Transport Insights

I’m not sure how much new news there is in the Guardian’s “exclusive” story today on the Lower Thames Crossing (LTC), which is a bit confused – to say the least – and is probably a bit exaggerated.

Citing “internal consultation documents”, the paper reports:

Ministers have stripped the government’s road-building agency of responsibility for a £10bn tunnel under the River Thames amid a drive by Keir Starmer’s cabinet to take tight control over important infrastructure projects for fear of cost overruns and delays.

It sounds very dramatic, but usually things in consultation documents haven’t happened yet.

Apparently oversight of the LTC “has been taken away from National Highways and handed to the Department for Transport (DfT)”, but:

It is understood that National Highways will remain responsible for the development of the crossing and will publish a breakdown of costs in its annual report, but decisions over the scope and funding of the project will be taken by ministers.

The article correctly describes the LTC as a “Tier One” infrastructure project. In fact the accounting officer’s assessment for the scheme states:

LTC falls under the Department’s definition of a Tier 1 Project and therefore adheres to control and governance arrangements within NH, DfT and HMT levels. Final approval of each stage of the business case is made by DfT and HMT ministers. Under its procurement delegations, NH would approve all other steps in the process.

So the DfT and Treasury have had control over the mega-project’s huge costs – expected to be well above £10bn – for a while.

We have also known for a while that the construction costs will not be coming out of the budget for the third road investment strategy (RIS 3) and probably won’t be paid by government in any case.

Ministers said earlier in the year that they are going to look for private finance – funded by tolls – to pay for the scheme.

There are a lot of basic facts wrong in the Guardian article. For example says ministers are searching “for a partner that could contribute as much as £2bn to the scheme”. But private finance could pay for a lot more than that – potentially the whole lot beyond the development costs.

The article also states:

The new Thames crossing has received final planning consent and secured £590m for early-stage excavation, surveys and consultations. In addition, the construction firm Balfour Beatty has landed a £1.2bn contract to build roads connecting to the tunnel.

In fact, three contracts have been awarded – one for the tunnel and two for the connecting roads on each side.

The £590m is also an underestimate for the money that the Treasury is currently stumping up to get the scheme off the ground, if not under the ground.

According to the National Infrastructure Strategy:

…with no legal challenges it can move forward at pace. The government is therefore providing £590 million of capital funding to progress work on the Lower Thames Crossing, in addition to the £250 million which was provided at Phase 1 of the Spending Review.

I can’t find contemporaneous reference to this £250m being allocated but the official Infrastructure Pipeline says it has £240m capital funding this year and £570 next year.