Community Infrastructure Fund: Information required for funding approval

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Background

1. The projects selected to be taken forward for more detailed appraisal for CIF support were announced on 17 March 2005 - see press release with list of projects .

2. This note sets out the further project appraisal and delivery information that is required to enable DfT and ODPM to take decisions on CIF support in Autumn 2005. Full approval will be subject to a further check on value for money (vfm) after tenders for a project have been received and a revised cost estimate has been provided.

3. Promoters should submit the required information by the end of July 2005, although it will be open to them to update or supplement the information after that if the need arises. Four full printed copies of the information for DfT, ODPM and Government Office use should be sent to Robert S Fox at the Department for Transport, Great Minster House, 76 Marsham Street, London SW1P 4DR. It would be helpful if documents could also be e-mailed to cif@dft.gsi.gov.uk and to cif@odpm.gsi.gov.uk .

Appraisal Information

4. A note setting out the appraisal requirements for CIF bids was issued with the initial bid invitation in November 2004. This stated that appraisals need to be in line with the New Approach to Appraisal (NATA) - detailed on DfT's Transport Analysis Guidance website ("webtag") - with impacts on the environment, safety, economy, accessibility and integration being assessed and with all assessments being supported by robust evidence. However, it was always recognised that there would be a need for a measure of 'proportionality' in the appraisal process for smaller projects and that it would not be necessary or appropriate for them to be subject to the full NATA process, with its attendant need for survey data etc. It has therefore been decided that projects with a total cost of less than £5m should be appraised using the Project Appraisal Report (PAR) approach that was developed by the Highways Agency for its smaller road projects.

5. While the principles of PAR are transferable to non-highway projects, DfT has yet to publish guidance on its wider use. Promoters that need to use PAR should therefore check the requirements set out in the (soon to be revised) relevant section of DfT's website. If they foresee any problems with applying it to their project, they should outline their difficulties in an e-mail to itea@dft.gsi.gov.uk.

6. To ensure that appraisals emphasise the housing delivered by the proposed CIF schemes, all project appraisals (whether being carried out in line with NATA or PAR) should follow the supplementary guidance on the treatment of Transport Economic Efficiency analysis and Integration objectives contained in the November 2004 note. They should also follow the additional guidance on accessibility provided in paragraphs 7-9 below.

Accessibility

7. DfT has released guidance on accessibility planning since CIF bids were first invited. This guidance is intended to help local transport authorities and their key partners to produce accessibility strategies for inclusion in their Local Transport Plans. The guidance can also help promoters seeking CIF funding to understand what constitutes accessibility and how improvements in it can be measured.

8. DfT has also recently released a bespoke accessibility planning software tool, Accession, which is available via a dedicated website. All transport authorities are eligible to receive one free copy of Accession on application to MVA, and additional copies may also be purchased.

9. Accession is one of a number of software packages that can help authorities to consider the accessibility implications of new developments and transport improvements. Promoters can use it to estimate the amount of time it would take someone to get to key destinations (such as workplaces, shops, education, health care, entertainment and other services) by private car, public transport, cycling and walking and can therefore use it to help demonstrate how the proposed scheme would help to improve accessibility. However, it should be remembered that the time factor is only one element of accessibility. Promoters should show that, as appropriate in light of their proposed schemes, they have considered qualitative implications as well (such as the ease of use of walkways and cycle routes, safety on and waiting for public transport, ease of use and comfort of bus services).

Value for Money (VFM)

10. The overall vfm offered by the proposed CIF projects will be assessed and will feed into DfT/ODPM Ministerial decisions on CIF projects, along with other important considerations. Advice to DfT/ODPM Ministers on vfm will be formulated in line with DfT's Guidance on Value for Money that was published in December 2004. This covers all spending proposals that are funded by DfT or require its approval. It is about the clear and consistent assessment of vfm for officials putting submissions to Ministers about investment choices and decisions.

11. The assessment of vfm must account for all impacts - so it is much wider than just those impacts that can be presented in monetary terms within the benefit/cost ratio (BCR). Impacts on the environment, regeneration, accessibility and integration, are important and should be reflected in the vfm assessment.

12. The guidance on vfm sets out how robust appraisal information is relied upon for the assessment of vfm in advice to Ministers which accounts for all impacts, and how the results of this analysis will place each project into one of four vfm categories: high, medium, low or poor. The presumption on value for money grounds alone, is that the DfT will not approve any bids offering poor vfm and only very few with low vfm.

Other Information Required

13. Deliverability will continue to be a key criterion in the final approval of projects. Promoters of all bids must therefore submit a business case that covers all relevant aspects of their project and its development from July 2005 through to completion. In addition to any planning, statutory and technical approvals, project timetables should provide for any gateway reviews or internal financial or technical authorisations that are required by promoters themselves or by other bodies.

14. The business case should contain the following information, supported by robust evidence:

  • Project title
  • Location map
  • Project description
  • Legal structure for delivery (describing any contractual arrangements between joint promoters and identifying the body that will invite tenders for works and services and contract for their delivery)
  • Partners' involvement in the project, with a note for each (including the promoter) of its role, responsibilities and relationships with other participating partners before, during and after construction.
  • Funding to be contributed by promoters, other partners and other bodies or organisations - before, during and after construction
  • Interests (through ownership or otherwise) in major assets to be acquired or enhanced under the project (persons interested and nature of interests)
  • Estimated project start and completion dates
  • Suggested project milestones to trigger CIF payments
  • Expected quarterly profile of eligible expenditure
  • The total bid for CIF and the preferred profile of quarterly payments
  • Any non-housing outputs directly generated by the project (e.g. access to new employment (total floor space and new jobs))
  • Any outputs indirectly generated by project
  • Any assumptions used and any constraints identified (including state aid issues, planning considerations and environmental assessments)
  • Assessment of main risks associated with project
  • Proposed management of risks and contingency plans
  • Agreed distribution of cost/programme risk responsibilities
  • Arrangements for evaluating the scheme to ensure that the expected benefits do materialise

The Cost of Preparatory Work

15. The cost of preparing bids is not eligible for CIF support. However, if a promoter wishes to bid for CIF support for the cost of other preparatory work that can be legitimately be reclassified as capital expenditure after CIF is awarded for a project, it should include a separate estimate of such expenditure with its main bid, and give any special reasons why it believes such support should be considered. The possibility of CIF support may then be considered if the total available is not fully taken up on main project costs.

Queries

16. If you have any general questions about the way forward, please e-mail cif@dft.gsi.gov.uk or phone 020 7944 4749.

17. Any questions about economic appraisal should be e-mailed to itea@dft.gsi.gov.uk. We will be arranging a workshop in late May to deal with any outstanding queries that promoters have on appraisal issues, but they should seek advice they need before this to help ensure that their appraisal work is not held up unnecessarily.

Department for Transport

Office of the Deputy Prime Minister

April 2005