APPENDIX 8
Memorandum submitted by South Yorkshire
LTP Partnership
SUMMARY
This response represents the collective view
of the four district councils in South Yorkshire and the Passenger
Transport Executive. Under the requirements of the Transport Act
2000 these authorities must jointly prepare and deliver their
Local Transport Plan as a single document for the South Yorkshire
Metropolitan Area.
We believe that, although the LTP has brought
certain benefits not least in terms of greater certainty of funding,
it remains largely marginal in terms of how it helps us address
the scale of the transport challenges we are still facing in South
Yorkshire. These challenges must be addressed if we are to secure
the economic transformation of the sub-region after many years
of industrial decline.
Particular areas of frustration relating to
the DfT's current focus on congestion as a driver for future public
investment in transport include:
— the inefficiencies of the major scheme
bidding process;
— the resistance by DfT to recognise
improvement in performance if targets have not been met; and
— the lack of connection between capital
and revenue funding.
LOCAL TRANSPORT
FUNDING
Have the local transport capital settlements met
what was expected and allowed delivery of the planned projects?
What have been the impacts on major transport schemes, and smaller
schemes? Have the full allocations been spent as planned? How
have cost increases been settled?
On the whole, although an improvement on previous
funding levels, local transport capital settlements have not delivered
what was expected. In South Yorkshire our targets for the first
LTP have, in the main, not been met. Projects of a more complex
nature have proved difficult to deliver within the reporting timescales
of APRs. Cost escalations of smaller schemes are met by re-allocating
resources from elsewhere in the LTP programme. Major scheme cost
increases have been handled through submissions to DfT for extra
resources. Full allocations are spent each year but not necessarily
on programmed projects.
The first LTPs were written as bidding documents.
There was, however, little if any guidance as to what level of
bidding was appropriate. The 10 Year Plan for Transport generated
an enthusiasm and belief amongst transport professionals and delivery
agencies that funding levels would be of an order capable of bringing
real change. LTP targets often reflected this and, in South Yorkshire
at least, were based upon identified need and in retrospect set
at unrealistically ambitious levels. In the event, the actual
levels of allocation, although higher than in previous years under
the previous Transport Policies and Programme system, were still
insufficient to meet the significant challenges facing South Yorkshire
as an area undergoing significant social and economic change after
years of industrial decline.
Although LTP settlements have been modest compared
with expectations at the start of the LTP process, the move to
indicative allocations for integrated transport block allocations
at least provided an opportunity to increase the degree of certainty
in programme planning for smaller schemes. In general, South Yorkshire
has generally spent its full allocation in each year of the LTP.
However this has not always been wholly in line with planned programmes.
The DfT's "use it or lose it" approach to annualised
LTP capital settlements has resulted each year in some expenditure,
deemed to be at risk of not being spent in-year because of delays
in the implementation process, being switched to other less complex,
less contentious and less effective (in terms of meeting LTP objectives)
measures. Transport delivery would benefit from a more relaxed
approach towards these annualised settlements.
The £5 million threshold identifying whether
a scheme is a major one or not is too low and has been set at
this level for over a decade. It also effects a "definition
by cost" rather than what the scheme seeks to achieve. Too
many projects of relatively local impact therefore are brought
into the DfT's remit for assessment. The introduction of the Regional
prioritisation process, as well as adding a further layer of complexity,
involves schemes of mostly local impact having to be assessed
against criteria concerning regional significance. The opportunities
afforded by Transport Innovation Fund to facilitate additional
major projects capable of meeting national productivity criteria
are significant, but the South Yorkshire partners' view is that
to achieve economic transformation here a programme, as opposed
to a project-based, approach is needed.
Is the formulaic funding approach the most suitable
method for allocating transport investment? What has been the
impact of the performance-related component?
The South Yorkshire partners generally welcomed
the formulaic approach to allocating the Integrated Transport
block and agreed with the basis of the formula set out in the
DfT consultation of July 2005 being an adequate reflection of
the pressures related to the transport shared priorities. We expressed
some concern at the time that the highest weighting used for the
formula, the public transport component, was based only on current
patronage data and did not, therefore, recognise efforts to secure
"modal shift" and the extent to which potential and
new passengers should contribute to this component. This point
did not appear to be acknowledged. Also, our preference to phase
in the formula over three years (as opposed to five) was not accepted,
resulting in a small adverse effect on South Yorkshire's total
settlement figure over the plan period of LTP2.
Although South Yorkshire's actual allocations
over the first LTP period have been higher than the indicative
amount, this has been the result of supplementary bids being awarded
in respect of Objective 1 related projects rather than because
of performance related reward funding. South Yorkshire, in recovering
from a weak rating for its APR in December 2003, has not had its
improved performance recognised in subsequent years' IT allocations
as, despite achieving higher scores in December 2004 and December
2005, its relative performance compared to other LTP areas placed
it in either the "average" or "fair" band.
The December 2005 settlement was particularly
disappointing for the South Yorkshire partners as, despite bringing
our LTP performance up by 17 percentage points to 75% on the previous
year, we were still classed only as "fair" and attracted
a 5% reduction in our indicative allocation for 2006-07. The assessment
of our provisional LTP as "promising" attracted no performance
bonus. We feel there is a degree of perversity in that poor performance
based upon an unfavourable assessment of performance is rewarded
with less funding which contributes to poorer performance. Penalties
for non-delivery of certain projects awaiting DfT decisions before
they can move forward are particularly galling.
In addition, our most recent supplementary funding
allocation for Objective 1 related projects was significantly
lower than the figure bid for as needed to deliver on existing
commitments. It has also been negatively affected by the adverse
impact of receiving only a "fair" rating for overall
LTP performance in 2004-05. In our view, the balance between allocating
resources according to need against recognising improving performance
is not achieved. The reward system appears not to favour LTPs
being delivered in challenging social and economic environments
and where delivery must be achieved in co-production as part of
a metropolitan area partnership context.
Do Local Authorities have adequate powers to raise
resources to fund local transport infrastructure? What other powers
would be helpful?
We believe, strongly, that local authorities
do not have adequate powers to raise resources locally for the
level of transport involvement necessary to support economic transformation.
As a result, the level of transport investment in South Yorkshire,
to date, has only been sufficient to aid economic recovery at
the margins. We believe a much more focussed effort is needed
if transport is not to remain a major barrier to economic transformation.
Changes in the institutional and financial arrangements are needed
if we are to deliver the types of transport project that can deliver
transformational change in South Yorkshire. In South Yorkshire
and the wider Sheffield City region the opportunities to improve
transport's role include:
— recognition by Government departments
of the economic impacts of transport investment;
— freedom and flexibility to plan and
make decisions locally;
— local powers to vire between funding
streams; and
— establishing the Sheffield City region
as a Pathfinder City Region on Government initiatives.
In addition, we believe that the most effective
approach to tackling transport barriers to economic transformation
would be to develop a locally based programme of transport improvements,
resourced from the "national productivity" strand of
the Transport Innovation Fund.
Has the balance between revenue funding and capital
funding for transport proposals been appropriate? How well have
the different funding streams from the Department for Transport
and the Office of the Deputy Prime Minister supported local transport
projects? Are transport services successful in securing sufficient
revenue funding?
There is a lack of connection between capital
and revenue funding, although both are critical to the successful
implementation of our transport strategy.
The LTP system has provided welcome additional
capital resources on levels previously allocated under the TPP
and Package approach. Revenue funding however has remained largely
at a standstill. As new assets are provided the revenue costs
of maintaining them need to be addressed through existing budgets.
More significant however has been the revenue consequence of supporting
a greater number of marginal bus services as operators reduce
or remove services considered to be unprofitable. A standstill
revenue budget has made it increasingly difficult for the South
Yorkshire partners to support such services and develop schemes
and projects, even though they are vital to maintaining access
to jobs and services for remote or disadvantaged communities and
in reducing the numbers of car trips. The imminent demise of rural
bus challenge funding will compound these difficulties and create
further stress on rural access to jobs and services in a number
of South Yorkshire locations.
How efficient is the bidding and scheme preparation
stage? What could be done to avoid local authorities wasting significant
resources on preparing and designing transport schemes which do
not get approval?
The current bidding process for major schemes
is not efficient. Too much time, effort and resource is needed
to prepare schemes which may or may not be viewed favourably by
DfT. Schemes we believe meet criteria can be delayed (as DfT request
more information not originally required). Increasing the £5
million threshold for major schemes or, more significantly, giving
more powers to local authorities to raise funds for local transport
investment, would avoid the wastage of effort.
In addition, DfT has passed more of the risks
associated with scheme preparation on to local authorities as
scheme promoters as a deliberate policy. Whilst this may have
the beneficial impact of reducing the number of purely speculative
major scheme submissions, the effect has also been to reduce the
preparedness of local authorities to commit resources to working
on projects that are costly yet could deliver significant benefits
in terms of LTP targets. The current DfT consultation on its draft
guidance for major scheme funding seems to increase the share
of risk carried by local authorities by also seeking a 10% local
contribution to all major scheme costs.
Consultation processes at the local level, often
the result of statutory processes, can have a delaying effect
on scheme implementation. Although it is entirely right that local
communities should have a say in the way schemes that will impact
on them are designed and delivered, the current process throws
up the following problems:
— To cover the costs of scheme preparation
a project needs to have first been programmed by the local authority.
This means the scheme could change, and its costs increase, as
a result of issues or changes identified during consultation.
— Once a scheme is programmed DfT's
reporting requirements expect to see an output delivered against
expenditure during the programme year. In some cases a scheme
may take several years to complete but DfT still expects to see
an output whenever any expenditure is recorded.
These problems could be reduced if DfT amended
its reporting requirements to recognise that the timescales of
some projects span several financial years, and allow work to
be progressed on design before "starting the clock"
running from when the delivery of outputs must be reported.
In addition, bidding for "challenge"
funding is particularly onerous in terms of staff resources etc.
LOCAL TRANSPORT
PLANNING
Were the administrative process and timetable
for delivering Local Transport Plans appropriate? How helpful
was the guidance from the Department for Transport? How did the
second round LTPs learn from the first, and how could the process
be further improved?
The LTP and APR processes represent a significant
improvement on previous transport planning processes. They have
brought an opportunity to consider transport in its wider context,
allow all modes to be considered and provide a framework for more
sensible debate about how transport can support wider policy objectives.
However, they are highly labour intensive, expensive in terms
of staff time and resources, and impose an additional layer of
bureaucracy and accountability on top of other auditing and inspection
regimes. In an area such as South Yorkshire, recovering from economic
decline and looking to transform its economy still further, the
LTP is only of marginal significance in delivering what the partners
agree is necessary. On this basis the LTP and its reporting requirements
are seen as requiring a disproportionate level of attention to
be paid to a regime that delivers only a fraction of the investment
needed.
In future, less onerous reporting requirements,
a focus on outcomes as opposed to outputs and how resources have
been spent would relieve the administrative burden and free up
more time and resources to delivering projects. The opportunity
to develop a unified reporting framework as part of Local Area
Agreements should be taken, although this may require DfT to adopt
a less hands-on approach to performance monitoring of local authorities
programmes.
DfT guidance is sometimes received too late
for LTP partners to assess and accommodate it, particularly in
an area such as South Yorkshire where the statutory requirement
to deliver a joint plan involves complex Partnership approval
processes that can be time critical. The particular issues of
delivery in a metropolitan area where councils and their PTEs
must prepare and deliver joint plans, do not always appear to
be taken into account within the guidance. There have been incidences
of some guidance being unclear or even contradictory, such as
in relation to accessibility planning indicators and targets for
LTP2. Guidance in relation to setting Congestion targets has been
tardy and reliant on untested data and collection methods. Indeed,
we are still waiting for the guidance on reviewing and setting
speed limits and certain aspects of the use of safety cameras.
How well have the Local Transport Plans delivered
better access to jobs and services, improved public transport,
and reduced problems of congestion, pollution and safety? To what
extent has the Government's Transport Strategy fed into the second
round Local Transport Plans?
Although the South Yorkshire partners have embraced
the transport shared priorities that form the basis of the Government's
Transport Strategy, and have written their second LTP with a specific
focus on how we can address the challenges we face in each, the
bigger issue in South Yorkshire at present is how economic transformation
can be secured and how transport investment can harness the potential
of existing or future opportunities. In this respect therefore
the limited funding potential of the LTP and its relatively short
term time horizon means that it is viewed here more as a local
interpretation of national policy priorities than a means by which
the partners can express their particular and ambitious vision
for transport.
Apart from accessibility planning, the focus
on shared priorities means that the LTP must address how we deal
with the negative impacts of transport, rather than adopting a
more positive planning process that incentivises economic and
social regeneration and growth.
How effective is the Local Transport Plan performance
management regime? Do the Annual Progress Reports give the necessary
transparency and rigour in assessing performance?
The annual reporting process has had the effect
of compounding initial errors made when we set unrealistically
high targets. It fails to acknowledge upward trends. The Partners
in South Yorkshire could have reset their LTP targets but decided
to stick with the original set in order to build a clearer picture
of progress over the Plan period. The effect of this decision
however was the subsequent annual criticism of non-achievement,
even where targets were only just missed.
In setting LTP2 targets at a more realistic
level we have learned the lessons of LTP1 of not being overly
ambitious and setting ourselves up to fail. We wait with interest
to learn if our LTP2 will now be assessed as not being ambitious
enough.
It is our understanding that at present the
APR system will not be applied to LTP2, so we await further guidance
from the DfT on how they will expect us to report progress. In
the meantime, SY has its own performance management regime in
place to ensure that progress is maintained.
How successful is the balance between infrastructure
projects and travel planning initiatives?
The considerable potential of "softer"
measures to deliver significant changes in people's travel behaviours
is not reflected in the capital focus of LTP funding. Although
some infrastructure improvements can support travel planning initiatives
in some locations, the majority of travel planning activity is
revenue based. With pressures on revenue budgets as intense as
they are, the full potential of travel planning is difficult to
realise.
CONCLUSION
Recognition by Government that local authorities
need more powers to raise resources locally would go some way
to relieving some of the inefficiencies and frustrations inherent
in the current LTP system. A move towards a single, unified reporting
framework as part of Local Area Agreements may bring some efficiencies
also in local performance management and help align DfT priorities
with other policy areas. At present, the intensive annual reporting
process is geared too heavily towards DfT's specific reporting
requirements. A move in LTP2 to outcomes-based reporting on a
bi-annual basis may bring some benefits, but the DfT guidance
needs to be timely and avoid contradictions arising from different
parts of the organisation giving different advice.
More importantly for South Yorkshire, however,
would be a move by DfT and other Government departments to recognise
the emerging and strengthening city regional governance arrangements
which will require greater freedoms and flexibility to plan and
make decisions locally.
25 April 2006
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