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SCOTTISH TRANSPORT STATISTICS No 23: 2004 Edition

Chapter 11 FINANCE

1. Introduction

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 It should be noted that 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" figures. Also, in this edition (as in other recent editions), the figures for local authorities’ net revenue expenditure exclude loan charges, whereas the equivalent tables in the 1998 and earlier editions included them.

1.3 The only change to the tables in this edition is the inclusion in Table 11.11 of figures for total household expenditure and the percentage which is spent on transport.

2. Main Points

2.1 The provisional estimated total of capital and current expenditure on motorways and trunk roads in 2003-04 was estimated at £299 million, an increase of 22% over 2002-03, and 21% more than the peak expenditure in recent years of £248 million in 1994-95. Total expenditure on transport within Scottish Ministers' responsibility in 2002-03 was estimated at £724 million, £199 million (38%) more than in the previous year. (Table 11.1)

2.2 In 2002-03, expenditure on transport controlled by local authorities was £456 million (excluding loan charges). In cash terms, this was 22% more than in 2001-02. Road maintenance (£251 million in 2002-03) accounted for more than half the expenditure in every year (apart from 1996-97). The other main categories of expenditure in 2002-03 were:

• contributions to passenger transport (£67 million);
• concessionary fares (£65 million, an increase from the previous year of two thirds, following the introduction of free off-peak local bus travel for elderly and disabled people in Scotland with effect from 30 September 2002);
• road lighting (£50 million);
• network and traffic management (£28 million).

In 2002-03, the net income from parking charges was £26 million, over three times the figure for 1994/95. (Table 11.1)

2.3 Expenditure on the management and maintenance of motorways and trunk roads totalled £112.1 million in 2002-03: £58.6 million on structural repairs and £53.5 million on maintenance and network management. (These figures do not include spending on construction). (Table 11.2)

2.4 The Local Authorities with the highest net revenue expenditure on roads and transport (excluding loan charges) in 2002-03 were: Glasgow City (£42.4 million), South Lanarkshire (£31.9 million), North Lanarkshire (£30.6 million), Fife (£28.8 million) and Highland (£26.9 million). (Table 11.3)

• Maintenance. Glasgow City and Highland were the local authorities with the highest expenditure on road maintenance (£24.6 million and £19.3 million respectively). Glasgow spent £1.6 million on winter maintenance plus £23.0 million on other road maintenance work; Highland spent £6.6 million on winter maintenance and £12.7 million on other road maintenance.
• Contributions to Public Transport. Shetland Islands (£9.0 million) made the largest contributions to passenger transport. Fife, North Lanarkshire, Orkney and South Lanarkshire each spent around £4.5 million to £4.8 million.
• Concessionary Fares. Glasgow had the highest expenditure on concessionary fares (£9.0 million), followed by Edinburgh (£5.9 million) and Fife (£5.0 million).
• Road Lighting. Glasgow spent most on road lighting (£8.4 million), followed by North Lanarkshire (£4.0 million) and Edinburgh, Fife and South Lanarkshire (around £2.9 to £3.1 million each).
• Parking. Edinburgh raised the largest amount from parking (£11.4 million, net), Glasgow raised £8.3 million and Aberdeen £3.1 million.

2.5 Gross capital account expenditure by councils and boards on local authority roads and transport totalled £170.1 million in 2002-03, an increase of 3% from the previous year. Of this total £118.5 million was spent on roads, £49.2 million on other transport and £2.4 million on toll bridges. Of the roads expenditure, £23.1 million was spent on roads projects costing under £2 million each, £23.2 million on improvements and reconstruction of major roads costing £2+ million each, £30.8 million on structural maintenance of roads, and £14.5 million on road safety for local roads. (Table 11.4)

2.6 The local authorities with the highest gross capital account expenditure on roads and transport in 2002-03 were:

• Orkney Islands (£15.5 million),
• Glasgow City (£15.4 million),
• City of Edinburgh (£15.4 million ), and
• Highland (£13.1 million).

Glasgow spent the most (£10.1 million) on ‘major’ road projects costing £2+ million each and Highland spent the most on smaller road projects (£4.4 million). City of Edinburgh spent the most on roads special objectives (£10.9 million). For other types of transport, the highest spenders were Strathclyde PTA (£15.8 million) and Orkney Islands (£14.7 million). (Table 11.5)

2.7 In 2002-03, local government roads and transport trading services revenue income totalled £39.2 million: £13.8 million from road bridges (Forth and Tay only), £11.6 million from ferries, £0.4 million from buses and £13.3 million from other local authority transport undertakings (such as airports, harbours and piers). The main sources of income were £26.2 million from sales, rents, fees and charges and a £11.5 million contribution towards deficiencies from general funds. (Table 11.6)

2.8 Local government roads and transport trading services capital account expenditure totalled £24.6 million in 2002-03. (Table 11.7)

2.9 In 2002-03, government grants for the construction and improvement of harbour facilities totalled £16.3 million. The recipients were Orkney Islands Council (£8.5 million), Scrabster harbour authority (£4.6 million), Highland Council (£2.7 million), and Caledonian MacBrayne (£465,000). (Table 11.8)

2.10 The average prices of unleaded petrol and diesel in Great Britain as a whole rose between June 2002 and June 2003, by 0.4 and 1.1 pence per litre respectively. Tax (duty plus VAT) represented about 76% of the price of unleaded petrol and 75% of the price of diesel in Great Britain in June 2003, compared with 66% and 65% respectively in June 1993, and with 77% for unleaded petrol and 75% for diesel in June 2002. (Table 11.9)

2.11 The UK Retail Prices Index (RPI) rose by 29% from a value of 140.7 (based on 13 January 1987=100) for 1993 to a value of 181.3 for 2003. 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 petrol and oil rose by 56%, the cost of maintenance of motor vehicles increased by 52%, and there was an 49% rise in the cost of vehicle tax and insurance. However, the cost of purchasing a motor vehicle decreased by 7% over the last ten years. As a result, the motoring expenditure index rose by 25%, slightly less than the 29% increase in the RPI, so the overall cost of motoring decreased slightly in real terms between 1993 and 2003. Over the same period, the overall index of fares and other travel costs rose by 39%, Rail fares rose by 37% and bus and coach fares by 42% and therefore both increased in real terms. (Table 11.10)

2.12 The total average weekly household expenditure in Scotland on transport and vehicles in 2002-03 was £58.20, an increase of 5% over the previous year and 43% on 1993. However, as a percentage of total household income this was 15.5% which was the same as the previous year and only slightly higher than 1993 where it was 15.4%.

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. From 2001-02 there are now 4 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
2.2% Maintenance of motor vehicles
3.8% Petrol and Oil
2.4% Tax and Insurance.

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

4.1 The statistics in this chapter come from the following sources:

5. Further Information

5.1 For further information on Table 11.1(a) - Motorways and Trunk roads and central government subsidies to transport industries, contact Alistair Lindsay of The Scottish Executive Finance Transport Division (tel: 0131 244 7485).

5.1 For further information on Tables 11.1(a) (Local Transport — Capital), 11.1(b) and 11.3 to 11.7 contact Mrs Margaret Sellar of The Scottish Executive Local Government Finance Statistics branch (tel: 0131 244 7035) or e-mail lgfstats@scotland.gsi.gov.uk.

5.2 For further information on Table 11.2 contact Mr Alexander Ramage of The Scottish Executive Road Trunk Roads Network Management Division (tel: 0131 244 7245)

5.3 For further information on Table 11.8 contact Miss Sharon Wood of The Scottish Executive Development Department, Transport Division 4 (tel: 0131 244 1679).

5.4 For further information on Table 11.9 contact Ms Deirdre Taylor, Department of Trade and Industry (tel: 020 7215 2722).

5.5 For further information on Table 11.10 contact the Office of National Statistics — Consumer Prices and General Inflation Division (tel: 020 7533 5845).

5.6 For further information on Table 11.11 contact the Office of National Statistics — Expenditure and Food Survey (tel 020 7533 5756).

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