Whitchurch on Thames Parish Council

Letter to Dept Transport

Secretary of State for Transport
c/o Julian Smith
Roads Strategy Division
Department of Transport
Zone 3/05,
Great Minster House
76 Marcham Street
London SW1P 4DR

10^th December 2008

Dear Sir

The Company of Proprietors of Whitchurch Bridge (the Company) has applied to increase the toll charges over Whitchurch Bridge in South Oxfordshire in 2009. The Whitchurch-on-Thames Parish Council wishes to object to this proposed increase on the following grounds:

1. The proposed increase in the toll is excessive. The cash toll was increased from 10p to 20p in 2005 and it is proposed that it will double again four years later. This represents a considerable amount of money when taken over the whole year for local people and means that the present bridge users would in effect be paying to fund a project with a lifetime of many decades. Many in the local villages have to use the bridge several times a day to go to the shops, banks, medical centre and other essential services in the Pangbourne over the Thames.

2. Contrary to its statutory obligations (as acknowledged in paragraph 3.1 of its Application), the Company has failed to build up sufficient funds in the Bridge replacement fund to pay for the reconstruction of the bridge. This failure is not explained in the Company’s Application. It seems to the Parish Council extraordinary that, 106 years after the present bridge was built and only 7 years before it is claimed that the bridge must be reconstructed, there is such a large shortfall in the reserve fund which the Company is obliged to build up in order to fund the replacement of the bridge.

3.  The proposed toll increase is an inappropriate method of financing a long-term capital infrastructure project such as the reconstruction of a bridge. The Company is planning to take out a loan for only 25% of the cost of rebuilding the bridge to supplement (a) the income from the proposed increased tolls in the next 5 years, and (b) the existing Bridge fund which currently stands at £1.4 million. The Company’s Application does not explain the basis for its assumption (see paragraphs 4.8.1 and 5.6 of its Application) that only 25% of the cost of reconstructing the bridge will be met by a loan. It seems to the Parish Council that it would be more appropriate, given the 100-year life of the new bridge, that a significantly greater proportion of the cost should be financed by a loan, which should be paid back over a longer time period. This would reduce the immediate burden on those living in the village now and other users of the bridge.

4. If the toll was to be increased to 40p the Company would still have a very high income from the tolls after the bridge was re-built.  There is no suggestion in the Application that the toll will reduce once the bridge has been reconstructed and the loan repaid. The next bridge re-build will be in many years’ time as the new bridge should last 100 years. This would mean that the Company is likely to receive excessive profits for many decades. This would be contrary to the requirements set out in section 6(3) of the Transport Charges &c (Miscellaneous Provisions) Act 1988. If permission is granted to increase the toll at all, we believe that this should be a temporary measure and reduced immediately the bridge reconstruction is complete.

5. The Company has declined to negotiate with the Parish Council about giving a binding commitment to charge reduced tolls for frequent users of the bridge who purchase Bridge Cards. When the Parish Council was advised by the Company that it was applying to increase the toll, we requested that the Company grant the local Parish Councils (Whitchurch, Goring Heath, Woodcote and Pangbourne) a legally binding guarantee that they would limit the bridge card discretionary rate to a fixed maximum amount if the cash toll were to be increased to 40p. The Company has claimed in its application that it intends to increase the card toll annually from 12.5p at present to 18p by 2011- 2012 and to 20p by 2012-2013 when the bridge is to be re-built.

The estimates of the likely cost of reconstructing the bridge have varied widely in the past. The Parish Council is concerned that the cost could well increase beyond the current estimate of £3.22 million, and that if the cash toll were set at 40p the discretionary card toll would increase to a much higher proportion of this and card holders could be paying an amount approaching 40p per crossing. The Company would only have to maintain a very narrow margin below the 40p on the bridge cards to encourage users to keep using the bridge cards which enable the Company to reduce their administration costs.

The Company has declined to agree a fixed upper limit on the card toll on the grounds that they face uncertainties in the calculation of their funding requirements. It is these uncertainties and the manner in which they will be dealt with that is giving the Parish Council greatest concern.

6. The Company stopped the local resident’s discretionary toll in 2005 in favour of a card toll for all frequent users as this was considered by the Company to be easier to operate.

The Company has refused to re-introduce a local resident reduced toll despite requests from all the Parish Councils to do so since the concession ceased in 2005.

We would like the Company to re-introduce a discount for local people who use the bridge to reduce the impact on them of the increasing tolls. This has been declined on the basis that it is potentially open to abuse and thus a loss of revenue for the Company. We think that this could be administered without significant risk to the Company as the system is now fully automated and the issuing of this concession to card holders could be based on their post code.

7. Is the Company using the correct priorities for the income from the tolls and could a higher proportion be used for investment and the bridge replacement fund and less used for dividends?

The relevant Acts of parliament governing the management of the Bridge namely the Whitchurch Bridge Acts 1792 and 1988 are unambiguous about the priorities which should apply for the utilization of income from the tolls.

We think that a closer inspection of the Company’s accounts is warranted to make sure that the appropriate amount of the toll income is utilized for investing in the Bridge rebuilding fund up to 2013 as is clearly stated in the 1988 Act.

The Parish Council has not had access to all the Company’s accounts as they are only filed with Companies House until 2005. The accounts for 2008 are attached to the application. Despite having inadequate funds in the Bridge rebuilding fund it would appear from the accounts that we have seen that there have been increasing dividend payments to shareholders and that these are planned to go on increasing until 2013.

8.  We would like to question why the current Shareholders of the Company are not making a contribution themselves towards financing the re-building of the bridge as they will remain the owners of the bridge once it has been reconstructed.

9.  The Application does not explain why it is necessary to construct the new bridge so that it can carry 40/44t vehicles. These vehicles will not be able to use the bridge in any event, due to the existing 7.5t environmental weight limit through the village. It may be possible to reduce the cost of reconstructing the bridge if it is designed to carry vehicles of only up to 7.5t.

10.  It appears from the Application that it would be possible to prolong the life of the existing bridge by reducing the weight limit to 3 tonnes (Application para 3.7.1). Whilst the Application claims that this would not be acceptable under its Acts or to the local community, the Parish Council is not convinced that this is so. If a reduced weight limit would enable the reserve fund for bridge reconstruction to be built up over a longer period without the excessive increase in tolls that is being proposed, this could provide a satisfactory shorter-term solution.           

11.  The Parish Council is concerned that there is no mechanism by which the Company would be obliged, if it’s Application to increase the tolls was allowed, to reconstruct the bridge in 2013, which is the basis on which the Application is made.

This letter represents the views of the Parish Council of Whitchurch-on-Thames, following consultation with the residents of the Village. We believe that many residents of the village will be writing on their own behalf. We are of the opinion that there are many issues that require further consideration before they can be resolved in the interest of all parties concerned.

Yours Sincerely
Jo Wheeler
Clerk to the Whitchurch on Thames Parish Council