Read the latest pronouncement by our new Transport Minister, it does not bode well for any improvement on the servives between Huddersfield and Manchester Victoria

Bus and rail users face ‘unwelcome consequences’, says transport minister

• £15.9bn Transport budget will have to be cut by at least 25%

• Environmental groups call for cuts in £6bn road building project

Dan Milmo

The Guardian, Monday 12 July 2010

Rail passengers, bus users and motorists have been warned that Britain’s transport system will suffer “unwelcome consequences” from public spending cuts of up to 40%, according to the Liberal Democrat transport minister, Norman Baker.

The Department for Transport has been asked to find cuts of between 25% and 40% to its £15.9bn budget before the autumn spending review, with the main candidates for the chop including the £5bn spent on the rail industry, followed by another £5bn a year for Transport for London and Crossrail, while environmental groups are calling for reductions in the £6bn road building programme.

Baker said achieving the cuts was “not impossible” despite strong protests from Network Rail and TfL that their cost savings programmes – launched long before the government was formed – are already cutting deep to the bone.

“I don’t think it is asking the impossible,” he said. But in a warning to commuters used to subsidized bus fares and motorists hoping for congestion-busting new roads schemes, he added that “nothing is safe”.

He said: “I think it will be difficult and will have unwelcome consequences. It is our job to mitigate the unwelcome consequences. We can ask for deferrals and ask for genuine efficiencies at Network Rail.”

Asked if Network Rail and TfL’s argument that they are doing enough already was acceptable, Baker said: “I always expect people in the transport industry to argue that their particular part of it needs protection. People will, inevitably, argue for their corner.”

In an indication that Network Rail’s £4bn annual grant will be under pressure, he added: “The department is very seized with the need to make Network Rail more efficient.”

Baker said the department’s capital spending programme, which includes the £16bn Crossrail project and the £6bn roads scheme, would probably not survive unscathed. The DfT’s capital spending plans have been limited to £7.4bn after a planned 1.25% annual increase in the budget was dropped – implying a cut in spending of £28.9bn this decade. Baker said: “I will be astonished if the entire capital spending programme we have got survives in its present shape. So there will be some disappointed people including, probably, ministers.”

The Conservative transport secretary, Philip Hammond, has in effect written off one of the Liberal Democrats’ key transport policies – reducing rail fares – by warning that the cap on ticket price increases might have to be lifted to lower the taxpayer’s contribution to rail fares.

Baker said “no decision” had been taken on rail fares but would not rule out an increase by his department. “The coalition document talks about fair fares. Nobody wants to put rail fares up. But we have got to come up with a package of measures which meets the requirement on the department to play our part in the budget reduction process.”

In an ominous reference to TfL’s annual budget, Baker acknowledged local authority concerns over the level of subsidy devoted to the capital, including its extensive bus network. “There is a feeling, justified or otherwise, that London gets a very good deal. If we are all going to have to take difficult decisions they have to be fair and not be seen to advantage one part of the country over another.”

Baker said the DfT was being forced to make unwelcome decisions because of a “fantasy” spending programme implemented by the previous government.

“It was callous electioneering. As someone who is regarded as being to the left [politically] I feel so angry. Labour’s policy of promising things it could not deliver was dishonest.”

Baker attempted to reassure bus operators that the department was not targeting the big five public transport groups – Stagecoach, FirstGroup, Go-Ahead, National Express and Arriva – despite intervening during a Competition Commission investigation by publishing a report that highlighted the sizeable profits generated by the groups from local bus networks.

Baker’s main responsibility as under secretary of state for transport are buses and regional transport. According to the Campaign for Better Transport, the bus industry receives more than £2bn a year from the DfT and the Communities and Local government departments. Baker said: “We have not got it in for them. We are driven by the need to ensure that the taxpayer gets a very good deal.”

Bus operators have been exercised by the threat of losing, or seeing a hefty reduction in, the £500m Bus Service Operators Grant. BSOG is under review and Baker has refused to guarantee its survival, although the transport secretary has expressed stronger words of support for the £1bn free bus scheme. “We are in favour of more people using buses.” He added: “But the bus industry has to understand that we are looking at every budget line because there is a spending review underway. Nothing is safe.”

guardian.co.uk © Guardian News and Media Limited 2010

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