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Major rail projects such as Crossrail are deemed safe, but rants to bus operators could be cut leading to higher fares.

Total budget and savings being asked for

The Department for Transport has an annual budget of ^15.9 billion. It is bracing itself for cuts of anywhere between 25 per cent (^3.97 billion) and 40 per cent (^6.36 billion)
 
Major spending commitments

Last year Network Rail unveiled a ^35 billion package of improvements, which it hailed as the "biggest expansion of Britain's railways since the age of Brunel".
Intended to cope with soaring demand for train travel, which has hit levels unseen since 1945, commitments included ^7.5 billion on two major projects across London: Crossrail which runs from east to west and Thameslink, which goes from north to south. Stations were to be overhauled including Birmingham New Street and Reading.
Several hundred million pounds have been earmarked for a number of major road projects. Some other schemes have been reconfirmed by the Treasury, including funding for the Tyne and Wear Metro and the Luton-Dunstable Busway.

Key successes

In March 2010 the Transport Select Committee said the Department had performed well in improving train punctuality, cutting road congestion and death on the roads. But it was still found wanting when it came to devising a long term strategy to deal with congestion, with traffic still expected to rise dramatically. A long-promised integrated transport policy was yet to be delivered and the DfT was urged to publish a progress report to see if it had delivered the promises made in a spending plan drawn up a decade ago.

Savings already identified/made

Shortly after taking office the Coalition unveiled ^683 million savings, towards the initial ^6 billion the Treasury was demanding across Government.
One of the first casualties of the Coalition was the ^50 million Better Stations programme, promised by Lord Adonis, the Transport Secretary in the previous Government. He earmarked 10 of the country's grubbiest stations - nine of which were in Labour constituencies - for a major overhaul.
Network Rail, which is responsible for maintaining and improving the country's track infrastructure has promised another ^50 million savings. The Coalition also put plans for hundreds of extra carriages to ease overcrowding on hold and also delayed pressing ahead with a new generation of electric-diesel express hybrid trains to replace the ageing 125 fleet.
Other cuts have included ^17.2 million from the road safety grant, which means that the Treasury now makes a profit out of the fines it collects from speed cameras. Under Labour the grant matched fine income. Nearly ^160 million has been taken out of the budget to ease urban congestion and another ^61.4 million has already been cut from the pot allocated for major projects such as road schemes. Transport for London is set to lose ^108 million in DfT funding.

Where further cuts are likely to be made and what impact is likely to be

The indications are that major capital projects such as Crossrail and Thameslink will be reasonably safe with the Coalition trying to to protect schemes which it believes are essential for economic growth. Nevertheless even these schemes could see their budget shaved. There is growing speculation that while the number of stations on Crossrail will remain unchanged, there could be some reduction in capacity as part of the drive to maximise value for money from the scheme.The high speed rail line from London to the West Midlands is also considered certain to avoid the axe given both Coalition parties' manifesto commitments. Grants to bus operators could be cut leading to higher fares.
Within the rail industry there is a growing belief that some of the extra rail carriages promised to commuters will be scrapped, while a revised and cheaper plan is expected for the next generation of long distance express trains.
The cost of rail travel is certain to rise sharply, with Philip Hammond having admitted that it will be tough to maintain the existing formula which pegs the rise in most commuter to one per cent above the retail price index. The future of a number of quangos, such as Passenger Focus and Cycling England is also known to be under review. The future of a number of road schemes is understood to be unsure.