2 Delivery of expected benefits
5. Five of the seven existing English light rail
systems examined by the National Audit Office had delivered many,
but not all, of their anticipated benefits. Passenger numbers
had fallen well short of forecasts on three of these schemes,
often because of over-optimistic passenger forecasts. Significantly
over optimistic forecasts for the Sheffield Supertram resulted
in the South Yorkshire Passenger Transport Executive having to
sell the operating concession for only £1 million against
an original expectation of £80 million. This shortfall in
privatisation proceeds meant that the Department had to provide
the Executive with extra subsidies of £6 million a year to
finance the Executive's debt. Passenger forecasts were generated
using guidance set out by the Department. The Department scrutinised
and approved passenger forecasts, using independent consultants.
The Department acknowledged that its guidance and appraisals had
been deficient. It had therefore issued new guidance, which it
expected to tackle optimism bias in passenger forecasts. It had
also set up a small dedicated corporate finance team staffed by
financial experts, and was about to create a directorate specialising
in major transport schemes, to strengthen its expertise in appraising
schemes and to reduce its dependency on consultants.[5]
6. The Department accepted that it should not have
approved systems that were poorly integrated with other forms
of transport. Outside London, light rail and de-regulated bus
services were competing against each other for custom, rather
than working together to provide customers with a comprehensive
through service. Local authorities have statutory powers to put
quality bus contracts in place as a means of integrating light
rail with local bus services, but none has done so. The Department
cannot insist on local authorities using their existing powers
but acknowledged that the minimum 21 month statutory period between
approving a quality bus contract scheme and its coming into force
was too long. The Department was about to reduce this period to
six months to make it easier for local authorities to put such
contracts in place. The Department would expect proposals for
all future schemes to include through-ticketing and timetable
integration between light rail and buses.[6]
7. There is a clear contrast between light rail systems
in England with those in France and Germany. Light rail abroad
was better segregated from road traffic and given priority at
junctions to provide quick and punctual services. Services connected
centres of social and economic activity. Systems in England had
had little or no impact on traffic congestion levels. The Department
acknowledged that mistakes had been made in the design and delivery
of schemes, in particular a failure to provide proper park and
ride facilities to attract patronage and reduce traffic congestion.
The Department and local authorities had learned lessons, particularly
about the need to adopt light rail as part of a package of measures
including those to restrain the use of cars in town and city centres.
The Nottingham Express Transit system, which opened in April 2004,
had well-placed park and ride facilities, good integration with
local bus systems and reliable trams, and had passenger numbers
close to the top of those forecast.[7]
8. The Department only has a partial evaluation of
what has been delivered for the £1.2 billion of public money
invested in light rail systems in England. The Department has
not, for example, evaluated the provision of tangible assets such
as vehicles, track and stations, and other quantifiable measures
such as frequency of services. It commissioned consultants in
2000 to develop a methodology for evaluating the impact of systems,
including on local regeneration, comparing the situation before
and after the systems were built, but it had proved too difficult
to develop an all-embracing methodology in isolation from a real
scheme. The Department plans to develop such a methodology as
part of the Manchester Metrolink Phase 3 scheme if that scheme
goes ahead in a revised form, and will carry out a wide ranging
evaluation to be used as a framework for other future schemes.
It will not be able to apply the framework retrospectively to
existing schemes in the absence of data for the period before
these systems opened. The Department envisaged that a full evaluation
would run for five to ten years in order to be able to assess
regeneration impacts, which take several years to come through.
It thought evaluations would therefore cost £10 million to
£15 million to carry out.[8]
5 Qq 4-7, 19-23 Back
6
Qq 9, 24-26 Back
7
Qq 4, 7, 31, 70-71, 82, 124 Back
8
Qq 74, 76-79, 85-93 Back
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