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Cycle to work scheme – weekend warriors or daily commuters?


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Presented at The Scottish Transport Applications & Research (STAR) Conference, 21 May 2014

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Cycle to work scheme – weekend warriors or daily commuters?

  1. 1. Institute for Transport Studies FACULTY OF ENVIRONMENT Cycle to Work scheme – Weekend Warriors or Daily Commuters? Scottish Transport Applications & Research Conference Wednesday 21 May 2014 Anne Clarke James Laird Jeremy Shires
  2. 2. UK cycling context UK cycling: a journey through time and space… 2% of trips made by bike in the UK in 2008 (and 2012) Bicycle usage fell from over 14 billion miles annually in 1949 to around 3 billion miles annually by the 1970s and then remained fairly static CAR USE BIKE USE
  3. 3. How the C2W scheme works • Salary sacrifice • 12-18 months repayment • Payments deducted before tax and National Insurance • Final payment to transfer ownership • 25% saving for basic rate tax payers • >50% use should be for commuting
  4. 4. About the data • York and Leeds • 6 public sector employers (2 in York, 4 in Leeds) • Online survey (35 questions) • Survey dates: June/July 2013 • 254 responses • Respondents accessed the scheme ~2010-2012
  5. 5. Who uses the scheme? N=254 23% 30% 47% Cycle to Work scheme users Did not own a bike already Owned a bike but cycled infrequently/ never Owned a bike and cycled regularly 53% of respondents reported no weekly cycling before using the scheme
  6. 6. Impacts – propensity to cycle 92% of respondents cycled to work after using the scheme 96% of respondents cycled weekly (all trip purposes) 0% 20% 40% 60% 80% 100% 49% 35% 8% 8% Proportion of scheme users who cycled to work at different frequencies after using the scheme Not cycling to work Less than 2 days per week 2+ days per week Every day
  7. 7. Impacts – propensity to cycle 78% 11% 3.5% 8% Do you use the bike purchased through the Cycle to Work scheme to cycle to work? Yes Yes, with another means of transport I use a different bike to commute I don't cycle to work Note: figures are subject to rounding
  8. 8. Impacts – propensity to cycle 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Before After * *The before information for leisure cycling is an estimate
  9. 9. Impacts – car mileage reduction 19% Existing cyclists 59% Those who owned a bike but did no cycling 51% Those who did not own a bike Average mileage reduction: 35 miles per week = 1,820 miles per year (22% of estimated average car mileage per annum)* This ranged from a few miles to over 100 miles per week for individual respondents *DfT (2013). Statistical Release – National Travel Survey: 2012
  10. 10. Impacts – health 27% increase in the number of scheme users who are sufficiently active (from 70% of all users to 89% of all users)
  11. 11. Appraising the Cycle to Work scheme CBA does not capture the main benefit of the scheme to the user: • A change to the purchase cost of a bicycle Financial analysis plugs this gap CBA includes: • Changes in external costs • The resource costs of the initiative • Change to use cost through a policy initiative (none for C2W) Approach: Cost benefit analysis + financial analysis
  12. 12. Appraising the Cycle to Work scheme – financial analysis (£000’s for all respondents over a ten-year appraisal period) Employees: £35 income tax/NI savings £252 vehicle operating cost savings £33 car sales £300 fare savings -£135 bike purchases -£455 maintenance costs £49 benefit overall Employers: £20 NI savings -£17 opportunity cost of loan £3 benefit overall Government: -£55 income tax/NI losses -£72 fuel duty losses -£19 vehicle excise duty losses £60 extra VAT revenue -£86 loss overall
  13. 13. Appraising the Cycle to Work scheme – financial analysis Public transport providers: -£300 fare revenue losses -£300 loss overall Car industry: -£180 vehicle maintenance sales -£33 car sales -£213 loss overall Cycle to work scheme providers: £21 commission and final market value £21 benefit overall Cycle industry: £114 bike sales (minus commission fee) £455 bike maintenance sales £569 benefit overall (£000’s for all respondents over a ten-year appraisal period)
  14. 14. Appraising the Cycle to Work scheme – financial analysis Winners and Losers Cycle industry £569 benefit Employees £49 benefit Public transport providers £300 loss Car industry £213 loss Employers £3 benefit Cycle to work scheme providers £21 benefit Government £86 loss (£000’s for all respondents over a ten-year appraisal period)
  15. 15. Appraising the Cycle to Work scheme – cost benefit analysis Benefits £485 in physical fitness benefits (society) £253 in decongestion benefits (economy) £41 in absenteeism benefits (economy) £23 in National Insurance savings (economy) £14 in greenhouse gases (environmental) ~£5 from other marginal external costs (noise, local air quality, infrastructure) Disbenefits £385 in fare revenue losses (economy) £61 in income tax and National Insurance losses (public accounts) £23 in Vehicle Excise Duty (public accounts) £21 in accidents (safety) £14 in indirect taxation (fuel duty and VAT) (£000’s for all respondents over a ten-year appraisal period)
  16. 16. Appraising the Cycle to Work scheme – cost benefit analysis Cost benefit analysis summary BCR is 3.5: The scheme represents high value for money for government
  17. 17. Appraising the Cycle to Work scheme – discussion of findings Could funding be better spent elsewhere? High level of cycle ‘funding’ through the scheme Would alternatives be better? Does not specifically target those who most need to become more active Does activity substitution need to be accounted for in appraisal of active travel schemes? Results showed many scheme users replaced other physical activity with cycling
  18. 18. Appraising the Cycle to Work scheme – summary and conclusions The C2W scheme significantly increases cycling levels Overall impact is reduced by high uptake from existing cyclists (around half of users) Users are ‘weekend warriors’ and ‘daily [or less frequent] commuters’ The C2W scheme also encourages cycling for other trip purposes Overall represents good value for money for government
  19. 19. References Statistics Slide 2 Goodwin, P. 2013. Get Britain Cycling: Report from the Enquiry and DfT. 2013. National Travel Survey 2012 Keep, M. 2013. Road cycling: statistics, Standard Note SN/SG/06224, House of Commons Library Pictures • • • • • • • • • • • •
  20. 20. Appraising the Cycle to Work scheme Questions Contact details: