Business leader letter to Chancellor urges Cycle to Work reform

Chancellor of the Exchequer, Rishi Sunak, will this week receive a letter co-signed by the Federation of Small Businesses, British Cycling, the Co-Op and the Cycle to Work Alliance calling for a reform of the salary sacrifice scheme to become more relevant to lower earners and the self-employed.

As it stands the legislation has been somewhat exclusive and arguably more beneficial to higher earners who have been able to make the greatest savings when choosing their bikes, eBikes or accessories.

The letter, coordinated by the Cycle to Work Scheme Alliance, has been sent with Trudy Harrison MP, Cycling Minister at the DfT, Paul Scully MP, Minister at the Department for Business, Energy and Industrial Strategy and Lucy Frazer MP, Financial Secretary to the Treasury, in copy.

The full list of signatories includes: British Cycling, Chartered Institute of Payroll Professionals, Co-operative Group, Cycling UK, Federation of Small Businesses, Forum of Private Business, The Association of Independent Professionals and the Self-Employed, and the Cycle to Work Scheme Alliance.

That social injustice has come under sharp criticism by the public, as well as with MPs interested in the subject. In speaking with CI.N in 2020, co-chair of the All Party Parliamentary Cycling Group Ruth Cadbury said: “Though we do have the cycle to work scheme and while I do welcome the ceiling lift, it is regrettable that it’s delivered via a salary offset scheme. Many non-PAYE workers cannot participate. For an employer the sign up is a bureaucracy. In the present climate many are just trying to pay the wages, so the way this functions needs to be simpler.”

That view is represented in a Cycle to Work Alliance study that broke cover in 2021, within which it was found that a third of employees who had not previously participated in the scheme said this was because their income was too low. A further 1 in 10 of these said it was because they were self-employed, meaning they could not access the scheme.

Paul Caudwell, Health Wellbeing Manager at the Co-operative Group, said “We’re Co-operating for a fairer world which includes doing what we can to make things fairer for our colleagues. The current legislation surrounding cycle to work schemes prevents us from giving our lower-paid keyworker colleagues access the same level of financial incentive, using a salary sacrifice arrangement, to use our cycle to work scheme. I believe that the legislation must change to allow a salary sacrifice arrangement to be able to reduce pay below the National Minimum Wage. This would make the incentives for using a salary sacrifice scheme more equitable for all of our colleagues and increase take-up of our cycle to work scheme.”

The changes have also received backing from Labour’s shadow ministerial team. Gill Furniss MP, Shadow Roads Minister, has voiced her and the Labour Party’s support for the changes to the Cycle to Work scheme.

She writes: “The Cycle to Work scheme has been shown to make bikes more affordable and accessible to a wide range of people. They have a proven track record of encouraging those who have not cycled before to take up active travel. This delivers such a wide range of benefits, including improving people’s physical and mental health, improving air quality and easing congestion on our roads. There is no path to net-zero without green transport and it is vital Ministers do more to encourage people to cycle to work, increase access and take-up of this popular scheme.”

During the pandemic, the scheme played a role in getting more people cycling to work. Between March and September 2020, Alliance members saw an increase of nearly 60% in new scheme joiners compared to the same period in 2019.

The scheme has been played a key role for key workers in particular throughout the pandemic. In the capital alone, London Ambulance Service saw a 111% increase in new scheme participants in 2020 from the previous year. New scheme joiners were also up 67% in the Metropolitan Police, and 47% among Transport for London’s (TfL) workforce.