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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1120-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE TRANSPORT COMMITTEE
LOCAL TRANSPORT PLANNING AND FUNDING
Wednesday 17 May 2006 MR TIM LARNER, MR NICK VAUGHAN, MR NEIL SCALES, MR TREVOR ERRINGTON and MR TOM MAGRATH
MR PAT HAYES, MR MARK BENNETT, COUNCILLOR DAVID SPARKS, COUNCILLOR TONY PAGE and MR BOB DONALDSON Evidence heard in Public Questions 1 - 110
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Transport Committee on Wednesday 17 May 2006 Members present Mrs Gwyneth Dunwoody, in the Chair Mr David Clelland Mr Jeffrey M Donaldson Clive Efford Mrs Louise Ellman Mr John Leech Mr Eric Martlew Mr Lee Scott Graham Stringer ________________ Memoranda submitted by the Passenger Transport Executives' Group, Greater Manchester Passenger Transport Executive, Merseytravel, West Midlands Chief Engineers' and Planning Officers' Group
Examination of Witnesses
Witnesses: Mr Tim Larner, Director, Passenger Transport Executives' Group, Mr Nick Vaughan, Project Development Manager, Greater Manchester Passenger Transport Executive, Mr Neil Scales, Director General and Chief Executive, Merseytravel, Mr Trevor Errington, Leader, West Midlands Chief Engineers' and Planning Officers' Group (CEPOG) and Mr Tom Magrath, Projects Director, Centro, and Member of CEPOG, gave evidence.
Chairman: Do any Members have an interest to declare? Mr Martlew: I am a member of the Transport and General and the Municipal Workers' Union. Mr Clelland: I am a member of Amicus. Graham Stringer: I am a member of Amicus and I chair the House of Commons PTEG, the Passenger Transport Executive Group. Mr Clelland: I am also a member of that group. Q1 Chairman: Gwyneth Dunwoody, ASLEF. I have apologies from Mr Wilshire and I think Mr Goodwill is hoping to join us as soon as he can. Good afternoon to you gentlemen. We are very delighted to see you at the first of our sessions on local transport planning and funding which we regard as being one of the most important subjects. I would be very grateful if you could identify yourselves for the record. Mr Magrath: I am Tom Magrath. Although I am a director of West Midlands PTE, I am here on behalf of the Chief Engineers' and Planning Officers' Group of the West Midlands of which I am the immediate past chair. Mr Errington: Good afternoon. I am Trevor Errington. I lead a team that works on behalf of the West Midlands Chief Engineers' and Planning Officers' Group in preparing the joint LTP for the whole of the metropolitan area. Mr Scales: I am Neil Scales, the chief executive and director general of Merseytravel. Mr Vaughan: I am Nick Vaughan. I am head of project development at the Greater Manchester Passenger Transport Executive. Mr Larner: I am Tim Larner. I am director of PTEG's support unit which represents the interests of the six units in the Transport Executive. Q2 Chairman: Am I to take it that none of your groups has anything you want to say before we begin? Mr Scales: Yes. Q3 Chairman: Was the first round of Local Transport Plans successful in meeting its objectives? Mr Errington, you are smiling. Mr Errington: In the West Midlands we believe the first round set a really good framework for engaging investment and programmes with the wider objectives of local authorities. In terms of that high level objective of moving from the old fashioned transport policy programmes which were very narrowly transport focused to making it part of the wider activity of the metropolitan authorities, everything embraced a wider agenda in terms of regeneration, social inclusion and so on. We think it has set a very good framework for it. Q4 Chairman: Did it deliver what the public expected in terms of transport improvements? Mr Errington: I do not think it has because clearly public expectations are always greater than we are able to deliver. One of the difficult issues in talking to the public is trying to explain the difference between an LTP and its inherent capital focus and often what is most important in the day to day operations, the need for revenue funded support for operational issues. That has always been a very difficult distinction to draw when you are talking to the public and trying to explain the niceties of public sector finance. Q5 Chairman: Five years into the framework there are only 60 per cent of authorities who are on track to meet half of the core targets and only five per cent of councils are on track to meet 80 per cent of the targets. Does anybody want to have a crack at why that is? Mr Larner: This was a real shift in the way that local authorities had to tackle transport planning. A lot of the targets that were set back in 2000 were quite suspect in many ways. They were based on aspiration and indeed the DFT encouraged local authorities to be aspirational in the way they set targets. Often, there was an inadequate baseline for those targets and not sufficient data collection for them to realise where they were starting from. There was implicit pressure almost to follow government targets and say, "If the government has set those targets, we have to move in line with those targets." Often the relationship between the amount of money you spent and the extent to which you achieved targets was not terribly well established in terms of the methodologies that were used. In other things, the different impacts of achieving targets are very often in the hands of other people rather than in the hands of local authorities and PTEs. The obvious one that comes to mind is bus patronage where there was a desire to see a ten per cent increase but most of the leaders are not in the hands of the local authority as to whether that target gets delivered. Q6 Chairman: Does anybody want to add to that? Mr Scales: One of the problems that we have on Merseyside is that the bus does not own the track on which it operates and part of our original plan was to introduce 90 kilometres of bus lanes. We probably have only 50 per cent of that. On average our bus lane delivery has been three years late and the reason for that is that the Passenger Transport Authority and Executives own the highways, not the Highways Authority. Q7 Chairman: Was that money or planning? What was the real problem with that? Mr Scales: It was just getting it through the various processes at a district level. Q8 Chairman: No one was seeking to deliberately hang you up? It was the technicalities of the office? Mr Scales: Yes. You have to go through a lot of consultation at a local level. One of our corridors goes from the centre of Southport and it has taken five years to put the bus lanes in that particular corridor. Q9 Chairman: How many years? Mr Scales: Five years. Q10 Chairman: You were putting gold along the edges? Mr Scales: And diamonds in the centre of the road as well, but it still did not work. It was still late. It would help us a lot if the PTEs and the PTAs had control of the strategic bus highway network in the same way as our colleagues here in Transport for London have. Q11 Graham Stringer: If you read the Department for Transport's submission, it is almost Panglossian, the best of all possible worlds; everything is perfect; whereas when I read the submissions from yourselves and other practitioners there were all sorts of problems. Can you elucidate whether or not there are any contradictions between the national priorities and targets the Department for Transport has set and your own local targets? Mr Scales: Translating them down to a local level on the congestion targets, it is particularly difficult for me because in Merseyside, for example, and in Liverpool itself we have a city that is built for a million people with a population of 440,000. Therefore the congestion problems we face are not the same as your colleagues in Greater Manchester or my colleagues in the West Midlands or elsewhere. The congestion targets will be difficult for us to achieve going forward, as an example. Another problem we have that Mr Larner alluded to, is that some of the targets are on bus quality and we have no control whatsoever over the 37 bus companies that operate in Merseyside. We have had a bit of argument with our colleagues in the Department for Transport over the number of bus passenger journeys per year we think we are achieving in Merseyside and what they think we are achieving. That flows through into the formula and therefore flows through into the funding so there has been some quite hard bargaining as to where they think the target is and where they think the target is. Mr Magrath: We think the target setting is a very proscriptive process. However, it is also challenging. What we have found useful is how it focuses a metropolitan area, which is some metropolitan and local authorities and a PTE, into a common purpose. The LTP process has helped us do that. The fact that some of these targets are really challenging, the fact that in many areas we do not have control, helps focus the mind. One of the things we have been doing in the West Midlands is looking particularly at the delivery of schemes. We have member working groups to help us do that more effectively so it has focused minds very much in that respect. Mr Larner: The national priorities which the DFT have set are very much transport DFT priorities. We miss out on the wider priorities of what cities are trying to do. Therefore, for much of the work that we do, we are trying to assist social and economic regeneration and create jobs in the local area. These are not reflected in DFT targets. They are reflected in other departments. The Department for Communities and Local Government has a target of reducing disparity within GDP per head across the regions, but that is not something which explicitly is reflected in the shared priorities. Similarly, Defra will have a target about global warming and reducing CO2 emissions and clearly as PTEs it is very important that we have a role to play in sustainable transport; but again it is not explicitly reflected in targets. It is that holistic view which takes place at a local level that does not necessarily get translated into the DFT and the Local Transport Authority relationship. Mr Vaughan: These shared priorities are quite transport focused and our priorities can be much wider, as Mr Larner has made reference to. Q12 Graham Stringer: Are there any specific examples where, if you had not had the national targets and objectives set by the Department for Transport, different decisions would have been made in the West Midlands, Merseyside or Greater Manchester whereby you would have abandoned a particular scheme or a target that you would have like because there had been one centrally imposed? Mr Errington: Within the West Midlands we have not abandoned anything. What concerns us is that, whilst our objectives were never to a large extent national ones, we had some extras, of which the most important one was economic regeneration, which was the bedrock on which our whole LTP and other corporate policy documents were based. It was not that the national priorities contradicted anything; it was that they were too narrowly focused and we did not give local authorities the discretion to focus and say, "Which of the four were more important to us and was there something which was more important locally than that nationally shared priority?" It did cause some concern but no contradictions. Mr Vaughan: It is fair to say that there would be a slightly different emphasis in some of the areas of activity. We have been successful in securing quality bus corridor major scheme managers. I think that is a reflection of a submission that targeted onto the department's objectives. If we had picked up on some of our wider economic regeneration ones, we would have focused more on quality transport corridors and we would have probably focused more on bus, cycling and pedestrian measures and the economic ---- Q13 Chairman: You are not saying that you, in a sense, bypassed some of those, are you? Because they were not part of the narrowly drawn terms of reference you tended to drop them from your schemes? Is that what you are telling us? Mr Vaughan: We have not placed as much emphasis on them as we might have done had the targets from the national level been wider. Q14 Graham Stringer: I think what you are saying is that it is distorting change in your local priorities. Can any of the witnesses tell us what the cost is to them of the interaction with the centre because reading the submissions it seems very expensive. There are schemes delayed. There is a lot of officer to official interaction. There is the cost of capital. Have you any estimates on how much this system costs you? Mr Scales: On Mersey tramline one, if you take the fact that to get a major scheme up and running at over five million, you have to have heavy interaction with the Department for Transport. You also have to get the Transport and Works Act Order powers. Although it is under review, the maximum at the moment you can recover from central government is 850,000. We probably spent ten times more than that just getting the powers and getting everything in place before we started moving the statutory undertakers, the gas, water and electrics out of the way of the path of the tram. There is a tremendous transaction cost involved in getting these things up and running and interaction with the department, as well as all the stakeholders that you have to keep on board back in the county to try and make sure that it is all pointing in the right direction. If it would help the Committee, I can give you a note specifically on the tram because that is something dear to my heart and we are already going through that exercise for another reason. I can give Mr Stringer that as a case study. Q15 Chairman: The Committee, I think, Mr Scales. Mr Stringer can have a copy. Mr Magrath, do you want to add to that? Mr Magrath: There are a number of risks in developing major schemes which in the first stages of development quite clearly fall with local authorities. What is quite important from our point of view is clarity about where that risk is transferred. Because of decisions on major schemes, certainly from our experience, being rather slower than we would have expected, that means that we are bearing these costs for longer. With major schemes, Metro schemes in particular, it is really important that there is a milestone approach to it, which the DFT and government are developing but I think it needs further development. In terms of additional costs, we can send a further note to you. By way of example, Trevor Errington, as part of the core support team for CEPOG, is paid for by a joint budget of about £600,000 which is to bring that coordination and back-up together. Mr Vaughan: As a further example, the Leeds/Salford/Manchester busway scheme secured provisional approval in December 2000 but we still have no conservative funding. We still have not moved forward in terms of getting approvals from the department. It has so far cost the PTE £4.3 million to take it through various stages of design and through the powers. That is for a scheme that has a capital value of about 45 million, so we are talking about ten per cent that has already been expended with still no certainty that we can move forward. Chairman: We would be very grateful for a short note about that from every department. Q16 Graham Stringer: The other new part of the funding scheme is the involvement of the regions in allocating funds. I would be interested in how that works. Is it successful? Is it effective or does it put uncertainty into the scheme? Mr Errington: We met a very challenging timetable in the West Midlands to deliver our priorities for regional funding. We found it an extremely demanding process in a very short timescale but a very worthwhile one because it really did focus some minds as to what the regions' key priorities were and how the metropolitan fitted into the region. Through some robust political debate, we agreed a consensus and a solution. We also identified how the mainstream LTP funding that will come through that process, which for the West Midlands is about 90 million a year, will go absolutely nowhere to meeting the needs of the area. It was very helpful in clarifying what our priorities were, in clarifying for our members what the scale of resources we were talking about was. Unfortunately, of course we are still waiting for a response to that submission in May. Our hopes are that that will be a very helpful process to us going forward. Q17 Graham Stringer: These are submissions for which financial year? Mr Errington: You had to do it for the next 15 years with certain timescales. We are looking forward five or ten years. We made the submission before Christmas. Originally, we were told we would be given a response by March. We are still waiting. Our hope is this could be a very valuable tool for focusing minds on what is important in the region, what is important in the metropolitan area and what else we need to do to meet our transport aspirations. Q18 Chairman: Does anybody disagree with that? Mr Larner: I think it has been helpful in refining the prioritisation process but we have to recognise that there is no decision making going on at a regional level. It merely puts projects in an order whereby they have to go through the Department for Transport's very strict appraisal process, cost benefit analysis and all the rest. It will be interesting to see whether the way in which schemes get full approval does accord with those regional priorities because our suspicion is that, whilst it will guide it, it certainly will not determine the speed with which these things emerge from the sausage machine and get some funding to be approved. Q19 Mr Scott: To what extent are Local Transport Plans limited in their chances of success by the lack of control over local heavy rail services? How could this be approached? Have you discussed this with the department and, if so, what was the response? Mr Scales: We are fortunate that we have control of Mersey rail electrics directly and therefore it is controlled by the Passenger Transport Authority and the executive, so we have managed to do that. It injects a great deal of certainty into what we are trying to do locally. Where we have been less successful is on the city line which goes out towards Manchester and beyond because you have relatively short term franchises. We have a 25 year concession and franchises tend to be seven or eight years. Our experience is that that is too short. For example, if you take the Dutch who are operating our franchise at the moment, they move at light speed for normal transport people and even they have taken three years to put a wheel lane into our system. If that was on a seven or eight year franchise, they just would not do it because there is no chance to recoup the cost. Things where you have a much longer lead-in and a much longer arrangement are that much better. Mr Magrath: It is interesting that the regional prioritisation process did include rail schemes, along with a more inclusive approach to transport generally, so the Highways Agency was involved in that as well. In terms of the Local Transport Plan, it is something which we think is absolutely essential. I am not aware of the outcome of any discussions in the West Midlands but we will drop a note to you about that. Chairman: Does anybody have a different experience? No? It is about the same. Q20 Mr Scott: Mr Scales, you suggest that the transport policy and land use, health and education policies are not joined up. Are these policies compatible and what can the Local Transport Plan process do to overcome these difficulties? Mr Scales: If we had a bit more joined up thinking in terms of the social inclusion side, we would be a lot better off. If you take Merseyside as an example, 38 per cent of households do not have access to a car. Therefore, there are people on Merseyside who have to do three or four trips a week to the shop just for fresh food shopping. We have to make sure that we get the access to those facilities. It is not just food; it is health care; it is leisure, opportunities for work. If you take the worst case scenario in terms of access to a car, in Tyne and Wear 42 per cent of households do not have access to a car. In Greater Manchester, as our best example, 32 per cent of households do not have access to a car. There should be something joining all that up. Another example is health care where an enormous amount of resource goes into transport services that we do not really understand or have any locus in. There must be an opportunity there to make the access to hospitals and transport joined up with the regional health authority. Q21 Chairman: When the regional authorities prioritise their transport schemes, do they not look at those? Mr Scales: Under the new Local Transport Plan going forward, we have to have an access plan and we have used accession software to do that. It shows up areas that are public transport deserts that we did not realise before. For example, in Merseyside, Deeside does not have any access to public transport at all unless we fix it and certain of our hospitals do not have access to public transport unless we fix it. There was a blind spot and we did not really know. We keep on subsidising public transport in all the metropolitan areas. In my area it is one in five, 20 per cent; in other areas, it is an average of 15 per cent. Q22 Chairman: I am very glad to hear that you have found this gap and are filling it but what I am asking you is something different. When the regional authorities prioritised, did they take account of that wider set of important factors? Mr Scales: Do you mean the Local Transport Plan? Q23 Chairman: Yes. Mr Scales: The Local Transport Plan does our access to health care but not directly. We did not have access to the patient transfer data and so on. Q24 Chairman: Mr Errington, did you do that? Mr Errington: Yes. The prioritisation process was for major capital schemes of more than five million. Often the solution to accessibility in the social inclusion agenda is revenue based schemes. Q25 Chairman: Did it also contain a series of footnotes saying, "We would have done this but unfortunately ..."? Mr Errington: No, because we were not asked to and within the timescale we had meeting what we were asked to do was challenging enough. Q26 Mr Clelland: Do you think the structures that are in place to develop regional transport planning are adequate? Mr Scales: We are trying to embed the Local Transport Plans into the regional transport plan to make sure that it is all generally pointing in the same direction. The question Mr Stringer asked before about the regional priorities has been helpful in that. It is always the boundaries that suffer. Making sure with ourselves, and our colleagues in Manchester, for example, that the Local Transport Plans match is always difficult because there is so much to do in a very limited time. It is very difficult to get the boundaries right. We are a bit more successful in Holton because we viewed it as part of Great Merseyside but on Manchester it is the boundary issues where it is more difficult to make sure it is pointing in the right direction. The over-arching priorities set by the Department for Transport we all subscribe to. The over-arching ones point in the same direction, but it is usually the gaps. A good example is the recent move towards concessionary fares because the bus across boundaries does not work particularly well because the reimbursement mechanisms have not been thought through yet. Q27 Mr Clelland: Are you talking about boundaries between local authorities? Mr Scales: Yes. Mr Magrath: The West Midlands authorities are taking a very proactive view about regional governance and regional transport issues figure very strongly in that. There is a city region concept at the moment which is being actively developed in the West Midlands, which will have as part of it looking out into the wider region for how to manage transport issues because of course we recognise that the metropolitan areas are not an island in themselves. A lot of the employment is provided by people who live outside the metropolitan area, so it is trying to get that joined up thinking for the journey to work area. We are taking steps to see how that can best be done. Q28 Mr Clelland: Do you think there should be perhaps a regional transport authority? Mr Magrath: I think we are doing it in a different way in the West Midlands. We are looking at a city region and the possibility of a transport authority representing that might be one of the outcomes of that, but this is all thought and work in progress at the moment. Mr Larner: One of the problems with the regional process is that it is a fairly weak coalition of interests over a wide area in many cases. It is often easier to spread the jam thinly across the whole of that geographical area and give each of the major authorities in that something so that they can say, "We got something out of it" rather than looking at the needs of the whole region. That is one of the reasons why we are quite keen to see the city region model where it recognises that there are much stronger needs for heavy investment in transport systems in the city region areas rather than across the whole region. Mr Vaughan: There is a tension between decisions that are appropriate to take at the regional level and decisions that are more appropriate to take at the subregional level. Those can affect the same scale of schemes in some cases. For example, it may be perfectly appropriate to place an emphasis in regional transport planning priorities on securing high quality public transport interchanges within, say, the Greater Manchester conurbation. It is much more of a subregional issue about which is the most appropriate of a long list of those to bring forward. Even though they are both major schemes, there is sometimes a debate that is best held at a subregional level about priorities rather than at the regional level. Mr Clelland: Just to pick a region at random, the north east, we know that north east spending on road and rail infrastructure has increased by just 25 per cent over the past six years which is almost four times less than the national average and nine times less than London. Do you get the impression that the Department for Transport is fully signed up to the government's wider objectives of reducing regional disparities? Q29 Chairman: Mr Larner, do you think that is possible? Mr Larner: Yes. Certainly in our evidence we have given the spending per head that takes place in London and in each of the English regions. London is up here and all of the regions are down here. There is no gradation that recognises the fact that, say, the Tyne and Wear area is somewhere between London and the rest of England or Manchester, Liverpool, Merseyside or anywhere else. We would all like to be where London has got to obviously but London has special needs. There is this massive gap in terms of what London gets and what the other cities get. Q30 Clive Efford: Mr Larner, do you support local authorities and Passenger Transport Executives having the powers to raise money locally to invest in transport schemes? Exactly what powers are you after and how would they improve performance? Mr Larner: One of the key things that TFL has had which none of the PTEs have is access to the revenue streams that generate passengers. If we were able to internalise that revenue that comes in through the bus system, through the light rail projects and heavy rail, that would give a much greater sense of leverage which would enable local authorities to use their prudential borrowing powers to invest more when they felt that was better local value for money. That is one aspect of it. The other aspect is, in many cases, the business community wants to see more investment and may in some cases be prepared to pay in order to see investment come in which increases the economic efficiency and their ability to move round conurbations more easily. There are a number of revenue streams that could be created locally that could be used by democratically elected PTAs and district councils in order to make their decisions about what is the optimum investment that should take place. Q31 Clive Efford: Are you saying that, in your discussions with local businesses, they are prepared to consider things like local land development taxes and employment taxes in order to invest in local property? Mr Larner: Yes. Q32 Chairman: We should record the fact that we are getting nods all along. Do you agree with that, Mr Scales? Mr Scales: Yes. Q33 Chairman: Mr Magrath, do you agree with that or are the businesses in the West Midlands rather tougher? Mr Magrath: The businesses of the West Midlands are very keen to see progress in tackling congestion and I think they have an open mind about ways of doing it. Q34 Chairman: You are telling us they have not discussed extra taxes with you. It is a tactful way of saying no, I think. Mr Magrath: We have not had specific discussions on that aspect. Q35 Chairman: Nobody has mentioned it to you. Mr Vaughan? Mr Vaughan: In respect of local business rate supplements or whatever, in the business community there would be a willingness but it needs to be clearly hypothecated to that particular set of actions and that is about improving accessibility to those very same businesses. Q36 Clive Efford: Mr Magrath, this is not something that you have been consulted on in your Local Transport Plan? Mr Magrath: We have had a lot of discussions with business in the Local Transport Plan and a couple of years ago we did a fair amount of work looking at alternative ways of raising revenue. It was the normal range of things. There were options around land values, business rating and that sort of thing but none of those options was a quick fix. In other words, most of them required some sort of primary legislation to get going. In addition, I think the concern of business is that they see outcomes before they are faced with further taxes. It is combining what they get for their money which is the challenge in finding new revenue streams such as that. Q37 Clive Efford: Mr Larner, why do you think local authorities have been so reluctant to use the powers currently available to them to raise funds from transport such as congestion charging or workplace parking schemes? Mr Larner: I think it comes back to this issue of economic regeneration being a very key local priority and the fear that congestion charging and workplace parking charging will choke off all of the good things we are trying to do to attract jobs and regenerate our areas. It is a picture which is changing quite slowly because people are waking up to the fact that there is no magic solution to this. We cannot build our way out of congestion but it is a slow confidence building exercise that is going on. Q38 Clive Efford: The assessment is that congestion is less of a problem than introducing a charge or a workplace parking levy? Mr Scales: On Merseyside we have less congestion than most but within the frontispiece of Local Transport Plan two there is a commitment to look at congestion charging through the Transport Innovation Fund. We have a sort of congestion charge in Merseyside for the two Mersey tunnels which is subject to a regional price index trigger on the tolls for the next 40-odd years. Any surplus toll revenue that we get from that can only be used for the Local Transport Plan so it is a sort of congestion charge and we recirculate the money for the benefit of the whole of Merseyside. We have something like that, but as I said in answer to one of the earlier questions the city, if we take Liverpool as the city, was built for a million people and there are about half that at the moment. We have some pretty wide roads and we have very, very low car ownership. Our challenge is to build a single, integrated public transport network as an alternative to the car so that when we do get the congestion we have the alternative. Mr Magrath: Congestion is perceived as being a very serious problem in the West Midlands. It is at the forefront of our Local Transport Plan and we were successful in winning pump priming funding from the Transport Innovation Fund last October in order to investigate this. We are in the middle of a feasibility study to look at how we can best tackle congestion and that does include looking at the option of road pricing along with a range of other options. Until that feasibility study reports later on in the summer, it is difficult to say how effective that option or any other option will be in tackling the congestion problems in the West Midlands. Work is being done on it and we hope to have some answers during the current year. Q39 Clive Efford: This is a general question for any of you to comment on: have you been able to use prudential borrowing and has that been introducing more flexibility to your ability to fund schemes? Mr Errington: I am not a financial expert. I spoke to my colleagues before we came. The big issue for my treasury colleagues is that we have to meet 100 per cent of the costs of the revenue for paying for any prudential borrowing. Q40 Chairman: That is too prudential for you? Mr Errington: They see that as too expensive because of the revenue issues. This is an area where, if you do require further information, we would be very happy to submit a further written perspective on this with input from my colleagues based within the West Midlands financial CIPFA. Q41 Chairman: Mr Vaughan, do you disagree with that? Mr Vaughan: I do not disagree with it. I was going to make reference to the fact that there has been some discussion in terms of looking at how the transport innovation funding might be used in order to secure prudential borrowing in the early years of investment. Like my colleagues, I do not have the details with me. Q42 Mrs Ellman: Would you say that local authorities have the right level of control over local capital transport schemes? Mr Scales: As far as the PTE and the PTA are concerned for Merseytravel, there has to be a lot of interaction between ourselves and the districts, ourselves and the Department for Transport. What that tends to inject into the process is delay. Delay makes cost. We do not have the control we would like. A good example is what we are trying to do on the Mersey electrics network, which is to get further integration - in other words, control of the stations and the track from our colleagues in Network Rail. What that will have given us is the ability to move station developments a lot faster than we can at the moment. As soon as you have any process involved, involving more than one set of stakeholders, the control is there but it is a longer, much more drawn out path. I think the short answer is no. How you inject a bit more pace into it is yet to be seen. Q43 Mrs Ellman: In terms of the proposed Mersey tram scheme, do you think that would have progressed differently if there had been more local decision making? Mr Scales: It probably would have, yes. We put a lot of effort into the Local Transport Plan and then we got the provisional funding on 10 December 2002. We were all ready to go for the Transport and Works Act Order, but even putting a seven figure sum into that it still took us two years to get the Transport and Works Act Order through with all the necessary procedures, through a public inquiry and Parliament. That was moving very quickly indeed. Ours from a standing start was one of the fastest Transport and Works Act Orders ever given but that was still two years. In those two years the 170 million allocated stayed at that level; whereas steel went up by 40 per cent year on year. Other indices like the construction index went up by 16 or 17 per cent. Anything that injects any delay into the process on a major scheme just means more cost. It would be good if we can find a mechanism to give us more control of the local schemes, yes. Q44 Mrs Ellman: Are there any other comments? Mr Larner: One has to recognise in this the complete discontinuity there is at the £5 million threshold for schemes. There is quite a lot of local flexibility below that level but as soon as one hits that £5 million one is into a whole raft of different procedures, conditional and full approvals with central government which really can add years onto the process. Q45 Chairman: Ought it to be bigger? Are you saying there should be a higher threshold? Mr Larner: Two or three of the witnesses before you say that we really need higher levels. I appreciate that in other parts of the country, where their level of block funding is much lower, there may be grounds for keeping it lower there but there is a lot more scope for local flexibility and raising that £5 million in the big cities. Mr Magrath: I was going to pick up the experience we are having with our tram scheme which is still live at the moment. It is really a frustratingly slow process, but it is also complicated because the bigger a transport scheme is the more you have to concern yourself with issues such as procurement, how you handle commercial risk and things like that. That does make the process more complex. What we are finding is that working closely with the department is helping to get that clarity, but I do think this is a milestone issue. There is further work that can be done between the department and local authorities to make that more effective. Q46 Mrs Ellman: Is the five million threshold the right level or is there another figure that anyone would like to suggest? Mr Scales: It is too low and the department is currently consulting and looking at schemes of between five and twenty million. It is going to be horses for courses really. In the metropolitan areas where we have much more flexibility with our block grant and much more flexibility with funding we can move things around over the whole county. I think a higher level is better. If it were a unitary authority or a city it would be a different set of scenarios. Mr Vaughan: It is also important that we find a way to speed up the process from when schemes have received provisional approval at the elementary stages through to conditional and full approval. In my experience, the department seems to be somewhat detached from schemes rather than taking them forward collectively in a partnership way. That increases the delays in moving those schemes forward to those various stages of approval. Q47 Mrs Ellman: Do you welcome the move to 100 per cent grant for major schemes? Mr Errington: This is subject to consultation at the moment. We have not responded formally. Given our treasury's concerns about the current funding regimes and the problems of supporting capital expenditure of revenue and the way that that is not funded, I anticipate they will be much happier with 100 per cent grant funding. Q48 Mr Leech: How well has the introduction of the Transport Innovation Fund fitted in with the Local Transport Plan bidding process? Mr Scales: We are still getting to grips with it on Merseyside. We have indicated a signal that we will be making a bid at some point but, as I have said before, our congestion problems are not as great as those of our colleagues in Manchester, West Midlands and elsewhere. We have said that it is part of the structure and we will be submitting a bid in due course. We are starting that work now. Mr Vaughan: In Greater Manchester we are working to submit a Transport Innovation Fund bid. The Transport Innovation Fund, we would recognise, is an opportunity to secure levels of investment that we clearly need in our major city regions and I think the levels of investment that are needed in our city regions far exceed the available resources through local transport planning funding allocations at the moment so we would certainly welcome that opportunity to secure additional resources. Q49 Mr Clelland: How useful and how successful has the PFI been in achieving funding for local transport initiatives? Mr Scales: I went out on two bases for Mersey tramline one, a PFI route or a conditional funding route. The PFI route was 40 per cent more expensive. As soon as you put banks into the process, they want to net the risk off with everybody, not them. You get banking lawyers involved. Banking lawyers always give you two opinions so they charge twice, et cetera, and we can borrow money cheaper than the PFI through a local authority risk. The PFI does not do anything for me at all. I prefer just conventional funding. You know where you are. If we have to borrow money using conventional borrowing, we can borrow money through the Public Works Loan Board cheaper than we can get it from a bank anyway because we are a local authority risk. Chairman: There is a nod from Mr Magrath. Does anybody have a different view? No. That is the generally held view. Q50 Mr Clelland: As you know, Sir Michael Lyons is looking at local government functions and financing at the moment. From a transport perspective, what do you hope will come out of the inquiry? Mr Scales: More clarity. As the city region debate moves forward, more opportunities to raise money locally that we can use for local solutions by local people with local problems, to implement our local transport plan on a city region basis. As has been said before by my colleagues, not all government experiments end in failure. Transport for London is a great example of something that has worked really well. They have control of the roads and they have all sorts of things they are able to integrate. They are able to do what the 1966 White Paper said and integrate public transport in areas. If we can add the travel to work areas to it and get control of the street bus and road networks so we can put our own bus lanes in, we are democratically controlled by the Passenger Transport Authorities in any event, so you have a level of democratic process in there and a level of delivery through the Passenger Transport Executives. We have been around since 1968. We are good at delivering things on a local basis. If you add all that together, it all works. Mr Errington: What we would hope would come out of it is more trust in local authorities to deliver the general transport agenda and less proscription. I brought this today to demonstrate something. That was our first LTP. We did a second one in 2003 following Michael Lyons's study and with the new prescriptive guidance that is the one we have just submitted. Q51 Chairman: Mr Errington, I know this will come as a surprise to you but you are not being televised so you are going to have to tell us how many pages are in the first one, how many pages are in the second one and how many pages are in the third one. Mr Errington: It is about four times longer but I think that makes the point about what Sir Michael Lyons is suggesting, that local authorities have a much greater role in this by shaping and much greater autonomy in determining what is best in their area within the national framework. That is what we really hope will come through the transport field, more trust for us to do what is best for our area within the national framework. Chairman: On that positive note, thank you very much, gentlemen. That has been very helpful. Memoranda submitted by Transport for London, the Local Government Association, and the Technical Advisers' Group
Examination of Witnesses
Witnesses: Mr Pat Hayes, Director of Borough Partnerships, Mr Mark Bennett, Head of Borough Funding, Transport for London; Councillor David Sparks, Chairman, LGA Environment Board, Councillor Tony Page, Transport Spokesperson for LGA Environment Board, Local Government Association; Mr Bob Donaldson, Transportation Manager, Sunderland Council City, Technical Advisers' Group, gave evidence. Q52 Chairman: Good afternoon to you, gentlemen. Have you had time to collect yourselves to the extent that you can tell us who you are? Mr Bennett: Mark Bennett, head of borough funding in Transport for London, responsible for the local implementation plan and the borough spending plan processes. Mr Hayes: My name is Pat Hayes. I am director of borough partnerships at Transport for London so I oversee the borough funding and planning processes. Cllr Sparks: David Sparks. I chair the Environment Board at the LGA which covers transport, planning, housing and waste. Cllr Page: Councillor Tony Page. I am the Labour Group transport spokesperson on the Environment Board of the LGA. Mr Donaldson: I am Bob Donaldson. I am transportation manager for the city of Sunderland and today I am representing the Technical Advisers' Group. Q53 Chairman: Does anybody have anything they want to say to us before we begin? No. Can I ask the LGA this: how did you help the department decide on the shared priorities for Local Transport Plans? Cllr Page: We had a series of meetings with officials at the department at a time when meetings were held more frequently with the department. There was a good deal of collaboration and give and take around the determination of the shared priorities. Q54 Chairman: Do you think that is a move away from a localised agenda to a centralised agenda? Cllr Page: No. It reflected the priorities that had worked their way up from local authorities, I would suggest. Q55 Chairman: It did not seem to feature climate change and economic performance very highly, did it? Cllr Page: Climate change is not one that features specifically. Having given evidence to the Environmental Audit Committee recently, they raised that with us and we accepted that that is an issue of now increased concern that perhaps could have been reflected in the priorities, but at the time that was not the case. Q56 Chairman: Can I put that to London? In the London Local Implementation Plans, what priority is given to climate change and economic performance? Mr Hayes: Starting with climate change and sustainability, we would be the first to acknowledge that the Mayor's transport strategy, which is the over-arching document which Local Implementation Plans relate back to, is probably lighter in the area of sustainability than we would now like it to be in terms of the review that is about to start. This is clearly an area that we will build more into. That is not to say that the Local Implementation Plans are now being brought forward. There is a considerable emphasis in terms of things such as green travel, travel demand management et cetera, so we have managed it through the process possibly more than is set out in the original Mayor's transport strategy. This document now relates back to 2001. Q57 Chairman: The department's guidance suggests that other quality of life issues, whilst not key objectives, are no less important. How do local authorities interpret that mixed message? Cllr Page: On the ground, local authorities always have given a high priority to issues of the general environment, noise and pollution particularly. My own authority is not rare in the fact that we monitor air quality and noise at select points around the town and have done for many years. That is built into the monitoring process and the reporting process as part of the Local Transport Plans. Whilst we might not write "climate change" in neon over it, the issues that go to make up concerns around climate change are very much a priority at local level but bringing it together in terms of the wider climate agenda has perhaps been ---- Q58 Chairman: They are including things like sustainable communities, quality of public spaces, conservation and biodiversity and they talk about noise and those sorts of things which had been part of your previous plans. Had you considered any of those? Do you think it is a mixed message? Cllr Page: It is in danger of being too prescriptive. We, as local government, do not necessarily want to see everything prescribed in great detail from central government and the guidance in the past, I would suggest, has allowed local authorities to exercise a degree of flexibility to reflect their local priorities. Cllr Sparks: I think it is fair to say that the big problem in relation to transport and climate change, when it comes to local authorities, is that local authorities when looking at transport have been overwhelmed by problems of congestion, lack of infrastructure et cetera. At the same time those same local authorities and the LGA as an association has been giving an increasingly higher profile to climate change. That was the reason why we set up an Environment Board and we put planning, transport, housing and waste together. We are involved in considerable discussions with the government on the whole question of sustainable communities, of which a large part is to do with the adequate provision of transport infrastructure. That has been the main driver to look at new ways of financing infrastructure but the problem is this has not been made explicit in local transport policies to the extent that it could have been. Q59 Clive Efford: Can I ask Transport for London why it has taken so long to move from production of the Mayor's transport strategy and the guidance document in July 2004 to the production of local implementation plans? It is two and a half years. What has been the impact of the delay? Mr Hayes: This was a major step change, a move forward, for local authorities in London in terms of having to look strategically at their transport priorities. Put them within a subregional context and all of a sudden it is perhaps an issue of climate change but around sustainability, integration of "public transport" which previously was operated by London Transport and the things they did themselves in terms of the borough road network. This was a challenging task for local authorities. The fact that we are now in a position of having a number of LIPs, Local Implementation Plans, agreed and there is a huge tranche in the pipeline so they will all be agreed by the end of this year is a major step forward for London in terms of the amount of thinking the boroughs have had to do. I think it is also fair to say there was a considerable uprating exercise in terms of the boroughs getting the capacity to produce these Local Implementation Plans. It has involved them in the main in having to take on or train people to do this. There has been an increase in capacity and they were not well placed to do this exercise to start off with. We are now in a position where the capacity has been built up in local authorities and in terms of London there is now far greater knowledge and awareness of transport planning both at the very grass roots level within the boroughs but also how it fits into regional structures and regional strategies. Q60 Clive Efford: How much has the Mayor's transport strategy been informed by dialogue with the London boroughs? Is this a sort of top down imposition which really imposes the shape of the Local Implementation Plans on local authorities or is this a two way thing? Have any of them been rejected? Mr Hayes: It is very much a two way process. The Mayor's transport strategy sets the overall framework and we are working with the boroughs at the moment in terms of getting their plans to a position of being agreed; then we look and identify their local priorities within this overall framework. This has been one of the things that has been very positive in that it has enabled local authorities, within the overall guidance of the Mayor's strategy, to see what we need on the ground, what are our local priorities and how can we work these up into detailed planning. I think it has delivered a degree of discipline of thought around that and in identifying where the funding will come from. One of the things that we have also done is to integrate what was previously our borough spending plan into the Local Implementation Plan process so that local authorities can now do specific schemes through their Local Implementation Plans. There is a direct link between the strategy and funding and that is an important element of local subsidiarity. Q61 Clive Efford: Can I ask the LGA if they would welcome the Department for Transport playing a hands on role similar to TFL with local authorities in coming up with their Local Implementation Plans? Cllr Page: I would not like to suggest that there is a similar relationship between the DFT and individual local authorities, no. Q62 Clive Efford: Would you like the Department or Transport to have a closer relationship in developing those plans? Cllr Page: It is always welcome to have the DFT involved in discussions about the development of local priorities, yes, if that is then accompanied with a buy-in from central government in terms of grant assistance and a realistic financing regime but clearly if it is not accompanied with appropriate resourcing I would not see any purpose in that exercise. Q63 Mr Clelland: Councillor Page is choosing his words very carefully. I would have thought the answer would be "definitely not". However, is there not room therefore for some sort of similar type of structure in the regions to what we have in London? For instance, could there be a Transport for the North East, a Transport for the West Midlands, a Transport for Yorkshire and Humberside? Cllr Sparks: It is an extremely live issue now in relation to city regions. I am also from the West Midlands, as you know, David, but I am not a politician. As far as I am concerned one of the tasks of the developing city region in the West Midlands will be to try and make sure that transport is at the very centre of the whole project in terms of a city region, not just because of questions of congestion and movement but because it is absolutely essential. Q64 Chairman: I am going to cheat a bit. Mr Clelland did ask you not just about city regions because within the north east that would not be a region; he asked you about a regional authority. Cllr Sparks: I will give you an LGA answer then. The LGA answer is that the LGA does not have a policy in relation to regions and it would depend on the local circumstances as to what machinery would be adopted. It so happens that in the West Midlands it would be a subregional one based on a city region. Chairman: We have the city region bits. Some of us who are not part of them are getting a bit worried about these city states. Q65 Mrs Ellman: How have the continual changes the department has made on the Local Transport Plan process affected local work? Have they created big problems? Mr Page: I am sorry, I did not catch all of that. Q66 Mrs Ellman: The Department has made continual changes to the local transport plan process. Has that affected the working of them? Mr Page: Not so much at elected member level but I think that it has had a major impact amongst officers, yes, so it is perhaps one more for the societies. Coming from an authority that has been regularly ranked, outside London, in the top three of LTPs, we have taken advantage of unitary status to plough our own furrow, and that means that there has been a considerable amount of local leadership and we have therefore used the guidance as best we can to mould it to our local priorities, but I know for other local authorities who are more reactive in the way that they deal with these things it has caused problems. Mr Donaldson: I think what is perhaps of more concern is the timeliness of the advice that accompanies those changes and that has been reflected in the comments that have been passed to me. In the past it has been felt that certain advice has come late in the process and caused difficulties for a number of authorities. Q67 Chairman: So it is not just the timing and the change, it is the fact that the advice on the changed circumstance is not given to officers until much later down the scale; is that it? Mr Donaldson: Yes in certain cases the detail is not provided sufficiently early in the process and that causes problems. Often I would suggest the intention to change is signalled and we are aware of that, but the detailed advice may be some way further down the line, and I believe that that happened both under LTP1 and LTP2. Q68 Mrs Ellman: This is to the LGA: why do you believe that some local authorities will have great difficulties in funding local transport plans? What is the particular reason? Mr Page: It links to one of the questions you had in the previous session about the Lyons Review which is a much broader issue than local government finance. We have a capricious capping regime which has been applied as arbitrarily as previous governments have applied it and that does present major problems to local authorities, particularly on the revenue side of our activities, and even if there is a will to spend extra revenue on, for example, concessionary fares or using fully our prudential powers, we may well find that simply within the current capping regime that is precluded. That is a major problem, and I hope very much the Lyons Review, and indeed the LGA hopes very much that the Lyons Review will come up with recommendations for additional sources of funding. We certainly very much agree with the comment Neil Scales made at the end of the previous session. Q69 Mrs Ellman: Are there any other recommendations you would like the Lyons Review to come up with in relation to the funding of transport? Mr Page: Certainly we will be presenting some very shortly and it might be more appropriate for David to say something about the work that we have currently commissioned. Mr Sparks: The situation on this one is that we have been in discussions with the government for several years now to try and move this whole question of local authority finance forward. This is before Michael Lyons was given the job to review it. One of the things that we particularly focused on is to try and ensure that where there is gain from development that the gain from development goes into transport infrastructure amongst other things. The Government have focused on the Planning Gain Supplement as a means of doing this. We have got queries about that, but our involvement initially in that exercise was not to just focus on one particular solution; it was to try and make sure that we looked at different solutions. The fundamental point, as you are more than aware since you were the leader of Lancashire County Council, is that local authorities are far more restricted now in terms of the amount of leeway they have to raise finance. If you are talking about, for example, climate change, we have flagged up with the Government that there is insufficient money allocated in the Comprehensive Spending Review for that block of expenditure which deals with that particular item. I would suggest that we give you a paper on this because there are an awful lot of dimensions to it. One final point: we have commissioned Tony Travers to have a look at producing a new paper on transport to try and move the current sterile debate that we have had in terms of deregulation or reregulation, or whatever, to go beyond the past arguments. To answer the point earlier on about London, we want outside of London the benefits that London has got whilst recognising that the conditions outside of London are different, and that we need to take into account local circumstances. We acknowledge that Crewe might be different from Stoke-on-Trent. Q70 Chairman: Crewe is the centre of the world, Mr Sparks, that is the only thing you need to acknowledge! Mr Sparks: I will not disagree, not today anyway! That is the whole point. It does not matter whether you are talking about regions or sub-regions, our business is helping the locality and local communities. Chairman: You have now started Mr Efford. Mr Efford wants to come in on this. Q71 Clive Efford: Frequently I hear people from outside London say that they look longingly on the powers that London has and wish they had them. What specifically are you talking about? Mr Page: We are talking about --- Q72 Chairman: Very briefly, Mr Page, we have not got 40 minutes for an exposition on local government financing. Mr Page: I was not so much talking about finance, Chairman, it is to do with powers. It is really something that you will also be addressing in your subsequent inquiry on bus regulation. It is the ability to be able to specify networks, frequencies and fares and integrate in a way that achieves objectives connecting with trains and other forms of public transport in a way that we do not have outside London. We have a commercially led system outside of London with perhaps 15 per cent tendered services which we can control. The rest is determined by the bus operators. Fares, frequencies and networks are all outside of our control. We need to be able to either control or heavily influence those in a way that the Mayor and TfL can. Q73 Clive Efford: Is that the fault of the private sector or is that the fault of the passenger transport executives? For instance, if I were to point to Brighton, they have been extremely successful in developing quite an extensive network of improving their bus services in partnership, without those powers. Mr Page: These are historic examples where they have always had good performance, I would suggest. I would challenge anybody to show me an example outside London in deregulated Britain where they have gone from having poor transport provision 20 years ago to having excellent public transport provision now. Brighton has always had very good public transport provision. Reading, where I was chairman for 20 years of a bus company which was municipally owned, it has always had good public transport, so we have survived in spite of not because of deregulation. Q74 Clive Efford: Those powers that you do have such as workplace levies or congestion charging you have not used. Why is that? Mr Page: In short, because we cannot recycle the benefits in the way that London can. If we were to impose a congestion charge that resulted in a modal shift to public transport, how would we under the present legal regime be able to get a penny of the profits? At the moment the Mayor takes the proceeds from public transport. It is subsidised, I accept, but the fact is outside of London all the money would go to the bus operators, and unless they agreed to pass some over we would not be able to get any and what is more we would still have no control over the bus networks, frequencies or fares. Q75 Clive Efford: Is "we" Reading or the LGA? Mr Page: "We" is the LGA in this sense. I speak very much for Conservative councillors as well. Chairman: You made that point. Mr Scott? Q76 Mr Scott: A question to the LGA and TAG: do you welcome the move to 100 per cent grant funding for major schemes and what impact will this have in practice? Mr Donaldson: Yes of course we must welcome that. However, I do not think that is the main problem or the main issue for authority-commissioned schemes. As was mentioned in previous evidence, it is the timeliness in terms of the decision and the risk. The scale of funds involved can be quite significant. In Sunderland, for example, there are two schemes at the present time awaiting decision. One is in the order of £13 million and the development costs to date are of the order of £850,000. The more recent scheme, which is seen as key to regeneration and would involve a new bridge crossing of the River Wear, estimates around £67,000 as incurred costs and development costs to date are in the order of £2 million. These are significant sums and present a significant burden to the authority, at great risk. The costs are incurred by virtue of the level of information that is required to be submitted at an early stage before the promoter really has much idea whether he is likely to be successful. Mr Scott: How appropriate are the "supported borrowing improvements"? What part do they play in enabling the local transport plan to be delivered? Q77 Chairman: Somebody have a go. Mr Sparks: The situation on that one is that it goes back to the point made earlier on. The financial situation that faces many local authorities is such that they cannot take advantage of extra schemes to invest in transport. It is as simple as that. Until there is a fundamental review of local government finance and local government powers and essentially the freedom of local authorities to, quite frankly, get on with it, you are always going to have a problem. Mr Donaldson: I think the movement towards full grant support as opposed to borrowing would also be of assistance to local transport schemes. Q78 Mr Clelland: I assume that the LGA and TAG would argue that the £5 million threshold is too restrictive in terms of major schemes, so at what level do you think it ought to be set? Mr Page: I cannot remember but it is many years since it was fixed so I would have thought at least double that, considerably more, but that is a personal view. Chairman: Any advance on £10 million? Q79 Mr Clelland: There is no methodology behind that? Mr Page: No, it was an arbitrary figure then and it remains an arbitrary figure. Q80 Chairman: It is the principle that you all accept but you are not setting a band within which the ceilings could be reapplied? Is that what we are to understand? I think a nod means yes. Mr Page: Yes. Mr Donaldson: Perhaps further analysis is required and we certainly do not have that information to hand today. Q81 Mr Leech: Do you think there is an argument to say that in different parts of the country the level should be different depending on the size of the transport authority? Mr Page: Clearly there is an argument for that. Some of us would go further and say that perhaps there should be - a point that Councillor Sparks made - a review of local government finance. We as local government are far too dependent on central government grants. We need a system that turns the whole thing on its head. We should have a system where a minority of our income comes from central government grants and we are raising more money locally from individuals, the private sector, and from regeneration, and using schemes that the Continent have used for many years and getting away from being the "grant junkies" that we currently are. We look at it far too much in terms of how much money we get from central government. Hopefully the Lyons Inquiry might enable a more radical departure and then the debate about what we are able to do might focus more on raising money locally from a variety of different sources rather than from central government. Central government's role should be in grant equalisation, in my view, and assisting those areas of the country with high levels of unemployment and other structural problems. Q82 Mr Clelland: I am not having a go at London, it is just a question. Is there a similar threshold for major scheme proposals for the London boroughs and, if so, what level is it set at? Mr Hayes: The arrangements in London are so different that there is not a threshold at which a project has to go to us or anyone else. The borough is self-financing and clearly they can do that. We allocate money through the borough spending plan process at the moment. In terms of the major projects that we take forward, because of the Mayor's powers and the Mayor's income-generating powers, effectively, we can push forward a major project if we can fund it using the things that we have access to, whether that is borrowing and that is part of the money we have and the decision processes around that. Mr Bennett: I would like to amplify what Mr Hayes has just said in that boroughs do approach us for money from schemes that raise from £5,000 upwards. If it goes beyond the £2 million we do expect slightly more detail according to a business case development manual that we have so that we can actually explore the value for money --- Chairman: So you do have parameters which apply to the boroughs? Q83 Mr Clelland: But perhaps not as restrictive as the parameters that face the members of the Local Government Association? Mr Bennett: I am not an expert but I understand that they are not as quite as complex as the LTP process requirements. Chairman: Mr Efford wants to question that. Q84 Clive Efford: There are certain aspects of transport in London that it is impossible for local authorities to influence. You are as tied up in contracts with bus providers, for instance, as anybody else. I find it impossible to get you to alter routes through my constituency. My experience has been all of the problems that have been described by transport authorities outside of London. Is that true? Mr Hayes: In terms of bus network development, the significant difference is that we specify the routes and we can determine where those routes go. We enter into contracts simply for the operation of those routes. If we have the funding and decide that it is appropriate, then we extend the route and extend the contract. There are some issues around varying the contracts and things like that but they can all be worked through. Chairman: It is a fundamentally different system. Mr Stringer? Q85 Graham Stringer: Three or four very quick questions. Can you put a figure on the cost nationally of the inefficiencies or even just the costs of the local transport plan funding system? We have got a lot evidence qualitatively that it costs money. Has the LGA done any work to say what that figure is? If not, why not? Mr Page: I think the short answer is that we do not have those figures. I am not aware that that has been raised as an issue by our members. The point I would make, as someone who has been actively involved in the local transport planning process, is that any good local authority should be doing most of that work in any case. Even if you were not bidding for central government funds, the process of taking forward local transport planning requires a strategy and it requires transparent policies and plans. It is one area of prescription that the government lay down that I do not think most local authorities have a problem with because you would need to do the work in any case is what I am saying. Q86 Graham Stringer: Possibly I am not being clear enough. In terms of the funding regimes that give permission to schemes over £5 million, we have heard that there are a lot of costs associated with delays over getting agreement and delays caused by too much involvement, all sorts of issues like that. Have you worked out the costs of those? I am sorry if I was not clear in the first question. Mr Sparks: We have had feedback from individual local authorities that this is a considerable problem but they have not quantified it. Q87 Graham Stringer: Would it be possible for you to? Mr Sparks: We will try and do that. Graham Stringer: It would be very helpful if you could give us some sort of figures. I think I am asking a very similar question to the questions that Mrs Ellman and Mr Efford asked but I will ask it anyway. What would a really good scheme and process for local transport planning and funding look like? We have heard this afternoon about the problems of the current scheme. What would a very effective and efficient scheme look like? Q88 Chairman: Somebody: Mr Donaldson? Mr Sparks? Mr Sparks: I think what we would say based on the work that we have done on climate change is that the local authority would need to have a plan that included transport but related transport to a whole variety of other goals, objectives and policies, be they to do with social inclusion, be they to do with climate change, energy efficiency, or whatever, so that we looked at it in its totality and we go totally beyond where we are at the moment. Q89 Graham Stringer: And would it have much involvement from the Department for Transport? Mr Sparks: We would hope that by that time the Department for Transport, through a more integrated approach by central government as a whole, would have an input. The problem you have got with central government in relation to this particular field is that we do not just want the Department for Transport. We want the Department for Transport and other departments to join with us in an integrated approach. That is why we are pushing local area agreements to be more sophisticated and expanded documents. Mr Page: There is also the additional point within the existing regime where you are using it to bid for government grant. That is one aspect but ideally, you should have a more flexible system whereby the local transport plan could be used to inform decisions, for example around the whole issue of Planning Gain Supplement, section 106 agreements. A good local transport plan can be a very effective tool in maximising a developer's contribution. Indeed, many developers are more than happy to contribute when they see that the local authority has got a good plan. It is the point I was making earlier. We would need this as a tool with or without it being used for bidding for government funds. I would like to see a much freer financing regime so that the LTP was only required to bid for really substantial projects that required government support, like a new light rail network or a major tunnel or indeed even an airport, although I realise that is a more sensitive area, those sorts of really major capital projects that were perhaps of regional or indeed national importance. The rest of it we should be able to raise locally from a freed-up local financing regime. Q90 Graham Stringer: At the end of the evidence session from the PTAs, at the very last question the witnesses got very excited at the prospect of having highways powers transferred to them. What is the view of the LGA about taking highways powers out of directly elected control? Mr Page: You mean taking it to another body? Q91 Graham Stringer: Taking it to a PTA. Mr Page: A PTA is not an unelected body. Q92 Graham Stringer: It is not directly elected. Mr Page: It is not directly elected but there is a long tradition of sharing the exercise of power. Personally I do not have a problem with that. The work that David Sparks was referring to that the LGA has commissioned looks at this. I accept that this is in the context of city regions, Chairman, but nonetheless the principle could be extended to shire counties as well. The way of overcoming the present ridiculous local authority boundaries that we have which militate against effective transport planning would be to create a wider PTA-equivalent area, and that could be created in shire counties as well as city regions. That would require authorities to cede power up to a higher level. Personally I do not have a problem with that. Q93 Graham Stringer: Are you speaking personally or for the LGA? Mr Page: I know I am speaking for probably the Labour and Liberal groups on the LGA. Do you want to have a different take? Mr Sparks: I will give you an LGA answer. The situation in relation to the Local Government Association is that we would genuinely be interested in looking at any mechanism that encouraged the development of transport in our local areas but it would have to be and it would have to include local democracy. It would have to involve local councils. We would not be in favour of, as it were, unelected bodies taking powers away from local government. Q94 Graham Stringer: And does that apply to unelected bodies that have elected people on them? Mr Sparks: No because in the development of, for example the city region in the West Midlands, the key factor there has been the proposed involvement of the not just seven district councils but the proposed involvement of local councils through their leaders and leading members and officers in any executive body that oversaw any functions that are conducted solely within individual local authorities. It would be matched or would have to involve the evolution down, shall we say, from central government of extra powers back to local government. That would be shared because we recognise that when we are talking about transport in particular we have to go across administrative boundaries and therefore it is in the interests, say for example, of my authority Dudley to have a relationship with Sandwell, Birmingham, Walsall and Wolverhampton to improve the transport network for our citizens than it would be if it was just giving Dudley Council extra powers. Mr Page: The government offices at the moment operate on the basis of urban area packages in many areas where they take an urban centre and will involve adjoining districts in those discussions. Those are effectively informal discussions that are arbitrated by the regional office. What we are talking about is having a much more transparent and democratically accountable structure that would get a proper buy-in from adjoining authorities as well. Q95 Mr Clelland: So that would be different from the Transport for London model then? Mr Page: Yes. Mr Donaldson: If I can add my experience, which is not particularly of this type but working with Tyne & Wear, I have seen a lot of frustrations coming from colleagues on the LTP in terms of the delivery of bus priority measures, which we heard mentioned in the earlier evidence. I can understand their frustration but the frustration often arises because of the need for public engagement and involving the local community in the development of the proposals. I was questioning myself about the current transport plan and the proposal to introduce a bus lane in Sunderland was in the local transport plan as a proposal and yet we had not consulted local members on that in any detail. It was just there indicative as a principle. However, the process that is given to us in developing our programmes requires us to go in some significant detail and that is a clear tension. Q96 Chairman: Yes, that is helpful. I want to ask you a slightly different thing. Are the separate funding arrangements for capital and revenue expenditure appropriate? No? No answer? Mr Page: I would say they are appropriate providing we were not subjected to the capping controls that I referred to earlier. Q97 Chairman: So you are asking for more flexibility between the two budgets. How is that going to work in practice? Mr Page: I think there is already a fair amount of flexibility that local authorities can exercise between capital and revenue budgets. Q98 Chairman: So what are you asking for? More? Mr Page: More of both, yes. Mr Sparks: The answer to this one is that we would want more flexibility in relation to both capital and revenue. When we are talking about the separation of capital and revenue intrinsic separation is not a good idea. It is not a good idea because it can lead to extra capital expenditure that cannot be serviced because of the restrictions on revenue expenditure. Q99 Chairman: Should performance reports be required annually, biennially, or triennially? Mr Sparks: We think increasingly --- Q100 Chairman: "We" being the LGA? Mr Sparks: We being the LGA. The LGA is pursuing a consistent policy of trying to develop local area agreements over a more meaningful period than one year. We would be in favour of any performance to be over a period of time that was mutually agreed between central and local government. Q101 Chairman: With respect, that does not really give me an indication, does it? Mr Page: Longer rather than shorter I think he is saying. Mr Sparks: We are not in favour of increasing controls and regulations on local authorities. We want to reduce that as much as we can. Q102 Chairman: I want to ask the LGA whether your view that any new duty or target to be included in local transport plans which was added in would require the dropping of something else is an unwillingness to adapt? It is all very well saying in theory if you ask us to adopt a new target we want you to drop one of the existing ones, but is that really what you meant? Mr Sparks: I am glad you have asked this question because --- Mr Page: Is that what we said? Q103 Chairman: I could quote to you what you actually said but you were asking for a reduction in the burden of reporting duties so any additional requirement ought perhaps to be matched by the removal of at least one existing requirement. All we want to know is what you mean by that? Mr Sparks: What is meant by that is that the Local Government Association has an established policy - and it can lead to difficulties - whereby we are not in favour of extra duties being imposed on local authorities, and if we have to have something imposed on us we feel that there should be a reduction in controls elsewhere. I want to flag this up. This is a real issue which I think the Local Government Association needs to come to terms with because there is a dilemma. In relation to climate change - because this is something that has been raised in relation to climate change - the dilemma is that the Local Government Association has an objective on climate change whereby we want all local authorities to take this increasingly seriously but at the same time we are against extra duties in relation to climate change, which affects our credibility when we argue in favour of more activity on climate change. So I think it is a dilemma that we need to acknowledge and we need to have another look at. Q104 Chairman: In other words, it is one of those sorts of things that people have said but when you think that there might be extra duties you would have to reconsider it? Is that what you are saying? Mr Sparks: We also have an agreement, as I understand it, with ODPM. I know that the ODPM has now become another department but I presume the agreement still stands that there will not be an overall increase in the burdens. Q105 Chairman: Councillor Page, all we are trying to establish is whether you really mean it. If you are saying under no circumstances can we be given any extra targets or any extra jobs unless you take away something, then we need to know that, but if you are just saying do not give us a lot more work without at least considering whether something else can be altered, then we know where we are. Mr Sparks: The precise situation is that the Local Government Association is not in favour of extra duties being imposed. It is not that we are not in favour of doing more. It is the principled question of more regulation of local government. It is not necessarily my personal view but it is definitely the view of the Association. Q106 Chairman: We are assuming that you are speaking for the LGA because that was what you were asked to do. Do you think London boroughs and local authorities have been able to secure the funding necessary to deliver "softer" measures? Mr Hayes: Through the BSP process we have put a substantial raft of funding together which has enabled London authorities to do a lot around soft stuff. It is one of the things that we are looking to bring forward in terms of looking far more now at area-based schemes, multi-modal schemes, but a lot of money has gone through walking, cycling and environmental improvements and things have also hit - and this was touched on earlier - non-transport related outputs such as community safety and broader regeneration services. Clive Efford: Can I ask a question? Chairman: Transport for London have made extensive use of prudential borrowing --- Clive Efford: --- That was what I was going to ask. Carry on! Q107 Chairman: How successful do you think that is in practice? Mr Bennett: The prudential borrowing that Transport for London has had access to is, of course, for its investment programme, part of which funds the borough spending plan which is what we are responsible for devolving down to the local boroughs. We are also aware that some London boroughs have their own prudential borrowing that can complement that so there is a matrix of prudential borrowing around London. We think that works well and the investment programme of TfL contains the more capital elements, if you like, of the borough activities on transport, but we do not necessarily feel restricted between the explicit capital and explicit revenue pot, particularly on softer measures. Q108 Chairman: That is useful. Could we translate those practices to somewhere else in the country? Mr Bennett: I am not necessarily the right person to answer that question, am I? Q109 Chairman: Has there been any discussion of the differences between the London system and the other local authorities? Mr Page: My understanding is that the capping constraints that I have had referred to do not apply in the same measure to TfL, but I stand to be corrected. Certainly whenever we discuss the use of the prudential regime it always has to be carefully considered in terms of the revenue consequences for the overall budget. It is not the fact that we have not got the ability to be able to borrow that money. It is the financing within the current restrictions that are the problem. Chairman: Mr Efford, a final question. Clive Efford: That was it, I wanted to know about the outside of London use of prudential capital. Q110 Chairman: Gentlemen, you have been very helpful. Thank you very much and next time we will remind you about equal opportunities, and gender balance, and boring things like that! Mr Page: We stand rebuked. Chairman: I think you sit rebuked, Councillor. The Committee is adjourned. |