By Jaimie Kaffash
21 August 2009
The government should make economic viability the priority when considering transport reforms even if it means closing lesser used rail routes, according to a think-tank.
A Reform report, Any time, any place, any way, said ministers should be focusing on projects that provide ‘value for money’ in the short term and not on major projects such as the high-speed rail link. It also claimed that fixed charges, such as road and airport taxes, should be abolished and replaced by user charges.
Dale Bassett, senior researcher at Reform, told Public Finance: ‘There are a lot of services that are not used very much, that are sustained at a substantial cost to the Treasury. This is an economically inefficient thing to do.’
He highlighted the fact that up to 20 railway stations have fewer than 100 passengers a year. ‘Those stations are kept open, staff are there and the infrastructure is maintained on the same basis as Waterloo, which has 100 million passengers going through it. The problem is, there is a very uniformed way in which we view it so you end up with a disproportionate amount of money being used to subsidise routes or methods of transport that aren’t used too much.’
He added that government funding was not necessary. ‘Transport can be economically viable. Everyone uses transport, people pay a lot of money for transport and a lot of modes of transport exist without public subsidy,’ he said.
Ashwin Kumar, director of Passenger Focus, the independent watchdog, disagreed with the think-tank’s conclusions. He said: ‘It is vital to ensure the right balance between taxpayer and passenger support of the railway. The railway is as much a public service as roads, schools and hospitals and it is quite right that the government pays a contribution to it.’
21 August 2009
The government should make economic viability the priority when considering transport reforms even if it means closing lesser used rail routes, according to a think-tank.
A Reform report, Any time, any place, any way, said ministers should be focusing on projects that provide ‘value for money’ in the short term and not on major projects such as the high-speed rail link. It also claimed that fixed charges, such as road and airport taxes, should be abolished and replaced by user charges.
Dale Bassett, senior researcher at Reform, told Public Finance: ‘There are a lot of services that are not used very much, that are sustained at a substantial cost to the Treasury. This is an economically inefficient thing to do.’
He highlighted the fact that up to 20 railway stations have fewer than 100 passengers a year. ‘Those stations are kept open, staff are there and the infrastructure is maintained on the same basis as Waterloo, which has 100 million passengers going through it. The problem is, there is a very uniformed way in which we view it so you end up with a disproportionate amount of money being used to subsidise routes or methods of transport that aren’t used too much.’
He added that government funding was not necessary. ‘Transport can be economically viable. Everyone uses transport, people pay a lot of money for transport and a lot of modes of transport exist without public subsidy,’ he said.
Ashwin Kumar, director of Passenger Focus, the independent watchdog, disagreed with the think-tank’s conclusions. He said: ‘It is vital to ensure the right balance between taxpayer and passenger support of the railway. The railway is as much a public service as roads, schools and hospitals and it is quite right that the government pays a contribution to it.’
