Regional Road Funding - Block Grant and REPAIR Programs

Government funding programs for Regional Roads can be improved

In 2013–14, Roads and Maritime Services (RMS) provided over $170 million to local councils through the Block Grant and REPAIR programs to spend on Regional Roads. Regional Roads are the link between State Roads and Local Roads.

‘RMS cannot show that the money it provides to local councils for Regional Roads is spent well and goes to where it achieves most benefit,’ said the Auditor-General, Mr Grant Hehir.

‘I cannot determine independently how well councils use RMS contributions as my mandate does not allow me to follow-the-money into local government and examine their processes and data,’ he added.

Block Grant program is administratively simple but allocation and accountability need to improve

Under the Block Grant program each council receives an annual grant for its Regional Roads. In 2013–14, $142.2 million was allocated to councils.  ‘The Block Grant program is administratively simple and allows councils to choose where money is spent,’ said the Auditor-General. ‘However, grant allocations do not take into account the disproportionate damage caused to roads by heavy vehicles and are based on traffic data that contains anomalies and is sometimes well over ten years old,’ said the NSW Auditor-General.

RMS should continue working with councils to improve the quality of data used for allocating Block Grants. They should require councils to certify that they spend Block Grants in line with priorities set in their strategic and operational plans. RMS should also perform a risk-based, desk-top assurance of this certification.

REPAIR program is well designed but needs better implementation in regions

The Repair and Improvement of Regional Roads (REPAIR) program provides funds to assist councils undertake larger rehabilitation and development works on Regional Roads. RMS provided $29 million to councils in 2013–14 – contributing half of the estimated cost of these works. 

‘The REPAIR program is well designed, merit-based and focuses on minimising whole of-life costs and providing positive net economic benefits. However, the six RMS regions need to improve how they are implementing aspects of the program,’ said the Auditor-General.

Two RMS regions did not select projects from a regional perspective and the way regions assessed the merit of projects varied widely, with most not adequately accounting for whole-of-life costs and economic development.

RMS should ensure that all projects are selected on a merit basis from a regional perspective and that adequate weight is given to whole-of-life costs and economic benefits.

A number of issues identified in this audit were already being addressed by RMS and they have agreed to address other key findings in the report.

Further information

Barry Underwood, Executive Officer, 9275 7220 or 0403 073 664.