Rapid Transit The Ashton Vale to Temple Meads and Bristol City Centre Rapid Transit Order

Rapid Transit The Ashton Vale to Temple Meads and Bristol City Centre Rapid Transit Order PROOF OF EVIDENCE Mr Peter Robinson Funding OA/14 23rd Apri...
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Rapid Transit The Ashton Vale to Temple Meads and Bristol City Centre Rapid Transit Order

PROOF OF EVIDENCE Mr Peter Robinson Funding OA/14 23rd April 2012

Bath & North East Somerset, Bristol, North Somerset and South Gloucestershire Councils working together to improve your local transport

Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

CONTENTS 1

INTRODUCTION ............................................................................................. 4

2

OUTLINE OF PROOF OF EVIDENCE .................................................................. 6

3

BACKGROUND ............................................................................................... 7 The Financing of Local Authorities ........................................................................ 7 Policy Framework .................................................................................................. 7 The Wider Transport Investment Programme ...................................................... 8 Summary.............................................................................................................. 10

4

FUNDING FOR THE AVTM BRT SCHEME........................................................ 11 Funding Statement and Estimate of Costs .......................................................... 11 AVTM BRT Capital Cost Estimate......................................................................... 12 Funding for the AVTM BRT scheme – Capital Funding ....................................... 14 Funding for the AVTM BRT scheme – Revenue Funding..................................... 15 Summary.............................................................................................................. 15

5

FUNDING FOR THE WIDER RAPID TRANSIT NETWORK .................................. 17 The Proposed Rapid Transit Network ................................................................. 17 Funding for the Wider Rapid Transit Network - Bristol City Council.................. 17 Funding for the Wider Rapid Transit Network - North Somerset Council ......... 19 Summary.............................................................................................................. 20

6

OBJECTIONS ................................................................................................ 21

7

STATEMENT OF MATTERS ............................................................................ 23

8

CONCLUSION............................................................................................... 24

Contents

Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

Contents

Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

1

INTRODUCTION

1.1

My name is Peter Robinson. I am Service Director, Finance and Section 151 Officer at Bristol City Council. I was appointed to this position in January 2009, prior to this I was Head of Finance and Procurement and have held various Senior Management positions within the Council and Gloucestershire County Council.

1.2

I am a qualified accountant with the Chartered Institute of Public Finance and Accountancy, qualified in 1988 and hold a Masters Degree in Business Administration from the University of Warwick.

1.3

Section 151 of the Local Government Act 1972 requires every local authority to make arrangements for the proper administration of their financial affairs and requires one officer to be nominated to take responsibility for the administration of those affairs. The Section 151 officer is usually the local authority’s treasurer and must be a qualified accountant belonging to one of the recognised chartered accountancy bodies. The Section 151 officer has a number of statutory duties, including the duty to report any unlawful financial activity involving the authority (past, present or proposed) or failure to set or keep to a balanced budget.

1.4

Both Bristol City Council (BCC) and North Somerset Council (NSC) are fully committed to the AVTM BRT scheme. At a full Council meeting on 29 June 2010, BCC confirmed the Resolution of the Council made at its meeting on 19 January 2010 (OA/14/2, Appendix 1) to promote, jointly with NSC, an order under the Transport and Works Act 1992 by the Secretary of State for Transport to authorise the construction and operation of the Ashton Vale to Temple Meads and Bristol City Centre Rapid Transit Scheme (OA/14/2, Appendix 3). NSC similarly confirmed their resolution of the Council made at its meeting on 23 February 2010 (OA/14/2, Appendix 2) at the same time (OA/14/2, Appendix 4).

1.5

As part of the TWAO application, BCC and NSC is seeking powers to compulsorily acquire land. ODPM Circular 06/2004 [CD/D7] requires authorities to provide information about the resource implications of acquiring land and implementing the scheme for which the land is required, demonstrate that there is a reasonable prospect of the scheme acquiring funding and show that it is unlikely to be blocked by any impediments to implementation.

1.6

As Section 151 Officer for BCC, I set out in this proof of evidence that BCC and NSC, as the promoters of the TWAO application before this public inquiry, fully support

Page 4

Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding the delivery of this scheme, have taken all the steps necessary to provide an accurate and robust statement of funding and costs and have taken, and continue to take, all the steps necessary to acquire reasonable prospect of funding for the scheme. 1.7

I hereby declare that insofar as the contents of this proof of evidence are matters within my knowledge they are true. Insofar as they are not within my direct knowledge, they are true to the best of my knowledge and belief and are drawn from documentation and information to which I have had access. I confirm that the opinions expressed are my true and professional opinions.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

2

OUTLINE OF PROOF OF EVIDENCE

2.1

I demonstrate in this proof of evidence that that there is a reasonable prospect of funding for the AVTM BRT scheme. In assessing these points, my proof is divided into nine sections.

2.2

Section 3 of this proof provides the background to the scheme funding including a summary of Local Authority financing, the policy framework and the wider transport investment programme. Section 4 sets out the funding for the AVTM BRT scheme with Section 5 discussing the funding for the wider transport investment programme.

2.3

Any objections received in relation to funding not covered by these sections are discussed in Section 6. Section 7 addresses the statement of matters produced by the Secretary of State and addresses the main points raised therein.

2.4

Section 9 contains overall conclusions on my evidence.

2.5

A summary of my proof is provided as OA/14/1 and appendices are provided as OA/14/2.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

3

BACKGROUND The Financing of Local Authorities

3.1

Local Authorities apply funding in two ways, revenue, for ongoing expenditure, such as staffing, supplies and services and operational contracts and capital where an asset is provided.

3.2

The construction of the AVTM BRT scheme is capital expenditure and the ongoing operation of the AVTM BRT scheme is revenue expenditure.

3.3

Revenue expenditure is financed in broad terms from three distinct areas, Council Tax, raised from house-holders, Government Grant and income from service provision.

3.4

Capital expenditure, items that have a continued value are financed from government grant, sales of surplus assets (capital receipts) or borrowing. Borrowing is financed from the revenue spend, that is, the interest and principal repayments for the borrowing over the life of the asset.

3.5

Both revenue and capital funding is allocated based on priorities determined by a majority decision of elected councillors. They do this by taking advice from paid council officers who take into account the statutory obligations of the council. Policy Framework West of England Joint Local Transport Plan

3.6

The current Joint Local Transport Plan, JLTP3 [CD/C7], was published in March 2011. It sets out the transport strategy for the West of England area from 2011 to 2026. It is a statutory document that all councils have to produce. The JLTP3 specifically lists the AVTM BRT scheme as a supported, significant improvement to transport infrastructure (included at OA/3/2 Appendix 1). The JLTP3 has the full endorsement of the West of England Joint Transport Executive Committee (December 2010) and full council approval of both BCC and NSC in January 2011. Bristol City Council Transport Strategy

3.7

BCC's Core Strategy includes a framework to enable delivery of the transport infrastructure required for Bristol to grow sustainably, improve accessibility, provide a step change in public transport and minimise the need to travel, especially by private car. Policy BCS10 specifically lists the AVTM BRT scheme as a

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding supported, significant improvement to transport infrastructure (included at OA/3/2 Appendix 3). The Core Strategy has the full support of BCC and was adopted in June 2011. North Somerset Council Transport Strategy 3.8

The draft NSC’s Core Strategy's locational strategy aims to place new jobs, services and facilities where they are easily accessible by public transport, walking and cycling, give existing and future residents a choice of how to travel. It highlights rapid transit in its Policy CS10 (Transport and Movement) including specific mention of the AVTM scheme within its schedule of proposed major transport scheme investment (included at OA/3/2 Appendix 4). The Core Strategy has the full support of NSC and was adopted in April 2011. National Policy Planning Framework

3.9

The new National Planning Policy Framework (NPPF) [CD/D27] sets out the Government’s planning policies for England. Issued in March 2012, the NPPF sets out a presumption in favour of sustainable development and that proposed development that accords with an up-to-date Local Plan should be approved. The AVTM BRT scheme is proposed development in both BSC and NSC Core Strategies and therefore is completely in line with the NPPF. The Wider Transport Investment Programme

3.10

The Joint Local Transport Plan identifies a package of integrated transport measures that are required to address the loss of productivity from congestion presently experienced in the sub-region (estimated to cost £300m per annum). Without these interventions the congestion situation in Bristol would get far worse by 2026, leading to the city losing its competitiveness.

3.11

JLTP3 sets out the transport-related goals and objectives that the West of England region aims to complete during the lifetime of the plan, with the overall objective being to improve the transport system and quality of life in the region.

3.12

The proposal for the Bristol urban area is for three schemes that include a majority element of guided and on road bus routes, alongside improved pedestrian and cycle routes. The AVTM BRT scheme will provide a new access route from the existing Ashton Vale Park & Ride site to the city centre. North Fringe to Hengrove Package (NFHP) will provide routes from Cribbs Causeway, Aztec West and Emerson’s Green into the city centre and then beyond to the new developments at Hengrove Park. South Bristol Link (SBL) includes a bus rapid transit route from

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding Hengrove Park to Ashton Vale (linking in to AVTM) alongside a new road connecting the more deprived suburbs of South Bristol to the existing road network at the A38 and A370. The total cost of these three schemes is £195 million. This represents a significant investment in transport infrastructure by the West of England Authorities. 3.13

The WoE authorities have a proven track record in the delivery of major transport infrastructure, most notably through the Greater Bristol Bus Network scheme. Over the last year the councils have taken further steps to enhance delivery arrangements including the development of capacity and capability, through the appointment of specialist transport consultants and advisers.

3.14

The Chief Executives of the four WoE authorities have established a Programme Assurance Board (PAB) comprising Strategic Directors and the Service Director, Finance, Bristol City Council as the S151 Officer for overseeing the delivery of the whole BRT network. The PAB receive high level reports from the Programme Delivery Board (PDB) of BRT Network, comprising the Senior Responsible Officers for each of the BRT schemes in the overall network, a Programme Director with responsibility for the whole programme, the Head of Transport for Bristol City Council and the Section 151 Officer from North Somerset Council. The PAB are responsible for:  Ensuring programme priorities are met and cross scheme actions are delivered.  Providing critical review and oversight of joint actions.  Managing programme level risks.  Reporting key programme issues, risks and opportunities to the Joint Transport Executive Committee.  Overseeing strategic relationships with the Department for Transport (DfT), Local Enterprise Partnership (LEP) and other key stakeholders.  Reporting high level progress to the LEP.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

Summary 3.15

As Section 151 Officer for BCC I am satisfied that:  Bristol City Council and North Somerset Council are committed to the delivery of the AVTM BRT scheme.  The AVTM BRT scheme is supported at all levels of local policy through the endorsement of the Joint Local Transport Plan, BCC Core Strategy and NSC Core Strategy and is therefore in line with the National Planning Policy Framework (NPPF).  Bristol City Council and North Somerset Council have a range of capital and revenue funding mechanisms available to fund the proposed AVTM BRT scheme works. This is set out in more detail in Section 4.  The proposed wider investment programme represents a significant investment in transport infrastructure by the West of England Authorities. The Authorities are working together at all levels to ensure that this is delivered through a robust and fundable programme. The funding for the wider investment programme is set out in more detail in Section 5.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

4

FUNDING FOR THE AVTM BRT SCHEME

4.1

This section of my proof considers the funding for the AVTM BRT scheme. Funding Statement and Estimate of Costs

4.2

A Major Scheme Business Case (MSBC) [CD/B1] submission for the AVTM BRT scheme was submitted to the Department for Transport (DfT) in March 2009 [CD/C9]. The capital cost estimate for the scheme at this stage in outturn prices was £47.798 million.

4.3

During 2009 and 2010 the project engaged with DfT on the MSBC submission [CD/B1] and commenced work in preparation for a draft TWAO submission. The AVTM BRT scheme was granted `Programme Entry’ status by DfT on 17th March 2010. The Programme Entry letter status allocated funding of £43 million.

4.4

The TWAO application for the AVTM BRT scheme was subsequently submitted to the Department for Transport on 10th June 2010. In accordance with the Transport and Works (Applications and Objections Procedure) (England and Wales) Rules 2006, Rule 10(3), the TWAO application for the AVTM BRT scheme included a funding statement [CD/ A8] and estimate of costs [CD/A9]. These documents were full and accurate statements of the funding position and cost estimates at the time the TWAO application was submitted.

4.5

In June 2010 Government announced a delay to all local authority promoted transport schemes seeking central government funding and that all schemes would be assessed as part of the Comprehensive Spending Review. Further details on the revised funding process emerged later in 2011 with DfT informing the councils in October 2011 that the AVTM BRT scheme had been allocated to the ‘development pool’ and in February 2011 DfT invited the Authorities to submit a Best and Final Funding Bid (BAFB) [CD/B2] for funding for the scheme.

4.6

The development of the BAFB [CD/B2] resulted in some proposed changes to the scheme which are set out in the AVTM BRT Order Factsheet 1: Revised Plans for Information [AM/1]. The capital cost estimate for the scheme was revised in outturn prices to £49.621 million. The capital cost estimate and overall funding of the scheme is set out in the BAFB [CD/B2, Section 8]. The BAFB was endorsed by the West of England Joint Transport Committee in July 2011 and approved by BCC Cabinet and NSC Executive.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding 4.7

The AVTM BRT Order Factsheet 1: Revised Plans for Information [AM/1] also sets out proposed changes to the scheme since BAFB [CD/B2]. These changes are all within the current cost estimate and agreed scheme funding. AVTM BRT Capital Cost Estimate

4.8

A full Quantitative Risk Assessment was undertaken to understand and measure the impacts of the principal risks associated with the cost of the AVTM BRT scheme. The assessment identified the cost implications for the scheme of £12.020 million at the P(80) level and £8.580 million at the P(50) level.

4.9

The costs were converted into outturn (in-year) prices based on the following central assumptions:  Construction profile of 25% in 2013, 65% in 2014 and 10% in 2015;  Land purchase would take place in 2013;  Site supervision and risk profiled in line with the expenditure profile for engineering works;  More than 50% of the total estimated preparatory costs spent since the original Programme Entry status was awarded, in order to progress the scheme. Remaining preparatory costs to be spent during 2012 and 2013, with an allowance for evaluation after scheme opening;  Annual Maintenance costs (lighting, cleaning, etc);  Periodic maintenance costs (resurfacing, etc) every 6 years; and  Fleet replacement every 15 years.

4.10

A range of inflation assumptions were adopted for the different elements of the outturn investment and operating costs associated with the scheme. These are set against a general base inflation rate of 2.79%.

4.11

The capital cost estimate for the scheme is set out in the BAFB [CD/B2] but in summary is:  Construction - £25,316,000.  Land - £2,135,000.  Preparation/evaluation - £6,066,000.  Supervision - £762,000.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding  Risk - £12,020,000.  Inflation - £3,322,000.  Total - £49,621,000. Assurance 4.12

Under the current DfT Grant arrangement, the scheme promoters bear the full financial risks of the schemes. This means that any cost overrun will be borne by the councils, not the DfT whose contributions are fixed. To mitigate this risk significant work has already been undertaken on the AVTM BRT scheme to ensure that the scheme has achieved a robust level of cost validation. The original bid was submitted in March 2009 and Programme Entry was gained in March 2010, hence there is now greater certainty in costs than in the original bid submission. Additional cost validation was undertaken in the lead up to, and for, the final BAFB in September 2011 [CD/B2]. The technical solution for the scheme has not changed significantly and the value engineering options report submitted with the BAFB [CD/B2] clearly sets out the approach to reducing costs and preserving benefits.

4.13

To provide BCC and NSC with necessary assurances, Price Waterhouse Coopers (PwC) was asked to undertake an independent financial review of the AVTM BRT scheme and the other rapid transit bid submissions. Specifically, PwC were asked to review the three draft bid submissions with particular focus on the financial assumptions and data underpinning the proposals and to highlight any risks and issues arising. The review commented on the impact of the proposed changes to the scheme. In doing this, they looked at:  the robustness of the BCR calculations;  the basis of revenue neutral assumptions;  the revised commercial proposition and subsidy requirements;  the sensitivity to operational costs; and  the impact on funding sources.

4.14

PwC confirmed in September 2011 that they had been provided with the appropriate management responses to each of their recommendations and that they were satisfied that the respective projects had noted and actioned those areas requiring further attention.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding Funding for the AVTM BRT scheme – Capital Funding DfT Grant 4.15

DfT in their letter of 7th December 2011 reconfirmed programme entry for the scheme. As part of their overall approval the DfT will provide a maximum funding contribution of £34.508 million towards the estimated total scheme cost of £49.621 million.

4.16

The MSBC [CD/B2] was submitted in March 2009 and Programme Entry was gained in March 2010. Additional cost validation was undertaken in the lead up to, and for, the final BAFB [CD/B2] in September 2011. Given the number of bidding rounds which have all been subject to DfT scrutiny, there is a high degree of cost certainty.

4.17

BAFB [CD/B2] has a value for money assessment (Benefit Cost Ratio) of 4.22 which represents ‘Very High Value for Money’ as defined by DfT. The scheme therefore has a good prospect of being awarded final funding. Local Authority Sources of Funding

4.18

BCC and NSC have entered into a Joint Promotion Agreement which sets out the cost sharing arrangements (OA/14/2, Appendix 2 (appended)). BCC’s share will be 80% of costs (and any surpluses) and NSC’s share will be 20% of costs (and any surpluses). This agreement was endorsed by both authorities at Full Council meetings (OA/14/2, Appendix 1 and Appendix 2).

4.19

The agreed funding contributions of the Authorities are:  BCC's total financial contribution, £12 million will be financed from borrowing and capital allocations. The borrowing will be funded from a combination of a revenue allocation and either a Business Rate Supplement to Bristol Businesses or a Workplace Parking Levy for workers who have a free parking space in central Bristol.  NSC’s contribution, £1.8 million, will be funded from its Capital Programme .

4.20

Both BCC and NSC are considering the local funding requirement of the AVTM BRT scheme in the context of the potential wider Rapid Transit Network local funding requirements. BCC is currently undertaking work to identify and assess the local funding options available to the council. This is discussed in more detail in Section 5. NSC has identified its contribution as part of a package to fund the wider Rapid Transit Network. This is discussed in more detail in Section 5.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding Other Sources of Funding 4.21

The agreed funding contributions from other sources are:  Bristol International Airport, £1.8 million - In December 2010, a section 106 Agreement was signed between all relevant parties (Bristol International Airport, NSC and BCC) committing Bristol International Airport to support the AVTM BRT scheme.

4.22

Other sources of funding available to the council, depending on priorities to fund the scheme include a direct capital allocation, using elements of government allocation for local transport schemes or applying capital receipts or funding borrowing from revenue from other means, re-prioritising other services so delivering revenue savings that could be applied, increasing Council Tax to the citizens of Bristol above that planned for, increasing charges for services provided. Funding for the AVTM BRT scheme – Revenue Funding

4.23

Similarly to the capital costs, the Joint Promotion Agreement (OA/14/2, Appendix 1) applies to revenue funded costs and revenues.

4.24

In terms of the financial sustainability of the ongoing operation of the service, financial modelling undertaken by the councils show that the forecast revenue streams will exceed the estimated operating costs, thereby potentially producing a net operating surplus after an initial period of establishing the new service on opening the scheme. There may be a requirement for funding in the initial period of establishing the new service on opening the scheme. The contractual model for the service is yet to be finalised. However the councils are likely to take the full revenue risk.

4.25

The proofs of evidence of Mr Robert Thompson (OA/6) and Mr James Willcock (OA/13) discuss the financial modelling and ongoing operation of the service in more detail. Summary

4.26

As Section 151 Officer for BCC I am satisfied that:  The funding statement submitted with the TWAO application was in full compliance with the Transport and Works (Applications and Objections Procedure) (England and Wales) Rules 2006, Rule 10(3). The documents were full and accurate statements of the funding position and cost estimates at the time the TWAO application was submitted.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding  The funding position of the project was revised as a result of the Government's Comprehensive Spending Review in 2011 and was included in the Best and Final Funding Bid in September 2011.  The project has taken all the steps necessary to provide an accurate and robust statement of funding and costs.  The AVTM BRT scheme has a robust and ‘very high’ value for money case and therefore has a good prospect of being awarded final funding by DfT.  Bristol City Council has a range of available funding sources it has access to in order to fund its agreed capital funding contribution to the AVTM BRT scheme. This is discussed in more detail in Section 5.  North Somerset Council has identified its agreed capital funding for the AVTM BRT scheme. This is discussed in more detail in Section 5.  The AVTM BRT scheme is forecast to be revenue neutral. There may be a requirement for funding in the initial period of establishing the new service on opening the scheme. Further work will be undertaken on the contractual model.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

5

FUNDING FOR THE WIDER RAPID TRANSIT NETWORK

5.1

This section of my proof considers the funding for the wider rapid transit network. The Proposed Rapid Transit Network

5.2

The Government’s Comprehensive Spending Review in October 2010 identified £900 million of funding for major transport schemes. All three rapid transit schemes were taken forward into the final bidding stage at the beginning of 2011 through the Best and Final Funding Bids [CD/C6].

5.3

The West of England Authorities successfully bid to the Department of Transport for three infrastructure transport schemes costing £195 million financed from government grant (£114 million) and third party contributions (£82 million) with the remaining funded from the Authorities.

5.4

The three schemes are:  AVTM BRT scheme (£50 million)  South Bristol Link (£44 million); and  North Fringe to Hengrove BRT (£101 million). Funding for the Wider Rapid Transit Network - Bristol City Council

5.5

The BCC contribution is £42 million of local investment to support £114 million of DfT funding and £41 million from the other local authorities jointly promoting these projects (NSC and South Gloucestershire Councils).

5.6

The BCC Cabinet received a report on 1 September 2011 [OA/14/2, Appendix 5] outlining the local funding options available for the Rapid Transit Schemes. Cabinet agreed:  to commit to funding £42 million local contribution to three major transport schemes;  contribute £5 million towards the local contribution from a combination of its own Local Transport Plan and Community Infrastructure Levy resources;  to commit to use all reasonable endeavours to identify other funding to minimise the overall requirement;

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding  that either a Business Rate Supplement or a Workplace Parking Levy focused on central Bristol be used to raise the balance of the local contribution; and  that a steering group comprising significant business representation is established to oversee further investigatory work on both Business Rate Supplement and Workplace Parking Levy. 5.7

The most viable options for the bulk of the local funding requirement have been assessed to be the options of Business Rates Supplements and Workplace Parking Levy. Because of the impact either of these options might have on businesses in the city early discussions were held with business representatives and some initial feedback was sought from the business sector by way of seminars arranged to explain the funding position and options being explored. It is clear from this that further work is needed to establish the impact on different kinds of business in various parts of the city for both Business Rates Supplements and Workplace Parking Levy options, but the most significant challenge from business was that it shouldn't be charged with finding all the £42 million BCC contribution but that the Council should look again to allocating more of its own resources to the major schemes.

5.8

The contribution of £5 million previously referred to, will be met from a combination of Local Transport Plan and Community Infrastructure Levy. Thereby reducing the £42 million BCC contribution from business to £37 million.

5.9

Indicative figures from the Public Works Loans Board indicate that around £2.6 million per annum would be required to repay this amount over a 25 year period. Repayments over 20 and 15 years would require annual repayments of £3 million and £3.6 million respectively. The earliest that any Business Rates Supplements or Workplace Parking Levy would be levied is 2015.

5.10

On the 26 January 2012 the Cabinet agreed to contribute a further £10 million as part of "The Investing in Bristol's Future Package" to be financed from prudential borrowing [OA/14/2, Appendix 6]. Thereby further reducing the £37 million BCC contribution from business to £27 million.

5.11

The £10 million was based on available resources and prioritisation. The Cabinet identified additional revenue savings to be able to afford prudential borrowing for priority Capital Projects. As a result, £10 million was allocated against BRT.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding 5.12

It was felt that £15 million in total was a fair contribution from the Council to the three schemes and met the need to say to business that all available resources had been exhausted Funding for the Wider Rapid Transit Network - North Somerset Council

5.13

NSC has three major transport schemes:  Weston Package Phase 1 - £25 million, funded through £10 million DfT grant, £3.25 million NSC contribution, £1.35 million third party contribution.  AVTM BRT Scheme - £49.6 million, funded through £34.5m DfT grant, £1.8 million NSC contribution, £1.8 million third party contribution and £12 million BSC contribution.  South Bristol Link - £44.5 million, funded through £27.6 million DfT grant, £5.26 million NSC contribution, £3.19 million third party contribution and £8.45 million BSC contribution.

5.14

The overall position for North Somerset Council across its three major schemes is a total local contribution of £10.28 million, excluding third party funding (£16.07 million including third party funding). The total third party funding secured by the council is £5.790 million and a further £6.015 million has been secured from council capital resources and the remaining £4.265 million is to be funded through the Council’s Capital Programme. Having firstly been approved by the Councils Capital Board the £4.265 million was included in the last four monthly corporate monitoring report, and subsequently approved by the Council’s Executive. The preferred approach for funding the £4.265 million is through prudential borrowing, funded by New Homes Bonus.

5.15

On-going revenue costs for Weston Package are limited to on-going routine maintenance, which will be met within existing highways budgets. For the AVTM BRT scheme and South Bristol Link, the financial modelling shows the service will not require financial support once established. Furthermore there are also modelling scenarios where the AVTM BRT scheme will generate an operating surplus depending upon the chosen service and vehicle specification. However there is a risk that during the first years of operation the service may require some financial support, depending upon the service and vehicle specification. This risk will be managed as the project progresses and should the authorities opt for a contracted service via competitive tender, the outcome of the tender process would provide clarity on the degree of financial risk to the authorities. Other

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding potential revenue costs falling upon the authorities will be maintenance costs for track and stop infrastructure. This will be defrayed through an operators access charge and or will be met from existing budgets. Summary 5.16

As lead Section 151 Officer for the AVTM scheme for both BCC and NSC I am satisfied that:  The funding proposals properly support the Joint Local Transport Plan ambition of providing a package of integrated transport measures that are required to address the loss of productivity from congestion presently experienced in the sub-region (estimated to cost £300 million per annum). And that without these interventions the congestion situation in Bristol would get far worse by 2026, leading to the city losing its competitiveness.  The solutions identified to repay the prudential borrowing are deliverable which for BCC is either Business Rates Supplement or Workplace Parking Levy and for North Somerset is New Homes Bonus.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

6

OBJECTIONS

6.1

A number of objections have been made to the draft Transport and Works Act Order submitted in respect of the AVTM BRT scheme. As part of the preparation for the public inquiry, we are seeking to discuss these issues with objectors and resolve them where possible.

6.2

This section addresses some of the comments made in relation to funding through the objections to the draft TWA Order which have not already been covered above and include:  Issue 1 - Funding should be used for other transport measures – heavy rail, ULR, cycling facilities etc.  Issue 2 - There is a large part of the scheme that is outside the TWAO (Long Ashton park and ride to Prince Street Bridge) but costs (with the exceptions exampled below) are included in the funding package.  Issue 3 - Objectors have raised concerns that cost over-runs will result in either increased council taxes or funding cut from other projects or services. Issue 1

6.3

The potential DfT capital grant is specifically to fund the capital costs of the AVTM BRT scheme as submitted in the BAFB in September 2011 evidenced by the schemes programme entry status with DfT. The funds are not available to be used on other transport proposals.

6.4

The inclusion of the AVTM BRT scheme in the BAFB is as a result of its identification within the agreed Joint Local Transport Plan (JLTP3) transport vision and major scheme investment programme as set out in the evidence of other witnesses. The BAFB reflects this endorsed capital investment programme. Issue 2

6.5

The capital cost of the works falling outside the works to be authorised under the TWAO are included in the full cost estimate included in the BAFB in September 2011. The capital costs of these works will therefore be monitored and managed as part of the overall scheme costs. If there were any additional works identified outside the works to be authorised under the TWAO these would need to be considered through the normal project governance processes as would any potential scheme changes to works that would be authorised by the TWAO.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding Issue 3 6.6

The Authorities have worked together to ensure that there are proposed project and programme management and assurances in place for the AVTM BRT scheme and wider Rapid Transit Network programme and that these will be maintained and continually reviewed to ensure the robust management of costs for the delivery of this scheme.

6.7

Capital cost over-runs on infrastructure projects can occur. As with any additional expenditure the Councils would be required to balance managing within the project budget with other calls on funding.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

7

STATEMENT OF MATTERS

7.1

The Statement of Matters issued by the Secretary of State for Transport and the Secretary of State for the Department of Communities and Local Government identified the following matters in relation to funding:  Matter 4 - The extent to which the scheme would be consistent with national and local planning, transport and environmental policies.  Matter 11 - The Promoter’s proposals for funding the scheme. Matter 4

7.2

As set out in Section 3, the AVTM BRT scheme is supported at all levels of local policy through the endorsement of the Joint Local Transport Plan, BCC Core Strategy and NSC Core Strategy and therefore is also in line with the new National Policy Planning Framework.

7.3

In this proof of evidence I have set out that, with regards to ODPM Circular 06/2004, there is a reasonable prospect of the scheme acquiring funding and there unlikely to be impediments to implementation with regards to funding. Matter 11

7.4

Section 4 sets out the funding for the AVTM BRT scheme.

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Document Reference Number: OA/14 Proof of Evidence of Mr Peter Robinson: Funding

8

CONCLUSION

8.1

I have assessed the funding matters for the AVTM BRT scheme as described in this proof of evidence.

8.2

For the reasons that I have set out, the AVTM BRT scheme is required for the realisation of the transport and related objectives for this area. In particular:

8.3



Bristol City Council and North Somerset Council are committed to the delivery of the AVTM BRT scheme.



The AVTM BRT scheme is supported at all levels of local policy through the endorsement of the Joint Local Transport Plan, BCC Core Strategy and NSC Core Strategy and is therefore in line with the National Planning Policy Framework (NPPF).



The proposed wider investment programme represents a significant investment in transport infrastructure by the West of England Authorities. The Authorities are working together at all levels to ensure that this is delivered through a robust and fundable programme.



Bristol City Council and North Somerset Council have a range of capital and revenue funding mechanisms available to fund the proposed works.



Bristol City Council has thoroughly and robustly explored funding options and the options of Business Rate Supplement or a Workplace Parking Levy are currently being progressed to repay borrowing to finance the scheme.



North Somerset Council has identified its funding for the wider investment programme including the AVTM BRT scheme.

On the basis of funding, I believe that there is no demonstrable reason that the draft TWAO application for the AVTM BRT scheme should not be authorised.

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