Transport Innovation Fund (Productivity)

The Secretary of State for Transport (Douglas Alexander): My predecessor published guidance on 26 January on the operation of the Transport Innovation Fund (TIF). The guidance explained that TIF would enable us to direct resources towards the achievement of two key objectives - tackling congestion (Congestion TIF) and improving national productivity (Productivity TIF). I can now provide an update on Productivity TIF.

We have been looking to identify a limited number of transport schemes which could be taken forward quickly for an initial allocation of Productivity TIF, and invited the Regional Development Agencies (RDAs) to submit their views on potential candidates. I am grateful for the constructive way in which the RDAs responded to this request.

In our discussions with the RDAs, we proposed two priority themes which might offer both a strong strategic fit at the national level with the objective of supporting national productivity, and scope for schemes to be delivered quickly, with implementation able to start during the first two years when TIF becomes available - 2008/09 and 2009/10. These themes were:

• measures to improve the capacity and resilience of the strategic national freight distribution networks, hence supporting international trade and competitiveness
• measures to make the most of capacity at key pressure points on the strategic networks, thus improving mobility for business and freight users

Among the range of suggestions offered by the RDAs, there was substantial support for schemes reflecting these suggested themes, and I have concluded that for this initial round of Productivity TIF we should broadly follow them.

We are also keeping open the possibility of a contribution to the costs of taking forward Crossrail, although funding decisions on Crossrail will not be taken until after the conclusion of Sir Michael Lyons' review of local government finances.

Accordingly, in addition to Crossrail, the schemes which will now be taken forward for business case development and appraisal are as follows:

The funding available in the opening years of the TIF is limited, and some will be needed for Congestion TIF, so it will only be possible for the TIF to support a small number of Productivity schemes in this initial allocation round. Only a limited proportion of the schemes above - particularly in the case of the larger, more costly road schemes - are likely to receive TIF funding.

Since the TIF is intended to supplement rather than supplant existing sources of funding, the availability of TIF funding for individual schemes will depend on other funding contributions, as well as value for money to the taxpayer.

The inclusion of a scheme in this list should not be taken to give any indication as to whether or not any statutory consents or other decisions that may be required for that scheme to proceed (for example, planning consents and decisions in relation to TWA Orders or Harbour Orders) will be given in favour of the scheme.

The Department will now be discussing with the appropriate delivery agents and other key stakeholders the work necessary to deliver the business cases by the end of July. I hope to announce decisions on first round allocations of Productivity TIF, and the approach to handling future allocations from the TIF, by the end of this year.

Delivered: 14 July 2006