Investing in Greater Manchester transport 2020/21

Transport is an important part of life for everyone in Greater Manchester. It connects people with jobs, education, family and friends; it gets customers and suppliers to businesses and 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) delivers the transport policies set by the Greater Manchester Mayor and the Greater Manchester Combined Authority. Our vision for 2040 is to have a city-region with world-class connections that support long-term, sustainable economic growth and access to opportunity for all.

To achieve this we want 50% of all journeys in Greater Manchester to be made on foot, by bike or using public transport by 2040. This will mean a million more sustainable journeys every day, enabling us to deliver a healthier, greener and more productive city-region without increasing motor vehicle traffic. We also work closely with a range of partners to address long-term strategic transport issues including congestion, air pollution and bus reform.

Greater Manchester’s exciting programme of capital transport investment is the largest in the UK outside London.

You can find out more about Greater Manchester’s long term plans to establish a fully integrated, high capacity transport network in the 2040 Transport Strategy (opens in a new tab).

Our Draft Delivery Plan 2020-2025 (opens in a new tab) shows how we will make real progress towards the goals of the 2040 Transport Strategy over the next five years.

We’re also planning for a more sustainable future. Through Greater Manchester’s Low Emission Strategy and Air Quality Action Plan we aim to make our city-region a cleaner, greener and healthier place to live, work and play in.

We also offer advice to Greater Manchester's ten planning authorities, advising them on the best way to improve land use and transport integration through plans and development proposals, explained within our Transport for Sustainable Communities (opens in a new tab) guidance.

What is TfGM responsible for?

TfGM coordinates transport networks across the region, and we own Metrolink, the UK’s largest light rail network – which currently accommodates more than 45 million passenger journeys each year. The network is operated on TfGM’s behalf by KeolisAmey Metrolink (KAM).

We are responsible for the further expansion of the Metrolink network and both build and manage bus stations and transport interchanges across Greater Manchester. TfGM also coordinates the delivery of cycling and walking infrastructure across Greater Manchester.

Along with local authorities and Highways England, TfGM oversees the highways network to make travelling as safe and efficient as possible for all road users, including pedestrians, cyclists, buses, car users and freight.  

TfGM does not operate rail services in the region and the majority of bus services are operated by commercial operators. We do however coordinate closely with rail and bus operators and provide travel planning and timetable information for passengers, as well as promoting walking and cycling as safe and healthy commuting options.

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.

TfGM Budget 2020/21

The TfGM Budget for 2020/21 is set out below: 

Resources

2019/20

Outturn

£000

2020/21

Budget

£000

Variance

£000

Levy allocated to TfGM

131,540

36,380

(95,160)

Statutory Charge

                 

-  

86,700

86,700

Mayoral General budget

3,950

18,650

14,700

Rail Grant

1,860

1,900

40

Utilisation of other reserves

9,700

-  

(9,700)

Retained Business Rates

-  

10,000

10,000

Metrolink funding from Revenue / Reserves

10,300

10,800

500

Earnback Revenue Grant / Reserves

5,750

-  

(5,750)

Other Grants

12,600

6,000

(6,600)

Total Revenue

 175,700

170,430

(5,270)

Call on Resources

2019/20

Outturn

£000

2020/21

Budget

£000

Variance

£000

Concessionary Support

75,080

79,300

(4,220)

Supported Services

27,610

27,900

(290)

Accessible Transport

4,910

4,910

                -  

Operational Costs

61,790

52,010

9,780

Financing

6,310

6,310

                -  

Total Expenditure

 175,700

170,430

5,270

Surplus/(Deficit)

-

-

-

 

In addition to the costs and revenues in relation to transport activities incurred or received by TfGM, GMCA also incurs certain costs including, in particular, the financing costs connected with the delivery of transport capital schemes. In 2020/21 these are budgeted to be £78 million and are not included in the analysis above. 

Resources

Levy and Statutory Charge

GMCA/TfGM receives funding from several areas. The largest part comes from a Levy and a Statutory Charge on the ten Greater Manchester local authorities via council tax. In total, this accounts for £192.5 million in 2020/21, which is consistent with the amount for 2019/20, after removing ‘one off’ adjustments.

Mayoral General Budget

As in 2019/20, the Mayoral Budget will support certain costs which have previously been funded from the Transport Levy but which are now a Mayoral function and 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.

Following the further Transport Order in April 2019, the Mayoral budget also includes the costs of the 16-18 Concessionary Travel Scheme.

The LTP costs are budgeted to be £3.55 million in 2020/21 and the costs of Concessionary scheme for 16-18 travel are budgeted to be £15.9 million.

Special Rail Grant

The Department for Transport (DfT) provides rail grants to TfGM which contributes towards the costs that TfGM incurs on rail activities. These are budgeted to be £1.9 million in 2020/21. 

Funding from reserves/Retained Business Rates

Financial reserves will provide a further £10.8 million in 2020/21.  This relates to the contribution from Metrolink net revenues to financing costs.

There is a requirement to continue to incur significant revenue costs to support scheme / pipeline 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 the Greater Manchester Infrastructure Programme; and to support the development of the Greater Manchester Spatial Framework and the 2040 Delivery Plan. 

An allowance of £10 million is included within the budget (from retained business rates) to enable the ongoing pipeline development work to be continued. The release of this is subject to approval of a business case. Regular updates will be presented to GMCA during 2020/21 on the progress on this work and on the priority projects and programmes which are being developed. 

Other grants

GMCA and TfGM have been successful in securing capital and revenue funding from a number of sources. A total of £6 million of this revenue funding is budgeted to be spent in 2020/21. 

Calls on Resources

Concessionary support

The concessionary reimbursement budget includes the cost of the English National Concessionary Travel Scheme (ENCTS) and the local Concessionary scheme, including the recently introduced 16-18 concessionary travel scheme. The ENCTS is a statutory scheme and TfGM cannot mitigate these costs other than seeking to manage its risk by agreeing multi-year fixed price arrangements where appropriate.

‘Fixed rate’ reimbursement arrangements with the major bus operators are currently in place or are in the process of being negotiated. These will succeed the previous agreements which expired on 31 March 2019.

A new concessionary travel scheme providing free bus travel for young people aged 16-18 was introduced in 2019/20. This commenced on 1 September 2019. The costs of this scheme are being funded from the Mayoral budget, primarily through the Precept; third party income (including from colleges) and other Mayoral funding. The budget for 2020/21 reflects a full year of this cost, compared to 7 months in 2019/20. This increase in cost of c. £6 million will largely be funded by an increase in the Mayoral Precept, as noted above.

It was previously agreed by GMCA that the existing balance on the Concessionary Fares Reserve, which was c. £9.3 million at 31 March 2019, will be retained to fund the risks connected with the 16-18 free bus Concession.

On 27 October 2017 the Mayor presented a report to GMCA which approved the introduction of the Women’s Concessionary Travel Scheme, which provided a local travel concession for c. 14,000 women in Greater Manchester born between October 1953 and November 1954. In February 2020 GMCA approved an extension of this concession to a further ‘cohort’ of c, 5,700 women, specifically those born between 6 November 1954 and 5 April 1955. The costs of this extension, which are estimated to be c. £0.3 million in 2020/21, have been included in this budget.

Supported Bus Services

In recent years the Supported Bus Services budget has reduced by over 20%. In the main these savings have been delivered from efficiency savings and service reductions rather than service removals. However there have been cuts to some services which have no longer been deemed to represent value for money, in particular in respect to patronage and cost. It is expected that the Supported Bus Services Budget will continue to be under significant pressure during 2020/21 due to a combination of inflationary pressures and commercial deregistrations. A limited additional allowance of £0.3 million has been included in the budget in this regard.

The funding which will be raised from the introduction of the £10 annual charge for elderly concessionary pass holders to access off peak tram and rail services, which is estimated to be c. £1.25 million per annum, will be ring-fenced for investment in bus and bus services. 

Accessible transport

This cost heading largely relates to Ring and Ride – a door-to-door accessible transport service for people who find it difficult to use ordinary public transport.

In 2020/21 the grant is budgeted to be £4.6 million, the same as 2019/20 when there was an increase by £0.3 million to assist with the replacement of up to 31 fleet vehicles which will reach the end of their economic life over the next two years. 

Operational costs

For 2020/21 the amount of money spent on operations is budgeted to be £52 million. As well as costs in relation to specific grants, 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

The reason for the reduction in expenditure compared to 2019/20 is primarily due to reduction in expenditure on grant funded activities.