Guidance

Transport expenditure: notes and definitions

Updated 14 December 2023

About this release

These notes and definitions accompany the statistical release Transport Statistics Great Britain, and provide background information for the transport expenditure tables.

This document includes information on sources, data quality, definitions and general information about the tables.

Public sector expenditure and investment

Information on tables TSGB1301 to TSGB1305

Data source

Information covering UK public sector expenditure is available in HM Treasure’s annual statistical release, Public Expenditure Statistical Analysis (PESA). PESA includes data on public expenditure on transport for the previous 5 years, which are often revised each year. Data released for years prior to these 5 years are not generally revised.

In addition to PESA, HM Treasury publish Country and Regional Analysis (CRA) statistics each November, the official source of historic public spending by UK region.

Following the publication of PESA (usually in July), breakdowns of expenditure are distributed to departments in order to allocate the spend to UK regions. Revisions to spending figures are often made between the publication of PESA and CRA.

The CRA is a purely statistical exercise and attempts to allocate the spending on the basis of which region benefits, rather than where the money is spent.

Most expenditure data appearing in PESA and CRA are taken directly from the Treasury’s public expenditure database, known as the Online System for Central Accounting and Reporting (OSCAR). Data entered onto OSCAR by government departments and devolved administrations include their own expenditure as well as the expenditure of agencies and Arms Lengths Bodies.

For public corporations, only capital expenditure is reported on as current spending is not treated as public sector expenditure in the National Accounts.

With a few exceptions, mainly in non-transport sectors, local government spending data in England are supplied by the Ministry of Housing, Communities and Local Government (MHCLG). The devolved administrations provide local government spending data for Scotland, Wales and Northern Ireland.

The sources for the data are explained in more detail on the HM Treasury website in Annex A of the annual publication of PESA.

Expenditure figures are reported nominally in PESA and CRA, though HM Treasure do publish real terms figures deflated using Gross Domestic Product (GDP). With the exception of TSGB1301, tables in this section therefore reflect nominal prices.

Definitions

Public sector expenditure: defined as in the National Accounts and includes spending by Central Government (including agencies and Arms Length Bodies), local government and public corporations (capital spend only). Expenditure is recorded at the point at which money leaves the public sector, spending between public bodies is not included.

Capital expenditure: includes expenditure on capital grants and spending on assets, such as the acquisition of land, buildings, vehicles and machinery. For transport, this includes the cost of building a road, or new rail lines and some maintenance work.

Current expenditure: covers recurring spending on items such as pay, benefits and the purchase of goods and services. For transport, this includes services such as concessionary fares and revenue support to public transport.

Non-identifiable expenditure: incurred for the benefit of the UK as a whole, or for small expenditure where allocating this expenditure by region is either not possible or cost effective. Examples in transport include expenditure on the Maritime Coastguard Agency (MCA), the Civil Aviation Authority (CAA), transport security, civil aviation services and accident and investigation work.

Outside UK expenditure: includes spending that benefits visitors to the UK or international organisations, rather than expenditure that has occurred outside of the UK. For transport expenditure, this includes a proportion of London Underground and High-Speed Rail 1 expenditure.

National roads: includes spending on roads which are considered by central government as part of their strategic road network. Almost entirely funded by central government, these include motorways and trunk roads. Motorways and trunk roads in London are generally the responsibility of Transport for London (TfL) and not included under national roads. Local authorities may provide small amounts of funding for national roads for particular projects, such as additional work on roundabouts or motorway exits. Expenditure on UK-wide agencies, such as DVLA, is also included.

Local roads: includes roads that are the responsibility of local highway authorities to maintain. Expenditure on roads within the London area, except for small sections of the M4, M1 and M25, are the responsibility of TfL and the boroughs, and are included here. There was some capital spending by central government on local roads, but this was in London, particularly during the 2012 Olympics. After the Olympics, those roads were transferred to the local authority.

Local public transport: includes Bus Service Operators’ Grant (BSOG) pad by central government, as well as local authority spending and mainly refers to road transport.

Railways: includes both mainline and the London Underground services. From the financial year ending (FYE) 2016, the full extent of Network Rail expenditure is included (see the methodology section below). Expenditure on the Channel Tunnel Rail Link, London and Continental Railways, and railway operators run directly by the government, are included. Subsidies paid to companies operating services on the mainline network are included, though the premium returned to government is outside the scope of this publication.

Other transport: includes maritime, ports, aviation, security and other expenditure, including local authority spending on ports and piers.

Changes in methodologies

Following the reclassification of Network Rail as a public body in the National Accounts by the Office for National Statistics (ONS) in 2014, PESA and CRA began to record the full extent of Network Rail spending as public sector expenditure from FYE 2016 (previous figures reflected the Network Grant paid by government to Network Rail only). As a result, a large increase in transport and rail spending can be seen from FYE 2016.

Other changes over time to accounting methods and recording practices have affected how spend is categorised between years. For example, in FYE 2017, the full extent of High Speed 2 (HS2) expenditure was assigned as railway spending where previously it had been categorised as ‘other transport’.

Additionally, changes to how infrastructure is financed can affect whether it is categorised as capital or current spending. For example, building a road is capital spending, but paying shadow tolls as part of a usage agreement with a private sector company who built the road would be considered current spending. HM Treasury have also noted that the PESA exercise published in 2012 was not strictly comparable with earlier publications.

Methods used to allocate spending regionally as a part of the CRA exercise are reviewed annually and improvements are continually made to reflect a more robust methodology. These changes in methodology can cause significant change to the final regional allocations.

From FYE 2017, the methodology used to allocate a large portion of the Department for Transport (DfT) rail expenditure across regions was updated to better reflect the geographic distribution of Network Rail spending. The impact of this change has been marginal.

In FYE 2018, the HS2 allocation method was revised to focus solely on where the benefits lie once each phase of the project is complete, whereas in previous years some of the allocation went to the areas in which land and property was purchased.

Interpreting transport expenditure figures

The data are subject to revisions, and these can be large if, for example, an organisation originally considered to be in the private sector is reclassified to the public sector for the purposes of National Accounts, such as Network Rail. Long run series are difficult to compile due to changes in accounting practices across time, including for example, the definition of capital and current and the definitions of functions of Government. HM Treasury usually only publish data for the last 5 years, so any revisions of earlier data are not captured.

Large infrastructure projects tend to require large sums of capital expenditure but deliver benefits for many years into the future. PESA and CRA record expenditure in each year, and therefore a large project can cause a spike in expenditure for particular categories of spend (and in particular regions) during construction.

Private sector expenditure is not included. This primarily affects airports and some ports but also includes projects that could be described as “planning gains”. For example, as a condition of granting planning approval for a housing development a local authority might require the builder to build the roads, which might then be turned over to the local authority to maintain. The private sector spending on the road building is not counted.

Additionally, PESA and CRA do not reflect the money returned to Government in the provision of some transport services. For example, railway expenditure figures include payments made to subsidised train operating companies (TOCs) but do not reflect the income received by government from premium paying TOCs.

The complexity of transport networks and limited data sources mean that it is not always possible or appropriate to allocate transport spending regionally on a ‘who benefits’ basis. Where this is the case, expenditure has been apportioned based on actual regional spend rather than where the benefit lies. Due to the cross-regional nature of transport, investment made in one geographic region often benefits those who live in other regions.

Public expenditure on specific transport areas (TSGB1305)

Table TSGB1305 includes details of public expenditure on several other transport related areas that of interest but do not appear as transport expenditure in PESA or CRA, including street lighting, bus service operators grant, concessionary fares and vehicle parking.

Information on public sector spending on street lighting is published in PESA, however is not categorised as transport expenditure, instead appearing under housing and community amenities.

Bus Service Operators’ Grants (BSOGs) are paid by Central Governments, by DfT for England, by the National Assembly for Wales, and the Scottish Government for Scotland. Whilst BSOG’s paid by DfT to bus operators in England can be identified in the CRA, payments from devolved governments and payments to local authorities cannot be specifically identified.

BSOG figures published in DfT statistics table BUS0502a give the figures for England. All remaining data included in TSGB1305 are sourced from Scottish Government Local Government Finance Statistics, the local government finance section at StatsWales and Local Authority Finance Statistics (England) capital and revenue data.

Household expenditure on transport

Information on table TSGB1306

A household expenditure survey has been conducted each year in the UK since 1957. The survey is continuous, interviews being spread evenly over the year to ensure that seasonal effects are covered. The FYE 2018 survey carried out on behalf of the ONS consisted of weighted responses from 11,689 cooperating households in the UK. The survey was first published on a financial year basis from FYE 2016 and includes data from FYE 2015 to enable comparisons to be made. Data are shown to the nearest ten pence in line with usual Living Costs and Food Survey practice.

The coding framework was changed for FYE 2002 survey onwards. The table has been amended to present data on the European Standard Classification of Individual Consumption by Purpose (COICOP) basis. Changes were also made in 2006 to the weights based on the 2001 Census, for further details see Family Spending 2014 (Living Costs and Food Survey 2013).

General indices

Information on table TSGB1307

These indices are taken from the published Consumer Prices Index (CPI) and the Retail Prices Index (RPI) rebased to 1997=100 for convenience. 1997 is the earliest base year for the CPI components. The 4-letter code used by the ONS to identify the series in their time series data and publications has been included.

The operation of personal transport equipment includes spare parts and accessories, fuels and lubricants, maintenance and repairs, and other services. The main difference between the operation of personal transport equipment from the CPI, the motor running costs index and all motor index from the RPI is that the latter includes the purchase of vehicle. There are some other exclusions from the CPI index such as car insurance (some of which is included in a different category) but these do not have a large effect on the CPI as the weights on these items are relatively small. The motoring costs index is calculated by excluding the “purchase of vehicles - DOCS” from the “all motor CHBK” calculations.

Information on table TSGB1308

These indices are taken from the published RPI, rebased to 1997=100 for convenience and comparison with the TSGB1307. The “all motor index” (CHBK) includes purchase of a vehicle, maintenance, petrol and oil, and tax and insurance. All the series can be downloaded from ONS. The RPI components are available in their current form back to 1987 and an accompanying historic table is also given.

The National Statistics designation has been removed from the RPI. In 2015 motoring and other travel components were added from the CPI.

There are some differences between these indices and those from the RPI, such as personal travel by road includes taxi fares and other items.

Information on table TSGB1309

GDP deflators (at market prices) can be downloaded from the HM Treasury website.

CPI and RPI deflators have been calculated directly from the published ‘All Items’ CPI and RPI, D7BT and CHAW respectively.

Taxes on road vehicles

Information on tables TSGB1310 and TSGB1311

The Blue Book presents the full set of economic accounts, or National Accounts, for the United Kingdom, and are compiled by the ONS. Figures on Vehicle Excise Duty and Fuel Duty are also published by ONS in the ONS Environmental Accounts. The figures in the table represented here do not include VAT.

Lead replacement petrol was developed to replace leaded petrol, but increasingly clean fuel legislation and duty incentives resulted in a switch to ultra-low sulphur petrol in the 2000s. Similar moves resulted in a switch by users to ultra-low sulphur diesel. Duty is also collected on bioethanol and biodiesel as well as liquid petroleum gas.

Value added tax is added onto the price of the fuel plus the duty but is not given in this table.

Figures on fuel duty receipts are produced on a regular basis by HM Revenue and Customs in their Hydrocarbon Oils Bulletin.

Vehicle excise duties are collected by the Driver and Vehicle Licensing Agency on behalf of the Government. The sources for the data published are the ONS Environmental Accounts. These sources are designated as National Statistics except where indicated.

As of December 2023, TSGB1311 (RDE0103) is under review by the Department for Transport and has not been recently updated. Any questions relating to the table should be directed to the Vehicles statistics team.

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