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Government announces fund for pay-as-you-drive

Local authorities are to receive £18m over the next three years to support the implementation of road charging, transport secretary Alistair Darling announced today in the House of Commons.

In a statement, he said these schemes could be funded from the Transport Innovation Fund (TIF).

Within the fund, up to an extra £200m a year will be made available to support the pay-as-you-drive scheme. He also said that if more good schemes emerge, more money could be made available.

The TIF, which comes into effect from 2008/2009, is set to increase over time reaching some £2.5bn by 2014/2015.

Darling says: “The fund will also be used to support local plans which help tackle congestion. We are looking for proposals which combine some form of demand management such as road pricing, with better public transport, including better use of buses, tram or light rail schemes, provided they offer good value for money. These pilot schemes will feed into our wider work on national road pricing.”

Darling also announced today that Government plans for distance based charging for lorries will be taken forward as part of wider on national road pricing.

He said: "Our thinking on national road pricing has developed further. We are now taking forward work on a national system of road pricing, so it is right for us to take forward the plans for distance based lorry charging as part of the wider work on national road pricing - to work for a single comprehensive, cost-effective system.

"So although the current procurement will not continue, we will continue to work with industry and ensure that we carry the full experience gained from the project into the wider work to develop a national road pricing system for cars and lorries."

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