Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report:

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1. Submitting a Full Business Case in respect of first phase of the Bus Rapid Transit (BRT) scheme.

2) Issues Covered in Report:

2.1. Background to new funding sources for major transport schemes.

2.2. Development of BRT in South East Hampshire.

2.3. Benefits and risks associated with the first phase of the BRT scheme.

3) Recommendations:

3.1. That final approval be given to submit a Full Business Case to the Department for Transport/Department for Communities and Local Government by 31 October 2008 for the first phase of the proposed bus rapid transit scheme along the disused railway corridor between Fareham and Gosport and thereafter to report to Cabinet following the announcement by Department for Transport of the successful bids in February 2009.

3.2. That, in view of the timescales for implementation of the first phase of the proposed Bus Rapid Transit Scheme, delegated authority be given to the Director of Environment, in consultation with the Head of Corporate and Legal Services, to undertake an appropriate procurement process for the selection of contractors and consultants to work with the Council to develop the preparation and design of the Bus Rapid Transit Scheme, and thereafter, if appropriate, to retain them to implement the Scheme.

MAIN REPORT

1) Purpose of the Report:

1.1. To outline the position with regard to the range of significant new funding sources available for the development and delivery of major transport schemes.

1.2. To set out details of the development of the proposed South East Hampshire Bus Rapid Transit (BRT) scheme, which is in accordance with the previous Cabinet decision of 27 November 2006.

1.3. To seek approval to submit a Full Business Case to the Department for Transport/Department for Communities and Local Government (DfT/DCLG) by 31 October for the first phase of the proposed BRT scheme between Fareham and Gosport.

2) Introduction:

Funding of Major Transport Schemes

2.1. In order to fulfil the growth objectives and investment needs of both Hampshire and the sub-region in line with the requirements of the South East Plan, major transport infrastructure improvements are essential. There are now a variety of newly available public sector funding sources which can be tapped into in order to fund major transport schemes. The new funding sources are linked to regionally significant housing and economic growth, and are in addition to the Regional Funding Allocation (RFA) process which prioritises transport schemes on a regional basis.

2.2. Despite the creation of a number of new initiatives, public funding for the development and implementation of transport schemes is still scarce and therefore schemes need to be prioritised in terms of their justification, feasibility and deliverability. Often local authorities are required to respond very quickly as and when funding packages become available and in submitting bids have to meet detailed and complex criteria. Therefore, it is necessary not only to prioritise individual schemes but also to investigate the practicalities and affordability of putting in place a funding strategy for their development needs.

South East Hampshire Bus Rapid Transit Scheme

2.3. The major transport schemes that have been prioritised in Hampshire include those which meet sub-regional as well as local objectives. As such they all assist in facilitating development and supporting economic growth. The proposed BRT scheme is a major priority in South East Hampshire. This report highlights its development and the relevant funding issues leading to the preparation of a Full Business Case for submission to the DfT/DCLG by 31 October 2008.

3) Funding of Major Transport Schemes:

3.1. The funding sources and bidding mechanisms for the delivery of major transport schemes have changed significantly over recent years and become more fragmented. In the past, bids for schemes costing over £5 million were submitted to the Department for Transport. There is now an ever expanding range of funding streams with different national or regional origins directed at specific objectives such as housing development or transport innovation.

3.2. While some of these bids are announced at short notice with very tight bid timetables they inevitably require detailed information on scheme details and financial performance. As a result the level of appraisal work required to secure public sector funding has become more intensive, time consuming and costly, and therefore the approach to funding and undertaking this development work also needs to be reviewed. Whilst there is no doubt the opportunities for obtaining public funding on a large scale are increasing, the Council's capacity and therefore ability to take advantage of these opportunities is becoming severely stretched as the required bids become more complex and time limited. There is then a strong case for the County Council to invest in both preparatory work to provide detailed information for major schemes likely to be strong candidates for these funds and also in the evidence which demonstrates how the specific schemes fit within the overall strategy for the area.

3.3. The following are examples of the numerous public and private funding sources which can now be used to support the delivery of major transport schemes. Public sources include the Regional Funding Allocation; the Transport Innovation Fund; the Community Infrastructure Fund; the Regional Infrastructure Fund; New Growth Point Funding and the more traditional Local Transport Plan funding. Private sector funding includes Developer Funding; The proposed Community Infrastructure Levy; Leverage Funding; Private Finance Initiatives and Joint Venture Agreements. These sources are detailed in the appendix.

3.4. All bids accepted for public funding sources are required at the very least to show that they represent good value for money and perform better than alternative strategies and schemes for the sub region/local area. The process is also competitive and therefore they will need to out-perform submitted schemes from other local authorities and/or regions.

3.5. Once schemes have been identified then detailed design and appraisal work is required in order to justify the scheme based upon a fairly generic approach in respective key areas but also based upon the specific rules applying to the funding source. The scheme design work is usually required to at least preliminary level. Detailed appraisals are fairly onerous and usually involve external consultants in order to provide specialist advice not readily available through the Council's in-house resources. Appraisal work includes Traffic Impact work based upon a robust traffic modelled evidence base and forecast analysis; Environmental Impact work which includes analysis of 13 key areas including ecology, hydrology, noise, air quality, archaeology, etc with in-depth studies required for key areas dependent upon the scale and location of the proposed scheme; Sustainability Appraisal work; Economic Impact work; Identification of Third party land requirements; Operational/Multi-modal analysis for public transport related schemes such as the BRT scheme; Cost Benefit Analysis culminating in the preparation of a Full Business Case.

3.6. The required significant level of appraisal work needs to be sufficiently robust to form an evidence base for potential Public Inquiries which are often necessary for major transport schemes. The appraisals are costly and also time-consuming and can take several years to develop. At present the development of just one major transport scheme for bidding creates a great strain on the transportation budget and associated design resources. The timescale for scheme development is a key determinant in why it is essential to have a prioritised list of schemes identified and developed to a certain state of readiness in order that the new funding sources which often materialise in shorter timeframes can be tapped into.

3.7. The studies into potential schemes for South Hampshire are listed in 4.5 (i) below and include the BRT scheme; access to the South Hampshire Strategic Employment Zone and Strategic Development sites as key major transport schemes. There is a great deal more work to do in South Hampshire in terms of individual schemes, and how it fits with Government proposals for motorways and the rail network. In relation to the rest of Hampshire a transport model is being developed for Basingstoke to look at the transport requirements associated with development scenarios in this growth area. Scheme development work will be needed to prepare appropriate bids as part of the development plan. In other parts of the County the justification for major infrastructure investment in transport is less pressing and unlikely to secure major scheme funding at this time.

4) South East Hampshire Bus Rapid Transit Scheme:

4.1. The report now focuses on the origins and subsequent progress of the development work in respect of the South East Hampshire BRT scheme.

4.2. Following the decision of the Government not to fund the proposed South Hampshire Rapid Transit (SHRT) scheme, on 27 November 2006 the Cabinet agreed:

(i) that the promoters of South Hampshire Rapid Transit (SHRT) formally abandon the scheme following the Secretary of State's decision not to provide funding;

(ii) that the former railway alignment and connecting route between Gosport and Fareham be safeguarded for use as a transport corridor;

(iii) that the County Council completes the purchase by agreement of the former railway line between Fareham and Holbrook to protect it for its future use as a public transport link; and

(iv) that work proceeds on developing options for an affordable transit system for South East Hampshire including Fareham, Gosport and Portsmouth.

Following this decision all elements of the decision have been actioned. On 15 September 2008, The Executive Member for Environment approved an allocation of £600,000 from within the approved 2008/09 Transport Capital Programme for the preparation of the Business Case for the first phase of the BRT scheme.

4.3. The partnership Transport for South Hampshire (TfSH) was established in October 2007 as a delivery agency for South Hampshire to promote the sub-regional transport agenda, implement transport schemes of a sub-regional nature and lobby and/or influence on all other associated aspects within the TfSH Area.

4.4. In order to formalise the governance arrangements of TfSH the County Council, Portsmouth City Council and Southampton City Council entered into a Joint Management Agreement dated 3 June 2008 with the intention of codifying the governance arrangements for TfSH. The Agreement records the intentions of the three parties to work together as partners within local government legislation in a common way to achieve shared objectives. The Agreement does not form nor infer any legal partnership of the three authorities for the purposes of the Partnership Act 1890.

4.5. On 17 October 2008 the Joint Management Committee of TfSH resolved to appoint the County Council as `Lead Authority' on all aspects relating to the first phase of the BRT Scheme, and furthermore to approve the submission of the Full Business Case, subject to final approval by the County Council. The appointment as `Lead Authority' provides the County Council with full authority and power to act within the scope of its roles and responsibilities laid out within the Joint Management Agreement on behalf of TfSH for the purpose of doing the activities agreed by TfSH as Lead Authority. Providing the County Council acts within the scope of the resolution given by the Joint Committee no further consent and/or approval from the Joint Committee will be required.

(i) following the consideration and validation of those schemes deemed as having the greatest prospect of attracting public funding, an indicative investment programme for South Hampshire for the period 2009-26 was established. This was approved by the Transport for South Hampshire Joint Committee on 14 April 2008 as part of the 'Towards Delivery' Statement, and sets out those packages and schemes which may be suitable for regional support.

Eight packages of interventions were assembled for submission in 2008 to the Regional Funding Allocation Refresh for prioritisation at a regional level for funding:

- Access to the sub-region

- Eastern access to Southampton (including the North/North East Hedge End SDA)

- Access in South East Hampshire including the North Fareham SDA (this package includes the BRT scheme)

- Access to the South Hampshire Strategic Employment Zone and associated rail improvement

- Access to Tipner

- Strategic Traffic Management

- Developing the Evidence Base

- Schemes identified through the LDF process.

4.6. Work has taken place to identify initial feasibility options for a viable, integrated public transport system in South East Hampshire. A range of public transport options have been considered taking into account compliance with the South East Plan; value for money; deliverability; ability to unlock housing growth; the potential to improve economic competitiveness and the need to address the accessibility issues in Gosport and Portsmouth. The transport options were considered in the context of the need to achieve the following key objectives:

(i) to provide a high specification, innovative, frequent, reliable, rapid bus service as an alternative form of transport to the private car in South East Hampshire; and

(ii) to connect key towns and existing key destinations and transport interchanges in the area, including Gosport, Fareham, Portsmouth, the Queen Alexandra Hospital, Port Solent, Havant, Waterlooville, Segensworth and Whiteley, with proposed new development sites including North Fareham Strategic Development Area and Tipner and the existing transport asset, namely the A3 Zip Priority Corridor.

4.7. The BRT scheme has been identified as the scheme most likely to meet the criteria identified above as part of the wider investment programme. Feasibility studies have been targeted at providing a BRT system involving an extensive network of high quality routes and services which will offer local residents substantially improved public transport services and provide easier access to employment, shopping, education, healthcare and other major destinations.

4.8. Figure 1 attached to this report identifies a broad route network for the whole BRT scheme covering South East Hampshire. Being a bus-based scheme it has the advantage of being able to combine on-street and off-street running. Figure 2 also attached to this report details the first phase of the system which will connect Gosport to Fareham via the disused railway corridor, providing passengers with the ability to avoid the adverse effects of traffic congestion and delays along the A32 and Quay Street Roundabout. It is anticipated that the majority of the remainder of the overall scheme will be on-street taking advantage of priority measures where appropriate and potentially a section of hard shoulder running along the motorway, subject to further evaluation and the necessary approvals with the Highways Agency.

4.9. The first phase of the BRT scheme will provide a dedicated busway, for use by high quality buses. The busway will be connected to the existing highway at appropriate points along the route, taking into account existing bus routes and residential areas and the potential to link in new services. Links with the existing highway network are likely to be signal controlled. Stops with quality waiting facilities will be provided at approximately six points along the route. It is intended that the buses will be high specification, environmentally friendly, single-deck vehicles that are about 12 metres long, and it is expected that the BRT services will operate at similar times to existing bus services.

5) Funding and Delivering BRT:

5.1. The BRT scheme has the benefit of being able to be progressed incrementally and therefore development and delivery will be phased to maximise the availability of both public and private sector funding and other opportunities as they arise. Initial outline cost estimates for an overall scheme indicate that at least £175 million will be required to deliver this major transport project in its entirety.

5.2. An Expression of Interest (supported by GOSE, DfT, SEEDA and SEERA) was submitted in April 2008 by TfSH, for £20 million of Community Infrastructure Funding (CIF) to deliver the first phase of the scheme. This first phase focuses on the Fareham Gosport section of the network comprising the delivery of an off-road bus way along the section of the disused railway line between Redland Lane in Fareham and Tichborne Way in Gosport and as such will begin to address existing problems related to accessibility and congestion. This bid was short-listed by the Government in July 2008 and subsequently TfSH was invited to submit a Full Business Case proposal by 31 October 2008.

5.3. Further key milestones can be summarised as follows:

Submission of Full Business Case 31 October 2008

Government decision on CIF award February 2009

Pre-application public consultation March 2009

Planning Application submission May 2009

Planning Application decision September 2009

Tender process Jun 2009-Feb 2010

5.4. At the Joint Management Committee of TfSH on 17 October 2008 approval was given for the bid to be paid direct to the County Council as `Lead Authority' for the first phase of the BRT scheme.

5.5. TfSH has also submitted a separate funding bid of £72 million to the South East Regional Funding Allocation for the period 2016-18 to support the development and delivery of further phases of this major scheme.

6) South East Hampshire Bus Rapid Transit Full Business Case

6.1 The Business Case has been prepared in a format so that it complies with CIF Round 2 Full Business Case Guidance issued by the DfT in August 2008. It makes a good case for the development of a bus rapid transit scheme and that the award of £20 million of CIF funding is essential to enable the first phase of the scheme to proceed.

6.2 This requires that the scheme is described in terms of how it fits within the overall public transport strategy for the South East Hampshire area, details of the strategic setting and content of the scheme and the problems and issues it is seeking to address and what alternatives were considered.

6.3 The Business Case also describes the governance arrangements for the scheme, the structure for delivering it and details the partnership arrangements.

6.4 Of particular importance is the section dealing with monetised costs and Benefits to Cost Ratio (BCR). The calculated BCR is considered to represent good value for a public transport scheme of this type. This monetary value assessment has been carried out for this first phase of the scheme in isolation. It is important to recognise that this is part of a much wider BRT network which as it is developed will contribute to even greater benefits for the South East Hampshire area.

6.5 The Government's "New Approach to Appraisal" (NATA) sets out the principles which are to be used in the assessment of all transport schemes which in broad terms requires an assessment against the five core Government objectives for transport, eg:

(i) environment;

(ii) safety;

(iii) economy;

(iv) accessibility;

(v) integration.

6.6 The Business Case demonstrates that the first phase of the BRT scheme contributes to a greater or lesser extent to each of these objectives resulting in an overall beneficial impact.

6.7 A significant part of the Business Case relates to Risk Assessment. A comprehensive Risk Review Assessment has been undertaken and a Risk Register prepared. The principle risks identified relate to:

(i) meeting the programme;

(ii) design and information requirements;

(iii) construction arrangements and impacts;

(iv) costings;

(v) impact on the existing highway network;

(vi) objections to the scheme.

6.8 Tasks to be undertaken as part of a Response Plan to address and mitigate the identified risks are identified in the Risk Register. The key response tasks involve:

(i) early and effective communication and liaison with the Client, Statutory Undertakers and other key stakeholders

(ii) early more detailed site investigations as part of detailed design

(iii) an effective consultation strategy

(iv) clear methods for addressing statutory processes

(v) adequate construction supervision and management.

6.9 The risks and costings will be regularly reviewed and updated during detailed design and construction, with formal reviews at key stages. This information will form part of the report to Cabinet in February 2009 detailing the outcome of this Business Case submission.

7) Key Issues:

7.1. Scheme Benefits

(i) due to the nature of the BRT scheme and the deliverables identified below the key advantage of this scheme is that it will enable TfSH on behalf of the County Council to tap into a significant source of funding which otherwise would not be available. If successful the bid for CIF funding will secure £20 million additional grant funding to the existing capital programme.

(ii) improvements to the public transport network remain essential in South East Hampshire. The highway network is constrained by geographical location, existing infrastructure, restricted access and egress, peak hour capacity problems and lack of viable opportunities to improve the situation. In addition it is recognised that improvements are urgently required in order for planned growth to take place and also to adequately cater for existing and additional travel demand. BRT will help reduce traffic flows on routes into and out of the capacity restrained Gosport Peninsula and Portsea Island.

(iii) the BRT scheme will assist in increasing the economic competitiveness in South Hampshire. The scheme will improve access to existing and proposed employment sites particularly at North Fareham, Gosport Waterfront as well as town and city centre areas.

(iv) ultimately the BRT scheme will directly benefit 100,000 households (230,000 people) who currently live within 1 kilometre of the proposed wider scheme, by providing a viable, alternative means of transport to the car. A further 28,000 dwellings are planned to have been built along the route by 2026 (including 10,000 dwellings at the North of Fareham Strategic Development Area), bringing over 250,000 people within a 10 minute walk distance of the route.

(v) South Hampshire Bus Operators Association (SHBOA) are offering support from an operational side for the project in terms of both the early phases and the wider scheme and are keen to help deliver a high specification service to meet the existing and predicted demand from the local market. A quality standards threshold for subsequent use by operators will be set.

(vi) the BRT scheme will improve public transport access to tertiary education and health services in particular it will provide direct access to the Queen Alexandra Hospital.

(vii) the BRT scheme can be developed and implemented in a phased manner as and when funding opportunities arise.

(viii) the BRT scheme will provide public transport access to both proposed employment and housing development and is significant in transport infrastructure terms on a sub-regional scale hence it has the ability to attract money from different funding sources e.g. CIF (Community Infrastructure Fund) directly related to unlocking housing growth, NGP (New Growth Point) funding from DCLG to growth areas and RFA (Regional Funding Allocation) via approval from the Regional Transport Board.

7.2. Key BRT Scheme Risks

Whilst there are many benefits relating to such a project, and mitigation can be employed to minimise risks it is important to highlight key areas as follows:

(i) Legal, Planning and Governance -

a. The County Council will be acting as lead Authority for the first phase of the BRT scheme. To indemnify the County Council in respect of any potential actions claims proceedings arising out of or in connection with or incidental to the County Council acting as Lead Authority in terms of its financial, contractual and or tortuous liabilities the County Council will need to negotiate side agreements with Southampton City Council and Portsmouth City Council to mitigate any risks to the County Council.

b. A Planning Application will be made in accordance with Regulation 3 of the Town and Country Planning General Regulations 1992 Act (as amended). A Transport and Works Act Order is not appropriate for an unguided bus scheme. This approach has been discussed with and is supported by Gosport Borough Council and Fareham Borough Council as the respective local planning authorities.

c. In the absence of a confirmed Compulsory Purchase Order (CPO) the ability to acquire all third party interests, including any possessory titles, by agreement and within project timescales cannot be guaranteed. Furthermore until the full extent of the scheme is identified and the route is cleared of vegetation and growth it is impossible to definitely state whether a CPO will have to be obtained. To avoid any delays and to minimise any potential risks to the County Council the CPO process will therefore be commenced at the same time as the Planning Application is submitted to the County Council. However even if land can be acquired by way of legal agreement it is highly probable that a CPO will still be applied for to secure the land. In the event any negotiations proved unsuccessful and agreement not reached, then the County Council would still be able to secure ownership of the land as secured in the CPO and time would have not been lost.

d. It would appear that some land to be acquired may be open space, and if that is indeed the case that will have additional legal time consequences.

If objections are raised in respect of any of the above matters then this would represent a major risk to the delivery programme being constructed and completed within the required timescale.

(ii) Financial - There are a number of financial risks relating to the early phases in particular:

a. Current advice specifies that the CIF funding if awarded will only be available until March 2011. If the delivery programme runs over this deadline there maybe a potential liability to the County Council. Work is currently progressing to identify how any potential financial shortfall and therefore liability to the Council as a result of not completing the project by March 2011 can be resolved by being able to access additional public funding sources, such as RFA underspend and the possible realignment of PUSH NGP capital funds.

b. In addition if the BRT scheme costs were to escalate and exceed the award value of £20 million, then again there may be a potential financial liability to the Council in meeting any shortfall.

c. It is essential that further preparatory legal and development works continue following the submission of the Full Business Case in October and the planned announcement of successful bids in February 2009. It should be recognised that the cost of such work will be at risk until the planned announcement of successful bids which is due in February 2009, from which time 50% of scheme development costs incurred can be reclaimed from Government.

d. It is highly likely that there may be compensatory claims pursuant to Part 1 of the Land Compensation Act 1973 arising from the use (but not the construction) of the BRT scheme works. These claims may be in respect of the noise, vibration, smell, fumes, smoke, artificial lightning and/or the discharge of any solid or liquid substance. However no claim can be made until one year after the BRT scheme has been opened but claims may be received for up to seven years from completion of the works. This aspect potentially has significant financial implications but cannot be included as part of, the CIF 2 allocation.

e. If a CPO is obtained there may be additional compensation claims from owners of property subject to the CPO seeking the loss in value of their homes and additionally, any reasonable expenses or losses to a trade or business incurred as a direct result of the CPO.

f. In addition to the above it is possible that there may be compensation claims in respect of planning blight.

(iii) Programming and Resource Management - ongoing work is taking place to finalise a delivery programme which is achievable and is in accordance with DCLG requirements. This again will be informed by the ongoing discussions with DCLG and DfT as referred to earlier in this report. In order that the BRT scheme can be progressed it is essential that adequate resources are in place to ensure all work streams are progressed in accordance with scheme timetables.

A further report to Cabinet will follow in respect of the more detailed implications and financial consequences of the delivery of the BRT scheme, to include the approval of Cabinet of the submission of the Regulation 3 Planning Application, and the entering into of the necessary side agreements to regularise the identified risks and liabilities to the County Council.

8) Progress:

8.1. Design - Engineering design is being progressed for the first phase of the BRT scheme along the disused railway corridor, concentrating upon the interfaces with the existing highway network, services, public utilities and drainage aspects. It is likely that the scheme will commence at the junction with Redlands Lane and continue south along the disused railway corridor as far as Tichborne Way. Design work and cost estimates are underway to define these issues. Site clearance is required to enable topographical and geotechnical surveys to be undertaken to inform the design process, this work cannot be undertaken until the completion of ecological surveys in the autumn and timing will need to be agreed to fit in with track removal.

8.2. Traffic - The necessary traffic appraisal process requires robust traffic modelling to enable forecasting and option testing to be undertaken. This work informed the Traffic Appraisal for the Full Business Case and also provided the data required for cost benefit analysis and noise calculations. The work was required for the submission of the Full Business Case on 31 October, however further modelling and traffic appraisal work will be required to support the Planning Application in spring 2009.

8.3. Environment - Environmental issues have been covered as part of the Full Business Case work. A Full EIA is unlikely to be required for the early phases of BRT and Screening is underway to identify with statutory bodies what aspects should be covered to accompany the Planning Application. Current guidance suggests that an Appropriate Assessment will be required with reference to the Portsmouth Harbour Special Protection Area; however this is unlikely to be an issue due to the limited impact on the reasons for designation. Ecological surveys have been completed.

8.4. Operational - South Hampshire Bus Operators Association are providing impartial advice throughout the project development and design process and fully support the scheme. Operational Design work on the wider scheme is also underway. The remit includes linking BRT in with numerous strategic development projects including Tipner, QA hospital, Fareham SDA etc. Close liaison with Borough and City Councils will form part of this study.

8.5. Marketing and Consultation - Public consultation on the scheme was held on 16/17/18 October 2008 to gauge public support and to identify any specific issues that may need addressing. The feedback from this initial consultation will be orally reported at this meeting. Marketing and branding work has been commissioned for the wider BRT project and the development of a premium image is seen as a priority. This work informed the public consultation that took place in October and also included E-consultation and web-communication.

8.6. Programme - detailed work has been undertaken in order to compress the construction period as much as possible whilst taking full notice of due processes (planning, CPO, procurement, etc) and potential risks.

8.7. An estimate of October 2011 to complete construction has been the basis of the full business case. However, if an early decision from DCLG happened and early contractor engagement was possible, then the construction end date would be earlier in 2011.

9) Outline of Options for the BRT Scheme First Phase:

9.1. A full range of scheme options has been considered over recent years including: heavy rail, trams or light rapid transit, trolley buses; guided buses, off-street bus corridors; on-street bus priority; improved conventional bus services and the do nothing option.

9.2. The viability of heavy rail, trams or light rapid transit, trolley buses and guided buses have been discounted in terms of deliverability due to significant cost and risk issues and also the fact that proposals for SHRT were formally abandoned in November 2006, following the Secretary of State's decision not to provide funding. Off-street bus corridors are also discounted in terms of the wider network due to limited opportunities however are put forward for the disused railway corridor from Gosport to Fareham.

9.3. On the basis of a consideration of possible options for an integrated public transport system for South East Hampshire, a rapid bus transit scheme, primarily based on-street together with an off-street bus priority corridor in the Gosport Peninsula along the disused railway corridor, has been identified as the preferred way forward.

9.4. Option 1:

a) Proposals for a high specification BRT scheme are now being progressed as the preferred solution to improve access to and from the Gosport and Portsmouth Peninsulas.

9.5. Option 2:

a) Quality Bus Partnership proposals for access to the Peninsulas will be progressed in tandem with the BRT proposal where appropriate but are not being progressed as the priority option as these measures will not secure the journey time savings or potential benefits of the proposed off and on-road BRT.

10) Conclusions:

10.1 In order to fulfil the growth objectives and investment needs of both Hampshire and the sub-region in line with the requirements of the South East Plan, major transport infrastructure improvements are essential. Whilst the range of funding options for the development and delivery of major transport infrastructure improvements have increased significantly over recent years the bidding process to unlock these funds has become more intensive and competitive. To take advantage of the various new and significant funding sources and maximise all opportunities, a new approach to prioritising and developing multiple major schemes to an agreed state of readiness in a managed way needs to be put in place. Such an approach would be used to ensure the County Council has the capacity to both commission and carry out any necessary studies and modelling exercises, as necessary.

10.2 The availability of the Community Infrastructure Funding has allowed for an opportunistic submission of a Business Case for £20 million of additional external funding. Although the overall scheme will need to be developed incrementally as funding opportunities arise and there are inevitably risks associated with developing such a major project these need to be countered against the potential regional benefits that can be accrued from investment at this scale. If successful the bid will provide the ability for significant capital investment over and above that which can be secured via more traditional funding sources. This report seeks approval to submit the Full Business Case for the first phase of the BRT Scheme.

11) Recommendations:

11.1. Please see the Executive Summary for the recommendations.

1799Rpt/315/KAW

CORPORATE OR LEGAL INFORMATION:

IMPACT ASSESSMENTS:

(i) Equalities Impact Assessment

Amendment of the Race Relations (Amendment) Act has been considered

in the development of this scheme. No adverse impact has been identified

in terms on race, creed or gender.

(ii) Impact on Crime and Disorder

The provisions have no impact on crime and disorder.

Appendix

POTENTIAL FUNDING SOURCES FOR MAJOR TRANSPORT SCHEMES

Public Funding

1. Funding for roads of `national' significance, eg M3 motorway

Improvements to the Strategic Road Network (SRN) are funded by the Department for Transport and administered by the Highways Agency. There has been very little involvement from the County Council in such schemes in the past, other than the interfaces with the local highway network, but closer consultation in South Hampshire is likely in the future with the signing of the Multi-Area Agreement (MAA) and the Memorandum of Understanding.

2. National Rail Schemes

National Rail Schemes are Government funded through Network Rail via the Department for Transport (Rail), formerly the Strategic Rail Authority (SRA). Again in the past there has been very little direct involvement from the County Council, other than as joint projects at railway stations. This could change in the future with closer partnership working.

3. Regional Funding Allocation

The RFA is a process managed at a regional level that determines which interventions will be funded from the resources available. It requires authorities to submit proposals that meet regional criteria including their contribution to enabling access to a sub-region, enabling strategic development identified in the SEP and maintaining economic competitiveness.

For the South-East Region the allocation is for £150 million per year, as part of an ongoing programme covering transport schemes (highways and public transport) for regional, national and local roads. The allocation is determined by the Minister following advice from the Regional Transport Board which is administered by SEERA. This allocation is fully allocated up until 2016.

Hampshire County Council and Transport for South Hampshire made bids for this funding for schemes which can readily be developed to demonstrate a good business case and projects to the value of approx. £64 million have been accepted in South Hampshire for the period 2014-16. Bids have also been submitted for 2016-18 for South Hampshire and Basingstoke growth areas.

4. Transport Innovation Fund (TIF)

The Transport Innovation Fund is essentially for innovative; usually management related schemes and the latest round are very much directed towards road charging. Although the County Council has not bid for this fund, funding has been secured for a project led by SEEDA for rail gauge enhancement between Southampton and the West Midlands which will enable larger containers to travel by rail on this route.

5. Community Infrastructure Fund (CIF) - Round 2 - 2008-11

This fund is for transport schemes which directly support housing growth. There is a total of £200 million available nationally in this round (plus £100 million for Thames Gateway). Schemes have to show a good economic case and be deliverable by March 2011. Transport for South Hampshire has bid for £20 million from this pot to deliver a first phase of the Bus Rapid Transit project in South East Hampshire. Bus Rapid Transit was short-listed for funding in July 2008 and an invitation was received to submit a full business case in October which will determine whether or not the scheme can be supported.

6. Regional Infrastructure Fund (RIF)

The Regional Assembly and SEEDA have been developing a proposal that will see the establishment of a Regional Infrastructure Fund. The primary purpose of the RIF is to facilitate the timely provision of regionally or sub-regionally significant infrastructure that supports the delivery of planned growth as set out in the South East Plan and the Regional Economic Strategy. The RIF is not about supporting delivery of infrastructure which can be secured through traditional funding mechanisms. The RIF will focus on bridging the gap in situations where the cost of infrastructure will ultimately be met, either in full or in part, through private sector contributions but where the availability of those contributions is itself dependent upon development taking place. In other words the RIF is a pump priming fund, through which the public sector forward funds the delivery or infrastructure, the cost of which is then recovered from the private sector.

7. New Growth Point (NGP)

New Growth Point funding is again linked to housing and development but is smaller in scale. The funding is allocated by the Department of Communities and Local Government to provide infrastructure and enable the implementation of new residential and economic development. In South Hampshire, this fund is distributed via the Partnership for Urban South Hampshire.

8. Local Transport Plan (LTP) funding

Local Transport Plan funding involves annual capital allocations awarded by the government to highway authorities. The County Council receives about £13 million per year for integrated transport and a similar amount for structural highway maintenance. Due to government restrictions on the funding provided for certain authorities including Hampshire, only a proportion of the integrated transport capital is currently available for use. This funding is used for the County Council's Transport Capital Programme for schemes costing less than 5 million and includes the casualty reduction, traffic management and minor works programmes. LTP funding is insufficient to deliver major transport schemes which by definition cost more than £5 million.

Private Funding

1. Developer Funding

Developers' contributions fund schemes identified in the Transport Capital Programme, or schemes relation to development.

Funding is collected via section 106 agreements to mitigate the effects of a development on the transport network, sometimes for specific schemes and sometimes for packages or by way of a contribution to a transport strategy.

Where required, developers provide works on the highway through section 278 agreements and also construct on site transport works within their developments which are usually adopted as public highway in due course if they are to the required standard.

2. Community Infrastructure Levy (CIL)

The proposal for a Community Infrastructure Levy (CIL) has been prepared by DCLG. The regulations implementing it are currently going through Parliament and will not come into force before spring 2009. It will be a new charge which local authorities will be empowered but not required to implement. It will cover most types of new development, with very few exemptions, and will be based on simple formulae which relates to the size and character of the development paying it. The proceeds will be spent on local and sub-regional infrastructure to support the development of the area.

It will supplement and be additional to existing government funding sources. CIL may only be spent on the infrastructure needs of the development and not to remedy existing deficiencies. "Infrastructure" can include transport, schools, health centres, flood defences, parks etc. It will also be targeted at sub-regional large pieces of infrastructure benefiting more than one local authority who can work together to pool contributions.

3. Leverage Funding

It would also be possible to raise funding through the City financial institutions by establishing investor confidence in South Hampshire, offering an attractive rate of return with a sound strategy that provided an income stream.

4. The possibility of raising revenue through a supplementary business rate is gaining momentum in the UK, having been applied in Europe for some years. This would gather relatively small taxes across the sub-region which in combination could be directed towards capital schemes or revenue costs for transport initiatives such as travel planning or public transport support.

5. Major Private Sector Companies and Private Finance Initiatives (PFI) can be developed for sufficiently large projects but will be specific to the project in question.