It’s official. According to Transport Secretary Patrick McLoughlin, the government will not bring forward plans to toll UK roads in this parliament.
Difficult politics is the obvious reason but the private investment needed to make it happen wasn’t there either.
The man in the hot seat is Lord Deighton. Former CEO of the London Organising Committee for the 2012 Olympic Games – and before that a partner at Goldman Sachs – Deighton was recently appointed Commercial Secretary to HM Treasury.
His job is to entice private finance into the £330bn National Infrastructure Plan, 85% of which needs to come from private sources.
The idea is that revenues from the infrastructure – like tolls from roads for example – is paid back to the investors in the steady, inflation linked way they like it.
But in an interview with Construction News last week, Deighton admitted that, ‘getting traction on the ground in some projects is proving incredibly challenging.’
In November 2011, a year after the NIP was launched, the government said it was looking for up to £20bn of investment from two groups particularly – the Pension Investment Platform and a separate group of insurance companies.
An update published alongside the Budget last week however says the ten members of the PIP have so far pledged only £1bn. Meanwhile the insurance group is ‘continuing to explore… the issues’.
The lack of direct experience of operating infrastructure projects is one factor holding UK investors back, as are long delays during the planning process. According to the FT however, the major factor is because they don’t want to take the risk on new build projects.
The public woes of the so-far disastrous M42 toll road last summer cannot have helped.
Introducing road tolls in the UK would be controversial. We’ve consistently argued though that public opposition cannot be taken for granted (and apparently George Osborne agrees).
But there would be little point fighting the battle if there was no money to build the roads anyway.
What is not in doubt is Lord Deighton’s commitment to tolls. He also told Construction News tolls were the way to go in the ‘medium to long term’.
One thing is absolutely certain. The issue of road tolls in the UK is not going to go away.