Your correspondent David Youd asks why Oxford City Council isn't progressive enough to introduce trams (Oxford Mail, May 20).

He deserves a reply, which comes in two parts.

The city council lost its autonomous county borough status in 1974 with the introduction of the two-tier structure of local government.

Since that time, Oxfordshire County Council has been responsible for strategic transport and highways policies for Oxford, not the city council.

Secondly, regardless of which council is responsible for transport, the cost of introducing a new tramway system into the city on any significant scale would be between £100m and £200m, and could only be funded by central government or by the private sector.

For private investors, the return on such a massive investment is unlikely to be attractive.

For central government, facing a large public sector borrowing requirement already, and a myriad of demands for public investment, a tram project for Oxford is also unlikely to pass the tests used by the Treasury to assess return on investment.

Personally, I think that a good case could be made for the Department of Transport dropping most road widening/improvement projects and transferring the capital investment into rail and tram infrastructure (and cycling!).

The rising cost of oil and the advent of Peak Oil makes the relative returns on investment in rail/trams in the medium- and long-term much better than they have been in the past.

I can assure Mr Youd that the new city executive board has already established a positive working relationship with our colleagues on the county council, and officers and members from the two councils will be working closely together to find solutions for the clearly urgent problems that the city faces in dealing with its transport needs.

Bob Price

Leader, Oxford City Council