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Transport spending: Getting more from less Paul Godier Transport Planning Society 26th 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? The key goals of the economy & climate change remain 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 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 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’ 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… 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 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 The scorecard Approx. potential annual savings £bn p.a. Efficiency 1.3 Expenditure cuts (net) 0.4 Taxes & charges 1.5 Private finance .25 Total 3.5 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 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
