The expensive reality behind Osborne’s plans for transport yesterday


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9:05 am - December 6th 2012

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by Richard Hebditch

The Autumn Statement was heavily trailed as a splurge of new infrastructure spending, with roads featuring high on the shopping list.

But the reality is far more complex. Four major road schemes costing £1bn have been given the go-ahead with funding from central Government. These will be paid for by cuts to other departments.

The Chancellor has found himself unable to announce the reams of projects that some expected. But this does not mean the threat of wasteful spending on unnecessary road schemes has gone away.

Instead, what the Chancellor has done is potentially lay the foundations for future projects chosen by business interests, paid for by PFI money, and underwritten by taxpayers at great long-term expense.

The high profile role given to Local Enterprise Partnerships in delivering infrastructure could lead to schemes going forward on the basis of which business is best connected rather than what is most needed.

The decision to cancel the road fuel duty increase due in January will help some hard pushed people. But there is so much else in transport which threatens to hit the poorest hardest.

Anyone who uses the trains will in January see season ticket prices go up above inflation for the 10th straight year. Buses didn’t warrant a mention in the Autumn Statement at all, but new research we launch next week shows the impact of two years of major cuts to national government support for services.

The announcement of a further 2% cut in local authority budgets in 2014/15 will ensure pressure on budgets remains painfully tight.

All in all, the transport picture looks less than rosy. The business community is set to choose which damaging road schemes the country pays for via unfavourable hire-purchase terms.

Train fares continue to spiral upward while bus services are axed back. The Chancellor’s claim that ‘we are not taking the road to ruin’ sounds very hollow.

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Richard Hebditch is Campaigns Director at Campaign for Better Transport

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Reader comments


1. Chaise Guevara

*Awaits someone saying “Oh, so now you’re against spending?” in the false belief that they’re clever.*

Hmm, whilst I think there is some sense in what is said, I think it disproportionately applies to those living in London. The greatest assistance of to people needing to travel, in particular outside the south east is making it easier to use a car. For millions in this country it remains the only reasonable mode of transport.

You mention buses, and whilst I really don’t think even more are needed on the streets of London, I would assume you refer to rural services, but I really can’t see an argument of running a bus service at an awful lose, simply to serve only a handful of people. There really does need to be some common sense as to whether a bus service is viable.

As for local authorities budgets I am all in support of having them cut. My experience of councils in particular is that a huge amount of money is wasted on admin staff. They need to go I am afraid, and their salaries should reflect more market orientated rates if we are to control budgets in future.

Hi Richard.

I agree with your sentiment on investment in public transport – but plans for road building is about business for a good reason.

The World Economic Forum ranks the UK’s infrastructure a pathetic 24th in the world.

That’s no problem if we want a very london-centric financial/legal services based economy. The infrastructure those guys need is limited. They have little by way of machinery to haul or products to crate up and export. And we can attract them to London by slashing taxes (and thus services) and regulations (and thus public well-being).

But if we want a more diverse economy that is less dependent on being a low tax country – we need better infrastructure so that manufacturers and such like will choose to operate in the UK.

” The Autumn Statement was heavily trailed as a splurge of new infrastructure spending, with roads featuring high on the shopping list.

But the reality is far more complex. Four major road schemes costing £1bn have been given the go-ahead with funding from central Government. ”

Calling this an infrastructure “splurge” is highly misleading. Moreover, £1bn on roads is a drop in the ocean to what is required. Road construction fell by 40 per cent in 2012 and an extra £1bn is not going to make much difference. Included in the £1bn is £333m earmarked for road maintenance, £314m for an upgrade to the A1 in North Yorkshire. That is 65% of the £1bn gone on those two things alone. I don’t think even the Greens who are opposed to new road construction deny we need to spend money maintaining the ones we have. After years of underinvestment and a few harsh winters the UK needs to spend around £20 billion on maintenance just to bring A and B roads up to scratch. So £333m is a trivial amount.

The so-called £5bn splurge is over three years set against a background of the UK construction industry contracting at £1 billion a month. It actually only really consists of £2 billion of new money because they have taken £3 billion underspends and added it to the total. Moreover, the £5bn is not even all going on infrastructure as it includes things like IT, exports guarantees and skills training. The coalition government are completely lacking in ambition because they are so obsessed with trying to meet the artificial fiscal targets that they set themselves for the next election.

So lots more juicy corporate welfare.

That is the modern trend. Socialism for the rich, and free markets for the poor. Nice little con trick the international right wing have dreamed up. A new type of right wing Keynesianism, where all the spending goes to the rich and their shareholders. And Gove wants to introduce regional pay rates for education. Obviously taking his orders from the Murdoch global elites who see education as a nice little earner.

I’m sure all those teachers who voted for the Lie Dems must be so happy. Lost deposits all over. Still, Danny Alexander can tell his grand kids he once appeared on newsnight pretending to be important.

@Freeman #2:

As for local authorities budgets I am all in support of having them cut. My experience of councils in particular is that a huge amount of money is wasted on admin staff. They need to go I am afraid, and their salaries should reflect more market orientated rates if we are to control budgets in future

Nope. If local authority staff were paid market rates for the job, Council budgets would go through the roof.

Taking lawyers, for example; two years ago, median salary for 2 year PQE lawyers in-house was £51,750; which is £10-15k ahead of what a 2yr PQE in a local authority would be earning.

http://www.laurencesimons.com/4-and-5-year-pqe-salaries-outperform-more-senior-in-house-roles

7. Derek Hattons Tailor

This is an incredibly London centric article – as virtually all transport policy under the last government was. The fact is, in large parts of the country outside the M25, public transport is at best expensive and unreliable, at worst non-existent. I live near a large City, I work a dozen miles away from where I live. I could not get to work without using a car. I use a car not because I am a planet wrecking capitalist, or because I choose to, but because I have to. What do you want me to do, move to London and make the transport system there even more overcrowded, or give up work (as some have done because transport costs make low paid work uneconomic) ? Yes PFI is about the worst way to fund infrastructure, and roads do have the some damaging consequences (as do all forms of transport) but to say we don’t need them, with an expanding population and a tanking economy, is ridiculous. And whatever happened with trying to balance the economy away from the SE ?


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    The expensive reality behind Osborne's plans for transport yesterday http://t.co/hWDW42vU

  2. cutchswife

    The expensive reality behind Osborne's plans for transport yesterday http://t.co/hWDW42vU

  3. Owen

    The expensive reality behind Osborne's plans for transport yesterday http://t.co/hWDW42vU

  4. Paul Trembath

    The expensive reality behind Osborne's plans for transport yesterday http://t.co/hWDW42vU

  5. Daniel Ball

    The expensive reality behind Osborne's plans for transport yesterday http://t.co/hWDW42vU

  6. Jason Brickley

    The expensive reality behind Osborne’s plans for transport yesterday http://t.co/2LqODw5r

  7. Better Transport

    CBT's Richard Hebditch on winners and losers from Osbourne's transport spending plans http://t.co/tSi8zq55 on #LiberalConspiracy

  8. leftlinks

    Liberal Conspiracy – The expensive reality behind Osborne’s plans for transport yesterday http://t.co/h3FYeQpo

  9. Richard Hebditch

    CBT's Richard Hebditch on winners and losers from Osbourne's transport spending plans http://t.co/tSi8zq55 on #LiberalConspiracy

  10. Mark Smithson

    The expensive reality behind Osborne's plans for transport yesterday http://t.co/hWDW42vU

  11. Save Our Green Belt

    CBT's Richard Hebditch on winners and losers from Osbourne's transport spending plans http://t.co/tSi8zq55 on #LiberalConspiracy

  12. CleanAirUK

    CBT's Richard Hebditch on winners and losers from Osbourne's transport spending plans http://t.co/tSi8zq55 on #LiberalConspiracy

  13. Mark Carrigan

    Anyone who uses the trains will in January see season ticket prices go up above inflation for the 10th straight year http://t.co/2WEfbfE2

  14. James Wilson

    Anyone who uses the trains will in January see season ticket prices go up above inflation for the 10th straight year http://t.co/2WEfbfE2

  15. Matt Stratford

    Anyone who uses the trains will in January see season ticket prices go up above inflation for the 10th straight year http://t.co/2WEfbfE2

  16. Is austerity working? The blogosphere reacts to the Autumn Statement | British Politics and Policy at LSE

    [...] While much was made of announcements about infrastructure spending, Richard Hebditch argues that the reality for commuters is far more complex. [...]

  17. Matt Barker

    http://t.co/4H4bLF0w #fb





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