pteg publishes spending review case

Monday, October 11, 2010
Pound coins being counted

Regional dimension and bus subsidy devolution are key

In the run up to October 20th, pteg today made public the case that it put to the Treasury as part of the spending review process. In the document Britain’s biggest city region transport authorities called on the Treasury to ensure that the regional dimension is factored into the transport spending review – to ensure that the already lower levels of local transport spending outside London don’t take a disproportionate hit.

The paper also calls for bus subsidies for both concessionary fares and the cost of fuel to be devolved to Passenger Transport Executives so that available funding can be targeted in a more cost effective and locally appropriate way.

The paper argues that without a clear regional dimension to the spending review, local transport spending outside London could be subject to drastic reductions. Independent analysis by leading local government finance analysts, Grant Thornton, found that capital spending could be reduced by nearly 90% and revenue spend by between 56% and 85%. This is because local transport outside London isn’t subject to the long term deals that National Rail and London enjoys.

Chair of pteg, Neil Scales, said:

‘Some of the areas we serve have fragile local economies, and there’s a growing body of evidence to suggest that these are the areas that could also be most affected by wider reductions in public spending. That’s why it’s so important that the regional considerations are built into the review of transport spending so that these more fragile economies have the transport links and services they need to give them the best chance of attracting and retaining private sector investment. Otherwise we could see not just new transport links cancelled, but frontline local public transport services withdrawn. The very services that unemployed people need to access work, and that city centres and regeneration projects need to ensure their success.’

It also argues that the £446 million pounds of subsidy for concessionary travel and fuel rebate that keeps vulnerable bus networks afloat in PTE areas should be retained and routed via the PTEs who would be able to better target those resources locally to achieve the maximum benefit for the available subsidy.

Neil Scales added:

‘Buses are the main form of public transport outside London yet the support and tax breaks buses receive are relatively modest when compared with rail or air. If buses outside London are not to lurch into another spiral of decline we need to ensure that they continue to receive the support their role merits. We also need to ensure that we make the best use of subsidy which we believe can be achieved by routing the funding to PTEs who because of their local knowledge and their role on Local Transport Plans, are in the best position to maximise the benefits from those subsidy flows.’

The report also shows:

  • how, because of the high-levels of non-discretionary spend in PTE budgets (including on the national concessionary fares scheme), any reductions in overall revenue spend will have double the effect on PTE discretionary spend. Discretionary spend includes frontline services like bus stations and interchanges and concessionary fares for children, young people and jobseekers
  • how on transport the emergency budget hit the Met areas harder than other areas
  • ways that greater efficiencies could be achieved through, for example, ‘total transport’ initiatives where other sectors (such as the health sector) contribute more to transport initiatives that save them money

ENDS

For more contact Jonathan Bray on 0113 251 7445 / 0781 804 1485