Cut in funding for Freight Facilities Grant

Cut in funding for Freight Facilities Grant

25th January 2012

A recent announcement by the Scottish Government has revealed a 62.5% cut in funding for Freight Facilities Grants. This cut in funding means that hundreds of thousands of tonnes of freight will stay on roads rather than switching to a more environmentally friendly rail transport method.

The news has angered transport groups who have attacked the cut in spending at a time when the Scottish government has increased the roads budget by 15%.

In a statement released by the Rail Freight Group, the reduced budget was described as ‘pitifully small’ and would undermine the government’s plans to meet carbon emissions reduction targets. In addition, the Rail Freight Group believes that the budget cut will discourage manufacturers and processors from investing in rail freight.

The Freight Transport Association have also expressed concern over the budget cuts and the effect they will have companies looking to operate in a more environmentally friendly fashion. Their concern related to doubt over whether the new allocated budget would match the demand from the companies looking to make the switch over to more environmentally friendly and efficient transport modes.

The Rail Freight Group’s Scottish Representative, David Spaven, said, “The Freight Facilities Grant budget will drop from £2 million this year to just £750,000 in 2012-13 – a pitifully small amount to devote to a successful scheme which delivers important economic and environmental benefits for Scotland.

“It is hard to believe that the Scottish Government is serious about the role rail freight can play in a sustainable Scottish economy. £750,000 is equivalent to the cost of just 2.5 metres of construction of the Second Forth Road Bridge, which is swallowing up much of the transport investment which should be going into carbon-reducing alternatives to big new roads.”

However, the FTA’s Head of Policy for Scotland, Chris MacRae, expressed relief at the budget cut. He said, “We are relieved that the Freight Facilities Grant has not been killed off altogether, as this was the real threat.

“We understand that the government doesn’t have a bottomless pot of money to play with, but there are strong economic arguments for it taking more seriously investment in ways to take more lorries off our congested roads and allowing the supply chain to benefit from more efficient alternatives.”

The Freight Facilities Grants can fund up to 75% of the cost of new facilities and equipment required to switch freight from road to rail and have been available in Scotland since 1975.

Following the news of the cut in funding for Freight Facilities Grants in Scotland, it was today announced that the Freight Facilities Grant in England to finance modal shift enabling more goods to be taken off the roads and onto rail or water, is now to be scrapped.

The Freight Transport Association’s Head of Global Supply Chain Policy, Christopher Snelling, said,

“Failing to fund modal shift is effectively a failure to invest in a more carbon-efficient, let alone more cost-effective, supply chain. All three major parties at Westminster have previously spoken of a commitment to greener transport choices, with warm words about the importance of rail freight. Sadly, this announcement suggests that warm words are all they were.

“While revenue support grants remain, the loss of the facilities grant will make it less desirable and more cost prohibitive to invest in the sort of machinery and technology, like cranes and other freight handling equipment, needed to make rail and water borne freight a reality for companies currently focusing solely on road freight.”

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