Local authority v DfT funding of services

[Dr Day]

A perception (rightly or wrongly) in the Greater Bristol area is that our local authorities have to fund the net operating costs of various new/additional services whereas elsewhere in the country these are wrapped up in franchise specifications hence effectively funded by the DfT/devolved governments. Is this perception valid, and if so is that a result of not having a PTE or not being in a devolved nation or something else?

Either way are there any rules of thumb around when the costs of providing the enhanced rail service facilitated by local-authority funded capital investments transfer to the DfT, or is it negotiation on a case-by-case basis? And how does/will this change with the shift away from TOCs taking revenue risk?

 

[pdeaves]

I think revenue support is required for up to a decade, wherever in the country the scheme is. Whether that comes from the local authority or 'elsewhere' (e.g. property developers) is for them to decide.

 

[The exile]

A perception (rightly or wrongly) in the Greater Bristol area is that our local authorities have to fund the net operating costs of various new/additional services whereas elsewhere in the country these are wrapped up in franchise specifications hence effectively funded by the DfT/devolved governments. Is this perception valid, and if so is that a result of not having a PTE or not being in a devolved nation or something else?

Either way are there any rules of thumb around when the costs of providing the enhanced rail service facilitated by local-authority funded capital investments transfer to the DfT, or is it negotiation on a case-by-case basis? And how does/will this change with the shift away from TOCs taking revenue risk?

It’s probably made more obvious by not having a pte “ in the middle” . Any cross Bristol service is likely to involve 3 local authorities which are not renowned for talking to each other or seeing the larger picture!

 

[WelshBluebird]

It’s probably made more obvious by not having a pte “ in the middle” . Any cross Bristol service is likely to involve 3 local authorities which are not renowned for talking to each other or seeing the larger picture!

Isn't that what WECA is for though?

 

[Dr Day]

I intended to term 'local authorities' to cover WECA, acting as a combination of some of them, plus North Somerset, Gloucestershire etc

 

[James90012]

Subsidies are both an interesting, and disappointing aspect of the current railway structure. Clearly, due to history, many (most?) services are operated every day which do not make money and never will. Those are largely part of the franchise agreements for the various operators. When a new proposal comes along that will increase subsidy, if it's not driven by the the franchising authority via the franchise, my understanding is the starting point is it would need to be funded or subsidised by the promotor. I think it's up to individual promoters to negotiate with the DfT (or TfW, or Transport Scotland). I don't think there is a standard approach. One thing I haven't seen is TS, TfW or DfT doing is going back to local regions advising that unless they fund an established service it will be pulled (yet?). This situation is disappointing and the Bristol Area is the perfect example as facing an uphill battle, but conversely if there was appetite and funding available locally things can happen. There is logic to this situation though as the approach of the Govt is to reduce the taxpayer input to the railway system, if schemes which drive up subsidy requirements were continually accepted and built in then taxpayer support would have to increase.

What I don't know is if any of the current services are still subsidised in this way, would be interesting to know!

 

[RT4038]

One thing I haven't seen is TS, TfW or DfT doing is going back to local regions advising that unless they fund an established service it will be pulled (yet?). This situation is disappointing and the Bristol Area is the perfect example as facing an uphill battle, but conversely if there was appetite and funding available locally things can happen. There is logic to this situation though as the approach of the Govt is to reduce the taxpayer input to the railway system, if schemes which drive up subsidy requirements were continually accepted and built in then taxpayer support would have to increase.

What I don't know is if any of the current services are still subsidised in this way, would be interesting to know!

Local Authorities simply do not have the funding available to pay for rail services - their revenue raising powers are proscribed and their Statutory duties (Education, Social care etc) take most of that. Why would there be an appetite to take on expenditure that Central Government currently pay? Any moves by Central Government to move rail subsidy funding to Local Authorities (even with legacy funding) will more than likely be accompanied sooner or later by service and line cuts. What little local funding that might be available now will be s106 Planning Gain money for specific projects.

 

[James90012]

I agree it's just a summary of the situation we are in, as I see it. I don't think LAs should be funding services which are part of a regional if not national network, at least not without devolution including funding.

I find it particularly frustrating when subsidy issues hold back the delivery of good schemes or services which would achieve modal shift and other benefits but the commercialisation of rail means we're pretty stuck. As noted the funding via development is a well used source.

 

[WatcherZero]

As I understand it in Greater Manchester the situation is the local authority has to fund a service strengthening or additional service for three years before it will even be considered to be included for adoption into a franchise specification by Westminster. They essentially have to prove its economically viable to the government.

 

[RT4038]

As I understand it in Greater Manchester the situation is the local authority has to fund a service strengthening or additional service for three years before it will even be considered to be included for adoption into a franchise specification by Westminster. They essentially have to prove its economically viable to the government.

In the PTE areas (of which Manchester is one, but Bristol is not) the funding arrangements are different. PTEs have fund raising powers of their own, although obviously politically accountable so there is a practical limit to what can be done.