Department for Transport announces spending cuts in response to CSR
Wed 20 October 2010
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The Department for Transport will be required to reduce programme and administration spending by 21% and capital spending by 11% in real terms by 2014-15 following the Comprehensive Spending Review. The Department for Business Innovation and Skills will have to cut programme and administration spending by 25% over the same period. The average departmental cut for programme, administration and capital spending is around 19%.
The Department for Transport says it will make the cuts through a combination of efficiency savings, improved procurement and contract management and improved delivery of front-line services. There will also be savings in rails costs and reductions in lower priority programmes.
DfT says that it will also reduce the administration cost of the central department by a third.
Some capital investments have been secured:
- £18 billion of rail investments, including Crossrail;
- £4 billion on HA major projects, capital maintenance and enhancements;
- £6 billion on local transport major projects, capital maintenance and enhancements;
- Funding for a further tranche of PFI projects and
- Funding to ensure the Tube upgrades will go ahead.
The Department's press release also focuses heavily on the localism agenda. It says that the coalition government has made clear that it wants to end the era of top-down government by providing a radical devolution of power and greater financial autonomy to local authorities.
Sustainability is also listed as a key priority. The DfT says it will priorities spending on sustainable rail projects such as high speed rail and Crossrail and provide commuters and intercity travellers with attractive new options instead of the car.
The press release says: "However we recognise that for many people, particularly in rural areas, the car is the only practical choice and that is why we are prioritising spending on making the UK a world leader in ultra low carbon cars. By de-carbonising motoring, we can include the car in our vision of a future, low carbon, transport economy. Our Local Sustainable Transport Fund will enable local authorities to bid for money to address the transport priorities in making their communities safe and sustainable".
In a response to the Spending Review, Transport Secretary Philip Hammond said: "This Government inherited a financial crisis because we were spending more money than the country could afford. That has meant that we have had to look again at every pound that we spend to ensure we get value for money.
"Whilst we have had to make some difficult choices, I am confident that our focus on the long term will ensure that we can continue to build a transport system that supports economic growth and reduces carbon. We have secured investment to allow us to go ahead with important projects such as high speed rail, support for ultra-low carbon cars and major road building and public transport programmes.
"We have taken big steps forward in improving efficiency – making genuine savings of over 21% from our resource budget. We have also radically reformed the way decisions are made, ensuring that local people have more control over their priorities."
The Liberal Democrat Transport Minister Norman Baker said: "This is a good settlement for the Department for Transport, in recognition of the crucial role that transport can play both in cutting carbon emissions and helping rebuild the economy. We will be spending more on capital projects in the next four years than was spent in the last four.
‘Lib Dems can be particularly pleased that key major rail projects are going ahead. The confirmation that tram extensions have been agreed for Midland Metro and the Nottingham tram system is very welcome, and reflects strong and effective lobbying. Also welcome is the Local Sustainable Transport Fund which I was able to announce at the Lib Dem conference.’
Greenpeace's response to the CSR focused on the Green Investment Bank. Greenpeace's executive director John Sauven said: “Billions of pounds for a new green bank could provide thousands of new jobs and make Britain a world leader in cutting-edge low-carbon technologies.
“But the green bank has to be a bank. A poorly financed fund is not a green bank. It doesn’t have the financial clout, or the independence to do the job, and will end up as nothing more than an ill-equipped quango.
“That’s why it was so important that Nick Clegg welcomed the green bank earlier today, even before the Chancellor stood up.
“So if this government wants to live up to its own billing as the greenest ever, this bank must be independent and properly financed.
“Anything less will dash hopes of a new green economy for Britain, and our chances of tackling climate change and energy security.”
The Society of Motor Manufacturers welcomed the Government's stated commitment to pursue economic growth. The SMMT said that it is encouraged that, whilst challenging decisions had to be taken, government committed to prioritising areas that will generate growth including ultra-low carbon transport and skills.
“Across industry, businesses have had to take difficult decisions on how to make best use of limited resources and we welcome government taking a similar approach to ensuring long term stability for the economy,” said SMMT chief executive, Paul Everitt. “While some measures will require even tighter budgetary control, industry is supportive of decisions that promote our products and the UK as an attractive place to do business.”
Other responses:
Campaign for Better Transport - press release link
Confederation of Passenger Transport - press release link
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