Further to my statement to the House on 5 July 2005, I am today publishing guidance on the operation of the Transport Innovation Fund (TIF). Copies are today being placed in the library of the House, published on the Department for Transport website and sent to all local highway authorities and Regional Development Agencies in England.

Through the fund we will be able to direct resources towards the achievement of two key objectives—tackling congestion and improving national productivity. The guidance I am publishing today explains how we will (a) support schemes aimed at tackling local congestion through demand management and better public transport, and (b) support schemes which meet national productivity objectives.

Schemes to tackle congestion

The guidance explains how local authorities can apply for funding from TIF to support the costs of smarter, innovative local packages which couple demand management, including road pricing, with improved public transport. It follows the award, on 28 November 2005, Hansard, column 3WS, of £7 million of pump-priming funding for seven areas in England to assess the feasibility of such schemes. The new guidance explains the process for bidding for TIF funds for such schemes and offers local authorities the opportunity to enter into a partnership with the Department to develop their proposals.

There will be a second opportunity to bid for TIF pump-priming funds in July this year. TIF funding is open to bidding by all authorities in England, regardless of whether they are awarded pump-priming funds or TIF partnership.

For schemes to tackle local congestion, some local authorities may wish to bid for TIF funding to, amongst other things, support bus schemes. Such authorities will want to be reassured that there are suitable mechanisms for involving private operators. The Transport Act 2000 provided two mechanisms for this—Quality Contracts (about which guidance was published in February 2005) and Statutory Quality Partnerships. Guidance on SQPs, including how they relate to TIF supported schemes, will be issued shortly. In this context my Department is considering ways in which SQPs, and existing or future partnership arrangements, could deliver major improvements in bus services as part of a package to improve traffic flows in cities outside London. My officials are discussing with the Office of Fair Trading how to ensure that these partnerships are consistent with competition law.

Schemes with benefits for national productivity

The Transport Innovation Fund will also be available for packages and schemes which are expected to make a major contribution to national productivity, but for which existing sources of funding are insufficient. The Department will suggest, for further evaluation, schemes which have been identified earlier, and which appear likely to meet the criteria set out in the guidance, and to assist in this process it will be seeking the views of the Regional Development Agencies on potential candidates and priorities. Accordingly, there will not be any form of bidding process for productivity schemes.

Decisions on the final allocation of TIF funds between these schemes will be taken following appraisal of their business cases against the criteria set out in the guidance document, alongside the bids for congestion schemes.