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Why short-term funding creates long term costs

With the battle of Brexit still dominating the headlines, one of the biggest revisions to local government funding is about to creep into action.

Effective from the 2019/ 2020 financial year, the Government will withdraw its Revenue Support Grant for local authorities and instead replace it with greater business rates retention.

According to the Local Government Association, this decision will cut funding for local services by £1.3 billion this year, at a time when many councils are already struggling to balance their books in the face of bankruptcy. To put it in perspective, the Financial Times reports that between 2015 and 2020 this will be a loss of 77p in every £1.

Whilst this will not impact on the delivery of new roads, which are covered by capital funding, it will impact on the ongoing upkeep and maintenance of existing roads, which receive a high proportion of funds from Revenue Support Grants.

Statutory services, such social services and adult social care (rightly) continue to be prioritised, but at the expense of others including bus routes, libraries and highways maintenance which are being stripped back or sacrificed to deliver savings.

Whilst the withdrawal of these services does not pose the same direct risks to health or wellbeing as statutory departments, they do have indirect repercussions. A reduction in bus routes can lead to social isolation; the loss of libraries can affect access to education and poorly maintained highways can cause harm to vehicles or worse still, human life.

So, with local authorities currently living hand-to-mouth with annual budgets, is it not time a more strategic approach was taken towards funding provision so councils themselves can operate more strategically? With long term funding provision, organisations could look beyond the next 12 months and deliver cost effective schemes that, although maybe more expensive to implement initially, will save money over time.

Jesse Norman, the Government’s Minister for Transport has been advocating more strategic funding opportunities for local authorities that replicate the approach taken to Highways England’s Road Investment Strategy. Launched in 2015, the initiative provides Highways England with £15 billion to invest in long term improvements along England’s motorways and trunk roads.

The availability of the funding has allowed Highways England to explore opportunities for new technology and sustainable approaches that it would not have previously been able to utilise – so much so that the Road Investment Strategy 2 is now in progress.

Earlier this month (March), the Chartered Institute of Highways and Transportation (CIHT) received the initial findings from its survey into ‘Improving Local Highways’ which showed:

  • 95 percent supported certainty of funding for a five-year period
  • 80 percent supported a roads fund for local highways network
  • 96 percent want to change the way utilities pay for maintenance of the network.

Figures by the CIHT showed that work by utilities companies reduced the life of the road by about 30 percent whilst a report by APSE (Association of Public Service Excellence) quoted figures by the Asphalt Industry Alliance suggesting that it can be 20 times more expensive to patch and mend than it is to undertake long lasting repairs.

A similar perspective on short versus long term funding regularly forms part of the conversation between Clearview and local authority road safety teams. When discussing new ideas on how to reduce accidents and deaths on local roads, the inevitable question of cost versus budget always rears its head. But when talking about saving lives – for which a price can’t be put on – this should not be a deciding factor, especially if there are solutions available with a proven return on investment over a longer term of operation.

An example of this problem can be seen when comparing retro-reflective road studs with our SolarLite Active Road Studs. Both products delineate the road. But whereas the retro-reflective studs rely upon a headlight beam to provide up to 90 metres of visibility, Clearview’s SolarLite Active Road Studs use an LED which can be seen up to 900 metres away. This can provide up to 10 times more visibility, and therefore up to 10 times more reaction time, SolarLite studs have been proven to reduce accidents by over 70 percent.

As well as offering greater visibility, the studs also have a longer operational lifespan of up to 10 years, compared to reflective studs which typically need to be replaced every two/ three years due to damage or diminished performance.

Although the costs of purchasing a SolarLite Active Road Stud is initially slightly higher than a retro-reflective stud, over their operational lifetime they are more cost effective than retro-reflective studs.

For a council looking to deliver value for money, solutions such as the SolarLite Active Road Stud should be the obvious choice. However, when faced with a limited annual budget that is unavailable to fulfil the need for basic repairs – let alone investment in long term solutions – councils enter a vicious circle of simply maintaining, rather than improving their highways.

With this is mind, surely it is time to break the cycle and provide local authorities with long term funding to deliver long term solutions? Such an approach has been used with Highways England and been deemed successful; so why is it not being replicated on a local scale?

Author: Jemma C |Date Published: March 2019

Links: Route Safety

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