pteg Summary of the Autumn Statement 2012

Pile of coinsWe thought we would share with you our summary of the key 2012 Autumn Statement announcements of relevance to transport and the PTEs.

Transport announcements – a focus on roads

£1.5 billion will be spent on improving the road network, of which £1bn will be invested in the current spending review period.

General transport spending:

  • £270m for ‘priority national and local projects to remove bottlenecks and support development’ (no further details available)
  • £42 million for the Sustainable Transport Fund for cycling infrastructure, including cycling safety.
  • £333m for road maintenance and £42m to develop the pipeline of potential Highways Agency road schemes

Projects in the North and West Midlands:

  • £378m to upgrade key sections of the A1 (Lobley Hill and Leeming to Barton) in the North East, bringing this route from the M25 to Newcastle up to motorway standard
  • £10m (from within DfT’s existing budget) for improvements to Junction 12 of the M40 in the West Midlands (starting 2013)

Projects elsewhere:

  • Guarantee to support £1bn of borrowing at a preferential rate to extend the Northern Line to Battersea, to enable the commercial redevelopment of Battersea Power Station and surrounding site.NOTE: This is one of the first projects to benefit from the £40bn UK Guarantees scheme which provides guarantees to ensure that priority projects in the infrastructure pipeline can raise the finance they need. The scheme is open until 31 December 2014.
  • £150m to tackle congestion via improvements to Junction 30 of M25 in London and £157m for a new link between A5 and M1 in East and dualling a section of the A30 in the South West

Other transport announcements:

  • A limit on the average increase in regulated rail fares and Transport for London fares to the RPI plus 1 per cent for two years from Jan 2013.
  • Fuel duty rise planned for Jan 2013 cancelled and deferred to 1 Sept 2013.
  • Strengthen the mandate of Infrastructure UK and increase its commercial expertise to boost the delivery of growth-enhancing infrastructure projects. As part of this, IUK plus an enhanced Major Projects Authority will undertake a detailed assessment of Whitehall’s ability to deliver infrastructure – to be completed by Budget 2013.
  • New pilot delivery model for reducing the time taken to plan and deliver new roads.
  • Assessing feasibility of new ownership and financing models for the strategic road network – progress report due in new year.

Governance announcements – a focus on LEPs

The Statement highlights the success of the first round of City Deals with a special mention for Manchester’s earn back agreement with Government to unlock over £2bn of investment in transport infrastructure.

The Government welcomes Lord Heseltine’s Review and is seeking to implement as many of the recommendations as possible. A full response is due in Spring, however, the Statement sets out the first stage of the response, including the following announcements:

  • LEPs will be asked by Government to lead the development of new multi-year strategic plans for local growth consistent with national priorities. They will be expected to consult with all relevant local partners. It is anticipated that the plans will provide LEPs with an increasingly important strategic role.
  • To help LEPs fulfil this role, the Government will provide £10m per year for capacity building within LEPs. Each will be able to apply for up to £250,000 additional funding per year to support the development and delivery of their strategic plan.
  • The Government will devolve a greater proportion of growth-related spending on the basis of these strategic plans by creating a single funding pot for local areas from April 2015. Funding will reflect the quality of the LEP’s strategic plans, as well as local need. LEPs will also be expected to leverage funding, including from local authorities and the wider public and private sector. The Government will seek to increase the proportion of spending awarded through the single pot. This is likely to include some of the funding for local transport. Further details to be set out in the Spending Review.

In addition to Lord Heseltine’s recommendations:

  • A new concessionary public works loan rate to an infrastructure project nominated by each LEP (excluding London), with total borrowing capped at £1.5bn.
  • A further £350m towards the Regional Growth Fund.
  • Support for local authorities that wish to create a combined authority or implement other forms of collaboration (e.g. shared management) including ensuring existing legislation is fit for purpose.


  • Detailed spending plans for 2015-16 will be set out in the first half of next year.
  • Simplification of the Carbon Reduction Commitment energy efficiency scheme from 2013, including abolition of the performance league table. Full review to be held in 2016 the tax will be a high priority for removal when public finances allow.

Rebecca Fuller

Policy and Research Advisor