Cutting Public Expenditure: Medium and Long Term Implications for Transport Infrastructure

Cutting Public Expenditure: Medium and Long Term Implications for Transport Infrastructure


T Hoe, M Shepherd, Oxera Consulting Ltd, UK


Public sector spending cuts are expected in many European countries. This paper focuses on expected capital spending cuts and the implications for transport over the medium and long term.


Public sector spending is being cut throughout Europe, and the implications of the necessary budget decisions are likely to be felt for a considerable time, particularly in the transport industry, given its typically long lead times for infrastructure. This paper will review the long-term characteristics of capital expenditure in the UK transport sector since 1980, and offer commentary on the possible impacts of the ongoing public sector spending cuts in the medium and long term. The authors will seek to establish whether the lessons that can be drawn from the UK can be extrapolated to other European countries, given the different approaches to transport infrastructure that exist across Europe.

The paper will consider whether the historical patterns of investment in infrastructure are likely to continue, in light of the recent and forthcoming fiscal tightening. The historical investment data shows that much of the volatility in spending on transport infrastructure is driven by the establishment and large-scale enhancement of existing transport networks. Reviewing a number of UK-focused documents?such as the Comprehensive Spending Review 2010, the Strategy for National Infrastructure, and departmental budgets will allow the authors to provide an indication of when the next large increases or decreases might occur in the medium term. This will be complemented by case studies of approved pipeline projects in both the UK and elsewhere (such as High-Speed 2, or Terminal 2 at Dublin airport).

The paper will conclude with some thoughts on the likely impact of the cuts in public spending in the medium and long term, once the current short-term fiscal retrenchment is completed and economies are again focused on economic growth. It will also consider the associated issues, such as congestion and crowding.


Association for European Transport