The Logistics Terminal

Concerns raised by MPs for budget towards Lower Thames Crossing

Concerns raised by MPs for budget towards Lower Thames Crossing

Local MPs are demanding further information over the funding of two of the biggest upcoming road projects in the country, with the schemes “sitting outside” of the second Road Investment Strategy.

The Department for Transport confirmed that they are still uncertain on the source of funding solutions for the multi-billion pound Stonehenge Tunnel and Lower Thames Crossing plans. The Public Accounts Committee stated that it is concerned that the Treasury and Department for Transport’s “lack of a clear plan” for the replacement of private financing for projects, which could “risk squeezing funding already allocated elsewhere.”

MPs mentioned that the Department for Transport has also delayed some previous road plans that were set to begin development before 2020. These delays result in a reduced budget availability for upcoming projects between 2020 and 2025.

Speaking on the matter, they stated: “Funding available for new projects over this period will be further squeezed if the A303 Stonehenge tunnel and Lower Thames Crossing projects are funded from this budget”

The two projects were partly funded through PF2, however, Chancellor Philip Hammond said during last year’s Budget that PF2 would no longer be applied for new projects in development. Simultaneously, Highways England announced the budget for RIS 2 was set at £25.3bn.

The committee stated that DfT had “confirmed that it remained fully committed to these vital projects, but that the Stonehenge tunnel and LTC sit outside the funding earmarked for the second Road Investment Strategy.”

They elaborated further: “The Department told us that it understood that Treasury supported its broad spending plans for the second strategy period and the Department’s aim to continue with the Stonehenge tunnel and LTC. On this basis, the Department believed that Treasury would provide funding for these projects to replace lost funding through PF2.”

Speaking on the matter, MPs stated: “We are not convinced by assurances that the Department and Treasury are fully committed to these projects without more detail on the alternative funding models that are being developed.”

In response, a spokesperson on behalf of the DfT: “We’re fully committed to both the Lower Thames Crossing and the A303 upgrade. Development is continuing as planned and the business cases will be considered this year.”

“The schemes were not being progressed just because of a particular financing route, the funding arrangements will be considered in due course.”

MPs say that within 3 months, members of the DfT and Treasury need to contact the Committee “clearly outlining the range of financing structures available to fund the A303 Stonehenge Tunnel and Lower Thames Crossing projects, how this will affect the budget of £25.3bn for RIS2 funding, what the effect will be on other road projects in RIS2 and how it will appraise the cost and risk implications of these options to protect the public finances over the long-term”.

The MPs said: “The Department told us that it expected to finalise this second strategy in 2019 and was not able to provide a figure for the amount of funding that would be available for new enhancements to the road network. It did, however, state that it expected around 40% of the projects that would now be completed in the second strategy period would have started prior to 2020.”