Examination of Witnesses (Questions 59
WEDNESDAY 23 MAY 2007
Q59 Chairman: Good afternoon to you
gentlemen. You are most warmly welcome. Would you be kind enough
to identify yourselves for the record?
Mr Leather: David Leather.
Sir Richard Leese: Richard Leese,
Deputy Leader of AGMA, the Association of Greater Manchester Authorities
for the purpose of this meeting.
Mr Hughes: Graham Hughes from
Cambridgeshire County Council.
Mr Inskip: Geoff Inskip, Chief
Executive of Centro, representing the West Midlands Passenger
Mr Bull: David Bull, Birmingham
City Council, Assistant Director Development Strategy, also representing
the West Midlands metropolitan councils.
Q60 Chairman: Did any of you want
briefly to say something before we start?
Sir Richard Leese: This Friday
the Association of Great Manchester Authorities Executive Committee
will be considering a report which sets out the draft Transport
Innovation Fund proposals for Greater Manchester and we would
obviously be more than willing to let the Committee have a copy
of that report.
Q61 Chairman: We should very much
welcome that. Thank you very much. I take it that is all of the
local authorities represented in your areas.
Sir Richard Leese: Yes.
Q62 Chairman: In principle do you
think it is a good idea to have a Transport Innovation Fund?
Mr Inskip: In principle the idea
of having a very large pot of money available for public transport
improvements is obviously a good one aimed at tackling both congestion
and productivity improvements; yes, we do.
Q63 Chairman: Is it sensible to have
a division between the congestion and the productivity strands?
Mr Inskip: We understand the distinction
which is being made by the department although, from our point
of view, clearly there is quite a crossover between some of the
public transport improvement schemes because they do actually
impact quite gravely on productivity as well. If you look at something
like the Midlands metro tram system for example, the work we have
done with external consultants shows that it does increase the
productivity of the region too by about £180 million a year
and increases employment by about 6,000 jobs as well. So there
is this knock-on effect which we should also like taken into account
when we are putting in our bid.
Q64 Chairman: So in general terms
you do not think the regeneration element is sufficiently strong.
Mr Inskip: The way the department
have gone about it, dividing between a Productivity Transport
Innovation Fund element and a Congestion Transport Innovation
Fund probably from our point of view is an artificial distinction.
Mr Bull: Birmingham City Council
has a growth agenda for the next 20 years that is supporting regeneration,
creating 80,000 new homes, 100,000 new people and 40,000 new jobs
in that time. TIF supports that approach but we need to mainstream
other infrastructure investments to support it as well. It is
not enough in its own right, but it is very helpful.
Q65 Chairman: Although that is not
an objection to the Transport Innovation Fund as it stands or
Mr Bull: No.
Q66 Mr Leech: On the point of separation
between congestion and productivity, do you think that bids to
the fund would have been different had there been just one pot
and the two elements of it were put together?
Mr Inskip: From our perspective,
no. What we are doing is looking at the economic and regeneration
agenda of the West Midlands and we are putting together a package
which respects that and helps that grow. Therefore where and how
big this pot is, is not really relevant to what we are going to
be doing. We are looking at this whole package in a way which
makes sense for us locally in the West Midlands.
Mr Bull: May I add, in backing
that up, that we have a problem with congestion? We know where
we need investment and if we are going to go forward it might
include an approach to demand management. It is about having the
investment to solve the problem and the investment up front before
moving forward and therefore we need a holistic solution and that
is why we need discussions with the DfT on a package approach
towards getting that investment we need.
Q67 Graham Stringer: Can each of
the three organisations tell the Committee how much extra money
they spent over and above the money they have got from the TIF
Mr Leather: We have spent a projected
£9.8 million and the amount of money we have received from
the Government is £3.2 million. The balance of that has been
found from existing resources and from reserves and we have had
to redirect a lot of the work we would otherwise have been doing
towards this scheme.
Mr Inskip: We have just spent
what the Government allocate us through the pump-priming work,
which is about £3.5 million.
Mr Hughes: We have been allocated
£1.4 million and we will spend all of that. We will spend
between £0.5 million and £1 million of our own money
coming through LPT and other sources to bolster that.
Q68 Graham Stringer: I should like
to thank AGMA for doing a briefing on some of these issues. In
the evidence you go through a number of alternatives in the model
you are using which show that the congestion charge on its own
will lead to less economic growth and you make the case that there
would be economic growth with a large investment in public transport
as a congestion charge. What would be the case if you just got
the large investment in public transport, control of the buses
and extra capacity on the trams?
Mr Leather: In terms of what that
would do to congestion and journey speeds, there would be a 3%
improvement in journey speeds with the investment; in other words,
if the investment came in at the sort of levels we have been talking
about without congestion charging. However, if you introduced
the package as a whole, then the overall improvement would be
an additional 14% above that, so a very significant additional
benefit from having the package approach.
Q69 Graham Stringer: What would be
the impact on the economy of just the improvement in the public
Mr Leather: The impact on the
economy would be positive; no doubt about that. That positive
element would erode over time without the introduction of congestion
Sir Richard Leese: The figure
given in the evidence was that if we did not have congestion charging
as part of the package then over the period of time of our current
economic development plan, which is to 2021, 30,000 jobs would
be lost against projected growth; that is 30,000 jobs less growth.
Q70 Graham Stringer: That is with
control of buses and extra capacity.
Sir Richard Leese: Yes.
Q71 Graham Stringer: Can you tell
us how much extra money you will have to take out of the fare
box and congestion charge over the period of this scheme, assuming
you could get borrowing powers for 30 years?
Mr Leather: If we get the money
or are able to retain the revenue for 30 years then there will
be a very significant amount of investment possible, because we
need to borrow funds which we then repay using those funds. In
terms of the actual numbers concerned, in terms of charging revenues,
we are looking at gross annual charging revenues of about £118
million and we are looking at gross public transport revenues
of a further £94 million, so £212 million a year.
Q72 Graham Stringer: That basically
funds a £2 billion extra over the TIF.
Sir Richard Leese: No, it is about
£1.5 billion over and above.
Mr Leather: What does need to
be taken into account is the additional operating cost of the
public transport which is put in because that is considerable.
In fact, when you look at the revenues generated from public transport
versus the cost of running that transport the two almost net off;
there is no significant net surplus from running the public transport.
Q73 Graham Stringer: Is the system
you are proposing effectively a double cordon system?
Mr Leather: There will be two
charging points; we do not refer to it as a cordon but there would
be two charging points on a route into the regional centre and
that would apply in the morning peak period travelling into the
regional centre and then it would also apply in the afternoon
peak period travelling out of the regional centre. To get into
the city all vehicles would pass two charging points if the journey
starts outside the outer charging points.
Sir Richard Leese: The key element
within this is that the modelling shows only 1% of congestion
in Greater Manchester is caused by journeys from outside through
to outside, so basically Greater Manchester generates its own
congestion. A solution has to address that and we are looking
at a first phase which is looking at congestion in and around
the M60 ring and the intermediate ring road, but there would be
subsequent phases which would then address congestion around other
nodes, which are principally the other town centres within the
conurbation. Some of the public transport investment we are talking
about would directly relate to that second phase.
Q74 Graham Stringer: But initially
it would be effectively two rings round the centre of the urban
Sir Richard Leese: It is actually
those corridors which penetrate those rings.
Q75 Chairman: Is that the same for
some of the rest of you? Mr Bull, you talk about the whole of
the region. Have you done the same sort of modelling?
Mr Inskip: The work we are doing
at the moment is actually in progress and therefore we are looking
at a lot of options and we have not determined a particular option
yet. We are actually looking at the impact on the economy of the
various proposals and packages we are putting forward. So we are
looking at public transport, the road pricing proposition and
also the impact on the local economy and also in relation to social
inclusion. At the moment that is still being worked through.
Q76 Chairman: You are going to have
to move a bit, are you not?
Mr Inskip: We are.
Q77 Chairman: With respect, other
authorities are not going to wait around while you do your nicely
rounded bit of research.
Mr Inskip: I agree.
Q78 Chairman: They might be grabbing
the money that would be useful to you. Heaven forefend that should
be the case.
Mr Inskip: We shall be ready for
the end of July.
Mr Hughes: It is worth saying
that Cambridgeshire is a slightly different case to colleagues
on either side of me in the sense that we are a relatively small
city and what we are looking at is a central stand-alone scheme.
The other authorities represented here are dealing with conurbations
with much larger schemes.
Q79 Chairman: You are nice and posh
Mr Hughes: Cambridge always likes
to be different in these things. The stage we are at is not dissimilar
to my colleague to the left, which is very much at the stage of
investigating the options. We have some fair way to go. What I
would say specifically in response to the point about timescale
is that the way we have in the past implemented difficult schemesand
we have put in place a number of very difficult transport schemesis
by making sure that we carry stakeholders and the public along
with us. We are not going to be pushed into any particular timescale;
we are going to make sure that if we take a TIF scheme forward
it is fully worked out, it is fully developed and therefore we
will move at the pace we feel we can move at rather than making
any hasty moves.