Swinney dismisses £1bn to help build new Forth bridge

SCOTTISH ministers have dismissed a new £1 billion offer from the Treasury to help fund the replacement Forth road bridge as containing no new money.

Yvette Cooper, the Chief Secretary to the Treasury, yesterday unveiled the package to John Swinney, the Scottish finance secretary, as she again rejected his plea to spread the cost of the £2.3 billion crossing over 20 years.

Ms Cooper's offer comprises £500 million as Scotland's share from the London Crossrail project, £300 million from projected Scottish underspending, which is normally returned to the Treasury, and £200 million from the sale of surplus government land and property.

However, she told Mr Swinney at talks in London that the door remained firmly closed on the Scottish Government's proposal to spread the cost of the bridge over a longer period.

Ms Cooper also rejected a new plan from Mr Swinney to achieve this by changing the funding of local authorities in Scotland so ministers could keep back more money for use on the bridge at Queensferry. A spokesman for the Treasury minister said: "We have to have responsible limits on borrowing which are fiscally sustainable. We specifically ruled out breaching UK borrowing limits."

The new crossing has been ordered by Scottish ministers because of fears that work to halt corrosion of the main cables on the Forth Road Bridge may not be successful, which could lead to traffic restrictions, such as a lorry ban, over the next decade.

Construction of the new crossing is due to start just west of the existing bridge in two years and be completed in 2016.

Jim Murphy, the Scottish Secretary, who accompanied Ms Cooper at the meeting, described the £1 billion offer as a "lifeline" for the new crossing.

He said: "It (the new bridge] is hugely important for Scotland and everyone accepts it needs to be built to serve future generations. Our talks were held in a constructive spirit aimed at helping that to happen.

"The UK government put a £1 billion offer on the table, which was taken seriously by John Swinney. I welcome the approach he took to our discussions and the manner in which the UK government's efforts to find a way through the issue was welcomed.

"It's clear our offer will form an important part of the funding jigsaw required to build Scotland's most important infrastructure project in a generation. Officials on both sides will work together on the detail."

A spokesman for Mr Murphy said Ms Cooper had offered a total of £1.5 billion, but this would require the Scottish Government to increase its efficiency savings more than forecast.

A spokesman for Mr Swinney said the Scottish Government had already taken all the money in the new package into account when calling for the bridge cost to be spread. He said: "We are quite clear this is not new money."

The spokesman said the Crossrail cash, which comes to Scotland under the Barnett Formula, had already been anticipated. He also said that raising £230 million from government sales was not realistic as half of its assets comprised roads.

The Scottish Government has also already rejected using underspending to help fund the bridge, claiming that it would effectively amount to a cut in its budget.

Funding gap could hit other major transport projects

YESTERDAY'S talks were the latest attempt to plug a massive hole in the Scottish Government's budget created by the new Forth road bridge.

Ministers have eased their headache by halving the cost of the crossing by switching tram/bus lanes to the existing bridge, streamlining the new crossing's design and slimming down connecting roads.

However, they fear that unless they can spread the £2.3 billion cost of the five-year construction project over 20 years rather than as it is built, planned new schools, hospitals and other road and rail schemes will have to be delayed or cancelled. The SNP government has little room to manoeuvre after admitting its proposed Scottish Futures Trust, the bridge's planned funding method, had run into problems and could not be used for the project.

In addition, the Nationalists have set their face against the public-private partnership financing model used by the previous Labour-Liberal Democrat administration.

It is thought that without extra funding or spreading the vast cost of the bridge over a long period, some £700 million a year would be taken out of its main capital budget for other schemes.

The Conservatives, who remain optimistic that they will replace Labour in government at Westminster, are anxious to help.

David Mundell, the shadow Scottish secretary, said a meeting had been arranged between Mr Swinney, the finance secretary, and Philip Hammond, the shadow chief secretary to the Treasury, to discuss the issue. He said: "In so doing, we are putting our mature and co-operative approach into action."