Today is Comprehensive Spending Review (CSR) day and it is dire news for commuters. According to the Daily Telegraph, “Mr Osborne asked the Department for Transport to prepare for cuts of anywhere between 25% and 40% to its annual budget of £15.9 billion” before today’s announcement. The Association of Train Operating Companies said that “money from train tickets pays for around half the cost of running the railways with the rest coming from the taxpayer.” The media have anticipated that the government plans to shift the costs to the passengers and we saw a lot of that in the details.
The current rate of increase for tickets is the Retail Price Index (RPI) plus one per cent which in September 2010 stands at 4.6% (down from 4.7% in August). This will increase to RPI + 3% for three years up to 2012. As we read in the CSR “some public transport fare increases will be unavoidable. This will include raising rail fares where necessary” (p.31).
The Channel 4 economics editor, Faisal Islam, wrote four days ago that the increases to rail faire could be 30 to 40% in four years. He seems to be right. The increase will not be put in place until 2012 and there is some wishful thinking about inflation falling but there is no guarantee of this.
The department of Transport will implement “overall resource savings of 21 per cent by 2014-15. … Bus subsidy will be reduced by 20 per cent and local government resource grants by 28 per cent” (p.46).
The number of people this would affect is a huge amount. An estimate of South West workers who travel by rail to work in 2008 suggests that the numbers are over 12,000. The number of bus travellers is twice that. For a glimpse of some bigger effects we need only look at travellers into the London, one of the major commuter routes from Bristol, with 510,000 people entering the city in that same year using bus or rail.
My own costs would increase by a huge amount. I currently commute by bus and train at a cost of around £5000 pre-tax. A 40% increase by the end of 2016 would mean a year-on-year pay cut as the costs increase to around £7000. That doesn’t make rail travel much of an affordable option.