The principles of the economic model used for the assessment of freight facilities grant applications are outlined in Department for Transport publication "Guide to Freight Facilities Grant (FFG) in England" which was published in November 2006 and is currently being reviewed. The document can be downloaded free of charge from:
http://www.dft.gov.uk/pgr/freight/railfreight/rfg/freight facilitiesgrantguide.pdf.
The purpose of the economic model is to ensure that grants are only awarded when there is a financial need for funding. Annex 4 of the aforementioned guide deals with the financial appraisal of FFGs and, in its first paragraph, states that:
"The main financial requirement for a FFG is that compared with the road alternative, the proposed rail or water scheme would not be financially justified without grant.... This can only be a general guide; it may not cover the entire issues specific to each application. The Department can offer help and advice on specific cases."
The Department for Transport has aimed to assess standard freight facilities grant (FFG) applications within four months and more complex applications within six months. However the time taken to assess applications depends on many factors, including the completeness of the initial data supporting the application. There is also the potential for further information being received from the applicant through the course of the assessment and the potential need by the Department for clarification, which inevitably takes time.
In the past three years, the Department has assessed the following cases:
Year application received Cases assessed within six months Cases assessed within nine months Cases assessed within one year 2006 3 1 0 2007 3 0 0 2008 1 1 0
In addition, a further application was received in October 2008 which is currently being assessed.
The process of applying for FFGs is currently being reviewed, with a view to shorten the time taken to assess applications and make the process clearer for applicants.
The Department for Transport and the then Strategic Rail Authority (SRA) do not keep details of every application submitted. Details are retained for each offer of grant made to successful applicants.
The number of successful applications and the average value of grants awarded for each year since 2000 are set out in the following table.
Successful applications Average value of grant awarded (£) 2000 35 711,944 2001 28 797,076 2002 33 989,859 2003 7 822,188 2004 2 2,514,083 2005 4 565,978 2006 5 359,000 2007 3 843,483 2008 1 1,325,578
The SRA suspended the FFG programme for most rail projects in 2003, although grants continued to be available for aggregate-based facilities through the aggregates levy sustainability fund. FFGs were reintroduced for all rail schemes by the Department in 2007.
The Department for Transport and the then Strategic Rail Authority has allocated the following budget for Freight Facility Grants (FFGs) since 2000.
£ million 2000-01 32 2001-02 61.8 2002-03 50.5 2003-04 32.5 2004-05 9.7 2005-06 7 2006-07 7 2007-08 7 2008-09 4 2009-10 7 2010-11 10 2011-12 16 2012-13 20 2013-14 25
The SRA suspended the FFG programme for most rail projects in 2003, although grants continued to be available for aggregate-based facilities through the aggregates levy sustainability fund. FFGs were reintroduced for all rail schemes by the Department in 2007.
Funding for the FFG programme was boosted in September 2008 with the announcement of a long-term increasing budget to provide certainty for potential applicants. This included £61 million of capital funding over three years from April 2011.