Examination of Witnesses (Questions 166-207)
Q166 <Chair:
Good morning gentlemen and thank you very much for coming to this
meeting of the Transport Select Committee. We are conducting a
national inquiry into transport and the economy, but we felt it
was important to come out of London to take evidence, so today
we're here in Birmingham to listen directly to you about issues
you feel are important and to spend some time looking around the
city for ourselves, as well. I'd like to start by asking you to
identify yourselves with your name and the organisation you represent.
Councillor Timothy Huxtable:
Good morning. Councillor Timothy Huxtable, Cabinet Member for
Transportation and Regeneration, Birmingham City Council.
David Bull: David
Bull, Birmingham City Council, Assistant Director, Development
Strategy.
Geoff Inskip: Geoff
Inskip, I'm the Chief Executive at Centro.
Councillor Jon Hunt:
I'm Councillor Jon Hunt and I'm Vice-Chair of the West Midlands
Integrated Transport Authority.
Q167 <Chair:
Thank you. How important are transport improvements to economic
regeneration in Birmingham?
Councillor Timothy Huxtable:
They're absolutely crucial and integral. This is why Birmingham
City Council actually merged the transportation and regeneration
portfolios into one. Birmingham is among the core cities that
are the engine houses of the British economy, and the transport
infrastructure is absolutely crucial in terms of the free movement
of people, services and goods in order to help us deliver our
economic regeneration objectives.
David Bull: We're
in a position where we have a high base for unemployment in Birmingham.
The Big City Plan is a major proposal that fully incorporates
transport and connectivity, so that the city can work with developers
in bringing forward the transport infrastructure that is crucial
in the current climate in giving the developers viable development.
Therefore, getting our fair share of funding for transport infrastructure
means that we can work closely with the private sector, as we
are, and with Centro, in providing the improved and sustainable
walking, cycling and public transport schemes, as well as access
to car parks, that are vital for jobs and regeneration in this
city in the future. We certainly feel that London and the South-East
have had more than their fair share of capital infrastructure.
We feel that in the current difficult financial climate the Midlands,
and indeed the North-West and North-East, should be getting infrastructure
to support our economies and reduce unemployment.
Geoff Inskip: It
is increasingly recognised, not only by the Coalition but also
from experience in Europe, that transport is a real driver for
economic growth. There are lots of examples that we can give in
relation to just how important it is that the transport investment
comes in at a time when we need to regenerate our economy and
make sure that the economy is really punching its weight. For
example, the recent announcement by the Coalition regarding Midland
Metro in Birmingham was obviously great and very welcome news
for us. It creates over 1,300 jobs and it has a GVA impact of
about £50 million a year, which means that there will
be just over a two-year payback in terms of what the local economy
will bring. I think that point about transport investment being
a real driver for economic growth is increasingly recognised now.
Certainly, there is another very good example whereby the Business
Improvement Districts in Birmingham, of which we now have four,
have come together to talk about transport needs to ensure that
the city centre works better. So, we have got a Big City Plan
and we have a transport element to that, called Vision for Movement.
The Committee may have seen this, but if you haven't, we'll send
it to you to show you how important the private sector believes
that getting the transport offer right is, in terms of good connectivity
in order to ensure that there is a good, efficient transport system,
so that they can actually thrive in this environment too.
Councillor Jon Hunt:
I think we need to stress that the whole West Midlands conurbation,
not just Birmingham, has pressing transport needs. In fact, the
Black Country conurbation, which is of a similar size to Birmingham,
is lagging economically behind Birmingham, which is perhaps a
reflection of historically poor and intractable transport issues
across that conurbation. These issues will need to be solved within
the next few years.
Q168 <Chair:
Do you think there is any danger that people are looking at just
Birmingham and forgetting the areas outside Birmingham?
Councillor Jon Hunt:
It need not be a danger. I think Birmingham will increasingly
become the transport hub for the West Midlands, if not the whole
country, in many respects. What we need to do is unlock those
links between the Black Country, Birmingham and other parts of
the region. Some of those schemes are already in place and in
the pipeline, but there is more that needs to be done.
Q169 <Chair:
Are there any examples of transport projects or investments that
have made a real difference to the economy?
David Bull: If
you look at the strategy that Birmingham City Council has had
in recent years, transport, and the investment in transport, has
been critical in putting in major improvements in the east side
of the city. This includes Millennium Point, opening up the Science
Park and putting in new highways in that area while removing the
old ones. That has had a major impact in the city. At the moment
we're constructing Selly Oak New Road, which is opening up a major
site development and which will create thousands of jobs over
the next five to 10 years. That highway is under construction
and is in the area where the new Queen Elizabeth II Hospital has
been opened, which is a very big, large, new hospital.
Indeed, there is potential for further job creation.
For example, at Longbridge, where as you know, 6,000 Rover jobs
disappeared a few years ago, we are being held back from development
in that area because we need £30 million worth of infrastructure
investment to open up the 140 hectare site. We can bid for that
through the Regional Growth Fund, or we can bid for that through
TIF funding—Accelerated Development Zone funding—but
there are a lot of hoops to jump through when it is absolutely
obvious that, if we had the funding for capital, we would be able
to create 10,000 jobs in that area more rapidly. So, this direct
link between infrastructure and jobs is the critical issue. The
problem is how many hoops we have to jump through in order to
get the funding in different areas to support development.
Q170 <Chair:
Are you clear at the moment just what you have to do to develop
that particular project? You are talking about hoops to jump through:
do you know what hoops they are, if they exist?
David Bull: Yes,
we do. In relation to the plan, and using Longbridge as an example,
we have an Area Action Plan that has gone through an examination
in public with an agreement between the developer and all of the
public sector parties. What is holding it up is the fact that
we were going to get funding for infrastructure from the Regional
Development Agency, which is no longer available. Therefore, we
will be making the private sector-led bid with St Modwen who own
the site, and we will be going forward for Regional Growth funding.
However, the Regional Growth Fund funding will be over-committed
in the short term because there's such a strong need for infrastructure.
But it is not just available from that area; there are other funds
as well.
Q171 <Chair:
But on the information we have, the Regional Growth Fund investment
is going to be about a third of what existed before, maybe less
than that. Is that not a problem?
David Bull: Yes,
it will be competitive.
Q172 <Chair:
It's competitive, so it's rather different?
David Bull: Yes.
Q173 <Julian
Sturdy: Just to come in on the point about the
private and public sector: you said earlier on that you were working
closely with the private sector and I think we saw one of the
examples of that when we came in, which was the new National Express
bus station. Could you go into some more details about private
sector-led schemes that you are trying to encourage, and how the
private sector is trying to come into this?
Councillor Timothy Huxtable:
I think the one I wanted to emphasise very clearly was the Evergreen
3 project which is happening right now. This is the upgrade to
the Chiltern line between London Marylebone and Birmingham Moor
Street, a £240 million of private-sector investment
designed to speed up train journeys between London Marylebone
and Birmingham Moor Street. This includes the reopening of the
historic platforms at Birmingham Moor Street. I think you visited
the Birmingham Moor Street area. It is absolutely crucial, because
on one side you have the whole of the East side development and
the proposed HS2 station, and on the other side you have the Bull
Ring Shopping Centre with the Selfridges building. Allied to that
we are progressing a seamless pedestrian link between Moor Street
Station and New Street Station because the connectivity and integration
within the city centre is vital. We are working very closely with
Chiltern Railways in order to deliver this. It is an example of
something happening right now which is absolutely influencing
economic regeneration in an area of Birmingham that really needs
it.
I wanted also to emphasise Paradise Circus and our
work with private developers and the Business Improvement District,
one of whom who has been referred to already by Geoff, in terms
of transforming that whole site in Birmingham City Centre. This
has been made possible by moving the Library of Birmingham. It
is a £189.6 million regeneration project and has the
crucial transport links that we will need, including walking and
cycling as well as getting people into the city centre through
heavy rail or Metro, in order to make that whole development scheme
work and to place less emphasis on the road network. If you ask
the Business Improvement District, the only reason that their
bid got renewed with a huge majority was the fact that they concentrated
on the necessity of increased transport links to that whole area
of Birmingham focusing on the economic redevelopment plans at
Paradise Circus.
Geoff Inskip: I
will just mention a couple of further examples. The first is the
Wolverhampton Interchange, which is being built now and is very
much private sector-led with Wolverhampton City Council. They
are trying to get a mixed-use development off the ground, and
key to that was the building of the new bus and rail interchange,
which Centro have been leading on. It was very much a partnership
between the public and private sectors. From the private sector-led
side, they wanted to see this mixed-use development take place,
but they needed the investment coming in from ourselves to enable
that to happen, so we made that happen in that way.
The other example I would give you is again related
to the Black Country, where we very much require a Wednesbury
to Stourbridge Rapid Transit Link as a part of the AAP as well.
Westfield, who are the developers, are committed to putting in
£36 million to a Rapid Transit Link between Wednesbury
and Stourbridge. I think that is a big commitment on behalf of
a developer in recognising the importance of public transport
links in their development.
Q174 <Paul
Maynard: Clearly you have a large range of infrastructural
projects, some of which are under way and some of which are on
a very lengthy wish-list. Do you believe there is a case for assessing
your wish-list and prioritising some projects over others, given
that overall funding is likely to decrease? If there is a case
for that, how do you think that process should occur? At what
level, what organisational body and what structure?
Chair:> Mr Bull,
what is most important and how should it be decided?
David Bull: In
the current climate, where there are scarce resources and lots
of concurrent priorities, it will be important to choose major
priorities. We believe that these priorities for infrastructure
that will lead to development should be made locally. We are creating
Local Enterprise Partnerships within Birmingham; for example,
Birmingham and Solihull partnership covers the travel-to-work
area. We are certainly capable of setting our own priorities,
as are the other LEPs within the West Midlands as well. I think
how those priorities are set is important to local people, and
what we don't want to have to do is spend a great deal of funding
on undoing Green Book-style business cases for proposals that
won't be prioritised in the longer term. I think that we want
central Government to take more notice of local needs and notice
of where there are private sector partners supporting these priorities,
so that the public and private sector can work together and be
successful in job creation in the short term. That links into
the point about viability.
Q175 <Chair:
Mr Bull, can I stop you there? When you say that the Government
should support schemes that have private sector support, do you
mean private sector financial support or verbal support?
David Bull: I think
that it's not out of the question that there is private sector
financial support in taking proposals forward. So for example,
at Longbridge, it is proposed that there would be joint funding
between public and private sector in the long term for all the
infrastructure that is required. But what is important to remember
in the short term when we need to create jobs quickly is that
the private sector, especially if they have bought land at higher
prices, finds it difficult to make its developments viable. Therefore,
public sector infrastructure on highways, and sustainable transport
to give connectivity and accessibility to their developments is
a way of getting jobs faster than you'd otherwise get. So, that
public sector-led infrastructure is important and certainly the
private sector is saying that it wants to work with us on that
issue.
Q176 <Chair:
How are assessments going to be made of projects that go outside
the existing or proposed LEP area, because the structures for
regional assessments are going? How is that going to happen?
Geoff Inskip: I
think the first thing to say is that the previous RFA system was
never really regional. It was all very controlled by central Government.
The evaluations, the appraisal networks and the appraisal process
were very, very heavy handed and very much controlled by central
Government. While the allocations of cash appeared to be in a
place that was okay, when we prioritised you then still had to
jump over hurdles and hurdles and hurdles to get and release that
funding. We can give you a great case study in terms of New Street
Gateway, if the Committee would like to hear it.
Q177 <Chair:
We'll take that as an example about the detail.
Geoff Inskip: Just
to talk about the future, which is about how we prioritise projects
now and across LEPs areas as well. We have a Local Transport Plan,
and that Local Transport Plan sets out very clearly through LTP3
what our priorities are in terms of regeneration, jobs, climate
change etc. We will prioritise by the projects that best fit against
that on a pragmatic basis with developers coming in. We'll prioritise
when we know when we can put the package of money together with
the private sector. Giving that decision making back to us locally
will actually enable us to speed up the way that the transport
developments can be delivered. So, it is very much about locally
determined schemes. Having allocated the cash through, for example,
a single pot which we would like to see going forward, then we
could actually make sure that regeneration, housing and transport
are all taken forward on a basis that best fits us here locally.
Councillor Jon Hunt:
I think Geoff Inskip has taken us some of the way there. The Local
Transport Plan is in fact about to go up for consultation, and
that will set out a clear programme for the next five years within
the funding envelope that's available. We think that's probably
an agreed plan. Beyond that, it's likely that the LEPs will then
have the ability to develop further schemes within their own priorities,
between business and Local Authorities, and put in bids for the
Growth Funds and Sustainability Funds, etc. They may then be able
to expand on what is in the Local Transport Plan.
Q178 <Paul
Maynard: This is specifically a question to Mr
Inskip. Centro is the only ITA not in the North of England; therefore
you haven't participated in the Northern Way consortium. Has there
been any difference in your view between your trajectory in terms
of policy development and those of the other ITAs that did participate
in the Northern Way?
Geoff Inskip: I'm
not sure there has really, because obviously we've been very much
part of a live debate here. We are at the heart of the road and
the rail networks, and as a consequence of that, a lot of the
through traffic, for example, is very much around national traffic
movement as well. As you know, the Access to Birmingham Study[1],
for example, identified a whole raft of issues which I think we
knew about before through the Transport Innovation Fund work we
did. So the Government did another study to indicate what these
issues were, really just reinforcing the messages that we know
about anyway. It is about Government listening very carefully
to what the local issues are and what we want locally to be delivered;
because, rest assured, we do know what's needed and we can prioritise.
Q179 <Kwasi
Kwarteng: I'm very interested in your general approach,
but I want to ask a very specific question about the obstacles
to economic growth in the region, from a transport point of view.
This is addressed to the Panel: in the next 10 years, for example,
you have a pathway to economic growth. From a transport point
of view, what are the obstacles in that path?
David Bull: The
biggest issue is the certainty of what capital we can bid for,
when we might get it and how we could work with the private sector
in implementing that infrastructure so that the private sector
can plan ahead as well.
Q180 <Kwasi
Kwarteng: So you think it's mainly a funding issue?
David Bull: It's
a funding issue on infrastructure, regarding when the funding
might come through, so that the timing of development and construction
can be coordinated with the private sector.
Q181 <Kwasi
Kwarteng: But that doesn't tell me anything about
what the actual problems are. Essentially, what you said is, "We
want money and when is it coming?"
David Bull: I'll
give you an example.
Q182 <Chair:
Where do you think the problems may lie at the moment in current
circumstances in dealing with the issue?
David Bull: I'll
give you an example. The City Council is working with the private
sector at Paradise Forum in the heart of the city centre on a
major development, which can only take place if we put in new
transport infrastructure. We have to close one road and put new
junctions in. To bid for that funding we could, for example, use
TIF. If we did that and we knew whether we were successful, when
that funding would come forward, we would be able to put in that
highway up front and the development could be planned. But at
the moment, because we don't know exactly when TIF will be coming
forward and what hoops we will have to jump through to be successful,
I can't say to the private sector when that construction can take
place. Therefore, it's difficult to plan what could be up to 2
million square feet of development. The important thing is that
uncertainty causes problems.
Geoff Inskip: Inevitably,
most of the obstacle is funding. If you have the funding and you
have certainty of funding, then you can actually work through
a prioritisation exercise to deliver locally. The remaining obstacles
that might be in place tend to be all around the timing of, for
example, when private sector developments would take place—clearly
you don't want to be putting in your transport and investment
too quickly in advance of that. There is a balance to be made.
I'm not saying necessarily that's an obstacle, but we do need
to get the timing right between the investment that comes in from
the private sector and the timing of the investment that goes
into transport to enable that to happen carefully. Certainly,
I think from our point of view that if we could have certainty
of funding and we could get back to a situation whereby we believe
that we can actually have an allocation of funding—let's
just say to the metropolitan area, "Here"—we could
actually take that, we could prioritise, and then we believe that
we could speed up the regeneration and growth agenda for ourselves.
Q183 <Kwasi
Kwarteng: Clearly, funding is a very general issue.
In Hull and Cornwall they would say the same thing about funding.
What are the specific obstacles here in this region, in terms
of problems? We know about the Eddington Transport Study which
said that we should be focusing on particular problems within
a locality. I just want to get a feel for that from your point
of view.
Geoff Inskip: I
think the biggest challenge we have currently is to expand the
airport runway. We have got an airport runway extension, which
is a fairly large project. We believe that enabling that to come
forward and ensuring that we can pull together a funding package
for that—we come back to funding again, I'm afraid—is
vital. The biggest challenge for us is that the airport is not
really punching its weight in the way that we believe it can in
terms of reaching its full potential. Therefore, there is a real
issue there for us.
I think the other big challenge for us at the moment
is the congestion on the rail network. In the main that is caused
by a lot of congestion in relation to the West Coast Main Line.
This is one of the reasons why one of the biggest benefits for
us locally from High Speed 2 coming into Birmingham Airport and
then into the city centre will be the release of capacity on the
heavy rail network. We can then use this release of capacity for
better local connections. For example, we worked out that High
Speed 2 and that local connectivity will generate something like
22,000 jobs and bring in about £1.5 billion of GDP[2].
Looking at the transport issues and how we want to unblock them
is, I think, quite a complicated picture. It is about making sure
that the very large transport investment goes in for High Speed
2, for example, but actually the local release of capacity on
the rail system will bring in big levels of connectivity, which
generates about half of that GDP increase I mentioned before.
Then we have the airport runway extension.
So, we are full of ambitious plans, but inevitably
you arrive at a situation where you say, "If we can unlock
the funding." We are not saying to Government that we want
a big allocation of transporting funding. What we are saying is:
"Bearing in mind our growth potential here in the West Midlands,
what you ought to be doing is giving us a single pot of money
and we can sort it out from there."
Councillor Jon Hunt:
I suppose one of the issues from the point of view of the passenger
is just joining everything up. Certainly in Birmingham City Centre
in the coming years, one of the challenges is to join everything
up. Those challenges are being taken on board as a result of the
development of New Street and City Centre Metro. Birmingham City
Centre is not necessarily large compared with the size of the
city as a whole, but it is still largeish and it is growing and
developing. Passengers who come into the city need to be able
to find their way around. People coming from around the conurbation
and the West Midlands region need to have confidence that they
can use this developing city centre transport hub effectively
and move from one mode to another confidently. Those are current
obstacles to passengers. These challenges are not necessarily
expensive to deal with, but they are ones that we have to respond
to.
Councillor Timothy Huxtable:
The key word that Geoff used was "capacity". We've all
seen the figures that show that commuter travel is going to grow
exponentially in the next few years. As Geoff said, we have ambitious
plans. The priority has been shared and agreed among Birmingham
City Council and Centro to reopen some of our disused railway
lines that are used currently for freight but not for commuters.
For example, the building of one particular chord at a key location
could rapidly expand the capacity of the rail network and make
life easier for a lot of people. It could also connect areas of
significant economic growth at both ends of these commuter lines;
in the city centre, but also on the outer fringes of Birmingham
where there still are manufacturing bases. So "capacity"
is absolutely the key word and that is an obstacle.
Q184 <Kelvin
Hopkins: I remember in my youth that Birmingham
went hell for leather for a car-based community; for me, representing
a car-producing town like Luton, there was a prejudice in favour
of the car. Is it not the case that you have turned completely
around now and are going for public transport?
David Bull: No,
we have a very balanced approach in moving forward within the
city. The car is important and there are lots of people employed
in the car industry. We still have 56,000 car parking spaces in
the city centre as evidence of taking forward that balanced approach.
What the developers were saying to us last week at the launch
of our Vision for Movement—which we've taken forward together
with the Business Improvement Districts— was that the quality
of the public rail with new development, particularly in the heart
of the city centre, is very important. Therefore, the connectivity
and improving the lot of pedestrians and cyclists and of the general
environment is very important; as is bringing forward Bus Rapid
Transit. It's the Business Improvement Districts that have been
talking to Geoff and myself and saying that they want us to bring
forward Bus Rapid Transit. We are accepting that in the short
term Metro is expensive and we can't expand Metro, but they are
saying, "Let's work with the private bus operators and bring
in Bus Rapid Transit that is high quality and reliable public
transport; that brings that same benefits as Metro but at a lower
cost."
Geoff Inskip: Just
to mention a couple of points that I think are probably helpful
as well. One is that the modal shift is in favour of public transport
in Birmingham now. That is quite good, because there is an ever-increasing
modal shift towards public transport. I think there is an acceptance
that in the long term we need to be less car-dependent. That is
all cities really, Birmingham included. We do need to have a good
integrated transport network to make that happen and that investment
needs to take place. If there's one message that came out of businesses
and people through the Transport Innovation Fund work we did here,
it was exactly that: we have to have the investment in the public
transport network to encourage people to get out of their cars.
Councillor Timothy Huxtable:
I was going to make a similar point. People choose to use their
cars because there is no viable public transport link. We know
that if we increase the capacity, as I have referred to previously,
people have said to us that they will use public transport because
then it becomes a viable option. But we need upfront investment
in that public transport infrastructure to actually encourage
people to choose to move out of their cars and on to a far more
viable transport system.
I will give you a very clear example. I live in Birmingham
myself. My local train station is five minutes walk away. It takes
me 12 minutes to get from my local station into the heart of the
city centre and the train service runs every 10 minutes. We can
replicate that through some of our disused railway lines. If you
try to do that same journey at peak hours, it can take you up
to three quarters of an hour. I'm very lucky because I do live
five minutes walk from a railway station; that's not the case
for a lot of people in Birmingham.
Q185 <Kelvin
Hopkins: In a sense, you've made my point for me.
Many cities across Europe of a similar size to Birmingham, including
its environs, have elaborate Metro systems and much more investment
in public transport. It seems to be that, as you say, using all
these former railway lines and getting more access to public transport
systems, one could see a situation where car use for commuting
diminishes substantially. You don't need to invest so much in
roads, and the whole town centre becomes much more pleasant. London
has car exclusion policies, as do other cities in the country.
Nottingham, for example, has really gone heavily for car exclusion.
Isn't that a direction to go in?
David Bull: In
fact, that is the direction in which the commuter is moving. As
Geoff says, we're moving towards public transport. In recent years
there's been a 1% reduction in car use coming into the city centre
in the peak period. Rail use in the past five years has increased
by 40%. But that gives us opportunities from the trip generation,
particularly in relation to the economy and new development, of
reconfiguring the ring road in order to get high quality floor
space and mixed-use development to create jobs. Birmingham needs
that infrastructure investment in order to support not just Birmingham,
but the region as well, as we are the regional capital.
Geoff Inskip: I
just want to say that the core cities generate 27% of the GDP
of this country, and London generates 22%. London has an investment
per capita of over £800 per person, and yet in the core cities
we invest less than £300 per person. The need is for that
investment to get up to the London levels, and then I think we
can start really tackling the problem you're talking about.
Q186 <Chair:
Yes, the Committee have noticed that point before.
Q187 <Kelvin
Hopkins: My final question is, if this was the
continent of Europe, this investment would have to come from the
public sector. The reality is that a lot of this investment does
not have a very immediate or a very high return. Sometimes it
might even be permanent subsidy, loss making, whatever; it has
other economic benefits, but not direct commercial benefits. Is
it not the case that we need much more public investment in these
areas to make it all work?
Geoff Inskip: Of
course.
Chair:> I think
we're probably with you on that.
Q188 <Julian
Sturdy: The point I was going to make was actually
going to follow on from that. Listening to what you say about
funding, I understand that certainty and timescales of funding
is very important, but we also know that funding is going to be
very difficult going forward. So it's probably not about the amount,
but it's the certainty and the timescales that are going to be
crucial. But, Mr Inskip, you touched on the decision-making process
and you said that the decision-making process is now being made
at a more local level and moving away from central Government
influence, shall we say. Do you think that process is helping,
or will help, to drive up public sector finance within the potential
schemes that you want to deliver because there is more local influence
over it rather than central Government influence?
Geoff Inskip: I
think we hope so. Clearly at the moment the Coalition has set
its stall out pretty clearly for the next three to four years
in terms of major scheme funding, etc. We all know now what we
have got to get on and deliver during that period of time. I think
the opportunity now is looking at the way in which we have other
priorities, and how we actually develop those through the Regional
Growth Fund. For me, I think the Regional Growth Fund is effectively
a single pot, but it's a national single pot. As David quite rightly
said, it's going to be competitive at this stage. What we want
to see in the longer term is that single pot driven down to the
more local level, so it is about us delivering locally. I think
the clever thing will be how individual LEP areas actually lever
in the private-sector funding as additional funding into the public-sector
funding that is there as well. I think that we know that if we
can actually start saying to developers that we have our share
of the funding available if they bring forward their development,
then you will get that merging and quicker delivery on the ground
as a result of that. At the moment, what holds back the private
sector is the fact that we don't have our money; when we have
our money, their money has gone away. If we can actually pull
it back together again, we can actually focus it and get it done
on the ground quickly.
Q189 <Julian
Sturdy: And that goes back to the timescales and
the certainty of the funding going forwards?
Geoff Inskip: It
does, yes.
David Bull: If
I can add to that, the other word that we need to put in there
is that word "confidence". If we have confidence on
the timescales, in terms of what funding for infrastructure is
coming forward and when, that builds confidence in the private
sector and their funders because they too know what is happening
and when.
Q190 <Chair:
So, you're looking at timing as well as the process?
David Bull: It's
timing that gives confidence for the developers' lenders to lend
to them and then you can be successful. If I could give you one
example, there is an area of the A45 which is by the airport and
the NEC. The cost benefit for improvements to highways in that
area is 8 to 1. For every pound spent, there's £8 of benefit.
The only way we can get the certainty so that the private sector
can invest in the airport and get the runway extension, is for
Centro and Birmingham City Council to say, "We will fund
that from our own funding."
Q191 <Iain
Stewart: That actually quite neatly anticipated
my question. I just wanted to probe a bit more on the balance
between shorter and longer-term projects. To what extent are you
comfortable that the projects you are looking at, say within the
five-year window that Councillor Hunt mentioned, are going to
be consistent with the projects that will be needed to complement
High Speed 2 if it comes and the airport expansion? Is there a
danger that you will do these short-term projects and then say,
"Ah, but now we need to change to complement the longer term
ones."?
David Bull: I think
the art of transportation planning is to plan for the medium and
the long term. In relation to High Speed 2, we've been talking
to the High Speed Two Company, we know that we can work together
and we're actually saying that potentially the High Speed Two
Company have £750 million worth of development money
over the next four years. We have a lot of local knowledge in
Centro and the City Council, so let's work out the improvements
in accessibility for that station together. We know it is long
term, but working to get the benefits to Birmingham and the wider
city region are major economic benefits that we desperately need
in this region for the longer term. Therefore, working together
and getting the timing right is the key issue again.
Councillor Jon Hunt:
There are some further examples to talk about. There has to be
a balance between creating the major transport infrastructure,
and often that is about taking people through the region as much
as around it, and making sure that the transport infrastructure
works around the region. But I can tell you that the first major
scheme that's being looked at within the LTP3 process will support
the development of the airport. That is down to consultation,
as I say, so it is not confirmed, but that is what is currently
being looked at in the draft.
The implementation of the City Centre Metro
extension again supports that joining up in bringing the Metro
across the city centre and laying the way to link High Speed to
the Metro when we have a timescale for High Speed. So joining
up the small schemes as far as possible sometimes seems hard to
do because, from a public point of view, the £120 million
spent on the City Centre Metro sometimes seems hard to justify.
Your ordinary bus traveller out there wonders what it is going
to deliver for them. Sometimes it is very hard to make the case,
but the case is there and it is essential because it does join
things up. So we have to get that balance in what we do.
Q192 <Iain
Stewart: Maybe I will just ask the question the
other way around. If High Speed 2 didn't happen, would all the
projects you are looking at still make sense and be complementary?
Geoff Inskip: The
answer to that question is that we are planning for High Speed
2 to happen. The benefit of having a transport strategy allows
us to do that. However, the theoretical point you make is that
things can change and things do change. Therefore, it's very relevant
that you actually review that strategy on an ongoing basis to
make sure that you are doing the right things in the right order.
If I turn it the other way around, three years ago we didn't have
High Speed 2 on our agenda, and now we clearly do; we've actually
amended and changed both our short-term and longer term plans
to encompass that new challenge.
Councillor Timothy Huxtable:
The other key point to make is that when we are planning in terms
of regeneration projects like Area Action Plans and like the Big
City Plan, transport is an integral part of that planning process.
This is so that it happens in conjunction with regeneration as
well as assisting further regeneration in years to come, and ensures
that they work complementarily.
Q193 <Gavin
Shuker: To characterise the position currently,
in order to get any public funding you need to prove that there
is a clear economic benefit to the local economy and to the regional
economy. I was wondering what capacity you have among yourselves
to prove that when applying for funding.
Geoff Inskip: The
starting point is economic value, jobs, regeneration, GVA, etc.
Something that we've consistently looked at in the four years
I've been here is to identify, together with transport projects,
not just the usual transport benefit to cost ratios and appraisal
methods but actually to really lift the debate above that to the
question: what are these transport projects doing for our cities?
Where is the economic regeneration? A lot of that we do because
when something happens on the ground we know what will happen
around it. We have transport economists who look at that now and
make sure that that assessment is made. We also make sure that
we then understand what the connectivity benefits are for bringing
forward transport projects and ensuring that that development
can take place. So, we do have the internal capacity to ensure
that is the case, because it's part of exactly what we do. It's
part of our transport appraisal; we would like to see it more
as a part of Government's transport appraisal too.
Q194 <Gavin
Shuker: What pressures do you face to put those
benefits forward in the most positive manner that you can? In
other words, is there any pressure on you to look at the more
optimistic perspectives of what the benefits might be in terms
of public funding?
Geoff Inskip: I
don't think so, no. The idea behind this is we have to take a
very professional approach. We look at things in the round and
we make sure that we have an objective assessment as to what we
think transport projects will bring. At the end of the day, there's
no point over-promising something and under-delivering. The benefit
is almost the other way around: let us show that it will generate
this and then it is better to come back and say, "Actually,
it did a lot better than that." Then that gives Government
confidence and I hope allows us to have some more money.
David Bull: In
fact, adding on to that, we obviously do put the business cases
forward. The DfT go through them with a fine-tooth comb and we
do make adjustments. However, quite often, what aren't taken into
account by the DfT are the wider regeneration benefits of that
investment. It is a bit narrow, and there is a debate going on
about demonstrating that the wider regeneration benefits should
be given more weight, just as environmental benefits are considered
as well.
Q195 <Gavin
Shuker: So you're saying that there's a tension
between yourselves and the DfT when it comes to characterising
what the benefits would be?
David Bull: We
get on wonderfully with the DfT.
Q196 <Chair:
But within that there might be slight areas of creative tension?
Geoff Inskip: If
I can point to the fact that some of the arguments we would make,
for example, are about jobs being generated or created in a particular
area. The Treasury might take a view that those particular jobs
would be created nationally and it is effectively a redistribution
impact rather than anything else. So there are no net new jobs
to the economy, but they will accept the net new jobs to the West
Midlands. We believe that that's actually quite an important part
of the discussions we have to have in terms of rebalancing the
economy anyway. We have an overheated South-East and we'd like
to see more jobs come up here into the West Midlands. If I could
just give you an example: we think that High Speed 2 could generate
60,000 to 70,000 jobs in the West Midlands.
Q197 <Chair:
So you're saying that nationally we should look at local impacts
and not just UK?
Geoff Inskip: The
local impact could well be 60,000 to 70,000 additional jobs in
the West Midlands. Of that, we think about 20,000 are new jobs
to the economy. But we think that both matters are relevant and
we do not think it is relevant to have an argument about one versus
the other.
Q198 <Kwasi
Kwarteng: I just want to talk about the airport,
because it seems that it has an important role to play in terms
of economic development. I just want to know what your vision
is for it, and how you think it would help the local economy.
Councillor Timothy Huxtable:
I think it's our number one regional priority. That is agreed
by everyone, coming back to the shared priorities and working
together, not just the public sector but also the private sector.
That 400 metres of airport extension delivers far more than 400
metres of concrete. It allows point-to-point city-to-city travel.
There are seven major global growth points in the world; from
Birmingham you can only fly to one of those seven. We know that
travelling point to point, rather than interchanging elsewhere,
would give a significant boost to the Birmingham economy. It would
also create more jobs at the airport, but we need to have an effective
travel system—a Rapid Transit System in all likelihood—to
get people from those jobs created along the Birmingham Eastern
Corridor, which is one of the most deprived communities in the
country with some of the highest rates of worklessness. As mentioned
in the Big City Plan, which I believe you have copies of, that
Eastern Corridor links the airport with the city centre, so that
Rapid Transit System would be of double benefit.
Q199 <Chair:
We are running out of time, does anybody disagree with that? I
don't want anyone to repeat themselves and I will assume you all
agree.
Q200 <Paul
Maynard: This is a question specifically for the
Council, in advance of the arrival of HS2: what economic development
planning are you engaged in, separate to infrastructural planning?
David Bull: In
terms of economic planning, the Big City Plan is about the economy
of the city. We are working through the Birmingham Economic Development
Partnership with all the agents, both private and public sector.
We are looking at research and innovation that comes out of universities.
Q201 <Paul
Maynard: Is that all because of High Speed 2?
David Bull: Not
just because of High Speed 2.
Q202 <Paul
Maynard: So there's nothing specifically related
to High Speed 2's arrival?
David Bull: In
relation to High Speed 2's arrival, we have looked at the agglomeration
affects of that, in terms of the relocation and the potential
development in the city of office space. The potential gainers
specifically related to High Speed 2 are the finance industry,
the legal industry and commerce. There will be major benefits
in those particular areas because getting between London and Birmingham
in less than an hour means that there can be major commerce and
floor space development both in London and in Birmingham.
Q203 <Paul
Maynard: As a result of that planning, are you
taking any concrete steps as a result of those findings?
David Bull: Yes,
the most concrete step is that we are strongly encouraging the
Government, and working with the High Speed Two Company, to look
at accessibility in the area, but also to take part in the public
consultation, which will be a four or five-month period from February
next year.
Q204 <Chair:
Finally, I just have one question I want to put to Centro. I'd
just like a brief answer please. You have an interesting proposal
in your written evidence for setting up a Commission for Integrated
Transport. Now, the Government's just abolished the National Institute
for Integrated Transport; is this going to happen?
Geoff Inskip: The
point that we were making in terms of the Commission for Integrated
Transport, which is not the same as the National Commission for
Integrated Transport despite the name, is basically how we can
pull together transport priorities across the LEP areas.
Q205 <Chair:
Yes, you've set out very clearly what it is. Is it actually going
to happen? I'm not clear from the submission how far it's developed.
Is it a hope or an aspiration?
Geoff Inskip: This
is all part of strengthening the role of the ITA.
Q206 <Chair:
Is it going to happen? My question to you is: is this actually
going to happen?
Geoff Inskip: We
haven't yet made that decision.
Q207 <Chair:
Thank you. Right, well on that note, thank you very much for coming
and answering so many questions for us. Thank you very much.
1 Department for Transport (2010) National Networks-Access
to Birmingham. Mott MacDonald, Colin Buchanan and Transport &
Travel Research Ltd (Unpublished) Back
2
High Speed Rail and supporting investments in the West Midlands:
Consequences for employment and economic growth, June 2010. KPMG
on behalf of Centro.
http://centro.org.uk/rail/HighSpeed2.aspx Back
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