Every day transport has been let down in the Spending Review according to local government and transport campaigners, however business leaders celebrated the extra capital investment.
Revenue funding is set to be slashed yet again in local government and transport, with a 37% cut to the operational budget of The Department for Transport and cuts of up to 56.3% to central grants for councils in real terms by 2019/20.
Although the Department for Communities and Local Government claimed the headline cuts were just 6.7% when additional revenue such as business rates, council tax and other cash pots were factored in.
Talking tough: Lord Porter (pictured right) sends a stark warning
Lord Porter, chairman of the Local Government Association (LGA), set the tone for local authorities with a stark message to ministers.
‘Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020,’ he warned.
Local government’s Association of Directors of Environment, Economy Planning and Transport (ADEPT) also raised the ongoing revenue funding concerns that have plagued the sector since the start of austerity.
Neil Gibson, vice president of ADEPT, said: ‘We need sufficient revenue funding, to be able to programme and project manage capital spend. We are already seeing many of our best people leave local authorities to work in the private sector where they are able to use their skills to best effect.'
Local roads win £250m for potholes but is it enough?
Speaking for the local roads sector, Howard Robinson, chief executive of the Road Surface Treatments Association (RSTA) was more forthright: ‘The chancellor’s announcement that capital funding of transport projects will increase by 50% to £61bn and just £250m will go towards a pothole fund underlines that he still does not understand that investment in prestige transport projects will be undermined if to reach them drivers and passengers have to use a potholed, poorly maintained road network.
‘The additional £250m will do little to address the £12bn backlog of road repairs of a network that carries 98% of traffic. The chancellor needs to understand the economic and social significance of having a well-maintained local road network. His continued focus on reducing local authority spending will add further pressure on stretched highway maintenance budgets.’
Stephen Joseph, chief executive, Campaign for Better Transport, struck a similar note, stating: ‘The chancellor's focus remains squarely on ever more infrastructure, often at the expense of vital everyday transport.
‘The chancellor's claim that 'We are the builders' will be meaningless for people finding it harder to get to work, school and town centres because their cash-strapped local authority can't support a bus service.’
However Carolyn Fairbairn, CBI director-general, welcomed the 50% boost to the Department for Transport's capital spending.
‘It’s good that the Government has increased capital spending and remains committed to road and rail investments, including the Trans-Pennine railway. Businesses will want to see promised projects breaking ground as early as possible in this parliament to maintain momentum.’
In the Spending Review document the Government announced plans to consult on reforms to the New Homes Bonus, ‘including means of sharpening the incentive to reward communities for additional homes and reducing the length of payments from six to four years’.
It added: ‘This will include a preferred option for savings of at least £800m, which can be used for social care. Details of both reforms will be set out as part of the local government finance settlement consultation, which will include consideration of proposals to introduce a floor to ensure that no authority loses out disproportionately'.
Planning ahead: New Homes Bonus set for shake-up
In response Cllr Paul Carter, chairman of the County Councils Network said: ‘Reforming New Homes Bonus is part of the equation. However, given the Government’s optimistic projections on business rate growth, reform must extend to business rates retention and wider local government finance. Failure to do so will leave those authorities facing the biggest demand-led pressures facing the largest reductions in key frontline services.’
Transport Network understands current financial payments for councils under the New Homes Bonus will be protected over the parliament, despite the potential for reforms for new deals.
Cllr Neil Clarke MBE, chairman of the District Councils’ Network (DCN), said: ‘DCN welcomes the decision to keep New Homes Bonus allocations in two-tier areas for the lifetime of this parliament. It is good that there is no change to the current scheme relating to six-year allocations and that this new scheme will continue for a further four years for all new homes.
‘We look forward to hearing a positive response in next month’s settlement in relation to our lobbying for localisation of fees and charges – in line with the Government’s desire for further local decision-making to promote more efficient delivery of growth.’
Local communities have been forced to spend £450m covering the cost of planning applications in the past three years, analysis from the LGA revealed earlier this month.
Sources inside Smith Square suggest the LGA is making a big push for cost recovery for councils on planning fees, and are hopeful of securing gains from government.
