House of Commons - Transport

Select Committee on Transport Fourth Report

3 The Department's targets

Developments since publication of the Annual Report

16. The Annual Report 2004 was published in April 2004. It contains details of progress against the Public Service Agreement (PSA) made with the Treasury in the 2002 Spending Review. This agreement was revised in the Spending Review 2004, and a new Public Service Agreement containing revised targets was published on 12^th July 2004.[13] Before we took evidence we asked for a memorandum on recent developments, which we publish with this report.

17. Whereas the 2002 Public Service Agreement established a single objective for the department of "Reliable safe and integrated transport for everyone, which respects the environment.", there are now four objectives:

Objective I: Support the economy through the provision of efficient and reliable interregional transport systems by making better use of the existing road network; reforming rail services and industry structures to deliver significant performance improvements for users; and investing in additional capacity to meet growing demand.

Objective II: Deliver improvements to the accessibility, punctuality and reliability of local and regional transport systems through the approaches set out in Objective I and through increased use of public transport and other appropriate local solutions.

Objective III: Balance the need to travel with the need to improve quality of life by improving safety and respecting the environment.

Objective IV: Improve cost-effectiveness through sound financial management, robust cost control, and clear appraisal of transport investment choices across different modes and locations.

These objectives give a much better picture of the range of Departmental activities, something harder to determine with only one catch-all objective.

18. There have been some changes to the PSA targets: a new joint target on greenhouse gas emissions has been introduced, the targets for London Underground target have been dropped (responsibility has shifted to the Mayor of London), the efficiency target is no longer a PSA target and revisions have been made to some of the remaining targets.[14] The 10 Year Plan for Transport also set a number of targets, some of which have been subsumed into the PSA targets, some of which have been achieved, and some which appear to have faded from view. Dr Greg Marsden and Professor Peter Bonsall provided an analysis of evolution of government targets since the 10 Year Plan itself, which gives a fuller picture than the PSA revisions alone.

Table 1: Evolution of Ten Year Plan Targets and Commitments

Original Target (as in 2000) Status pre July 2004 announcement July 2004 statement/revised target

1 Reduce congestion on the inter-urban trunk road network and in large urban areas in England below 2000 levels by 2010 No definition for congestion has yet been agreed The Department is developing better measures of inter-urban and urban congestion and will publish new targets by July 2005

2 Increase rail use in Great Britain (measured in passenger kilometres) from 2000 levels by 50% by 2010, with investment in infrastructure and capacity, while at the same time securing improvements in rail punctuality and reliability Government had conceded that the extra capacity needed to allow a 50% growth in rail use is unaffordable. The 2000 rail crisis had resulted in greater public interest in rail performance. The rail patronage target has been abandoned. The new rail target is to improve punctuality and reliability of rail services to at least 85% by 2006 with further improvements by 2008

3 Increase bus use in England (measured by the number of passenger journeys) from 2000 levels by 10% by 2010, while at the same time securing improvements in punctuality and reliability. On track (almost entirely due to substantial increases in bus use in London which represents around 1/3 of the UK bus market) Increase the use of public transport (bus and light rail) by more than 12 per cent in England by 2010 compared with 2000 levels, with growth in every region

4 Double light rail use in England (measured by the number of passenger journeys) by 2010 from 2000 levels Increased tender prices have led to the recent suspension of many proposed schemes

5 Cut journey times on London Underground services by increasing capacity and reducing delays (specific targets were to be agreed by Mayor after the PPP had been established) The PPP deals were concluded during 2003 and the underground is now the responsibility of the Mayor. There is a whole suite of performance related targets embodied in the PPP contracts but this is now seen as a matter of London governance. To date, performance against benchmarks is mixed (NAO, 2004) There is now no national target relating to the London Underground

6 Reduce the number of people killed and seriously injured in Great Britain in road accidents by 40%, and the number of children killed or seriously injured by 50% by 2010 compared with the average for 1994-98 On target across all categories of casualty (DfT, 2003) The target has been augmented by adding, "tackling the significantly higher incidence in disadvantaged communities".

7 Improve Air Quality by meeting our National Air Quality Strategy objectives for carbon monoxide, lead, nitrogen dioxide, particles, sulphur, benzene and 1-3 butadiene. Joint target with DEFRA On track for all seven pollutants except NOx and PM10 (but these too are "on a downward trend" (DfT, 2003)) Unchanged

8 It ought to be possible to achieve an 80% increase in rail freight by 2010 Rail freight increased by 10% in the first year of the plan but suffered through disruptions to the Channel Tunnel rail link. Insufficient funds were available to support the necessary freight infrastructure upgrading and there is a shortage of inter-modal interchanges Target abandoned

9 Triple the number of cycling trips compared with a 2000 base, by 2010 The decline in cycling has flattened but performance against target very poor. Target abandoned to be replaced by a general aim, supported by as yet unspecified local targets, "to increase walking and cycling in the next 20 to 30 years"

10 Achieve a 1/3 increase in the proportion of households in rural areas within 10 minutes walk of an hourly or better bus service by 2010 Substantial increases have been reported Local targets for bus service provision now encouraged

11 By June 2001, no more than 0.5% of bus services cancelled for reasons within operator's control Not on target - 1.6 % of services cancelled in 2002/03 compared to 1.8% in 2000/01. Failure related to a number of factors including labour market conditions Incorporated into the new combined public transport target

12 Bring down the average age of buses to 8 years by 2001 This target has been met (DfT, 2003) and a commitment has been given by bus operators to maintain this New target relating to low floor or accessible buses.

13 Reduce rail overcrowding to meet SRA standards Rail overcrowding standards continue to be breached and there seems little prospect of solving commuter overcrowding on all stretches of the London network Target abandoned

14 Maintain our strategic road network in optimum conditions This target is being met. Target now specific to the Highways Agency

15 Provide sufficient resources to local authorities to halt the deterioration in the condition of local roads by 2004 and to eliminate the backlog by 2010.

The condition of unclassified local roads continues to deteriorate although the backlog in other roads has been halted in line with the first target. There is considerable on-going debate about the true size of the maintenance backlog. Target abandoned to be replaced by local targets

16 Invest £121 billion of public money by 2010 Extra resources have now been pledged to the £121m already committed but less private finance has become available than was originally anticipated. Rail costs have risen significantly so it is unclear whether spend is rising in real terms Not officially a target but the new total remains a clearly defined statement of investment intent

Source: Marsden, G. and Bonsall, P. (2004) Understanding the role of performance targets in transport policy, Proc. European Transport Conference, Strasbourg, France, 4-6 October

19. It is helpful that both the Annual Report 2003 and Annual Report 2004 clearly set out not only the current Public Service Agreement targets, but those from earlier spending rounds. We welcome the fact that this approach has been continued in the Autumn Performance Report. The Autumn Performance Report notes that although the London Underground targets are no longer contained in the Public Service Agreement, the Underground's performance indicators will still be monitored. We recommend that reports on the indicators continue to be included in future departmental Annual Reports.

20. The Table above sets out the evolution of targets in a summary form. There are some points we wish to make about particular measures.

Congestion

21. Last year we noted that "three years into the 10 year plan, the performance indicator to measure progress in reducing congestion on the interurban trunk road network is still in development stage."[15] The Spending Review sets a target to "reduce urban and inter urban congestion" although it notes "new targets to be developed by July 2005".[16] It is remarkable that, four years after publication of the 10 year plan, the Department for Transport should have what is effectively a target to set a target for congestion. The result is that the Departmental Annual Report for 2004 describes progress in terms of inputs, rather than outputs.

22. The Autumn Performance Review set out progress on developing congestion measures as follows:

Work is progressing on developing a basket of new congestion indicators,

currently including:

reliability;
average vehicle delay;
average person delay (urban only);
time spent below specified threshold speeds (inter-urban only).

For urban areas, the target will relate to average delay per vehicle, as set out in the draft guidance for the second round of Local Transport Plans. Other performance measures will be available after July 2005.[17]

We consider the range of measures of congestion that the Department is developing is likely to be more satisfactory than the previous measure. We recommend that the Department ensures that there is full and regular reporting against the new congestion reduction target as soon as possible.

Targets for Rail Use

23. The previous targets for rail were to increase the kilometres travelled by rail passengers, and to increase the proportion of freight carried by rail. The target for increasing the number of passenger kilometres travelled was not ideal, since it focused on intercity rather than local journeys, but at least it recognised that it was desirable to achieve some modal shift from the roads to other forms of transport. It is not surprising that this target has been abandoned. The Strategic Rail Authority forecast that the likely increase in rail passenger growth by 2010/2011 would be between 20% and 30%, rather than 50%, and costs on the rail network have escalated hugely. It is less clear why the target for increasing the amount of freight on rail has also been removed. The Secretary of State told us that the amount of freight carried had increased, and that "there are a number of reasons for optimism in the freight industry".[18]

24. The new PSA target for rail is "to improve punctuality and reliability of rail services to at least 85% by 2006 with further improvements by 2008". It conspicuously does not predict any increase in rail patronage, even though The Future of Transport indicates that it may be necessary to make further rail provision to meet increased demand and the Secretary of State told us that "I see the railways carrying more people".[19] We are disappointed that although the Department is aware of the problems which increased road usage will bring it has not set out aspirations for the growth of rail.

25. The Secretary of State told us that new target had been chosen because

The thing that is holding back the railways at the moment is reliability. If you want people to use the railways, as opposed to using their car, you have got to be able to tell them that if they come to the station the train will be there and it will get to its destination at the time it is supposed to get there. … That is why, for this three-year period that we fix these PSA targets, I was quite deliberate in saying "I want to concentrate on reliability", because if you sort reliability a number of the other things you want to come alongside that, like increased usage, will follow from that.[20]

We welcome the fact that the PSA target to improve punctuality and reliability is precise about what performance will be delivered over the next few years, although this is the type of target which in the past might have been left to franchise specifications or Network Rail. We note that a longer-term target for modal shift has been replaced by a short term tactical target to improve the performance of the railways. Once the reorganisation of the railway is complete, we expect to see more strategic targets setting out the role that rail can play in an integrated transport system. We also recommend that future Annual Reports contain figures on rail passenger usage and rail freight so that trends in rail use can be easily monitored.

Local transport related targets

26. Previously, there were separate targets for bus and light rail, as shown in the table above. The Spending Review 2002 combined these into a new target to "secure improvements in the accessibility, punctuality and reliability of local public transport (bus and light rail) with an increase in use of more than 12% by 2010 compared with 2000 levels".

27. The Annual Report 2004 suggests that this target is largely on course, although London is responsible for most of the growth in bus use. The Autumn Performance Report notes that "there was a significant drop in [bus] patronage outside London in 2003-04."[21] Despite this, the Government considers that improved bus services "will be key to reducing congestion and pollution and safer than travelling by car" and that "buses should be seen as an alternative to rail services in some areas."[22]

28. In effect, the target for increases in light rail patronage has been abandoned, and the targets for increasing bus patronage have so far been secured by improvements in London services and the congestion charge. The Government has recognised the London effect, and we welcome the fact that the new target now requires growth in every region. We are currently undertaking an inquiry into light rail, as part of a wider inquiry into integrated transport, and will be looking closely at the extent to which it is realistic to see bus and light rail as comparable.

Bus quality contracts

29. The Future of Transport states that Passenger Transport Authorities would be given the ability to choose whether to channel subsidies towards rail or other forms of public transport. The Department proposes to give PTAs powers to set bus quality contracts in cases where they decide to transfer subsidy from rail to bus, and wish to ensure that bus routes, timings and fares will meet passenger needs. The Secretary of State told us that quality contracts could also be used as part of an overall coherent plan for reducing congestion, and that the Government was making:

quite specifically an offer to PTEs and to larger groups of councils to say "If you come up with a coherent transport solution we are prepared to make it easier for you to deal with the problems that you might otherwise have on buses."[23]

The Minister for Transport, Mr Tony McNulty MP, reiterated this during the Standing Committee debate on the Railways Bill.

In the context of a fully integrated and comprehensive transport strategy for an area, we have said to authorities that we will consider allowing them to go down the route of the quality bus contract. Furthermore, we will allow authorities to dispense the bus service operators grant, rather than, as now, it going direct to the operators.[24]

30. The Railways Bill will allow quality contracts to be used when a local authority wishes to reduce rail services; we believe the Transport Act 2000 already gives local authorities the power to include integrated transport as a consideration when they draw up their bus strategies. The Secretary of State emphasised that a "coherent transport solution" would be needed before bus quality contracts were approved; we see no reason why such coherent plans should not include rail services which are maintained, or even strengthened, if local authorities think it appropriate.

Environmental targets

31. The Department now shares the target to reduce greenhouse gas emissions to 12.5% below 1990 levels and to move towards a 20% reduction in carbon dioxide emissions below 1990 levels by 2010 with the Department for the Environment, Food and Rural Affairs (DEFRA) and the Department of Trade and Industry. Transport produces one fifth of all domestic carbon dioxide emissions; we welcome the extension of the Government target to reduce greenhouse gases to the Department for Transport.

32. The DfT has long shared the target to "Improve air quality by meeting our National Air Quality strategy objectives" for a range of pollutants[25] with DEFRA. As the Autumn Performance Report notes "there are some sites where, with present policies and technologies, it is questionable whether the targets for NO₂ and PM₁₀will be met by the relevant dates. This is mainly due to emissions from road transport." Table D8 of the Annual Report is largely incomprehensible and appears to be at variance with the table in the Autumn Performance Report. While the Autumn Performance Report sets out how the Department is working with local authorities to produce improvements, and mentions that there is an interdepartmental review of the Air Quality Strategy, it does not explain how DfT and DEFRA work together or how the Department identifies and manages its own performance against its joint target. It should do so.

Underperformance

33. It is clear from the Autumn Performance Report that the Department is facing difficulties with meeting a number of its targets. On rail punctuality, greenhouse gases and air quality, in particular, steps must be taken to bring performance back on track to meet the Department's strategic objectives. In its response to our report on the Department for Transport's 2003 Annual Report the Government reiterated its commitment to the strategic objectives of the 10 Year Plan, noting that the Progress Report identified areas where "further actions may be needed."[26] Some of these remedial actions should already have been identified, and in the Spending Review, Estimates, and Annual Report it should be clear how resources are being (re)directed to improve performance. At present, relating the strategy to expenditure and performance or understanding how expenditure has been redirected to improve performance is virtually impossible. We recommend that the Department ensures that when it reports performance against targets it says a great deal more about what it is doing to improve or secure future performance, and describes the impact of this work on its expenditure plans.

13 2004 Spending Review, Public Service Agreements 2005-2008, Cm 6238 Back

14 The Department provided a table showing how the Department's PSA targets had changed since 2002, which is printed with its evidence at the back of this report. Back

15 Second Report of the Transport Committee, Session 2003-04, The Department for Annual Report 2003, HC249, para 8 Back

16 Spending Review 2004, box 9.1, page 103 Back

17 Cm 6403, p.8 Back

18 Q 17 Back

19 Q 30 Back

20 Q 5 Back

21 Cm 6234, para 9.23 Back

22 Cm 6234, para 5.7, p 67 Back