Consultation is now open on how we’ll set funding assistance rates

The second round of consultation on the funding assistance rates review will help shape our decisions

We’ve started our second round of engagement with local authorities on the best way to implement the provisional funding assistance rates framework developed as part of a review into the funding assistance rates system.

The funding assistance rate is the proportion of costs of a land transport activity undertaken by a local authority (or other approved organisation) that is paid from the National Land Transport Fund.

The ‘Funding assistance rates (FAR) review Options Discussion Document(external link)’ seeks councils’ and other stakeholders’ views about the framework, the factors that will determine approved organisations’ funding assistance rates, any trade-offs that will need to be made, and how the components should fit together. 

It also sets out how funding assistance rates fit within the wider set of tools we use to make planning and investment decisions for our transport network. The discussion document emphasises the principles around ensuring we invest optimally across the whole of the transport network rather than taking a district-by-district approach, and needing to find the appropriate way to split the costs between road users and land owners.  

• The discussion document asks where the overall split of costs between local authorities and the National Land Transport Fund (known as the ‘overall NLTF co-investment rate’) should sit across the country as a whole.   It proposes that that split should be within a range from:
• 50 percent (a 50:50 cost split), to
• 53 percent (the overall effective rate over the last few years).

It presents five options for how councils’ funding assistance rates could be set, with an invitation to suggest other options. Each option uses different metrics (index of deprivation, capital value of rateable land, number of rating assessments and lane kilometres of local roads), or combinations of those metrics, as proxies for councils’ ability to raise the local share of land transport activities. Councils are grouped into possible funding assistance rates bands and the document provides two sets of indicative funding assistance rates for each council under each option (one at each end of the possible overall co-investment rate range from 50 percent to 53 percent).

The document also seeks feedback on:

• how the Transport Agency should determine funding assistance rates for emergency works
• how to address National Land Transport Fund investment eligibility and funding assistance rates for Waitangi National Trust and Department of Conservation carriageways
• how we could transition in new funding assistance rates.

Jenny Chetwynd, steering committee chairperson says: “Over the next couple of months, we’ll be talking with councils and other stakeholders about the issues, as well as encouraging them to talk to each other. Ideally we want them to work through potential options with each other and us as that will help us make the best possible decision.”

The closing date for submissions is Monday 3 March 2014.

About the funding assistance rates review

The review into the funding assistance rates system was set up to:

• determine the role(s) of funding assistance rates in achieving the purpose of the Land Transport Management Act 2003 and giving effect to the Government Policy Statement on Land Transport (GPS).
• review both:
  • the approach the Transport Agency uses in setting funding assistance rates, and
  • the funding assistance rates themselves to determine whether or not changes should be made to enable funding assistance rates to be more effective in achieving the purpose of the Land Transport Management Act 2003 and giving effect to the GPS, while also being reasonable and efficient.
• do this in time for any changes to funding assistance rates to be factored into the 2015–18 regional land transport plans and council long-term plans commencing 2015.
• develop a greater mutual understanding with approved organisations, the Ministry of Transport and other stakeholders as to what the role of funding assistance rates is and what they can, and should, seek to achieve.

You can find out more about the review on the Transport Agency’s website.(external link)