We’re not out of the woods but transport gets off lightly
December 1st 2010 The transport sector has dodged a bullet. Put simply most of big Government departments are looking at deeper cuts over the next five years.
For example, despite Education and Health being supposedly ring-fenced, the capital expenditure budgets for these departments will fall by 60% and 17% respectively. In contrast, Transport faces a relatively modest 11% cut.
True, departmental resourcing for transport (paying wages etc) will fall broadly in line with many others. Transport’s budget will decline by 21% to 2015 while that of the Home Office will fall by 23% and Defra by 29%. But the main point is that infrastructure projects, both new build and maintenance, will largely be protected.
This is a significant victory for the sector and was by no means inevitable. It is a credit to everyone who lobbied for the cause that this result has been achieved. Industry bodies such as the Freight Transport Association took the lead. They did not go to the Government with a long and unrealistic wish list to suit narrow vested interests. Instead they focused attention on key elements such as important transport routes which benefit the nation as a whole.
Transport is the bedrock of all possible economic recovery scenarios and the Treasury is clearly pragmatic enough to ensure the foundation remains solid. It is also surely pragmatic enough to realise that there is little point raising fuel duty if lorries are discouraged from travelling by a lousy road network and stifling congestion.
The priority for the economy now the cuts are out in the open is to avoid an Ireland-style downward spiral, where deep cuts have proved not deep enough as the economy has contracted further with a corresponding fall in tax revenue. The UK economy is likely to be too big and too diverse to fall into this trap but recovery can’t be taken for granted. That’s why it is is good to see GDP growing faster than expected. The Office for National Statistics reported that it grew 0.8% in the quarter to September, compared to a widely predicted growth of 0.4%. This comes after 1.2% growth in the previous quarter.
While this is encouraging, the private sector still must step up to the plate as the public sector shrinks. At least the private sector should not lack a first rate transport infrastructure to build from.
As George Osborne assured the transport sector that it will invest £30 billion in projects over the next four years - more than was spent in the last four years - the only bullet should the one rushing from the starting pistol as this work gets underway.
Simon Duddy, Editor More articles from Handling & Storage Solutions: | 
