Transcript Transport opportunities & challenges

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:
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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:
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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
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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:
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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