Writing to the Chancellor on behalf of our members earlier in February, we argued that long term investment in transport is the key to economic growth, social equity and sustainability. It is however disappointing that the Chancellor only mentioned public transport in passing in last week’s Spring Budget. Here’s a look at the few transport takeaways from his Budget. 

Spending squeeze and uncertainty continues  

The Chancellor confirmed that departmental capital spending will follow the profile set at the 2023 Autumn Statement. As explored before, this in real terms means a freeze in capital spending from 2025/26. By failing to increase spending anywhere near levels of inflation, ‘unprotected’ departments, and in turn our members, will be left to ‘do more with less’. 

Fuel duty freeze cost  

The Chancellor also, as widely expected, confirmed that the 5p cut and freeze in fuel duty is set to continue for another 12 months. According to the Office for Budget Responsibility, this combined extension will cost the Treasury £4.2bn for 2024/25.  

This is the 14th consecutive year of fuel duty freeze. The Campaign for Better Transport has done the calculations behind its impact, suggesting that the consecutive fuel duty freezes and cuts between 2011/12 and 2024/25 have cost HM Treasury a total of £133bn in foregone revenue and over the next four years (2025/26 to 2028/29) are due to cost another £77.5bn.  

Any relief that can be passed on to consumers, many of whom are struggling with the ongoing cost of living crisis, is commendable. However, if even a small fraction of this was reprioritised for public transport, it could unlock current constrained opportunities for public transport in our city regions.  

Devolution progress  

On a positive note, the Chancellor announced the North East trailblazer devolution deal. The deal signifies the next step towards deeper transport devolution and long-term funding certainty. The North East deal, when it comes to transport, combines elements of the Level 4 devolution framework and the existing Trailblazer powers, with additional locally specific levers, including on integrated ticketing and funding for the Tyne and Wear Metro.  

Also unveiled were three new level 2 devolution deals for Buckinghamshire, Warwickshire and Surrey, giving the counties powers over adult education and infrastructure. This follows the recently announced progress on Level 4 devolution for West Yorkshire, South Yorkshire and the Liverpool City Region, which, according to the Government, will act as a ‘stepping stone to the full trailblazer-style single settlement.’ 

It was also announced that the future development corporation in Cambridge will receive a long-term funding settlement at the next Spending Review. As part of this, the Chancellor announced £10 million for ‘crucial local transport and health infrastructure’. 

This progress is a very welcome recognition of the importance and success of continued devolution across England. Devolution is no longer the exception, but rather the proven best approach to realise place-led local and regional growth, particularly through long term transport investment.  

Notable absences  

The future of bus services across the country remains challenging. With networks still recovering post-pandemic and some local authorities expecting to face additional financial pressures with the new England National Concessionary Travel Scheme calculator, there is an urgent need for sustainable long-term funding for bus services, as part of an integrated transport package. The chancellor failed to address concerns over the next looming funding cliff edge in 2025.  

Notably absent was any announcement on sustainable long-term funding for local councils. This year saw the sixth one-year settlement in a row for councils. The financial difficulties faced by local councils up and down the country, including the constituent members of Combined Authorities, is an increasing concern to our members, as cost and demand pressures are rising faster than funding  

We will continue to make the case for long term sustainable funding for public transport, not as a cost to the Treasury but an investment in places, communities, the environment with real tenable social and economic outcomes.  

Monta Drozdova is Policy and Research Advisor at the Urban Transport Group

Photo: HM Treasury, Flickr