Asphalt Industry Alliance
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Discussing the government's commitment to improving local roads.
I’m really sorry I can’t be with you in person today. None the less, this is an important event dealing with important issues and I really did want to find a way to take part in it.
So thank-you for giving me an opportunity to say a few words through the wonders of modern communications technology and, indeed, for helping me to promote another part of my brief - namely alternatives to travel.
My department is focused on building a modern and sustainable transport system - one that connects our communities, supports our economy and protects our environment. But, as you’ll understand, that is a real challenge when set against the backdrop of the country’s enormous inherited debt crisis.
On the spending plans we inherited, British taxpayers would be paying out £70 billion in debt interest a year by the end of this Parliament - that’s more than we spend on educating our children, defending our country or policing our streets. To use a motoring metaphor, the public finances inherited by the coalition government resembled a car that had been running dangerously low on engine oil. We have had to stop the car, top it up, give it a service and get it back on the road in a fit state to take us forward.
So the government’s top priority is to tackle that legacy of debt. And a watershed moment in our efforts to put the public finances back on track will be the autumn spending review. But the challenge of the spending review is also an opportunity - an opportunity to reassess and re-evaluate priorities in transport spending.
Local highways will, of course, be no exception to this process. But make no mistake - our local highways matter. They are not simply a vital part of the wider transport network, they are the most valuable transport assets that a local authority will own. Unfortunately, they can also be an easy target for cuts. Well, given that local roads help to support the social and economic goals, both of central government and local authorities, unthinking cuts all too often are a false economy.
Let me give you some good news. This government is committed to localism, to letting councils get on with they job for which they were elected. Under this government, local authorities like yours will have greater freedom to spend money where it is needed. In other words, you will be able to focus and target capital investment on those areas that offer the very best returns. And the indications are that investment in highways maintenance not only offers real value for money for taxpayers, it also produces benefits for the travelling public in lower vehicle operating costs and faster travel times.
I’m sure that everyone in the audience will know that, in March this year, the Chartered Institute of Public Finance and Accountancy published a new code of practice on transport infrastructure assets. This will begin to affect local authorities in a very real way from 2012 to 2013, when the current replacement cost of their highways assets begins to appear in their accounts. And, while, at first glance, the change may seem to be a challenging one, it also offers genuine benefits to local authorities because the evidence base for the budget decisions you take, and the consequences of those decisions, will be much clearer to you, your council tax payers and the wider public. All in all, better decision making.
The new code will mean that if local authorities fail to invest in their highways networks the impact on asset values will be plain for all to see. There is a mandatory dry run in 2011 to 2012 So, while I have the chance, I want to tell you that it’s not too late to register for the launch event that CIPFA are running on 19 July in London at the Treasury.
Asset management is an important tool for delivering efficiencies. Indeed, CIPFA themselves estimate that somewhere in the order of 5% a year worth of savings can be achieved. So, in an age where all of us must learn to do more with less, making the best use of existing assets is often a better choice than spending on new build. Put simply, keeping up investment in highways maintenance, even in testing times, makes economic sense, not just transport sense. That’s the reason that I, and the Secretary of State for Transport, were united in ruling out any cuts in the money for repairing pot holes - a stitch in time and all that.
Local roads are so much more than highways that take you from A to B. They are also where people live, work and shop. So when we plan, when we devise policy and when we debate and discuss the key issues we should consider each and every stakeholder - from car drivers to pedestrians, and from local residents to local businesses.
We should also think about the contribution local highways make towards sustainable travel. After all, making a journey by bike or on foot - 2 forms of travel that are good for our health as well as good for the environment - would be a lot more difficult without properly maintained roads and pavements. And the same is equally true when people come to use public transport like buses, or join car clubs. Both modes of travel help to cut carbon emissions but both depend on decent roads.
Our approach to local roads is rooted in this government’s commitment to localism. For us, the new politics we have promised is one where the best form of government is the government that lets people govern themselves.
That’s why, in the coalition agreement, we have pledged to a review of local government finance - something that will give greater financial autonomy to local government.
It’s also why, in the Queen’s speech, we announced the Devolution and Localism Bill. This important bill will shift power from the central state back into the hands of individuals, communities and councils. It will empower local people giving them more power over local government. And it will free local government from central and regional control so that they can ensure services are delivered according to local needs.
It doesn’t make sense for local councils to have to fill in endless forms, to bid for this or that pot of money, or to seek clearance from central government for actions that you are well capable of deciding for yourselves. We are going to deal with that.
Okay - I know you have a packed schedule. So it just remains to me to thank you for listening and to wish you an enjoyable and productive day. I look forward to working with you all in the months and years to come.