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Transport grants cut in number

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Transport grant streams to councils will be cut from just under 30 to only four, transport secretary Philip Hammond has said following the spending review.

The Department for Transport’s resource spending will fall over the next four years from £5.1bn to £4.4bn, and its capital spending from £7.7bn to £7.5bn, while its administration costs must fall by one-third.

Concessionary bus fares for elderly people will continue but will be linked to an increase in the retirement age to 66 by 2020.

The mileage subsidy paid to bus operators will be cut by 20% by 2014/15, equivalent to £300m, and the DfT will “work with bus operators and local government to examine smarter ways of administering this subsidy to get better results for passengers and taxpayers”.

This may include combining it with other local bus funding streams, as the Local Government Association has advocated.

A number of road and rail capital projects have been protected despite the carnage elsewhere:

  • construction of London’s Crossrail project
  • extension of the Midland Metro
  • construction of the Mersey Gateway Bridge in Halton
  • reconstruction of Birmingham New Street station
  • extension of the Nottingham tram network
  • upgrading the Tyne and Wear Metro and improvement to the Tees Valley bus network
  • widening of the A11 to provide a continuous dual carriageway between Norwich and the M11
  • spending on upgrading the London Underground network will be protected but Transport for London will suffer a 28% cut in other resources
  • PFI highway maintenance projects in Sheffield, Hounslow and the Isle of Wight.

Mr Hammond said: “I am confident that our focus on the long term will ensure that we can continue to build a transport system that supports economic growth and reduces carbon.”

Ian Simpson, head of transport at Deloitte, said the £30bn for transport capital spending was “better than might have been feared and reflects a strong desire to protect the infrastructure which will support the growth of the economy”.

He said the cuts meant both that new public sources of funding, such as the Urban Challenge Fund and tax increment financing, would be needed as well as private money.

“It is our belief that more complex and innovative funding packages will be required, needing a strong degree of local public-private support and partnership,” he added.

  • 1 Comment

Readers' comments (1)

  • We welcome the Government’s commitment to maintaining transport infrastructure investment and supporting growth. Transport infrastructure is a key enabler of economic growth. In times of fiscal constraint such spending needs to be used as effectively as possible. We'll need to wait for the details in the national infrastructure plan to judge the potential impact of the DfT’s priorities. However, the initial set of schemes and policies announced in the Spending Review today is does not always line up with this goal. In a time when benefits payments are cut and we want to help people take up jobs, is it sensible to reduce bus subsidies by 20% while maintaining concessionary fares? Both of these policy choices risk cuts to the less commercially viable of our cities’ bus services – meaning it will be even more difficult for people living in UK cities' more deprived areas to access jobs.
    Lena Tochtermann, Centre for Cities

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