With increasingly slim council budgets and the looming Brexit deal creating uncertainty, the municipal transport sector is going through a difficult patch
Ever since then Leader of the Conservative Party David Cameron announced that the country would be heading into the “age of austerity” 11 years ago, local councils and authorities have been scrambling to work out the most efficient and effective ways to spend their diminishing annual budget.
The public sector has witnessed significant delays in the procurement of new fleets as local authorities become increasingly anxious to part with money. Naturally with budgets tightening, universal spend across all sectors has fallen but the transport sector has been one of the worst hit. In 2010-11, English councils spent on average £121 per person on transport annually, but in 2017-18 that figure had slumped to £72. That’s a decline of 40%.
The UK’s exit from the European Union is a factor that must be considered too. With genuine uncertainty about how Brexit will transpire, it is more important than ever that council budgets are watertight so that the smoothest transition can be achieved that prevents any more pressure being mounted.
Cities are the unrivalled engines of the economy, but have been clobbered the hardest by austerity. They house more than half the population, provide more than 70% of the most productive jobs and account for 63% of economic output, while they have taken 74% of the pain in local government cuts. A recent Centre for Cities thinktank study that was conducted earlier this year revealed that the poorer, more derelict areas of the country have borne the biggest brunt of council spending cuts. The report suggests that there is a “city and country divide” with several urban councils shouldering cuts to several transport services including street cleaning and road repairs which on average are twice as deep as those dealt by affluent authorities.
This means northern councils are predominantly struggling more than those further south, and according to Transport of the North, fixing the transport system in the north of England will cost at least £60bn over 30 years. The strategic transport body has been backed with £260m of central government funding to try and transform transport networks across the North East, North West and Yorkshire. But for that to work the £72 per head figure has to be more than doubled to £150 per person.
And herein lies a major problem for the commercial transport and particularly municipal sector. Councils have already begun to reduce the number of vehicles in their fleets and are changing the way in which they operate. Services that required vehicles had to apply for approval which inevitably has led to widespread cuts. And ultimately this could have a significant effect on the civilian should services like bin collection and road sweeping become limited. This also leads to job losses and the thinning of management structures.
Andrew Carter, Chief Executive of Centre for Cities argues: “Councils have managed as best they can but the continued singling out of local governments for cuts cannot continue. Fairer funding must mean more funding for cities.”
However, it is important that fleet managers do not pursue the risky alternative of sourcing the cheapest possible vehicles, thinking that this will save them money. Traditionally councils bought their own vehicles and maintained them themselves but with budget constraints tying hands, the idea of purchasing a second-hand unit outright can seem appealing. But this is often a knee-jerk reaction rather than a calculated decision. The whole-lift cost of the vehicle must be considered as a newer vehicle is all but guaranteed to cheaper to run as it has not undergone as hard a life.
Hiring and leasing is a useful alternative to this predicament though as it provides several advantages. It all but guarantees an up-to-date, reliable vehicle is being used as hire and leasing firms will not supply councils with older trucks. But perhaps most pertinently, it alleviates the issue of money being tied up in investments, as a fixed and predictable fee will be paid to the leasing or hire company which can easily be calculated into any budget plan.
It is up to the councils up and down the country to devise the most effective plan and to ensure their services do not suffer from mismanagement and poor finances. There are a multitude of companies that can help councils in all aspects of municipal transportation for all sizes and budgets. Across the next 12 pages, The FACTS Municipal Buyers Guide highlights the latest products, service and news from this sector.