Budget 2013

George Osborne

The Chancellor George Osborne delivered his 2013 Budget statement on 20th March 2013

Here’s our quick summary of the main points from today’s Budget 2013 announcement, focusing on those of relevance to transport and the PTEs.

Departmental spending

  • Reduction in Resource Departmental Expenditure Limits equivalent to a 1% reduction for most departments. Schools and health budgets remain protected. Individual departmental budgets will be published in the 2015/16 Spending Round.
  •  Departments saved £5.5bn in 2011/12 and are expected to deliver comparable additional efficiency savings each year.

Local Government

  • Local Government allocations that have been set out for 2013/14 will not be changed.
  • Extending restraint on public sector pay by a year by limiting increases to an average of up to 1% in 2015-16. The Government will seek further significant savings through reforms to progression pay at the 2015/16 Spending Round.
  • The Government will establish a new multi-agency network to drive the transformation of local public services. The network will spread innovation from the Whole Place Community Budget pilots and What Works Centres to support other places to provide advice and support on co-designing local public service transformation. Plans to extend the benefits of the Whole Place approach will be announced at the 2015/16 Spending Round.

Governance

  • Confirms that the overwhelming majority of the Hestletine Review’s recommendations have been accepted, including creation of a competitive Single Local Growth Fund, devolved to local level through new Local Growth Deals. Funding will be allocated to LEPs on the basis of strategic multi-year plans for local growth. They will be challenged to leverage private and local funding and commit to governance reform – those who offer the most will be more likely to benefit in terms of increased funding and flexibilities. The fund will be operational by April 2015 and further details will be set out at the 2015/16 Spending Round.

Transport and Infrastructure

  • Using savings from Departments outlined above, the Government will increase capital spending plans by £3bn a year to improve UK infrastructure. The Government will set out how this will be allocated at the 2015/16 Spending Round. This will take a long-term approach, including setting planning assumptions out to 2020/21.
  • Planned September 2013 fuel duty increase cancelled.
  • Tax incentives to support the manufacture of ultra-low emission vehicles.
  • Double to £10,000 the size of loans that employers can offer tax free to pay for items such as season tickets for commuters.
  • Implement a series of reforms to effect a step change in Government’s approach to infrastructure delivery, supported by Infrastructure UK and new Infrastructure Capacity Plans. Government will also consider options for making more use of independent expertise in shaping its infrastructure strategy.

Planning

  • Publish significantly reduced planning guidance by this summer.
  • Will be asking local areas to put in place bespoke pro-growth planning policies and delivery arrangements as part of new Local Growth Deals and through City Deals.

Look out for…

  • More details on many of these measures to be contained in the 2015/16 Spending Round, to be announced on 26 June 2013.

Rebecca Fuller

The biggest bargain in transport policy?

Bus crossing tram line in Manchester

The urban bus – a highly effective social and transport policy

Is the urban bus the biggest bargain in transport policy? There’s certainly a strong case to be made – as our new report (‘The Case for the Urban Bus – The Economic and Social Value of Bus Networks in the Metropolitan Areas’) shows.

The key to the exceptional value for public money that the urban bus represents boils down to the fact that the urban bus is a highly effective social policy which also has economic and transport benefits. And looking at it from the other end of the telescope it’s a highly effective transport policy which at the same time has considerable social benefits.

There’s not so many forms of public expenditure that achieve so many multiple and overlapping policy objectives for every pound spent. A policy that gets young people to education, the jobless to jobs, and tackles isolation for older and disabled people. Part of the solution to problems like these that will ultimately incur major costs to society if not tackled. And at the same time as it does this it, it also reduces congestion for motorists and provides the access that city centre employers and retailers rely on. Not bad!

Over £2.5 billion in economic benefits

The report sets out all these inter-linked benefits in detail – and, crucially, puts some hard numbers against those benefits. It finds that in PTE areas alone bus networks are estimated to generate over £2.5 billion in economic benefits by providing access to opportunities; reducing pollution and accidents; and improving productivity.

The report also finds that specific bus funding streams generate significant economic benefits:

  • BSOG generates at least £2.80 of benefits for every £1 of public money spent – over a quarter of these benefits go to other road users due to buses’ role in reducing road congestion.
  • The national concessionary fares scheme generates £1.50 of benefits for every £1 of public money spent – a high return for a social measure.
  • The non-commercial bus services that local authorities support can generate benefits in excess of £3 for every £1 of public money spent. Most of these benefits are to the bus users who depend on these services to access opportunity (like jobs, education and healthcare).

The report also finds that because of the local nature of bus services and operations, much of the bus industry’s turnover (in excess of £5 billion a year) is ploughed back into regional economies through the supply chain, and because the people who work on local bus services live and spend in their local areas.

The report highlights the key role that urban bus services play in tackling social exclusion – from linking jobseekers to jobs, to getting young people into education and training, to providing a way out of social isolation for older people.

Without the bus the report finds that ‘our cities would be more divided, the poorest and the most vulnerable would be more isolated and severed from the opportunities that many take for granted, and so much talent that dynamic and prosperous cities need would go to waste as training, education and jobs would be unreachable for many young people.’

Although this report focuses on the largest urban areas it should absolutely not be inferred that this means that there is a not a strong case for supporting rural bus services. Many PTE areas contain substantial rural hinterlands and we know just how important the rural buses we support are for keeping communities connected, for the rural tourism economy, and to tackle major problems of social exclusion in rural areas. However, this report we concentrates on the specific urban case because a good bus network is so important to urban areas it deserves this detailed analysis of the specific benefits that urban bus services bring.

A strengthened evidence base

Since the last spending review (where the collective failings of the bus industry, the DfT, and local government on assembling the evidence base on buses were exposed and punished) there has been a concerted effort, led by Greener Journeys, Campaign for Better Transport and pteg, to systematically fill the gaps in that evidence base through a series of complementary and overlapping reports. There’s more to come but the evidence base has now been thoroughly transformed. It is robust and battle ready and my sense is that decision makers are now taking it more seriously. However, there’s a long way to go. Public funding for the bus has some unique challenges in that it comes from a variety of sources, and in some ways the Department for Communities and Local Government (CLG) is more important for bus funding than the Department of Transport as CLG take the decisions on local government funding which ultimately determine a big slab of bus funding. And the bus is far from the forefront of CLG thinking. Bus funding is also highly revenue dependent at a time when capital rather than revenue spending is favoured by Government.

However the evidence base is there for the bus. The task now is to continue to take it to key decision makers and to find some collective asks of Government on bus funding whilst accepting that there will remain fundamental differences between many incumbent bus operators and local government on the deregulation / regulation issue. It can be done and it needs to be done if we are going to get a better result from this Spending Review for the bus this time, than we did last time around.

Jonathan Bray