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Transport spending: Getting more from less

Transport spending: Getting more from less. Paul Godier Transport Planning Society 26 th January 2011. The challenge. Cut of about 20% by 2013/14 (Labour PBR) Local authority spend too Total saving needed ≈ £3½ billion p.a. Balance of tax & spend?

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Transport spending: Getting more from less

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  1. Transport spending:Getting more from less Paul Godier Transport Planning Society 26th January 2011

  2. The challenge • Cut of about 20% by 2013/14 (Labour PBR) • Local authority spend too • Total saving needed ≈ £3½ billion p.a. • Balance of tax & spend? • The key goals of the economy & climate change remain

  3. Expenditure savings 1 - efficiency • Some already built in to existing projections • Many examples of further scope: • Midlands Highways Alliance – joint procurement etc £11m pa • Shropshire CC – whole life road maintenance – save 24% • Norfolk CC – Integrated Transport Unit – save £0.6m pa • Network Rail – ORR require 21% pa saving by 2014 • We suggest a realistic aim of 7½% cumulative - saving £1.3 billion p.a. by 2013/14

  4. Expenditure savings 2 – bus subsidy • Key opportunity – restructure concessionary fares for the elderly • Package together with: • Faster smartcards & Incentive Per Passenger • Pre-loaded value • Multi-modal • Potential saving of £400m p.a. • Interim options – charge per card/flat fare

  5. Expenditure savings 3 – and some high VFM addbacks • Road capacity investment to be reduced • Increased spend on high value areas: • Road safety • Smarter choices • Rail ‘grand projets’ – beware ‘crowding out’

  6. Green taxes • Fuel duty +2p • Air passenger duty +25% • Simple lorry charging scheme • Could raise £1½ billion p.a. We are not arguing for hypothecation, but…

  7. Decarbonisation • Looming fiscal hole – falls in VED & fuel duty yields • Loss estimated at £4 billion by 2020 & rising • More congestion as motoring gets cheaper • Step forward…road user charging • Also makes short term road spend unworthwhile • Can be phased • Once in, reduces case for public transport subsidy

  8. Private sector • Community infrastructure levy • Business rate supplement • Workplace Parking Levy • Estimated £¼ billion p.a. from these sources • Opportunity for regulated utility model for national roads • Infrastructure Fund for pension investment may assist also

  9. The scorecard Approx. potential annual savings

  10. In summary • It’s tough, but… • …there’s a menu of options that could: • Make a big contribution to short term fiscal need • Still deliver a great deal on the economy & climate change • Tax ‘bads’ not ‘goods’ • Elicit private sector help • Fix the looming hole in fuel duty & VED • Full report at www.bit.ly/tsgmfl or Publications on CfIT site

  11. What’s happened? • DfT resource DEL cut 21% over 4 years • Capital DEL only cut 11% • Burden on fares and Local Authority funding • Local Sustainable Transport Fund (30% less than Congestion TIF) • Tax Increment Financing

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