Examination of Witnesses (Questions 47-74)
Q47 <Chair:
Good morning, gentlemen. Would you identify yourselves, please,
for our records? Could I start at this end with Mr Riley?
Mr Riley:
I'm Chris Riley. I was DfT's chief economist until five years
ago, since when I've been an economic consultant. I work part
of my time on transport.
Professor Phil
Goodwin: Phil Goodwin, currently at the University
of West of England and formerly a member of SACTRA, the Standing
Advisory Committee on Trunk Road Assessment, and head of the Transport
Research Groups at Oxford University and University College, London.
Mr Griffiths:
I'm Malcolm Griffiths. I have a small consultancy called Bluespace
Thinking. I'm a civil engineer by background. I've had 30 years
in the civil engineering and energy businesses, most of which
was involved in the development of strategy and decision making.
So my interest is in good decision making rather than transport
specifically.
Q48 <Chair:
Thank you. Would you consider that Eddington's recommendations
are relevant today, with lower traffic growth and lower economic
activity than predicted?
Professor Phil
Goodwin: A large part of my evidence is about trying
to push at the Eddington conclusions to see how vulnerable they
are. My feeling would be that, like your previous witnesses, in
terms of priorities there may be a lot more benefit to be gained
from a focus on urban transport, especially city transport. That
is in terms of the priorities among the three priority areas.
For policy, I think the Eddington conclusion—that,
if the Department for Transport's traffic forecasts are right
and if there is no road pricing, there is no infrastructure capacity
improvement which can actually make traffic conditions better—is
a robust one. I think that is still valid, although I now take
a different view than he did, and that the Department for Transport
has done, about the possibilities of traffic growth being very
much less than was assumed then.
On evidence, I think there is a vast range of
evidence now, which Eddington was not able to take into account,
about the benefits and costs of other policy options, including
non-pricing methods of reducing car use, which shift the balance
among the types of projects that you would want to support.
Q49 <Chair:
Does anybody else want to comment on that? Mr Riley.
Mr Riley:
I think that Eddington's main conclusions remain valid, although
clearly the context is rather different from what he was assuming.
I think his assessment of the key priority areas is still valid:
urban congestion, inter-urban networks and international networks.
His focus on the importance of value for money, in making decisions
about transport spending, seems to me absolutely right and one
which we should pay great attention to.
I think the third key conclusion of his, which is
the importance of getting prices right, which underlay both the
Eddington study and also the Stern report on climate change, seems
to me absolutely crucial. I don't think his other conclusions
suffer if we don't have road pricing, but clearly road pricing
is an important element of his conclusions that still is very
important. Lower economic growth will reduce the value for money
from transport investment across the piece because it will mean
less pressure on transport capacity, but the basic messages that
he put forward—and I think the priorities that he put forward—seem
to me to be the right ones.
Q50 <Chair:
Mr Griffiths?
Mr Griffiths:
Yes, I agree. I think the trend of where he was going was correct.
I think two things have changed though. One is that saturation
per person, in travel terms, has now appeared; it is now there
in the numbers. Whether that is due to technology, or other things,
that is to be seen. It is certainly not just an economic effect.
So that saturation has occurred.
The other thing is, if you look at the economic changes
as to where the economic growth has come from and which sectors
of society it has occurred to, the wealthy have got wealthier
and the increase is in things like health, education, property,
financial services. We've seen manufacturing and agriculture go
down over the period. I think that impacts on where transportation
should be focusing to help the economy going forward.
Q51 <Kelvin
Hopkins: Just to follow that point, the Government
are talking about rebalancing the economy. You have mentioned
manufacturing and I agree absolutely, but the big manufacturing
sectors and the ones that need the development are further north,
not in the south-east. The big conurbations are the midlands and
the north, north-east and Scotland, but they don't have an effective
strategic freight network to serve them, and this is one of the
points made in our papers here. So freight is constantly underplayed.
People talk about marginal changes, little improvements here,
little improvements there, but you probably heard my earlier questions
about the need for dedicated freight corridors, particularly on
rail, capable of taking the kind of volumes of freight we need
to transport.
Mr Riley:
The first observation I would make is that the freight intensity
of the economy, as I understand it, is falling and I have no reason
to think that, even with some rebalancing of the economy, that
trend will not continue. But I think, as previous witnesses have
said, whether investment in rail freight is good value for money
depends on the numbers and depends on whether that is better for
the economy than ensuring there is sufficient capacity for other
forms of freight. I think there is an open question about that.
Mr Griffiths:
If you're deciding where to put your business you need a good
work force; you need an experienced workface; you need those people
to be able to get to your business and you need to be able to
send your product to market. Those are the three things in that
decision. I think the question of freight is dependent on how
we see the economy going because if we're going to a services
economy—be it financial services or information technology
services—then there is not a lot of freight involved in
that. It is much more the high-speed broadband and things.
My own view is that in part we have to reverse the
decline in manufacturing. The imports that we are now getting
in manufacturing are far exceeding our exports and they are the
technology things: they are the computers, the TVs, everything
that we have going forward. So I do think we need to reverse manufacturing.
Whether we need new freight infrastructure or not
I don't know. It is a case of looking at: where can we have the
economic development; what are the products going to be; where
are the markets; do they need rail freight or are there existing
systems? I don't know the answer to that.
Q52 <Kelvin
Hopkins: I am in contact with supermarkets over
this. Supermarkets are keen to get more of their inter-urban traffic
on to rail but the capacity isn't there. I have meetings with
them. If we could get just the supermarket traffic— that
is going to continue, food and drink are going to continue—could
we not investigate or at least think there is a realistic possibility
that they might shift a substantial proportion of their road traffic
on to rail if the capacity was there?
Mr Griffiths:
I totally agree with that. I was talking to a gentleman yesterday
about Rugeley. Rugeley is an area that is quite some way down,
in terms of health and economic development. He explained to me
that they have a new warehouse there that could give employment
as a distribution centre, but they didn't have transportation
links to the warehouse. In that context, freight clearly has to
be important.
Q53 <Chair:
Should there be more flexibility between capital and revenue expenditure?
Professor Phil
Goodwin: I'd like to come in on that, but could
I also comment on the freight thing, because I'd like to add another
point there. It does seem to me that there is a very attractive
idea of having a strategic rail freight network with a European
dimension and with connectivity, that being the key. You have
to have unbroken connectivity to make that work. But I think my
view is a bigger contribution to freight efficiency than that—not
instead but as well—would be gained from giving freight
a higher priority in access to scarce road space than it currently
has. One of the ways of doing that is encouraging a greater transfer
of car use from the road network—where very often it's not
necessary—to rail and public transport, thereby giving more
elbow room to have freight priority systems, especially on the
roads to and from ports, that sort of area. So I do think there
is an interaction between the freight side and the passenger side
here.
On revenue and capital, I think we have a bit of
a problem in that, although both manifestly are going to be subject
to very tight constraints over the next few years, there is an
implicit assumption that capital is good because it is investing
for the future and revenue spending is bad because it is subsidies.
I don't think that is valid at all. What is getting the highest
value for money, in transport congestion and economic terms at
the moment, includes a lot of quite cheap revenue schemes. I think
we have to find a way of raising their position in the moral high
ground of what gives good value for money.
Mr Riley:
I agree very much with the points that Phil has just made.
A point I would also make is that ideally capital
spending, when it is worth while, should be financed largely by
borrowing—debt—because the benefits accrue very largely
to future transport users, future generations, and that is the
way you should pay for them. Current spending should be financed
out of current user charges and taxation. That is the way that
ensures equity between the generations. That is a flexibility
that is not always allowable within the way in which we control
public expenditure, but ideally it should be. I can't believe
that very good capital projects, financed by additional borrowing,
would suddenly cause a great loss of confidence in our fiscal
policy. So that is the first point I would make.
Secondly, I think there is an issue about maintenance
of existing assets. If we don't maintain worthwhile transport
assets in a reasonable state, we just simply store up the need
for more capital spending in the future and that is an extremely
short-sighted approach. Not only do we save some money if we don't
maintain our assets but the value of those assets goes down, so
the public sector is not gaining anything by making this false
economy.
The final point I would make is that the most
important thing is that we use our existing assets, as Eddington
said, as efficiently as possible, and that comes back once again
to getting the prices right.
Q54 Paul Maynard:
We have had a lot of attention so far on the issue of appraisal,
cost-benefit analyses, wider economic impacts. How can we improve
the current assessment system to better reflect the need for economic
growth when taking transport decisions? Do we need to re-design
the cost-benefit analysis or do we need to put something in place
that is parallel to it and, if so, what would that something be?
Professor Phil
Goodwin: My feeling here is that it is a very tricky
problem that may not be solved by successively more and more elaborate
calculus methods of doing the sums. I live with these sums. That
is part of my life. I am very well aware that they are imperfect.
I think the key thing is about scrutiny and challenge, not about
big consultancy studies to do the sums. That is why in relation,
Mr Maynard, to your earlier points about transport policy statements
and a new planning regime, it does seem to me there is an enormous
danger in having abandoned the formal scrutiny and challenge that
used to be carried out in the public inquiry set-up, the reason
for that precisely being the points that you mention: this is
all very complicated; it produces vast volumes of paper; claims
are made that are extraordinarily difficult to substantiate—usually
over optimistic—and the only way one is going to be able
to get that is by having a level of technical scrutiny and debate
and challenge, by people who disagree with each other. I am a
great fan of the almost courtroom atmosphere in this, if you take
my meaning.
Q55 Paul Maynard:
What should "transformational" mean, in terms of economic
growth? It is a word that is getting old. What should it mean?
Chair: "Transformational".
What should it do in relation to economic activity? What should
it mean and what has it meant in the past?
Mr Riley:
I think one of the extraordinary things about British economic
history is how little the underlying rate of economic growth has
varied. We have had big cycles over many centuries but the underlying
rate of growth has remained pretty close to 2%, or thereabouts,
for hundreds of years. I think if transport—or indeed any
other policy—were capable of adding a quarter of a percentage
point to our underlying growth rate that would be regarded as
a great success. One of the great problems of economic policy,
for all Governments, has been Ministers deluding themselves that
they have produced a sea change in our growth prospects and then
of course it all comes to a terrible halt, as we have seen in
2008.
Mr Griffiths:
Thinking about "transformational" and thinking about
"strategic", these things have to start with a hypothesis
of something that can be done that will make things so much better
for people. They don't start with a whole bunch of detailed numbers
in a computer. You first have to say, "I think doing this,
that and the other will make a difference". My own particular
view, in terms of the economy, is getting people in the lower
30% of households into work and having a better standard of living.
I think health costs would reduce; I think welfare benefits would
accrue. I think that is important. From a transportation point
of view, I think it is getting individuals to work quickly and
cheaply. It may lead to subsidy. It almost certainly leads to
better bus services, to car sharing—dealing with the cultural
difficulties of that—and some of the ICT-type benefits.
But it starts with a hypothesis and you can then
say, "Yes that may work" and then you test it with the
analysis. You see whether that really stacks up. To me that is
transformational thinking, as opposed to this project or that
project that is suddenly going to change things. It isn't. It
is going to be more difficult than that.
Q56 <Kwasi
Kwarteng: It was interesting; I'm not sure how
much of the last panel you saw, in terms of the people and their
contributions, but it seems to me that what you are suggesting
is at subtle variance with what a gentleman in the last session
was saying, when he said that he wanted to look at projects on
an individual basis. I am caricaturing what he said because he
did accept that there was scope for strategic decisions, but he
was very focused on the project-by-project basis and you seem
to be saying something quite different from that.
Mr Griffiths:
I am saying that, at that higher level of strategy, do we focus
on long distance travel; short distance travel; trains; buses?
I think you have to have a transformational and strategic hypothesis,
then you test it with the analysis and then you say, "These
projects fit and these ones don't". You do the analysis in
tiers, as opposed to putting forward a pet project and trying
to decide whether this is good or not.
Q57 Kwasi Kwarteng:
Sure and, in terms of policy, which body or Minister or Department
do you see driving that strategic vision?
Mr Griffiths:
I think it is for central Government Departments to provide that
sort of thinking but then for the localities to say, "It
works for us" or "It doesn't work for us", and
make the decisions about it.
Q58 Chair: Do you
think the encouragement to look at it in that way should come
from the centre, although counties should be looking at what they
require?
Mr Griffiths:
I do. Bear in mind that my background is more business than politics,
but I know that big multinational companies develop their strategy
and their hypotheses centrally; they lay down systems that subsidiaries
need to comply with; then they let the subsidiaries get on with
running the business. But that strategic thinking only needs to
be done once. It needs to be done with consultation and involving
everyone but it only needs to be done once.
Q59 Chair: Perhaps
you could link it with some of the points you made in your written
evidence, where you were talking about smaller projects giving
better value for money than larger ones, which is not the same
thinking that DfT has. Perhaps you could link that?
Professor Phil
Goodwin: Yes. I am wrestling with this word "transformational".
I think I have come to the conclusion it is best to avoid it.
The reason for avoiding it is because it almost inevitably leads
you to make claims for individual schemes, which individual schemes
are quite incapable of delivering and possibly even the transport
sector, as a whole, is incapable of delivering. I do however use
the word "strategic". I think that is a useful one and
it seems to me there that "strategic" should not be
a code word for big schemes. In order to justify huge schemes
they call it "strategic".
Strategic is about the coherence and logical consistency
among all the different elements of policies that are aimed not
to undermine each other. It seems to me that an inescapable conclusion
from localism is that there must be strategic divergence in the
pathways adopted by different parts of the country, different
cities and different regions. The result of that will be a greater
evidence base on which ones work well and which ones work poorly.
That will be a stronger long-term strategic position to be in,
just as our experience in the UK is immensely strengthened by
the fact that some other European countries have been doing something
different and we can, therefore, look to evidence.
My own calculations for what they are worth suggest
that, by quite a big margin, the best value for money at the moment
is coming from things like smarter choices packages composed of
workplace and school travel plans and individual travel marketing;
behaviour change schemes that are astonishingly successful, in
spite of the presumption that it is impossible to change human
behaviour. It is not impossible at all. It is happening on a very,
very big scale all the time.
Q60 Chair: Are
they successful for economic activity, as distinct from successful
for environmental purposes or relieving localised congestion,
making people's lives more pleasant? Are they successful in relation
to the economy?
Professor Phil
Goodwin: I take the view that there are two elements
to that. The first is that contribution to narrower transport
objectives—congestion, safety, efficient movement—is
a necessary condition for there to be any wider macro-economic
benefit. It is not a sufficient contribution but it is a necessary
one. You are not going to get top-up effects on the economy if
you do not have improvements in travel conditions to start with.
Therefore, prima facie, there is at least a case to argue that
the investments that are delivering the biggest narrow transport
benefits may also be delivering the bigger potential for wider
economic benefits as well.
The second element of that, which is indirect
evidence but I think quite persuasive, is that at least some of
the areas in which these policies are most successful are also
those which the macro-economic analysis suggests have the greatest
potential. For example, in very short distance movements in efficient
inner and central city areas, the agglomeration argument is enormously
helped by these sorts of small-scale policies, provided they are
done, I should say, in quite a big way. The individual elements
are small but the overall effort that you have to put in does
add up.
Q61 Chair: Mr Griffiths,
in your written evidence you say that current appraisal methods
favour the larger major capital projects. How does that happen?
Mr Griffiths:
It is quite specific and detailed but I think it has three stages.
Firstly, historically there has been the view that travel correlates
with GDP increase. That connection has disappeared, with the effect
of saturation and what has happened over the last few years. If
you look over the last six years of data from the Office of the
Rail Regulator and the ONS, that correlation is not there. That
correlation then goes into something that is called "elasticities"
and they are much higher for longer distances. Again, that arrangement
has disappeared and, in fact, there is a new revision of the appraisal
guidance that hasn't yet been put into place, but that will dramatically
change that.
Now, because of those two changes, whenever
you do a calculation, if it's big and it's going a long way, it
will look much more beneficial than it will do when the appraisal
method has caught up with what's happened over the last 10 or
15 years.
Mr Riley:
I have a comment on that. As I read the evidence, and as Phil's
paper sets out, it is very often the smallest schemes that have
the biggest rates of return using the appraisal methods we currently
use. So I am not really quite sure I understand the proposition
that the appraisal system benefits large schemes.
If I may just comment briefly on the general
points that have been raised here; it is clear that the strategic
analysis of big schemes will typically tend to be of a different
form, using different models and different approaches, than the
analysis of small schemes, or individual schemes rather than strategies.
The basic framework that the current appraisal system uses—I
have to declare an interest, having been involved in developing
it—is the overall effect on welfare including, the economic
benefits, the social benefits and environmental benefits, and
to try and make those as transparent as possible, which seems
to me absolutely essential.
That is not to say that it's not perfectly reasonable
to focus on a particular component of it, which individual Ministers,
or governments or lobbyists, will do at different times, focusing
on the effects on economic growth or the effects on the environment,
or whatever. That seems to be a perfectly reasonable adjunct to
go alongside the existing appraisal methodology.
I think the third point I would stress—which
Henry Overman made this morning—was that some of the wider
benefits or impacts of big transport schemes, which might or might
not be called "transformational", are very difficult
to understand and model. To try and shoehorn them into a very
tightly defined methodology, which we currently have, is not going
to be the end of the story. It's very important to bring to bear
other kinds of evidence that can support the overall decision,
whether it is strategic or local.
Q62 Paul Maynard:
If it is very difficult to construct one single calculation that
will turn out a number at the end, in order to rank 10 projects
in order and go for the top three, when you have a defined pot
of money—and a smaller pot at the moment, as we now have—what
mechanisms should we be trying to use to decide between say a
Mersey gateway and a northern hub, or a northern hub or the HS2?
How do we prioritise? If I understood Professor Goodwin correctly,
it has all become so complex and we are almost being reduced to
going on a hunch, perhaps. That is perhaps a bit unfair.
Mr Riley:
It's always been the case that appraisal is just one input into
decisions and that is absolutely right. The methodology we have
is not sufficiently robust to be able to just simply take the
top ones off the list. It's a matter for politicians and local
decision makers to make choices. The plea I would make is: it
is important that they should be based, as far as possible, on
evidence. What form that evidence takes may vary according to
the type of scheme or strategy that is being considered. It doesn't
have to be all shoehorned into a model.
Q63 Kwasi Kwarteng:
I think it is obvious to the general public that these decisions
are political. No sophisticated model in the world is going to
be able to decide between building a bridge across the Humber,
or whatever it is, and something in Cornwall. That isn't the function
of these models to do that; I appreciate that.
What I was particularly interested in is this
question of strategic direction. Ultimately, I accept these are
political decisions but do you think there is a possibility for
a framework beyond the cost-benefit analysis—this is going
back to a question my colleague asked—where we can appraise
these different things to make it slightly more objective? What
I am saying is: obviously, ultimately, these are political decisions
but is there any way we can try and create some sort of framework
of looking at these?
Chair: Is there any way of trying to
assess what we do or we don't call transformational schemes, strategic
schemes?
Professor Phil Goodwin:
I think there is. I suppose there are two big errors that one
might make with the structure of benefit cost analysis. One is
to say, "It's perfect" and the other is to say, "It's
rubbish" and both of them leave you helpless in the hands
of manipulation. I do think that a framework along the lines of
that which the Department for Transport has worked out over the
years—sometimes it has three main priorities and sometimes
it has five, and it always allows for the statement of both the
economic calculations, and the policy, equity and social argument
as well—is right, and to be required to do it formally and
thoughtfully, and then be open to criticism and scrutiny helps.
What one wants to do is look at patterns and
it does seem to me that there are very clear patterns now; the
sorts of strategies that are coming out with good rates of return,
do seem to be robust over many different situations and subject
to all sorts of trying to test away at the assumptions. I think
that is useful.
I was interested in the apparent conflict between
Malcolm and Chris's point: is the existing system biased or not,
for or against big schemes? I think the resolution, why they are
both right in a sense, is that if it is done properly, the present
situation need not be biased, but it's almost never done properly
because there is so much vested interest—
Q64 Chair: Who decides
what is proper?
Professor Phil Goodwin:
I take your point, and that is why I am in favour of that: once
the calculations have been done, they must be open to challenge
and argument and then it is a political process.
Q65 Chair: Professor Goodwin,
have you spoken to the DfT with your proposals for appraisals?
Professor Phil Goodwin:
Yes, indeed.
Q66 Chair: What has its
response been? Can you tell us?
Professor Phil Goodwin:
If I can be a tiny bit heretical, the Department for Transport
within it has about the same range of views about transport strategy
as exists in the population, or indeed on this Committee, and
quite right too. Therefore, it doesn't surprise me at all to meet
people who say, "Great, you're doing a grand job. We can't
say it but you keep on saying it, it's great," and others
who are saying, "You must be out of your mind, this is not
the way that we do our calculations at all" and maybe the
conventional wisdom is somewhere in the middle. Maybe recently
ex-Department for Transport officials are the people to ask about
that.
Chair: When we read that response, we
will have to consider what we think it means.
Q67 Kelvin Hopkins:
I must say I have a very jaded view of Government decision making
in Britain over a long period. We are very good at saying no to
things. We are very good at underfunding things and we are very
good at making wrong decisions. I hesitate to say this in front
of Chris Riley, who was centrally involved during the exchange
rate mechanism; for example, privatising the railways, the PPP
scheme, and we could go on. Giving tax credits to the HMRC was
complete nonsense, in my view.
Chair: Can we keep to transport, Mr Hopkins?
I know it's tempting.
Kelvin Hopkins: Malcolm Griffiths
talked about the way companies operate and they decide very carefully
their strategic way forward, to make sure they get the decision
right presumably, and then allow work to be carried out at a lower
level and different arms, and so on, but they make sure they get
the decision right in the first place and then they support it.
British Government and British politics, it seems to me are governed
by prejudgments; people have ideals. I have been talking
to a senior civil servant—more than one in fact—who
says that, with all this talk of evidence-based policy, if politicians
or senior officials don't write the policy, they ignore the evidence.
Is that not the case?
Mr Riley: I couldn't
possibly comment on that, but I think it does lead one to the
view that the most important consideration in many ways is transparency,
that the evidence on which decisions are made should be laid out
as clearly as possible. I think that is one of the great merits
of the present system we have, but it should go wider than that.
If there are specific objectives or other criteria that are brought
to bear within decisions, then there are perfectly good techniques
available for displaying these. You can even analyse them, in
a very technical way, using multi-criteria analysis if you wish,
but the important thing is they should be set out clearly. So,
where there is a political judgement or an arbitrary judgement
of some other kind imposed on analysis, it should be absolutely
clear and then that gives commentators the opportunity to criticise
and to comment.
Q68 Chair: What is going
to happen now with regional projects, if we have LEPs and no RDAs
and no regional government offices? Does anybody have a view on
how they would be taken forward?
Mr Riley: There
is clearly a need for co-ordination of some kind between local
authorities on decisions affecting their local areas. I think
for national schemes, for inter-urban schemes, those have to be
taken centrally, very largely, but for schemes that are primarily
local in nature, and given that local authority boundaries are
not big enough to encapsulate the whole area of a city region,
let us say, there has to be co-ordination.
Local Enterprise Partnerships are evidently
a way of trying to bring this about but, from what we have heard,
they are not going to do that necessarily. We've heard this morning
already that there are three in the Tyne and Wear area, so how
are they going to be co-ordinated? The Government has a responsibility
to facilitate the kind of co-ordination that is necessary to make
sure that transport planning, how it links with housing and all
the rest of it, at an appropriately defined regional level, does
happen. Therefore, I think we have to wait and see how Local Enterprise
Partnerships function.
Q69 Chair: So you think
the Government will have to look at ways of doing this?
Mr Riley: There
needs to be co-ordination, if this is going to be done efficiently,
at a city regional level or at an economic regional level.
Q70 Chair: The issue here
is for schemes that cross those boundaries and are not at levels.
Mr Riley: Yes; like
travel to work areas, for example. The proof of the pudding will
be in the eating but, at the end of the day, someone—and
I guess it has to be central Government—needs to ensure
that there is sufficient co-ordination across local authorities,
or across Local Enterprise Partnerships, taking place.
Q71 Paul Maynard:
Do you think that transport policy in the north of England is,
or should be, any different from transport policy in the rest
of the country?
Mr Griffiths: It
goes back to the discussion we were having earlier, in terms of
urban congestion and getting people to work and having transportation
that fits with other policies in a particular area. If you look
at London, London is almost the perfect example of where there
is lots of transportation all coming in, and things are working,
and you get something like Docklands that needs regenerating and
the developers come in and the transport comes in. To my mind,
there needs to be more of a focus on that, on the northern urban
areas that need to be developed. That could well mean that more
money goes into that than in other places.
We have talked about a framework. The high-level
framework is about resource allocation, so whether it's, "I'll
give this much money for long distance; this much money for urban
congestion", whatever those big policy things are, that is
the framework. Those are the political decisions supported by
lots of evidence, "If you do this, this is what will come
out". Having allocated the resources, then it is for the
localities to get on and say, "Right, this project is better
than that; that project is better than the other. Three of us
need to get together to make something work across areas".
Q72 Julian Sturdy:
Just following on from that point, outside of London, do you feel
that part of the problem has been that local authorities have
been making transport decisions on their individual area and not
looking at the bigger picture? I think London is an exception
to that and this especially relates to the north. The LEPs, if
they're done on a city region basis where they are based around
the way people move to work and things like that—based on
an economic sense—will help slightly to balance that out
and move away from the more parochial thinking that transport
has been done within local authorities over the past few years.
Professor Phil Goodwin:
The problem is when the historically determined local authority
boundaries don't correspond anymore with the economic entity of
the area. This happens quite often when two small towns, in effect,
merge and become a single city but they still have two separate
town councils. Having said that, I must say I don't detect a lot
of difference between the concerns, the range of alternatives
for solving them, the sensitivities in discussions about transport
strategy in the north or in the far west or in the south. There
is a difference clearly between urban areas and rural areas, but
I don't think there are different criteria that are applying in
the north discussion and the south discussion. Basically, it's
the same thing.
Mr Riley: I think
there is a different dimension to this and that is the whole question
of regional balance and regional equity. If one simply adopted
the national principles of looking ideally for where the best
value for money is and applied that across the country, you might
well end up concentrating your investment in the most dynamic,
fast-growing regions—like London and the south-east, for
example—because rates of return, as measured, would be higher
and that would arguably generate the best economic benefit for
the country as a whole. However, there is another objective and
that is about the balance between regions, the equity between
regions, and the great unknowable about how much investment in
transport in less well performing regions would help, which is
debateable. I think that other dimension has to be factored in,
as I think the Secretary of State said in the evidence he gave
to you in July.
Q73 Chair: How important
is it we invest in ports and airports in supporting economic activity,
investment and tourism?
Q74 Professor
Phil Goodwin: It is not clear to me
that a port deserves an entirely different importance to any other
area of important economic activity. I was a nonexecutive
director of a major port for 15 years and I fought—as one
would—for the priority of that port, but when it comes down
to it, the transport issues that affected it were largely those
about the delivery of customers, both freight and passengers,
on a crowded road and rail system where this wasn't about investment
in the port at all. This was about investment in the connection
between the port and the rest of the country. I think I took that
to be Eddington's focus. He was talking about access to
ports, rather than the investment strategy of the port itself,
which, life being what it is, is largely going to be taken on
commercial grounds anyway.
Chair: Thank you very much for coming
and for answering our questions.
| 
