UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1120-ii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

TRANSPORT COMMITTEE

 

 

LOCAL TRANSPORT PLANNING AND FUNDING

 

 

Wednesday 24 May 2006

MR ANDY SOUTHERN, MR JONATHAN SPEAR, MR BRIAN WITTEN

and MR PETER CARDEN

MS ALISON QUANT, DR IAN HARRISON, MR TONY MATTHEWS,

MR ROY NEWTON, MR BOB WILKINS and MR GRAEME FITTON

Evidence heard in Public Questions 111 - 251

 

 

USE OF THE TRANSCRIPT

1.	This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
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Oral Evidence

Taken before the Transport Committee

on Wednesday 24 May 2006

Members present

Mrs Gwyneth Dunwoody, in the Chair

Mr David Clelland

Mrs Louise Ellman

Mr Robert Goodwill

Mr Lee Scott

Graham Stringer

________________

Memoranda submitted by Atkins Global and Mott MacDonald

 

Examination of Witnesses

 

Witnesses: Mr Andy Southern, Director Transport Planning, and Mr Jonathan Spear, Senior Managing Consultant, Atkins Transport Planning, Mr Brian Witten, Divisional Director, and Mr Peter Carden, Divisional Manager, Integrated Transport, Mott MacDonald, gave evidence.

Chairman: Gentleman, before we start I should warn you that there may be votes and for those of you who do not know House of Commons' procedure, it means that I have to suspend the Committee and it has to be suspended for a minimum of 15 minutes. As long as you do not think it is entirely personal if we all leap to our feet and run away. Otherwise you might think that something very strange is going on - and it may be, but not about that! Good afternoon to you all. We do have a little bit of housekeeping first, if you will forgive us. Members having an interest to declare. Mr Clelland.

Mr Clelland: Member of Amicus.

Chairman: Mr Stringer.

Graham Stringer: Member of Amicus.

Chairman: Gwyneth Dunwoody, member of ASLEF. Mrs Ellman.

Mrs Ellman: Member of the Transport & General Workers Union.

Q111 Chairman: Gentlemen, those of you who have given evidence before will know that the acoustics in this room are not very easy, so I want you to speak up. The microphones in front of you record what you say but they do not project what you say, so if you would keep that in mind. Can I ask you to identify yourselves for the record, starting on my left?

Mr Southern: I am Andy Southern from Atkins.

Mr Spear: I am Jonathan Spear from Atkins.

Mr Witten: I am Brian Witten from Mott MacDonald.

Mr Carden: Peter Carden from Mott MacDonald.

Q112 Chairman: Thank you very much indeed. Did either group have anything that you wanted to say to us at first or may we go straight to questions?

Mr Southern: Straight to questions is fine by me.

Mr Spear: I am happy with questions.

Q113 Chairman: This is for all of you. Has the first round of the Local Transport Plans delivered what was expected? Let us ask Atkins first. Your 2003 report said that "major enhancements in delivery" were required. Has it improved?

Mr Southern: I will perhaps start and give an answer on this one. The principles that were set out in the 1998 White Paper introduced the Local Transport Plans and I think that many of those principles have been adhered to and followed through in the first round of Local Transport Plans to a greater degree or a greater breadth of local transport improvement, the type of schemes, the level of public involvement and consultation, inclusion that is reflected in the way they went about developing the programmes. I think progress in some areas has been good in terms of what has been delivered, and in other areas it has been slow. I think overall that there has been perhaps a tendency to follow the art of the possible, and do some of the least controversial measures, which, not surprisingly, are very easy to be implemented.

Q114 Chairman: In five years only 60 per cent of authorities were on track to meet half their core targets. It is not very good, is it?

Mr Southern: No, but I think that one of the explanations for that is at the time they were setting targets they were primarily aspirational targets and I do not think they quite understood the importance of getting those targets well defined and being realistic. I think you will see in LTP2 that some of the targets are now more realistic.

Q115 Chairman: What are the most difficult ones to meet?

Mr Southern: I think bus patronage is the one that most authorities are having most difficulty with.

Q116 Chairman: Bus patronage. Anything else? Yes, Mr Spear?

Mr Spear: I would add probably cycling on to that. It may be a relatively small area but it has been one of the least successful areas so far, partly because actually monitoring of cycling in itself is inherently difficult, so some of the noise with the cycling indicators is as much about are we actually sure what is going on rather than whether they deliver the targets or not.

Chairman: Mr Southern specifically mentioned the fact of consultation when he opened. I am sorry about this, gentlemen; the Committee is adjourned. If Members can make it back in ten minutes I would be grateful.

The Committee suspended from 2.46 pm to 2.56 pm for a division in the House

Q117 Chairman: I understand that we shall be interrupted again, I am sorry. I wanted to know a bit about the slowing of delivery with the consultations. The suggestion seems to be that it was public consultation that slowed the responses. Is that genuinely a problem? Mr Spear, do you want to have a go?

Mr Spear: If I can start on that? I think one of the issues is that authorities have had to become better at consultation as the process has gone through. Certainly when they started I think there were examples of consultation resulting in delays to the process because expectations were not managed, because there was not a clear timetable and authorities were not clear what the limits of consultation might be. As the process has gone through I think that authorities are now getting much better at that; therefore, it is less an issue of delay, it is a question of an appropriate timescale for how long the process takes.

Q118 Chairman: We did have a witness who said that one scheme he had been involved in had taken five years just to put bus lanes into a particular corridor. That is a bit bizarre.

Mr Spear: That is a bit bizarre and I cannot comment on that.

Q119 Chairman: No, I am not asking you to. But is that the average? Would you think that was common, or would you think that was an exception?

Mr Spear: That sounds very high to me but it would depend on the complexity and size of the scheme and also the local political controversy associated with it.

Mr Witten: I have certainly been involved in bus priority schemes that have been delivered in a much shorter time than that, but I do think that difficulties can arise when administrative boundaries and so on are being crossed.

Q120 Chairman: You think it is more likely to be because there is more than one authority involved?

Mr Witten: I am speculating on that but in my experience it is possible to actually deliver within a reasonable length of time, including the consultation process.

Q121 Chairman: What would you say would be a reasonable time from the beginning of the consultation to the delivery of a bus lane?

Mr Witten: That depends very much on extent and many other factors. In one scheme in which I have been involved we did substantially deliver quite a large package of public transport improvements over a two-year period.

Q122 Mr Goodwill: Just on that, do you have any observations about whether these are genuine public consultations or merely an opportunity for some political debate which maybe could have gone on in the council chamber, or maybe the usual suspects from the environmental and other interest groups just to get pitched in? Do the public really feel that they have been consulted?

Mr Witten: I think in general that the public consultation can be quite good. It is sometimes difficult to engage members of the public, they just say, "Do something tomorrow, please." I think that the authorities are actually getting better at the consultation process and engaging more different stakeholders to actually get a genuine feeling on consultation and a genuine result at the end of the day.

Q123 Mr Goodwill: So it is not just a case that they have made up their minds what they want to do and they can rubberstamp it by going through a consultation? They do actually change things because of the consultation?

Mr Witten: Indeed, very much so, yes.

Q124 Mr Clelland: If, as was suggested, crossing local authority boundaries sometimes causes a problem with delays, would it be better if there was a bigger authority network for delivering bus lanes and things which cross boundaries?

Mr Witten: That was speculation on my part on the case that was being quoted to me, and local authorities can indeed work well together in certain circumstances. Where there are political differences obviously that can cause delays.

Q125 Chairman: Mr Carden on this.

Mr Carden: There are examples in the large conurbations where authorities do get together to resolve and assist and can formulate conurbation-wide plans for bus corridors very effectively. Going back to the point on consultation, often the delay comes in when the secondary consequences of a piece of infrastructure have not been completely thought through. So putting in a bus lane may be quite easy but replacing residential parking may be much more difficult.

Q126 Mrs Ellman: What would you say are the main barriers to meeting targets set out in the Local Plans?

Mr Witten: Certainly political barriers in overcoming those, and particular types of schemes. For example, rail has been very difficult to deliver because of financial issues, withdrawal of rail passenger partnership funding and so on, and engagement with the strategic rail authority. So I would say that rail in particular has been difficult to deliver.

Chairman: I am sorry, Mr Southern, you will have to keep it for ten minutes. The Committee is suspended for ten minutes.

The Committee suspended from 3.02 pm to 3.13 pm for a division in the House

Q127 Chairman: Mr Southern, you were just about to say something.

Mr Southern: I was going to add to the question about the barriers to delivery and say that there are a number of barriers that have been identified from the research we have done with local authorities, which include the lack of revenue funding, both through implementation and also from maintaining capital schemes once they have been built - bus stations, for example. One of the big problems certainly in the early stages of LTP1 was the scarcity of skilled resources and with the wrapping-up of the funding it was difficult to find the right skills.

Q128 Chairman: Is that in local authority terms? You are not suggesting that the firms that put in for the work were lacking in expertise?

Mr Southern: No.

Q129 Chairman: But the officers needed to monitor and respond, is that what you are saying?

Mr Southern: Yes. I think that local authorities have more constraints over their ability to recruit and gearing up for the increased spend. I think there were barriers on dealing with the bus issues associated with deregulated bus environments and how they engaged with commercial bus operators to deliver some bus improvements. Then perhaps linked to that is the increase in tender costs, but also genuine cost inflation as well proved to be a barrier.

Q130 Chairman: What impact did the use of external consultants have on delivering costs? You must be the right person to answer that.

Mr Southern: Sure. I think that the various models for involving the private sector in delivering Local Transport Plans varies from one authority to another.

Q131 Chairman: That is a very diplomatic response. So if there are staffing problems in local transport departments what do you really need to do to give greater continuity in the delivery of Local Transport Plans?

Mr Southern: I think there are methods for ensuring partnership arrangements between local authorities and the private sector, so I think those work better now than five years ago. I think there has been quite a lot of emphasis on trying to bring more professional people into the industry and training. The Department for Transport itself has funded the Transport Planning Skills Initiative, as an example. There is a wider array of skills being brought into the professions.

Graham Stringer: If I can refer to the Working with Weaker Local Authorities Report that you have produced. You say, "At least five of the authorities are critical of the advice provided by government officers ... We are unable to comment on this but suggest this concern is indicative of the local authorities paying insufficient attention to the guidance and, hence, not grasping a detailed understanding of what was required."

Chairman: Could you tell us the page and the paragraph?

Q132 Graham Stringer: It is M6, page 3-5, at the bottom of the page, the first paragraph on that page. Why do you come to that conclusion?

Mr Southern: I am sorry, the conclusion that local authorities are not understanding what is required of them?

Q133 Graham Stringer: It is a perplexing sentence. You say that you are unable to comment on it and then you say that probably it is local authorities paying insufficient attention to the guidance. Why do you say that?

Mr Southern: Because we are drawing on the evidence of working with those local authorities to address their shortcomings, why they are classified as weak, and understanding or getting a perspective of their understanding of the guidance and what they needed to do to better understand that guidance. Also it is from talking to the Government Office representatives as well involved in that process. We felt that there had been a relatively high level engagement with the respective authorities concerned.

Q134 Graham Stringer: Could it not just be that they disagreed that the Government Office advice was appropriate to what they wanted to do?

Mr Southern: It could be I think in most, but not all, situations the local authorities in submitting their Annual Progress Reports wanted to get the endorsement of Government Office, given that it has an impact on their rating. So they are unlikely to deliberately go against the Government Office advice.

Graham Stringer: That is an interesting answer. If we move to Local Transport Plans Policy Evaluation in Part 1, Final Report, 2003.

Chairman: That is the Mott MacDonald report.

Q135 Graham Stringer: That is page 13, Integration (Chapter 7). You say, "The case studies, our review of LTPs and Government Office LTP assessments show a good level of consistency with national policies. However, in many cases this is due to the prescription of the LTP Guidance rather than the aspirations of local Members, who may see electoral advantage in appealing more to car users and whose rhetoric may be at odds with the principles set out in the LTP." The point I am trying to get you to comment on really is that in your reports you are saying that local authorities are not doing very well, but I have the reports carefully and it seems to be that you are saying that they disagree with some of the government guidance, and you do not really distinguish where there is a policy difference from the elected Members there from what the government wants.

Mr Spear: Firstly I would query the point about we are saying that the authorities are not doing very well. I think given the difficulties of the process I think very good progress has been made.

Q136 Graham Stringer: Could I just be clear? It is particularly in the first report where you are talking about failing local authorities, weaker local authorities, so they clearly, in your terms, were not doing very well, and this is saying here that it is really code for saying that there is a disagreement, that local Members actually do not agree with the national objectives.

Mr Spear: I think what we are saying is that there is certainly a tension between the objectives and the criteria which may be set out in the first Local Transport Plan and the decisions that Members may make on a more day-to-day basis in terms of the particular programmes and schemes which are being delivered, which are more on a scheme basis rather than a high level strategy basis. I would argue that that is part and parcel of any process that gives more decision-making powers back to the local Members compared to the TTPs where it was ministers who were effectively making the investment decisions. We now have the process under LTPs where actually local Members and local authorities themselves have more discretion to make decisions. Inevitably that is going to lead to more tension between the Members at local level and possibly ministers at DfT level.

Q137 Graham Stringer: That is really the point, is it not? What I get from reading these reports is that while the Local Transport Plans should be just that, that actually there is some resistance to those Local Transport Plans, and if there is a resistance - the way I read the reports that you have written - is that authorities do not get the money. So that there is an appearance of local decision-making but you say that when local Members do not like it they see electoral advantage. That is probably what they are there for, to represent the opinions of local people. It is a very odd way of describing what local people want to do. You do not think that that distorts the whole process?

Mr Spear: I would agree that it is a balancing act between reflecting the national transport priorities and reflecting the local transport priorities where they may not be identical yet.

Q138 Graham Stringer: If I can ask two or three more questions? Would you take that to the point that actually at the end of this process the national priorities are squashing the local priorities? That the national priorities are winning because you do not get funding if you do not do what the national priorities say?

Mr Spear: I would not put it as starkly as that. If you look at the current share to national priorities, the so-called share priorities - congestion, accessibility, road safety and air quality - a lot of this is motherhood and apple pie stuff, it is not things that local Members or national Members would necessarily disagree about. There are some areas - and I would probably focus particularly on things economic regeneration and the sustainable communities agenda -where there is probably more of a gap between the local level and the national level and how that Agenda was taken forward. So, yes, there are tensions, there are differences in interpretation but I would not necessarily say that the two are mutually exclusive.

Q139 Graham Stringer: That brings me neatly to the next point because you are rather scathing - and I can go to the reference - about the relationship with the Regional Development Agencies and you almost dismiss them and say that they are only interested in economic regeneration and their policies do not fit into the transport policies somehow, so the RDAs have got it wrong with being interested in creating jobs.

Mr Southern: I do not think we are saying that the RDAs have got it wrong; I think they are seeking to deliver on different objectives. As I understand, there is no PSA target for the Department for Transport, which is related to economic regeneration directly.

Q140 Graham Stringer: You are absolutely right but do you not find it rather strange that the prime objectives, which are safety, air pollution and accessibility, do not have as a priority what most local authorities and certainly what the RDAs have as their priority, job creation and economic regeneration? Is that not a weakness in the national transport policy rather than in the local authorities and the RDAs?

Mr Southern: I think there is a weakness in as much as central government, as I understand it, does have through ODPM a focus on regeneration and sustainable communities, but that is actually through a different department rather than the Department for Transport. I think there was an issue over the extent to which the government is joined up in this approach.

Q141 Graham Stringer: Would it not be helpful then, in your reports, where you say that local authorities' policies, particularly when you are dealing with the weaker local authorities, should be more joined up, would it not have been worth a reference to central government to say that their policies should be more joined up?

Mr Southern: I think that work was beyond the scope of the weaker authorities who would not have the evidence on which to base that. There is some work at the moment being done by the Commission of Integrated Transport, which involves looking at precisely those issues regarding delivering some of the economic growth in housing in growth areas.

Q142 Graham Stringer: Do you not think that the £5 million threshold is ridiculously low and that that gives more and more central control as inflation eats away at that, the real value of that £5 million?

Mr Southern: Yes, there has been considerable debate about whether that £5 million is at the right level and there is some consideration whether it should be raised to £10 million. I think there is an issue with any scheme which falls slightly below that threshold as to whether there will be sufficient funding to pursue that through the Integration of Transport pot, so there is a danger that the higher level that you will miss out on schemes in the £5 million to £10 million category if that level was raised to £10 million.

Mr Spear: Just to add to that, we did actually do some work on that specific issue at the earlier stages of the research looking at that threshold, and we did look at whether it should be raised to £10 million, and we also looked at whether it should be lowered down to maybe £2 million to £3 million for some of the smaller unitary authorities who might not otherwise have been able to identify a major scheme in their area. So actually that debate cuts both ways.

Q143 Graham Stringer: Did you make a recommendation when you looked at it?

Mr Spear: Our recommendation to the Department in that report was for unitary authorities and small authorities in particular. There was a case for not adjusting the threshold per se, and actually designating a new type of scheme which we called the Intermediate Scheme, which would have simplified appraisal requirements attached to it, and that would allow some of the larger schemes for a smaller authority to be delivered outside of the LTP bloc.

Q144 Graham Stringer: How much has the Department for Transport paid you for these works?

Mr Southern: The total contract value over a period of four years, of which we are in the third year now, is in the order of £700,000.

Q145 Mr Scott: A question for Mr Southern and Mr Spear. You recommended that transport be given more weight in the Corporate Performance Assessment back in 2005. Was this recommendation implemented?

Mr Spear: This is in relation to the Comprehensive Performance Assessment?

Q146 Mr Scott: Yes.

Mr Spear: You are right in the sense that the CPA1, if I can call it that, the importance of transport was relatively small - and we are talking about two per cent in terms of the actual ---

Q147 Chairman: You are getting a bit confidential, Mr Spear, when you are talking about money; could you give us a little more voice?

Mr Spear: I was just saying that in CPA1 the importance of transport, you are quite right, was relatively small. In CPA "the harder test", as it is known, which is the 2005 model, there are some changes but they are relatively minor in terms of what is called the service assessment and the best value performance indicators. So the immediate impact of the CPA harder test on the Department for Transport is going to be relatively small. However, there is a requirement to include what is called Transport and Sustainable Communities within the Corporate Assessment, the CPA, which is actually looking at the performance of the authority overall and the operation of the centre, if you like, and that does go into some detail about how the authority is delivering transport - is it linking the transport to wider objectives, does it have a good strategy in place and is it delivering it and so on? Given that the Corporate Assessment has a three-year cycle to run through all the authorities I think what you will find is that transport does become more recognised at the corporate level, but it has not happened instantly and it will actually creep in over time as the first Corporate Assessments work their way through.

Q148 Mr Scott: Would you say that if more decision-making on transport were given to local authorities that perhaps it would have a far higher priority, which would be reflected in performance assessment? Would you disagree with that?

Mr Spear: I would not disagree with it. What I would say is that authorities do face a range of different priorities, some of which they perceive to be more pressing than others, and certainly a consistent element of our research is that at corporate levels authorities understandably will look more towards thinks like education and social services because the budgets are higher, they are more politically higher profile and the members may get more inquiries about them. Unless there is a dramatic change in the priorities that they perceive from the public I cannot see transport rising to be the top priority. I think it is going to be an important one - it is a bit like the plumbing, if you like, it basically needs to be done but no one is necessarily going to focus on it as the be all and end all in itself. So in answer to your question, giving authorities more decision-making powers beyond what they have in LTPs, I am not sure that is going to happen.

Q149 Mr Scott: Would you agree, though, that it is fair to say - you have spoken about the priorities of local authorities in education, et cetera - that without a good transportation system you have problems with all the other things?

Mr Spear: Absolutely and that is the argument that local transport officers and deputy chief executives and members need to be putting. The argument for transport is not as an end in itself, it is actually about how do you make these other things work, so how do you get children to school, effectively, how do you get people into employment if the cost of the bus fare may actually be the main thing that is keeping them from achieving that, which is very much about joining these things up, which we have been talking about just now.

Q150 Mr Scott: I am sorry to push you on this, but surely then giving local authorities a bigger role to play in that is going to encourage them to put transport far higher up the agenda?

Mr Spear: It will do but it is also, I think, members and authorities themselves recognising that these things can actually be joined up with the powers that they already have.

Q151 Mr Clelland: Did you find that there is a better focus and more priority given to transport where we have specific transport authorities such as the passenger and transport executive areas or Transport for London than we do in areas where it is merely a matter of general authority to the local council?

Mr Spear: To some extent in the larger conurbations clearly there tend to be some bigger transport issues anyway, and there is certainly a greater capacity in the authorities to deal with those issues. I am not able to comment on how transport priorities are judged to be relative to other priorities in the major conurbations.

Q152 Mr Clelland: We have been hearing that transport does not seem to get sufficient priority in some authorities because it is competing with other services, but have you found a difference therefore between those areas where we had transport authorities set up, like the LPT areas as opposed to the shire areas where the county councils were doing that and have all those competing objectives?

Mr Spear: The work we did with weak authorities demonstrates that certainly in some of the small authorities that there was not the political will or the capacity to deal with transport adequately and it is pushed down the agenda.

Chairman: Can I ask for shorter questions and shorter answers now? Mrs Ellman.

Q153 Mrs Ellman: Is it possible to get a comprehensive picture of what is happening in transport through the Annual Progress Reports?

Mr Spear: I think the answer is yes in the sense that that is what they are there for. The APRs do give us a good picture across the country of how much money is being spent, what type of schemes are being delivered, and in broad terms whether authorities are on track to meet their targets. Moving on, the so-called delivery reports for LTP1, which are due this July, which will cover the whole five-year period of LTP1 where authorities will effectively be looking back and saying, "What have we achieved? Have we delivered what we said we were going to deliver? Have we met the targets?" and so on, will actually provide a lot more information over the whole round. The one qualification I would put on what I have just said - and we talked about it just now - is the issue of the targets and whether the data which is being collected for the targets is necessarily as robust as we would like it to actually get a fully accurate picture. We do have examples of, if you add up the APR data, for example, on bus patronage and then you compare it to national data on bus patronage you get a slightly different picture in terms of trends and what is going on in different parts of the country. That is really a question of looking at all of the data available and then coming to a view.

Q154 Mrs Ellman: So would you say that there should be any change in the number of targets and what those targets are?

Mr Spear: Given that we have just signed up to a new set of targets in LTP2 for the next five years I think it would be probably premature to change them again in the short-term.

Q155 Mrs Ellman: Are you satisfied with them as they are?

Mr Spear: I think in overall terms the spread of core targets - that is targets set by DfT - in broad terms is about right in terms of the key things that you would want to look at, and of course authorities are able to set local targets themselves as well.

Q156 Mrs Ellman: But are the targets set comparative? You might have one local authority with very ambitious targets and another one that requires very little change. Would anyone else like to comment on this?

Mr Carden: I think what you are picking up is correct, that the judgment of the performance of local authorities is very dependent on how they select the target they are going after, and that is something which needs to be taken, where it can be more normalised by looking across the country.

Q157 Mrs Ellman: How would regional monitoring rather than local monitoring work, as Atkins suggested in their submissions? How would it actually work?

Mr Spear: I am not sure that we suggested that regional monitoring ---

Q158 Mrs Ellman: You suggested that some regional monitoring should be introduced since the impacts of some initiatives were only to be seen at a regional level. Who will do that?

Mr Spear: I would suggest that the obvious lead agencies for that would be either Regional Assemblies or the Regional Development Agencies. This is really about how you monitor regional transport strategy.

Q159 Mrs Ellman: Yet you have said in other evidence that you thought the Regional Development Agencies did not know much about transport. Did you have any evidence at that stage?

Mr Spear: I do not think we said that they knew nothing about transport; I think our comment was that the RDAs and their remit, indeed, was to look at economic development and of course transport covers a wider range of priorities than economic development.

Q160 Mrs Ellman: Has the Local Transport Plan process given local authorities the flexibility that they were seeking over the five-year period?

Mr Witten: I think there have been some problems with flexibility and I believe that in the introduction of LTP1 that flexibility was actually mentioned as being an objective, but then when local authorities tried to flex they found that that was actually frowned on. So, yes, I believe that that has been a problem for local authorities during the course of LTP1.

Q161 Mrs Ellman: What changes would you like to see to make that flexibility a reality?

Mr Witten: I think there could be a case for local authorities, especially groups of smaller local authorities being able to share between them different stresses in their programmes. So there are schemes that maybe fall underneath the £5 million threshold for major schemes, but still have quite lumpy expenditure profiles. It might be interesting to see if local authorities would be interested to share their expenditure between each other, to actually even out that lumpiness.

Q162 Mrs Ellman: If the Annual Progress Reports were every two or three years what impact would that have on funding allocations? Would it be a matter of concern? Does anyone have a view?

Mr Southern: My view on that would be that I would not have a major concern. I think there is a concern which is separate from whether they produce their Annual Progress Reports and their approach to monitoring. Monitoring what they are doing should be used as a management tool and they should be doing it anyway and adjusting their programme accordingly. There is a danger that if they are just relying on reporting because government asks them to report that it becomes a tick-box exercise rather than being done as a useful management tool.

Mr Carden: If I could add to that? I would have concern if it moved into to three years. If one got into a situation where monitoring did not happen because there was not a demand for it then three years would be too big a window. I think one of the other key issues with monitoring is to introduce the collection of data as part of the business delivery, so that it is not an additional task, it is just part of local government efficiency.

Q163 Mrs Ellman: What proportion of authorities registered as weak and needing assistance in preparation of local plans have actually improved?

Mr Spear: It is a relatively small number and it has been decreasing over the last three years. I think last year it was about four out of 85.

Mrs Ellman: Four out of 85?

Q164 Chairman: The 85 were the weaker groupings, is that what you are saying?

Mr Spear: No, there were 85 LTPs in round one, and four in APR5 - the last APR - were classified as weak by DfT.

Mr Southern: The year before that it was eight and the year before that it was ten, but to take the ones that were classified as weak within APR3, the ten, very few, if any, were classified as weak in APR4.

Q165 Mrs Ellman: Akins have recommended that those authorities should be helped by a mixture of sharing, best practice and training. Was that taken up?

Mr Spear: There has been an ongoing programme of contact between those in government offices and DfT, but the details of that you will need to ask the Department on that.

Mr Southern: There is also a local authority network now for sharing best practice as well, which has been in existence probably no more than two years.

Q166 Mrs Ellman: What about the amount of money spent on bid preparation? Can that be improved in any way? Mott MacDonald, how do you view that?

Mr Witten: I think that the one size fits all kind of advice on schemes is a bit difficult or can prove difficult, and I think there could be a more targeted approach where there is actually a variable scale of the amount of effort required, depending on the nature and the extent of the scheme.

Q167 Graham Stringer: On that point, is it possible for you to make an estimate of how much waste there is in the system, how much money local authorities spend in preparation for schemes that do not happen or in terms of talking to central government? How much inefficiency and waste is there in the system attached to it?

Mr Witten: Unlike my colleagues, or my competitors, WS Atkins, we have not done a national study of local authorities so I cannot give an answer nationwide. But I do know that some authorities put a lot of effort into preparing submissions for major schemes and felt that they could have been helped by better advice from DfT on the kind of scale, size and amount of major schemes that it might be possible for them to achieve. So I believe there has been some inefficiency there.

Q168 Graham Stringer: Can you give us help in the schemes you have been involved in? Is it five, ten, 15 per cent of the total costs as reported?

Mr Witten: No, I could not give an estimate.

Mr Carden: Just to come in on that, I think it is very important that one looks at schemes which do not go forward and decide whether that work is actually aborted. It may well be that a local authority learns a great deal about their transport process in taking a decision not go to forward with the scheme, and so the work may not be entirely wasted, though it may not go forward and get government funding.

Q169 Graham Stringer: Do Atkins have a view?

Mr Southern: I would not be able to quantify it but I would agree that certainly in some of the major schemes I am aware that there has been a considerable amount of work done over a considerable number of years in the preparation. How much of that is aborted is impossible to say.

Q170 Chairman: What about post-scheme evaluation? It is all very well saying, "We made this recommendation and we do not know whether they actually did it or not," which is what you have said previous schemes, and then this business on the schemes themselves. Has nobody asked you to look at the actual impacts that were forecast?

Mr Southern: I understand that certainly on major schemes and particularly light rail schemes that have been implemented there have been detailed studies looking at the impacts

Q171 Chairman: Do they support what you have said? I would have thought one would have quoted someone else who said, "Yes, that is right." Is that not the case? Have you not had evidence that in fact your view is supported by subsequent reports?

Mr Southern: I am sorry, a view on what; I am not sure that I follow?

Q172 Chairman: To review the whole question because after all you have made this point very specifically on waste and on discontinuance of plans and now Mr Carden says do not entirely use that as a negative because they may have learned during the process of preparing the bid something that is subsequently used. The Committee need to know. If there is a large amount of work being done by local authorities, which has to be abandoned for one reason or another, and is costing a lot of money, taking a lot of time, what you are saying to us is that that should not be allowed to continue, the Department needs to tighten up its recommendations. What exactly is it you are saying? We are talking big, big bucks here; we are talking large amounts of money. Are the local authorities wasting their money and is it because they are not given clear guidelines in the first place, or is this a general view that you think there are too many schemes and too many people putting in too many bids and they should be doing something better like clearing the drains? I paraphrase.

Mr Witten: I think that DfT need to engage more with the local authorities in terms of what is realistic for local authorities to put forward.

Q173 Chairman: So you are actually saying, Mr Witten, that local authorities should be told much more precisely how likely they are to get something and not just told to put in bids; is that what you are saying?

Mr Witten: Yes, given better advice on the scale of funding that might be available and the kind of scheme that might be funded.

Mr Goodwill: I know in my region in Yorkshire that we have two schemes, the Scarborough Integrated Transport Scheme, a £17 million scheme which was pulled two weeks before they were due to cut the first sod and a lot of money went into that, and the Leeds Super Tram which they spent squillions getting ready for it and it was pulled fairly late. What is the hit rate for these schemes? Are we talking ten per cent, 20 per cent, 50 per cent? How much money is being wasted by local authorities in preparing these detailed schemes only to be told right at the altar that they are being jilted?

Q174 Chairman: Expensively jilted! Come on gentlemen, you are the consultants, you know all the answers otherwise you do not need to be paid!

Mr Witten: We have not done a national study on that; we work with a number of local authorities but by no means all.

Q175 Mr Goodwill: For example, how many light rail schemes have been prepared and how many have been allowed to go ahead?

Mr Carden: I do not know the answer to that question. I think an issue here is that there are too many large and very expensive schemes to prepare, which get jilted at the last moment.

Q176 Chairman: I do not want to spend too much time now. Atkins' report recommended that the Second Edition Guidance should give greater emphasis to the importance of revenue funding. Did the Department respond?

Mr Spear: We recommended the importance of revenue funding and we also recognised that it was not purely an issue for the Department for Transport.

Q177 Chairman: I am prepared to accept the qualifications but did the Department respond? Did they act on your recommendations?

Mr Spear: The Department's response in the second Local Transport Plan Guidance was to give more emphasis to revenue funding, supporting LTP objectives, which is an advance on the first round guidance. The second issue is that DfT's argument in that guidance is that it comes back to this joining up issue and actually for local transport officers and departments to be making the case within their authorities, to emphasise the importance of transport and to meet corporate objectives and therefore provide greater justification to members why the transport budget should be maintained or even increased.

Q178 Chairman: So you are really saying that that is the way in which you can ensure adequate revenue funding for transport improvements?

Mr Spear: It is a way within an authority if the - I will not use the phrase "revenue allocation" - revenue support grant and the local government settlement to authorities remains the same.

Q179 Chairman: It has been suggested that whole life costing and good asset management with strategic transport planning is not helped by having separate capital and revenue funding streams. Is that right?

Mr Spear: Personally that is not a statement I would disagree with.

Q180 Chairman: That is a double negative. We will take that as a yes. That must cost the Department a lot of money - too many double negatives and I would ask for my money back! Would a major scheme threshold of £2 million for small authorities lead to a significant increase? You have mentioned it briefly but supposing we went for a £2 million threshold for smaller authorities?

Mr Spear: It might lead to a larger number of major schemes coming forward from smaller unitary authorities. I think the £2 million threshold probably relates back to the last session when you were talking to Transport for London, and the definition of a major scheme in London is £2 million - outside of London it is five.

Q181 Chairman: Is it going to be more difficult to win funding for major schemes in the second round?

Mr Spear: Almost certainly yes. In the first round this was in the days just after the publication of the ten-year plan. The national transport budget was relatively flush. In the second round public finances are more constrained and the DfT has been saying for about the last two years that certainly getting major scheme funding in LTP2 will be more difficult. Firstly, I think, because funding is more constrained; secondly, there have been the lessons learned from the experience of major schemes in the first round where possibly a lot of the schemes approved in 2000 were approved too early and at a stage where they were not ready to actually go forward to statutory process and detailed planning.

Q182 Chairman: Some of the "excellent" authorities were told that they were not going to be required to produce Local Transport Plans. Would the absence of a five-year planning document such as the Local Transport Plan lead to a lack of strategic planning and accountability? Mr Southern?

Mr Southern: I would say potentially yes, and I think some of the excellence authorities have responded by saying that if even there is a requirement on them or not to produce it that it is sensible and good practice to produce that local transport planning.

Q183 Chairman: Finally, how successfully has the Smarter Choices Agenda been incorporated into the second round?

Mr Spear: It is too early to tell in the sense that the second round only started on 1 April. If you are asking is the Smarter Choices Agenda more strongly reflected in the second LTPs as strategic documents and planning documents, I think the answer is yes. Whether that leads to better delivery of travel plans, travel awareness campaigns and so on by local authorities, I think remains to be seen, particularly as many of those measures effectively are revenue based rather than capital based.

Chairman: Gentlemen, you have been very patient and I am sorry to have forced you to sit there through our longueur, but thank you very much for coming.

 

Memoranda submitted by Hampshire County Council, Devon County Council, Association of Greater Manchester Authorities, County Councils Network

and County Surveyors' Society

 

Examination of Witnesses

 

Witnesses: Ms Alison Quant, Director of Environment, Hampshire County Council; Dr Ian Harrison, Deputy Director of Environment, Economy and Culture, Mr Tony Matthews, Local Transport Plan Lead, Devon County Council; Mr Roy Newton, Greater Manchester LTP Team, Association of Greater Manchester Authorities; Mr Bob Wilkins, Director of Transport and Environment, East Sussex County Council, County Councils Network; and Mr Graeme Fitton, Chair, Finance Committee (CSS), Head of Transport and Highways, Warwickshire County Council, County Surveyors' Society, gave evidence.

Q184 Chairman: Good afternoon to you. I am sorry to have kept you waiting and very grateful to you for coming. Can I ask you to identify yourselves for the record?

Ms Quant: I am Alison Quant, Director of Environment at Hampshire County Council.

Dr Harrison: I am Ian Harrison, the Deputy Director of Environment at Devon County Council.

Mr Matthews: Tony Matthews, Devon County Council.

Mr Newton: Roy Newton, Head of the Greater Manchester Local Transport Team. I am responsible for co-ordinating the production, monitoring and review of the Local Transport Plan of Greater Manchester.

Q185 Chairman: Good, we will have lots to ask you, Mr Newton.

Mr Wilkins: I am Bob Wilkins. I am the Director of Transport and Environment at East Sussex County Council. For the record, I am not mandated to speak for the County Councils Network.

Q186 Chairman: We will remind you if you look like you are going to be about to do that.

Mr Fitton: I am Graeme Fitton from CSS.

Q187 Chairman: Thank you very much indeed. I am assuming nobody wants to lecture me. Does anybody have anything they want to say? Good. The Department for Transport states that it has increased both capital and revenue funding to local authorities. Is the balance of funding right to allow the improvements needed in transport?

Mr Wilkins: Can I start by saying that I am not sure that it has increased the revenue expenditure. The amount of money that I have to spend on road maintenance, for example, is far less in real terms than it was when I took up my post 12 years ago, so the amount of money that comes through the revenue system into local authorities is not as high as it was some time ago.

Q188 Chairman: What do you attribute that to? Is that because some bits are being creamed off to other bits of the same policies?

Mr Wilkins: I think there are enormous pressures on local government finance generally and the money gets targeted by passporting through to education and social services, for example.

Q189 Chairman: That cannot be news surely. If you have been in local government for a long time that must happen to you all the way down the line, does it not?

Mr Wilkins: It has happened for a long time but I just wanted to make the point that I do not see that the revenue expenditure has increased.

Q190 Chairman: Why have council transport departments not been more successful in getting revenue funding? Does anybody want to have a go at that?

Ms Quant: I think passporting to education made it impossible for any authority who wanted to survive to ignore that. That must be around 50 per cent of the budget, 60 per cent if you take out social services and education funding. On social services it is more worrying if you let somebody die if you do not have proper protection measures in place than if you do not fund your transport system, so it is never going to rate as highly in political priorities either from central government or local government.

Q191 Chairman: Do you think the separate funding arrangements for capital and revenue are appropriate?

Ms Quant: I think they are completely meaningless. Most of us try and flex the budgets by stretching capital to do revenue things. Since we are now only getting capital as the ability to borrow, why do we not just get it as revenue? In fact, for the "floor" authorities it is much worse than that because we are not even getting the revenue support now. I do not understand what it means and certainly if you talk to the private sector they have not got the foggiest idea what it means or why you do it.

Q192 Chairman: Does anybody else want to comment on that?

Mr Newton: If I can come in on this one. The problem with the capital/revenue split is it is very artificial. Because it is tied in with particular legislation requirements and you are audited there are certain things you can spend capital monies on and certain things you cannot. An example of what we did in Greater Manchester was we produced a freight map to assist heavy goods vehicle drivers and we funded that out of the LTP fund. We were allowed to do that in the first instance but now that we want to reprint it our auditors are saying a reprint is a revenue issue, so you have got completely the opposite position.

Q193 Chairman: The information was presumably to improve the traffic flow and improve the facility for freight operators.

Mr Newton: Yes, it was.

Q194 Chairman: What has now changed when it is the same thing being reprinted? Apart from the price.

Mr Newton: It is because it is the same thing reprinted. Basically what the auditors are saying is that for capital what you are doing is borrowing the money and repaying it back over a 30 year period, therefore ----

Q195 Chairman: It must have been a very expensive map!

Mr Newton: It cost very little money. Given that the budget for Greater Manchester is around 35 million for the LTP, the actual freight map production cost about £2,000 but because of this artificial constraint between revenue and capital it causes great problems. It should not do, it is an artificial constraint that is of no use.

Q196 Chairman: Just as a matter of interest, how did you solve that one or did you just say "We will not reprint"? How did you actually solve that one?

Mr Newton: We have to look at trying to raise some additional funding to be able to print the map. That is what we are doing at the moment. The way I would suggest ----

Q197 Chairman: Well, I hope you will not get carried away and start printing maps all over the place, it is obvious that this is a very dangerous undertaking!

Mr Newton: We would not want drivers using the right routes, would we?

Q198 Chairman: No, it would be very embarrassing if they actually took some notice of your traffic planning. I have got one for the County Surveyors' Society. Your submission indicated that the use of Supported Borrowing Approvals for transport schemes was hampered by council tax capping. Should local authorities have complete flexibility to raise revenue funds through local taxation?

Mr Fitton: I think the problem there lies with the changes in the finance system. At the moment the issue is fraud, particularly for "floor" authorities. Sufficient revenue support grant is not coming through to address the debt charges for the capital borrowing allowance that has been given to us, so any increase will not be capital allocation debt. That puts us in quite a difficult position. The choice there is whether we reduce the services outside transport, whether we do not take up the borrowing, or we ask for significant increases in council tax. That puts us in a very difficult position when capping is around as well.

Ms Quant: Could I give you a specific example?

Q199 Chairman: Yes, please, that would be very helpful.

Ms Quant: In my own authority my treasurer has said that he can save a million pounds off our revenue budget next year if we reduce our transport capital spend by five million. That is what he has recommended.

Q200 Chairman: Do you want to say that again because I cannot believe what I have just heard.

Ms Quant: He is saying he can save a million pounds off our revenue budget next year if we reduce five million spend on our transport capital programme and that is what he is recommending.

Chairman: That sounds very constructive, I must say.

Q201 Mrs Ellman: Is the £5 million threshold for local decisions on capital schemes the right level?

Ms Quant: It has got nothing to do with that. He would like to save a million pounds.

Q202 Mrs Ellman: That is a separate question. Is five million the right level?

Ms Quant: For?

Q203 Mrs Ellman: For local decisions on capital schemes.

Dr Harrison: I think £5 million is probably too low a threshold now for major schemes given the amount of effort and, therefore, costs required to mount a major scheme bid. This is an argument which would support the threshold perhaps going to £10 million rather than £5 million schemes but with the proviso that if the threshold were raised there would need to be a greater proportion of the expenditure put into the transport block to allow authorities to be able to fund those schemes in the four million to ten million range, say.

Q204 Mrs Ellman: Would it be practical to have a different threshold for different sorts of authorities?

Dr Harrison: I think that is a difficulty. Smaller authorities, small unitaries in particular, do already have difficulty in promoting major schemes. I think it would cause problems of differential approaches if some authorities were allowed to promote a scheme of a certain size through one route and others were not, or if unitaries in proposing the schemes had to use a major scheme format for schemes of a lower cost nature to get around the issue. That would seem to be unduly burdensome.

Mr Matthews: Can I clarify that. Under the existing processes we can make a case for a scheme under £5 million to go forward as a major scheme, but it has to be a special case. There is a way to do that already for a smaller autohrity.

Q205 Chairman: So you are saying it is not a burden even though we have taken evidence that it might be?

Mr Matthews: In theory there is a way you can do this. As a smaller authority you can put forward a case.

Mr Fitton: Can I just expand on that. The rules around the small and major schemes are very tight and very difficult to achieve. I think it is only going to be the very small unitary authorities that can match the rules on that. If we are talking about raising the threshold for a major scheme from, say, £5 million to £10 million what we would need is a supplementary bid process to hit schemes between that £4 million and £9 million mark in the same way we had up until about two years ago where if an authority had a £3 million scheme or a £4 million scheme that would put a huge hole in the integrated transport budget we could put a submission in for a supplementary bid on that and that would deal with the intermediate schemes of between £4 million and £9 million.

Ms Quant: I think you have got to refer back to what is the total sum of money available for spending. If you think that the South East region, which represents eight million people, is only £30 million per annum at the regional level and out of that comes the major scheme funding, it simply is not possible to hand out large lumps of money, so you run into the difficulty as the pot is quite small of distributing that in a fair way because if you do that then you probably will not be able to do any of the larger schemes at all. There are trade-offs here when you have got such a limited pot of money.

Q206 Mrs Ellman: How do you relate that to changing the system or would you leave it as it is?

Ms Quant: I think the route you probably want to explore is how local authorities can raise money for transport which might be a more fruitful route than arguing about precisely how you distribute not enough money.

Q207 Chairman: Is that just Hampshire or do other authorities think that?

Mr Wilkins: I think a number of us would share in that. We would argue that we would like to see Government making more money available for transport and for the sorts of things we are doing. We would like to explore what freedoms there are on obtaining other money from other sources. The problem is that very often the routes that you take for those, developer contributions for example, come up against bids for other factors. For example, in one of my towns there is a major flooding problem that people look to see developer contributions going to solve before you get into health facilities and so on. It is quite a difficult area. We have to find ways of raising more money somehow to start doing some of these schemes.

Q208 Mrs Ellman: What efforts have any of you made to raise money in different ways? Has anybody got any examples that you can give of how you have tried to raise money in other ways or ways you would like to see opened up?

Mr Fitton: I believe most authorities are making full use of section 106 agreements and securing significant funds from that for transport infrastructure to enable development to go ahead and to help the infrastructure as it stands at the moment.

Q209 Chairman: You do not think that is a bit limited, Mr Fitton, because by definition that must be limited to particular areas where you can demonstrate what you are using the money for to the people from whom you are taking it?

Mr Fitton: It is limited to a reasonable distance within development but at the same time you get the added benefit of addressing existing issues or issues that will become a problem in the near future by the section 106 funding. It has added benefits other than just development.

Q210 Mrs Ellman: Are there any other suggestions?

Dr Harrison: All authorities use the range of funding sources that are available to them. For example, we use match funding from European Objective 2 in parts of Devon and also look at partnerships with district councils - district councils contribute to some of our schemes - and, indeed, the Regional Development Agency although RDAs, certainly in our part of the country, have not been particularly keen to invest directly in transport schemes themselves.

Q211 Mrs Ellman: What would prudential borrowing?

Mr Wilkins: The problem with that is you are still up against what you can afford through your revenue support to pay for. The rules allow you to borrow but you are still up against how much you can afford each year. There is a limit on what local authorities can spend each year out of their revenue budget, which is the point Alison made earlier on. It is something that is there but it is a problem for us.

Dr Harrison: Devon is contributing from its own capital resources to supplement LTP funding.

Q212 Mrs Ellman: Have you given any thought to any new proposals like employment tax or land-value tax, any other ideas?

Mr Newton: As part of our pump-priming bid for Transport Innovation Fund we were investigating the use of supplementary business rates but that is tied in with the Lyons Review. We are hoping that the Lyons Review does give us much greater flexibility for raising local revenue in that way because even with section 106 agreements it is only limited to those areas where the economy is working and you can actually get a reasonable amount from the developer. In large parts of Greater Manchester where the economy is still very, very tenuous you cannot hit developers too hard otherwise they will not develop there, so we are looking at other ways to raise it and supplementary business rates is one we have started to discuss with the business community.

Q213 Mrs Ellman: What sort of response have you had?

Mr Newton: Providing they can see a direct investment they are broadly comfortable with that but there has got to be that visible introduction of transport improvements. What we are doing is we are looking along Metrolink lines and saying could we raise rates along the Metrolink lines to fund Metrolink expansion.

Q214 Mrs Ellman: What sort of response have you had from Government on that?

Mr Newton: It is still early days with Government. The DfT are still playing it close to their chest.

Dr Harrison: We submitted a Transport Innovation Fund bid looking to use private taxation and private and residential car parking spaces as a means of raising funding. That was one of the pump-priming bids in last year's Transport Innovation Fund round but it was not supported for pump-priming funding at that time because, of course, the Government's main interest is in congestion charging rather than PNR taxation.

Q215 Mrs Ellman: Is that something that you are pursuing?

Mr Newton: We are pursuing it. We are looking at the issue again and some new guidance for the next round of pump-priming bids has just been issued. We believed that for smaller settlements, and we are talking about the City of Exeter in this case which has a population of 110,000, PNR taxation was likely to be a more successful means of raising funding than congestion charging. We had made some progress with both the City Council and the business community who were supporting the idea of PNR taxation and up until now have not been enthusiastic about congestion charging. Clearly we are looking at that again to see how one might move forward either with a congestion charging scheme or possibly a hybrid scheme.

Mrs Ellman: Do you think that a city-region model would improve transport in the different types of areas you represent?

Q216 Chairman: Mr Newton, how about the city-regions? City-states in the case of Greater Manchester.

Mr Newton: The AGMA view is very much welcoming the city-region approach but from a co-operative process rather than introducing another tier. What I would like to see is a more federalist approach where the authorities work together but with more devolved powers in order to enable them to implement particularly transport improvements. That is the sort of model that AGMA is pushing for.

Ms Quant: If I might say, my members feel very strongly that only accountable authorities should have spending abilities and powers and if there is to be a city-region there needs to be a form of local government that matches it otherwise it becomes relatively unworkable to deliver anything in areas where there is complexity and difference.

Q217 Chairman: You have got some city-states, Dr Harrison.

Dr Harrison: I would agree with Alison in terms of the procedural mechanisms for delivering transport but in terms of planning through the new process of Regional Spatial Strategies we are working on a city-region basis already and doing sub-regional planning. In the regional funding allocations the South West effectively submitted proposals for major scheme bids on the basis of city-regions.

Chairman: We are very impressed as my memory is that you could not get the South Hams to even talk to Bristol so, if you are doing that, well done.

Q218 Mrs Ellman: Do you anticipate that these city-regions will encompass what are now county councils?

Mr Wilkins: I know that my chief executive was involved with a Government minister last week in discussions on the south coast about these issues and raised the issue of not only city-regions but county-regions as well, so the idea of a bigger area developed around a county or a city. Certainly if you look in the South East there are not many big cities along the south coast but there are quite a lot of towns that are not big enough to stand on their own and if they could work together with the counties around them you might have some success. One of the things we have done very successfully in East Sussex is a partnership between the County Council, Hastings Borough Council, Bexhill District Council and the Regional Development Agency on uplifting the economic performance of the whole of that sub-region. That is with a lot of government support. If you take away the idea of just calling it a city-region and talk in terms of something that may be more acceptable to some people then you might have more success with it.

Q219 Mrs Ellman: It has been suggested to us that members are not especially interested in transport and do not see it as a high priority. Is that reflected in your authorities?

Mr Wilkins: No.

Q220 Chairman: Mr Wilkins, are you going to put your head on the block?

Mr Wilkins: All of my county councillors would tell you that the biggest mailbag they get is about transport. They still have a problem when it comes to deciding on the budget because they are so strongly led by where money is directed into education and the adult social care area and they are very passionate about trying to do something about transport but they do find themselves restrained very often by the amount of money.

Q221 Chairman: Does anybody else want to add to that?

Ms Quant: They would say their postbag is mostly about potholes and most people think the roads should be better maintained. I think they are much more ambivalent about some of the transport things we do. My experience is that most local members have a great deal of common sense and often they are a very good bulwark against some of the mantras about what current transport policy should be delivering.

Q222 Mr Scott: If I could just progress that point. If local authorities were given more power over some of the transportation issues that affect you, and perhaps the funds to go with it, or if maybe some of the other funds you are allocated are not ring-fenced, do you feel then members would take an even greater interest in local transportation issues?

Dr Harrison: Can I say that I think Devon County Council members do take a very strong interest in transport. As I indicated earlier, they do so to the extent of supplementing the Local Transport Plan allocations with some of their own capital funding, so that is demonstrated by their policy and allocation of funds. However, it is true that they feel they could make more progress if they were able to have more influence over those elements of transport funding which are beyond them at the moment. Local rail is one issue that members are very interested in but find it very difficult to make progress with. Also, with the deregulation of buses members are sometimes frustrated because they can see investment going in but it is not in exactly the places they would want to see the investment targeted.

Q223 Mr Scott: Mr Fitton, your submission described the Annual Progress Report process as "flawed" because of the erratic performance tables. Have these problems been resolved yet?

Mr Fitton: I am hoping that they are. I think things are improving. Through the life of LTP1 what we have seen are some authorities that have swung from the bottom of the league table to the top and others in the opposite direction in consecutive years, and clearly you do not become a good or a bad transport authority overnight. East Sussex have suffered from that, Oxfordshire have suffered from that and Somerset as well. Through the life of LTP1 the concentration has been on output and on a programme that we submitted in July to carry out in the following financial year but there has been no allowance to change that programme, no flexibility. If for a very good reason that programme was to change that has not been accepted in the scoring system. The problem has been inflexibility and rigidity in the way the scoring has been carried out.

Q224 Mr Scott: The Atkins research found that local authorities were doing well at delivering schemes but not meeting targets and objectives. Does this suggest that the schemes implemented are not effective, or that the targets are not right?

Ms Quant: I think on LTP1 it is fair to say that was the beginning of target setting and we were all encouraged to be as aspirational as we could be on targets and there was not much checking whether they were reasonable and deliverable, and certainly we did not have the experience of it. You got marked down if you were not aspirational. There was much less emphasis on whether you delivered it. There has been a learning process over LTP1. Certainly on LTP2 we fought the DfT quite hard, who pushed us to set higher targets, and said, "We do not believe they are deliverable". Not all authorities may have done the same so you may see a continuation of there being poor performance against the targets set, but whether you would have got any better performance by doing something else is another question. You have got to ask what the targets are measuring. When you think how little influence we all have over transport, national spending is something like £10 billion a year and private householders spend about £108 billion - that is on 2003-04 figures - most decisions are made by individuals. We have a bit of influence at the edges. We do not control rail, we do not even control light rail any more since we are not doing it, and we do not have much control over buses. What is it that is being measured? How can one judge success or failure by some targets about global outcomes.

Mr Matthews: I would like to support that. In LTP2, the preparation of the second Local Transport Plans, the Government Offices have been a lot more rigorous in challenging the targets set by local authorities to ensure they are stretching targets rather than targets that can be easily met, so we have got aspirational targets in our second LTPs which we are all going to have to strive to meet.

Q225 Chairman: You are saying something different from Ms Quant. What she said in effect was you started off with aspirational targets in Local Transport Plan 1 and by Local Transport Plan 2 the local authorities were beginning to argue, "We cannot do this so do not push us". You are saying something slightly different.

Mr Matthews: They have come back and challenged that. For the final LTP2s they want targets that are challenging. We are going to be marked and rewarded or penalised in two ways, firstly on the judging of the LTP, and one of the ways of marking that is are our targets challenging and our funding would be ----

Q226 Chairman: That is a lovely word, "challenging". It could mean almost anything, could it not?

Mr Matthews: It is the DfT's word, not mine. "Stretching and challenging" are their words. Then we are going to be judged with the final results on whether we deliver those targets through delivery reports.

Q227 Chairman: Challenging and aspirational targets, my goodness.

Mr Newton: What the guidance actually says is that the targets should be "challenging but realistic", which is an interesting concept.

Q228 Chairman: And how, pray, is this defined?

Mr Newton: DfT do not define it. When I had my discussion with my Government Office they defined it as if you are above your target you have been unrealistic and if you are below your target you have failed. Either way you have failed.

Q229 Chairman: What they really mean is hit the target or do not bother to come back.

Mr Newton: Yes.

Q230 Chairman: That is not a difficult thing to put in writing. Could you perhaps not suggest to the Department there are easier ways of phrasing their guidance?

Mr Newton: What we are trying to do with both the Government Office and going back to the Department is to work out a more sensible way forward. Part of the issue is about monitoring and background noise because various indicators will go up and down in each year anyway. One of the problems we had in LTP1 was that we were seen to be doing well on our arguments so the Department required us to set more challenging targets and then we missed them, hence the reason why we only got 60 per cent of them. What we are trying to do now is say we need to be in a band where statistically we feel confident that we have had an impact on them. We are trying to steer the Department away from being too challenging because we just lose money if that is the case.

Q231 Graham Stringer: You have explained very clearly the problems with the monitoring and target setting within the system. It is my impression, having read the evidence to this Committee, that the process itself changes local priorities and if local members were left to themselves they would have different transport strategies and priorities. Is that fair?

Mr Newton: It is fair to a degree. Because money is attached to achieving the targets that tends to drive the process. Because a lot of the indicators are mandatory, that automatically determines the way we go. To be honest, it is the same with Audit Commission performance indicators as well, they start to drive the process. If you choose the right targets in the first place that is not a problem, but if you choose targets that are difficult to achieve or skew resources away from what it is you are trying to achieve that is a problem. One of the issues with the targets in LTP2, and to a certain extent in LTP1, is they are very transport focused whereas what we want to try and do in Greater Manchester is improve economic regeneration, that is our key focus, to improve social inclusion and protect the environment, but none of those go directly into the target setting process, so we are one staged removed from what we really want to be doing.

Mr Matthews: Could I come in on that point? As well as the four shared priorities the Government has set local authorities, we have the discretion to set our own objectives and our own targets so we can meet some of our members' aspirations for how they want these to be formed in our authorities' areas by setting our own objectives. In Devon we had improving health and wellbeing, tourism and recreation and improving public spaces as some of our objectives with targets related to those. They were peripheral to the main shared national priorities and we do have that scope.

Q232 Graham Stringer: In your evidence you have given the example of the delightfully named BV165 policy. Can you tell us how that has distorted what is happening?

Mr Newton: You will need to remind me which one it is.

Q233 Graham Stringer: It is about puffin crossings apparently.

Mr Newton: Disabled people facilities. For example, with that particular Best Value Indicator what we have to do is make all the crossings compliant for use by disabled people. What that means is it focuses on improving existing crossings whether that is where you want crossings or not rather than saying, "As part of your new policy do you need some crossings in better areas, better locations that you want to put in that meet the Disability Discrimination Act requirements?" It tends to distort the investment into where your existing crossings are rather than where you might want to put in new crossings.

Mr Wilkins: Could I just add to that, if I may. We had an Audit Commission review of our transport services and had a major argument about how well we had performed. We had done very well by putting in crossings to the old standards, which allowed about half an inch up-stand, which most of the people I spoke to who were in wheelchairs said was not a problem. The new standards require it be absolutely flush and we were told all the old ones did not count any more and you could only measure new ones unless you got the disabled community to agree in writing that they were happy for them to be left as they were. Of course they would not do that because they would want them improved. It is that type of nonsense. We had a major issue about that with the Audit Commission. We took the view that we would rather invest in new ones and expand the range of those rather than go back over everything, dig them all up and drop them down half an inch.

Q234 Chairman: What was the response?

Mr Wilkins: We won the argument at the end of the day with the Audit Commissioner who was prepared to accept that we had at least done the reasonable thing. It was very hard to win the argument, we had to sit down and batter away at it.

Q235 Graham Stringer: The problems that a deregulated bus system causes for hitting passenger targets have come up both in oral evidence this afternoon and in the written evidence before us. Would you agree with my assessment that when Government puts money into improving radial routes in cities and towns it often leads to a contracting of the transport network, so although you might get extra passengers on that route, the bus companies concentrate on that route and you lose services that feed in? Is that your experience?

Mr Newton: Essentially what has been happening in Greater Manchester over the last few years is a contraction of the commercial services on to their core routes. A lot of them tend to be the radial routes into the key centres and the city centre. Yes, what tends to happen is you lose Sunday services and evening services which from a social inclusion perspective causes us a great deal of problems. The PTE has been trying to subsidise a number of those evening and Sunday services but you have got a limited budget and increasing pressures and the more the commercial network contracts the bigger the cost to the subsidised network and there just is not the budget to do that.

Q236 Chairman: Have you got any real sanctions you can use against private bus companies that do that to you, Mr Newton?

Mr Newton: No, in a word.

Q237 Chairman: That is what I thought.

Ms Quant: It has not made a difference in metropolitan areas but certainly nationally we are looking at costs of contracts going up eight to 12 per cent a year, on the one hand, and we are also looking at a declining group of people who are using buses, because if you look at the transport statistics and see where private car travel has grown it is largely women and poorer people who, as their incomes increase, have chosen to opt for the alternatives. Those two pressures are both going in the wrong direction for us trying to provide services for those who do not have a choice. It is very difficult to unpack what is the impact of a reconfiguration, particularly with things like concessionary fare passes coming along at the same time and also switching the system dynamics. It is very difficult to unpack exactly what is going on. I would not necessarily believe it is because private commercial companies are making more profits from fewer passengers as a general perception, the dynamics of the whole business are such that we cannot go on sustaining the subsidised transport system that we have got and we are not getting to grips with that in a very holistic way.

Q238 Chairman: The slight hazard about that is when you look at the difference between the bus system that operates in a big conurbation like London, where they do actually have control over this, and the bus services that are provided outside London, which are organised completely differently where local authorities can be held to ransom whenever the local bus company decides to be bloody-minded, you do begin to see that it is possible to expand bus ridership if you provide the services. Would you not feel that the expansion of the special concession to so many extra people would mean that if the services were expanded and were available people would use them more and not less?

Ms Quant: I think it has got to be very place specific. As with most transport things, your strategy has got to be worked out with the specifics of what is going on in your area. I am sure metropolitan areas are different and have got different opportunities but in the sort of rural county that I represent that is not going to be a choice, you cannot provide a good enough level of service. You do need to work it out for yourselves in your local area. I think it is possible in the right places.

Q239 Chairman: Dr Harrison, how are you going to cope in Devon?

Dr Harrison: We are growing bus patronage in Devon, particularly in Exeter, although not just in the city but on the routes into the city. We are growing patronage quite healthily. I would agree that is partly on the back of a comprehensive network, in other words you do not grow bus patronage if the bus does not go close enough to where people live. We are fortunate in a place like Exeter that we have retained good bus penetration into the residential estates where people live. I agree that this is very place specific. Our challenge is to spread that which is happening in the slightly more populated areas of Devon to the rest of the county.

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 per cent 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 six or seven per cent 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 although 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 grāce. 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 per cent 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 ten per cent, 25 per cent or 50 per cent. 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 Devon 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 per cent of the cost, for example. At the moment Government is talking about looking at 100 per cent funding of capital of major schemes but perhaps having a ten per cent 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.