section 106 agreements and the new Community Infrastructure Levy (CIL) are also important contributors to the transport capital programme, particularly as match funding for the Growth Deal infrastructure schemes. These are however likely to be constrained for transport infrastructure investment for the foreseeable future due to viability issues. The overall viability of sites is under pressure due both to the state of the housing market and other infrastructure requirements such as education, flood risk and environmental mitigation measures. Devon was successful in securing an initial first phase of £21.3 million Growth Deal funding in the 2015/16 to 2018/19 period for the following larger schemes in partnership with the Heart of South West LEP: - Bridge Road, Exeter - Marsh Barton Rail Station - A382 widening, Newton Abbot - Roundswell Phase 2 access, Barnstaple - A361 Portmore Roundabout, Barnstaple - A39 Heywood Roundabout, Bideford - A38 Deep Lane Junction, Sherford The 2015/16 elements of the funding are indicated in this year of the programme but are subject to final business cases being approved by the Heart of South West LTB leading to an offer letter, and a Growth Deal agreement being signed between the LEP and Government. The next stage of Growth Deal proposals for schemes in the 2016/17 to 2020/21 period is expected to be submitted to Government by the end of November 2014 in conjunction with the LEP. It is anticipated the Government will announce the results of the Growth Deals around March 2015. A range of schemes and sustainable transport packages are being considered including those already in the LTB’s current programme. The final proposals will be subject to indicated LEP and Government priorities – these are particularly focussed on achieving economic growth through housing and employment. The Growth Deal process is very competitive and there is no guarantee of further success. All schemes will require substantial design and match funding to generate potential Growth Deal funding. 2015/16 Programme The 2015/16 programme is strongly influenced by three main requirements: - To complete schemes started in 2014/15 including match funding commitments such as Granite and Gears and Local Pinchpoint Fund; - To match fund and complete design on Growth Deal Stage 1 schemes from 2015/16; - To design and prepare schemes for the second stage of Growth Deal funding from 2016/17 to 2020/21 and beyond. A number of the larger schemes are expensive to design and prepare. This is particularly the case for the two main strategic schemes for the A303 and A361 (North Devon Link Road). Three schemes are being prepared for the A303 – it is anticipated that County Council investment in this process now will strongly improve the likelihood of Highways Agency funding being allocated to one or more of these in the period to 2021. Work will take place over the next five years to prepare schemes on the A361 for the next Growth Deal period from 2021 onwards, including scheme design and land acquisition. Once commitments and match funding requirements are included in the 2015/16 programme there will be significantly reduced levels of funding available for smaller schemes of all types due to the reduced Integrated Block. It is hoped that funding for some larger sustainable transport schemes can be achieved through the next stage of the Growth Deal where they support housing and employment growth. This is however subject to securing LEP and Government support. The majority of other smaller schemes will be subject to securing sufficient external funding such as S106 and CIL in the context of the constraints noted elsewhere in this report. These would still require some initial design investment from the County Council to secure the funds. 3. Options/Alternatives The new Growth Deal process and funding arrangements gives the County Council less flexibility in determining priorities for funding schemes. Priorities are now heavily determined by the LEP’s objectives and the scope of the Growth Deal funding. The LEP will only prioritise County Council schemes it feels meets these objectives and will successfully secure Growth Deal funds. District Councils also have a major part to play in determining how and if S106 and CIL receipts are allocated to transport schemes in relation to other priorities to match fund other sources such as the Growth Deal. An alternative programme model would be to focus it on directly funding a range of smaller schemes. This would however make it impossible to draw down significant match funding for larger schemes from the Growth Deal and S106/CIL. In turn this would have significant impacts on the ability to deliver the necessary transport infrastructure to support housing and employment growth around the County. 4. Consultations The original consultation for the 2011 to 2026 Devon and Torbay Local Transport Plan shaped the overarching priorities for transport investment including economic growth and carbon reduction. There are on-going consultations with the Heart of South West LEP and Local Transport Board to shape the nature of the Growth Deal proposals to Government. This will influence the County Council’s own capital programme. The County Council works closely with District Councils in developing infrastructure plans to support Local Plans delivering growth and shaping the nature of the Local Plans themselves. There are also arrangements in most Districts for Joint CIL Boards to determine priorities for the use of CIL receipts which form an important part of the transport capital programme.
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