Budget reduction plans in the Department for Transport (DfT) may not provide sustainable savings, according to a National Audit Office (NAO) report published today, because the department “did not have a long-term plan against which to make shorter-term decisions for the spending review period”.

The report found that over half of the planned reductions “are the results of cuts or deferrals to new investments and higher fares, rather than new approaches to delivering the same for less”.

The transport department had begun to consider how it could make long-term, sustainable savings in 2009, said the report, but this project did not produce its final reports until after the spending review in 2010.

The NAO report questions whether reductions to road and rail budgets will prove sustainable in the long term, saying that reducing road maintenance budgets could increase costs because of deteriorating road surface quality, while rail savings depend on the outcome of negotiations with Network Rail.

It commends the department for having a good understanding of relative costs and benefits in specific schemes such as Crossrail, but said there is more limited information in other areas, particularly over costs and benefits of rail franchises.

You can read an article by perm sec Lin Homer on the challenges for DfT in 2012 here.

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Written by csw