Funding public transport
Defending dynamic urban societies
22 October, 2003
In response to a number of announcements by national governments that public transport budgets are to be cut, the leaders of International Association of Public Transport (UITP) stressed the importance of public funding and called for creative new ways of financing public transport. This call came during the organisation’s Policy Board meeting held in Venice, Italy, from 16 to 17 October.UITP’s Policy Board members discussed the fact that, in most cases, external finance must supplement fare revenues if public transport is to provide an appropriate level and quality of service. This need for financial support from governments, local authorities and other bodies reflects the fact that fares and service levels are set with specific policy objectives in mind. “Such funding is not a subsidy, but rather a payment for services rendered to the community, such as contributing to the functioning of urban economies, causing less damage to the environment, and combating social exclusion,” stated UITP’s President, Wolfgang Meyer at the Policy Board meeting. “In order to allow public transport to fulfil its potential to facilitate the movement of people, improve the urban environment and prevent social exclusion, the need for public funding in most cases should be clearly recognised.” Hans Rat, UITP Secretary General, added: “Cost-cutting in public transport may prove to be more costly in the long-term. UITP’s research shows that cities with well-developed public transport systems spend less of their GDP on mobility.”Dr Meyer stated however that the harsh reality is that there are tight limits on public-sector budgets in general and public transport budgets in particular, as has been witnessed recently in a number of countries including the Netherlands and France. “Although UITP strongly laments this situation, we must not let ourselves be paralysed by it. Indeed, such budget pressures could be seen as a challenge as they provide our sector with a powerful incentive for developing alternate forms of finance to complement public funding.” These forms, which also imply the active involvement of public authorities, may be classified under three main headings: ‘polluter pays’, ‘beneficiary pays’ and ‘general public pays’. Within these general mechanisms, a wide variety of possible sources of funding can be identified. Indeed, in practice, funding of public transport may involve a combination of mechanisms.“By arguing for appropriate investments in compact cities which are well-served by quality public transport, we do not wish merely to defend the cause of the public transport sector, but, more generally, that of a dynamic urban society that is concerned about the legacy it leaves for future generations,” concluded Dr Meyer.