Transport secretary Philip Hammond this week ordered project promoters to look hard at ways to slash costs as he warned that public spending cuts could be deeper than expected.
The Department for Transport has been asked by the government to draw up plans to cut its budget by up to 40%.
Hammond told the BBC’s Andrew Marr Show that departments that fail to make a good case for sustained investment will suffer most. Health and overseas aid spending will be ring-fenced, while defence and education face cuts of 10% to 20% (see p6).
“The non-protected departments will have to face reductions of 25% on average,” said Hammond. “But we’re not just going to take a sort of salami slice off every department. Departments are being asked to prepare not only a 25% case but also a 40% case.”
The Campaign for Better Transport (CBT) said Hammond’s announcement should serve as a wake-up call.
“The 40% announcement is about putting a rocket under departments to tell them government really is serious,” said CBT roads campaigner Richard George.
“It is time local authorities and government agencies started coming forward with much cheaper alternatives to traditional road and railway schemes,” he said. “I can understand why they are reluctant to put anything cheaper forward as it makes it look like the scheme is not that important.
“But this is not the age when a £100M bypass can be delivered.”
“This is not the age when a £100M bypass can be delivered.”
Hammond admitted that he did not expect cuts in any department to reach the full 40% but that “some departments may see cuts a bit higher than 25%”.
In his own department he said the cuts would effectively halt new road building - but that big infrastructure projects that helped the economy would still be prioritised.
“There will certainly be less money available for major new road projects,” he said.
“We will have to focus first and foremost on maintaining the roads we have got.”
George agreed that continued maintenance funding was more important than building new.
CBT says that £7.6bn could be saved by axing or descoping new road schemes and postponing the development of the High Speed 2 rail link to the North.
By doing this it believes 20% to 25% cuts in the transport budget can be made without jeopardising Crossrail, London Underground’s upgrade programme or support for local buses. It also believes rail fares can be maintained at current levels or even cut, provided Network Rail delivers on its efficiency programme.