Written evidence from Merseytravel (TE15)
1. INTRODUCTION
1.1 Merseytravel welcomes the Transport Select
Committee's inquiry into "Transport and the Economy".
The publication of the Eddington Report marked a step change
in the way that government viewed transport and its role. Instead
of simply perceived as being a means of moving people from A to
B, the wider of contribution of transport, especially in terms
of economic development, was really for the first time given the
attention it deserved.
1.2 The publication of the Eddington report,
alongside the Stern report on climate change, meant that there
was an opportunity to integrate, in policy terms, local, regional
and national transport with economic, social and environmental
objectives. More recently, the costs and other disbenefits of
congestion have been measured by the Cabinet Office report, "An
Analysis of Urban Transport", amongst other studies. Together,
these reports demonstrate the central role that transport plays.
1.3 Unfortunately, the opportunity of integrating
transport into wider policy development has yet to be fully realised
and this means that transport is still not allowed to play its
full role.
1.4 Merseytravel is the combined Passenger Transport
Executive (PTE) and Integrated Transport Authority (ITA) for Merseyside,
and is the public sector body responsible for the coordination
of public transport across the Liverpool city region with the
exception of Halton. Working with our partners across the Districts
and the business community, our objective is to produce a fully
integrated transport system which is accessible to all.
2. ISSUES
2.1 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?
(a) The changing nature of the UK's economic
position, and the downturn, should be viewed as a short term issue
in terms of transport provision. The long term trend is for increasing
demand for travel and this should not be ignored in the debates
regarding the future requirements for all modes of transport.
(b) It is disappointing that the Government has
already ruled out certain transport policies, such as road pricing,
without an examination of their impacts and how any revenue generated
could be used. Without such a cross-modal approach to transport,
any facilitation of economic, social and environmental improvements
could be hampered.
(c) Clearly, a lack of accessible and efficient
transport links present a real barrier to economic growth and
investment. This, in turn, can contribute towards worklessness
and social exclusion. Research has shown that better coordination
and integration in our transport networks can have a sustained
impact on their usage and, in turn, on the economic performance
of our city regions (see for example Centre for Cities, "On
the Move", see www.centreforcities.org/onthemove).
(d) As an economic enabler, effective transport
infrastructure connects people to jobs and markets, benefiting
businesses and potential employees, and helping to tackle worklessness
and unleash the skills potential of many people on the peripheries
of our towns and cities. Effective transport infrastructure creates
greater opportunities for businesses by opening up new markets
and increasing competition and productivity. In addition, investment
in transport infrastructure can also directly support jobs and
boost local economies.
(e) New legislation has been passed since the
publication of the Eddington report which also needs to be reflected
in the provision of transport and in the calculation of its contributions.
The recent Equalities Act introduced a new duty to carry out
Equality Impact Assessments as well as the need to demonstrate
that due consideration of the socio-economic impacts of decisions
and spending have been given.
(f) Eddington adopted a blanket approach that
all passengers enjoyed the same access to transport and that all
passengers had the ability to pay the full, including environmental,
cost of that transport. This is clearly not the case and in the
current economic setting this inability to access and pay has
become even more marked.
(g) So the economic discussion also has to be
concerned with barriers to accessing transport and these impact
on already disadvantaged groups and communities. This makes consideration
of the bus network a key policy area as this remains the most
used form of public transport.
(h) In addition, work by the Joseph Rowntree
Foundation shows that the high cost of transport imposes barriers,
especially on the young, to work, education and training opportunities.
(i) In an era of reduced budgets Merseytravel
recognises the need to be more creative in the use of funding
whilst maintaining a focus on reducing economic and social inequalities.
This means delivering on the smarter choices agenda but also
communicating the business benefits of initiatives such as Neighbourhood
Travel Teams, Personalised Journey Planning and more targeted
support such as WorkWise which encourages the widespread adoption
of smarter working practices.
(j) Public transport connects people to jobs,
services, friends, family, education and leisure — particularly
those on the lowest incomes, more than half of who do not have
access to a car. Again, equality of access has to be a key consideration.
(k) Alongside this when new developments are
being planned there is often a failure to properly consider transport
requirements. Merseytravel considers that the only way for transport
and land use planning to be fully integrated, especially now that
regional strategies have been abolished, is for PTEs where they
exist to be made statutory consultees in the planning process
at a local level.
(l) Taken together these issues illustrate some
of the steps which need to be taken if economic improvements are
to be made and transport is to play its role in securing those
improvements.
2.2 What type of transport spending should
be prioritised, in the context of an overall spending reduction,
in order to best support regional and national economic growth?
(a) There is not a single answer to the question
as such decisions should be made locally. In some areas, infrastructure
provision will be required, in others the emphasis may need to
be on supported services. The spending should be focused on where
it delivers the greatest economic, social and environmental benefits.
This is an issue picked up in section 2.4.
(b) However, for such policies to be established
requires clarity over decision-making structures, the level of
resources available and sources of funds. This means that clarity
is provided on issues such as Local Enterprise Partnerships (LEPs)
and the Regional Growth Fund (RGF) as a matter of priority.
(c) Unfortunately, we fear that those projects
most at risk appear to those in the North of England. However,
as spending per head on transport is already lower in the North
than it is in London then to reduce spending still further would
appear to undermine the rebalancing of the economy for which the
Government is striving.
(d) Clarity on issues such as the balance between
taxpayers and farepayers on the price of rail tickets will help
to establish the level of spending available elsewhere in the
transport sector.
(e) The principle of using the RGF to leverage
private sector investment is one that Merseytravel supports and
it is clear that certain parts of the country are more heavily
dependent on public sector spending than others. As the Government
will recognise, the RGF cannot be a substitute for a genuinely
strategic and properly funded approach to economic development
and regeneration policy and so further information is required
regarding how the RGF is intended to integrate with other policy
instruments and funding streams.
(f) We need to understand the role that public
sector funding in transport plays. It is not simply about the
provision of infrastructure but it can also be an enabler of private
sector investment. Whilst the private sector may not always readily
see the returns that can be made from transport projects, partly
because of the timescales involved, public sector funding can
attract development to an area. The ability of transport to connect
people, for instance giving business access to a workforce or
communities access to health, education and leisure facilities,
means that development becomes viable and attractive to the private
sector. It is these connections that help developers to make
a return on their investment.
(g) The ability to pump-prime for the private
sector investment needs to be reflected in the appraisal of transport
projects (see Section 2.4).
2.3 How should the balance between revenue
and capital expenditure be altered?
(a) Again, this is a decision that should be
made locally but for such decisions to be really effective this
requires greater local control over total funds. For instance,
greater flexibility on revenue spending and more say over how
funds can be raised and spent.
(b) PTE revenue spend is increasingly dominated
by funding the free off-peak bus pass for older and disabled people.
There are concerns that, alongside the grant that the Government
provides for the pass being cut, the element of direct grant that
PTEs receive for the scheme could be removed and pooled together
with the general funding received by local authorities. All these
proposals directly threaten the sustainability of concessionary
fares.
(c) There is a lack of clarity over revenue budgets
too. The Bus Service Operators Grant (BSOG) is being reviewed
and we hope the decisions taken around the Spending Review on
20 October will set out the current and future plans for BSOG,
which plays a valuable role in the delivery of affordable bus
services.
(d) The legal requirement for PTEs to fund the
national concessionary fares scheme will doubtless remain in place
meaning that should there be any further pressure placed on revenue
funding then the other services provided by PTEs will be further
squeezed. This could mean that groups such as young people and
job seekers who require access to transport having to pay more
for the service and/or facing cutbacks in services. This would
run counter to the requirements of the Equalities Act and would
hit economic development in the areas concerned.
2.4 Are the current methods for assessing
proposed transport schemes satisfactory?
(a) It is widely recognised that the NATA system
of appraisal is in need of work and we welcome the Government's
commitment to its review. We believe that this should be a matter
of priority for the DfT.
(b) Some good work has already been undertaken
by the likes of the Campaign for Better Transport on the reform
of NATA but what is clear is that climate change priorities and
carbon reduction have to be more fully reflected in the appraisal
methods.
(c) However, more emphasis is also required on
the agglomeration benefits of transport projects in their appraisal,
including their ability to leverage in private sector finance
but also attract wider private sector investment to an area.
Transport projects can, in effect, pump-prime an area for private
sector investment. The expected delivery outcomes of the project,
as assessed, should reflect real economic needs and requirements,
for instance the projects' ability to support sectors in the local
economy.
(d) Appraisal methods should also ensure that
major investments are supported by "soft measures"/smarter
choices such smartcard ticketing facilities, rather than simply
being stand-alone, largely capital projects.
(e) The proposed Green Infrastructure Bank could
assist in the revision of project appraisal methods and one of
the immediate tasks for the Bank should be for it to look at basis
upon which it supports projects.
2.5 How will schemes be planned in the absence
of regional bodies and following the revocation and abolition
of regional spatial strategies?
(a) Merseytravel is currently involved in the
preparation of a LEP for the Liverpool City Region and we believe
that such a body might provide a mechanism for some sort of wider
strategic authority. However, how LEPs relate to one another
or "compete" for funding is not yet clear.
(b) In addition, until LEPs are up and running
we may be in a position where private sector investment is being
postponed or possibly even cancelled. Anecdotal evidence suggests
that developers are not willing to make investment for fear of
legal challenge now that regional strategies have been abolished.
This obviously runs counter to the need to encourage economic
growth and job creation.
(c) The speed with which a new system can be
agreed and implemented is the key.
We are also concerned that those local authorities
(or city regions or LEPs) that are best able to facilitate private
sector investment are likely to benefit at the expense of those
areas less able to facilitate such involvement.
This would appear to be a regressive approach and
so further information on the criteria by which decisions on funding
will be made and how some degree of "equality" between
areas will be ensured in the absence of any formal structure between
the local (or LEP) and national levels. Furthermore, there is
also a risk that the RGF could be seen as a centralising process,
rather than a localising one, with the final decision resting
with ministers on the advice of the Independent Approval Panel.
(d) In essence, there is a risk of finance being
attracted to areas with an existing robust private sector and
or existing transport links, rather than helping to spread growth
and rebalance the economy.
(e) The abolition of the regional strategies
also means that the ability of a larger geographical area to plan
for infrastructure requirements and balance completing needs has
been removed. If, as has been speculated, larger LEPs, for instance
those following existing county council boundaries, are rejected,
then this problem will persist.
3. OVERALL
3.1 As a Grant Thornton report for pteg concludes
"the economic logic for investment in local transport and
improved inter-regional connectivity remains" ("Government
Spending Cuts: Scenarios for Future Transport Funding").
3.2 The task facing us is to allow local control
over finance so that travel opportunities can be opened up but
policy needs to ensure that travel choices are not just given
to those that already have them.
3.3 The system of appraisal also needs to be
reviewed so that it actually reflects the economic and environmental
benefits of
September 2010
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