A REPORT commissioned by Gordon Brown to assess Britain’s transport requirements will say there is a need for extra capacity on Britain’s roads and railways and at its airports.

But the report, due in 10 days’ time, by Sir Rod Eddington, the former chief executive of British Airways, will also conclude that poor management of the transport network is to blame for most of the problems that dog British business and hurt the economy.

It is expected to say that “smart” investment in removing bottlenecks, such as making roundabouts and motorway junctions work more efficiently, could generate significant gains at low cost.

“Doing the little things right can make a big difference,” said an official familiar with the report, jointly commissioned by the Department for Transport and the Treasury.

Eddington is not expected to make specific recommendations on new projects, including the long-delayed London Crossrail project, a proposed high-speed north-south rail link and a third runway at Heathrow.

As well as proposing additional capacity and better use of the existing network, he will back the government’s road- pricing scheme as a way of managing demand more efficiently.

The Eddington Transport Study, which will be published alongside the chancellor’s pre-budget report on December 6, had as its brief an assessment of the long-term impact of transport decisions on productivity and economic growth.

It follows Sir Nicholas Stern’s report on the economics of climate change, published last month. While Eddington is sceptical about the impact of aviation on global warming, the pre-budget report is expected to signal a modest shift to green taxes, including higher air passenger duty and extra road tax on high-emission “gas guzzling” vehicles. But Whitehall experts doubt that Brown will signal other green taxes.

The Treasury is upbeat about the economy, which is expected to grow by 2.75% this year, compared with the 2% to 2.5% forecast in the March budget. Recent inflation figures have also been better. A survey of analysts by Ideaglobal.com shows that 60% think Bank rate has peaked at 5%. The Treasury also believes the public finances are under control.

The City, however, is not convinced. “Despite strong economic growth, the fiscal deficit is likely to overshoot the start-of-year budget forecast again this year, for the sixth consecutive year,” said Michael Saunders, a Citigroup economist. He expects a deficit of £41 billion, £5 billion above the budget forecast.

The pre-budget report, which Treasury insiders say will be “policy rich”, will include a series of independent reports, as well as the Eddington study. The Leitch review of skills, under Lord Leitch, will propose a more business-focused approach to training and skills, and warn of the dangers of not improving the skills base.

The Barker review of land-use planning, under Bank of England monetary policy committee member Kate Barker, is expected to pave the way for an eventual “planning gain supplement” on land for development.

Other independent reviews include the Lyons inquiry into local government and its financing, the Gowers review of intellectual property and the Cooksey review of science research.

Ahead of the pre-budget report, the Treasury will publish a study of the challenges facing Britain in the next 10 years.

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