Cycle to Work Alliance: protecting the cycle to work scheme
Brief & objectives
Westminster Advisers runs the Cycle to Work Alliance, a coalition of leading providers of the cycle to work scheme. The scheme is a salary-sacrifice, tax-exempt employee benefit which incentivises individuals to commute by bike.
The July 2015 Summer Budget noted Treasury was concerned at the growth of salary sacrifice arrangements. In the November 2015 Autumn Statement, a review of salary sacrifice schemes was announced. This created a strong threat to the cycle to work scheme, which would undermine its long-term success.
Our brief was the protection of the tax relief underpinning the scheme, to ensure its continued viability and success.
Our objectives were to:
- Ensure the scheme is recognised by Government as a core tool in delivering increased cycling participation;
- Improve understanding amongst policymakers of the role of the scheme in achieving public health and sustainable transport objectives;
- Make a persuasive case that the salary sacrifice mechanism was crucial to the continued success of the scheme.
Strategy and tactics
1. Developing the evidence base
WA developed a robust evidence base quantifying the contribution of the scheme and the benefits it has delivered. This included:
- Using the Alliance’s networks to survey over 13,000 employees and over 350 employers participating in the scheme, generating evidence of the benefits to scheme users, and understanding the characteristics and habits of participants.
- Undertaking a survey of independent bike dealers (IBDs) to demonstrate the value of the scheme to retailers, and the local economic impact.
- Working with the Institute of Employment Studies to quantify the contribution to employers and the workplace in terms of productivity, absenteeism and retention.
WA used this quantitative research as the basis for media outreach, social media and online engagement, and parliamentary and third party engagement.
2. Building up parliamentary and third party allies
WA implemented a targeted engagement programme to build a cross-party network of supporters of the scheme and the benefits it delivers.
This included maintaining relations with parliamentarians with an interest in cycling, including the chairs of the All Party Parliamentary Cycling Group and Shadow Transport Ministers, as well as Conservative backbench MPs receptive to the importance of the scheme.
The Alliance engaged with local constituency MPs through visits to providers of the scheme to build up further support.
This resulted in:
- A number of parliamentary questions tabled focused on the policy benefits the scheme delivers for government;
- Reference to the success of the scheme made in Parliamentary cycling debates;
- Formal representations made by Parliamentarians to the Chancellor calling for the scheme to be protected and noting its key role in delivering the government’s policy objectives.
In addition, WA engaged with cycling, health and employment third party groups to secure endorsement for the scheme and look for opportunities to work in partnership.
3. Engaging with government departments
Using our research findings, we engaged with key government departments including the Department for Transport and Department of Health, to drive recognition of the scheme. We focused on demonstrating its contribution to the departments’ specific objectives, highlighting how the tax relief was a key tool in helping deliver their policy priorities and commitments.
The Alliance established a strong relationship with the lead officials at DfT with ongoing dialogue, particularly in the run up to the Budget, and met with the Cycling Minister Robert Goodwill MP.
4. Direct engagement on the government’s salary sacrifice review
Following the announcement that a review of salary sacrifice was to take place, WA quickly identified and engaged with the officials leading the review within HM Treasury and HMRC, building up an ongoing dialogue based on the sharing of information and data.
The two stage approach was based on first using the Alliance’s evidence base to demonstrate the benefits of the scheme and its contribution to government policy objectives. Secondly, the Alliance successfully made the case for why the salary sacrifice mechanism was key to the delivery of the scheme.
Outcomes and impact
WA’s public affairs campaign successfully delivered the Alliance’s objectives. Budget 2016 protected the salary sacrifice mechanism that delivers the cycle to work scheme and the tax reliefs associated with it.
The Budget noted that:
“The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes. However, the government’s intention is that pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”
The Budget drew a distinction between those salary sacrifice scheme with a clear policy rationale (pensions, childcare and health related schemes) and other schemes. This is positive for the long term success of the scheme.
The impact of this outcome is:
- The scheme remains a key mechanism for government to deliver its cycling policy objectives and increase participation levels.
- Employers are able to continue to offer a valued employee benefit to their employees.
- Potential for future business growth for providers of the scheme.