Examination of witnesses (Questions 20-39)
WEDNESDAY 26 JULY 2000
RT HON LORD MACDONALD OF TRADESTON AND MR WILLY RICKETT
Mr Olner
20. How much, Minister, do you think the total
will be that the local authorities will spend on transport over
the next ten years?
(Lord Macdonald of Tradeston) The total in our plan
is about £59 billion going to the local transport side. The
total public expenditure figure is probably about £132 billion
in total of which £51 billion is for local authorities outside
London; £15.2 billion for London; and about 2.7 which, as
Mr Rickett said earlier, comes from local and London road user
charges. So more than half, about 52 per cent, of the total public
spending is by local authorities.
21. Given all the vagaries of the Standing Spending
Assessment and how it affects local authorities up and down the
country, the differences it gives, are you sure that all of the
benefits from this money will go equally to all parts of the United
Kingdom?
(Lord Macdonald of Tradeston) I think that they will
go according to needs. I do not know that they could necessarily
go equally to all parts of England. We are talking mainly about
England when we talk about the spend here. Rail is on a Great
Britain basis, but what we are discussing in terms of local transport
plans, it is, of course, for England only. So it would be on the
basis of need but there is a proportionality in some of the crucial
areas of funding, based on population for those areas.
22. Given that some local authorities have already
started on their local transport plans before you announced the
ten-year plan, do you think they will have to revisit those with
an even better wish list?
(Lord Macdonald of Tradeston) They will have the opportunity
in what will now be five-year local transport plans to come back
year on year. We will certainly be reviewing, on a regular basis,
the delivery of our plans but we do know that the local transport
plans' money will almost be doubled in the coming year to £1.3
billion; so I would hope that the commonsensical aspirations of
the local authorities can be met; and that they would have had
an anticipation that there would be more money available - I think
that was understood—but that they would still have looked
at local need rather than just gone on aspiration, thinking there
was far more money than ever before and, therefore, they should
put in programmes to which they were not fully committed.
23. May I ask whether or not these local authorities
will be penalised in any way by your Department if they do not
bring in congestion charging or workplace charges?
(Lord Macdonald of Tradeston) Obviously there are
some areas that do not feel the need for the introduction of congestion
charging. There are 24 councils that have said they are minded
to examine it as a possible way of reducing congestion in their
areas.
24. But the total money that is going to be
needed for these local plans, will you be saying, you must raise
so and so by congestion charging or workplace charging?
(Lord Macdonald of Tradeston) No, we will not. We
will be saying to local authorities—for instance, if we
are looking at a light rail scheme—we would expect a local
contribution to be made alongside that of perhaps the developer
and of central Government. But we would not be linking that to
the introduction of any road user charging or workplace parking
schemes. Although some authorities might find that an attractive
way of raising money, the first priority would be the reduction
of congestion, and not to see this as a way of raising money through
an additional tax.
25. So what you are saying is that this would
be top-up?
(Lord Macdonald of Tradeston) It could be. It would
be one stream available to the local authority but it would have
other streams if it wished to tap into them.
26. Do you think that over the next ten years
workplace charging and congestion charging have a role to play?
(Lord Macdonald of Tradeston) They do have a role
to play. That is why we are bringing in powers in our Transport
Bill going through Parliament. Those powers, of course, already
exist through the Greater London Authority Act and the Mayor has
said that it is his intention to bring in charging in London,
perhaps in two years' time. Our sense of timing is that it would
probably be a year or two beyond that before other cities in England
felt ready to charge, partly because they should have the right
technology in place first. Secondly, they should have a developing
and improved local transport option. Thirdly, we have asked that
they show some measure of support from local business or from
local citizens. So for that reason I would look perhaps to the
middle of the decade before you have these schemes in place. We
assume by the end of the decade that there would be about 20 areas
in England with charging schemes in operation locally.
27. Finally, is the main thrust of those schemes
to raise revenue or to encourage reduced car use?
(Lord Macdonald of Tradeston) The intention is to
reduce congestion. It should not be seen by local authorities
to be used as an additional revenue stream. Where money is raised
when charging is introduced to reduce congestion, it must be hypothecated
to investment in better transport.
Chairman
28. This Committee did a report on charging,
both on motorway tolling and congestion charging. It is not a
difficult thing to bring in. Why should you think it would take
five years? There is the use of smart cards; the use of all sorts
of forms of charging. It is not a difficult thing to bring in,
is it?
(Lord Macdonald of Tradeston) We have a charging development
partnership for these 24 local authorities, and this is a timescale
that emerges from their thinking, knowing their local circumstances
better than we do in central Government. There may be some that
will come in more quickly if they are simpler schemes. I am thinking
of one in Derbyshire which is very much tourist related, but I
do think a number of the larger councils are looking to see a
visible improvement in their public transport alternatives before
they bring in charging, to make it more acceptable.
29. You are not against it in principle though?
(Lord Macdonald of Tradeston) Clearly we are not against
it in principle because we have afforded these powers in the Transport
Bill.
30. You have not gone off it? It is not something
that you regard as being less attractive the closer we get to
a General Election?
(Lord Macdonald of Tradeston) Indeed not. In the settlement
for London we have factored in the cost of infrastructure that
the Mayor may need for the introduction of charging in London.
But, of course, we have cautioned all along, before the mayoral
elections in London, that this must be done very pragmatically.
We had the `ROCOL' group of expert advisers (you may remember,
Madam Chairman) who suggested that it would take perhaps until
2003 to get the technology right and prepare the circumstances
for introduction in London. So our advice to the Mayor has been
that we are clearly supportive, as we have been through legislation,
but do try to think it through, get it right, take all the advice
that is required. It is important to us because if it is successful
in London then other councils will be more minded to emulate that.
Chairman: Well, it is jolly nice. We are all
giving the Mayor advice. I am sure he is grateful! Anne McIntosh.
Miss McIntosh
31. I shall refrain from calling them fantasy
figures. However, may I just ask: the ten-year projection must
surely be based upon certain assumptions that the Government has
made about the economy continuing to grow to the projected level.
My first question is: if the economy fails to reach that level
of expectation of growth, how does the Government expect to make
up the shortfall?
(Mr Rickett) The projections are based on the Treasury's
forecasts of economic growth. Clearly, if the economy does not
grow in line with the forecasts, then we will need to review the
spending plans. That is what reviews of spending plans are about,
among other things. One of the things you need to be aware of
is that many of the problems we are dealing with here are problems
of economic growth: generating additional demand for travel, additional
demand for rail, road and local transport. So if there were changes
in the level of economic growth, you would have changes in the
nature of the challenges which we would be addressing, not just
in the public finances. We think that the projections we have
made are perfectly prudent and achievable.
Chairman
32. Conservative, I think.
(Mr Rickett) Yes.
Miss McIntosh
33. So it is a ten-year projection, subject
to an annual review.
(Mr Rickett) It is not an annual review. The Government
reviews its public spending plans every two years because we have
a three-year rolling process in which only the final year is subject
to review.
34. If the projected share to be made up by
the private sector does not materialise, then what provision have
you made to make up that shortfall?
(Lord Macdonald of Tradeston) As Mr Rickett said earlier,
we are confident of being able to achieve that level of private
investment. Our confidence is also echoed by the CBI and you will
find by the City itself. I do not think there is any lack of interest
in investing either in 30-year PPPs or shorter term PFIs or investing
in tram schemes or light rail schemes. Of course, in the refranchising
process, which would be perhaps a 20-year lock-in on the rail
side, again there seems to be an encouraging level of interest
in that refranchising process; so I would say in answer to your
question that once that money is locked in by contract, it is
perhaps the most assured money of all.
35. Could I turn to the strategic road network.
The map is quite difficult to follow. I do not want to give my
own personal wish list, which I will raise with you in October,
if I may, my Lord, but on the A1 the Deputy Prime Minister has
referred in an annex that was published with this statement to
the A1, but it is not clear which part of the A1 is covered. As
I am sure your Lordship is aware, there is a particular problem
where the A1/M1 link ceases to be a motorway and just becomes
an ordinary dual carriageway. There are enormous road safety problems.
While you are looking at that, if I could link my question to:
is the Government still committed to its detrunking programme,
and if it is, the ten-year plan appears to be silent on what provision
is going to be made for local authorities to be given extra provision
from central Government to compensate for the fact that they will
have all this responsibility for that road network.
(Lord Macdonald of Tradeston) As the detrunking programme
goes ahead, the local authorities have not expressed any concern
to us on that because they see their money for roads being proportionate
to whatever is switched over. Indeed, you will see there is a
very large sum, £30 billion or so, for local road schemes.
On your point—I am sorry if it seems confusing—but
on page—
Chairman
36. £30 billion. I thought some of that
was road maintenance.
(Lord Macdonald of Tradeston) Yes, the £30 billion
would be for road maintenance and strengthening of bridges and
lighting schemes and so on, and there is as well the other road
monies which would cover the 200 or so major local schemes that
we anticipate could be funded from this, including some 70 local
bypasses. If I may move on to the point you make about the various
tranches. I am sorry if there is any confusion but on page 27
of the plan you will see from the multi-modal studies that we
have in progress that we will not be usurping or subverting any
of them. The A1 study has been moved from the third tranche, which
would have started in 2001/2, to a tranche which starts this year.
That is because we are aware of the great concern in the north
east about the 60 deaths that have occurred on the A1 north of
Newcastle.[3]
We have suggested that we could advance the process there of studying
this route and come to a conclusion as quickly as possible on
the dualling of the A1, at least from Newcastle up to Berwick.
There is another question that my right honourable friend, the
Secretary of State, referred to about whether the A1 in dualled
condition all the way from Edinburgh south could be seen as a
more strategic route to take freight off other areas; but, of
course, it is for the Scottish Executive to decide its view of
what happens north of Berwick with the A1. We are certainly pushing
ahead on that. If I could say in passing that you will also see
in the back-up documentation to the plan that the average ten
years taken in developing a medium-sized road scheme we believe
can be accelerated by 30 to 50 per cent, without creating any
loopholes in the planning process, but by just a more purposeful
approach, putting some of the processes in parallel, and speeding
up procurement. I am sure that kind of advance would be welcomed
all round.
Miss McIntosh
37. I understood that a lead time normally for
building roads was an average of seven years rather than ten.
Are you saying that we must put that up by a third?
(Lord Macdonald of Tradeston) The figures vary. There
is a 13-year average figure for roads from conception to completion.
The four roads that were delivered last year had taken an average
of 20 years, I believe. The figures the Department have given
me for a medium-sized road are ten years. My planning colleagues,
Nick Raynsford and others in the Department, now suggest that
that average ten years could be speeded up by, as I say, 30 to
50 per cent.
38. Could I ask on the investment in the rail.
The Government is now thinking of awarding a 20-year franchise
for the rail franchise renewals which are coming up for negotiations.
Is that correct?
(Lord Macdonald of Tradeston) We are certainly looking
at longer franchises than the 7Ö years which were offered
post-privatisation, because we feel that this is the trade-off
which will allow us to demand greater investment from the franchising
train operating companies.
39. The statement does make quite clear, particularly
on the East Coast Main Line, that the Government is minded to
improve capacity on that route. As the Minister will be aware,
there are two competing bids on that route, which are proposing
quite variant alternatives. It is just the cart before the horse.
Clearly the capacity will not be in place before the franchise
is awarded. Is my understanding correct because it obviously has
implications for the successful bidder and also for freight. How
is the Government going to decide which should have priority?
Passenger or freight?
(Lord Macdonald of Tradeston) These are matters which
are being worked through by the Strategic Rail Authority. In the
light of this ten-year plan and the subsequent pronouncements
of the Rail Regulator on the track access regime, the Strategic
Rail Authority will bring forward their strategies for freight
and for passenger rail travel, we anticipate, in November.
Miss McIntosh: Finally, I was surprised, (and
I wonder if the Minister shares that surprise), that the Commission
for Integrated Transport had not met to consider rural transport
before making a submission to the ten-year plan. In that regard,
presumably you would have welcomed evidence from that Commission.
May I make a plea to the Minister that in agreeing that local
authorities rule bus grants, that a sufficient period of consultation,
particularly with parish councils, will be factored in.
3 Note by Witness: There have been 60 deaths on the
A1 in Northumberland since 1989. Back
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