Return to homepage

GOVERNMENT LOCAL AUTHORITY GRANTS
(Under Section 56 of the 1968 Transport Act)

Section 56 of the Transport Act 1968 allows the Minister of Transport to make a grant towards capital work for public transport. The Local Authorities are also empowered to do the same.

One of the main criteria for the awarding of such grants has been the 'non-user benefit' aspect. Bath is uniquely placed in this respect, as an electric tramway would:-

• Benefit the environment and buildings of Bath which suffer particularly badly from pollution by traffic fumes.
• Enhance the tourist industry with a cleaner, quieter ambience.
• Unlock the full potential of the Western Riverside and other sites which are at present held back from development by transport problems.

The wording of 'Section 56' ?

E.E.C. GRANTS

These would not be directly available for a major capital project such as a tramway, but they are available for research into an innovation, particularly one which promotes public transport and could have wider application

Advantages	Disadvantages
The proposals for Bath could clearly be considered innovative in the context of the current public transport of Britain. Whilst heavy tramway corridors are undergoing a revival in larger cities, the light tram network which is better suited to smaller towns and cities has not yet been seriously investigated.	There could be a problem persuading a Brussels bureaucrat (who travels to work each day on a light tram) that this would be considered such an innovation in Britain.

BUSINESS FINANCE

Usually involves the eventual operators and sometimes the contractors.
Used in several recent tramway projects.

Advantages	Disadvantages
Gives the contractors an incentive to co-operate and provide good value for mony because they have a stake in the end product.	Gives the contractors a monopoly position, they cannot easily be replaced if they supply faulty goods or services.

PUBLIC SUBSCRIPTION

Selling shares, usually locally, is a way of getting the public to show their confidence in a project.
Sometimes an inducement, such as concessionary fares for shareholders, can prove useful

INVESTORS

This is one of the more usual ways of financing business ventures.
It may prove less than easy to finance a tramway in this manner because Public Transport ventures are not nowadays seen as a quick route to riches. Nevertheless, investors are now making a useful contribution to the financing of some of the recent British tramways.

BANK FINANCE

Banks, until recently, have been reluctant to finance ventures such as tramways because
a) The payback period is very long
b) They don't have much idea what is involved and examples are difficult to find.

As more tramways are being opened in Britain, banks can see working examples and are becoming more willing to finance future projects.

LOTTERY HERITAGE GRANT

This has been investigated but the current rules would not allow a tramway to be funded from this source.

LOCAL AUTHORITY BONDS

At present it is illegal for the Local Authority to raise money in this way but there is a possibility that something of the kind may be permitted after the year 2003.

In the past, some Local Authorities have owned tramway tracks and leased the operating rights to a transport operator. Blackpool still uses this system.

A funding route for Bath

Return to Financial Homepage