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Council Tax - Transport Funding

Transport

Investing in Greater Manchester transport 2018/2019

Transport is an important part of life for everyone in Greater Manchester. It connects people with jobs, education and their families; it gets customers and suppliers to businesses and it connects people with important public services.

The following information gives an overview of how revenue funding will be spent on transport over the next 12 months.

Who will manage transport and the revenue funding?

Transport for Greater Manchester (TfGM) is the organisation that delivers the Greater Manchester Combined Authority’s (GMCA) transport policies. It coordinates transport networks across the region and owns the UK’s largest light rail network, Metrolink. The network, which sees more than 40 million passenger journeys each year, is operated on TfGM’s behalf by KeolisAmey Metrolink.

TfGM also builds and manages bus stations and transport interchanges, however, train services, and the majority of bus services, are operated by commercial operators. TfGM provides travel planning and timetable information to passengers and promotes walking and cycling as safe and healthy commuting options.

As well as coordinating public transport, TfGM works closely with Highways England and the ten Greater Manchester councils that are responsible for local road networks.

TfGM is committed to making travel easier by delivering, coordinating and maintaining an integrated transport network for the people and businesses of Greater Manchester, working alongside the bus, tram and train operators who run the services.

Funding

GMCA/TfGM receives the following revenue funding to provide for its expenditure. The table below shows the figures for the last financial year (2017/18) and the forthcoming one (2018/19):

GMCA revenue funding for expenditure

 

2017/18 Budget

2018/19 Budget

Variance

 

£m

Total

£million

Resources

Total Levy

103.87

279.20

175.33

Special Rail Grant

1.86

1.86

-

Metrolink Funding from Revenue / Reserves

8.73

9.88

1.15

Funding from/(to) reserves

134.55

(70.60)

(205.15)

Mayoral General Budget

-

3.95

3.95

Earnback Revenue Grant/Reserves

-

13.50

13.50

Other Grants

10.50

16.51

6.01

Total Revenue

250.78

244.42

(6.36)

*Total Levy in 2017/18 was net of an adjustment of £91.3 million, largely in relation to the reduction of the Transport Levy on a one off basis to provide the necessary financial capacity to facilitate savings in the GM Waste contract.

Please note all figures are rounded.

Total Levy

GMCA/TfGM receives funding from several areas. The largest part comes from a levy on the ten Greater Manchester local authorities via council tax. In total, this accounts for £279.20 million in 2018/19.  The total levy in 2018/19 includes a one off adjustment of £87.98 million in relation to a return from districts of transport reserves which were refunded to them in 2017/18.

There is also a reduction of £3.95 million in relation to costs now to be met from the Mayoral General budget.

GMCA has budgeted to spend £244.42 million in total in 2018/19 on transport activities.

Special rail grant

The Department for Transport (DfT) provides a rail grant to TfGM which contributes towards the costs that TfGM incurs on rail activities. This is budgeted to be £1.9 million in 2018/19.

Funding from reserves

As noted above, £87.98 million will be returned to transport reserves in relation to a refund from districts of transport reserves which were refunded to them in 2017/18.  In addition, financial reserves and contributions from third parties will provide a further £17.4 million, including a contribution from Metrolink net revenues of £9.88 million. 

GMCA has approved the use of £6 million of reserves in 2018/19 to fund activities in relation to bus reform and developing the proposition of rail station partnerships.

The balance is supporting further investment in transport activities, including through the Greater Manchester Transport Fund. 

Mayoral General Budget

In 2018/19 certain costs which have previously been funded from the Transport Levy are now a Mayoral function and will need to be funded by a Mayoral Precept or Statutory Charge. This includes, in particular, the costs associated with developing, updating and delivering the Local Transport plan. The costs, which are budgeted to be £3.9 million in 2018/19, are to be funded from the Mayoral General budget in 2018/19 and there is a corresponding reduction in the Transport Levy.

Earnback Revenue Grant/Reserves

In accordance with the Bus Services Act 2017, the GMCA has instructed TfGM to carry out an assessment of a proposed franchising scheme.  The costs of these activities in 2018/19 are forecast to be c£11.5 million. The Mayor has agreed to this cost being met from Earnback monies.

In addition in October 2017 GMCA approved the introduction of an extension to the Local Concessionary Scheme to allow women in Greater Manchester born between October 1953 and November 1954 to participate in the scheme. This will be introduced in April 2018 and the cost in 2018/19, which will be funded from Earnback Revenue, is estimated to be up to c£2.0 million, with overall estimated costs of £2.8 million.

Other grants

GMCA and TfGM have been successful in securing capital and revenue funding from a number of sources. A total of £16.51 million of this revenue funding is budgeted to be spent in 2018/19. 

How will the money be spent in 2018/2019?

This table below shows the figures for the last financial year (2017/2018) and the following one (2018/2019):

How will the money be spent in 2018/19

 

2017/18 Budget

2018/19 Budget

Variance

 

£m

Total

£million

Call on Resources

Concessionary Support

65.72

67.18

1.46

Supported Services

27.11

27.11

-

Accessible Transport

4.91

4.61

(0.30)

Operational costs (including funded from reserves and grants)

61.11

60.45

(0.66)

Financing

91.93

85.07

(6.86)

Total Expenditure

250.78

244.42

(6.36)

Please note all figures are rounded.

Concessionary support

TfGM funds the cost of concessionary fares including the English National Concessionary Travel Scheme and Local Concession schemes.

GMCA has approved the introduction of an extension to Local Concessionary Scheme to allow women in Greater Manchester born between October 1953 and November 1954 to participate in the scheme. The cost in 2018/19 is estimated to be up to c£2.0 million.

Supported services

Buses are vital to the region’s economy and society. More people travel in Greater Manchester by bus than by all other means of public transport put together, with around 196.5 million passenger journeys taking place by bus last year (October 2016 - September 2017).

Under the current system, the majority of Greater Manchester’s bus services are run by private companies. These operators are free to decide routes, timetables, and set fare levels.

TfGM financially supports around 20 per cent of Greater Manchester’s bus services, which run at times of day and in areas where there is a social need. £27.1 million is budgeted to pay for these services.

Rail

TfGM also receives a Rail Administration grant of £1.5 which is used to contribute to the costs of implementing policies to ensure that local rail services meet local travel needs. These activities include:

  • Passenger information services during multimodal events and disruption
  • Facilities management and improvement planning at specific stations
  • Cross-city station links, such as the free to use Metroshuttle service
  • Project development and delivery
  • Service development and investment planning with Rail North & Transport for the North

Accessible transport

TfGM funds Ring and Ride – a door-to-door accessible transport service for people who find it difficult to use ordinary public transport.

TfGM also provides travel vouchers for those not able to use ordinary buses, trains or Metrolink and who have serious walking difficulties or are registered blind. They can be used to pay for taxis, private hire vehicles and for travel on accessible bus services such as Ring and Ride and community transport.

Operational costs

For 2018/19 the amount of money spent on operations is budgeted to be £60.45 million – 25 per cent of total expenditure. This covers the costs of:

  • Bus station operations
  • Travelshops
  • Safety and security
  • Bus shelters
  • Traffic signals, maintenance and operation
  • Passenger information
  • Consultation, diversity and social inclusion
  • Support costs

Included within these costs is the expenditure that TfGM is incurring on Devolution related activities and on scheme development and feasibility work on known GMCA priorities. TfGM is continuing to incur significant revenue costs to support scheme development/feasibility work on known GMCA priorities, including the development of potential public transport solutions that will support the city region’s growth agenda; the development of a second Transport Fund; and to support the development of the Greater Manchester Spatial Framework.