Memorandum by the Department for Transport,
Local Government and the Regions (TYP 28)
The Plan makes a number of assumptions including
factors such as motoring, public transport and fuel costs and
land use policy.
— What assumptions should be modified
or challenged?
— How important are the assumptions
to the outcome of the plan? What remedial action is necessary
if assumptions or targets need to be changed?
1. The 10 Year Plan provides the overarching
framework for securing real improvements to our transport system
over the next decade, across all transport modes, and the resources
needed to deliver them. The long-term perspective taken in the
Plan represents a significant departure from previous practice
and has been universally welcomed. But any long-term Plan needs
to have the flexibility to adapt to changing circumstances.
2. As envisaged in the document itself,
we will be undertaking a first review of the Plan later this year,
alongside the forthcoming biennial Government spending review.
This first review of the Plan will take account of progress and
events since its publication, and their possible implications
for the delivery of the targets and objectives it set out.
3. The projected outcomes set out in the
10 Year Plan and the analysis of its impacts were inevitably dependent
on a wide range of assumptions. These cover both underlying trends
over the next decade and changes due to implementation of the
Plan. The assumptions used were described in some detail in the
supporting document Transport 2010: The Background Analysis.
4. Since the Plan was produced we have been
developing a new multi-modal National Transport Model to replace
the National Road Traffic Forecasts and other models previously
used. This new integrated model is still under development, but
should be available to inform the forthcoming review.
5. A description of the new model and details
of the assumptions applied, both in the model and elsewhere in
the Plan review, will again be made explicit in supporting documents.
The new model will include new, up-dated assumptions on the factors
mentioned where appropriate, including on GDP growth. On fuel
costs, however, although these fluctuate from month to month as
the price of oil changes, we do not at present see any reason
to change the original long-term assumptions. Sensitivity testing
of the key assumptions will be included as part of the review
work.
In particular, will the expected number of congestion
charging and workplace parking levy schemes be implemented and
when?
6. The 10 Year Plan included a working assumption
about the number of local road user charging and workplace parking
levy schemes that would be operating in towns and cities across
the country by 2010. Modelling of the Plan outcomes assumed that
such schemes would be making a small contribution, alongside other
more significant measures, to reduced levels of congestion and
pollution in 2010. The modelling made no assumption about the
timing of any such schemes within the 10 year period, although
the experience of authorities such as Bristol and Nottingham suggests
that it will take four or five years to develop and implement
an urban congestion charging scheme. The congestion charging powers
in the Transport Act 2000 are of course permissive, and the actual
outcome is therefore ultimately dependent on decisions taken by
individual local authorities. At this stage we have no reason
to change the assumptions in the Plan, but we will be re-examining
these in the forthcoming review.
Are the skills and capacity available to deliver
the improvements suggested?
7. There are concerns within the transport
sector and elsewhere about actual and potential skills shortages
in certain areas. The new levels of investment set out in the
10 Year Plan will certainly increase the demand for skilled workers
throughout the transport sector, as well as in the construction
industry and in some local authorities. Changes within the transport
industry are also demanding new types of skills—in management,
customer care and ICT for example.
8. These new demands require a new approach
to training and recruitment. As part of the delivery of the 10
Year Plan we need to move away from the short-term perspectives
of recent years and towards long-term planning and skills improvement
across the transport sector.
9. Part of the solution lies within the
10 Year Plan itself. Feedback from employers suggests that one
of the main barriers to better practice has been the lack of longer
term investment framework for transport. By providing such a framework
and putting an end to stop-go funding patterns, the 10 Year Plan
should provide employers with the greater certainty they need
to invest in recruitment, training and skills development for
the longer term.
10. My Department is already taking action
in a number of specific areas in collaboration with the Department
for Skills and Education, transport operators, National Training
Organisations, the education sector, trade unions, professional
institutions and others. There is a wide range of initiatives
now under way. Examples include new programmes to improve skills
within the rail industry and to produce more and better-qualified
transport planners. Other initiatives are being led by the Freight
Transport Association, the Institute of Civil Engineers and the
construction industry. We will be bringing all the various interests
together at a seminar in February, hosted jointly with the DfES
and the CBI, to pool experience and consider further steps.
Implementation of the Plan depends on the provision
of a mixture of public and private sector finance.
— How will the current situation
in the railway industry affect the need for provision of private
and public sector finance?
11. The Plan envisages the need for substantial
public and private sector investment in the Railways, and the
current situation in the industry has not altered that requirement.
12. Railtrack plc was taken into administration
by the courts because the company was insolvent or likely to become
so. The Government stands behind the rail system and is prepared
to commit substantial new investment through the 10 Year Plan
to ensure a radically improved rail network. But it is not prepared
to fund the poor performance of individual companies and the interests
of their shareholders. A review of railway regulation is being
carried out as part of the long-term aim of achieving a more efficient
and responsive railway. This in turn will make it easier to attract
private finance. The Government also believes that, if Railtrack's
successor is a company limited by guarantee, further efficiencies
could be achieved. These considerations will feed into the review
of the 10 Year Plan.
13. The Government has already committed
an extra £4 billion of public funding since the 10 Year Plan
was published, bringing the total for rail to £33 billion
over 10 years. The Government is confident that sufficient levels
of private sector investment will be available to the industry
going forward, and it will look to the Strategic Rail Authority
(SRA) to lever that investment in. More details of the SRA's strategy
for attracting private sector funding for the railway will be
set out in their strategic plan, due to be published on 14 January.
The SRA will send copies of the plan to the Committee when it
is published.
Is the balance and phasing of investment across
funding areas correct? Should the plan represent a better balance
between large and small schemes, and between infrastructure, management
and operations?
14. The funding allocations and profiles
in the 10 Year Plan represented the Government's then best assessment
of what was needed to secure delivery of the outcomes set out
in the Plan.
15. The Plan envisaged that the balance
and profile of funding in the Plan would be reappraised periodically,
as specific projects emerge and policies are developed (see paragraphs
5.5, 5.9 and Annex A3). Such reappraisal will be part of the forthcoming
review.
16. Approximately one third of the funding
in the Plan is allocated to local transport schemes for use by
local authorities in accordance with their own local transport
plans. Although some of this will be used for larger local road
and public transport schemes, most will go to fund tens of thousands
of smaller projects over the next decade—for example, schemes
to facilitate walking and cycling and to improve road safety and
traffic management. It is for local authorities to determine in
detail the appropriate mix of investment locally in accordance
with their local transport plans, but we have made it clear that,
on the basis of the local transport plans received covering the
first five years of the Plan period, we expect that the majority
of local transport funding will be spent on smaller schemes and
improved maintenance.
17. Inevitably the 10 Year Plan itself included
more detail on major national infrastructure projects. This reflects
the fact that final decisions on these are made at national level,
and also the scale of some of the individual projects involved.
However, even where the national rail and strategic roads networks
are concerned, significant amounts of funding will be devoted
to relatively small schemes—for example through the Highways
Agency's current programme of safety and congestion improvements
and the SRA's Rail Passenger Partnership Scheme—and to maintenance.
Are more flexible financing arrangements required
to deliver major local schemes?
18. The current arrangements for the financing
of major local transport capital projects provide a range of options
for local authorities.
19. The most common are projects financed
through a mixture of credit approvals and specific grants (Transport
Supplementary Grant given under Section 87 of the Local Government
Finance Act 1988; and Public Transport Facilities Grant, issued
under Section 56 of the Transport Act 1968).
20. Other existing mechanisms include procurement
through the Private Finance Initiative or through specific public-private
partnerships such as those established for the procurement of
large light rail schemes. These involve a mix of funding sources:
credit approvals and grants during the construction phase, and
PFI credits to support availability payments during the operations
phase.
21. Funding for transport improvements can
also be secured through agreements under Section 106 of the Town
and Country Planning Act 1990, which provides the opportunity
for authorities to facilitate transport improvements through the
development process.
22. The recent Local Government White Paper
Strong Local Leadership—Quality Public Services set
out our plans to abolish credit approvals and replace them with
a new local prudential regime. This will allow authorities to
decide for themselves how much to borrow, provided that they can
afford to service the extra debt without Government support. However,
the Government will continue to provide support for the major
part of authorities' capital programmes.
23. We have also provided local authorities
with the powers to introduce road user charges and workplace parking
levies, revenues from which are required to be spent on improving
local transport.
How do the emerging multi-modal studies affect
the 10 Year Plan?
24. As the Plan made clear, the recommendations
from the programme of multi-modal studies will be a key element
in determining which solutions and packages of measures are chosen
to tackle the problems on many of our major transport corridors.
The studies seek to provide long-term strategies for these corridors;
the 10 Year Plan provides the resources to implement agreed schemes
arising from the strategies over the period to 2010.
25. Decisions have now been announced on
two of the studies. Recommendations have been produced by two
others, and most of the remainder are due to report over the next
18 months. The studies' recommendations will have a significant
impact on the selection and prioritisation of major transport
schemes over the next decade and beyond.
The Plan sets a number of targets for growth in
areas such as travel by rail and bus and reductions in factors
such as congestion and vehicle emissions.
— Are the targets and the dates
for their achievement well designed (eg is reducing congestion
the right objective)?
— What other targets, if any, should
be included (eg modal shift, walking, traffic levels?)
— Should a more regional approach
be adopted for target setting?
26. The Government stands by the targets
and objectives set out in the Plan. Although these will fall within
the compass of the review, we would not expect any major alteration
of the existing targets at this early stage.
27. The targets set out in the Plan are,
in the main, national ones. It is open to regional bodies, as
well as local authorities and the Mayor of London, to develop
their own targets in the context of the transport strategies for
their areas. Indeed all highway authorities outside London have
set targets for their areas as part of their Local Transport Plans.
The 10 Year Plan is the investment plan to deliver
the Government's integrated transport policy.
— How well does the Plan balance
social and environmental policy with efficient investment?
— Does the Plan set out a balanced
approach to all modes (eg walking)?
— Are there any conflicts between
the Plan and the policies in the White Paper—A New Deal
for Transport?
28. The Plan aims to address all transport
impacts, including environmental and social ones. It also seeks
to ensure that transport policy promotes sustainable development
and contributes fully to the achievement of other Government objectives,
in particular those listed at paragraph 1.9 of the Plan.
29. The Plan represents a departure from
previous practice in adopting a multi-modal approach to transport
investment. As such it seeks to secure an appropriate overall
balance between investment in different modes, taking account
of its underlying objectives. In many cases, however, the balance
is not determined in detail within the Plan, but will be decided
by local authorities through their Local Transport Plans, through
the London Mayor's Transport Strategy, and through the recommendations
of the multi-modal studies. It will be for local authorities to
determine the appropriate mix of investment for schemes within
their areas, including measures to promote walking.
30. The 10 Year Plan is based on the policies
set out in the earlier Integrated Transport White Paper. It aims
to provide the resources and the improvements in transport infrastructure
and services needed to put those policies into practice.
What impacts will policies in the European White
Paper on Transport have on the Plan?
31. The analysis of transport problems set
out in the European Commission's White Paper on Common Transport
Policy is broadly similar to that in the 10 Year Plan. We are
currently conducting a consultation exercise on the policies the
Commission proposes to tackle these problems. The consultation
closes at the end of January and we will not reach final conclusions
on the proposals until we have analysed the responses. However,
we will be looking to ensure that any legislative proposals that
emerge from the White Paper are consistent with, and where possible
contribute to, the delivery of our 10 Year Plan objectives.
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