Select Committee on Transport Seventh Report

5  The Department's impact on economic growth and productivity

Performance against road congestion PSA targets (two targets)

42.  The urban congestion PSA target has not been assessed in the 2007 Departmental Annual Report. It was due to be assessed in the Autumn Performance Report (December 2007), but there was still no assessment available in this document.

43.  The strategic congestion target has been assessed for the first time in 2006-07, and is showing slippage. This is disappointing given that the original target was not very ambitious: simply to improve the reliability of the worst 10% of journeys on the strategic road network, by any amount, no matter how small. The Autumn Performance Report 2007 states that average reliability declined by 10.1% in the year September 2006 to August 2007, compared to the baseline period (August 2004 - July 2005).

44.  The deterioration noted in the period August 2005 to July 2006 was 2.9% according to the Autumn Performance Report of December 2006. The situation is not only worsening, but doing so at an increasing rate. In absolute terms, the deterioration was from 3.78 minutes of delay per ten miles (baseline) to 4.16 minutes in just 12 months between September 2006 and August 2007.

45.  The continued failure to deliver on road congestion targets, especially given the modest nature of the target, is very disappointing. The Department has very little time to reverse the trend towards ever more serious delays on the strategic road network. In order to do so, the improvements cited by the Department, such as enhanced Incident Support Units (ISUs) and improved road-works management, will need to be implemented very quickly and efficiently. The problem is likely to become more significant, as two of the four new PSAs relate to congestion.

46.  We are also concerned at the implications of roads planning for the Department's role in supporting the new PSA target 7. Improving regional economic performance, especially in the north, will require improvements to highly congested routes. There is a significant risk that some regions will be unable to make progress beyond a certain point so long as their roads infrastructure is not transformed. There may be a conflict between the priorities set by reference to the cost - benefit ratio of transport investments and the priorities arising from the need to strengthen regional economies. For instance, we are concerned that the most favourable cost - benefit ratios may not direct investment towards projects which contribute to reducing the gap in economic performance between regions.

Road pricing and the Transport Innovation Fund

47.  Sir Rod Eddington argued that the net value of the benefits from a national road pricing scheme could amount to some £20 billion annually. His model also suggests that congestion could be cut by 50% in 2025 compared with the situation without a national road pricing scheme.[38] In Towards a Sustainable Transport System, the Government accepted Eddington's conclusion that "the potential benefits from a well-designed, large scale road pricing scheme are unrivalled by any other single intervention."[39]

48.  Despite the apparent high priority attached by the government to a national road pricing scheme, the Department has made little progress and favours the implementation of local charging schemes initially. Since the petition against road pricing on the No. 10 website, which attracted some 1.8 million virtual signatures, much of the responsibility for delivering congestion charging has been placed on local government through the Transport Innovation Fund (TIF).

49.  We have previously commented that the size of the fund may be insufficient for more than a small number of local projects to be taken forward simultaneously and that the cost of bids might prevent a broad range of towns and city regions from exploring the best solutions to local congestion problems.[40] We have also urged the Government to conduct pilot studies of the effect of pricing on the strategic road network.[41] However, only Manchester and Cambridge have submitted detailed bids for congestion TIF funding; and these might yet be defeated locally. The Secretary of State has stated that ten areas are currently benefiting from financial assistance from the Department in order to work up TIF bids locally.[42]

50.  We note that little progress is being made with regard to road pricing. There is little evidence to suggest that local authorities have the appetite for submitting the necessary bids and securing TIF support. We have previously noted that local road pricing schemes cannot be effective pilots for a national scheme. We therefore recommend that the Government re-examine its policy with respect to national road pricing.

Lorry road user charging

51.  The Government first announced that it would consider introducing a user charge for lorries or a "vignette" in November 2000. The intention was to ensure that "foreign hauliers start to contribute towards the costs of maintaining the UK road network and the environmental costs that they impose".[43] In the budget statement of 17 April 2002 the Chancellor announced that he would go ahead with a road charge for lorries based on distance, with off-setting tax cuts for the UK haulage industry. Charges would have been administered using satellite-based technology. However, the Secretary of State announced in July 2005 that the lorry road user charging scheme was to be scrapped as a stand-alone project and that the scheme would be incorporated in the Government's broader plans for national road pricing.[44]

52.  The haulage industry has expressed dissatisfaction with this decision. The Freight Transport Association and the Road Haulage Association have considered taking the Government and the EU to court over whether the change in policy constituted reverse discrimination against the UK road haulage industry.[45] We are deeply disappointed by the lack of progress on lorry road user charging. In the absence of a national road pricing scheme for the foreseeable future, United Kingdom hauliers continue to pay towards the cost of maintaining the infrastructure while their foreign competitors generally make no such contribution. This situation is highly unsatisfactory and has been going on for far too long. The Department must act to level the playing field between UK hauliers and their overseas competitors. Since a national road pricing scheme remains a distant prospect, we recommend that the Department revive its plans to set up a lorry road user charging scheme as soon as possible.

Performance against the rail PSA target

53.  The original Spending Review 2002 PSA for rail was dropped when the Spending Review 2004 target was set. As we have noted previously, this was regrettable given the need to encourage modal shift away from the car in order to address pollution and congestion problems. Rail use continued to grow in 2006-07, though not on the scale that would be necessary to achieve the 2002 Spending Review target. Further growth is likely to be problematic, as capacity constraints are asserting themselves on ever widening sections of the network, especially at peak times. The recent announcements of Crossrail and improvements to Thameslink, together with the plans to introduce longer trains, give us hope that there will be improvements in this area, at least in the London area. We acknowledge that the 2007 White Paper on rail set out to address the capacity problems on the railways for the next thirty years, and our views on the Government's approach will be published as a separate report.[46]

54.  The Spending Review 2004 target had two elements: to improve punctuality and reliability of rail services to 85% by 2006, and to ensure that additional improvements were made by 2008. The first element of this target, measured by the 'Public Performance Measure' (PPM), was met on time. The second element was only fixed precisely in the 2007 Autumn Performance Report: to increase the Public Performance Measure (PPM) further, to at least 89.4 per cent by March 2008.[47] This element has been assessed as being 'on plan' in 2007. There are limitations to this measure, as it considers trains to be on time provided that they arrive within 5 minutes of schedule - with the margin rising to 10 minutes for long-distance rail services. Even with the extra margin, the long-distance sector is still not meeting the 85% target. Long-distance trains achieved a PPM of 84.9% by August 2007.[48] This is anything but impressive.

55.  The failure to achieve the target for punctuality and reliability on the railways suggests either that the Department is not sufficiently pro-active in driving up standards among train operating companies and other partners, or that it does not have the means to compel operators to get this sorted out. Whichever is the real problem, the Government needs to act promptly and decisively to ensure that passengers get the level of reliability and punctuality they deserve.

56.  There is as yet no decision about the place of high-speed rail in forward planning. We were reassured by the Minister that it has not been ruled out, but the capacity problem on the West Coast Main Line is already grave. We were therefore concerned that the Department has no time-frame for a decision on a high speed link, at least as far as Birmingham, the stretch of the line with the most pressing problems. The Department should clarify the time-frame in which it will make a decision over the high-speed rail link to Birmingham. We understand the logic of the Eddington report which suggests that now is not the right time to make this decision, but given the long lead time for any major engineering works, we believe the Government needs to commit to making a decision by 2010 at the latest.

38   HMT, The Eddington Transport Study, December 2006, para 3.76 Back

39   Op cit, page 48 Back

40   Ninth Report from the Transport Committee, Session 2006-07, The Draft Local Transport Bill and the Transport Innovation Fund HC 692, para 213 Back

41   Ibid, para 225 Back

42   Q237 Back

43   Pre-budget report, HM Treasury, November 2000, para 6.69 Back

44   HC Deb, 5 July 2005, col. 173 Back

45   Hauliers to fight on over lorry charge climbdown, The Daily Telegraph, 1 September 2005 Back

46   Department for Transport: Delivering a Sustainable Railway, Cm 7176, July 2007 Back

47   PPM combines figures for punctuality and reliability into a single performance measure for passenger rail services. Back

48   DfT Autumn Performance Report, Cm 7266, p.24 Back

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