£30bn shortfall threatens rail and road plans

The Guardian reports today that the recent nationalisation of the country's most expensive rail contract has exposed details of a £30bn funding gap in Britain's transport system.

The newspaper has had sight of a leaked industry memo that warns of "looming spending cuts" on major transport projects, raising fears that major schemes could be delayed, reduced or scrapped in an expenditure freeze.

The list of improvement schemes in the firing line include the £16bn Crossrail scheme linking Heathrow airport to Canary Wharf and Essex; a £6bn road building programme including the extension of the hard shoulder on Britain's motorways; a proposed new high-speed rail route and the rail fare cap of inflation plus 1%.

As a result of Treasury plans to bring public finances back into line over the next 10 years, the paper claims that the DfT is braced for a reduction in its capital expenditure plans that could total £28.9bn over the next decade.

Yet despite this looming funding crisis evident in this single government department - who knows how many others - the government still sends billions of pounds a year to the EU, the accuracy of whose accounts have been criticised by auditors for 14 years running.

At stake according to this article is public transport improvements totalling almost £30bn. When we consider that Britain hands the EU £10.2bn (gross) every single year, by just 2012 the EU instead will have swallowed up the funds needed to ensure these transport improvements stay on track. Unless our EU cheques are stopped now.

Handing such a vast amount of cash to the EU, rather than using it to stop our transport system crumbling, is completely unjustifiable given auditors have for 14 years running had considerable trouble explaining how the EU is spending that money.

Meanwhile reports abound of waste and fraud on a vast scale, even within the EU's own institutions.

The money for essential services is running out and it's time for some tough choices. The EU budget deal agreed in the pre-crisis days of late 2005 is no longer sustainable. If anything must be cut, spending on the EU should be top of the list.

The government must go to Brussels urgently, re-open the EU funding deal, secure drastic cuts and show us that it is serious about maintaining properly funded public services in this downturn.