Further to the then Minister of State for Transport's written statement of 1 February 2005, it is now the Department's intention to increase the minimum budget available for the sustainable distribution fund from £22.6 million to £25.5 million for 2007-08, combining resource funding of £18.5 million and capital funding of £7 million. This fund is designed to secure the benefits of reduced pollution and congestion and better safety on a mode-neutral basis. In order to enable the freight industry to plan involving schemes supported by the fund, I also intend to allocate a resource budget of at least £18.5 million, for each of the financial years 2008-09 and 2009-10. The budget for capital expenditure from 2008-09, such as the freight facilities grants, will be set following the 2007 spending review.
The Department is today beginning the process to submit to the European Commission, for state aids clearance, a new grant scheme for intermodal rail freight—the rail environmental benefits procurement scheme. A summary of the proposed scheme is available on the Department's website at: www.dft.gov.uk and has been placed in the Library of the House.