1 Reducing the budget deficit is a Government priority. The 2010 spending review announced significant spending reductions across Government. The settlement for the Department for Transport (the Department) provides a budget that is 15 per cent lower in real terms than the baseline of £12.8 billion in 2010-11. This is in addition to an earlier £683 million reduction the Department committed to in the 2010 emergency budget which was already incorporated in the baseline for the spending review. To live within this settlement, the Department has reduced spending plans across all areas of its business.
2 The Department provides leadership across the transport sector. Its primary objectives are to support economic growth and reduce carbon emissions. The Department works with local and private sector partners to deliver many of its services and funds major road and rail infrastructure projects. Spending decisions in transport often result in long-term commitments, and at any point in time, the Department has spending commitments resulting from earlier investment decisions. This can make it difficult to vary spending plans at short notice.
3 This report sets out the Department for Transport's cost reduction plans (Part One), how the Department identified and assessed cost reduction measures (Part Two), and its progress in implementing them (Part Three). Appendix One summarises our audit methodology.
4 In November 2011, the Government announced additional transport spending in its Autumn Statement, which is not covered further in this report. This amounted to £1.7 billion of new spending on transport infrastructure over 2011-12 to 2014-15, and a further £950 million of improvements to the rail network financed through Network Rail. In addition, there is a £345 million expense associated with keeping the cap on passenger rail fare increases at 1 per cent above inflation in 2012 (it was previously due to rise to 3 per cent above inflation).