Chapter 10 FINANCE
1.1 This chapter provides information on finance, such as expenditure on transport within Scottish Ministers' responsibility and on transport controlled by Local Authorities. It shows capital and current expenditure on motorways and trunk roads, Local Authority revenue and capital income and expenditure on roads and transport, government grants for the construction and improvement of harbour facilities, petrol and diesel prices and duties, and average weekly household expenditure on transport.
1.2 Almost all the figures in this chapter are expressed in what are referred to as current, out-turn or cash prices: no table gives constant price (i.e. deflated) figures.
2. Main Points
Motorways & Trunk Roads
2.1 The total of capital and current expenditure on motorways and trunk roads in 2010-11 was estimated at £508 million, an decrease of 5% over 2009-10. Total expenditure on transport within Scottish Ministers' responsibility in 2009-10 was estimated at £1,753 million, £68 million (4%) more than in the previous year. (Table 10.1)
2.2 Expenditure on the management and maintenance of the trunk road network totalled £161.9m in 2009-10. Excluding an inflation adjustment of £15m, the expenditure is split £89.3m on structural repairs and £57.6m on routine, cyclic, winter maintenance and network management. (These figures do not include spending on construction). (Table 10.2)
2.3 In 2009-10, expenditure on transport controlled by local authorities was £485 million (excluding loan charges). In cash terms, this was 7% more than in 2008-09. Road maintenance (£293 million in 2009-10) accounted for 60% of the expenditure in recent years. The other main categories of expenditure in 2009-10 were:
- contributions to passenger transport - £72 million;
- road lighting - £69 million;
- network and traffic management - £42 million
In 2009-10, the net income from parking charges was £23 million, £6 million less than 2008-09. (Table 10.1)
2.4 The Local Authorities with the highest net revenue expenditure on roads and transport (excluding loan charges) in 2009-10 were: Fife (£38.6 million), Glasgow City (£35.7 million), South Lanarkshire, (£35.1 million), North Lanarkshire (£34.3 million) and Highland (£32.5 million). (Table 10.3) The table also shows local authorities' figures for other types of expenditure in 2009/10:
- Road maintenance/Winter maintenance South Lanarkshire had the highest expenditure on road maintenance (£17 million), followed by Fife (£16.5 million). Aberdeenshire and Highland spent the most on winter maintenance (£9 million and £8.2 million respectively)
- Contributions to Public Transport in terms of the total net revenue expenditure on 'local authority' and 'non LA' public transport, Shetland Islands (£13.5 million) made the largest contributions to passenger transport. Fife spent £10.3 million and Orkney spent £9 million.
- Road Lighting Glasgow spent most on road lighting (£10.6 million), followed by North Lanarkshire (£5.9 million) and South Lanarkshire (£4.4 million).
- Parking Edinburgh raised the largest amount from parking (£13.3 million, net) and Glasgow raised £6.2 million.
Gross Capital Expenditure
2.5 Gross capital account expenditure by councils and boards on local authority roads and transport totalled £471.2 million in 2009-10, a decrease of 5% on the previous year. Of this total £230.8 million was spent on roads and £153.8 million on other transport. (Table 10.4)
2.6 The local authorities with the highest gross capital account expenditure on roads and transport in 2009-10 were:
- City of Edinburgh (£145 million),
- Glasgow City (£27.2 million),
- East Dunbartonshire (£25.4 million) and
- Aberdeenshire (£21.2 million)
East Dunbartonshire spent the most on roads (£24.7 million) and North Ayrshire spent the most on bridges (£4 million). (Table 10.5)
2.7 The National Concessionary Travel (NCT) bus scheme was introduced in April 2006 and administered at by Transport Scotland for Scotland as a whole. Previously local authorities administered their own schemes, therefore local expenditure on concessionary travel (and therefore overall totals of spend) shown in Table 10.3 will be greatly reduced from previous years, now only covering rail, subway, ferry and some taxi schemes. Further statistics on concessionary travel can be found in table 11.29.
2.8 Between June 2009 and June 2010 the average price of unleaded petrol increased by 15.9 pence, and diesel increased by 15.8 pence per litre in Great Britain. Tax (duty plus VAT) represented about 63% of the price of both unleaded petrol and diesel in Great Britain in June 2010, compared with 73% for unleaded petrol and 74% for diesel in June 2000, and with 66% for unleaded petrol and 65% for diesel in June 2009. (Table 10.6)
2.9 The UK Retail Prices Index (RPI) rose by 31% from a value of 170.3 (based on 13 January 1987=100) for 2000 to a value of 223.6 for 2010. Most of the Transport components of the RPI increased more rapidly than this, and therefore rose in real terms. In cash terms, the costs of the maintenance of motor vehicles increased by 69%, petrol and oil by 47% and there was a 69% rise in the cost of vehicle tax and insurance. However, the cost of purchasing a motor vehicle fell by 20% in cash terms over the last ten years. As a result, motoring expenditure index rose by 20%, less than the 31% increase in the RPI and therefore a real term fall between 2000 and 2010. Over the same period, fares and other travel costs rose by 56% in cash terms - rail fares by 51% and bus and coach fares by 58%, both real term increases. (Table 10.7)
2.10 Average weekly household expenditure in Scotland on transport and vehicles in 2007-09 was £61.10, representing 13.9% of total household expenditure. On average, £24.10 was spent on the purchase of vehicles, £27.30 on the operation of personal transport (including £18.40 on petrol, diesel and other motor oils) and £9.70 on transport services (such as bus and train fares). (Table 10.8b)
3. Notes and Definitions
3.1 Following local government reorganisation on 1 April 1996, the management and maintenance of motorways and other trunk roads was sub-divided into 8 operating units. These applied for the years from 1996-97 to 2000-01 inclusive. New arrangements were introduced with effect from 2001-02 which resulted in 4 Operating Companies maintaining the trunk road network. The introduction of 3rd Generation Contracts for Trunk Road Maintenance in April 2006 and 2007 means there are now 3 Operating Companies. Details of the areas covered by each of these companies can be found in the Annex.
3.2 Local authority trading services: Those services of a commercial nature which are, or could be, substantially financed by charges made to recipients of the services.
3.3 In a few cases, negative figures are shown in the net expenditure tables. This is due to income/receipts exceeding the expenditure in a particular category.
3.4 Retail Prices Index: Rail fares are 5 parts per 1,000 (or 0.5%) of the Retail Prices Index. Bus and coach fares are also 5 parts per 1,000 (or 0.5%). 'Motoring costs' accounts for 14.6% of the Retail Prices Index. This breaks down into:
6.2% Purchase of vehicles (CHBK)
2.2% Maintenance of motor vehicles (DOCT)
3.8% Petrol and Oil (DOCU)
2.4% Tax and Insurance.(DOCV)
Car parking charges are included under 'Maintenance of motor vehicles'.
3.5 Resource Accounting and Budgeting (also known as Accruals): Under resource accounting income is shown when it is earned, and costs are shown when they are incurred, the timing of the cash movement is irrelevant. The costs of a capital asset are spread ('depreciated') evenly over its useful life. A capital charge is also made against the value of the asset.
3.6 Cash Accounting: Income is shown when money is received, and costs are shown when payment is made. All receipts and payments made in a financial year are included in the cash accounts for that period. The whole cost of a capital asset is recorded when it is bought.
4. Sources & Further Information
4.1 The statistics in this chapter come from the following sources:
- Table 10.1(upper half) - Building a Better Scotland: Spending Proposals 2003-2006 and Scotland's Budget Documents 2006-07: Budget (Scotland) (No.3) Bill Supporting Document - contact Dawn Williamson of Transport Scotland (tel: 0141 272 7526)
Scottish Government - contact Bruce Golding (0131 244 7033) or email: email@example.com .
- Tables 10.2 - Transport Scotland Trunk Roads Network Management. Contact James Watson of Halcrow (tel: 0141 272 3300)
- Tables 10.6 - The Department of Energy and Climate Change. Contact Susan Lomas (tel: 0300 068 5047).