Friday, September 23, 2011

Rail Freight Grants Abandoned to the Consternation of Logistics and Manufacturing Groups

FFG's Cut in Spending Review
Shipping News Feature

UK – SCOTLAND – Despite the strongest protestations from rail freight representatives and some very big hitters from industry the Scottish Government has axed Freight Facilities Grants (FFG’s) in its 2011 Spending Review (see HERE). The FFG scheme has been under threat for some time but in January pressure was brought to bear by various logistics trade organisations and bosses from the whisky and water bottling industries leading to an extra £2 million in funding and a promise to reconsider the scheme which supports the intermodal shift from road haulage to rail cargo.

FFG’s have been seen as key to transferring freight from trucks to trains for the past thirty five years and organisations lined up against the Authorities included the sustainable transport body, Transform Scotland, the Freight Transport Association (FTA) and the Rail Freight Group (RFG). Now David Spaven, RFG’s Scottish Representative says the Spending Review had left industry very confused about the Scottish Government’s intentions for rail freight commenting:

“The Scottish Government has long been committed to supporting freight modal shift and has previously celebrated the fact that freight grants have removed more than 40 million lorry miles from Scotland’s roads over the last four years. So why scrap grants that will only help reinforce that trend? The Scottish Government’s recent Report on Proposals and Policies for a Low Carbon Scotland says that £15m annually has to be spent between now and 2022 on freight mode shift in order to deliver on carbon targets, yet there will now be no obvious grant mechanism for achieving this aim.

“There is now a new ‘Future Transport Fund’ but there is absolutely no clarity on if and how this might be used to help get more lorries off the roads. It also covers walking & cycling, electric car development and so on, so we have no idea what, if anything, might be available for rail freight development. The Government needs to act quickly to shed some light on the evident inconsistency and uncertainty of its provision for freight modal shift in Scotland.”

Speaking of the Spending Review Colin Howden, Director of Transform Scotland, criticised the Government in very strong terms saying:

“The Government has made no attempt to fund its own Report on Proposals and Policies (RPP) in order to meet its climate change targets. It is perverse for the Government to draw up plans to tackle climate change and then not to fund and implement them. This budget also fails to support other key transport measures. There is no mention of the Freight Facilities Grant, which has been important in shifting freight from road to rail.

"This budget fails sustainable transport and the prospects for hitting our climate targets. The Government has reneged on their climate plans and has slashed investment in active travel. Transport is the basket case of climate policy and yet the Government has cut funding for the areas which would deliver emissions cuts. While the large trunk roads budget sees a further increase of 25%, the already modest budget for sustainable and active travel has been cut by 25%.”

The English equivalent grants were withdrawn last year and the Scottish Spending Review does provide continued funding for the Mode Shift Revenue Support (MSRS) scheme which provides revenue grants to enable specific freight flows to stay on rail, but only £1.1m annually. For producers who do not have convenient railhead facilities, the availability of a capital grant can be crucial to making the vital first step of shifting from road haulage to rail transport or to improve access to ensure rail freight is viable.