Written evidence from Derek Halden (TE
04)
Have the UK's Economic Conditions Materially Changed
since the Eddington Transport Study and, if so, does this Affect
the Relationship between Transport Spending and UK Economic Growth?
The theory in the Eddington transport study has not
changed, but the emphasis and approach to making changes should
be revisited. Perhaps the most important point is that Eddington's
conclusions were couched in quite academic terms and did not connect
with many transport practitioners. A refresh of the policies is
needed to re-focus public spending specifically as follows:
- The transport economy and the impacts of transport
on the wider economy are different things. For example, shrinking
the transport economy does not necessarily damage the wider economy
(eg if more people walk rather than drive to the shops and as
a result spend more). With future growth likely to come from digital,
knowledge and experience sectors, the traditional elements of
growth in the transport economy like fuel and car sales, bus fares,
and freight tonnes moved, will be progressively replaced with
new drivers of transport growth from improved accessibility, information,
digital connections, and lifestyle tariffs for transport (eg car
club membership like mobile phone payments).
- Related to this is the concept that connectivity
is not just about infrastructure and capacity but about the costs,
security, and flexibility with which travel can be achieved. "Making
the Connections" through accessibility planning is still
viewed more from the social inclusion perspective by many transport
bodies than from its economic growth potential. Public funding
should focus on demonstrable accessibility improvements from better
connections rather than simply fuelling demand within a narrow
transport economy.
- Transport investment should be in networks rather
than specific modes. This means that separate administration of
road, rail and bus budgets could be replaced with investment funding
for access to work, access for shopping and leisure, access for
international tourism, etc.
What type of transport spending should be prioritised,
in the context of an overall spending reduction, in order best
to support regional and national economic growth?
Public investment should maximise capabilities and
reductions should consider carefully the consequences:
- Capabilities — If it is not easy to identify
how businesses will make direct financial gains from public investment
then the expenditure may not be making a big impact on growth.
Also identifying winners and losers from transport investment
helps to identify funding partners able to contribute to the costs
of delivery. Social and distributional appraisal is therefore
central to deciding on priorities.
- Consequences — Most transport investment
is designed to reduce spending in other sectors of the economy.
Reducing transport spending (e.g. on bus services) simply to add
costs to other sectors (eg NHS spending on health transport) would
be counterproductive and wasteful transferring budgets to sectors
less able to secure value for money transport delivery.
How should the balance between revenue and capital
expenditure be altered?
There are potential benefits from aiming towards
zero revenue expenditure from government, provided clarity is
provided on the rules governing revenue and capital. Investing
in people is part of the knowledge capital of the economy and
"jobs for life" (revenue) in transport should be replaced
with a "life of jobs" (capital) as far as possible.
Funding for rail franchises could work towards being increasingly
capital "railway development projects", and non profit
making services like road maintenance and dial-a-ride could be
managed within new social markets removing them from the publicly
funded revenue balance sheet (eg as recommended by the Social
Market Foundation). Making these changes will take some time,
but the direction of travel for public revenue spending should
be down.
Are the current methods for assessing proposed
transport schemes satisfactory?
Transport appraisal fails even in its own terms since
it has only weak influence over decision making. A fairly fundamental
change is required so that future appraisal measures the extent
to which transport meets the needs of businesses and citizens.
Central to this will be to discontinue the use of value of time
appraisals which measure narrowly the economic value of transport
to "the transport industry" and often mask the true
effects of transport on the economy and society. Attempting to
"retrofit" within NATA the value of travel time analysis
with additional appraisals of wider economic impacts, social and
distributional impacts and agglomeration benefits, has made appraisal
impractical for most purposes. It would be much preferable to
start with much simpler economic benefit calculations that represented
a wider range of benefits of transport investment for the economy
than can be captured within the value of travel time concept.
How will schemes be planned in the absence of
regional bodies and following the revocation and abolition of
regional spatial strategies?
Most transport investment requires partnerships for
delivery. Partnerships between local authorities should become
the norm rather than the exception. Provided partnerships have
a clear project delivery focus they are efficient. Partnerships
to plan investment will recognise that city regions often overlap
and different partners are needed for different planning goals.
September 2010
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