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ITEM EX13

EXECUTIVE – 15 OCTOBER 2002

TRANSPORT CAPITAL PROGRAMME 2002/03 TO 2005/06

Joint Report by Director of Environmental Services and Director of Business Support

1. On 17 April 2002, the Executive approved the transport capital programme for 2002/03 to 2004/05 and asked to be updated on the progress on the programme in October 2002. This report updates the 2002/03 programme and also seeks approval, in principle, to a revised allocation for the programme under the six main budget headings, as set out the Local Transport Plan (LTP), for the period 2003/04 to 2005/06 to assist with the forward planning of the programme.
2. As last year, the final approval to the detailed 2003/04 transport capital programme is not anticipated to be made until April 2003 after the Executive has considered the Single Capital Pot (SCP) capital allocation and the County Council has approved the Capital Programme. However, it is important if preparation work is to be undertaken on schemes to be implemented in 2003 and beyond, that ‘in principle’ approval is given to the main budget headings at this stage so that resources are directed at developing the schemes most likely to form the programmes for 2003/04 and later years.

Background

3. On 19 February 2002 the Executive approved a provisional SCP allocation for the period 2002/03 to 2005/06 from which the detailed programmes for 2002/03 to 2004/05 were developed and subsequently approved in April 2002 (Annex 1).
4. The forecast outturn and other changes to the 2002/03 programme, together with other events, now make it appropriate to amend this provisional SCP allocation. It should be noted that the provisional SCP allocation was based on the Government’s indicative allocations that were advised when the LTP settlement was received in December 2000, updated to take account of the additional £750,000 for 2002/03 included in the transport element of the SCP announced in December 2001.
5. Although the Government specifically required that local authorities did not include bids for additional schemes in the Annual Progress Report, submitted in July 2002, there is reason to hope that the transport element of the SCP to be announced in December 2002 will be higher than the indicative allocation of £15.921m that has been assumed to date. There will also be a discretionary element of the SCP but none of this has been assumed to be available to support the transport capital programme.
6. In considering the proposals for a revised provisional SCP allocation, the Executive should note that the transport capital programme is also supported by 5 other sources of funding:

• Developer Contributions
• Surpluses from the On-Street Parking (OSPS) Account
• Contributions from other authorities
• £1.5m repayment from the revenue budget due in 2004/05 and in 2005/06
• Ringfenced special grant for the Home Zones challenge scheme in Saxton Road Abingdon. (£350k).

7. The total amount of developer contributions held by the County Council for transport schemes at the start of the financial year was just over £23m with a further £13m that has been secured by legal agreements but not yet received. Approximately £11m of these contributions is committed to the ITS programmes and the major road schemes in Banbury, Bicester and Didcot.
8. The remaining £12m of the developer funding available is planned to be used to fund the Cogges Link improvement in Witney and provide further support to the ITS programmes. The actual amount of developer contributions that will be available in 2003/04 and later years is dependent on the terms of the agreements, the schemes selected for implementation and the pace of development. The City Council also hold approximately £3.8m of development contributions which it is anticipated will be allocated to support the future OTS programme.

On-Street Parking Surplus

9. The surplus on the OSPS account at 1 April 2002 was approximately £3.3m. Approximately £2.7m is committed to the Water Eaton and Thornhill P&R sites, with the remainder being used to refinance some of the Sustainable Transport projects carried forward from 2001/02 that were not funded from the SCP last year. The surplus on the OSPS account (approximately £1m per annum) is available to support elements of the transport programme, subject to meeting the conditions that relate to Section 55 funding. It is anticipated that the management costs of the new P&R sites and further P&R enhancement schemes will be funded from this source.

Progress on the 2002/03 Programme

10. A key factor in trying to assess the forecast out-turn for the 2002/03 programme is the feasibility of incurring the expenditure within the financial year. The SCP is only valid for one year and payments have actually got to be made if the expenditure is to count against the SCP allocation. This means that work has to be completed by about mid February if the invoices are to be passed and payments made within the financial year.
11. The detailed summary of progress on the schemes being progressed as part of the 2002/03 programme is set out in a document (Update on the 2002/03 Transport Capital Programme) which has been placed in the Members’ Resource Centre. Contact names are included so that members can seek any additional information on individual schemes. The forecast out-turn figures have been assessed, based on the best estimates currently available from client managers, Babtie and Isis Accord. These indicate that there is a forecast underspend on this year’s SCP of £1.8m. The £1.8m will be required to complete works on the 2002/03 programme that will not be charged to the 2002/03 SCP. If action is not taken there is a risk that this part of the SCP would no longer be available to the County Council.
12. There are various courses of action available to the County Council to resolve this problem. The advantage of carrying out an October review of the current year’s programme is that there is still time to reallocate funding into the structural maintenance budget where less preparation work is required and additional expenditure can more easily be incurred. It is therefore proposed that a sum of £750,000 is transferred into the 2002/03 capital maintenance budget and next year’s structural maintenance budget reduced by a similar amount to fund the expenditure on the current year’s integrated transport programmes that has to be carried forward to next year. This is in line with the Executive’s previous policy of seeking to bring forward essential maintenance work to improve the road network. A scheme on the A4130 in Didcot has already been identified from next year’s programme that can be brought forward with the advantage that it can be carried out at the same time as a developer funded cycleway scheme.
13. In some jointly funded schemes it would be possible to incur more SCP expenditure this year than planned and defer expenditure of either developer contributions or OSPS funds until 2003/04. This has the advantage that a decision does not have to be made until nearer the year end when the likely outturn position is clearer. Hennef Way is currently under construction and it is planned to spend £1m of SCP and £1.927m of developer contributions during 2002/03. At this stage it would be possible to increase the SCP allocation by £1.05m to £2.05m with a consequent reduction in next year’s SCP requirement from £1.668 to £618k. The £1.05m would then be available to fund those integrated transport schemes that require carry-forward funding. Depending on the final outturn figures it would be possible to adjust this figure to ensure that there is no underspend of the transport SCP allocation this year.

Other factors affecting the 2003/04 to 2005/06 Transport Capital Programme

14. The provisional programme for 2003/04 to 2005/06 shown in Annex 1 includes a sum of £3.9m for Marcham Bypass. Due to inflation, design changes and increased estimates of land costs and compensation, the cost of this scheme is now over the £5m threshold set by the Government for Major Schemes. This means that Marcham Bypass will have to be subject to a bid to the Government for specific funding. It is considered that a good case can be made for Marcham Bypass but progress will be dependent on a bid being successful. On the positive side it does mean that Marcham Bypass cannot now be funded from the SCP allocation and therefore £3.9m will be available to be allocated to other projects.
15. Projects that may require additional funding are elements of the Carterton, Witney to Oxford Transport Links Strategy that is the subject of a later report on the agenda of this meeting. This report recommends that phase 1 of this strategy is not progressed as a major scheme bid in order that more rapid progress can be made on improvements to Wolvercote Roundabout and a new link road joining the A40 to the A44/A34. Some funding will be required in the 3 years from 2003/04 to 2005/06 but it will be included in the provisional allocations for major schemes (for County purposes these are defined as over £0.5m), integrated transport strategies (e.g. for Wolvercote Roundabout as part of the OTS programme) and Sustainable Transport.
16. A study is currently being carried out on the A40 Green Road Roundabout. If low to medium cost solutions are recommended then these will need to be included in a future OTS programme. Due to the need for extensive consultation and complex design issues, it is unlikely that significant expenditure could take place during 2003/04. Any major scheme proposals are likely to take some years to develop and probably could not be programmed until 2005/06 at the earliest. The capital programme will need to be reviewed if a major scheme is to proceed prior to the next LTP submission. Smaller scale improvements could be included in the 2004/05 programme.
17. The recent Executive decision to fund the 2003/04 preparation work on GTE out of the SCP will require an additional £800k to be allocated to the major schemes budget heading.
18. The contractual difficulties with the Cornmarket Scheme in Oxford have exposed the County Council to a financial risk in the order of £600k. Action has already been taken to offset this risk by charging all of the 2000/01 and 2001/02 expenditure, including the cost of the abortive work, to previous Supplementary Credit Approvals. Every effort will be made to secure reimbursement of abortive costs by way of the contracts’ dispute procedures. The cost of future work in Cornmarket will be largely covered by the City Council’s contribution. Any funding recovered by the County Council through the disputes procedures will be available to support future capital programmes. It is not possible at this time to predict when this money might become available but £600k has been notionally included in the 2005/06 budget as being the most pessimistic date.
19. The current programme for Cogges Link, Witney means that it is unlikely that the programmed £1m contribution will be required until 2004/05, as it will be essential to spend developer contributions first to meet the requirements of Section 106 Agreements.
20. The budget for the extension of the Thornhill P&R site includes a developer contribution of £135k from the City Council. One of the key objectives of the Thornhill extension was to provide additional parking for staff and visitors accessing the Churchill and Nuffield hospitals. Tenders have been invited for bus services to link Thornhill to the hospital sites. Unfortunately there are not sufficient developer contributions currently available to fund this service but, subject to the agreement of the City Council, it would be possible to use £135k of the forecast underspend to fund the Thornhill P&R extension and so release this developer contribution to support the bus service.
21. If this course of action is acceptable to both Councils it will mean that there would be a shortfall in the carry forward funding required to complete this year’s integrated transport programmes. This can either be funded from next year’s SCP or potentially from the OSPS which, subject to the conditions relating to Section 55 funds being met, could be used to support the OTS programme next year. It is suggested that a final decision on how this shortfall should be funded be deferred until the level of the overall SCP allocation is known.

Revised Provisional Programmes proposed for 2003/04 to 2005/06

22. The key criteria used to develop the revised provisional programme are:

• The structural maintenance budget (including repayments from revenue) should be increased over the remaining 3 years of the 5 year programme from a total of £13.604m included in the existing provisional allocation, to £22m. This requires general reductions in other budget areas but these will be offset to some extent by additional OSPS and developer contributions that become available.
• The revenue contributions of £1.5m in 2004/05 and 2005/06 will be allocated to the structural maintenance heading, reducing the required capital allocation in these years to £6.0m.
• The casualty reduction budget increases over the three years in view of the national and local targets for casualty reduction.
• The Community Safety budget for 2003/04 takes into account the results of the Scheme Assessments completed to date and the potential need to jointly fund the M40 J6 Lewknor Improvement scheme. Increases are proposed in future years to reflect the growing demand for safety schemes.
• The Sustainable Transport budget is the most difficult to predict with any accuracy. There are growing demands on the BWTS programme as more schools make strong applications and cycling schemes are generally becoming more expensive as schemes develop following public consultations. The County Council’s aspirations for GTE, rail improvements, Premium Routes and Real Time Passenger Information would impose severe demands on the next 3 years’ capital programme if they were all to be realised. In practice it is unlikely that they will all be deliverable within the next 3 years and many will form part of the next Local transport Plan bid in 2005. The £8m SCP proposed for 2003/4 to 2005/06 will have to be supported by developer contributions and OSPS if this challenging public transport programme is to be delivered.

23. The proposed revised provisional programmes are set out in Annex 2. These provisional programmes have been developed taking into account the Draft Budget Strategy considered at the last Executive and the need to meet the targets set out in the LTP and the PSA. It is emphasised that these are for forward planning purposes only and it will need to be reviewed early next year in the light of the actual SCP allocation and the Council’s decision on the whole capital programme. Cost estimates and programmed dates are also subject to change as feasibility and design work is progressed.

Financial and Staff Implications

24. The financial implications are as set out in the report. Assessment, promotion and design of schemes in the programme will be undertaken by a combination of existing staff, Halcrow, the County Council’s term consultant for transport planning, and Babtie, the County Council’s term consultant for engineering design. The growing transport capital programme increases the demands on client and project management and on the resources required for transport planning and engineering design consultancy support. This can be partly funded form the capital programme but only at the expense of the overall size of the programme.

RECOMMENDATIONS

25. The Executive is RECOMMENDED to:-

1. approve the revised provisional transport SCP allocation for 2003/04 to 2005/06, as set out in Annex 2, for forward planning purposes;
2. authorise the Director of Environmental Services, in consultation with the Director of Business Support to increase the 2002/03 SCP allocation for Hennef Way, with a corresponding reduction in the 2003/04 SCP allocation to Hennef Way, to ensure that the £18.613m SCP allocation for 2002/03 is fully utilised;
3. approve the transfer of a total of £750,000 from the forecast underspend on the 2002/03 Sustainable Transport, Community Safety (Transport) and Casualty Reduction budgets to the Structural Maintenance budget and make an equivalent reduction in the proposed provisional Structural Maintenance allocation set out in Annex 2 for 2003/04, to enable the 2002/03 schemes carried forward to 2003/04 for implementation to be funded; and
4. approve the use of an additional £135k of SCP underspend in 2002/03 for the funding of the Thornhill Park and Ride Extension to release the allocated developer contribution of £135k, subject to the agreement of the City Council, to support proposed contracted bus services from Thornhill Park and Ride to the Churchill and Nuffield Hospitals.