Local Transport Bill [HL]

Part of the debate – in the House of Lords at 4:15 pm on 30 January 2008.

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Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip 4:15, 30 January 2008

My Lords, I thank the noble Lord for his explanation of the purpose of the amendment. I am a bit disappointed in him because he is a good localist, and like me he has enjoyed many years' grace and pleasure in local government. I thought that he had listened to what I said the last time around, and mistakenly assumed that we would not see this amendment again. The amendment is very limited, since it would add only to the provisions of Schedule 23 to the Greater London Authority Act, to state, in that instance, that the funding provided to authorities in London should not be negatively influenced by any revenue from a local charging scheme.

As the noble Lord observed on Report—he probably did again today; I did not catch it, but may have missed it—the public acceptability of schemes such as road pricing increases when that revenue is linked to spending on transportation. That has to be the case, as I made clear to the noble Lord, Lord Glentoran. Some of the Government's own research establishes this important point and we acknowledge it. The Bill therefore contains provisions to give charging authorities and the general public certainty that all net revenue from charging schemes will be spent precisely on transport policies. Such provisions have been supported for that reason.

As for central government funding, I am sure that noble Lords will be aware—given her experience, the noble Baroness, Lady Scott, will certainly be aware—that block capital funding and revenue support grant are currently allocated on the basis of a broad formula. The noble Baroness says that the formula is difficult to understand, and I agree; it is very difficult. When I used to look at our annual budget with the old borough treasurer—latterly with the director of finance—it took a long time to unravel the various elements. Parts of it always seemed unfair because they did not seem to apply to us while other bits did, and I could see their wisdom. Yet others seemed to relate to London boroughs rather than Brighton. But there we go.

In any case, revenue support grant has to reflect the ability to raise council tax revenues and that relationship has to be understood. However, such formulae generally do not take into account the various alternative sources of revenue available to authorities. Across the country, authorities benefit from different streams of revenue. Portsmouth, I think, earns £5 million a year—perhaps a little more—from its port. Some authorities have bus companies. The director of transportation services in Ipswich, which I visited recently, told me that their bus company returned some three-quarters of a million pounds a year to revenues. So the authority was able to make use of profit it made in one area perhaps to suppress levels of council tax or raise standards of services, whichever it chose to do. There is always that ability to raise revenue support from the locality. In the case of the noble Lord, Lord Hanningfield, perhaps Essex has a big profit motive tucked away somewhere in its budget, though I am sure it is not expressed in those terms—they are probably not allowed to express it in those terms. But I am sure that Essex County Council makes income from many of its services which it then applies more generally across the range of services that it provides to its communities.

As I made clear on Report, there are no plans to change our current policy on this. Regarding the allocation of specific grants for major schemes, the department takes into consideration the level of local contribution, including, for example, any developer contributions and any revenue likely to be generated by the scheme. That is an important aspect of an authority's business case and of the calculation of the scheme's value for money. That has always been the situation for major transport schemes, because it is fair that revenue from any transport fares is factored into the business case of a scheme. We do not see that road-pricing or road-charging schemes are any different.

It is perhaps also worth reminding noble Lords that the Government annually provide £1.5 billion in capital funding as well as substantial revenue support for local and regional transport outside London. Indeed, funding for local transport in every English region outside London has more than doubled since 2000. I think that that is a pretty enviable record. If someone had said a decade or more ago that we were going to do that, there would have been gasps of disbelief. As for funding in London, as well as the revenue support grant given to the London borough councils, the Greater London Authority also receives a transport grant from the Department for Transport. That is a substantial amount of money which, as I said, has more than doubled over the past few years. The transport grant up to 2017-18 was agreed between the department and Transport for London as part of the Comprehensive Spending Review 2007.

I also remind noble Lords that the Government are working with local authorities to develop local road-charging schemes. Additional funding on top of what I have already discussed is available from the transport innovation fund to support authorities' packages of local transport improvements combined with road charging. The £200 million a year earmarked up to 2014 is in addition to any other funding sources. This is a substantial commitment of extra funding for areas taking forward local road-charging schemes and the very opposite of the reduction in funding which the noble Lord's amendment suggests.

I refute the allegation that we are bearing down on or pressing local authorities to bring forward pricing schemes. I would not want there to be a suggestion that we are using the transport innovation fund as a form of blackmail, because that is not the case. What we genuinely want to see is innovation. We hope that this legislation will assist in the process so that innovations are brought forward; so that smart and intelligent bids are made to tackle road congestion issues and improve the quality of local transportation; and so that local authorities work closely with their transport providers and the public to ensure that standards continue to rise. What we want to see from the Bill is more people making better use of public transport, particularly bus services. It is in everyone's interest that we get more passengers on to buses. The welcome improvements in bus passenger numbers over the past few years need to be spread across the country so that we achieve a much more effective and efficient use of this form of transportation.

I have given the noble Lord a rather long reply because I want to put his mind at rest on this. I hope he does not feel the need to press the issue to a Division. I would like to think that he will take my assurances at face value.