In the Spring Statement the Chancellor (23 March 2022) gave an update on the economy highlighting how growth forecasts have been revised downwards and inflation was at a recent all-time high[1].

The Chancellor made changes to the tax regime and announced a temporary cut in fuel duty.

Forecasts for inflation have been increased in recent months[2] and this will have an impact on the highways and transport sector, including potentially on the amount of investment that can be made in the sector by government. Appraisal and justification of investment will therefore become even more important than previously.

The highways and transport sector has been faced with increasing pressures within global supply chains that have caused cost increases and delays in obtaining materials. The war in Ukraine, and the increased costs and materials disruption because of this, is likely to see further cost and supply-chain pressures for the sector.

The highways and transport sector faces three overlapping challenges:

• How to reduce carbon from the sector,
• How to invest in the changes required to reduce carbon emissions at a time of worsening global financial pressures whilst providing the benefits of an effective transport network to maximise growth, improve health and improve equality,
• How to attract the skills and resources required to make the changes needed.

CIHT would reiterate its Spending Review submission[3] whereby the local highways network can be the focus for delivering aspirations of Levelling Up for government and whereby action to address climate change can be delivered. CIHT would recommend that its Improving Local Highways report is considered in regard to changes required for the local highway network, regarding issues such as funding.

 A longer-term funding settlement for the local highways sector and Devolved Governments would be welcomed by CIHT as a mechanism by which to address the increasing cost pressures that the sector faces.

CIHT launched its Climate Change Pledge[4] and this guides the work of the Institution around policy issues, recently Climate Action was highlighted as a key strategic theme in the CIHT Strategy 2022+.

In the Spring Statement, the Chancellor announced a 5p cut to fuel duty - "the biggest cut to all fuel duty rates ever” as the Chancellor, Rishi Sunak, said. CIHT would, although acknowledging that household budgets are facing pressures, consider that decreasing fuel duty will send the wrong message about action to reduce carbon emissions. It is imperative that government uses all of its levers possible to encourage a shift to supporting the sustainable transport hierarchy – whereby walking, wheeling, cycling is at the top, then followed by public transport, and then shared and private car use, is put in that priority order.

The climate crisis is not going away, and we face a changing economic backdrop. This is the opportunity to invest in the changes required to reduce carbon emissions and provide a highway network that meets the needs of everyone. When it comes to climate action and levelling up CIHT sees investment in the local highway network (LHN) as the biggest priority for transport investment as, without adequate funding, it means that other government plans will not be met. This is not about road building but about transforming communities.

The Government must set out how the aims outlined in the DfT’s Decarbonisation of Transport strategy are to be delivered in this changed economic climate. Government should be encouraged to secure a longer-term funding settlement for local highways as this will help the industry to be better equipped to face supply-chain disruptions and costs increases.

Andrew Hugill, Director of Policy & Technical Affairs, CIHT

[1] Spring Statement 2022: documents - GOV.UK (www.gov.uk)

[2] Spring Statement 2022 - Institute For Fiscal Studies - IFS

[3] September 2021 - CIHT Comprehensive Spending Response Submission

[4] https://www.ciht.org.uk/knowledge-resource-centre/resources/climate-change-pledge/

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Andrew Hugill, Director of Policy & Technical Affairs, CIHT