06 October 2015
Article by Andrew Minnis, National Assembly for Wales Research Service
We’ve had a number of enquiries recently about Severn Bridge tolls so I thought a quick update might be useful.
The Severn Bridges Act 1992 made Severn River Crossing Plc. (SRC) responsible for the existing bridge, and constructing the new bridge. Both are financed by tolls.
The bridges are a matter for the UK Government and the bridges will revert to public ownership at the end of the concession.
Current tolls are:
- Vehicle Category 1 (Up to 9 seats) – £6.50
- Vehicle Category 2 (Goods vehicles up to 3,500KG) – £13.10
- Vehicle Category 3 (Goods vehicles from 3,500KG) – £19.60
Motorcycles and UK Disabled Badge Holders are exempt and there is no extra charge for towing caravans and trailers.
So when will the concession end?
The short answer is “it depends”.
The concession expires either after 30 years (1992 – 2022), or when SRC’s revenue target is reached, whichever is earliest.
Andrew Jones MP, the UK Government’s Parliamentary Under-Secretary of State for Transport, told a Westminster Hall debate in Parliament on 21 July 2015 this should be in 2018:
Members have asked when the concession will finish. That will happen when it has achieved total income of £1.029 billion at 1989 prices, so it is not possible to give an exact date for when it will finish. We are able to project ahead based on current usage but, as I mentioned earlier, usage is going up, so the date may come forward… We are looking at a potential end date for the concession of around 2018. It is a financial target, rather than a fixed date, which means that we have a requirement to plan appropriately, and I will address that next.
Will the tolls go when the concession ends?
This is unclear in the long-term, but it is clear that tolls won’t end immediately the concession ends as the UK Government will recover its own outstanding costs of £88m which are outside the concession agreement.
The Under-Secretary of State told the Westminster Hall debate:
Our intention is to continue tolling after the projected end of the concession in 2018 simply to recover the costs that have been incurred in relation to the crossings that fall outside the agreement. The current projection of those costs stands at £88 million. We have not made any decisions about the operation and tolling arrangements for the crossings once the current regime ends.
The UK Government has until 2027 to recoup its own costs, but it has indicated it is likely to take 1-2 years.
You can find further details of what makes up the £88m on page 4 of an April 2013 letter from Stephen Hammond MP, the then Parliamentary Under-Secretary of State for Transport, to the House of Commons’ Welsh Affairs Committee.
How much do the bridges cost to maintain?
In March 2015, the then UK Government Minister for State for Transport, John Hayes MP, provided a written answer which said recent SRC accounts showed operating and maintenance costs as £13.1m in 2012 and £14.4m in 2013. It also said the total cost to the Highways Agency / Department for Transport was £512k in 2012-13 and £632k in 2013-14.
Lord Ahmad of Wimbledon recently responded to a written question asking for details of the annual maintenance costs for the two bridges in each of the last 10 years by providing details of “operational expenditure (including maintenance)”. This makes clear that separate costs for the two bridges are not available.
So what will happen to the toll levels in future?
The Chancellor has previously committed to a number of changes once the bridges revert to public ownership, including VAT exemption for tolls. The March 2015 UK Budget “Red Book” says:
The government will, once the Severn River Crossings are in public ownership post-2018, abolish VAT and reduce tolls by the equivalent amount and, abolish Category 2 (small goods vehicles and small buses) and include those vehicles in Category 1 (motor cars and motor caravans), therefore reducing the toll paid by small goods vehicles and small buses.
The Welsh Government’s position is that tolls should be its responsibility but it has not committed to removing the tolls should it become responsible. The First Minister told Plenary on 21 October 2014:
we [believe] that the toll should be in the hands of the Welsh Government. We believe that we could reduce the tolls. At the same time, of course, it was important to raise enough money for the maintenance of the bridges—not just the one bridge, but the two bridges as they come together………it is absolutely essential that it does not come back to the public ownership solely of Whitehall.
The Highways England (formerly the Highways Agency) Road Investment Strategy commits to working with Welsh Government and others to consider the future of the crossings:
This is an appropriate moment to think about the long-term future of the crossing, including how best to secure its continued maintenance, how to support the economies on both sides of the bridge, and whether the legal regime at the crossing can deliver this. The Department for Transport, working with the Company, the Welsh Assembly Government and other affected parties, will examine the future of the crossing in detail during this Road Period [2015/16 to 2019/20].