6 options for funding public transport in Wales post-Covid

Following publication of ICE’s discussion paper on future transport funding, John Mather takes a look at the specific implications for the Welsh government.

View of the upgraded railway station, Newport, Gwent. Image credit: Network Rail
View of the upgraded railway station, Newport, Gwent. Image credit: Network Rail
  • Updated: 21 July, 2021
  • Author: John Mather, Honourable Secretary ICE Wales Cymru, North Wales Branch

The Covid pandemic has brought about substantial and rapid changes in how people get about and, indeed, if they get about at all.

It’s worth remembering that we were, at the height of the pandemic, instructed to stay at home and only to go out for essential purposes. We were told to avoid public transport, in order to reduce the transmission of the virus, and to make room for essential workers who needed our bus and train networks in order to get to/from work.

These government interventions deprived the operators of bus and train services of their income from fares; many or most public transport services became unsustainable ‘overnight’. The government had to step in and provide emergency financial support in order to keep our public transport services running.

Wales has a long history of promoting and supporting public transport services. We are fortunate to have a relatively low population density, three national parks, a very long coastline and five areas of outstanding natural beauty.

The problem in Wales

Most of our population is concentrated in the south: in the Valleys and in the cities and towns along the Bristol Channel. In the north, we have a number of coastal towns, which are connected by the A55 Expressway and the North Wales Coast Main Line railway. Long and medium-distance trips are predominantly east/west rather than north/south.

We have an ageing population and, many, particularly those resident in the Valleys, do not keep the best of health. The Valleys have challenging topography, and a depressed economy resulting from the demise of the coal and steel industries. The Welsh government continues to invest in new and expanding business in order to boost the local economy.

Many people of working age have had to find work out of the area and are heavily reliant on private cars to get to and from work. They are not likely to welcome the news that they should leave their cars at home and walk or cycle to work, to schools/colleges or to community facilities.

The Welsh government has laid the groundwork

We are fortunate in that the Welsh government takes climate change, public health and equality very seriously. It has long championed:

  • reductions in greenhouse gas emissions;
  • in modal shift, from the private car to active travel and public transport; and
  • the conservation of the environment.

The Welsh government is striving to create a more prosperous, equal and greener Wales. It has produced some ground-breaking legislation and policy in recent years:

  • Active Travel (Wales) Act 2013;
  • Wellbeing of Future Generations (Wales) Act 2015;
  • Planning Policy Guidance 11; and
  • Decarbonising Transport.

Most recently, we have the new Welsh transport strategy, Llwybr Newydd, and the recently announced Roads Review.

Transport for Wales, which operates rail passenger services in Wales, is wholly owned by the Welsh government. National, regional and local bus services are largely funded by central and local government.

Central government is seeking to create and maintain an accessible, sustainable and efficient transport system in Wales. They have three high-level priorities:

  • To bring services to people, in order to reduce the need to travel.
  • To allow people and goods to move easily from door to door by accessible, sustainable and efficient transport services and infrastructure.
  • To encourage people to make the change to more sustainable transport.

What are the options for funding the future public transport in Wales?

So, in a nutshell, we know what we want to achieve and we have a strategy for its delivery. It’s clear that public transport has a major part to play in creating a more prosperous, equal and greener Wales. We do need to ensure that its funding is robust, flexible, resilient and, most importantly, acceptable to the people.

So, what are the options?

1. Maintaining government support

This, I would suggest, is going to be essential in the short-medium term as the operating costs of bus and rail services are unlikely to be covered by fares.

2. Raising fares

Not likely to be popular. Rail commuters in the South East of England pay huge amounts for season tickets. Rail fares in Wales are burdensome for low income families and for the unemployed.

3. Cutting back services

This is not going to help us deal with the climate change crisis. We need more people to leave their private car at home and to use public transport.

4. Introducing road user charging

This is going to be necessary at some stage. The substantial income the UK government derives from fuel duties has been declining for some time, and this is likely to accelerate as diesel and petrol engine vehicles are phased out. Road user charging might be used to incentivise modal shift, peak spreading and remote working.

5. Land value capture

Perhaps only relevant in densely populated areas of the south east of England and in South Wales which attract new commercial and residential development.

6. Low/free fare public transport

We already have ‘low’ fares made possible through public subsidies. Free fares might be used to influence attitudes and behaviours, perhaps as a short-term fix.

Role of ICE

I must take my hat off to the ICE’s policy team for circulating a well-researched paper and for kickstarting this discussion on how public transport might best be funded in a post-Covid world.

One thing is certain, change is coming and the ICE is well-placed to play a leadership role.

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