Government funds best spent on roads not water, says haulage association

Business Editor, Sunday Herald

Sunday 10 June 2012

The body representing Scotland's haulage industry has criticised the Scottish Government's decision to divert a £50 million Treasury grant to scheduled infrastructure upgrades by Scottish Water rather than to its own list of economy-boosting "shovel-ready" upgrades of key Scottish roads.

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Transfer of £50m grant to water infrastructure projects attacked By Colin Donald

Phil Flanders, Scotland director of the Road Haulage Association, said upgrading key trunk routes listed by the Scottish Government would deliver more "bang for the buck" for the economy than spending on already well-funded Scottish Water.

Flanders told the Sunday Herald: "With the shortage of money at the moment we have to be realistic, but we would like to see the majority of major roads brought up to a decent standard. The [shovel-ready] road upgrades identified by the Scottish Government are the trade routes that freight moves on, often to and from our ports."Investment in roads would deliver more bang for the buck. We need better freight transport links, better links for communities, and also better roads to encourage tourism in Scotland." In February, The Herald newspaper revealed that the £50m "ring-fenced" by Chancellor George Osborne in the 2011 autumn statement for the Scottish sleeper rolling stock upgrade, intended to be matched by Scottish Government funds, had been loaned to Scottish Water pending a consultation on potential improvements to the Inverness-London service. The unannounced re-allocation of the funds was described by opposition parties at the time as "lacking transparency."Cabinet Secretary for Finance John Swinney told the Scottish Parliament: "The mechanism that I chose for deploying the resources enabled me to have the flexibility to draw the resources back out, given the overall financial commitments that the Government has given to Scottish Water over a five-year period. [It] enables me to ensure, without question, that the resources can be deployed for the Caledonian sleeper service when they are required." However, Scottish Water confirmed last week that the full £50m amount would not be fully repayable until the 2014-15 financial year, despite Swinney's claim of "flexibility" on deployment of the funds. The Scottish Government said last week that "as anyone involved in the rail industry knows - rolling stock improvements cannot happen overnight" and the sleeper funds would not be required "for a number of years".In a statement in March, the Scottish Government said its "shovel-ready wish list" included "valuable projects, that will boost the economy, provide work [and] are ripe for investment now".The statement added: "If these projects got under way this year, rather than being delayed, they would generate significant employment impacts."Asked in the Scottish Parliament on March 14 if the Scottish Government had sought guidance from HM Treasury whether the windfall could be used to fund shovel-ready projects, Swinney replied "No". The Scottish Government has repeatedly demanded that the UK Government releases extra funds to finance a £300m wish list of "shovel-ready" projects, which also includes schools and tourism facilities, following discussions with Prime Minister David Cameron. Gavin Brown MSP, a Scottish Conservative member of the Scottish Parliament's finance committee said: "The Scottish Government has made great play of their shovel-ready projects proposal. They were given £50m by the UK Government but failed even to ask the UK Government if the money could be spent on shovel-ready projects. The money, instead, was loaned to Scottish Water despite previously stating that Scottish Water did not need additional funds this year. This was a missed opportunity."David Lonsdale, assistant director of CBI Scotland, said: "If the Scottish Government feels these road projects are crucial to enhancing our economic prosperity, and if they are unable to winkle any extra money out of Westminster, then they ought to consider altering their spending plans accordingly to fund them, or possibly add them to their existing £2.5bn not-for-profit distribution programme."A Scottish Government spokesman said: "The Treasury stipulated the conditions for use of this money and that it was specifically for the sleeper services so could not be spent on shovel ready projects. Instead, the UK Treasury should act now and provide the £300m funding to let these projects go ahead now."Asked if Scottish Government civil servants had specifically asked HM Treasury colleagues whether the funds could be used for "shovel-ready" projects as well as for water infrastructure, the spokesman declined to answer, saying: "SW was the best option available to ministers as it would allow them to accelerate some infrastructure development and for ministers to be guaranteed that the funds could be repaid as and when they are needed for the sleeper."

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Government funds best spent on roads not water, says haulage association

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