Privatising the roads: the policy time-bomb in the Infrastructure Bill

There has been much debate since the last election about the piecemeal privatisation of the NHS – despite the fact that the mainstream media have given it far less coverage than it merits.  But there’s another huge piece of privatisation being lined up, and the Infrastructure Bill announced in the Queen’s Speech is laying the foundations for it.  And that’s the privatisation of the strategic roads network, and its effective removal from political control.

The Department for Transport has long been engaged on turning the Highways Agency – the Agency that manages the strategic (i.e. main inter-urban) road network in England  – into a Government-owned company.  It argues that this will allow the network – and in particular the massive new road building earmarked for the next Parliament to operate more efficiently, although it will also have the effect of reducing Ministerial oversight of key environmental issues. The Unions – including my own union, PCS – argue that this will package up the management and construction of strategic roads for privatisation, and point to the fact that there is no evidence that a Government-Owned Company (GOCO) will bring any real efficiency gains.

But measures announced in the Queen’s Speech, as part of the Infrastructure Bill, would go further.  Effectively, the future roads programme would be locked into law.  There would be no discretion to change the programme – a measure whose aim, according to the Government, is to give contractors long-term certainty, which would in turn reduce costs.  Quite obviously, it also gives a privatised highways management authority a legally guaranteed revenue stream.

But there are huge risks in all of this.  There is the obvious democratic risk – that future Governments cannot review the roads programme in the light of evidence or changing political priorities (and it is worth remembering that roads building is based on traffic forecasts that, almost invariably, have proved to be substantial overestimates, with the debate over peak car adding new uncertainties; and on appraisal systems based on arbitrary valuations of an essentially subjective set of benefits – both real reasons for making changes to decisions).

Moreover, there is a huge potential effect on local authority transport spending. Guaranteeing future spending on strategic roads ill mean that local authority spending takes second place; and with local authority spending almost entirely funded from the centre, that means local cuts.  Moreover, small local schemes involving public transport, walking and cycling – even on the DfT’s skewed appraisal criteria, which favour large projects – provide far better value for money than big schemes, and are more likely to bring substantial public benefits in the form of environmental or safety gains.  And by moving the strategic network outside the political process, it will be more difficult for decisions to reflect those priorities.  It’s a particular issue for a new Labour Government, committed to devolving real economic decision-making to the regions; without control over transport decisions those proposals are hugely weakened.  Moreover, that huge road-building programme – the largest for fifty years – is, in the view of many economists, simply very poor value for money, simply providing more space to be filled by congestion in the longer term.  A Labour Chancellor could without difficulty find ways of investing that money with far better outcomes – in housing for example.  Put bluntly, prestige highway schemes are just bad value for money.

The Government’s real agenda is perhaps best summed up by the proposal to extend Passenger Focus, the body that represents bus and rail passengers, to embrace the concerns of road users, as a sort of democratic counterbalance.  But it’s nothing of the sort. It’s basically giving a voice to strategic road network users – i.e. car drivers and the road haulage industry – while the people who live beside roads, and whose communities bear the fallout from road building, are left outside. Because those who benefit from the strategic road network tend to be more affluent, that’s a socially and economically regressive policy.  And it’s not as if the road haulage industry – once described within my hearing in my DfT days by a former chief executive of the Road Haulage Association as “the Tory Party at work” – has ever lacked access to Whitehall.  It’s about shifting the balance towards car users and their vehicles, and in particular the industries about to reap the benefits of the Tories’ massive road-building programme.

In short, this looks like a big step towards the creation of a privatised national roads authority which would reduce risks for big business – and appease the motoring lobby – with potentially huge wider costs, and while massively constraining the ability of local authorities to deliver transport programmes that really improve local outcomes.  And ultimately, the only logic behind these changes is to create a privatised national road system, and to lock its corporate profits into  law.

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One thought on “Privatising the roads: the policy time-bomb in the Infrastructure Bill

  1. They should rename fuel duty “Public roads rent” and ringfence all road spending from these revenues. Payment of Public Roads Rent “entitles the user to use petroleum products to drive a certain number of miles on public roads.” A reduction in Public Roads Rent (or increase in road spending) must be met with reduction in other roads spending, or implementation of tolls. This ensures “100% of revenues used for spending on roads is paid for by the users of such roads, and not general taxpayers.” It would not be perfect as a very small proportion of rent will be paid by users of private roads.
    I think this is an excellent idea and combined with land value tax would reduce the chance of “white elephant” projects. The people who gain from public infrastructure would pay for it, as land value gains are what people literallt value public improvements.
    We could ringfence airline duty for airline spending, land value tax for revenues to build council houses, carbon tax for flood defenses, etc. The government acts as a landlord of roads, of public infrastructure.

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