Jeremy Corbyn has pledged £1.3bn per year for buses, to be funded by Vehicle Excise Duty. Is that a fair proposition, or is the Urban Transport Group’s suggestion of a Connectivity Fund a much better idea?
It’s local election time, so Jeremy Corbyn has pledged that a Labour government would spend £1.3bn per year to reverse cuts to local bus services. That will be funded by income from Vehicle Excise Duty (VED).
That’s fine at one level, although I’m struggling slightly with the idea that motorists should fund local bus services, especially as today the motorist pays some £35bn per year in taxes but sees only £5bn per year spent on road maintenance and road building.
Rebalancing attempt
In an attempt to reverse this imbalance, at least in part, the Conservative government has legislated to create a new Road Fund, into which all income raised from VED would be paid. That income would be hypothecated for spending, initially, on the strategic road network and then increasingly on the local road network, too.
A Labour government would, apparently, scrap this plan and instead set up a ‘sustainable transport fund’ – with the income for this fund presumably still coming from VED receipts, part of which would fund local bus services.
At one level, these proposals seem perfectly sensible. But motorists get a raw deal, given the huge imbalance between what they pay and what is spent on the road network.
It’s true, of course, that the relative cost of motoring has gone down in recent times, but that imbalance is still there. The creation of the Road Fund was driven by the need to address the serious under-investment in the network and remove the constant risk of road funding being cut. There’s no easy answer to any of this. There are always winners and losers in any spending decisions a government makes.
Labour’s proposals certainly have merit, but if the plan to abolish the Road Fund leads to a loss of hypothecated funding for our road network, as it surely will, I worry about the consequences. In any case, buses need a well-maintained road network as much as motorists do.
Connectivity Fund
Of course, there is a wider issue of where funding for buses should come from, given that there a range of cross-sectoral benefits from buses, as the Urban Transport Group’s (UTG) updated report, The Cross-sectoral Benefits of Backing the Bus, helpfully reminds us.
Aside from the DfT, this report identifies no fewer than 11 government departments that derive policy benefits from buses. Should the burden of funding bus services thus fall on the DfT and local authorities?
I’m quite taken by the UTG’s proposal for a Connectivity Fund, which would effectively see all relevant government departments contributing to bus services.
Doubtless, government mandarins would wince at the idea of creating a pan-Whitehall funding pot, given the complexities of working out how much each department should contribute to it. But it’s a compelling idea, and it merits serious consideration.
