Examination of Witnesses (Questions 240-251)
MS ALISON
QUANT, DR
IAN HARRISON,
MR TONY
MATTHEWS, MR
ROY NEWTON,
MR BOB
WILKINS AND
MR GRAEME
FITTON
24 MAY 2006
Q240 Chairman: Let me ask you something
different. What is happening in the South Hams? How many people
are going from Totnes to Kingsbridge and how many people from
Exeter to Cullompton? What is the effect on some of your rural
areas?
Dr Harrison: What is happening
in the South Hams is that Devon County Council is providing revenue
support to keep the bus services. Exeter to Cullompton is the
subject of investment between us and the bus operator and Department
for Transport through a kick start programme, so there it is a
rural route where we have had a 30% increase in patronage over
the last year with the introduction of new low floor double-decker
buses. If you create the right circumstances you can get people
on to public transport.
Q241 Graham Stringer: Yesterday I
read the minutes of the Committee of Public Accounts when Mr Rowland,
of the Department for Transport, answered similar questions. Basically
he said that where bus patronage is dropping it is the fault of
the local authorities for not providing the resources and it is
not to do with deregulation compared to Greater Manchester. What
would you say to Mr Rowland?
Dr Harrison: Mr Rowland did refer
to Exeter in his evidence. I would say we come back to the revenue/capital
issue. This is one area where local authorities may have the capital
spending power to put in bus priority measures through the Local
Transport Plan but have not necessarily got the revenue power
to sustain bus services that are needed that are socially necessary.
Mr Wilkins: I would agree with
that. In the last round of budgets in the County Council within
the total package we had available to us my department overall
was having to take reductions of about 6 or 7% for the coming
financial year relative to last year and passenger transport subsidies
had to take a share of that, so we are reducing the amount of
money at a time when we know that the inflationary impacts are
greater than RPI, they are in the high single figures or the low
double figures. What you can buy with your money is a lot less
than you could a few years ago, which goes back to the very first
point I made today about the amount of money you have available
to do it. It is really difficult to do it with the total amount
of money you have got. You do the best you can, you redirect it,
you use the time limited grants that Government give you over
three years, but they leave you with a cliff edge where you then
have to try to pick up the pieces at the end of that. It is a
major problem.
Dr Harrison: Faced with exactly
the same situation in this budget round in Devon our members have
decided to protect the public transport services but at the expense
of highway maintenance in rural areas. There are trade-offs to
be made and one suffers either way.
Mr Newton: I think it is fair
to say that we can help grow bus patronage by some of the things
we do but we are not the prime driver in increasing bus patronage,
at the end of the day that is down to the bus companies. What
they do with their pricing structures and what they do with their
frequency of services has far more impact on bus patronage than
what we do in terms of highway network or in terms of bus subsidy
with limited amounts of funds.
Q242 Graham Stringer: In the evidence
from Hampshire you say that the advice given by the Department
on your light rail scheme was "poor and inconsistent".
Do you think you could expand on that experience and tell us what
the conclusion was and how much it cost?
Ms Quant: If I could start with
the figures. We spent £10 million, it might have been a little
bit more than that. In fact, we spent getting on for three-quarters
of a million between our transport funding being withdrawn and
the final coup de grace. That was because the Department
made us rework all of the figures. We have yet to have an answer
from the Government as to what is wrong with our scheme. They
said two things: it is unaffordable and the cost had increased,
yet it is a transport scheme that has one of the highest benefit
to cost ratios in the country of any transport scheme because
it is nearly 4:1. We started off requiring a public subsidy of
£170 million and it went up to £270 million when we
had private sector bids in but we significantly reduced that so
that by the time of our final submission, having done some scope
changes and reapportioned the risk, we were only asking the Department
for a £170 million contribution from it as opposed to the
75% of that originally. £20 million of that cost was caused
by the Ministry of Defence requiring us to provide a deeper tunnel
under Portsmouth Harbour because their ships were going to be
bigger. In fact, the cost increase that was due to things that
the local authority had any control over were very small indeed.
We have yet to understand what "affordable" means. We
have been invited to go away and think of something else but we
do not know what is the sum of money that is available for solving
the scale of congestion difficulties that we have got on the Gosport
Peninsula. We are left not knowing what we have done wrong or
what would be the right scheme to submit in order to get funding
approved.
Q243 Mr Goodwill: That leads me seamlessly
into my question. During the previous evidence session the consultants,
who I would have thought would have been in a position to have
an overview as to the proportion of schemes which turn out to
be aborted—I particularly asked them about light rail schemes—did
not give us even a guess as to whether it was 10%, 25% or 50%.
I appreciate that you may be less well qualified given you are
looking at individual authorities but have you any idea how many
of these transport plans turn out to be completely aborted and
the money spent on them completely down the drain? What sort of
ballpark figure are we talking about nationally being wasted in
this way? We have just seen £10 million wasted down in Hampshire
and that is repeated in places like Leeds and Manchester and all
around the country. How much money is being wasted on producing
schemes which turn out not to be delivered?
Mr Newton: It is always difficult
to say when it is absolutely aborted because what tends to happen
is that major schemes tend to go on the bottom shelf and wait
for 20, 30, 40, 50 years and then get dragged out and resubmitted.
Let us take Greater Manchester as an example: we had 35 potential
major schemes when we were looking at developing our second Local
Transport Plan. What we tried to do was reduce those to a manageable
number that fitted in with the regional funding allocation process,
so we reduced it down to about 11, but that still leaves 24 major
schemes for which work has been done and for which more work will
still be done because the view from local authorities is that
the LTP is only one potential source of funding, the Transport
Innovation Fund is another, Private Finance Initiative is another,
developer contributions, et cetera. It is difficult to say whether
any is absolutely wasted or not but there is certainly a lot of
money being spent on scheme preparation for schemes that could
take 15, 20 or even 30 years to deliver.
Mr Wilkins: It is really difficult
to answer your question, but if I can give you an example of a
project that we are currently working on where we are having to
fund entirely the upfront costs, including buying blighted land.
This is a scheme that has got ministerial provisional approval,
a link road at Hastings, a £50 million project. We are going
to be spending up to £6 million or £7 million without
any expectation that when we submit that scheme it will be finally
approved. We have got no offer of any money back from that, so
in other words we are funding all of that. That may go ahead but
it was preceded by a proposal that the Government had to build
a bypass there on which it spent in the order of £15 million
developing designs and it was aborted because the Secretary of
State at the time decided to drop the scheme out of the programme.
This is going back some years. We are now into the new generation,
if you like, and having to start again. Whilst we would accept
that sometimes there are benefits, and one of the consultants
said you can sometimes get benefits out of the aborted work, in
reality you end up a few years later having to almost start the
whole process again, even though it does help you a bit. You start
the whole consultation again. If that scheme were to fall at some
stage because it was decided by Government that it wanted to put
priorities elsewhere, that is the sort of sum we could be talking
about in one county with half a million population.
Q244 Chairman: But you have said
it is essential that preparatory costs are recoverable.
Mr Wilkins: Yes.
Q245 Chairman: That is not terribly
realistic, is it?
Mr Wilkins: I think what we would
say is at the moment there is no guarantee beyond the very limited
amount. I would accept an offer of much closer to 75% of the cost,
for example. At the moment Government is talking about looking
at 100% funding of capital of major schemes but perhaps having
a 10% contribution from local authorities on major schemes going
through the regional programme. I would be happy if there was
an offer much closer to the costs than are there now.
Q246 Chairman: Irrespective of whether
or not the Government approved of the final scheme?
Mr Wilkins: Yes, because at the
moment the scheme I am doing is something the Secretary of State
asked us to do.
Q247 Chairman: That is slightly different,
is it not? If the Secretary of State specifically says, "Will
you do a scheme", that is one thing.
Mr Wilkins: He has already not
only asked us to promote the scheme but provisionally approved
it. He said, "You have taken it through the first stage of
consultation, I want you now to work it up into a final scheme
but I will then make a final decision myself about whether it
goes ahead". In that case I think there is a further obligation
on the Secretary of State to cough up some of the money towards
that scheme, to be honest. We are picking that up at that invitation,
we have taken it through and got to that point but to spend another
£6 million, which we are doing now, and potentially find
it is aborted is rather a big ask of a local authority.
Mr Fitton: If I could just expand
on preparatory costs. It is not until you have got past the statutory
process of public inquiry that you can recover an element of preparatory
cost but a significant amount of investment has been made to get
to that point, a significant amount. That does cause some problems
where we are investing at our risk entirely.
Mr Goodwill: Chairman, I wonder if maybe
we could give notice to the Secretary of State when he makes his
first visit that we might ask him if the Department has figures,
for example, as to how much money is being spent on light rail
schemes that have not come to fruition or more generally on other
integrated transport schemes. It seems that we may have just hit
the tip of the iceberg and large sums of money are being wasted
and lots of people's hopes are being built up about schemes going
ahead when all of those come to naught.
Q248 Chairman: Do you not feel there
is a difference between a scheme that you feel you have been asked
to go ahead with where there is at least some indication that
the Department is not against it and a scheme which has been decided
upon by your members which may be tremendously useful to them
but it does not fit into the general scheme of things?
Mr Wilkins: Yes.
Dr Harrison: We are now in a new
era of regional funding allocations in that if authorities are
working up schemes that have been submitted to the Secretary of
State through the regional planning allocations process as being
recommendations for the programme then there is a reasonable expectation
that those schemes will go ahead. One of the slightly frustrating
things at the moment is that regional submissions were made earlier
in the year and there has been no response from the Secretary
of State yet so authorities are working up the schemes within
those regional funding bids at their own risk. I agree entirely
that in conjunction with that we need a situation where as much
as possible of the preparatory cost is actually refundable. Certainly
when a scheme gets to programme entry stage it seems reasonable
that that should then be a partnership between the local authority
and the Government; programme entry being an indicator that the
scheme is going to go ahead.
Q249 Chairman: Let me bounce something
off you. What would then happen if the priorities were dependent
upon where the schemes came in the regional planning risk?
Dr Harrison: That is exactly what
I am saying. If you have got a scheme that the region believes
should be part of the regional programme then it seems fair to
me that the authority should have some degree of comfort that
their costs will be met. If an authority decides to promote something
that is entirely outwith that programme, perhaps because it has
got a genuine problem it is trying to solve that is not a regional
priority, then the authority is clearly putting itself more at
risk.
Q250 Chairman: Devon seems to be
a Centre of Excellence for local transport delivery, how have
you managed to achieve that?
Dr Harrison: By setting ourselves
targets through Local Transport Plan 1 and achieving most of them.
You had a debate with the previous team about achievement. We
set ourselves what we saw were realistic but achievable targets
and have managed to achieve them and, therefore, we have that
designation.
Q251 Chairman: They are not all based
on Exeter, are they?
Dr Harrison: Certainly not, no.
The Centre of Excellence is for two specific elements: one is
road safety and the other is for rural public transport, so it
is a county-wide issue.
Chairman: I must check with Totnes before
I accept that! Gentlemen, madam, you have been extremely helpful
and informative. I think your evidence will form a great deal
of our useful report, I hope. Thank you very much for coming.
I am sorry that you had to be delayed a little.
| 
