Select Committee on Transport Minutes of Evidence


Examination of Witnesses (Questions 59 - 79)

WEDNESDAY 23 MAY 2007

SIR RICHARD LEESE, MR DAVID LEATHER, MR GRAHAM HUGHES, MR DAVID BULL AND MR GEOFF INSKIP

  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 Transport Authorities.

  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 the division.

  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 bids?

  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 transport infrastructure?

  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 charging.

  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 conurbations.

  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 though.

  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 schemes—and we have put in place a number of very difficult transport schemes—is 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.


 
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