30 October 2024 – Corby, UK - Chancellor Rachel Reeves has unveiled one of the most substantial budgets in over 30 years, detailing future plans that impact the logistics, transport, and supply chain sectors.

This budget features significant investments focused on enhancing connectivity and addressing the UK's pressing infrastructure needs.

In response to the Autumn Budget announcement, experts from the Chartered Institute of Logistics and Transport UK (CILT(UK)) have shared their insights on its implications for the sector.

Lee White FCILT, Chair of CILT(UK)’s Bus & Coach Policy Group:

 “Confirmation of the bus fare cap being retained but at £3 per journey is likely to mean that in urban areas many capped fares will be higher than operators / local authority day tickets.

“In rural areas, the benefits to users on longer journeys will remain significant hence why this funding commitment is broadly welcomed. We welcome the allocation of £640m for local authority bus service funding in FY2025/26.  

“Although we see no change announced in BSOG (fuel duty rebate) principles we welcome the commitment of £285m to this funding source.  We, however, have concern that fuel duties generally will remain unchanged thus perpetuating the artificially low cost of private motoring to continue.”

“In the spirit of change promoted by the government we were disappointed that the Chancellor did not offer the opportunity to move bus funding onto similar terms to major road and rail funding where multi-year settlements are the norm.”

Julian Worth FCILT, CILT(UK) Rail Freight Forum Chair shares his opinion on the announcement:

“Extending HS2 to Euston, whilst essential and welcome, is only half the story. At least as important for the British economy is sorting out the mess left by the last Government at the interface between HS2 and the West Coast Main Line in Staffordshire.

“If nothing is done, by the end of this parliament the country's main economic artery will be clogged and facing a thrombosis. At the very least, a new link needs to be built to avoid the severe pinch point at Colwich, near Stafford.”

“We look for this and a number of much smaller key freight schemes, which would deliver major economic and growth benefits, to be addressed in the Sending Review next Spring.”

The Budget Summary: What has been outlined for the sector?

Rail Transport Enhancements

Key elements of the budget include:

• Trans-Pennine Upgrade: Upgrades will connect York, Leeds, Huddersfield, and Manchester, with fully electric local and regional services expected between Manchester and Stalybridge by the end of this year.
• Electrification Initiatives: Additional electrification of services between Church Fenton and York is planned by 2026, aiming to improve the speed and reliability of rail services in Northern England.
• East-West Rail: The government has committed to delivering the East-West Rail project, which is anticipated to drive economic growth between Oxford, Milton Keynes, and Cambridge.
• HS2 Project: Funding has been secured for the HS2 project segment between Old Oak Common and Birmingham, including tunnelling work to London Euston station, expected to attract private investment in the region.

Road Network Improvements

The budget also addresses road infrastructure with:

• A commitment to address local road maintenance with an additional £500 million for the years 2025-26, bringing a total amount of £1.6 billion to fix roads in England over the next year.
• An extension of the 5p cut in fuel duty for another year to help ease the financial burden on motorists.

Support for Public Transport

In a move to enhance public transport, the budget includes:

• Over £650 million for improving transport in towns, villages, and rural areas.
• A continuation of single bus fares at £3 until the end of 2025 as part of a package worth over £1 billion to support bus services across the country.
• £500 million in new funding for the Affordable Homes Programme, contributing to the broader investment of £5 billion for 1.5 million new homes. This in turn will have an impact on transport planning in areas where housing will be built.

Aviation Developments

In the aviation sector, the budget outlines changes to Air Passenger Duty (APD):

• From 2026-27, APD rates for short and long-haul flights will increase slightly to account for inflation: a £1 increase for domestic flights, £2 for short-haul, and £12 for long-haul flights. Children under 16 will remain exempt from APD.
• A 50% increase in APD for private jets is also set to take effect.