HC Deb 30 March 1981 vol 2 cc41-3W
Mr. Skeet

asked the Secretary of State for Transport if he is satisfied with the volume of motorway and trunk road construction achieved in 1980–81.

Mr. Kenneth Clarke

I should like to have done more in the financial year but it is central to the Government's strategy to keep within cash limits. Taking 1980 and 1981 together, however, we are running very close to the programme we set ourselves in last June's White Paper.

Mr. Skeet

asked the Secretary of State for Transport if he will state the effect on the planned volume of motorway and trunk road construction in 1981–82 of actual cost rises (a) twice that assumed in the cash limit and (b) half that assumed.

Mr. Kenneth Clarke

Doubled cost increases would reduce the real resources available by about £25 million at 1980 survey prices; the lower increases would allow room for them to increase by about £15 million. The effect on the programme would depend on progress on schemes under construction, the dates when new schemes are ready to start, and the timing of cost increases.

Mr. Roy Hughes

asked the Secretary of State for Transport what are the reasons for the outturn of the inflation factor for motorway and trunk road construction costs having been approximately twice the assumed level for each year in which a cash limit has applied to the motorway and trunk road construction budget.

Mr. Kenneth Clarke

I cannot answer for the factors used in setting cash limits by previous Administrations. For the years when I have been responsible, the factors have reflected the Government's judgment of the allowance they were prepared to make for price increases.

Mr. Roy Hughes

asked the Secretary of State for Transport (1) if he will state the estimated increase in motorway and trunk road construction costs for 1980–81 and the increase allowed for when setting the cash limit for the year; and if he will explain the reasons for the discrepancy;

(2) what were the factors that led to the estimated outturn for English motorway and trunk road construction in 1980–81 being less than planned.

Mr. Kenneth Clarke

The Roads etc. England Vote for 1980–81 allowed for an increase of 11.7 per cent. in the cost of motorway and trunk road construction from estimated November 1979 prices. The actual movement in costs, as measured by the national indices which are used for revaluation purposes, was about 32 per cent. The reason for this movement is the increase in tender prices and contractors' costs that has occurred.

The difference between the cash limit allowance and the movements in the indices for that period, together with the fact that the final value of November 1979 prices was some 6 per cent. higher than the provisional figure used for the Estimates, are the main reasons why expenditure on motorway and trunk road construction in 1980–81 expressed in constant price terms is now expected to be less than planned. In addition, although the total amount of cash in the Vote is expected to be almost fully spent, there have been some transfers from trunk road construction to other highways purposes such as the Humber bridge.

Mr. Roy Hughes

asked the Secretary of State for Transport what is the inflation factor for motorway and trunk road construction assumed for the cash limit for 1981–82 in England; and if he is satisfied that this is a realistic estimate.

Mr. Kenneth Clarke

The cash limit for the Roads, etc. England Vote, in common with all other cash-limited Votes, allows for an increase in the average level of prices of 11 per cent. between 1980–81 and 1981–82. It is too early to say how this will compare with the movement in road construction costs over the period.