Transport & Logistics Autumn Statement 2015 review
On 25 November, the Chancellor delivered his latest Autumn Statement. In a year which has already seen the government commit to investing in the sector, transport & logistics firms were perhaps quite positive about what this year’s Autumn Statement might bring. A spending review for UK transportation was promised as a key focus, with capital funding for additional transport projects forecast to increase.
In this article we summarise the key points arising from the Autumn Statement and focus specifically on what the changes may mean for the transport & logistics sector.
In summary (general):
- Tax credit cuts scrapped all together
- £12bn in targeted welfare savings to be delivered in full
- Small business rate relief to be extended for one more year
- NHS to receive £10bn more funding a year in real terms by 2020
- Basic state pension will rise by £3.35 to £119.30 a week
- New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016
- Doubling of housing budget to £2bn a year
- Capital funding of transport projects to rise by 50%
- Increased devolution with 26 new or expanded Enterprise Zones announced
- Transport (37%), environment (15%) and energy (22%) departments all face funding cuts
- Capital funding of transportation projects to increase by 50%
- London to get £11bn investment in transportation infrastructure
- 37% cut in Department for Transport operating budget
- Pressing ahead with construction of HS2 beginning this Parliament
- Continued devolution of transport powers to mayor-led city regions (e.g. Sheffield City Region)
- Largest road investment since 1970s
- Highways England given £15 billion for better roads
- Permanent national pothole fund announced
Transport infrastructure – biggest investments in decades
Paul Wormald, Partner at Hawsons, commented: “Overall, this year’s Autumn Statement and spending review brings good news to the transport & logistics sector. As the sector is arguably the linchpin of the British economy, investing in transport is critical to our long-term economic growth. This significant additional capital funding for our road and rail networks is therefore absolutely essential and is indicative of the Northern Powerhouse. Although it must be noted that many of the big transport infrastructure projects the Chancellor spoke about had already been announced. Nevertheless, it is good to see ongoing commitment and the green light given to press ahead with plans.”
“How will the big cut for the Department for Transport – actually the biggest of all government departments – impact the delivery of these transport projects? That is a question many will be asking after the department’s operational budget was slashed by over a third.”
Transport Secretary, Patrick McLoughlin said: “This settlement is a great boost for the future of Britain. Faced with difficult decisions on the public finances we could have rolled back our ambition on transport. Instead, we are choosing to invest for the future by increasing capital investment in Britain’s transport network by 50% to £61 billion over this Parliament. This will support jobs, enable economic growth and bring our country closer together.”
Paul Wormald, Partner at Hawsons, commented on other possible transport & logistics implications from the 2015 Autumn Statement: “Out of the other key announcements from this year’s Autumn Statement it was good news for the smaller transport & logistics firm. The extension of the small business rate relief for another year and the introduction of an apprenticeship levy are both welcome announcements. Of course, with the apprenticeship levy, larger business will be the big losers. In conjunction with the forthcoming burden of the new National Living Wage, wage costs are rising significantly, and without much notice.”
“One of the other issues, which was hidden away in the details, was the government’s decision to ‘explore the sale’ of its 49% shareholding in NATS (National Air Traffic Control Service). We will have to wait and see for further details on this, but a sale looks increasingly likely.”
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Paul Wormald is a partner at Hawsons, working in the Doncaster office. He worked previously with two national firms of Chartered Accountants prior to joining Hawsons in 2001. For more information or advice on anything covered in this article, please contact Paul on [email protected] or 01302 367 262.[/author_info]