UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 104-ii

HOUSE OF COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE THE

EAST MIDLANDS REGIONAL COMMITTEE

 

SHARE OF FUNDING

THURSDAY 17 DECEMBER 2009

(DERBY)

STEPHEN ABBOTT, JIM BAMFORD, SPENCER GIBBENS and DAVID HORNE

COUNCILLOR ROGER BEGY, COUNCILLOR DAVID PARSONS and DR. STUART YOUNG

 

Evidence heard in Public

Questions 56 - 109

 

USE OF THE TRANSCRIPT

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Oral Evidence

Taken before the East Midlands Regional Committee

on Thursday 17 December 2009

Members present:

Paddy Tipping (Chairman)

Mr. Bob Laxton

Sir Peter Soulsby

Judy Mallaber

 

Examination of Witnesses

Witnesses: Stephen Abbott, Secretary, TravelWatch East Midlands, Jim Bamford, Rail Officer, Nottinghamshire County Council, Spencer Gibbens, Route Enhancement Manager for the Midland and Continental Route, Network Rail, and David Horne, Commercial Director, East Midlands Trains, gave evidence.

 

Q56 Chairman: Welcome. I see that the sun is shining on the righteous-are you all right there? We can see you, because you are in the sunlight. It will keep you nice and warm, and Bob will make you sweat when he starts asking questions.

Welcome to Spencer Gibbens, the Route Enhancement Manager for Network Rail; my old friend, Jim Bamford, from Nottinghamshire County Council; Stephen Abbott from TravelWatch East Midlands; and David Horne from East Midlands Trains. This is part of an inquiry into funding for the East Midlands and whether it gets its fair share of funding. We are especially keen to talk to you about transport, particularly high-speed links and the electrification of the Midland main line.

Let's start with you, Spencer. You say in your evidence-let me put it bluntly, or crudely-that lots of money has been spent in the area. Is that really right? It is not the public's perception.

Spencer Gibbens: Yes. For me, coming here today is a mixed bag, or a double-edged sword. On the one hand, I want to say that, in reality, lots of money has been spent on the railway here, but, on the other hand, we could always spend more and we would always welcome more. It is mixed for me in that respect.

To set the issue in context, one of the things that we have to bear in mind is that Network Rail took over from Railtrack, which was a bit of a mess-that is probably the best way to describe it. The first years of Network Rail centred on getting the basics right and trying to attack cost control and train performance in particular. The way in which Network Rail structured itself was very much about getting on top of train performance by getting safety in the right place and getting to what are the unprecedented levels of train performance that we have at the moment.

It is only in the past two to three years that we have turned to enhancement projects. In the background, there has been a considerable amount of investment in basic things. The region is dominated by our big re-signalling programme, which is rolling on, but over the past few years, we have turned to some significant investment, such as East Midlands Parkway, the new station at Corby-that was a triumph of working together and collaboration-and on minor bits of lines. Capacity and performance schemes have taken place in the Kettering and Wellingborough area. We are about to commission work to eliminate a bottleneck between Derby and Nottingham, and to bring about line-speed improvements to the Ivanhoe service.

We will get on to electrification, but we were disappointed that it did not immediately come to the Midland main line, because we think there is a good case for it. So it is a mixed bag. We can always spend more, and we have significant projects coming up in the next control period, such as the line-speed improvements to London and considerable enhancements to Nottingham station.

 

Q57 Chairman: David, in your evidence you also say that there is loads of money being spent in the East Midlands. What are you particularly proud of?

David Horne: We believe that there has been more investment going into the East Midlands rail network in recent years than at any time since the war. Here in Derby we are building the new £22 million depot properly to maintain the Meridian trains, which form the core fleet for us between the region and London. Last year and next year, there has been the East Midlands Parkway station, Corby station, and the new depot here, and the refurbishment of two of our fleets is under way. The investment, when you add those up, is probably in the region of £70 million, so the region is getting a significant level of investment. The services in the region are improving and that is reflected in our punctuality figures and in our passenger numbers.

Passengers are responding to these improvements and are travelling, but as Spencer said, there is more that can be done. We are very keen to see the line speeds improve. I know that is something we are going to talk about shortly. Of course, we see other regions getting more investment and we are keen to see similar investment on the Midland main line, whether it is in further improvements to line speeds, electrification, or other improvements. So, yes, a lot is being done. We need to celebrate the fact that that is being done, because it has been hard fought for, but further investment can be made.

 

Q58 Chairman: We are all going to have to speak up a bit, because it is a nice room but it is echoing a bit. So, if you could, shout at me-everybody else does, so just join in. Jim and Stephen, you take a slightly different view, don't you? Both Spencer and David have said that there is a lot of investment coming in, but you would like to see more.

Jim Bamford: I would, but I do not think that is a different view from that given by Spencer and David. I would actually endorse every word both of them have said. Spencer's point was quite a crucial one. The region has been catching up and a lot of work has been done, both on the infrastructure and the train operating company, to improve things. I know there have been marked improvements in both respects recently, but essentially our rail services started from so far behind that I think there is quite a long way to catch up. In particular, on the Midland main line, in terms of average speeds and journey times to London, we are basically the poor relation of the inter-city routes to and from London. That is not a criticism of the train operating company at all; it is just a fact that the trains can only go as fast as the track will allow them. That is a consequence of how much is invested in them.

On Network Rail, I think in one sense Spencer was a little modest about its achievements. Network Rail has come up with what I think is an absolutely excellent scheme. I think we described it as near-miraculous value for money in our submission, and it is. Network Rail has been allocated £69 million to reduce the journey time between Sheffield and London by eight minutes. This bit of the East Midlands-Derby and Nottingham-would get about six minutes, and Leicester would get about 4 minutes. The precise times have not been finalised yet. That is for £69 million.

Now, I had a discussion with people from the Highways Agency a couple of months ago about the widening of the M1. As I understand it, they expect that will reduce the reliable journey time from Sheffield to London by about 10 minutes. I asked them what they would say if they had been given £69 million to achieve that and they just laughed. In fact, they have £1.5 billion, which is £1,500 million. I think it is true to say that, compared to any comparable road or rail scheme for that sort of journey time improvement, this is an extraordinarily small sum of money. I think that the question of how to deliver it is giving Network Rail a real headache. It has come up with ways of doing so, but it is a real difficult job.

We think that there are a couple of further things that could be done for a modest additional sum of money, perhaps £30 million or £40 million. We cannot be precise about that at the moment, because Network Rail has had such a big job working out how to deliver the eight minutes for £69 million. It is only starting to move on to look at the next bit-for example, at provision for a couple of loops at Desborough, which would allow it to get freight trains out the way and give passenger trains a clearer run. Its broad estimate is that that could be done for £10 million.

We suspect that there are a couple of other things that, for another £20 million or so, would enable the journey time benefits of electrification to be realised in the short term. That would not give us the other benefits of electrification, but we are not going to get that for quite a few years. We are going to have to wait until the back end of the next decade. At least that spending would allow us to have the journey time benefits in the short term.

 

Q59 Chairman: We will focus on some of those issues in a minute, but that is important stuff. What I think you're saying-shout me down if I've got this wrong-is that in the short term, with some fairly modest investment, you can improve journey times, and that you ought to do that now, before electrification. Ultimately there is a discussion to be had about the high-speed link-that is further into the future-but all those schemes are possibilities. Stephen, what is the consumer's view? What is your bid, basically?

Stephen Abbott: Again, I would like to echo what the other speakers have said. In terms of investment in the infrastructure to enhance the Midland main line, there has been nothing since the 1960s. The last investment in the late '80s, which was the re-signalling through Leicester, was in many ways a disinvestment, because to keep the scheme at a moderate cost, a lot of facilities were eliminated-loops at Desborough, one of the tracks through Leicester and so on-which we badly need now. As Spencer said, the third track between Kettering and Wellingborough has been put back at some expense, having been wantonly thrown away in 1987. That is with hindsight, of course. So I think there is some catching up to do. It is nice to see money being spent. My concern, which I think reflects what Jim said, is that the enhancement scheme on the Midland main line-the line speed and so on-is cheese-pared to keep the cost in bounds, rather than a full job being done. We would sooner see the work phased and done properly than see them skimped.

For example, in Market Harborough, where I live, there is a scheme to enhance the line speed. My understanding is that at present the intention is to do what I call half a job-to do some straightening of the curves, but not a complete job, which would involve the demolition of a redundant bridge and so on and so forth. At the moment, trains going north to south or south to north through Market Harborough change direction five times because of the nature of the reverse curves. If we could smooth that out, you would get not only a line-speed benefit, but a maintenance benefit. I know from my observation that the rails do not last. Because they are on curves, they get side-cut. There is an ongoing maintenance cost there, as well as a time penalty. But I echo what Jim said: if we are going to have electrification, by all means alter the track. Do what you have to do with the track first, because once you've got those wires up, it is very difficult to straighten curves and alter other infrastructure features.

 

Q60 Chairman: Stephen, what about the view around the region that we are a poor relation compared with the West Midlands? Have I made this up?

Stephen Abbott: No, I think we are, in terms of the main line, when you look at the Midland main line compared with the east coast main line and the west coast main line. I think if you looked at those three routes in the late '60s they were comparable. We each had a 100 mph line speed. There were similar sorts of journey times for equivalent distances, but the east coast main line has been modernised and electrified, and the west coast main line has been modernised twice. The lesson there is that it was skimped in the '60s. A lot of the money that has been spent in the '90s and early in 2000 on the west coast main line has been spent putting right things that should have been done 40 years earlier. I don't want to see the Midland main line go down that route.

I think the East Midlands loses out in all sorts of ways because of a sort of identity crisis. We get lumped with the West Midlands. People say, "Oh, we spent some money in the Midlands"-on Birmingham New Street or whatever-"so off you go." One good feature now is that we have a train company that you can identify with the region through its name. That has been a very positive thing. The passengers have responded to that.

 

Q61 Chairman: I get the impression that the campaign for electrification of the Midland main line is going forward. EMDA produced the Arup report fairly recently, and some of you went to see Lord Adonis on Monday. What do you make of the Arup report? It seems to suggest that for £69 million, we get a lot of benefit. Spencer, have you had a chance to look at it?

Spencer Gibbens: I've had a look at the brief details. Network Rail is on record as saying that we want electrification to happen anyway. We completely agree on the environmental benefits and so on. It is difficult to add anything because we completely agree with it. We just want to carry on rolling on, electrifying large parts of the network.

 

Q62 Chairman: Jim, you were at the meeting?

Jim Bamford: Yes, I was. I understand the Government's position. We have had two announcements now, and I think there are four different stretches of line that are being electrified. There is the Great Western route, which is the largest scheme, and three medium-sized bits of line in Lancashire. It is a little frustrating because the Network Rail electrification route utilisation strategy that was published last year identified the Midland main line as having the best business case for electrification. When we did not get that, there was inevitably a bit of frustration. We were thinking, "What have we got to do to get the investment? Even when we have the best business case, it goes somewhere else." I think we understand the reasons for that: it is to do with rolling stock replacement.

We are extremely keen on electrification; it produces a number of benefits. It makes the railway line cleaner and quieter, with more pleasant trains for the public to use. It is quicker, although not as much as people often imagine. There is often an automatic assumption that electric trains are quicker. They are to some extent-they will accelerate and brake a bit faster than diesel trains-but it is nowhere near as marked as people think. The stuff that was presented to Lord Adonis on Tuesday evening said that it would give about four minutes off the Sheffield-London time, about three minutes from Nottingham and Derby, and two minutes from Leicester. It does give a big CO₂ saving and it makes the railway cheaper to operate. That is one of the reasons it has such a strong business case: it makes it easier to get modern trains and so on.

We understand the whole raft of reasons, but the bottom line is that no passenger ever went to the ticket office and said, "By the way, what fuel is the train going to use?" The passengers don't care. All they care about is the fare and what time the train will get to St. Pancras. That is why, at the risk of repeating myself, we are so keen on the additional money for the line speed scheme. We regret, though we understand, the Government's position that we are not going to get electrification in the short term. I hope I understood Lord Adonis correctly when he said, essentially, "You are the next." When the funding is available, the midland line should be next. We would want that position stuck to. We would be extremely upset if that was not the case. If we are not going to have electrification for 10 years or so, could we at least have the equivalent journey-time benefit in the short term?

 

Q63 Chairman: That's really helpful, but just tell me this: people say to me that they are going to spend more on enhancing car parks down the west coast main line than the entire cost-the £69 million-on the Midland main line. That sounds like a crazy policy to me.

Jim Bamford: That is the case. What is wrong with that is not the investment in the west coast car parks. The car parks on the west coast main line are getting £90 million spent on them. They will generate far more than that in additional revenue. They are the sort of thing that any commercial enterprise will do. I do not criticise Network Rail for doing that; it is an extremely sensible thing to do.

 

Q64 Chairman: You are all being very nice to Network Rail.

Jim Bamford: All I am saying is that it does put in sharp relief just how small an amount of money Network Rail has been given to improve line speed along the whole length of the Midland main line. The additional money that I am suggesting we might need would more or less bring the whole of the Midland main line scheme up to the same allocation of funds as the west coast car parks have got, which does not seem an unreasonable thing to ask for.

 

Q65 Sir Peter Soulsby: I guess we will probably come back to electrification in a few minutes. I wanted to divert for a moment to the regional funding advice mechanism. In its evidence to us, TravelWatch stressed the value of including rail schemes in the regional funding advice mechanism. I wondered whether you would like to comment on the input into that advice at the moment-insofar as it relates to rail-and whether it is adequate and whether you think you have a part in the process. Let's start with Network Rail.

Spencer Gibbens: I think the thing with the regional process is that the switch-the change-to include rail is fairly recent. I don't think any region is making good progress on this and, really, thanks to Jim's personal effort, the only one that the East Midlands has got in is improvements between Nottingham and Lincoln, in terms of development.

I think the overall idea is a good one-trying to match the control periods that Network Rail has and the five-year planning for the regional funding allocation is in principle good, because then there is a decision that Government can make as to whether that is a local scheme that comes through the regional allocation or a nationally important scheme that becomes part of Network Rail's funding allocation

So, I think in principle the idea is a good one. It has made some slow starts. We have already seen that the emphasis is all about the A46 and so on-being the railway, that is frustrating, but I guess that I would probably come to the same conclusion if I saw all the facts and figures. So, a good start, but work in progress needs to move ahead a bit quicker as far as rail is concerned.

Jim Bamford: I would endorse that. It was extremely welcome when the Government changed the advice for the regional funding allocation-I think it was in July of last year, 2008, that the advice was changed, to allow rail schemes to be considered in the mix. There was no rail funding that went in.

I commend the Government emphasis on the DaSTS-I think that's the acronym for Delivering a Sustainable Transport System-which is the framework that will guide the next set of allocations in the regional funding allocation. In that framework you do not start off with a solution-we want a road here or a better train service there-then have a look at what problem it addresses. You identify the problem first-for example, you need the benefits to the East Midlands economy of connecting the three cities to Manchester, Leeds, London, Birmingham or wherever it might happen to be. So, you start off with the problem and identify that, then look at how that can be most cost-effectively met. That seems to me a laudable way of addressing things.

From that I am hopeful and fairly confident that a number of rail schemes will feature quite highly, because they are a quite cost-effective way of improving our connections to precisely those places-other big parts of the British economy, such as Leeds, Manchester, Birmingham, London and so on-as well some connections within the region, such as from Nottingham up to Lincoln, from Leicester across to Birmingham, or from Leicester eastwards to Peterborough and Cambridge. Those can be done for relatively quite a lot less with rail schemes than they could be with the equivalent road scheme.

To take the Nottingham-Lincoln corridor, the A46 is costing £350 million; the allocation to do up the broadly parallel railway line for 90 mph running is £50 million. That is a lot, lot cheaper. Again, it comes back to what I said earlier, and I am happy to continue to pay credit to Network Rail, which is really getting a good grip on its costs. The costings are coming down and down. Working closely with Network Rail helped us to make that submission.

Yes, it is frustrating that there are not more rail schemes in the second round of regional funding allocation, but I think that is partly because there was a whole load of schemes in there anyway and it is more difficult to dislodge established stuff. But I trust, and am hopeful, that for the next round rail schemes will feature quite highly. It seems to me very important that they should do so.

 

Q66 Sir Peter Soulsby: Stephen, TravelWatch particularly drew our attention to the importance of this process. Can you comment on how well it is beginning to work?

Stephen Abbott: Yes, I think the signs are that it is starting to work and that it is a good move, because regional transport really needs organising on a regional basis-and funding, ideally, to some degree, in the regions, perhaps something like the German and Swiss model. One of the reasons that I say this is because over the past 30 years something has developed that I call the third market for rail travel.

Most people acknowledge that rail is very good for inter-city to London; it is good for taking people to work, into major cities; but the thing that has developed, which has been notable in the East Midlands over the past few decades, is inter-urban and inter-regional travel-journeys of 20, 50 or 60 miles by people living in one city working in another, or by those who travel from A to B for social reasons. These journeys are best looked at from a regional perspective.

As I think we said in our evidence, over the past 10 years, there has been a degree of disjointedness in some of the connections between the major centres in the East Midlands and from the East Midlands to the outside. There have been some notable developments, one of which is the Nottingham to Leeds train service, but other connections have been split. For example, Lincoln, as well as being one of the largest places with no trains to London, is probably the largest place in England with no trains to Birmingham-you've got to change at Nottingham. I think that a regional planning of rail transport, with the money to back it, is a welcome thing.

 

Q67 Sir Peter Soulsby: It could be argued, could it not, that focusing on these things on a regional basis might actually be rather narrow, and that the issues that you've talked about require inter-regional collaboration and priority setting. Do you think that there is not a risk that if that is left at a regional level, the focus is sometimes too narrow?

Stephen Abbott: That is a risk, and I think the inter-regional connections are particularly important to the East Midlands, because we perceive that there is a pent-up demand for better connectivity to major nodes, such as Birmingham, Leeds and Manchester. If you can get to those three places easily, you can get to a whole host of other places. Of course, we have to remember that the East Midlands, apart from the Lincolnshire coast, is landlocked-we're surrounded by five other English regions, but the connections to them are not always that good.

 

Q68 Sir Peter Soulsby: Yes, but I want to add, to what extent linking regions is a matter of national priority setting rather than regional priority setting?

Jim Bamford: I think you're right. At the very end of our evidence, where we talked about inter-regional links, we said that we hoped that that issue would be picked up in the next high level output statement, which is the statement of what the Government wish the railway to deliver over the next five-year period. I think it is both. Yes, you are right. Those links, because they are cross-regional, matter to the national economy, but they clearly matter to the regional economy as well, so I would hope that that would be picked up at both levels.

 

Q69 Sir Peter Soulsby: Is there not a real concern that rather than being both, it ends up being neither?

Jim Bamford: Yes, there is a danger.

 

Q70 Mr. Laxton: Can I talk about regional co-operation? David, you talked about the East Midlands trains in the evidence that you have given, and you have been very positive in saying that a whole load of regional stakeholders-local authorities, county councils and a host of organisations-have been crucial. But you go on to a more critical note when you talk about what some of the other regional development agencies have done around other regions compared with what has happened here. Would all of you like to comment briefly about what level of co-operation you have with other stakeholders in general around the region?

Spencer Gibbens: I think it is something that we've worked hard to try to develop. Again, I think it could be improved. It might sound like Jim and I spend most of the time praising each other.

Mr. Laxton: It does a little, yes.

Spencer Gibbens: That is only because of the relationship that we have tried to develop. There are examples: Corby, which was about the region coming together, and Derby, where I was thinking, "Well, that's actually important. We'll support that." The fact that there is a bus between East Midlands Parkway and the airport is again because the region has come together. In terms of-I'll let David answer for himself-dealing with Yorkshire Forward, it seems to be a lot easier for the railway industry than it is in the East Midlands; that certainly seems to be the fact.

Again, we've all got to want to work together to make it happen. We certainly try to do our bit. There were comments earlier about the national perspective and taking a focus on the region. For our part, we have recognised that and have created our own route now that is essentially the Sheffield to London line. We have linked that with the high-speed line down to the Channel Tunnel so, from an operational perspective, we are looking at that from a point of view that suits this region. Again, our stakeholder management mirrors that. Good work is in progress, but it has to be a two-way activity.

Often I get lobbied and we can't always do the stuff that we are lobbied for. We would rather work in partnership and do things together. One thing that we have just got authorised is £50 million-worth of redevelopment for Nottingham station. Again, that is entirely partnership-based with Nottingham city council and EMDA. We worked with EMDA on East Midlands Parkway and Corby. Nottingham station is the paradox that Jim was describing earlier; we can find £60 million to spend on a station but only £69 million to spend on line speed, because the business case is generated in a different way. I think that there is always room for improvement, but our stakeholder relationships are very good.

 

Q71 Mr. Laxton: In this locality, I can speak with direct experience of partnership between local partners and yourselves just over the way, and the work is going on, which is very commendable. It has transformed Derby railway station completely, and outwith of the station and the area, the associated work will improve the entrances to the station.

Jim Bamford: The examples that Spencer gave were good: Corby Station and East Midlands Parkway, and the contribution that EMDA is making towards the Nottingham station scheme. They are all very welcome, but I think that it is fair to say that there is plenty of scope for EMDA to do more and all of us would wish that it did so. There has been more money going in from the regional agencies in other regions, and I think that we would all welcome much more of that in the East Midlands.

 

Q72 Mr. Laxton: Steve, you will have an overview as to how you think it works well or perhaps less well in some parts of the region-inter-regional co-operation and partnerships.

Stephen Abbott: I agree with what Jim has said. I think that EMDA has done some good work, with the parkway and so on, but hopefully it can be a little more proactive in getting rail schemes off the ground. One comment that I would make, which echoes something that I think Spencer hinted at, is that, certainly from the grassroots level upwards, there is a very good measure of consensus in the East Midlands as to what the priorities are. I have been at meetings where it was agreed that the top two priorities are Corby and a better train service for Lincoln. That is from people who live 60 miles from Lincoln. They saw in the regional list that those have to be the top two. I think that this is a good attribute that we can build on for the future-by and large, people in the regions agree, even though we are a multi-centred region.

 

Q73 Mr. Laxton: David, in your evidence, you were slightly critical-perhaps a little more than slightly-about EMDA. How would you like to see it help more? Perhaps you could be specific.

David Horne: Let's first explain the example where it has worked, which is where Yorkshire Forward has funded some of the pump-priming costs of starting the second train per hour between Sheffield and London, which we started on Monday. Sheffield city region came to us and said that it would like an improved frequency of train service between Sheffield and London. We found a way of doing that with additional rolling stock linked to the Corby opening, but we needed pump-priming investment. Sheffield city region thought, "Well, why don't we try Yorkshire Forward?" Through Yorkshire Forward, we have secured the funding to start that service. There are other aspirations within the East Midlands, particularly to do with train capacity. If Yorkshire Forward were the RDA for the region, we would probably be looking at additional rolling stock to secure the capacity for those services, for example, between Nottingham and Matlock, where we have overcrowding; between Derby and Crewe, where we have overcrowding, because all trains are operated by one-car trains; and between Nottingham and Lincoln.

When we talk to our stakeholder partners, however, about whether we can put together a bid with EMDA for funding for additional rolling stock, the view is, no, that is not what EMDA does. When you look at the EMDA annual report for 2008-09 and see that, out of the £100 million regional expenditure, only £400,000 is being spent on transport, you can sort of understand that it is, at the moment, unrealistic to expect EMDA to play the same role in the east midlands that Yorkshire Forward has been playing in South Yorkshire. We think that there is an opportunity for more to be done and very much recognise that EMDA is contributing-and has contributed-to some schemes, but if we compare this region with other regions, RDAs in those areas seem to be doing more.

 

Q74 Chairman: Have there been discussions with EMDA about that? Spencer and David, have you talked to anyone about it?

David Horne: Indirectly, on behalf of East Midlands Trains. As I said, with Sheffield City region, it was the region that had the discussion with Yorkshire Forward. So the way we've been doing it is to have discussions with the local authorities in the East Midlands, because it needs to be done in partnership. That seems to have been how it has been successful in South Yorkshire.

 

Q75 Chairman: We have talked a bit about the other regions-the North West and South Yorkshire-and one of the things that strikes me is that they've got PTEs. There's no PTE in the East Midlands, at all. I know, Jim, that you and I have talked about this in the past. Do you think having a PTE in the East Midlands would make a difference?

Jim Bamford: A PTE does bring with it more resources and so on, as there are just more people working on ground issues in the region. I can understand the reasons why the East Midlands doesn't have one: it doesn't have the single large conurbation with the same sort of pattern of rail services that Leeds, Birmingham or Manchester has. Yes, if there were a PTE, I'm sure it would give us more clout in some respects, but, in all honesty, it's difficult to see that coming about because of the different geographic circumstances of the region.

 

Q76 Chairman: Stephen, what's your view on this?

Stephen Abbott: I think there would be a benefit from a PTE-type structure for the East Midlands, not least to get consistency in the provision and promotion of the local rail and bus services-such things as a common fare structure; this is something that we in the East Midlands do not have. There is great disparity in the fares and the types of ticket available for particular regional journeys. I am talking here about the 20, 30, 40-mile journeys. That is due to history, really, because we have come up through a variety of train companies and their backgrounds.

One of the things that a PTE would do is get the detail right. A simple matter like saying there should be a sign outside a railway station saying that the bus to so-and-so leaves from 100 yards away is very difficult to achieve in the East Midlands, because there is great debate about whether it is the train company's job or the local authority's job as the transport body. Some of these things just fall by the wayside. Something that has been touched on in various people's evidence is that the bus-rail integration in the East Midlands is not that good. A lot could be done without spending much money just to get the information side right, so when you come out of a railway station, you've got a clear indication of where and when buses go to wherever. Some sort of co-ordinating body-call it a PTE or what you like-for regional journeys would be beneficial.

Chairman: At the beginning of the session, we talked quite a lot about Midland main line improvement and electrification. Let's just focus on that for a bit because it is a topical issue.

 

Q77 Sir Peter Soulsby: Yes. You have reminded us that there is a very powerful business case for electrification, and Jim in particular reminded us of what it will and will not do. It is clearly not a panacea; on the other hand, it is pretty important in terms of planning for the future and, indeed, making the railway more environmentally friendly and green. I just wonder whether there is a need for us to have early certainty about when it is likely to happen. The Secretary of State very helpfully-very encouragingly-said, "It is not if; it is when," but of course that could be still quite some time in the future. Taking it from Spencer's point of view-Network Rail's work on improvement to the line-would it be helpful to have an early commitment to enable you to plan?

Spencer Gibbens: I think that, yes, that answers the question for us. The issue is making sure that we can actually create a rolling programme and we can get the most efficient resource, because that's what keeps the cost down. The investment will go into factory trains, which are the sort of vehicles that they use in Austria. The whole thing can happen two or three kilometres at a time, when the line is closed overnight, because one of the things that we are desperately trying to do is have a railway that doesn't put people on to buses. Planning for that certainty would allow us to develop smarter production modes and roll them out.

 

Q78 Sir Peter Soulsby: I guess it would make a difference to the way in which you look at the costings of the Great Western, for example. It is part of a programme that will continue beyond the electrification of that main line.

Spencer Gibbens: Yes, and the investment for the Great Western will be on the basis of building these factory trains. Again, if we could have two or three, because there is a rolling programme, that makes the investment on all the routes much more efficient.

 

Q79 Sir Peter Soulsby: What about from a rolling stock point of view, David? Does it make a difference to your planning?

David Horne: Potentially, it could. The interesting opportunity that we have on East Midlands Trains is that the Meridian trains we use for the majority of our services to London could be converted to bi-mode operation-that's to say, they could operate with electric traction where there are electric wires and they could operate with diesel traction where there are not. Bombardier is developing this as a concept. It would involve building an additional carriage for each of the trains, but that is a good thing because that would give us additional capacity to cope with extra passenger numbers. As Spencer rolls electrification north from Bedford, our trains could actually operate with that electric traction to the extent that it is there. That would deliver immediate CO₂ savings, as well as the operating cost savings that we'd have on the maintenance side. At the end of the day, it's a lot cheaper to maintain a transformer on an electric train than it is to maintain lots of diesel engines. I don't think any of the London train operators actually got that opportunity-it is something that is unique to our trains. The work could be developed by Bombardier here in Derby, so we could start to get the benefits of electrification almost immediately, given that 50 miles of the route is already electrified. As with many transport issues, planning is so important. To have the certainty that electrification is going to happen and when it is going to happen is obviously important.

 

Q80 Sir Peter Soulsby: Does the planning for the replacement of the HSTs make any difference to what you might want to replace them with-whether or not the line is electrified?

David Horne: Yes, it does at industry level, because at the moment our franchise expires in 2015. If the high-speed trains are to continue for a long time after 2015, we'll have to make a lot of investment in them to keep them going. It would be helpful to know whether those trains are going to be replaced in, for example, 2018, because we are going to have electrification in 2018; or whether the high-speed trains need to keep going for a lot longer because electrification is going to be further away. That's why I say we need some certainty that it is going to happen and when it is going to happen.

 

Q81 Sir Peter Soulsby: So, in effect, continuing to refurbish them and to put new engines in and whatever else you are doing could actually be abortive if there were electrification, or at least you might programme it rather differently?

David Horne: You might need to do a second round of refurbishment and a second round of upgrade works if you're not going to electrify. The investment that we are making at the moment will take us through for the next five or six years before electrification comes along, but in five years' time, we are going to have to know whether we should invest more in these trains, or not.

Sir Peter Soulsby: Wonderful as they are, those iconic trains, even when refurbished, still show their age, don't they?

David Horne: Yes.

Sir Peter Soulsby: Jim, I think you wanted to comment as well.

Jim Bamford: With the electrification-to come back to Spencer's point-Network Rail will know this better than we do, but our understanding now from the set of Government announcements that we have is that Network Rail will have to buy two sets of kit: one that will work its way round the Great Western lines to Bristol and Swansea and so on, and the other that will do the lines in Lancashire. I haven't seen dates for that, but on the face of it, you would expect the Lancashire lines to be finished first, and I think that what we would want then is a commitment that that kit will be transferred over immediately it becomes available and starts working its way up the Midland main line, precisely for the reasons that Spencer gave-because that is the cost-effective way to do it.

You've got the kit there; the trouble is there will be a cost saving in deferring that. It's not a cost-effective cost saving but it is nonetheless a cost saving, and there will be a danger that in 2016 or 2017, or whenever it is that they finish doing the lines in Lancashire, that the Government-whichever Government happens to be in at the time-will be looking for savings and will say, "Oh, we can save a certain amount by pushing that back five years or 10 years or whatever," even if that leaves very, very expensive sets of kit just sitting around idle. That is our real fear, and anything that can be done that gives a firm commitment that the Midland main line would follow on immediately the equipment to do it becomes available would be very welcome. But there is precisely that fear that, even with that commitment, a subsequent Government could change that and defer it at the time. That is why we are-I'm trying to think of a better word than desperate-so anxious that the modest sum of money is made available for us to at least get the journey time improvements realised as jam today, because they are a very cost-effective thing to do.

 

Q82 Sir Peter Soulsby: Something that we haven't really mentioned yet is that very shortly, of course, the report on HS2 will be landing on the Secretary of State's desk. I just wondered whether you are able to comment on what might be the best thing in it for the East Midlands, or whether it's really something that is largely irrelevant in terms of its benefits for us. Spencer first, perhaps.

Spencer Gibbens: Network Rail published its own version of what it envisaged for high-speed rail, calling them new lines as opposed to high-speed lines, to try to broaden it out. A second report will be published at the beginning of 2010. The first one looked at the west corridor up to the north and west, and this second report will look at a corridor to the north and east, which would pass through or close to the East Midlands. Ultimately, it will be a matter for the Government to decide whether they want to take a Network Rail proposal, a HS2 proposal or one of the others that are out there in terms of the way forward.

Even if one route gets constructed, which we would all hope, and that did go towards the West Midlands and the North West, the benefits to the East Midlands would be felt through the fact of freeing up capacity on the classic routes anyway. One of the reasons that Jim has been talking about freight loops on the Midland main line is because we have to run a mixed-traffic railway, with freight and passenger trains. If that mix of trains can be spread out better across the west coast, the Midland main line and the east coast main line, that is always going to have a benefit because we can do more with the classic infrastructure. Even if a high-speed route did not come in the direction of the East Midlands, it would still give benefits.

Jim Bamford: I don't entirely agree with that. I think that's partially true. I think that Spencer is slightly overstating the potential benefits to the Midland main line from a high-speed line that goes broadly up the west coast route. Yes, it is right that there is some scope for freight diversion, but it is not massive from the flows that currently go on the Midland main line.

I think that a high-speed line needs to go directly from A to B. A lot of groups have been working on this over the past 12 to 18 months, and a lot of maps have been drawn and there are a lot of possible scenarios. However, because people are so keen to be on a high-speed network and realise the benefits of that to their economies, which is the bottom line of why we want it-we don't want trains for their own sake; certainly from the local authority side, we want our economy to thrive-there is a danger of them clutching at almost any sort of connection to a high-speed network. The maps that I have seen that connect Derby or Nottingham to London via Birmingham and Heathrow will give a very small journey time benefit. There is an old joke: what do you call a boomerang that won't come back? A stick. The railway equivalent of that is: what do you call a high-speed line that goes all over the place? A railway line. It may go fast, but it won't give you a short journey time.

If Birmingham is going to get a journey time to London of 46 minutes from a high-speed line, that is the equivalent journey time that Derby and Nottingham need to be looking for. Sticking to the Midland main line-I know it is outside our region, but it is the same thing-if Manchester is going to have a journey time to London of an hour and six minutes, Sheffield needs an hour and six minutes, because it is a similar distance from London. The map that I saw at Tuesday night's event in Parliament showed a high-speed journey time from Sheffield to London of an hour and 42 minutes, which is not a whole lot better than the existing Midland main line. If you projected that on to Leeds, it would actually be slower than going on the east coast main line.

Broadly, it seems to me that the high-speed network needs to follow the main spine of the British motorway network. There is a reason why the M1 and M6 go where they are: it is basic geography that picks up all the key core cities. A high-speed network needs to do that. I think we all understand that it can't all be built in one go, just like the motorway network wasn't built in one go, but there was a plan from the start with the motorway network that it would pick up all the key transport corridors in Britain. It seems to us that a high-speed network needs to do the same, even if we have to wait a while to get the benefits of it.

Sir Peter Soulsby: That is a very useful and timely reality check. Thank you.

 

Q83 Mr. Laxton: David, Peter referred a moment ago to the InterCity replacement. It is probably a gross understatement to say that I was somewhat critical of the decision to award the contract to Agility Trains. This is probably slightly off the subject of electrification, but with the advent of electrification of the Midland main line and HS2 coming on, do you think it possible that the replacement for the high-speed trains is almost overtaken in some respects?

David Horne: I think it is a big danger when we talk about big projects, such as the high-speed line and electrification, that some of the more modest projects that we have referred to today get overtaken or even blighted by the fact that a high-speed line is going to come along and solve all the problems. When you look at the railway as it is today, you will see that we have been putting a lot of investment in to make it better. For relatively modest amounts of additional investment, whether that is in additional line, speeds, improving the stations or what we really need, which is additional trains to cope with the capacity for commuting to the regional cities, we can achieve a lot of the benefits, such as modal switch and CO₂ savings. There are plenty of opportunities and there is a danger that the high-speed line will take the focus off them and even take some of the funding away from them. As a region, we have to be working up those schemes. We have to be working out the benefits and we have to invest our time and money to secure them.

 

Q84 Mr. Laxton: Finally on this point, because Peter referred to the iconic HST 125, is there the ability to keep those pieces of kit, although they are refurbished and getting to the point where they could then be dropped out of service with electrification, new trains and HS2 coming in?

David Horne: The industry is currently looking at a way of extending the life of those trains into the 2020s, but they were built in the late 1970s so they are due for replacement. Many of our passengers like the high-speed trains, but many also like the new Meridian trains. At some stage, because of the passenger growth that we envisage as an industry, the industry is going to have to invest in additional vehicles. We need to replace those trains; we need to come up with a plan to replace those trains, as well as investing in additional capacity in the regional services. We need to work out what we are doing in terms electrification of the high-speed lines. I suspect that if the high-speed line goes via the West Midlands, we are still going to need to invest in capacity on the East Midlands route, because that will remain the core route for people to get to London from the region.

 

Q85 Mr. Laxton: I was going to ask a question about the economic benefits of faster journey times, but I think that has been more or less covered in a lot of what you have said, Jim. Turning to another question, do you think that the reductions in journey times really are significant enough to justify the expenditure on the electrification of the Midland main line on a cost-benefit analysis?

Jim Bamford: The business case for electrification isn't built primarily on journey time benefits. There is an element of that in there and that is costed and part of the benefit, but the biggest chunk is the reduction in operating costs of the railways as a whole. It is much cheaper to maintain the trains in particular, and there are other benefits, such as carbon reduction, and they are quieter, cleaner and so on. The journey time benefits are in there, but they are only a small element of it.

Spencer Gibbens: I would just echo what Jim said there. The main driver is operating cost reduction, because you have lighter, simpler trains. The trains are easier to maintain, but also the track is easier to maintain as well. There are environmental benefits, because hopefully we have a more sustainable electricity system than we do fuel. It is really around the operating costs.

We have looked at what the latest generation of electric train would do to reduce the London-Sheffield journey time, and it is only around 3 to 4 minutes, which comes from their superior acceleration. One reason to choose the Meridian trains is that they are very powerful and quick performing trains. Converting that to electric actually just makes it all cheaper; it does not make it faster.

Stephen Abbott: The cumulative effect of nibbling away at the journey time, even though the reductions in themselves are quite small, sways passengers, certainly in their decision to use rail as compared with the car or other modes. Even a small reduction in journey time is worth while to the passenger. Perhaps to bring a little light relief to proceedings I would not worry about new inter-city electric trains, because on past experience we will get second-hand trains. The east coast main line will get the new inter-city express electric train and we will have the present electric trains that run on the east coast main line-if the Midland main line is ever electrified. Apart from the Meridian trains, since the 1930s the Midland main line has had no new rolling stock whatsoever. It has all been second-hand.

Spencer Gibbens: May I comment on that? If that happens, we all need to fight against that because they are slugs compared to the Meridian trains and the journey times would be longer with cascaded east coast rolling stock.

 

Q86 Sir Peter Soulsby: Certainly, David's point about the potential for taking those Meridian trains and making them electric is well taken, because they are good stock and the fact that there is the potential to do that is exciting.

Stephen Abbott: Just to comment on that, it would help things when the trains inevitably have to be diverted via Corby or Castle Donington, or whatever, for engineering work, if the train can run on diesel power.

Mr. Laxton: Has a dual capacity.

Stephen Abbott: My one worry with the dual-power approach is that you might reach a point where someone says, "Oh well, you've electrified to Leicester. It's not worth doing any more, because it can run on diesel to Sheffield." I would not want that to happen. I think if the Midland main line is electrified, you want to do the whole job.

 

Q87 Chairman: Nobody's mentioned freight in the context of electrification. Presumably, Spencer, a freight terminal in the East Midlands with a direct route down the Midland main line and across the channel tunnel would have some benefits, wouldn't it?

Spencer Gibbens: I think it would. One of the things we've not brought out in the conversation about the Midland main line is that journey times are a challenge because of the way that it was originally constructed in the Victorian times: it's twisty and steeply graded. If you compare that to the east coast main line, which is pretty much flat and level, that's why you get those superior journey times to York and Leeds. Of course, on the west coast main line, the tilting trains have been introduced, because that line has the gradients in the same way as well. But if the west coast line was about putting tilting trains to Birmingham, which is kind of the equivalent to us, again, the business case wouldn't stack up.

What's that all got to do with freight? One of the constraints we currently have with journey times is that a 2,000 tonne freight train takes something like 25 minutes longer to run between Leicester and Kettering than an equivalent passenger train. Therefore the timetable is structured partly around that and to flight passengers trains then to allow enough space to get through.

If the lines were electrified, then more powerful electric locos could be used that are compatible with taking freight services on to the continent without changing locos, because as soon as you do that that puts another cost in. I have to temper that by saying that, if some of our freight colleagues were here they would say they like diesel engines' added weight, which adds traction, and unlike the passenger operators, which need lightweight trains, they need heavy locomotives to haul the freight trains. Nevertheless, for the same sort of weight, you could put almost twice the power into an electric locomotive, which would mean that that sort of differential between Kettering and Wellingborough could be reduced.

There are lots of ideas for distribution terminals in the East Midlands. Again, if one of those was to come off, it would be ideally placed because of the way that both the road and the rail networks are tied together.

 

Q88 Chairman: Just before we finish, talk to me about this new concept-to me, anyhow-of route utilisation strategies. What are they and what does it say for our region?

Spencer Gibbens: Okay. The route utilisation strategy is something that's required by the rail regulator. It's a condition of Network Rail's licence conditions. However, we lead it on behalf of the industry, so it's an industry document, not a Network Rail document. There are one or two misnomers about the route utilisation strategy. Its aim is to look at the underlying position and plan for that. So one thing that we quite often get criticised about-I think that's the right word-is that there's a lot of housing growth planned in the East Midlands and we can't take that into account in terms of that strategy. So it looks at this underlying growth.

For the one that's out to consultation at the moment, which will be published in the new year, none of the findings are particularly surprising. It's saying that by 2018, trains out of London will be intolerably overcrowded, as will certain trains out of Nottingham and Leicester. It makes recommendations principally on train lengthening. Because of the way the route is engineered and the slower journey times, the way that the East Midlands route has come together has kind of made up for that in terms of frequency of service. Coming over here, I was reflecting on where else in Europe there is a provincial city like Leicester with four off-peak inter-city trains to its capital city. Certainly, there's nowhere in Britain. I wondered whether Reading might fall into that category, but Birmingham doesn't-it has only three. We make up for it in other ways. While you are going five or 10 minutes quicker down the east coast main line, at Leicester you have to wait only 10 minutes to take you down to London, so you make up for it like that.

As for the route utilisation strategy, in the main, we have talked about freight loops-that will come out of that, because that is a key way of operating heavier freight trains on the route and still allowing the mix of passengers. The overcrowding will be coming out that. Of course, that overcrowding will be worse if these housing developments materialise. Therefore, we will have to find a way of addressing that later.

 

Q89 Chairman: When you're going back to work or home-I guess, David, you will be walking-some of you will be going on the train. What is the key point that each of you would like to make? What is the headline issue that you want to raise that you would like us to put in the report? David, you start.

David Horne: The key medium-term issue for the railways in this region is going to be capacity. The Secretary of State is saying that electrification is going to happen, so we need to find out when that is. Whether electrification happens or not, we are going to see continued growth in the number of passengers using the railways. We have seen that even in the last year, when we have been in a recession. The prospects for rail are good. We need to work as a region to come up with schemes to grow further the rail market but, most particularly, we need to work together-and by that I mean the region and the Department in London-to identify solutions to the capacity issue. If we are getting more passengers, we need more carriages to carry them. There is a great opportunity if we do, because we will attract even more.

Stephen Abbott: Yes, capacity is key: we want more capacity. We also want improvement in services where it can be justified. For example, there is demand for a later train southwards from Leicester in the evenings to Kettering, Wellingborough and so on, so people can go to the theatre. That would be cheaper to provide if it was an electric train, because you wouldn't need to get it back to Derby for fuel and maintenance, you would just put it in a siding and lock it up.

The other issue, I think, that concerns passengers is access to the railway-that is, the provision of car parks, bus integration and so on-and also stations. Something we haven't touched on is that on the Midland main line, some of the stations, particularly at the medium-sized centres, are very poor. I would cite Wellingborough, Market Harborough, Loughborough, Long Eaton. On what other main line do you have platforms which are too short for the inter-city service from London to stop at? Where else do you find a station that has 750,000 passengers a year, as Market Harborough does, without a single metre of platform canopy? There is no shelter whatsoever, other than a small waiting room. So you cannot go from the ticket hall to the train without getting wet. What other main line in Britain has got that?

Chairman: That's a powerful point. Jim?

Jim Bamford: You asked us to single out one issue. I could think of more, of course, but the one that stands out is that we need a top-up for the superb value-for-money line speed scheme that Network Rail is already working on. I would think an additional sum of about £30 million, which we understand is less than 10% of the cost of the electrification. If we are not going to get the electrification, can we at least have the journey-time benefits of that on top of the line speed scheme? It would include the freight loops at Desborough that Spencer described, so there would be a freight benefit from it as well. If you could make a recommendation to that effect, that would be really helpful.

Spencer Gibbens: I don't know, after that. All of the above, I think. I echo David's comment about rolling stock. For this region, we simply do not have enough for what we want to do. Crewe and Matlock trains with single coaches on it should have gone years ago.

Chairman: Thank you very much for coming. Go on, Jim. You want the last word.

Jim Bamford: I just wanted to ask this. Because we haven't been able to be specific about the line speed stuff, would it help if we sent a further note to the Committee? I realise that there will be a tight time scale for that, and I just wondered if we could offer to joint note between us. No doubt your staff will tell us what date you would need that by.

Chairman: Yes-25 December. I need to do something on that day. That really would be helpful. Spencer, on another issue, we talked about freight a bit. If you could let us have a note on that, that would be useful too. Thank you all very much.

 

Examination of Witnesses

Witnesses: Councillor Roger Begy OBE, Leader, Rutland County Council, Councillor David Parsons CBE, Chair, East Midlands Regional Assembly, and Dr. Stuart Young, Executive Director of East Midlands Regional Assembly, gave evidence.

 

Q90 Chairman: As you can see, the Select Committee meeting here in Derby in the East Midlands is a bit more informal than what happens in Westminster, and perhaps is better for that. So, can we just keep it on that informal, chatty basis? I welcome colleagues who are here representing the Regional Assembly-thank you for coming and for helping us once again.

The issue of funding for services in the East Midlands is one that I have been interested in for a long time. I have to confess that I have not made a lot of progress on it. Why do you think, in comparative terms, services in the East Midlands are underfunded? That is the view, isn't it? David.

David Parsons: Does this, Chairman, represent how the Government view the East Midlands? It is clearly their lowest priority, in regional terms, therefore we don't receive the benefit of good funding.

Roger Begy: I don't think people recognise rurality down in London. We must be one of the most rural areas in the country. If you look at the added costs that are undertaken in day-to-day services in rural areas compared with urban areas, then that really does have a major impact.

Dr. Young: I think part of our problem is that we are average. We have average levels of income and fairly average levels of employment. We are a region marked by a large rurality; we also have a number of core cities. In rural areas we have problems of access to services. In the urban areas there are obviously problems of deprivation. Also, in the northern parts of the region there are problems with coalfield areas. As a region-we can perhaps pick this up in more detail later-we have an expanding population and a growing number who are of pensionable age, which is not necessarily picked up in funding formulas. We also have a low proportion of employment in the public sector, which in turn draws much funding from the centre as well. There are a number of reasons why as a region we receive low levels of public funding and low levels of resources. It is difficult to pinpoint one particular issue.

 

Q91 Sir Peter Soulsby: Just very quickly, and I am provoked to ask this because of David's response. Is it not the case, David, that it is not this Government, but successive Governments who have underfunded the East Midlands? A lot of it is an historic underfunding being carried forward by Governments of all political colours. Is that not really a more accurate description of it?

David Parsons: It might be, although I have a long memory and this Government have been in office for quite some time. You may well be correct, but certainly for the last 10 years-the time for which I have figures-we have been rampantly underfunded. In fact, I think we are the lowest funded region in the country.

 

Q92 Chairman: Is that last point right, Stuart?

Dr. Young: It is. In some respects we have to interpret the figures. If you look at the total amount of funding given to English regions, we are the second lowest. If you look at the total amount of funding in regard to spending per head, we are the third lowest. But, usefully, the IPPR did a rather sophisticated piece of work that matched the level of funding against need and deprivation and looked at GDP per head. On those scores, where they relate to funding to need in a region, this region is the lowest funded. We are the most underfunded region in England. Often the message out there is that we are not. People often look to the North East or the North West, and assume that they are the most underfunded regions. Actually they are not. Unfortunately, some of the averageness of this region masks the real level of need.

 

Q93 Mr. Laxton: Not wanting to be too mischievous, and trying not to be, there are views in some quarters about the possible abolition of regional development agencies. Do you think the scrapping of regional development agencies would enhance the prospect of the East Midlands obtaining better and focused funding or lead to an even further deterioration?

David Parsons: I think the jury is out on that. I don't necessarily want to see the scrapping of regional development agencies, but I do think that we want to see them rather more focused. There are large numbers of people employed by the regional development agency and I would like to see those numbers justified for the amount of work it does, but I am not against regional development agencies per se. Interestingly, neither is my party. There are a number of views on that.

Roger Begy: Recently there was a dinner of business people in East and West Midlands. The conclusion that we came to from that dinner was that there are certain things that should be done regionally. There are certain topics, such as the last one you mentioned, transport, which should not necessarily be local and need to be done on a regional basis. Getting that balance right, which it may or may not be at the moment, is the point here.

Mr. Laxton: Okay, thanks.

 

Q94 Chairman: We are going to talk about transport in a minute, Roger, so you'll have your chance to have your say. David, you've talked to us before about the regional landscape changing but you've always been clear that there is a need for some kind of regional body. I guess one of the purposes of that regional body would be to advocate and campaign on behalf of the region. Have we been doing enough around campaigning on funding issues?

David Parsons: Well, two days ago, a lot of us were in Westminster-I travelled down on the Midland main line actually-to campaign for electrification of the Midland main line. If the truth were known, there is scope for even more campaigning on a number of issues, so I would be more than happy to look at that.

There are a number of power centres-if I can put it that way. One of those is the Regional Assembly, which does campaign a lot-for instance, my role in Europe as the region's member for the Committee of the Regions means that the East Midlands leads in relation to childhood obesity and the campaign there across all 27 member states. There is a power centre in the Regional Minister, although he does not share with me too much about the campaigning that he does. There is also this Committee, and I am sure that this Regional Select Committee has its own agenda as well. But, there is scope for more, certainly.

Dr. Young: I think that is right. In certain areas, I think we have done very well in relation to, for example, the regional funding advice. That is a good example of where the region was able to get together-different regional organisations, local authorities and stakeholders-in putting the case to central Government and considering how we can focus on some regional priorities. But there is more that we can do. Part of our problem as well-we have to acknowledge this-is that funding formulas do not necessarily reflect our needs and priorities. Until those change, we still need to ensure that we perhaps up our game and lobby-if that is what is needed to be done-Government to ensure that when they are making decisions, they bear in mind what we need for the East Midlands and the local areas within it.

Roger Begy: I don't operate at the same elevated level as David. We have a seat on the funding working party and we are using that more and more to try to get the formula to reflect some of the needs that are specific to the East Midlands. It takes time to try to persuade some civil servants to change formulas and so on when you have statisticians going to the fourth decimal place. That is a little difficult. But that fourth decimal place is sometimes the equivalent of millions of pounds to the East Midlands.

 

Q95 Chairman: You've mentioned the role of the Minister for the region. David, you said that you didn't have a lot of private discussions with him, but conceptually he is in a position to advocate for the region. Is that right? Let's try and be honest with each other-we are all politicians, apart from Stuart. Is he doing enough?

David Parsons: Chairman, I thought you might ask this question, and I took the trouble before I came here to measure my contact with the Regional Minister. In 2008, we had five meetings, which were largely on structure, although there was some strategic discussion as well. In 2009, we had no formal contact, and in 2010, we have been pressing the Regional Minister for a meeting. We had one arranged for January, which, just before I left, I was told had been cancelled in favour of a meeting on 10 February 2010 for three quarters of an hour.

There are other contacts with the Regional Minister. I am a member of his regional economic cabinet, but on that I specifically represent local government, not regional bodies. I don't want to be too prissy about it, but that isn't a regional strategic body as I know it; it represents local authorities rather than the Regional Assembly. In my view, there is room there for greater co-operation.

 

Q96 Chairman: So is the feeling that it is too one way and there is not enough appreciation of the voices coming out of the region?

David Parsons: I think he's doing a job. I certainly know that we're doing a job. If you add the two together, you will get greater than the sum of the parts and that is still work in progress. I don't underrate his current responsibilities as Minister of State, but, nevertheless, it might be a structural thing, which needs looking at.

 

Q97 Chairman: Let me just look at the scene a little bit. As you said David, there is a strong campaign around the electrification of the Midland main line. My own judgment is that the police authorities have been making a strong campaign on underfunding. One thing that struck me during the course of the inquiry was that if you look at the spending on the health service, all of the PCTs in the East Midlands are under target almost without exception. You will recognise from Leicestershire that in terms of spend per head on education you are pretty low down. I thought that we would have a lot more evidence around this and that people, given the inquiry, would use it as an opportunity to shout a bit louder, but that really hasn't been the case. Why do you think that the health sector isn't pitching in? Why aren't schools writing in and saying that they could be better funded?

David Parsons: Maybe they don't know the influence that this Committee undoubtedly has. I clearly have not been doing my job and going around telling them that they need to write into the Regional Select Committee. I don't say that cynically, I think that people perhaps haven't got used to new procedures.

Let me take those two things. On health, I lead local government in the "Total Place" project and have had a lot to do with health. I have found health a real challenge. If you ask me for the one single thing that I think that we could do to marry up those priorities and spending, it would be to get together a public service board in each area to use the democratic mandate of local government to assist health services, the police and other bodies to spend their money wisely and get local priorities. I really think that that is important.

That probably is the same for education. Strategically, Leicestershire has been leading the way in education. It has taken the Building Schools for the Future programme from the Government and has run with it. It has a hugely successful programme now. If I looked at education, I would say that that was possibly more on track-and do not forget that my own county of Leicestershire has some of the lowest funding but some of the best results in the country. I would not wish to pursue that analogy too far but, nevertheless, that is a fact.

Chairman: Roger, have you got a view on this?

Roger Begy: I don't think that we've got the message of the Regional Select Committee across to people outside local government or some of the senior places. The issue of underfunding in rural areas and schools has been there for a long time. There has been the F40 campaign, and they are all rural areas. It is the same in Lincolnshire and in Rutland, but, again, we have had to use those to the best of our ability and I think that our results in our rural areas have been particularly good.

The one that really worries me, and we need to get ahead on it, is our ageing population in rural areas. In Rutland, 23% of people are over the age of 65, I think that on the east coast of Lincolnshire it is 23% and by 2020 we are looking at it being at something like 28% or 29%. When we start looking at care costs for that ageing population, with a hospital system that is going to be focused on the key cities, it is a big issue and I do not think that we have got that message across to people.

 

Q98 Chairman: Stuart, you spend a lot of time in the region talking to other partners. Would it surprise you to learn that we have written to the strategic health authority in the East Midlands three times asking for evidence on funding and not had a reply yet?

Dr. Young: That probably would surprise me, yes.

Chairman: We all stick together in the East Midlands.

Dr. Young: Without wishing to place anyone in an invidious position, we were invited to submit evidence to this Committee and we were delighted to do so. I think it is important for the assembly and also for a body representing local government that we play a full role in this. There is-I know it was picked up by Roger a minute ago-a problem with awareness. Part of that is caught up in the wider changes that are happening to the regional agenda-for example, the sub-national review and the Acts that have recently been passed. There are a number of governance changes. Some might find it difficult to keep fully abreast of the changes that are happening. Organisations such as ourselves obviously have a full role to play and we should be contributing. You might wish to pick that up with individual partners.

Roger Begy: If you look at one thing across the region, health has always been an issue of engaging with partners within that partnership.

 

Q99 Chairman: May I just pick up a slightly different point from the one you were making, Roger, about the growth in the number of very elderly people in the region? Population growth in the region outstrips growth elsewhere in the country. Just sketch that in a bit for us.

Dr. Young: In terms of wider population growth, recent figures from the Office for National Statistics are very clear. We are the fastest-growing region in terms of population and also the fastest-growing region in terms of population of pensionable age. Both of those will bring a number of pressures on service providers-for local authorities and for health and education. Our concern is that we have to respond to that, but we have to respond within the context of a fairly inflexible funding regime that does not necessarily pick up some of the recent changes. Often there is a lag. It takes a while for the funding regime to change or to respond to some of the issues happening here and now, particularly population change. As Roger has just said, there are going to be particular pressures within the region in terms of an older population and adult care services.

 

Q100 Chairman: If I have got it right, because I am not as clued-up on this as I used to be, the population figures are fed into the distribution formula, but there is a time lag. Typically, what are we talking about?

Roger Begy: 2006-07 tends to be up-to-date figures.

 

Q101 Chairman: Presumably you discuss this with colleagues in Westminster and Whitehall. What is the response when you say we should be using more timely up-to-date figures?

Roger Begy: The standard response is "We need to make sure that they are accurate".

Dr. Young: I think that is fair. There is no enthusiasm for using figures that are historical by their nature. There are problems of validation and also problems with collection.

 

Q102 Sir Peter Soulsby: In addition to the points that you have made today and in the evidence about the lack of responsiveness to changing situations, you also very strongly in the evidence made the point about fragmentation with different funding regimes, and the extent to which there are difficulties because each differs from the other and there can be different criteria in different streams of funding. Can you expand on that a bit and give us some flavour of the difficulties that this causes?

Dr. Young: Obviously, different funding partners would have different requirements that the recipients of that funding are obliged to meet. In our role, we have experienced some frustration with regard to the role of regulators. Regulators in rail, water or power effectively control the investment programmes that are delivered within the region, and companies can only raise revenue if the regulator agrees to that. Obviously, they might wish to raise revenue for the provision of infrastructure. I think two decisions that that impacted upon, and which I think are worth while raising today, are the Lincoln to London rail service and the upgrade of signalling around Nottingham station. In the first instance, it was refused by the regulators, and was only agreed to, in effect, by appeal. The situation arose in part because different organisations react to different information. Regulators do not necessarily bear in mind the increase in demand pressures from an increase in population and the knock-on effect for increasing infrastructure provision as part of their decision-making process. When you are working with different partners, they often have a different set of constraints within which they are internally advised to work. It is our job to try to work through that rather complicated set of circumstances.

We probably would not have had this discussion 20 years ago, as we did not understand the flows of public expenditure and the flows into the region. Now we can have that discussion and try to find solutions. Hopefully, with a better understanding of the flows of public expenditure into the regions, we can better direct that now, so different Parliaments can look to free up some of the rules and regulations and try to enable their specific funds or resources to directly target specific regional needs and priorities, rather than necessarily responding to more national and, by the very nature, generic constraints.

 

Q103 Sir Peter Soulsby: In your evidence, you talked about the desire to see mapping and co-ordinating public expenditure at a strategic level. Would you envisage taking a lead on that?

David Parsons: Yes, in a word. This is probably what "Total Place" is all about. We can look at the pilots, which will probably be relevant to the whole of public expenditure. First, there is the total count-knowing what is coming into a sub-region. Typically, £6 billion or £7 billion a year is spent in a sub-region in the UK. Secondly, they look at what it is trying to achieve and thirdly, they try to achieve it better. The question is how we try to achieve it better. I say go local, but I don't expect people in Whitehall to give me a budget of £6 billion or £7 billion a year in each sub-region. I can hope, but I don't think it will happen.

As I was saying, how do you use locally accountable people to get together with the major spenders in an area and see how best to spend that money? Of non-discretionary spending, 5p in every pound is controlled by locally elected councillors, and 95p of that pound is not. That seems to me to be out of balance. Part of my campaigning zeal with others in "Total Place" is to try to redress the balance a little.

Dr. Young: For my region, the local authorities and partners are very keen to take a lead on this. We are well placed to understand the problems and changes that we face. If you look at the emerging process that we already have through the regional funding advice, it is a start. It enables partners to get together and look at some of the funding that we have available and direct that to the most appropriate project. So we would happily take a lead. Mapping only goes so far, because it just tells a story. Once you properly understand where the public expenditure flows are going, you need to then decide if they are best directed.

Roger Begy: And then you can make some fairly simple decisions. The one thing that struck me in a presentation from Leicestershire and Leicester on their "Total Place" is that there are 68 public buildings used by various Departments across that area. It is a fairly simple thing, but you would not necessarily have known that figure, and you have to say, do you really need 68 different buildings to achieve this?

 

Q104 Sir Peter Soulsby: What do you think are the next steps that the Government needs to take to facilitate this being taken forward?

David Parsons: If I might say so, they have already taken them. It grieves me to say this, but I thought the governance White Paper, published two weeks ago, was really rather good.

Roger Begy: I feel the pain from here.

David Parsons: It spoke of removing ring-fencing; it spoke of harmonising performance management regimes; it spoke of using peers to regulate local authorities; it was generally welcomed, certainly by myself, but by other people as well. So, looking at the direction of travel that the White Paper gives us, I think that that is a good start. At the highest level, this Government have taken messages from the Local Government Association, of which I am deputy chairman, and are beginning to run with it.

Work with Her Majesty's Opposition is still work in progress, if I may put it that way. I am doing all I can, which is probably not much, to get them in the swim of things, along the lines of the White Paper as well. I am generally an optimist, and I think that the key thing in each respect-however you divide up this thing-is that you need to use the democratic mandate of local councillors to assist in the spending of that money. If we can get that message over, I am hopeful that we can spend public money better and, incidentally-I think Liam Byrne, the Chief Secretary to the Treasury, is particularly alive to this-save money.

 

Q105 Sir Peter Soulsby: I am very heartened that at least in the East Midlands we seem to have a cross-party consensus on the issue.

Stuart, you mentioned the regional funding advice process and suggested that it was a fairly positive start and a useful step forward. I was wondering whether you would like to reflect on how far it has helped, and on what needs to be done to improve the process.

Dr. Young: It is a start, but it is certainly not the panacea for all our problems. In many ways I view these things as tests, and we have repeatedly passed these tests. The Government set a test for the region to work in a co-ordinated and coherent fashion, to look at its own regional needs and priorities, and to dedicate Government resources to meet those needs and priorities.

Now we have had two rounds of regional funding advice, and I think that this region has done very well in how we have managed that. We would be very keen for an extension to regional funding advice, for example specifically to include skills. If you look at previous rounds, we have done particularly well on transport. In the last round we looked at transport, housing and wider economic development, and transport was of real interest to the region and to stakeholders. A degree of organisation and political-with a small p-maturity was shown; it was not a case of everyone looking to their own particular pet scheme. People actually looked at what would benefit the region as a whole. That is why we were able to look at, for example, promoting the schemes for the A46 and the A453. We were able to look at cross-regional issues as well; we don't need to look at the East Midlands in less-than-splendid isolation.

The RFA has gone as far as it has gone. It needs to go further, I think, but it also needs to allow us to bring into play wider pressures, such as the increase in population growth, which we have picked up on already. In relation to transport, the RFA did not really allow us to pick out the particular issues that this region is facing, such as a very substantial increase in traffic growth. However, we would be very keen to extend the process because, to pick up on previous points, it enables us to hone in on those particular priorities for the East Midlands.

Roger Begy: One of the key things that we have to focus on now is skills. If we are going to move forward in the East Midlands, it is through the way in which we develop those skills; reduce the number of NEETs in the region; base ourselves on our growth industries; and upskill and get away from being a low-wage, low-skill economy in the East Midlands. That is probably one of the next most important things that we have to do.

 

Q106 Sir Peter Soulsby: It's not just about getting the funds; it is also about spending them, once they are allocated to the region. Was it 2008 when concern was expressed in the Department for Transport about the spending of funds that were allocated? Do you want to reflect on that, on whether the criticisms were justified and on how the region has responded?

Dr. Young: I entirely agree-if you're going to be allocated a spend, you need to spend it. We did receive a letter from the Department for Transport last year in relation to the spend profile of the regional funding allocations. That letter and that concern were based on initial returns from local authorities that indicated that, as a region, the East Midlands was below spend. Obviously that would be of concern.

We clarified with the Department for Transport that in fact it had used the wrong regional budget figures and that DFT was using different spend figures from the ones that local authorities were being required to report on. So as a result we have standardised assumptions between local authorities, ourselves, and DFT, and we have also standardised financial reporting and information to ensure any sort of confusion doesn't happen in the future.

I think, usefully, our latest returns have confirmed that our profile is broadly on track, and DFT has also confirmed that it is content with our performance. I think part of this relates to the very nature of some of these RFA projects, specifically as regards transport. The RFA budget deliberately included a 20% over-programming to allow for slippage and overspends, because most of this relates to very large capital projects, and they are very chunky by their nature.

Recently a number of schemes, including the A46, have been delivered below what is called the mid-point estimate-the assumption of where they would be at this current time. The reason why they are below is not poor profiling. It is because we have had some very good weather recently, despite the last few weeks. Also, the impact of recession has driven down the cost of construction across the board.

Chairman: You heard the previous session; we talked a lot about transport and particularly the Midland main line. I know you've all been campaigning.

 

Q107 Mr. Laxton: Yes. David, I know you were down in London on Tuesday, as you've already said. I'd hoped to be there but I was diverted off to some meeting with a Minister and I couldn't make it, sadly. In terms of the Regional Assembly, what sort of work are you doing to press the case for electrification of the Midland main line?

David Parsons: I could go through our campaigning work. I did the "Politics Show". Significantly, it was the last interview of this session of the "Politics Show", and maybe that will find resonance. We have done the lobbying events, and we're linking up with other regions, including Yorkshire and the Humber and, specifically, the Sheffield city region. I was joint host with Clive Betts, who is a Sheffield Member of Parliament. He has been enormously supportive of this, so it's really good to bring in that region. Of course, the Midland main line goes all the way up to Sheffield.

We have been campaigning for this internally within the Regional Assembly. We have had presentations to all members of the Regional Assembly, which represents every local authority. That includes the so-called ESEP members-environmental, social and economic partners, so we are spreading the message that way. There have been a number of other campaigning venues where we've attempted to put the case, so I think that we've got a good record within the Regional Assembly of campaigning for not only electrification, of course, but modernisation of stock, and quadrupling of track. You mentioned freight services earlier on, and I think that that is particularly important as well.

Anyone who travels up the M1, as I do regularly, knows that it's clapped out in places, and clogged up, and we certainly need to campaign there. This is something on which my interest in formal campaigning has only just started, but nevertheless it has been apparent to me for some time that we need to do something there.

 

Q108 Mr. Laxton: On the advent of the new Leaders Board, the campaigning will obviously carry through to it. Do you have an expectation that the board is likely to be more focused, and that it is going to have a bit more bite or punch, in terms of campaigning on the issue-and, for that matter, on some of the other, wider regional issues that you are going to be engaged in?

David Parsons: More focus. The danger, of course, is that it could be less inclusive, because it is a smaller body. There is a challenge there that we are hoping to take up through the structures within the Leaders Board. The Leaders Board has started its work and, in its infinite wisdom, it elected me chairman. We are doing our best to see how that will work, but the Leaders Board has not yet really started its work. When it does, I will probably be able to report back.

As I say, inclusivity and taking on the ESEP members, who feel rather bruised at the moment because they will not have as formal a mechanism for being involved in regional politics as they did before, are challenges. Taking on the national parks is a challenge as well, and I will visit the national park authority next week. All those need to be tempered to the work of the regional Leaders Board.

Dr. Young: Part of the approach that we have found very effective is to make sure that we work well with the respective Government Departments at the official level. That worked well in relation to the A46, and it is something that we are very keen to continue as we carry on working on the electrification of the Midland main line. Officials within Government Departments will be asked questions by Ministers, and we need to make sure that they have access to all the information and are included in the process by which we undertake these pieces of work, so that they are able to engage in the product or the outcome. It is a dual approach: as officials we need to work closely together and provide them with answers to questions they will be asked, but also, on the political level, Members campaign vigorously on behalf of the region to try to secure as much investment for the region as they can.

Roger Begy: The A46 scheme is a good example that we need to take into account. It worked, and it got people across the region backing something that was not actually to their benefit-it was to their loss. We have to keep doing that. If the Leaders Board can do that along with local government in the East Midlands, or the East Midlands councils, I think that we will go from strength to strength. If we start splitting up again into factions and parties and so on, it won't work. We have to make sure that we put those things aside, as we did in that case, and make it happen.

Mr. Laxton: Okay. Thanks.

 

Q109 Chairman: A warm welcome to Judy Mallaber, who has been experiencing the joys and delights of the road system in the East Midlands, and particularly the safety features of the East Midlands. I am pleased that you have arrived here safely.

Let me just conclude. I hope you won't mind me saying this, but we have all been around the block a few times and know how the system works. When you were coming here today, is there one thing that you thought, "I'm going to tell them that"? What do you want? If you were writing the report-you'd probably write it better than we would-what would be your conclusions? Let's start with you, David.

David Parsons: Chairman, I don't want to tell you anything. I want this to be a co-operative venture. Three words, if I may: localism, localism, localism. We really need to get local. It is more efficient to spend money that way. If there is one message that goes out from this session, I really do hope it is that.

Dr. Young: Simply put: more freedom of flexibility.

Chairman: You are all very succinct. Roger?

Roger Begy: Mine would be recognition of the rural issues within this region.

Chairman: Thank you all for coming. I am sure that before the general election-whenever it comes, David; I noticed the tone of your comments at various points-we will meet again. I am very grateful for all the help we get from the assembly and its staff, so thank you in particular to Stuart, and thanks to the staff here at the Roundhouse, which is a really impressive building. It shows that if local politicians, Bob, are allowed to act and get involved, you can make a real difference. So, thank you, and thanks to the staff from the House of Commons. I wish you all a very happy Christmas-

David Parsons: Same to you and your Committee, Chair.

Chairman: And a successful new year, although that may mean different things to different people here. Thank you all very much.