TRACK REPORT
Page 24
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how many will be convinced?
• The promised Ministry of Transport report, "Road Track Costs", published yesterday (Thursday) attempts to assess the total costs of providing roads and to attribute costs to different types of road-user.
Following the Ministry's evidence on track costs to the Geddes Committee on Carriers' Licensing in 1964, a major programme of economic research has been undertaken in the Ministry. An "InterUrban Transport Costs Model" which aims to predict traffic flows and transport costs on the basis of varying assumptions about the split of traffic between road and rail is in preparation, says the report.
The Road Track Costs study stems largely from the main inter-urban costs model research, which is continuing.
The report concludes that in assessing the relationship between the expense of providing roads and the charge made for their use, community costs such as noise, fumes and general loss of amenity should be included. Though these cannot be quantified at present, the report suggests that it would be reasonable to attribute £80m to £90m air pollution costs to motor vehicles. Severe traffic noise may cost the community £35m to £40m.
The report claims that what can be assessed is the share each vehicle category should bear of the public costs of providing
the road system, i.e. those costs paid by central and local government in one way or another.
Three categories of road costs are distinguished. User costs, met directly by road users, include the cost of vehicles, fuel, oil, tyres, time spent travelling, and the various payments made by road-users to the Government.
Public costs are costs falling on central and local government and include money spent on building new roads and maintaining, cleansing, lighting and policing existing roads. They also include the cost of administering these expenditures and the proportion of that part of the cost of accidents falling on the State.
Community costs fall into neither of the above categories and include loss of amenity from vehicle noise and fumes and loss inflicted on the community at large by accidents (e.g. reduced output and the subjective costs of grief and pain).
The report says that taxation differs from other user-costs in that it is not a payment for goods and services but part of the country's tax system for distributing income to different groups of people or to services such as health and education. But "the amount raised by taxation may, precisely because it does not represent the consumption of resources by road-users, be usefully compared with the total of other costs, public and community, which are not borne directly by road-users, to see what the relation is between the total payments by road-users and the total costs incurred on their behalf".
Because no commercial accounts have been made out for the cost of providing roads over the years there is now no agreed way of presenting in financial terms the benefits of past expenditure— going back hundreds of years: benefits which road-users are now enjoying. The report explores methods of treating capital investment in the roads.
As regards community costs, the report says their treatment presents formidable difficulties as there are no acceptable ways of estimating most of them. If they could be estimated and road-users could be made to meet them out of their own pockets, the costs would probably fall because roadusers would fit devices to reduce noise and fumes or because fewer journeys would be made. But "while it is clear that road-users impose community costs, it is not apparent . . how and how much they should pay for them".
The report suggests that revenue from road-users will increase from £1,100m in 1965/6 to £1,895m in 1975. The road haulage charge is likely to increase from 130m to £37m in this period, and vehicle excise charges will rise from £247m to £419m. While total revenue from road taxation substantially exceeds the cost of roads—whether calculated on a current expenditure or public enterprise basis— "there are strong grounds for arguing that this is not the right basis for comparison".
The report concedes that there is no necessary relationship between what road-users pay in revenue and the level of road costs, public or community. Revenues once intended to be devoted to road-building have long since become part of the Government's general revenue. The level of this revenue is not therefore decided by the amount of money to be spent for the benefit of road-users but by, among other things, the public sector's overall financial requirements and the need to regulate the level of demand in the economy. None of the various principles for charging road-users, says the report, revealingly, can be applied regardless of fiscal policy.
' It argues that the road haulage charge is justified by the fact that heavy goods vehicles are responsible for 28.9 per cent of total costs although in numbers these vehicles only represent 6.5 per cent of motor vehicles. Revenue contributed by heavy goods vehicles in terms of fuel tax and excise duties represents a rather smaller proportion of total revenue-24.8 per cent—than their share of total cost. "This fact, that operators of heavy goods vehicles contribute less revenue in proportion to their attributable costs than owners of other vehicles, has been taken into account by the Government in formulating their proposals for the new charge."
The report says the incidence of the proposed scale of charges varies from about 0.6d per vehicle/mile to 1.25d depending on the size and utilization of the vehicle affected. These figures represent cost increases of about 2+ to 3+ per cent. The report concludes that even if all this extra cost is passed on to the user of road transport, its effect on the amount of traffic carried by road is likely to be small.
The report is published by HMSO at lIs.