Local authorities and integrated transport authorities from time to time wish to develop proposals for new or enhanced rail services where, in their view, they offer the best way of meeting the transport needs of their area. They have the necessary powers to secure the provision of such services but they are sometimes inhibited by the risk that significant revenue funding may need to be committed over the long term. I am keen to encourage local bodies to identify the best solutions for identified local needs and therefore wish to ensure that they are not deterred from considering an improved rail service where it clearly offers value for money.
The Government’s priority remains one of reducing the budget deficit and, therefore, careful consideration has to be given to any proposal that might increase the cost of the railway, either in the short or long-term. However, we recognise the arguments put forward by promoters that regional and local rail services need to adapt to population, housing and economic growth in localities. Therefore, it is only right that, once they have demonstrated value for money after a trial period, new or improved services promoted by local authorities are treated in a similar way to the more established services which are currently funded as part of the national network.
I would therefore like to announce to the House that the Government still intend to fund the provision of new or enhanced services promoted by authorities which have rail industry support, but in view of the tough financial decisions made as part of the spending review, no such funding will be provided prior to April 2015 (the start of the next spending review period).
It is important that the promoter demonstrates that a rail scheme is the best way to address regional and local transport issues; hence promoters would still be expected to fund a new or enhanced service for the first three years to demonstrate its commitment to the service and show that it delivers value for money in the light of actual experience.
Schemes which the Department would consider funding in this way would be subject to a number of conditions, details of which have been deposited in the Library of the House and will be made available on the Department for Transport’s website.