Tag: privatisation

• What could possibly go wrong?

  I’ve been looking at the Final stage Impact Assessment of the Highways (Financing) Bill published by the Lower Thames Crossing (LTC) team at the Department for Transport (DfT), which obviously tries to big up the legislation, but also flags a few pretty obvious risks.

  The LTC appears in the assessment as an example of how the mechanism of a Regulated Asset Base (RAB) model might get private money to build highways infrastructure in exchange for (toll) revenue and how some highways infrastructure might be handed over to a private entity.

  The section on Risks, unintended consequences and assumptions sets out a few things that might go wrong, all quite likely and very good reasons not to deploy the model.

  The section on Risk of higher road user charges sets out the basic model:

  Under the RAB model, the regulated company (RegCo) is entitled to recover efficiently incurred capital and operational expenditures associated with the asset. In addition, the framework can allow for the RegCo to recover costs that would not typically arise under conventional public delivery, such as private financing costs, transaction and administration costs, and, depending on the licence and transaction, certain tax costs. These costs would be recovered by Road User Charges (RUCs) and associated revenue mechanisms.

  So already there are additional costs, with the obvious consequence:

  As a result, there is a risk that charges could be higher, or structured differently, than those that might be set under a public delivery model.

  

  But its ok because:

  Regulatory oversight can provide cost incentives, prevent excessive charges, and ensure that RUCs remain proportionate over the life of the scheme.

  Note that the mitigation imports the word PR “ensure”, albeit attached to can, which makes it meaningless as a statement of certainty.

  There is also the risk of Private sector inefficiencies:

  (more…)

  2026.09.18

• No rethink: Burnham backs privatisation

  Contrary to (my) expectations, the Government has now published the Highways (Financing) Bill, which provides for even more public assets to be privatised, destroying Andy Burnham’s promise to be “relentless” in giving people “ownership and control”.

  I had thought that a very recent statement that the Bill would be published “when Parliamentary time allows” meant that it would not be appearing any time soon – or why make such a statement about a bill in the King’s Speech, but the Bill was in fact introduced to the House of Commons and given its First Reading yesterday with Second Reading on 15 October.

  

  Aside from setting up the private funding mechanism for building the Lower Thames Crossing, the Bill will facilitate the transfer of the Dartford Crossings – and their revenue – to the same private entity.

  It’s probably best to set this out in terms of the explanatory notes:

  The Highways (Financing) Bill (“the Bill”) establishes a statutory framework to enable private sector investment to construct, operate, maintain and improve new and existing strategic road infrastructure through a Regulated Asset Base (“RAB”) model and for private companies to act as a Highway Authority for that infrastructure.

  And, somewhat mealy-mouthed:

  The main provisions, needed to establish the RAB model, will:

  […]

  provide transfer schemes to allow property, rights and liabilities to be transferred between the Secretary of State strategic highways companies, licence holders and other appropriate persons in connection with the licensing regime established by the Act.

  Make no mistake: this is privatisation. And the notes make explicitly clear that the Government believes that giving away a public asset and its rights to collect tolls is “needed to establish the RAB model”.

  This means they don’t think they can get private finance to build the LTC without a huge amount of public funding being diverted from the DfT to a private body.

  By way of a reminder, the PM said last week:

  The government I lead will be relentless in giving people and places what they were promised 10 years ago, ownership and control.

  Not so relentless after all. It seems that Burnham is as happy to seen public assets privatised as Starmer and Reeves were.

  The obvious contradiction, the earlier failure to set a date for the Bill, and the qualification “at this stage” made me think that a rethink was being carried out. I was, it seems, very wrong.

  In fact, the DfT’s recent response is almost word-for-word what roads minister Simon Lightwood said in February.

  As a former PM once said, “nothing has changed”. Privatisation remains Labour policy.

  One response to “No rethink: Burnham backs privatisation”

  1. Is Burnham about to pull a U-turn on the runway? – Transport Insights

     25/09/2026

     […] another piece of climate-wrecking and unconvincingly justified transport infrastructure (the LTC), it turned out that ministers are (for now) going full steam […]

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  2026.09.11

• Is a Thames tunnel U-turn on the way?

  A response from the Department for Transport on the question of whether it is really going to privatise a major public asset as part of its plan for the Lower Thames Crossing (LTC) suggests that the penny has dropped that it is incompatible with Andy Burnham’s promise to give people more “ownership and control”.

  Officials have suddenly slipped the phrase “at this stage” into what otherwise appears to be a doubling down on the choice of the Regulated Asset Base (RAB) model, under which ownership and operations of the Dartford Crossings would transfer to a new regulated private sector entity.

  When you look at the scheme’s Accounting Officer Assessment, the choice of the RAB model looks pretty decisive:

  The project is affordable on the basis of the regulated asset base (RAB) model
  
  The decision that the LTC will be taken forward on the basis of the RAB model
  
  The RAB model is the only current option that is judged to sufficiently meet the government’s strategic objective
  
  The decision to … take forward the RAB model as the government’s preferred financing model

  As for as I can see, the DfT has not previously used “at this stage” when describing the financing model for the £10bn+ project.

  

  It has now:

  (more…)

  2026.09.10

• You’ve let the King down…

  I’m still awaiting a response from the Department for Transport as to whether it is still sold on the privatisation model for the Lower Thames Crossing (LTC), which delay may itself be significant, but in the meantime I have noticed something that brings the delay to the required legislation into sharper focus.

  Although inclusion on a King’s Speech doesn’t guarantee that a bill will be in the next session of Parliament, a letter in May from transport secretary Heidi Alexander to Transport Committee chair Ruth Cadbury explicitly said this one would be.

  Setting out “the Department for Transport’s legislative agenda for the second Parliamentary session, as set out in the King’s Speech”, Alexander wrote:

  The department will also be introducing two new pieces of legislation in the next session.

  […]
  
  Furthermore, our Highways (Financing) Bill will enable a new financing approach to fund large-scale road schemes, supporting the UK Government’s commitment to deliver a modern transport network that helps people get where they need more easily and safely.

  

  So when Lord (Peter) Hendy can only say that the Bill

  will be brought forward when Parliamentary time allows

  that’s a significant backtracking, suggesting either incompetence or a rethink.

  Meanwhile, an “independent” review of the Office of Road and Rail (ORR) looks at the expectation that it will be the regulator for the entity that will build and operate the LTC.

  (more…)

  2026.09.08