The Mad, Mad Strange World of Local Government Finance

One of the most common themes I hear from people is complete puzzlement that the Council has apparently run out of money but "wastes" it by investing in schemes like cycle lanes and bus lanes and other stuff which are less of a priority than fixing our existing roads. 

To be fair to those in charge at the Council, it is to do with the way things are funded and not poor decision making.

A good way to think about it is a mortgage lender providing you with the money to build an extension on your home but declining to give you anything towards fixing that hole in the roof.

Whatever your views on the benefits of safer cycling routes or bus routes lanes, that are to improve public transport journey times, the Council does not use its finances to fund these. They are normally funded by capital grants directly from central government, Merseyside Regional Authority or by Developer contributions (know as CIL monies) where local house building takes place. Similarly, the funding for the poorly managed scheme for the regeneration of Central Birkenhead was grant money that was ‘ring-fenced’.

The Council cannot spend the money it receives for capital projects on revenue costs such as maintaining the roads. Of course, it is within the gift of government to change the policy. 

Ironically, the more things that the Council provides by way of capital funded projects, the more revenue it takes to maintain things. Put simply.... add another lane to the A41 and you will later have more pot holes to repair!