Spending review: the winners and losers in the transport stakes

Which transport sectors did well and which did badly in the Comprehensive Spending Review? Throughout the linked articles LTT delves into the detail of the review and speaks to experts to see what the settlement means for transport policy and delivery

In the end it was bad but not quite as gloomy as some had expected. The DfT faces a 15% real terms cut to its budget between 2010/11 and 2014/15, slightly below the 19% reduction to Government spending overall.

Transport secretary Philip Hammond’s argument that transport infrastructure investment was vital for the economy played out well, with just an 11% reduction in the Department’s capital budget. The settlement ensures the delivery of a number of ‘big ticket’ infrastructure projects and programmes, notably Network Rail’s enhancement programme, London Underground upgrades and the capital’s east-west Crossrail route.

The Highways Agency’s trunk roads budget will, however, be heavily cutback and local authority capital funding will also suffer cuts. Many councils will learn in the New Year that their major transport schemes are unaffordable. London boroughs could see a 25% reduction to their Local Implementation Plan budgets.

Councils in England must also grapple with a 28% reduction in revenue support from central government. Staff cuts, new approaches to service delivery and reductions to tendered bus networks and road maintenance are all likely consequences.

The DfT itself faces a 21% cut to revenue spending. This will be delivered partly through rises in rail fares and cuts to bus subsidy. The latter will, in turn, force operators to reduce services or put up fares.

The relatively good capital settlement for the DfT is not mirrored in the devolved nations. Scotland, Wales and Northern Ireland all face capital cuts of 35-40% over the next four years with obvious consequences for transport investment.

For the environmental lobby there was some cheer with the news that the DfT’s Local Sustainable Transport Fund will provide £560m over four years for packages of low-cost transport improvements. 

DfT Expenditure Tables

£m cash	Baseline 2010-2011 Capital (1)	2011-12 Capital	2012-13 Capital	2013-14 Capital	2014-15 Capital
National Roads (Highways Agency)	1571	1244	921	877	1040
Rail (including net rail income)	3778	4109	4896	4662	4532
Local government funding	1618	1554	1503	1465	1664
o/w Local Sustainable Transport Fund	n/a	30	40	60	80
o/w maintenance	871	806	779	750	707
o/w Integrated Transport Block grant	450	300	320	320	450
o/w Major local enhancement schemes	199	418	364	335	427
London transport grants	n/a	424	352	184	0
Other programmes	719	400	410	292	281
o/w Regional Growth Fund	n/a	165	100	-	-
Total	7686	7731	8082	7480	7517

£m Cash	Baseline 2010-2011 Resource (1)	2011-12 Resource	2012-13 Resource	2013-14 Resource	2014-15 Resource	2014-15 Resource
National Roads (Highways Agency)	1124	1118	1016	998	947	-23%
Rail (including net rail income)	-337	-87	-247	-483	-435	n/a
Local government funding (3)	473	378	401	413	420	-28%
o/w Local Sustainable Transport Fund	n/a	50	100	100	100	n/a
o/w transferred to CLG formula grants (3)	n/a	303	276	288	295	n/a
Local PFI (4)	170	195	239	311	320	71%
London transport grants	2764	2804	2803	2699	2404	-21%
o/w General TfL grant	n/a	-	-	200	-	n/a
o/w Investment grant	295	272	252	233	216	-33%
Other programmes	1091	1007	907	1131	884	-27%
o/w Regional Growth Fund	n/a	-	-	200	-	n/a
o/w Departmental Administration	295	272	252	233	216	-33%
VED Collection & Enforcement (5)	191	189	190	191	191	-9%
Total	5141	5299	5033	4971	4436	-21%

 

Key:

1. The Government's spending review process allocated capital according to a bottom-up appraisal methodology; baselines for 2010/11 for individual programmes are therefore estimates and inflated baselines for subsequent years are not available. Therefore savings against baseline do not apply.

2. % reductions compared to the 2010/11 baseline adjusted for inflation

3. These payments transfer to CLG budgets and are therefore not included in DfT's total DEL. The baseline includes funding for demographic pressures on Concessionary Fares in later years

4. Private Finance Initiative (PFI)   

5. Vehicle Excise Duty (VED) Collection & Enforcement