An update to the criteria upon which grant decisions are based, could lead to a more favourable climate for switching from road to rail in populated areas. This could reduce congestion on some of the busiest roads in Britain, although questions are raised over the viability of switching in more remote locations.
The UK Department for Transport, and the devolved governments in Scotland and Wales, administer a series of funding schemes. These are designed to encourage the industry to switch traffic away from road haulage and onto rails, and in some cases, waterways too.
The schemes are designed to offset the additional costs incurred by industry where the overall social benefit would be desirable. However, the costs may not be fully recouped by the businesses involved, due to factors such as the anomalous way that environmental impacts are charged back more leniently to road haulage.
The most relevant of the so-called Freight Mode Shift Grant Schemes include the Freight Facilities Grants (FFG) to help offset the capital cost of providing rail and water freight handling; and the Rail Environmental benefit Procurement Scheme (REPS), designed specifically to assist companies with the operating costs associated with running rail freight. A dedicated Waterborne Freight Grant (WFG) exists, although Britain’s limited inland waterways network means there have been few calls on the fund.