The Chancellor’s restraint on new spending was reflected in no new investment promises on transport. There were details on how £1.3bn of new transport funding announced in the Autumn Statement would be spent – including £113m for motorway ‘pinch points’ and the opening of a new £690m transport fund for local authorities. The Chancellor also announced an agreement with the Greater London Authority on the devolution of further powers, including on action to tackle congestion and piloting new infrastructure funding models.  

Overview

The Chancellor’s restraint on new spending was reflected in no new investment promises on transport.

There were details on how £1.3bn of new transport funding announced in the Autumn Statement would be spent – including £90m for motorway ‘pinch points’ in the North of England (and £23m in the Midlands), and the opening (later in 2017) of a new £690m fund for local authorities to bid into to finance regional transport schemes.

But no further public investment or major initiatives on transport were made in a decidedly quiet budget for infrastructure.

The Chancellor announced an agreement with the Greater London Authority on the devolution of further powers, including on action to tackle congestion and piloting new infrastructure funding models. The Budget document also referenced ongoing ‘discussions with Greater Manchester on future transport funding’ – but no further detail was provided.

Policy announcements - Investment

Local transport projects

As part of the allocation of the £1.1bn support for local transport projects included in the National Productivity Investment Fund (NPIF) launched in the 2016 Autumn Statement, the Chancellor announced details of a £690 million fund to ease congestion and get “local networks moving”, £490 million which will be available from autumn 2017. The funding will be allocated to local authorities on a competitive basis.

Strategic road network- ‘pinch point’ investment

The 2016 Autumn Statement’s National Productivity Investment Fund (NPIF) included a £220 million fund to “address pinch points” on the National Road Network.

In his Budget speech, the Chancellor announced the first regional allocations of this fund – with £90m for the North of England and £23m for the Midlands – with details of the specific projects to be funded to be announced ‘shortly’ by the Department for Transport.

Electric vehicles

The Chancellor announced that part of the initial £270 million investment from the Industrial Strategy Challenge Fund will be made available to support the UK becoming a “world leader” in the “development, design and manufacture of batteries” that will be used to power electric vehicles.

Policy announcements - Air Quality

Diesel

The Budget confirmed that the UK Government will be bringing forward a draft plan and consultation on how to improve air quality in spring 2017. As part of its efforts to improve air quality, the Government will be exploring the current tax treatment of diesel vehicles, which will include engagement with stakeholders, ahead of the Autumn Budget 2017.

Policy announcements - Devolution

London

The Chancellor announced a new London Devolution Agreement with the Greater London Authority on the devolution of further powers, including on infrastructure funding.

Under this agreement, a new taskforce including the GLA, TfL and the DfT will explore options for piloting a Development Rights Auction Model (DRAM) fund future infrastructure projects – with the aim to develop projects more quickly and with less reliance on central government funding. The agreement did not however include new commitments to specific infrastructure projects.

The agreement also included a commitment from the government to work with London authorities to ensure they have the powers necessary to tackle congestion – with a consultation later in 2017 on extending the scope of the Lane Rental Charge. Within the agreement, the GLA also committed to publish a new Mayor’s Transport Strategy later this year.

Manchester

The Chancellor announced an agreement with the Greater London Authority on the devolution of further powers, including on infrastructure funding. The budget document also noted that the government was ‘in discussion with Greater Manchester on future transport funding’ as part of the devolution agenda – without providing further details at this stage.

Midlands

The Chancellor announced that the Government will be publishing a Midlands Engine Strategy tomorrow, designed to improve the productivity of the region.

Policy announcements - Transport Taxes

Vehicle Excise Duty (VED)

The Chancellor announced that from 1 April 2017, Vehicle excise Duty rates for cars, vans and motorcycles registered before April 2017 will increase by the Retail Prices Index (RPI).

HGV Vehicle Exercise Duty (HGV VED) and Road User Levy

It was announced that HGV VED and Road User Levy rates will be frozen from April 1 2017.  The Government also announced that it will be issuing a call for evidence on updating the HGV Road User Levy in the spring. The updated levy will be designed to reward efficiency and improve air quality.

Air Passenger Duty

The Budget announced that in 2018/19 Air Passenger Duty rates will be “uprated” in line with RPI. The Budget paper notes that in order to provide the aviation industry with good notice, the 2019/20 rates will be outlined in the 2017 Autumn Budget.