Cut concessionary travel spend and raise motoring taxes says CfIT

Cuts to concessionary travel, higher motoring taxes and more spending on travel behaviour change policies have been recommended by the Commission for Integrated Transport in advice to ministers on transport policy in the new era of austerity.

The report is the final piece of advice to be offered by the Commission that was set up by former deputy prime minister John Prescott in 1998. The Government this week confirmed that CfIT is being abolished.

CfIT says the £1bn spent on concessionary travel for the elderly and disabled in England each year represents poor value for money. “At the time of our 2002 report we estimated that a 100% [ie free]  scheme would have a benefit:cost ratio of less than 1. The main reason why [the BCR is so low] is that we estimated that the great majority of trips made by those entitled would have been made without the concession.

“Given our focus on reducing carbon dioxide emissions, economic recovery and the fiscal crisis, a universal 100% concession for older people does not therefore seem a high priority for transport spending.”

CfIT suggests giving people eligible for free travel a preloaded value on their smartcards. The entitlement should be valid on any mode of transport where smartcard readers are fitted. “We estimate that a £500m scheme could still allow at least £75 per annum per person, and perhaps as much as £100.”

The Commission suggests raising an extra £1.5bn a year from taxes in the form of higher fuel duty, air passenger duty and a system of charging for foreign lorries to use Britain’s roads. It justifies higher motoring taxes by asserting that the marginal cost of car use is “generally lower than the cost which that use imposes on society”.

In the longer-term CfIT suggests introducing road user charging across much of the network, a policy that it says should raise an extra £6bn a year.

CfIT says the Government’s CO2 reduction targets and the lower fuel tax yields as cars become more fuel efficient has fundamentally changed the case for road pricing.

“What previously might have seemed a policy option increasingly looks to be an inexorable policy necessity given the fiscal and congestion consequences of the current mix of taxes,” says the body, chaired by London’s transport commissioner Peter Hendy.

It suggests road pricing could  be extensively introduced by 2016 at the earliest.

CfIT says some of the additional fuel duty income should be used to fund a ‘sustainable travel fund’ of policies to reduce car use. It strongly endorses small-scale ‘smarter choice’ travel behaviour change measures and suggests the policies could have resonance with the Government’s Big Society agenda. “[The policies] provide an opportunity for community leadership and engagement, coupled with encouragement of personal responsibility, which is lacking in more traditional transport interventions,” it says.

CfIT also wants a more rapid switchover from Bus Service Operators Grant (BSOG) – fuel duty rebate – to a per passenger subsidy (Incentive Per Passenger (IPP)). It describes the previous Government’s plan to complete the transition by 2020 as “disappointing”.

The Commission concedes that the switch to IPP will harm rural services because IPP payments on these routes will be much lower than BSOG payments. CfIT therefore recommends a £31m rural bus safety net. It says there is also a need to rethink public transport in rural areas, with greater use made of taxibuses.