Memorandum submitted by the Association
of Greater Manchester Authorities and Greater Manchester Passenger
Transport Authority
This evidence, submitted by the Association
of Greater Manchester Authorities (AGMA) and Greater Manchester
Passenger Transport Authority (GMPTA), should be read in the context
of the current changing environment for local transport funding.
The indicative regional funding allocations (RFAs) have highlighted
the limited, whilst important, role that Local Transport Plan
(LTP) funds can play in delivering future transport infrastructure
projects. For example, for the entire North West region, the total
RFA for transport investment in 2006-07 will be £115 million.
Therefore, AGMA and GMPTA have welcomed the Government's introduction
of the new Transport Innovation Fund (TIF) as the main funding
resource for major transport interventions, such as our planned
expansion of the Greater Manchester Metrolink system.
Following our receipt last year of TIF "pump-priming"
resources from Government, we are now working with DfT officials
and other key stakeholders to establish an integrated, corridor-based
approach to transport planning in order to secure the deliver
of our Integrated Transport Strategy through a series of corridor
partnerships. The aim of the partnerships is to integrate transport
planning fully with the delivery of a wider set of transport and
regeneration outcomes than has historically been the case. All
the key stakeholders within a corridor will be involved in agreeing
each set of outcomes in return for Government agreement to the
provision of TIF funding. We are also investigating new innovative
funding options for local transport investment and revised governance
systems to support this. It is our intention to complete this
work in advance of a full TIF submission in July 2007.
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?
Funding during the later years of our first
LTP exceded indicative amounts given at the start of the process.
This is welcome, however, further funding is essential to enable
Greater Manchester to address its transport problems properly.
There were no indicative amounts for major schemes,
so settlement amounts cannot be compared with them. Moreover,
the tendency to submit bids based on the most optimistic delivery
timescales means that it is not instructive to compare bids with
settlements.
In total, minor scheme expenditure levels have
been similar to those planned. We have greater concern with regard
to Government treatment of major scheme cost increases, which
has varied from scheme to scheme. For example, increases on the
Manchester and Salford Inner Relief Route were accepted, but the
cost increases on the Metrolink expansion project were not.
Is the formulaic funding approach the most suitable
method for allocating transport investment? What has been the
impact of the performance-related component?
The formulaic approach to funding is a welcome
move away from the previous bidding approach, which could sometimes
work against cross-boundary cooperation with competing neighbouring
LTPs. However, as with all formulaic systems the devil is in the
detail—which LTPs benefit or lose out depends upon the weightings
applied to the different components of the formula. In terms of
the allocations received by Greater Manchester, the allocation
process has been fair, and produced a reasonable result.
However, the Greater Manchester authorities
remain concerned about the extent to which the DfT evaluation
of major scheme bids reflects the wider regeneration or social
inclusion agendas. There is a potential mismatch here with Government
policy aspirations for regional economic regeneration and the
renaissance of our major city regions. Appraisal criteria need
to include a suitable assessment of, and weighting towards, a
scheme's regeneration impact if we are not to risk jeopardising
the sustainability of recent regional economic growth. DfT's consideration
of this under the Transport Innovation Fund's productivity strand
is welcome. We would urge a similar approach be maintained across
all major transport funding mechanisms.
The performance related component resulted in
GM authorities receiving a 5% reduction in funding in the December
2005 settlement, despite achieving a score of 78 out of 100. The
performance related approach as adopted only allows for a small
number of authorities to be excellent and hence rewarded. This
is because all of the funding was included in the indicative allocations
for local authorities; therefore in order to reward some authorities,
others will have to lose money to make it available. Thus the
thresholds have to move to enable a few authorities to be rewarded.
This is counter-productive as it can lead to authorities improving
performance yet being penalised, which was the case in Greater
Manchester. The system should be trying to encourage all local
authorities to become excellent.
Do local authorities have adequate powers to raise
resources to fund local transport infrastructure? What other powers
could be useful?
Local authorities outside London are hindered
by their inability to raise resources for local public transport
schemes through innovative means. This is in contrast to the situation
in London where the Mayor, with a much greater range of powers,
has been able to provide a far more integrated system, which in
turn has seen continued increases in public transport patronage.
We would encourage Government to develop new
mechanisms that will enable local authorities to raise resources
to support investment in local transport schemes, which they have
identified as being essential for the sustainable economic growth
of their areas. The Greater Manchester authorities have engaged
enthusiastically with the current Lyons Inquiry into Local Government
to assist in the consideration of options for identifying new
funding opportunities for local infrastructure developments. In
addition, we have put forward a case for the adoption of prudential
borrowing arrangements to support our Metrolink expansion plans,
which is being developed further through our ongoing discussions
with DfT.
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?
Census 2001 shows that in Greater Manchester,
some 33% of households do not have direct access to car. In a
number of circumstances, the most effective transport solution
to the social exclusion that can result from this requires ongoing
revenue support for a local bus service rather than a one-off
capital expenditure. Local authorities' and PTAs' limited access
to revenue resources, coupled with the inability to utilise LTP
resources for revenue activities, means that it is not always
possible to deliver integrated transport for those who need it
most.
The deregulated bus networks outside London
have resulted in bus companies focussing on the profitable, often
main arterial, daytime routes to the detriment of neighbourhood
routes and evening services that are essential in social inclusion
terms. The costs of providing subsidised services in such areas
has increased significantly over the years as the commercial network
has reduced in scale. Limited PTA budgets mean that the level
of coverage, particularly in the evenings and weekends, has reduced
over the years. This has not only contributed to social exclusion,
but has also been accompanied by reduced bus patronage and increased
car travel, and hence increased traffic congestion. PTA budgets
are limited to the resources that constituent District Councils
can afford to provide when considering against other services,
which are often afforded a higher priority. This can be exacerbated
by the precept system, which has been retained for police and
fire/rescue services, but has not been extended to PTAs since
1990.
Therefore, the balance between capital and revenue
remains a significant problem in a number of areas. With the current
system, it is much easier to build new infrastructure than maintain
it; it is also difficult to fund complementary measures to infrastructure
(for example provision of travel planning advice, bus services,
and marketing). Implementation of local transport schemes has
meant a growing burden of revenue demands which are not properly
linked in the financial system—for example, maintenance
and renewal of white lining, signing and surface colouring on
Quality Bus Corridor and road safety schemes.
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?
During the early stages of LTP1, when more money
was available, the bidding and preparation stage yielded good
returns for LTP authorities; however, since resources for major
schemes have become tighter, LTP authorities are having to gamble
on designing schemes with limited prospect of them being funded.
Whilst the Regional Funding Allocation exercise has been helpful
in providing an identified level of likely resources available
to a region, we remain concerned that the NWRA is not able to
effectively reflect the economic importance of the Greater Manchester
and Merseyside city regions in coming up with a prioritised list
of interventions. We also note that this process carries no guarantee
of funding, since Government still issues the final approvals.
Moreover, we would suggest that there is a spatial mis-match between
local transport planning at the sub-regional level and spending
prioritisation at the regional level. We believe that the devolution
of decision-making arrangements to city regions, in parallel with
the funding arrangements discussed earlier in this evidence, would
make for a more effective, outcomes-driven process.
It would be difficult to stop local authorities
continuing to prepare and design major transport schemes, as the
LTP is only one of a number of potential funding sources and it
is prudent to have a number of schemes ready in preparation should
additional funding become available. However, we would encourage
DfT to ensure greater certainty for major schemes with "programme
entry" status so that the further expense incurred in full
scheme development is not wasted.
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 of Local Transport Plans learn from the first, and
how could the process be further improved?
The process could be made much easier for local
authorities by central government providing timely advice. The
provision of advice three months or less prior to submission has
been problematic, as by this stage documents are already into
approval processes and hence have limited scope for change. Guidance
could also usefully clarify how documents can be made shorter,
yet still provide all the information required by DfT. Despite
this, guidance has evolved to give a much clearer indication of
how—in theory at least—the Plan will actually be scored.
One weakness in the LTP process is that there
are a number of indicators which DfT set as mandatory and against
which the LTP will be assessed and resources allocated, yet over
which the LTP has very limited influence. For example bus patronage
is affected by the actions of the private bus companies (such
as fare setting and punctuality) far more than via the LTP. Indeed,
over the lifetime of LTP1, it has been noticeable that Government
has moved away from qualitative assessments to a much greater
concentration of targets, in the apparent belief that LTPs can
deliver them. As noted above, this is not always the case.
Hence, target setting can pose a significant
challenge in achieving an appropriate balance between ambition
and realism. This is increasingly difficult given that authorities'
funding allocations are linked both to the extent to which they
have shown ambition for the future and to performance against
previous years' targets. We do not believe that, as yet, DfT guidance
provides enough assistance and clarity in this regard.
The system still remains a very prescriptive
approach and differs substantially from other disciplines where
central government sets broad policy and direction and then leaves
local government to determine the best way of delivering national
policy. For example in spatial planning, government issues a series
of planning statements of national policy and then leaves it to
the regional and local levels to develop the detail to reflect
local circumstances and need, whilst still retaining the power
to call in plans that are contrary to national policy. DfT tends
to adopt a micro-management approach to LTPs and major schemes
requiring ever increasing amounts of detail to be provided. The
latest guidance on major schemes, for example, states that:
— In order to obtain Full Approval
authorities will need to provide a further update on the five
aspects of their original bid, including a revised scheme appraisal.
Authorities are asked to provide full details of the selected
bidder's offer together with any conditions that apply (including
the firm and final offer if post tender negotiations have taken
place). In certain cases the Department may additionally request
a copy of the selected supplier's bid document, details of other
bids received, or the authority's tender evaluation documentation.
As part of the delivery aspect, an updated risk register and project
plan with milestones should be provided. The Department will require
details of the evaluation and monitoring proposed by the authority
at this stage if not before. Full Approval will be given when
the Department is satisfied:
— that the costs of the scheme
are reasonably secured and that the authority has taken adequate
steps to protect itself from the risk of increased costs;
— that the balance of risks and
liabilities is satisfactory, is clearly understood and offers
adequate protection for the public sector against potential increases
in costs; and
— that adequate contract management
arrangements are in place to ensure delivery to timetable and
budget, including the necessary resource for contract management
within the authority.
— The Department states that it will
make every effort to complete its consideration of bids for full
approval before the expiry of tender prices but cannot guarantee
it.
An approach similar to that adopted by ODPM
on planning would help to improve the process.
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?
Whilst several of the above factors have not
been explicitly part of the LTP1 monitoring regime, a number of
proxy measures can be referred to, which demonstrate that the
increased funding under the LTP process has contributed to improvement.
These factors are a focus for LTP2 and our economic and transport
models indicate a positive effect of LTP2. By way of an example,
with regard to congestion, our LTP1 strategy to enhance access
to major town and city centres has resulted in less congestion
for journeys to Greater Manchester's Regional Centre than there
would have been without the investment we have put into public
transport. In contrast, there has been growth on the local motorway
system, over which we have no effective control and where there
have been limited policy interventions.
How effective is the Local Transport Plan performance
management regime? Do the Annual Progress Reports give the necessary
transparency and rigour in assessing performance?
To date, the LTP performance management regime
has not been as strong as it could be as there was no direct linkage
between performance and the financial settlement. In addition,
the "core" indicators have not always reflected the
breadth of Greater Manchester's top priorities. However, the December
2005 settlement did make that explicit linkage which has focussed
attention on delivery of the targets and the revised suite of
targets does come closer to reflecting local priorities—although
a greater focus on regeneration linkages is needed to complete
this challenge.
The lack of clarity over the scale of ambition
needed for targets has been referred to earlier in this evidence.
A good example is that of the Greater Manchester bus patronage
target, which was revised upward on DfT advice after encouraging
early progress, but then performance fell back, leading to a missed
target. It would have been preferable for the target to have been
left unchanged to reflect the longer-term nature of such performance
trends. Future Delivery Reports need to ensure that authorities
strengthen their internal links between PI reporting and subsequent
actions by providing detailed guidance on scoring methodologies
in advance of the assessment process.
Greater Manchester feels that there is insufficient
acknowledgement of the complexities that Metropolitan areas face
in producing LTPs and APRs, which could be said to put them at
a disadvantage compared with a single unitary authority. It simply
is not possible to provide the detail of analysis for each part
of Greater Manchester within an LTP in the way that it is for
a unitary authority with between 100,000 and 200,000 inhabitants.
The transparency of the impacts of transport investment is therefore
compromised. There is also a failure by Government to acknowledge
the time lag between implementation and outcomes.
As with all performance indicators, there is
an ultimate distortion of investment from the original intentions,
simply to achieve a specified target. For example, improvement
of BV165 (puffin crossings replacing pelicans) will divert funds
away from providing new crossings in locations of need.
How successful is the balance between infrastructure
projects and travel planning initiatives?
In-keeping with Government policy, the Greater
Manchester authorities are committed to employing softer, travel
change measures alongside infrastructure projects to encourage
modal shift. Indeed, as has been referred to above, many infrastructure
projects require associated promotional activity to maximise their
impacts. During LTP1, non-LTP funding money was made specifically
available (via a bidding process) for Workplace Travel Plans and
School Travel Plan Bursary posts (and more recently School Travel
Advisers). However no other LTP funds have been made specifically
available for any of the other "Smarter Choices" measures.
Over the duration of LTP1, confusion has remained
over the ability of authorities to utilise LTP resources for mainstream
"Smarter Choices" measures. This matter has not been
clarified by LTP2 guidance. We believe that it is essential for
authorities to be able to call upon LTP resources to support travel-planning
initiatives, so as to support infrastructure investment and to
properly reflect the prominence of this activity in Government
policy. Therefore, we would recommend DfT to clarify the guidance
on the extent to which LTP resources can be utilised for "Smarter
Choices" initiatives over the lifetime of LTP2.
April 2006
| 
