Economic Implications for Transport Planning of the New Grant System
Published date | 01 December 1975 |
Author | W. J. TYSON |
Date | 01 December 1975 |
DOI | http://doi.org/10.1111/j.1467-9299.1975.tb00227.x |
Economic Implications
for
Transport
of
the New Grant System
W.
J.
TYSON
Mr.
Tyson
is
Lecturer
in
Econoniics at the
Liniversity
of
Manchester.
This paper is
a
revision
of
a
discussion paper presented to the Eighth
Symposium on the Future of Conurbation Transport held at the University
of Manchester in October
1974.
The author is indebted to members
of
the Symposium for their comments on it.
INTRODUCTION
Events of the past year have resulted in what could be a radical change
in transport policy in the United Kingdom. The combined effects
of
the
1972
Local Government Act and changes in the form
of
central govern-
ment financial assistance to local authorities for transport purposes have
meant that the new county councils have significant powers and responsi-
bilities for transport policy which hitherto they did not possess. This
paper discusses several important issues concerning resource allocation
in the transport sector which bear directly on the ways in which county
councils approach these new responsibilities for transFort planning. Few
authorities are likely to have examined them in depth as yet because of
the necessity
of
producing Transport Policies and Programmes in a short
time period. By raising these issues it is hoped to draw them to the attention
of those concerned with transport planning and thus zssist in determining
the direction of policy logically and consistently.
As outline
of
the paper is as follows. After describing the new organiza-
tional and financial arrangements for transport planning, comparison is
made with the system they replaced, bringing
out
advantages and dis-
advantages. Implications for county councils are raised concerning their
organizational structure and the skills they will need to employ in transport
planning. This leads to the main body
of
the paper which discusses several
economic issues.
The first concerns objectives and it is argued that objectives are prere-
quisites
of
policy on resource allocation. Those set in the past are reviewed
but it is concluded that they offer little guidance. In their place a suggested
objective is put forward of meeting transport demands arising from
a
given
34
7
PUBLIC ADMINISTRATION
land use pattern at minimum cost to the community. Having set objectives,
a county council can proceed to implement policies which will help attain
them and the paper argues that this will centre initially on investment and
pricing.
As
county councils are taking over an existing situation rather
than making
a
completely ‘fresh start’ the process is to review what is
taking place at present, determine whether
it
is consistent with the objec-
tives and identify any overriding constraints. From this, changes in policies
and criteria can be determined
so
that progress towards objectives is made.
As
far
as
investment is concerned, inconsistencies in the use of social
cost-benefit analysis
-
such
as
using it only when other techniques fail
to give the desired result-are examined. The main conclusion is that
although limitations of the technique exist and need to be taken into
account it is an essential aid to decision making when allocating invest-
ment funds. In the field of pricing many deviations from the policies
which, ideally, would achieve the suggested objective are discovered. Some,
such as pricing of road space, cannot be changed at local levels and thus
have to be regarded as constraints. The implications of this for pricing
public transport and for subsidy policy are discussed.
Much of the above is
a
summary of what to transport economists is
‘well-trodden ground’. Following from it
a
related set
of
issues is raised
-
including the interactions between pricing and investment policies
-
which has received less attention. In these ways the paper aims to give
those responsible for county council transport policies an appreciation
of
some
of
the economic issues with which they now deal -implicitly or
explicitly
-
and hopefully
to
provide them with some pointers through
what to many is complex and uncharted territory.
THE NEW SYSTEM AND ITS IMPLICATIONS
FOR LOCAL AUTHORITIES
The main significance for transport policy of local government reorganiza-
tion is that it gives county councils policy responsibility for public trans-
port, highways and land use planning
-
the three key elements
of
transport
policy
-
which has never before been vested in one authority. This consoli-
dation is reinforced by changes in the system
of
finance. Central govern-
ment assistance for local authorities’ transport expenditures (which in
recent years has been quite significant) largely took the form of
a
series
of grants for specific types of expenditure, each at a set rate (for example
75
per cent. for principal road construction). In addition, part of Rate
Support Grant would be used on transport expenditures. The new system
which took effect in April
1975
basically gives one grant for all ‘eligible’
transport expenditure, part of which is distributed
via
Rate Support
Grant and part through
a
new Transport Supplementary Grant, which
covers expenditures above
a
‘threshold‘ level, The threshold is set by the
Department
of
the Environment each year and it is hoped that
in
time an
348
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