Ahead of the 2015 Spending Review on Wednesday 25 November, partners from Deloitte set out their thoughts on the priorities and challenges for UK public finances and public services.

Transport

"A reduction of 30% in funding over the course of this Parliament will require a rethink about the size and scope of the UK's transport decision-making bodies, particularly as power is pushed out to devolved regions and arms-length bodies.

"Giving extra transport powers to regions and cities is welcome but the challenge lies in ensuring that they can make decisions on local issues that are consistent with a joined-up, national transport system.

"With operating funding decreasing, transport bodies may need to look at generating additional income, including the commercialisation of their assets, sponsorship, retail and property ties ups and disposals. This requires thinking differently, new ways of working and a shift in culture and skills. This is likely to be the case in London, with TfL facing the loss of its central government grant. That said, TfL is an example to follow in being innovative in raising additional income.

"In the years to come, road charging may come back on the agenda as a means of funding. There are political obstacles but it would ensure those who use UK roads the most make the largest contribution to their development and upkeep."

Infrastructure

"With the Conservatives' manifesto committing to invest £100 billion in infrastructure during this Parliament, and the UK languishing in mid-table on its rankings for quality of infrastructure and productivity, infrastructure has been trailed to be at the heart of this Spending Review.

"Most likely this will be in the form of investment in housing, roads, rail and nuclear energy, as well as the Northern Powerhouse.

"More clarity on the powers and role of the National Infrastructure Commission as well as the share of the £100bn commitment the private sector is to be asked to contribute, would both be welcome. It will also be important to get assurances that the newly constituted Infrastructure and Projects Authority will retain the level of impact in the development of infrastructure that Infrastructure UK had established. The move from HM Treasury to the Cabinet Office is not encouraging as the real power lies where the money is allocated.

"The challenge will lie in finding funds to kick-start infrastructure projects when large spending departments are being asked to realise significant budget savings. We are expecting the reinvigoration of the role of private finance in this Spending Review. The 'PF2' model was launched in the last Parliament but has been little-used. The hesitance of politicians and civil servants around private finance would have to be overcome but the reality is that, for departments looking to deliver capital projects, private finance might now be the only game in town."

For further information: Spending Review 2015 | A look towards 2020

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