A green light for capital transport projects but who pays?
There’s a sense of relief as the CSR gave the green light to a range of capital transport projects with potential positive impacts on regional economies. High Speed Rail, Tyne and Wear Metro, the Mersey Gateway, Midland Metro, Nottingham Tram, Crossrail and a number of significant road schemes remain on track. Some might point to the absence of the electrification of rail lines to Wales and the South West and the Thames Gateway Bridge as notable absences but the Department for Transport’s capital budget has come through better than some feared.
While this is clearly welcome there are also huge concerns, with rail commuters, bus services and other local transport services shouldering the burden.
The government’s increase of the cap on regulated rail fares (typically season tickets and other commuter fares) from 1% to 3% over RPI means massive fare increases for rail passengers, well in advance of most people’s pay settlements. Assuming RPI remains around its current levels, this could entail a 30% increase in rail fares, amounting to an extra £1000 to season ticket costs for many rail commuters by the time of the next election, according to the Campaign for Better Transport. Interestingly, the Government in this case have chosen to peg fare increases to the higher rate RPI as opposed to, say, public sector pensions that are to be linked to the lower CPI rate.
At the same time the Bus Services Operating Grant will be hit by a 20% reduction. Local bus users will be faced with termination of services or large fare increases. Needless to say, affects like this on bus services clearly hit young people, pensioners and low income passengers the hardest. At least we are seeing protection of the statutory entitlement to concessionary bus travel.
In addition to huge cuts facing local government, local resource grants (central government funding to local authority transport initiatives) are also facing reductions of around 28% and there’s a 20% cut to Transport for London.
The CSR report confidently predicts savings of over £100 million a year by 2015 from the Department of Transport and its arms length bodies through improved efficiency and waste reduction. We wait to see the detail of this and the implications therein for other transport schemes and the impact of potential job cuts on service delivery, including safety.
Behind the good news on headline capital projects, many questions remain to be resolved and the beginning of a pattern of fare rises and local service decline is emerging.