Statistical Document December 2019

Transport Statistics Great Britain 2019 Notes and Defnitions: Transport Expenditure

About this Public Sector Expenditure and Investment document Information on Tables TSGB1301 to TSGB1305 This section provides notes and defnitions for Data Source the Transport Expenditure transport section of Transport Information covering UK public sector expenditure is available in HM Statistics Great Britain ’s statistical release, Public Expenditure Statistical Analysis published in December 2019. (PESA), available at the following address: This document includes information on sources, https://www.gov.uk/government/collections/public-expenditure-statistical- information on data quality, analyses-pesa defnitions and general information for the tables. Published annually PESA includes data on Public Expenditure on transport for the previous 5 years, which are often revised each year. Data released for years prior to these 5 years is not generally revised. In addition to PESA, HM Treasury publish the Country and Regional In this Analysis (CRA) statistics each November, the ofcial source of historic document public spending by UK region. The latest statistics are available from: Public sector p1 https://www.gov.uk/government/collections/country-and-regional-analysis expenditure and investment Following the publication of PESA (usually in July), breakdowns of Household p5 expenditure are distributed to departments in order to allocate the spend expenditure on transport to UK regions. Revisions to spending fgures are often made between the General indices p5 publication of PESA and CRA. Taxes on road p6 The CRA is a purely statistical exercise and attempts to allocate spending vehicles on the basis of which region benefts, rather than where the money is spent. Further Most expenditure data appearing in PESA and CRA are taken directly information from the Treasury’s public expenditure database, known as the Online System for Central Accounting and Reporting (OSCAR). Data entered Public enquiries onto OSCAR by government departments and devolved administrations 020 7944 2419 include their own expenditure as well as the expenditure of agencies and [email protected] Arms Length Bodies. Media enquiries For public corporations, only capital expenditure is reported on as current 020 7944 3066 spending is not treated as public sector expenditure in the National Accounts.

Transport Statistics Great Britain 2019 Notes and Defnitions: Transport Expenditure - Page 1 With a few exceptions, mainly in non-transport sectors, local government spending data in are supplied by the Ministry of Housing, Communities and Local Government (MHCLG). The devolved administrations provide local government spending data for , and . The sources for the data are explained more fully on the HM Treasury website in Annex A of the annual publication of PESA. Expenditure fgures are reported nominally in PESA and CRA, though HM Treasury do publish real terms fgures defated using Gross Domestic product (GDP). With the exception of TSGB1301, tables in this section therefore refect nominal prices.

Defnitions Public Sector Expenditure is defned as in the National Accounts and includes spending by Central Government (including agencies and arms length bodies), Local Government and public corporations (capital spend only). Expenditure is recorded at the point at which money leaves the public sector, spending between public bodies is not included. Capital Expenditure includes expenditure on capital grants and spending on assets such as the acquisition of land, buildings, vehicles and machinery. For transport this includes the cost of building a road, or new rail lines and some maintenance work. Current Expenditure covers recurring spending on items such as pay, benefts and the purchase of goods and services. For transport this includes services such as concessionary fares and revenue support to public transport. Non-identifable Expenditure is that which is incurred for the beneft of the UK as a whole or for small expenditure where allocating this expenditure by region is either not possible or cost efective. Examples in transport include expenditure on the Maritime and Coastguard agency, the Civil Aviation Authority, transport security, civil aviation services and accident and investigation work. Outside UK Expenditure includes spending that benefts visitors to the UK or international organisations, rather than expenditure that has occurred outside of the UK. For transport expenditure this includes a proportion of Underground and High Speed Rail 1 expenditure. National roads expenditure includes spending on roads which are considered by Central Government as part of their strategic road network. Almost entirely funded by Central Government, these include motorways and trunk roads. Motorways and trunk roads in London are generally the responsibility of Transport for London and not included under national roads. Local authorities may provide small amounts of funding for national roads for particular projects such as additional work on roundabouts or motorway exits. Expenditure on UK-wide agencies such as DVLA is also include. Local roads includes roads that are the responsibility of local highways authorities to maintain. Expenditure on roads within the London area with the exception of small sections of the M4, M1 and M25 are the responsibility of Transport for London and the boroughs and are included here. There was some capital spending by Central Government on Local Roads but this was in London particularly during the Olympics. After the Olympics those roads were transferred to the local authority.

Transport Statistics Great Britain 2019 Notes and Defnitions: Transport Expenditure - Page 2 Local public transport includes Bus Service Operators Grant paid by Central Government as well as Local Authority spending and mainly refers to road transport. Railways expenditure includes both mainline and the London Underground services. From 2015/16, the full extent of Newtork Rail expenditure is included (see methodology section below). Expenditure on the Channel Tunnel Rail Link, London and Continental Railways and railway operators run directly by the Government are included. Subsidies paid to companies operating services on the mainline network are included, though the premium returned to Government is outside the scope of this publication. Other transport includes maritime, ports, aviation, security and other expenditure including local authority spending on ports and piers.

Changes in Methodologies Following the reclassifcation of Network as a public body in the National Accounts by ONS in 2014, PESA and CRA began to record the full extent of Network Rail spending as public sector expenditure from 2015/16 (previous fgures refected the Network Grant paid by government to Network Rail only). As a result, a large increase in transport and rail spending can be seen from 2015/16. Further details about the reclassifcation can be found below: https://webarchive.nationalarchives.gov.uk/20160106001631/http://www.ons.gov.uk/ons/rel/ na-classifcation/national-accounts-sector-classifcation/classifcation-of-network-rail-under- european-system-of-accounts-2010/art--classifcation-of-network-rail-under-european-system-of- accounts-2010.html Other Changes over time to accounting methods and recording practices have afected how spend is categorised between years. For example, in 2016/17 the full extent of High Speed 2 (HS2) expenditure was assigned as railway spending where previously it had been categorised as ‘other transport’. Additionally, changes to how infrastructure is fnanced can afect whether it is categorised as capital or current spending. For example, building a road is capital spending, but paying shadow tolls as part of a usage agreement with a private sector company who built the road would be considered current spending. HM Treasury have also noted that the PESA exercise published in 2012 was not strictly comparable with earlier publications Methods used to allocate spending regionally as a part of the CRA exercise are reviewed annually and improvements are continually made to refect a more robust methodology. These changes in methodology can cause signifcant change to the fnal regional allocations. From 2016/17, the methodology used to allocate a large portion of DfT rail expenditure across regions was updated to better refect the geographic distribution of Network Rail spending. The impact of this change has been marginal. In 2017/18 the HS2 allocation method was revised to focus solely on where the benefts lie once each phase of the project is complete, whereas in previous years some of the allocation went to the areas in which land and property was purchased.

Transport Statistics Great Britain 2019 Notes and Defnitions: Transport Expenditure - Page 3 Interpreting transport expenditure fgures The data are subject to revisions and these can be large if, for example, an organisation originally considered to be in the private sector is reclassifed to the public sector for the purposes of National Accounts, such as Network Rail. Long run series are difcult to compile due to changes in accounting practices across time, including for example, the defnition of capital and current and the defnitions of functions of Government. HM Treasury usually only publish data for the last fve years, so any revisions of earlier data are not captured. Large infrastructure projects tend to require large sums of capital expenditure, but deliver benefts for many years into the future. PESA and CRA record expenditure in each year, and therefore a large project can cause a spike in expenditure for particular categories of spend (and in particular regions) during construction. Private sector expenditure is not included. This primarily afects airports and some ports but also includes projects that could be described as “planning gains”. For example as a condition of granting planning approval for a housing development a local authority might require the builder to build the roads, which might then be turned over to the local authority to maintain. The private sector spending on the road building is not counted. Additionally, PESA and CRA do not refect the money returned to Government in the provision of some transport services. For example, railway expenditure fgures include payments made to subsidised train operating companies (TOCs) but do not refect the income received by government from premium paying TOCs. The complexity of transport networks and limited data sources mean that it is not always possible or appropriate to allocate transport spending regionally on a ‘who benefts’ basis. Where this is the case, expenditure has been apportioned based on actual regional spend rather than where the beneft lies. Due to the cross-regional nature of transport, investment made in one geographic region often benefts those who live in other regions.

Public Expenditure on specifc transport areas: TSGB1305 Table TSGB1305 includes details of public expenditure on a number of other transport related areas that of interest but do not appear as transport expenditure in PESA or CRA, including street lighting, bus service operators grants, concessionary fares and vehicle parking. Information on public sector spending on street lighting is published in PESA, however is not categorised as transport expenditure, instrad appearing under housing and amenities. Bus Service Operators’ Grants (BSOGs) are paid by Central Governments, by DfT for England, by the Nation-al Assembly for Wales, and the for Scotland. Whilst BSOGs paid by DfT to bus operators in England can be identifed in the CRA, payments from devolved governments and payments to local authorities cannot be specifcally identifed. BSOG fgures published in DfT Statistics table BUS0502a give the fgures for England. All remaining data included in TSGB1305 are sourced from Scottish Government Local Government Finance Statistics, the local government fnance section at StatsWales and Local Authority Finance Statistics (England) capital and revenue data.

Transport Statistics Great Britain 2019 Notes and Defnitions: Transport Expenditure - Page 4 Household Expenditure on Transport Household Expenditure on Transport: TSGB1306 A household expenditure survey has been conducted each year in the UK since 1957. The survey is continuous, interviews being spread evenly over the year to ensure that seasonal efects are covered. The 2017/18 survey carried out on behalf of the Ofce for National Statistics consisted of weighted responses from 11,689 cooperating households in the UK. The survey was frst published on a fnancial year basis from 2015/16 and includes data from the fnancial year 2014/15 to enable comparisons to be made. Data are shown to the nearest ten pence in line with usual Living Costs and Food Survey practice. See: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfnances/ expenditure/bulletins/familyspendingintheuk/fnancialyearending2018 The coding framework was changed for the 2001/02 survey onwards. The table has been amended to present data on the European Standard Classifcation of Individual Consumption by Purpose (COICOP) basis. Changes were also made in 2006 to the weights based on the 2001 Census, for further details see Family Spending 2014 (Living Costs and Food Survey 2013). Details of the methodology of the survey is available at: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfnances/ incomeandwealth/methodologies/livingcostsandfoodsurvey

General Indices

Retail and Consumer Prices Indices: Motoring Costs: TSGB1307 These indices are taken from the published Consumer Prices Index (CPI) and the Retail Prices Index (RPI) rebased to 1997=100 for convenience. 1997 is the earliest base year for the CPI components. The four letter code used by the Ofce for National Statistics to identify the series in their time series data and publications has been included. See below for the indices: http://www.ons.gov.uk/economy/infationandpriceindices The operation of personal transport equipment includes spare parts and accessories, fuels and lubricants, maintenance and repairs, and other services. The main diferent between the operation of personal transport equipment from the CPI, the motor running costs index and the all motor index from the Retail Prices Index is that the latter includes the purchase of vehicle. There are some other exclusions from the CPI index such as car insurance (some of which is included in a diferent category) but these do not have a large efect on the Consumer Prices Index as the weights on these items are relatively small. The motoring costs index is calculated by excluding the “purchase of vehicles - DOCS” from the “all motor CHBK” calculations. Retail and Consumer Prices Index: Transport Components: TSGB1308 These indices are taken from the published Retail Prices Index, rebased to 1997=100 for convenience and comparison with the TSGB1307. The “all motor index” (CHBK) includes purchase of a vehicle, maintenance, petrol and oil, and tax and insurance. Again all the series can be downloaded from ONS. The Retail Prices Index components are available in their current form back to 1987 and an accompanying historic table is also given.

Transport Statistics Great Britain 2019 Notes and Defnitions: Transport Expenditure - Page 5 The National Statistics designation has been removed from the Retail Prices Index (RPI). In 2015 we added motoring and other travel components from the Consumer Prices Index. There are some diferences between these indices and those from the RPI. In particular personal travel by road includes taxi fares and other items. Gross Domestic Product and Retail Prices Index defators: TSGB1309 Gross Domestic Product defators (at market prices) can be downloaded from the HM Treasury website at: https://www.gov.uk/government/collections/gdp-defators-at-market-prices-and-money-gdp Consumer and Retail Prices Index defators have been calculated directly from the published ‘All Items’ Consumer and Retail Prices Index, D7BT and CHAW respectively.

Taxes on Road Vehicles

Vehicle Duty and Fuel Duty: TSGB1310 and TSGB1311 The Blue Book presents the full set of economic accounts, or National Accounts, for the . These accounts are compiled by the Ofce for National Statistics (ONS). Figures on and Fuel Duty are also published by ONS in the ONS Environmental Accounts. The fgures in the table represented here do not include VAT. Lead replacement petrol was developed to replace leaded petrol but increasingly clean fuel legislation and duty incentives resulted in a switch to ultra-low sulphur petrol in the . Similar moves resulted in a switch by users to ultra-low sulphur diesel. Duty is also collected on bioethanol and biodiesel as well as liquid petroleum gas. Value added tax is added onto the price of the fuel plus the duty, but is not given in this table. Figures on fuel duty receipts are produced on a regular basis by HM Revenue and Customs in their Hydrocarbon Oils Bulletin, see bellow for more details: https://www.uktradeinfo.com/Statistics/Pages/TaxAndDutybulletins.aspx . Vehicle excise duties are collected by the Driver and Vehicle Licensing Agency on behalf of the Government. The sources for the data published are the ONS Environmental Accounts at: https://www.ons.gov.uk/economy/environmentalaccounts/bulletins/ukenvironmentalaccounts/2019 and http://www.ons.gov.uk/economy/environmentalaccounts/datasets/ ukenvironmentalaccountsenvironmentaltaxes These sources are designated as National Statistics except where indicated.

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