For anyone following the cost of living crisis, this not only impacts your day to day living costs but also has a major impact on Local Authority spending power.

Using the West of England Sustainable Transport Settlement project breakdown we can see that the original 2021 costings for delivery of the £616 million STS balloons to a staggering £1,239 million by the 2026/27 financial year.

More alarming is that the Department for Transport has staggered the settlements in 5 equal payments over the coming 5 years:

2022/23	£104,961,000
2023/24	£108,760,000
2024/25	£108,760,000
2025/26	£108,760,000
2026/27	£108,759,000

Financial disaster

So assuming a 15% inflation rate for the coming 5 years we end up with a rather scary scenario.

Total Cost phase 1 (£m) [CRSTS + Local Contribution]	22/23 (£m)	23/24 (£m)	24/25 (£m)	25/26 (£m)	26/27 (£m)
£616.00	£708.40	£814.66	£936.86	£1,077.39	£1,239.00

The full breakdown of WECA’s City Region Sustainable Transport Settlement (CRSTS) projects and the inflation calculator, changeable by year, is available here.

Projects will be cut AND paired back

Given the DfT payment schedule there is very little that Dan Norris et al can do to prevent inflation from curtailing projects and some will be abandoned. That 2026/27 settlement payment is not going to be worth £108m by then, it’s going to be worth around £54m in todays money.

This is not just a Combined Authority Problem

Think about it. Every multi-year project that a Local Authority is trying to deliver loses 15% of it’s spending capacity year on year. It’s going to be critical for Local Authorities to accelerate delivery of big ticket items. Section 106 and Community Infrastructure Levy (CIL) funds being used for big ticket items may no longer cover the construction.

Act FAST!

This is an absolute nightmare given the length of time it takes between agreeing to do something, allocating funds, and getting shovels in the ground. With such high inflation playing out across the UK, funding may have to radically change at local and national level.

Local Authorities will be seeing massive holes appearing in their budgets that are completely outside of their control and can do very little about it given the way National Government funds schemes.

Local Impact

Ignoring the CRSTS for a second, this is likely to impact delivery of the Entry Hill Bike Park, the Bath River Line, Somerdale Brislington Link Bridge, and many more, even the building of the first new social housing in 30 years. This is going to be such a big headache for every council across England.