The recent budget represents a missed opportunity to tackle transport poverty which is seriously hampering the ability of many, particularly the young unemployed, to access employment.
Predictably the Chancellor pledged to continue to freeze fuel duty. The Treasury estimates that petrol will be 20 pence a litre cheaper than it otherwise would have been, giving motorists an average saving of £680 over the course of the Parliament.
Whilst freezing fuel duty has been consistently one of the Government’s most popular measures, it fails to address the fact that a quarter of households have no access to a car, this rising to nearly half of all workless households. And it does little to address the challenges faced by those unable to access employment opportunities through lack of affordable and available public transport. Whilst it is true that freezing fuel duty also helps to keep bus costs down, any benefits to bus passengers are more than outweighed by heavy cuts to bus funding elsewhere. Recent research by the Campaign for Better Transport, for example, shows that 46% of local authorities have cut spending on their supported services.
The Chancellor should have demonstrated that he is serious about getting people to work by providing targeted support for those who need it most.
One group most in need of support are the more than one million 16-24 year-olds in the UK not in education, employment or training. The Government’s commitment to extend grants for small businesses to support 100,000 more apprenticeships is to be welcomed. However, very little thought seems to have been given to how these new apprentices will be able to get to work.
Research conducted last year by the University of Leeds, reveals that young people are more reliant than any other demographic group on bus services, and this is particularly acute for young unemployed. For the vast majority of young unemployed people the bus is the only form of transport available. 82% have no access to a car, and a quarter have been prevented in some way from securing a job because of the lack of a suitable bus service. This is one of the reasons why cuts to local bus services are so damaging for the prospects of a sustainable recovery.
New measures are needed to ensure we foster talent among the young in the UK, and it is right that apprenticeships should be a key priority for the Government. But with the ‘apprentice minimum wage’ set at £2.68 an hour – or approximately £5,200 per year – the cost of getting to work means many young people cannot afford to take on a position even if they manage to secure one. According to Department for Transport research, around a third of young people not in employment, education or training would have chosen to participate in education or training if they had more money to cover the cost of transport.
This is why Greener Journeys is calling for the Government to implement a national concessionary bus travel scheme for young people in the first year of their apprenticeship. The scheme would improve access to jobs by making it easier and cheaper for them to commute to work by bus. Such a scheme would also have clear benefits for the wider economy. KPMG estimate it will generate a net benefit of £27.8 million per year to the UK economy providing £2.44 of benefits for every £1 invested – high value for money according to the Department for Transport’s appraisal guidance.
Another group in need of support are low income commuters, many of whom heavily depend on buses. With transport costs second only to housing, fuel and power in terms of their share of total household expenditure, the affordability of commuting is a real financial challenge for many households.
This is why Greener Journeys is calling for the introduction of the Bus Bonus, a tax incentive to allow employers to provide their employees with help to pay for the cost of commuting to work by bus. KPMG estimates that the Bus Bonus initiative will cost the Treasury £75 million per year, mainly in foregone tax revenues, but it would deliver £150 million benefits to the wider economy thus generating an overall net benefit of £75 million.
Buses play a central role in helping people access employment. If the Chancellor wants a sustained and resilient recovery he must get the foundations right. If he is serious about tackling the epidemic of youth unemployment he must ensure that young people can access job opportunities. And with the rising cost of living a key concern for millions of low income commuters he should implement the Bus Bonus, which would not only put money directly back into hard working people’s pockets but would also give the economy a much needed boost and improve access to jobs.