pteg Summary of the Autumn Statement 2013

Autumn Statement 2013 front coverWe thought we would share with you our summary of the key 2013 Autumn Statement announcements of relevance to transport and the PTEs.

Transport and local government budgets

  • For 2014-15, the majority of Whitehall departmental budgets will be cut by 1.1%.
  • Local government is excluded from this reduction, to help local authorities to freeze council tax in 2014-15 and 2015-16. As such CLG Local Government will see no reduction in its departmental resource budget for the next two years.
  • DfT will see a £41m cut in its resource budget for 2014-15 and £36m in 2015-16.
  • The Government is looking at giving local public services the same long-term indicative budgets as departments from the next Spending Review.

Local government

  • The government is inviting proposals for sales and better use of local authority assets as part of growth deals. As an incentive, the government will allow local authorities the flexibility to spend £200 million of receipts from new asset sales on the one-off costs of reforming services.
  • An additional £90 million over 3 years to improve the energy efficiency of public sector buildings.
  • £5 million during 2014-15 for a large scale electric vehicle-readiness programme for public sector fleets. The programme aims to promote the adoption of ultra low emission vehicles, demonstrating clear leadership by the public sector to encourage future wide-spread acceptance.
  • For more on the implications for local government, see the Local Government Association response to the Autumn Statement and the Guardian Local Leaders Network summary.

Transport

General

  • A new webpage on http://www.gov.uk, providing a single source of information on schemes designed to help manage the cost of transport to individuals and households.

Rail

  • A cap on the average increase in regulated rail fares for 2014 in line with RPI. Confirmation that the permitted ‘flex’ above the overall cap on average rail fares will be reduced to 2%. Read Campaign for Better Transport’s reaction.
  • Confirmation of a trial of flexible rail season ticketing in the South East to benefit those who work flexibly or part-time.

Motoring/road freight

  • Freeze fuel duty for the remainder of this Parliament.
  • To incentivise a shift to cleaner, cheaper fuel, commits to maintain the differential between the main rate of fuel duty and the rate for road fuel gases such as Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) for 10 years. This aims to provide businesses with the certainty they need to invest in alternatively fuelled commercial vehicles.
  • Measures to encourage the development of driverless cars in the UK, including a review reporting by end 2014 and a prize fund of £10 million for a town or city to develop as a test site for consumer testing of driverless cars.
  • A guarantee for £8.8 million to help fund the installation of energy saving lighting equipment across a portfolio of NCP car parks.

Infrastructure

  • The Government’s plans for National infrastructure are detailed in the National Infrastructure Plan 2013 (NIP 2013) published on the 4th December.
  • On the same day, the Government also published ‘The UK insurance growth action plan’ including a commitment by UK insurers to work with partners to deliver at least £25 billion of investment in UK infrastructure over the next 5 years, including but not restricted to projects in the published infrastructure pipeline.
  • Alongside NIP 2013 the government published the National Networks National Policy Statement for consultation and parliamentary scrutiny.
  • Launch of an overarching review of the Nationally Significant Infrastructure Planning Regime focusing on shortening the lengthy pre-application phase and further streamlining of the consenting process.
  • Creation of a £1 billion, 6-year programme to fund infrastructure to unlock new large housing sites (Manchester and Leeds were mentioned specifically). £50 million of this will be earmarked for Local Enterprise Partnership supported bids.
  • Maintenance of the Local Growth Fund at £2 billion in 2015-16 (including through making £110 million of Regional Growth Fund available for the Local Growth Fund). The Local Growth Fund will be at least £2 billion every year of the next Parliament.

Land-use planning

  • The government will take steps to address delays at every stage of the planning process, incentivise improved performance and reduce costs for developers, including consulting on measures to improve plan making, including introducing a statutory requirement to put a Local Plan in place.

More information

Rebecca Fuller

How well did transport really do in the Spending Review? The fine print analysed

c. Images_of Money on Flickr. Used under Creative Commons

A clearer picture on Spending Review outcomes is emerging, but important questions remain.

The 2013 Spending Round (commonly referred to as the ‘Spending Review’) announced a step change in infrastructure investment , backed by an impressive array of specific commitments .

But although the key transport capital budgets have emerged as obvious winners, the picture is less clear when it comes to some of Department for Transport’s (DfT) smaller grants.

At the same time, the unexpected decision to pool a substantial proportion of local transport capital funding into the Single Local Growth Fund (SLGF) makes the long term outcome uncertain.

A clearer picture is unlikely to emerge until the DfT clarifies its detailed spending plans for 2015 onwards and the results of the first SLGF competition emerge in the second half of 2014. The key points from the Spending Round are summarised below.

Treasury big picture:

  • The June Spending Round did not entail any net change in overall government spending relative to the March budget.
  • In reality, the annual year-on-year growth in total government capital spending between 2014-15 and 2017-18 will most likely fall below the rate of inflation.
  • The Spending Round did include some new capital funding commitments beyond 2018, with HS2 and the Highways Agency emerging as the big winners.
  • Although overall capital expenditure will be higher in 2014/15 than originally set out in the 2010 Comprehensive Spending Review (CSR), this will be at the expense of resource budgets, which will be 8.5% below original plans. This is of particular significance to local government funding, which has been the main source of savings.

DfT budget:

  • In 2015-16, the DfT’s budget will be 4.5% lower than in 2014-15 (as set out in the March 2013 budget).
  • Although DfT capital funding will increase by 6.7% (from £8.9 to £9.5 billion), its resource budget will go from £4.4 to £3.2 billion. The largest chunk of the saving will come from Transport for London’s (TfL) resource grant and assumed efficiency savings in Network Rail spending and DfT’s rolling stock procurement.
  • Our previous analysis of the 2010 CSR and subsequent budgetary announcements up to Autumn 2012 provides additional background information.

Local transport:

There will be a significant boost to key local transport capital grants in 2015-16:

  • +28% in real terms, relative to the 2014-15 budget
  • +16% in real terms relative to Labour’s 2010-11 budget

However, the unexpected decision to route a large proportion of local transport grants into Local Enterprise Partnerships (LEPs) via competitive growth deals makes it difficult to anticipate what proportion of this money will end up funding transport schemes in PTE areas.

The Spending Round said nothing about what will become of smaller competitive grants such as the Pinchpoint Fund, the Green Bus Fund, the Cycle Ambition Grant or the DfT’s contribution to the Regional Growth Fund. However, even if these were to be scrapped altogether, local transport capital funding would still increase by around 15% (in real terms) between 2014-15 and 2015-16.

On the revenue side, the current rate of Bus Service Operators Grant (BSOG) has been protected until 2015-16 and we also know that the DfT will manage a considerable Local Sustainable Transport Fund (LSTF) resource grant in 2015-16.

You can read our full analysis of the Spending Review on the pteg website.

Pedro Abrantes