Transport spending accounted for 2.8% of total spending in 2014–15, slightly below its average historical share: it has fluctuated between 3 and 4% of total spending for most of the last three decades. Figures 1a and 1b show the changes over time in transport spending (in real terms and as a percentage of national income).
Figure 1a. Transport spending in real terms (£ billion, 2015–16 prices), 1978–79 to 2015–16 [Download the data]
Figure 1b. Transport spending as a share of national income (%), 1978–79 to 2015–16 [Download the data]
After a peak in transport spending in the early 1990s, spending in this area fell dramatically until March 2000, when it started to increase rapidly again, at an average annual real growth rate between 1998–99 and 2007–08 of 8.9%, faster even than growth in health and education spending over this period. This planned increase was set out in 2000, in the government’s Transport Ten Year Plan, and supplemented at successive Spending Reviews, which, prior to the financial crisis, had set out long-term plans to increase transport spending by an annual average real rate of 2¼% from April 2008 to March 2019.
The financial crisis and the subsequent tightening of spending reversed the long-term plans for increases in transport spending. Between 2010–11 and 2014–15, the Department for Transport’s budget (including the grant to Network Rail) has been cut by 11%, though this is significantly less than the real-terms cut that was originally planned at the time of the 2010 Spending Review (see this IFS Green Budget chapter).