Road scheme must be value for money

The widening of the Heads of the Valleys road is an important part of the strategy for improving the economic prospects for this deprived part of south east Wales.

Yet it must not become a sacred cow that is immune from the careful considerations around value for money that must inform every spending decision in the current fiscal climate.

The Welsh Government is considering a private sector partnership to fund the estimated £428m cost of turning the 12-mile stretch of the A465 from Dowlais, in Merthyr Tydfil, to Hirwaun in the Cynon Valley into a dual carriageway.

This is no victimless way of postponing the impact on the public purse of this major construction project.

The legacy of private finance in public projects from the Tony Blair years has been a bitter one.

We have seen from similar deals that the fees charged for such a deal end up totalling three or four times the initial construction cost.

If it goes ahead, the final bill is likely soar to more than £1.2bn and transfer its impact onto future Welsh Government budgets, affecting the funds available for investment and public services for decades.

It would create a huge imbalance between the economic return from the 12-mile road widening scheme and a bill that would be almost as large as the projected cost for building an entirely new M4 relief road around Newport.

At a time the UK Government is still able to borrow money at relatively low interest rates, it is inexcusable that the Welsh public sector is being forced to consider such an inefficient and largely discredited means of borrowing to fund public investment.

There is an enormous benefit to be had from putting investment into the most deprived parts of Wales even if those schemes do not immediately appear to have the same economic impact as rival projects around the M4 corridor.

Previous economic impact assessments have calculated that the return for every £1 poured into the A465 widening would be just £1.05 but it is eminently possible to justify it when there is an enormous need for investment in deprived parts of the south Wales Valleys.

However that is not a justification for allowing its cost to balloon to unreasonable, unjustifiable and unnecessary levels.

It is the Valleys themselves, which have the greatest dependence on public spending and public services, that would suffer the most in future years from profligate spending decisions today that deliver little return.

The deprived parts of Wales need more than just tokenistic investments that look good, sound good and deliver little more than huge long-term financial bill that will just prolong austerity here.

We should not be contemplating bequeathing a poisoned well to future generations.

We need to use the most efficient means of borrowing to fund the economic development initiatives that will build a more prosperous future for everyone in Wales. The Western Mail newspaper is published by Media Wales a subsidiary company of Trinity Mirror PLC, which is a member of IPSO, the Independent Press Standards Organisation. The entire contents of The Western Mail are the copyright of Media Wales Ltd. It is an offence to copy any of its contents in any way without the company’s permission. If you require a licence to copy parts of it in any way or form, write to the Head of Finance at Six Park Street. The recycled paper content of UK newspapers in 2016 was 62.8%