New criteria for road to rail grants in UK

Trucks in jam - Mari Buckley wikicommons

An update to the criteria upon which grant decisions are based, could lead to a more favourable climate for switching from road to rail in populated areas. This could reduce congestion on some of the busiest roads in Britain, although questions are raised over the viability of switching in more remote locations.

The UK Department for Transport, and the devolved governments in Scotland and Wales, administer a series of funding schemes. These are designed to encourage the industry to switch traffic away from road haulage and onto rails, and in some cases, waterways too.

Grant schemes

The schemes are designed to offset the additional costs incurred by industry where the overall social benefit would be desirable. However, the costs may not be fully recouped by the businesses involved, due to factors such as the anomalous way that environmental impacts are charged back more leniently to road haulage.

The most relevant of the so-called Freight Mode Shift Grant Schemes include the Freight Facilities Grants (FFG) to help offset the capital cost of providing rail and water freight handling; and the Rail Environmental benefit Procurement Scheme (REPS), designed specifically to assist companies with the operating costs associated with running rail freight. A dedicated Waterborne Freight Grant (WFG) exists, although Britain’s limited inland waterways network means there have been few calls on the fund.

Update criteria

The report which set up the schemes is now just over ten years old, and the DfT has issued updated criteria, which takes into account competing changes in industry and infrastructure. The update notes that while road haulage continues to improve its efficiency overall, particularly fuel consumption, the number and severity of congestion points on the road network is rising.

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The DfT also say that, over the years, research has yielded improved understanding of the impacts of modal shift, and they have a better understanding of how the community is impacted by different modes of freight operations, including better methods for assessing factors such as noise and climate change.

Positive impacts

In the updated document, and perhaps unsurprisingly, the calculations for the benefits of modal shift from road to rail have the most impact when the shift is made within a heavily urbanised environment, such as London, Manchester or Glasgow. The positive impacts on infrastructure, congestion and noise, among other factors, all comfortably outweigh the loss of road taxation revenue, and the inherent impact of increased rail operations. In the most extreme cases, the overall modal shift benefit (MSB) is calculated to be as much as GBP7.69 (euro9.16) per lorry mile (1.6km).

“To calculate the final MSB values in this report, we determine the benefit of removing a lorry from the network and consider the rail externalities associated with diverting road freight to alternative modes”, says the departmental statement. “These values therefore present the net effect of moving freight from road to rail by accounting for the benefits of reducing road freight traffic while taking to account the negative benefits of additional rail freight traffic”.

Marginal cases

The report (“Mode-Shift Benefit Values: Update” – available at the DfT website and other open government sources) does however conclude that modal shift is at its most marginal when current road operations are closely connected to the UK motorway network.

Figures produced are expected to remain valid until 2025. It is too early to tell if the revision will result in a raft of new applications, but the figures do point to a favourable regime for inner-city rail freight development, which plays very much into the climate change agenda.

Author: Simon Walton

Simon Walton is RailFreight's UK correspondent.

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