Funding, structure and delivery of local transport Tony Travers London School of Economics

Funding - 1  Transport is one of the ‘not-protected’ services  Unlike the NHS, schools, international development, social security  Other ‘unprotected’ services include defence, environmental services, fire & emergencies and highways  Public sector capital investment to be cut by 50%+ between and  Likelihood, therefore that capital and revenue spending will fall sharply

Funding - 2  Implications of such sharp public spending reductions include:  Increase in user charges Fares, parking charges, licences Renewed interest in road pricing?  Search for ‘private finance’ Need for government to manage planning and other inhibitors to investment  Inevitable pressure to cut back unprofitable public transport services

Structure - 1  National and local responsibilities  Little likelihood of major new schemes at the national level unless a radical change is made to capacity to raise income  Risk of endless preparation of schemes as substitute for action…  More hope locally if freedoms are given to local/city-regional authorities

Structure - 2  Local and city-regional authorities would have the possibility of undertaking small-scale investments and service improvements  But freedoms would be required, eg  Less constraint on ‘prudential borrowing’ resulting from tax capping  Innovations such as Tax Increment Finance  New access to local charges or taxes

Delivery - 1  Risk that revival of growth in private sector will coincide with shrinkage of public transport services and investment…  …which could mean relative switch of growth in travel to road transport  Looks like return to ‘booms’ and ‘slumps’ of investment in transport  Endless effort to clear a backlog of under- investment

Delivery - 2  Key challenge facing the next decade is, therefore, how to sustain existing transport services and quality of infrastructure  Unless there is significant additional freedom at the local level, hard to avoid a big squeeze on provision  Perennial risk of ‘false optimism’ in regards to major projects

Conclusions  Transport is not high on any political party’s list of services to be protected  Failures to invest, eg in many urban and inter-urban routes, will become increasingly exposed by 2020  Probably better for transport to lobby for ‘across the board’ impacts of public expenditure constraint?  Transport facing radical change…

Funding, structure and delivery of local transport Tony Travers London School of Economics