Smarter Cuts

Stephen Joseph, July 2010

Stephen Joseph became the executive director of what was Transport 2000, now the Campaign for Better Transport, in 1988. His transport expertise is widely regarded and he is regularly called as a government adviser. He has led numerous successful transport policy campaigns. In 1996 he was awarded the OBE for services to transport and the environment and in 2008 he was honoured with a PTRC (Planning and Transport, Research and Computation) Lifetime Achievement Award for furthering the role of transport planning in society.

Under Stephen's direction, the Campaign for Better Transport (CfBT) has produced a report, 'Smarter Cuts', taking an in-depth look at the implications for transport of the Government's deficit reduction programme. Stephen says: "Our research shows that, on transport spending, the Government has a choice. It can go for easy cuts, taking money out of all budgets, upping fares and giving priority to roads. Or it can go for smarter cuts which protect the spending that helps the economy, meets carbon and environmental targets and strengthens communities".

The report offers an alternative scenario giving priority to funding local public transport , cycling and maintaining roads, paid for by cancelling some large road building projects. It also sets out new approaches which would save money by integrating transport better with other services.

Below we reproduce the Foreword to the report, written by Stephen. The full version of the report is downloadable from the CfBT website.

The new Government has made reducing the budget deficit its prime target. It has ring-fenced some budgets, but transport is not one of them. This means that transport spending is likely to be cut by 25% or more. In fact, the cuts have already started - as part of the immediate #6bn spending cuts, the Government is reducing transport grants to local councils, Transport for London and Network Rail. It has also effectively frozen all further work on local roads and public transport projects and orders for new trains pending the autumn spending review. These cuts of course mainly apply to England, though rail funding decisions will affect Wales and Scotland - other decisions on transport in those countries and in Northern Ireland will be made by the devolved administrations. But it is notable that the Scottish Government has already halted some transport schemes.

This report looks at the implications of cuts in transport spending. It argues that the Government has choices in what it cuts, and also how it does it. So far the focus of discussion has been on specific transport projects such as Crossrail in London. But the implications of the transport priorities the Government will set go far wider than this, and link to other Government policies and objectives:

• Transport services and infrastructure support the economy, and congested or poorly maintained roads and poor or expensive public transport will impede economic recovery
• Transport is responsible for over 25% of UK greenhouse gas emissions, and the spending decisions made will affect whether the Government meets the targets for reducing these emissions set out in the Climate Change Act and reduces reliance on imported and expensive oil
• New housing and commercial development need good access - transport spending will influence how and where development takes place and how car dependent it is
• Increasing social justice will depend on transport planning and services, and in particular on whether poorer households can access public services or opportunities for employment, education and training
• Transport also has an impact on people's health, through obesity (lack of physical activity), air pollution and road crashes, and on local quality of life in terms of noise and intrusion if there is too much air or road traffic or poor street design - transport spending decisions will therefore affect people's health and the communities they live and work in

Finally, there are the people and businesses who use transport. Transport spending priorities, combined with other Government decisions on transport regulation, planning and taxation, will increase or reduce the choices open to transport users. Depending on these, people may have a wide range of choices in how and where they travel, or be forced to use cars everywhere.

This means that the Government can't duck out of transport - it has a critical role to play if it wants to meet its wider objectives, for example reviving the economy and being "the greenest Government ever". In fact all Governments in recorded history have regulated or funded transport, because the private sector on its own can't deliver transport services or infrastructure in ways that meet these objectives.

Transport strategy and prioritisation process

Traditionally, transport planning and funding has tended to be dominated by building big new infrastructure schemes - roads, railways, airports. These have tended to take political and financial priority over smaller schemes and local travel, and particularly over walking and cycling, and support for buses. There has been a view that the "natural" form of travel is the car and that new transport and development needs to be planned round that. In fact, one transport official once suggested that walking and cycling are not really transport at all - "transport is something you get in". Siren voices still suggest that people want to drive places and that big motorway widening - to 14 or even more lanes - is the only answer.

This ignores the evidence from many places - here and in other countries - that if people are offered good alternatives to the car, and cities, towns and villages are planned so that people can get places without lots of driving, enough people will choose to use these alternatives so that we can have prosperity and a good environment with low levels of car use, and stronger communities too. In many cases, people are not "choosing" to use their cars - they have no other choice because facilities and services are centralised or built in out-of-the way places, public transport isn't an option and cycling or walking feels too dangerous. Transport patterns are changing too - even during the boom years, traffic growth fell away, while public transport and rail in particular increased substantially. Now new communications technology provides alternatives to travel - it is notable that some of the arguments for new roads and airports and for providing for increased travel seem to imply a world in which the internet, broadband and remote working haven't been invented yet.

Transport choices - the easy choice

So our report sets out the choices. In one scenario, the Government could slash spending on rail and buses and on local transport, but keep building new roads. This would result in some small lengths of new roads, but potholes in existing ones. We could also expect increasingly expensive and scarce trains and buses would potentially all but disappear outside the bigger cities. This scenario would, we argue, increase traffic jams, pollution and potentially road casualties, and hurt rather than help the economy and the environment. In fact, our report shows that the available spending would buy very little new road because road construction has become extremely expensive - the A14 scheme in Cambridgeshire, now on hold, would see just 21 miles of new road for #1.3bn. Widening the M6 north of Birmingham, when last costed, came out at over #1000 an inch. And there would be other quirks - pensioners might have free bus passes, but many would have no buses to use them on. Despite Government rhetoric, there will be an increased north-south divide under this scenario, with northern and midland cities losing out to London and the South East.

Transport choices - the right choice

However, there are alternatives. In another scenario, even with much less money, the Government can fund a lot of smaller, local transport projects - it can focus road spending on better maintenance and management of the roads we have, rather than building new ones. It can retain, improve and electrify rail services, while reducing the costs of providing them. It can protect and enhance bus services. It can get freight off the roads and on to the railways. It can fund schemes and training which will get people cycling rather than using cars for short distances. And it can join up transport so that people get a range of door-to-door transport services, with smartcards, connecting services, good interchange and reliable information.

But this benign scenario is not just about transport projects themselves. We argue too that there are a wide range of new approaches that can make transport work better. These include joining transport up to other Government decisions, so that, for example, when decisions are made on health services or the future of rural post offices those making the decisions have to take account of the transport consequences, rather than just assuming people will get there somehow or that they will drive. Joining transport up to planning policy will reduce the need for people to travel and shorten journeys - it will also bring big savings to people, businesses and public spending. Bringing together local transport services - so that health, education and social services are no longer commissioning their own transport independently - also allows savings and efficiencies.

New approaches to funding

We also point out that there are alternative sources of funding for transport. The Government has ruled out general road user charging, but has proposed road charging for lorries and a per plane tax for aviation. Some of the revenue from these could go into transport. There are also examples of new forms of local transport funding, here and in other countries - business rate supplements (already being used to fund Crossrail), developer contributions, parking charges and others.

The priorities for the spending review

Our work has thrown up some other issues. First, the way in which transport projects are assessed and prioritised needs to change, and the coalition government is committed to this. Previous work by us and others has shown that the business case for transport projects changes, in some cases quite radically, if the value of small time savings changes and if other impacts such as climate change and health are given more weight.

Second, there is the proposed high-speed rail line, which the Government is also committed to. There is some acceptance that the cost of building the line should be separate and extra from the transport budget. But if the preparation costs of the line, which with blight payments and a parliamentary bill could easily be #2bn, are to be met from a reduced transport budget, then further major cuts to existing services and projects are unavoidable. In this scenario, the Government could spend this Parliament buying up land in Buckinghamshire, while roads get potholes and buses disappear from much of the country.

Third, we think bus services could suffer particularly from cuts and fare rises. Bus funding could be hit by cuts in central Government spending, such as Bus Service Operators Grant, and also by cuts in local government spending. The combination of these would mean a spiral of decline in which operators withdraw services/raise fares and local councils have no money to subsidise them. All this will be below the national radar - but will be especially critical for deprived communities.

This raises a further issue - localism and devolution, which the Government is committed to. It is unclear what devolution will mean for transport - will duties and funding be devolved, and if so will they go to city-wide authorities as in London or to individual boroughs? Will Government require any conditions or set any framework for transport funding or will it be content to see potholes grow, transport services disappear and carbon from transport increase in some areas? Hard thinking and clear decisions are needed on the implications for transport of greater devolution and localism.

Finally, there is the economy. It is clear from our analysis that decisions on transport spending will affect the quality and quantity of employment and business. For example, our roads-based scenario would have knock-on effects, with job losses and closures of precisely the "green" manufacturing industries (eg train and bus manufacturers, and engineering firms) that the Government wants to encourage, while a more benign scenario would see increases in employment in these industries. This means that transport needs to be part of, rather than isolated from, the Government's economic strategy to promote green investment and low carbon industries.

Time to debate what kind of transport we want

This is work in progress. We will be seeking people's views on what we've said here and producing a revised version as a submission to the spending review. And we are working on other related projects - on lorry road user charging, transport taxation, and also practical projects such as an area wide quality bus partnership to demonstrate ways services can be planned better and more efficiently.

So the decisions on transport spending that the Government will make are not just about transport - they are about political choices: what kind of society we want to live in and what kind of economy we want. We should be optimistic about what we can do with smaller amounts of money more carefully invested. The Government must show true leadership in creating a transport system that meets our long-term future needs, while providing us with real choices for our everyday transport needs.

Stephen Joseph, June 2010