Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence


Memorandum by Merseytravel (RG 52)

INTRODUCTION

  1.  Merseytravel is the operating name of the Merseyside Passenger Transport Authority (PTA) and the Merseyside Passenger Transport Executive (PTE). As a Passenger Transport Authority, Merseytravel is subject to the Government's best value regime and, as such, represents itself as one of the "best value authorities" alongside police, fire and national park authorities, amongst others.

  2.  The changed nature of transport and its delivery to citizens over the past 20 years means that there is a need for a major review of Transport Authorities. The forthcoming Local Government White Paper provides such an opportunity. Merseytravel proposes:

    —  that Passenger Transport Authorities must remain and do not fit neatly within any likely local government reorganisation; and

    —  that communities must have a much bigger influence in their transport provision, through Passenger Transport Authorities.

  3.  Transport, unlike many other services, does not recognise administrative boundaries. In the major conurbations, Passenger Transport Authorities and Executives work across boundaries and hence work within some complex partnership arrangements. Any review of local government will inevitably have an impact on the success of these partnerships.

  4.  Merseytravel welcomes this inquiry by the ODPM Select Committee and, if it would assist in the inquiry, Merseytravel would be pleased to appear before the Committee in order to expand upon the proposals set out in this memorandum.

BACKGROUND

  5.  There are seven PTAs and corresponding PTEs located in metropolitan areas of Great Britain, but Merseytravel is unique in that, to the fullest extent permitted by law, the PTA and PTE operate as a single organisation. All other PTAs and PTEs still operate as separate entities. The integration of the PTA and PTE on Merseyside began in July 1988, as a response to the changing responsibilities of those bodies, following the advent of the 1985 Transport Act. It was a radical step, driven forward by the Labour-led PTA of the time, which has greatly enhanced Merseytravel's ability to meet the changing demands of delivering high quality public transport.

  6.  PTAs and PTEs were established nearly forty years ago under the Transport Act 1968, which followed Barbara Castle's 1966 Transport White Paper. Since then the powers and roles of PTEs, and to a lesser extent PTAs, have been altered but there has never been a fundamental review of their structures. During the 1970s and 1980s, PTAs were submerged into the metropolitan county councils but they were re-introduced in 1986 when metropolitan country councils were abolished and PTAs were identified as the most effective way to deliver transport in the city regions.

  7.  PTAs were formed to consist of:

    "Persons appointed by local authorities whose areas fall wholly or partly within the area of designated by the order . . . being councils of counties, county boroughs or county districts. . ."

  Local Elected members from the five district councils are nominated to form the Passenger Transport Authority developed policies which their Passenger Transport Executives implemented via their own funding mechanisms (including, now, the council tax levy).

  8.  The PTEs were established as operators with responsibilities, among many others, that included powers to:

    "(i)  carry passengers by road within, to and from that area;

    (ii)  carry passengers by any form of land transport or by any form of water transport . . ."

  Until the mid-1980s a major element of the PTEs' work was the operation of publicly-managed bus services. Bus deregulation in the Transport Act 1985 compelled the PTEs to sell their bus fleets to private operators. They were also stripped of their powers to regulate the fares and timetables of private bus operators.

  9.  In the Local Government Act 1999, PTAs were identified alongside fire, police and waste authorities as specific authorities that would be subjected to the best value regime. This would ensure that their performance would be measurable and comparable. But the structure of PTAs and PTEs means that, unlike fire and police authorities which include the delivery arm of the authority, the work of PTEs is presently not subject to the scrutiny of the Government's best value regime.

MERSEYTRAVEL

  10.  On Merseyside the PTA comprises 18 elected councillors nominated (in proportion to their respective populations of their relevant district) from each of the five metropolitan district councils:

      Knowsley Metropolitan Borough Council;

      Liverpool City Council;

      St Helens Metropolitan Borough Council;

      Sefton Metropolitan Borough Council; and

      Wirral Metropolitan Borough Council.

  11.  The PTA in its current form was established in 1986 on the abolition of Merseyside County Council.

  12.  The "Authority" sets the transport policies in the Merseyside sub region, which are then implemented by the Executive. The policies are set out in the Merseyside Local Transport Plan, a statutory document which is jointly produced and delivered by Merseytravel and the five Metropolitan district councils, covering the period of 2000-01 to 2005-06. The draft Local Transport Plan 2 will be finalised in July 2006 and will set out the transport priorities for the sub-region between 2006-07 and 2010-11.

  13.  Current legislation requires that some functions are performed by the PTA and others by the PTE and, therefore, to the extent that there is legal requirement to maintain that separation between the two bodies, Merseytravel does so. However, where no such constraints exist, Merseytravel operates as a single entity to ensure that close working relationships are developed between those responsible for policy and its implementation. This has helped Merseytravel to develop and deliver significant improvements to public transport on Merseyside including:

    —  the introduction of one of the first free concessionary fares schemes, which from April 2006 the Government will be extending nationally;

    —  securing unique concession-granting powers for Merseyrail, which in three years has been turned around from being known as "misery rail"' to become the best performing railway in mainland Britain;

    —  turning the Mersey Ferries into a major attraction, including promotion of the ferries and ferry terminals as popular tourist attractions;

    —  promoting an active social inclusion agenda;

    —  securing the long term future of the Mersey Tunnels by promoting the Bill which became the Mersey Tunnels Act 2004;

    —  promoting a single integrated public transport network accessible to everyone;

    —  promoting an active environmental policy.

  14.  Merseytravel has been identified as a Transport Centre of Excellence by the Department for Transport recognised as the "PTA of the Year" for the past two years.

  15.  In terms of governance Merseytravel operates a committee structure. Like any other local authority, the organisation has looked at the alternative governance structures which have developed as part of the Government's modernisation agenda. However, given the PTA's cross-boundary responsibilities, the conclusion is that the traditional committee system needs to be retained in order to ensure fair representation of all the district authorities across a range of policy areas.

THE INQUIRY'S TERMS OF REFERENCE

  The potential for increasing accountability of decision-making at the regional and sub-regional level, and the need to simplify existing arrangements

  16.  In re-organising local government, the Government may be attracted to transferring the powers of PTAs to a single tier authority. In Merseytravel's view, because of the nature of transport planning and delivery, this would be inappropriate.

  17.  Transport must be structured according to demand; travel to work areas do not conform with natural administrative boundaries and in many cases the area of "local travel" for residents is far larger than any multi-functional local authority could justifiable oversee. Each region should work together to determine the best structure for their transport authority—there is unlikely to be a "one size fits all" solution.

  18.  Any new transport body will need to be formed to reflect a fair representation for everyone in the "transport region". Election onto the body must be on a representative basis and it will be essential that any scrutiny procedures are sensitive to the need for a fairness of cross-boundary decision-making. The current structure of electing members to PTAs is successful in achieving fair representation and as a result there would be no need to change their constitution. Decisions cannot be made on policy alone, geographical priorities must also be a consideration.

  19.  There is no question that the electorate often find it difficult to understand the different tiers and lines of accountability within local government and, as this example shows, the transport sector is no exception but, merging functions simply to deal with that issue would put an unnecessary constraint on the scope and remit of transport authorities.

The potential for devolution of powers from regional to local level

  20.  The North West, like many other regions in the UK, has more than one urban hub. Therefore, any form of regionalisation must include scope for the devolution of power to the sub-regional or local level to take account of those demands.

  21.  In the case of Manchester and Liverpool, each city and its surrounding areas has their own challenges and transport priorities (in Manchester the focus is congestion management, whereas in Liverpool there is a much greater need for encouraging inward investment to address social exclusion and regeneration). A larger region incorporating more than one major area would challenge prioritisation for transport and not allow for a focussed needs-based programme of improvement. The scope of each transport body must be decided to reflect local circumstances and priorities.

  22.  Last year, the Secretary of State for Transport introduced a new regional tier of decision-making into the approvals process for major transport schemes; there are now three phases, initial approval from the DfT, securing a place in the regional prioritisation as decided by the Regional Assemblies, and then securing final approval from DfT once procurement procedures have been completed. Merseytravel does not believe that this additional regional "hurdle" promotes best value in procurement as potential suppliers may be put off working on UK schemes because of uncertainty about their future. There are also significant costs to the public purse when planning a scheme which the bureaucratic approvals procedure at the regional and national level may decide to reject. In many cases these costs are not recoverable. This approach can result in promoters shying away from innovation because of up front costs before undergoing an uncertain approvals procedure.

  23.  There is scope to devolve funding decisions currently held at the regional and national level. Transport for London (as part of the GLA) has the benefit of an agreed budget for transport over a five year period and devolved decision-making on how to spend that budget. Local transport bodies should be given similar security in their level of funding to allow for better longer term planning and more project certainty. There is also the opportunity to transfer the strategic bus road network to the PTE which would allow swifter introduction of bus lanes and other bus priority measures.

  24.  Merseytravel accepts that were there to be devolved decision-making of a five year commitment to infrastructure, there would be a need for wider scrutiny of decisions. Should the Committee consider this an attractive solution for Government, there would be a need to consider how value for money evaluation and measurement would take place. Scrutiny could be closely tied to an agreed constitution and managed in close partnership with central government and, more importantly, the local community.

The effectiveness of current arrangements for managing services at the various levels, and their inter-relationships

  25.  Presently, PTAs' and PTEs' delivery records are vulnerable to the actions of a wide number of people outside the organisations. As well as central and, now, regional funding approvals, projects are subject to ongoing planning approvals from the relevant planning authority throughout the life of the project. These relationships are subject to differing political and geographical priorities to that of the original promoter.

  26.  As the pressure to devolve local decisions from central government to the local community grows, transport bodies will be able to identify appropriate methods of scrutiny within the evolving regional structures. Regional priorities should be identified at the local level and the PTAs would be expected to champion scrutiny of transport decisions made locally. The ongoing relationships with planning authorities should be restructured to reflect community-based decision-making so decisions are made independently of the promoter but with the overall good of the region in mind. This would enable a more streamlined decision-making process that would make the public better aware of how local money was being spent.

  27.  Merseytravel recognises the need for an ongoing dialogue with central government and recommends a longer-term change in the relationship from "bank manager—account holder" to a genuine delivery partnership where the scrutiny of decisions made jointly by government and local government was conducted locally. The partnership between central and local government would ensure a longer term commitment to delivery rather than the them/us relationship presently in place.

  28.  Current procedures for securing any funding from the Department for Transport do not ensure a secure future. Presently, funding for smaller projects is block-granted on an annual basis according to the previous year's delivery. The process for securing funding for major infrastructure projects currently takes about three years. These procedures need to be streamlined. The proposed devolved funding decisions over a five year period would have a significant impact on reducing costs spent on approvals.

The potential for new arrangements, particularly the establishment of city regions

  29.  Merseytravel has demonstrated how transport bodies do not fit neatly into the progression of the city regions debate. There remains an important role for PTAs, formed according to need in each area.

  30.  The PTEs should be streamlined as the delivery arm under the PTA structure. This, in effect, is the Merseytravel structure which has proved extremely successful since its introduction in 1988.

  31.  The role of PTEs has changed significantly since their formation from an operator to a commissioner of public services. Merseytravel had foresight when making the decision to merge the two statutory bodies in 1988 and the benefits of the decision are now becoming more and more prominent, particularly given the findings of the Gershon efficiency review.

  32.  There are some significant benefits to this approach:

    —  Transport Authorities will be formed in a common structure with other "best value" authorities—providing a better clarity of structures in this already unique tier of local government.

    —  As part of the PTA, PTEs' functions will fall within the best value regime.

    —  Improved accountability as the PTEs' are under a directly elected body.

    —  Inevitable efficiency savings—in line with Gershon recommendations.

  33.  There may also be a need to expand the responsibilities of the PTA/PTE bodies to include some of the responsibilities currently with the Traffic Commissioners and the local highway authority. This would ensure an improved, streamlined public transport service for the electorate. Communities must have a much bigger influence in their transport provision, through Passenger Transport Authorities.

The impact which new regional and sub-regional arrangements, such as the city regions, might have on towns and cities

  34.  Merseytravel is supportive of the proposals for revised arrangements at the regional and sub-regional level. However, because of the strategic nature of transport planning and the fact that travel patterns, particularly travel to work areas, do not recognise administrative boundaries, Merseytravel considers that transport must continue to be managed with a sensitivity to cross-boundary and geographical issues in towns and cities and with appropriate representation across the area served. Merseytravel believes that this can best be achieved by merging the existing PTAs with their corresponding PTEs.

The desirability of closer inter-regional co-operation (as in the Northern Way) to tackle economic disparities

  35.  Additional inter-regional co-operation would be welcome as long as it does not turn into an additional layer of government. At present, relations across different levels of government can be burdensome and increase the risk of a project not succeeding. Merseytravel accepts that big infrastructure projects have national as well as regional drivers. Co-operation is not just desirable, but imperative. However, the layers of Government must be streamlined to identify the best value for money for taxpayers.

  36.  A merged transport authority with better security over their medium-term funding for large-scale infrastructure projects will be in a stronger position to work collaboratively across policy and regional boundaries as there will be much more security in their position which will inevitably lead to a more cooperative approach than is presently seen when competition and uncertainly of funding is so common.

CONCLUSIONS

  37.  In any review of local government structures, it is imperative that all of the services that may be affected are carefully considered so that solutions which work for one aspect of the public sector are not inappropriately imposed on others. Merseytravel considers that transport, because of its inherent nature, is best delivered on a sub-regional basis but that significant improvements can be made to the delivery of integrated transport solutions.

  38.  The review comes at an opportune time to modernise PTAs and PTEs to reflect their changed responsibilities, and Merseytravel recommends that the Select Committee consider the suggestion that the Merseytravel "model" of one passenger transport body that is streamlined, accountable to the public and in accordance with the Government's best value regime is extended.



 
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