Memorandum by the CBI (TYP 50)
INTRODUCTION
1. The CBI welcomes the opportunity to submit
evidence to the Transport Sub-committee on the Government's 10
Year Transport Plan. Business believes an efficient transport
system is essential to maintaining the competitiveness of the
UK economy. The CBI has long campaigned for sustained and higher
levels of investment in transport. We therefore welcomed the Government's
10 Year Plan which broadly matched the value of investment CBI
believes is necessary to bring our transport system up to the
sort of standards enjoyed by much of Europe today.
2. The CBI believes it is vital the Plan
meets its core targets in order to reduce both congestion on our
roads and pollution. Published last July the CBI conducted its
own assessment of the Plan's progress in the first year since
it was published. Our report entitled "Transport 2010: On-track
or off-target" identified a number of barriers that, if not
tackled, risked throwing the Plan off course even before it gets
going. Generally there is the need to turn the Plan itself into
a costed and prioritised programme of work with a timetable for
delivery. Progress has been made with the Highways Agency roads
strategy and more recently the SRA's Strategic Plan but there
is still more "flesh to be put on the bones" to turn
it into an instrument for delivering real improvements to our
transport system.
3. Our principal concerns centred around:
— the ability of the railways to meet
its 10 Year Plan targets;
— the need to put in place the right
structures to deliver private sector investment (especially for
rail);
— serious skills shortages in all areas
of transport operation and provision of infrastructure; and
— delays to major projects caused by
the planning system.
4. These issues remain to be tackled but
since our report developments, in particular on the railways following
the decision to out Railtrack into Administration have only served
to underline the impacts of the problems we highlighted and increased
the difficulty and complexity of their resolution.
RAILWAYS
5. The CBI report had already identified
that the current state of the railways was a serious impediment
to achieving the 10 Year Plan targets. The industry faced two
fundamental problems. Firstly, the lack of a clear strategy and
direction for meeting its core targets of 50 per cent growth in
passenger usage and 80 per cent for freight. Secondly, the need
for the right structures to be put in place to encourage the private
sector to deliver the £34 billion of investment to enhance
rail infrastructure. The subsequent decision to put Railtrack
into Administration has created greater uncertainty and instability
within the industry and increased the difficulty of attracting
private sector investment.
6. Despite this, the CBI believes the private
sector can deliver the amount identified but Government and the
industry will have to work hard to create greater certainty within
the industry and restore investor confidence.
7. The recent publication of the SRA's own
Strategic Plan is an important first step to achieving this. It
rightly prioritises the need to restore stability to the industry,
improve network performance and gears the balance of projects
and investment to meet the 10 Year Plan's core rail targets.
8. However, raising such a large amount
of capital will be hugely challenging and there are still many
practical issues that need to be resolved if the private sector
money is to become a reality. A key question is whether rail can
generate enough revenue from the forecast growth in passenger
and freight use to fund such a large investment. Government may
have to examine the need for more direct Government involvement
with the private sector in underwriting the finance of railway
enhancement projects.
9. Other key issues the SRA and the Government
must work to tackle include:
— establishing a clear timetable for
a successor to Railtrack, the outcome of which must be a company
that can operate and maintain the network efficiently and safely;
— a programme to resolve the deep seated
structural problems of the industry;
— streamlining the regulatory regime
with greater clarity between the respective roles of the Government,
SRA, ORR and HSE;
— greater contractual certainty for
the private sector with clear output specifications and certainty
of payment;
— better information to allow investors
to make informed decisions, costings and assess risk eg an accurate
and up to date register of railway assets;
— establishing the true cost of running
the railway-operation and maintenance (this may require more public
spending support); and
— accounting for the expenditure impacts
of the EU Interoperability and Noise Directives, additional safety
and Disability Discrimination Act requirements.
10. Many of the above issues could have
clear public spending implications with more money being required.
However, if so, this should be financed through additional transport
expenditure within the context of the forthcoming CSR and not
shifted from other modes within the 10 Year Plan returning to
"stop-go" investment programmes of the past.
NATIONAL ROADS
11. The Highways Agency in general has made
a good start in setting out how it intends to deliver its part
of the Plan. However, the CBI is concerned over the slow progress
and quality of the Multi-Modal Study (MMS) programme. Delays are
raising fears amongst contractors of a hiatus in work after 2002
when the contracts for the bulk of the targeted programme will
have been let. This uncertainty may see contractors reluctant
to invest in the necessary resources needed to deliver the Plan,
further magnifying the skill shortage problem. Ministers will
need to make swift decisions upon receiving recommendations from
regional planning bodies.
12. Initiatives from the EU, Treasury, Highways
Agency (Dartford), and individual MMSs, suggest that inter-urban
tolling may be back on the agenda. The Government needs to clarify
the role it sees, if any, for inter-urban tolling as part of the
10 Year Plan, and consider it within the context a general review
of road user taxation/charging.
LOCAL TRANSPORT
13. There has been a welcome increase in
local authority capital funding, continuing with the recent local
transport settlement. The 2002-03 settlement was worth £1.58
billion, compared to £1.36 billion in 2001-02. However, this
is allocated within a single capital pot whereby there is no guarantee
all will be spent on transport. There will need to be robust monitoring
of local authority expenditure and greater transparency to ensure
money earmarked for transport is not siphoned off for other uses.
14. Further concerns also exist over the
mix of capital and revenue spending. While capital spending is
increasing, revenue spending is not increasing at the same rate.
This means that local authorities may not be able to afford some
of the necessary preparatory work for new schemes, or their subsequent
maintenance, which are funded from revenue expenditure. There
is therefore a danger that some of this capital expenditure might
not be spent on transport and could, under the single capital
pot, be diverted. Work is needed to establish to what extent this
is a problem for local authorities.
CONGESTION CHARGING/WORKPLACE
PARKING LEVIES
15. The CBI believes that under the right
conditions congestion charging schemes can play a role in reducing
congestion but remain opposed to workplace place levies as an
ineffective means of tackling congestion which simply add to business
costs. The Mayor's proposed congestion charging scheme for London
is the first such scheme in the UK and it appears many local authorities
are waiting to assess the outcome of the London scheme (should
it finally go-ahead) before bringing forward their own proposals.
16. However, possible complications and
delays to London scheme could mean that the other twenty congestion
charging and workplace parking levy schemes anticipated in the
Plan might not be brought forward, at least within the ten year
timescale. This will have clear implications for the Plan's congestion
reduction targets and revenue forecast, and Government should
assess now the potential affects should the expected number of
schemes not take place.
SKILLS
17. It is clear that, currently, the skills
and capacity of the industry are currently not available to deliver
the Plan. The issue is whether the private sector, local authorities,
highways authorities and rail companies are able to recruit the
necessary personnel as increased work comes on stream. Government
have recognised that this is a serious barrier to delivery and
is working with the CBI and others to address this problem.
18. The issue is particularly acute for
the railways with shortages in specialist areas such as signalling
and overhead line equipment engineers causing problems completing
existing projects let alone future commitments. For many local
authorities the skills shortages is a bigger barrier to delivering
their LTPs than lack of money. A recent Steer Davies Gleave survey
found that 90 per cent of local authorities agreed there were
skills shortages. These were highest in areas such as traffic
management and monitoring, travel behaviour, marketing and promotion,
and most importantly project management.
PLANNING
19. The delivery of infrastructure enhancements
to both road and rail may be seriously undermined by the planning
system that currently can take decades between the conception
of a project and completion. The Government has recognised this
as a problem and have published a series of proposals in their
document "Major Infrastructure Projects: Delivering a fundamental
change". The CBI welcomes the proposal to increase the role
of national government in approving in principle projects of national
significance, although we await Parliament's views on what type
of process this might take.
CONCLUSION
20. The CBI continues to support the objectives
of the 10 Year Plan. For too long our transport system has suffered
due to stop-go investment and uncertainties over funding. Sustained
government commitment to the Plan is essential if confidence it
to be generated and these uncertainties overcome. The CBI looks
forward to working with the Government in the months and years
ahead to help ensure that the Plan stays on target and the key
barriers to delivery are addressed.
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