Spending on transport is set to grow by 50% to a total of £61Bn this Parliament, Chancellor George Osborne announced today in his Spending Review and Autumn Statement.

The Department for Transport’s own operational budget will fall by 37% but increased capital expenditure confirmed by the Chancellor secures funding for the start of construction on High Speed 2 and continued delivery of the Road Investment Strategy.

The Spending Review and Autumn Statement also provides £13Bn for transport in the north – including £150M of funding to support integrated smart ticketing – and £11Bn for London’s transport infrastructure.

“Today’s announcements are good news for the construction sector, formally committing funds to vital infrastructure projects such as HS2, the Northern Powerhouse and London wide transport,” said Civil Engineering Contractors' Association chief executive Alasdair Reisner.

He added: “The confirmation of funding for key projects will enable the construction industry to plan for the future to deliver strategic projects in an innovative and efficient manner.”

Kier executive director for highways Dave Wright said: “We welcome the increase of transport capital spending to £61Bn in today’s Spending Review, as transformation of our highways network could provide by far the most immediate boost for the UK economy, north-south connectivity and regional regeneration.”

But infrastructure consultancy Turner & Townsend's UK managing director Patricia Moore said: “This gulf between rising capital spending and reduced operational spend raises the stakes for the infrastructure industry. Day-to-day it will have to do more with less.”

The Chancellor has also confirmed investment of £5Bn on roads maintenance, a £250M pothole fund and up to £250M for a major new permanent lorry park to take pressure off Kent’s roads in the event of Operation Stack.

Road surfacing company Toppesfield’s managing director Matthew Pryor said: “It’s fantastic news that the Government has decided to create a dedicated pothole fund. For too long motorists have had to contend with crumbling roads over the winter months and cash-strapped councils tasked with repairing them have been operating with one hand behind their backs.”

Highways Term Maintenance Association executive director Geoff Allister said: “Increases in capital maintenance budgets are welcome.” But he added: “Ongoing revenue pressures will result in reductions in the amount of essential routine maintenance that is carried out and will increase the risk of failure to deal with the impact of severe weather events.”

Freight Transport Association director of policy Karen Dee said: “We are delighted that the Chancellor has recognised the devastating impact of Operation Stack on the logistics industry and its customers and we look forward to developing a permanent solution with purpose-built facilities for drivers.”

But she added that the 37% cut in the DfT’s resource budget was “very significant” and would undoubtedly put at risk some important areas of spending.

Cycle charity Sustrans’ policy director Jason Torrance said: “Government has committed to a Cycling & Walking Investment Strategy to double cycling levels and reduce those killed and seriously injured on our roads. But these targets will be missed unless investment is increased.”

Campaign for Better Transport chief executive Stephen Joseph added: “The Chancellor's focus remains squarely on ever more infrastructure, often at the expense of vital everyday transport. While Mr Osborne dons his hi-vis jacket and hard hat at big construction projects, bus services continue to be lost and high impact investment in walking and cycling is scaled back.”

George Osborne also said the Government will continue to devolve significant transport powers to mayor-led city regions, including Greater Manchester, Sheffield City Region, Liverpool City Region, the North East, Tees Valley and the West Midlands.

He added that new elected mayors will receive devolved powers to raise business rates, provided they are used to fund specific infrastructure projects supported by the local business community.

CIHT's Director of Policy & Technical Affairs Andrew Hugill concluded: “The confirmation of the Road Investment Strategy, funding for HS2 together with confirmed levels of capital funding for highways maintenance on the local road network in England are all welcome. The importance of transport to the devolved administrations was also addressed in the statement.

“The emphasis on reform of local authorities continues. There was confirmation of devolved powers for new combined authorities and elected mayors. This may assist in delivering funding for key infrastructure. The structure of local government revenue funding will change over the life of this Parliament and how this effects the local transport network will need to be carefully assessed to ensure additional capital funding is used effectively.

“The amount of the apprentice levy wasalso  announced in the statement, showing a commitment to addressing the skills shortage across the sector but the impact of the levy will need careful monitoring.”

Image: Highways England (left) and Conservatives (right)