Chancellor sets out spending plans at Budget

27th Oct 2021

Funding to deliver more than 50 local road upgrades, increase provision of electric vehicle charge points and begin mobilisation of the new Great British Railways organisation has been promised in today’s Autumn Budget and Spending Review announcement.

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Chancellor Rishi Sunak told the House of Commons that the UK’s “uneven economic geography” must be tackled and said infrastructure investment “connects our country, drives productivity and levels up” the economy.

The Department for Transport is set to receive an £8.5Bn cash increase over the course of the current Parliament, bringing its budget up to £26.2Bn in 2024/25.

This will help to support spending of £2.6Bn over the next five years to deliver a long term pipeline of local road upgrades. These include the A509 Isham Bypass near Kettering in Northamptonshire, A259 Bognor Regis upgrade in West Sussex and A350 Chippenham Bypass, in Wiltshire, documents accompanying the Chancellor’s speech reveal.

Further local transport projects will benefit from a £1.7Bn allocation from the Levelling Up Fund, Rishi Sunak said, while £2.7Bn will be spent over the next three years on local road maintenance in places not receiving city region deals.

Prior to the Budget, seven city regions were promised £5.7Bn of funding for London style transport settlements on top of £1.2Bn for improvements to bus services.

On the railways, £205M is promised to begin the mobilisation of Great British Railways, as proposed in the Williams-Shapps Plan for Rail.

However no update was given on plans for Northern Powerhouse Rail or the eastern leg of High Speed 2 to Leeds. Rishi Sunak said the Government’s Integrated Rail Plan will be published “soon”.

Law firm Womble Bond Dickinson’s transport partner Kevin Bell described these major rail schemes as the “elephant in the room” at the Budget. “The continued delays to the publication of the Integrated Rail Plan and the fact that the Chancellor failed to publicly quash any of the continuing rumours about the eastern leg of HS2 being scaled back and downgraded at the despatch box only adds to the increasing uncertainty surrounding these projects,” he said.

Decarbonising transport was also a theme of the Chancellor’s speech, with the Department for Transport’s funding settlement expected to provide £620M of additional investment to support a transition to electric vehicles. This includes money for public charging infrastructure in residential areas and targeted plug in vehicle grants.

Funding of £300M has also been earmarked for research and development to help commercialise low emission technologies, including plans to trial zero emission heavy goods vehicles on UK roads.

Rishi Sunak also pledged to lower the rate of air passenger duty for domestic flights from April 2023 and cancelled a planned rise in fuel duty for motorists.

Meanwhile £23M of new funding was announced to take forward the final recommendations of Sir Peter Hendy’s Union Connectivity Review, which are yet to be published.

Sue Percy CBE, Chief Executive, CIHT said:

“CIHT welcomes the budget announcement that has outlined how investment in highways and transportation infrastructure and services will play a key role in ‘levelling up’ the UK economy. We will be analysing the detail behind the announcements but the initial figures of £21bn in local transport and over £35bn investment in rail to connect towns and cities across the UK are in line with what CIHT called for in our original submission to the treasury.”

“Similarly, we welcome Government’s commitment to the skills agenda and its announcement to invest £3bn in transforming post-16 education. We believe there is a need to match up how this investment will support the development of the necessary skills in the highways and transportation sector which is critical to economic performance and productivity.”

“CIHT would like to have seen Government take this opportunity to deliver on some of transport’s decarbonisation challenges. The biggest financial issue facing the highways network – and on which the budget is silent – remains the impact of the roll out of Electric Vehicles on the tax income needed to maintain the highways network and upgrade it to support decarbonisation. CIHT would like to see the debate begin on alternatives including road user charging as it has the potential to help manage demand – a key element of the government’s own Net Zero pathway."

Today’s Budget placed insufficient focus on rural transport, commented countryside charity CPRE’s chief executive Crispin Truman. “We have yet to see any sign of a serious plan to tackle the transport deserts blighting the lives of millions of people living in rural towns and villages. Local transport for anyone living outside a major city doesn’t get a look in.”

Think tank IPPR North’s research fellow Marcus Johns said: “The promise of an infrastructure revolution has been rolled out once again. But rehashed, repackaged, and re-announced pots of funding at each Budget are not going to close the UK’s regional divides, which hold back the northern and national economy.

The Civil Engineering Contractors Association’s director of external affairs Marie-Claude Hemming predicted that the sector will welcome today’s Budget but said: “Industry is keen to see the outcome of the Integrated Rail Plan, which will be vital for investment and growth across the entire UK.”

(Photograph: HM Treasury)

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