Written evidence from TravelWatch NorthWest
(TWNW) (TE 23)
1. INTRODUCTION
1.1 TravelWatch NorthWest (TWNW) is an independent
Community Interest Company representing users of all forms of
public transport in North West England. We are grateful for the
opportunity to be able to comment on this consultation by the
House of Commons Transport Committee. It is understood that there
will be a further opportunity to comment on specific DfT financial
responses to the Government's Comprehensive Spending Review after
this is published on 27 October 2010 and therefore the following
is a general comment plus answers to the five questions posed
by the Committee.
2. GENERAL COMMENT
2.1 We seriously question a transport projects policy
which prioritises solely on a criteria of economic growth. It
is essential to consider social and environmental factors[35]
in parallel.
2.2 When the seminal Eddington Report was published[36]
the perceived wisdom that good transport provision was a prerequisite
of economic growth was rarely questioned. Earlier research however[37]
had already revealed the fragility of this presumption by demonstrating
how some new transport infrastructures had the potential to actually
disadvantage the economy of some of the locations they were intended
to benefit. A sometimes unintended consequence has been that industry
and labour can find it easier to migrate to more prosperous locations.
Paradoxically, industry can also find it easier to supply from
these more economically prosperous areas the regions originally
intended to gain from the initial investment!
3. SPECIFIC QUESTIONS
(i) Has the UK economy changed since Eddington?
If so does this effect the relationship between economic growth
and transport spending?
3.1 The Eddington Report was written in December
2006 and thus pre-dated the global economic crisis of 2008.
3.2 The relationship between economic growth
and transport spending is less clear in a recession, although,
noticeably there has been a slight decline in car usage, both
the number of trips and overall mileage. To provide an example
of changing relationships, a pre Eddington investment on outputs
such as new roads or supported public transport links between
areas of relatively high unemployment and areas with labour shortages
might have several benign, and often unintended, outcomes
such as reducing:
- DWP's unemployment benefit payments.
- NHS costs of treating illness and depression
associated with unemployment and isolation.
- Crime rates.
3.3 As a further example, supporting a rural bus
service can reduce the social and health costs of domiciliary
or hospital care for elderly dependants by removing their isolation
and facilitating their continued, and generally preferable, independent
living[38].
3.4 Recessions make it easier to show cross sector
benefits. It is astonishing that such benefits (which are patently
obvious) are generally not captured when prioritising initial
proposals for transport investment. It is high time there was
a universally recognised and mandatory mechanism for doing so.
See also item five in the Bibliography — "Trunk Roads
Assessment".
(ii) What type of transport spending should
be prioritised to best support Regional and National growth?
3.5 TWNW supports a number of committed major high
cost transport investments in the NW such as the Manchester Hub,
the expansion of Metrolink and HS2. It is regrettable that current
circumstances are likely to constrain and/or delay future spending
on transport.
3.6 Aside from the big schemes there are a large
number of low cost interventions which could have relatively high
returns[39]
and which TWNW believes could be prioritised. These include many
which have the potential to beneficially alter modal split.
3.7 Passengers value reliable and punctual public
transport which makes it possible to predict travel time and to
rely on making connections. They would also value Smart ticketing,
ticket interavailability and through ticketing schemes which can
remove the interchange penalties incurred when different operator's
buses and trains are used. Associated Park and Ride provision
(including increased capacity at packed out rail station car parks),
cycling and walking links are not only sustainable but are also
cheap by comparison with high capital cost schemes. Investment
in sustainable transport creates more direct/indirect employment
than investment in less sustainable modes of transport and in
roads[40].
Grants could for example be made available to support experimental
taxi bus services[41]
in mainly, but not exclusively, rural areas. All these integration
interventions for which TWNW has long campaigned[42]
and which often incur relatively little capital expenditure could
well be prioritised.
3.8 The desperate shortage of suburban and inter
Regional train rolling stock in the North of England is caused
not only by a lack of capital investment but also by insufficient
revenue support and by Train Operating Companies' (TOCs) not being
permitted to lease existing spare stock. The problem, which is
arguably more acute than in the South East, could be addressed
if TOCs were to be given longer franchises, more operating freedoms
and realistic revenue support[43].
(TWNW is responding to the current DfT consultation on rail franchising.)
(iii) Should the balance between revenue and
capital expenditure be altered?
3.9 The DfT has long preferred making capital grants
to providing subsidy through more open ended and thus less controllable
revenue support. The assumption behind programmes such as Kickstart,
Urban and Rural Bus Challenge and Rural Transport Partnership
Funding has been that these would pump prime innovative public
transport initiatives so that they become commercially viable.
This, however, rarely happens, and services become "at risk"
once capital assets are fully depreciated and/or operating costs
outstrip revenues.
3.10 Local Transport Authorities (LTAs) often suffer
"innovation fatigue" from constantly having to amend
services they are funded to support to make them somehow new and
different and so able to benefit from this often applied but artificial
criteria governing the continuation of services! What is needed
instead is certainty of longer revenue support for unremunerative
but socially desirable services in recognition of the fact that
many of these never will be fully commercial.
3.11 The same arguments apply to rail, viz. that
longer franchises would give Train Operating Companies (TOCs)
an incentive to partner investment in the infrastucture they use
and which is currently provided for them by Network Rail. (See
response to previous question).
3.12 Local Transport Authorities have a duty to secure
by tender those bus services which are unremunerative but socially
desirable[44].
3.13 In the present recession operators are deregistering
more and more services previously believed to have been commercial
and revenue support to continue these is increasingly difficult
to provide. This is true in most rural areas and also more and
more often in some urban and suburban areas. Evening and Sunday
services are being lost for lack of revenue support[45].
If the cross sector benefits (including the benefits to LEAs of
school buses) of these services could be captured many might be
able to continue to operate. TWNW has consistently tried, but
without success, to establish how many deregistrations are made
"tactically" by operators planning to tender to run
their replacement but now as a subsidised, rather than commercial,
services?
3.14 DfT has recently consulted on ways, short of
Statutory Quality Partnerships/Contracts, in which PSV operators
can be better regulated. In responding[46]
TWNW suggested a number of relatively low cost initiatives which
might be taken to address this issue.
3.15 The current overview of Operators' reimbursement
for concessionary travel (which TWNW fully supports) and of the
makeup of the Bus Service Operators' Grant (BSOG) also suggests
a number of relatively low cost initiatives. Amongst these is
the proposal by the Association of Transport Co-ordinating Officers
(ATOC) for the establishment of a number of Tendered Network Zones
within which BSOG would be paid to LTAs.
3.16 The economics of running bus services is likely
to deteriorate because of rising costs and decline in funding
from LTAs, partly related to Concessionary Fares remuneration
. TWNW believes that a high priority should be given to whatever
mechanisms emerge for supporting local bus services, even if this
means some rebalance of funding from capital grants to revenue
subsidies.
3.17 There is a counter argument to prioritising
revenue spending where lack of capacity is constraining economic
growth. In that situation where it is not possible to procure
extras services or lease extra vehicles from revenue, capital
grants should be given a higher priority.
(iv) Are current methods for assessing proposals
satisfactory?
3.18 TWNW agrees with some recent criticisms of current
methods of assessing proposals[47].
Events over the DfT's current time scale of 60 years cannot be
accurately predicted, and discount rates will vary widely in that
time. As already noted (above) they also fail to capture cross
sector benefits.
3.19 The original Cost/Benefit Analysis model (CoBA)
failed to capture non user benefits. It was a useful tool which
relied on quantifying aggregations of a multiplicity of small
savings, but was also quasi objective in that it assigned subjective
and often disputed monetary values to events such as a traffic
fatality or a few minutes time saving.
3.20 CoBA's incorporation into the DfT's New Approach
to Appraisal (NATA 1998[48])
was an improvement, as this allowed non user benefits and other
unquantifiable data to be used to help rank competing schemes.
NATA was "refreshed" in 2008 to enable further "drivers"
such as opportunity costs and costs of "better use options"
to be taken into account.
3.21 TWNW considers NATA to be the best currently
available appraisal tool but believes that work on refining it
should be ongoing, particularly on the assessment of time savings
which tend to benefit road investment. It could be said that some
schemes are so patently deserving of prioritisation as to not
need elaborate and expensive assessment exercises to be conducted
on them. Some of these may be schemes of national importance (such
as HS2), and with the demise of the Infrastructure Planning Commission[49]
mechanisms need finding which can protect these where a region's
"balkanised" local government has difficulty in doing
so.
(v) How will schemes be planned in the absence
of regional bodies and the abolition of RSS?
3.22 TWNW is very concerned about the demise of Regional
Assemblies and now Regional Development Agencies. By developing
Regional Spatial Strategies (which included Transport Strategies)
and Regional Economic Strategies together with robust mechanisms
for prioritising spending of their Regional Funding Allocations
(RFAs) they put in place a system of regional planning which gained
the approval of the sub regions and whose advice the Regional
Government Offices (themselves now to be scrapped) clearly valued.
This action seems to be contrary to government policy of decentralisation.
3.23 There appears to be no obvious replacement for
RFAs. — granting LTAs their own planning powers will not
fill the vacuum except perhaps in newly designated city regions[50].
It is possible that Local Enterprise Partnerships may come to
offer co-ordinated approaches to planning when the promised national
planning framework is revealed but this is presently very unclear[51].
3.24 What is clear from a public transport perspective
is that the present "localism"[52]
trend is unlikely to be helpful where services need to be co-ordinated
within wide sub regions including "city regions". There
is a clear need for a regional co-ordinating body to resolve cross
border issues.
3.25 It is also clear that Local Transport Authorities
will need to be more imaginative in developing new funding packages
(like the exemplary Greater Manchester Transport Fund). There
now exists an extensive and confusing menu from which they can
assemble funding packages, including, in no particular order,
the following:-
- Congestion charging, road pricing and work place
parking levies with revenues hypothecated to public transport
(Local Transport Act 2009).
- Supplementary Business Rates and Land Value Capture
(Business Rates Supplements Act 2009).
- Planning Gain - non site specific and site specific
developer contributions and Community Infrastructure Levies (Highways
Act 1980 s 278; Town and Country Planning Act 1990 s 106 and Community
Infrastructure Planning Act 2008 respectively).
- Urban Challenge (replacing TIF).
- PFIs and PPPs.
- Bonds supported by revenue streams and judicious
borrowing.
The list is not exhaustive, and each can be used
jointly or separately to assemble an LTA's individual funding
packages.
4. SUMMARY
4.1 Priority for Transport Funding should be given
to mainly revenue support for low cost projects with predictable
high value outcomes.
4.2 High Cost projects of national importance where
funding is not already committed should be protected and progressed
when affordable, or where there is a clear high CBR—for
example as with the Manchester Hub.
4.3 Local Transport Authorities will need to assemble
imaginative funding packages from a variety of government and
private sources.
4.4 Mechanisms should be created for capturing cross
sector benefits
5. BIBLIOGRAPHY
1. Decentralisation and Localism Bill (TSO 2010).
2. Local Democracy etc Act 2009 (TSO 2009).
3. "Sustainability of Rural Transport Projects"
Countryside Agency/Sheffield Hallam University 2004.
4. "Rural Transport—a guide"
Fawcett P Iceni Press 2009.
5. "Trunk Roads Assessment" Standing
Advisory Committee on Trunk Road Assessment (SACTRA) Reports 1980
(HMSO) and 1999 (TSO).
6. "Transport's role in sustaining the UK's
productivity and competitiveness" Eddington Sir R. TSO December
2006.
7. "Employment and sustainable transport"
CBT August 2010.
8. "Integration—are we getting there?"
Challis G and Fawcett P, RPC for NW England May 2003.
9. "Rural Transport Funding" TWNW,
August 2006.
10. "Planning—local difficulties"
Guardian editorial 6/7/10.
11. "Transport and the Environment"
Royal Commission on Transport and the Environment (RCTE)—Houghton
Sir J., OUP 1994.
12. "Improving Bus Passenger Services through
the Regulatory Framework": TWNW's Response to DfT April 2010.
September 2010
35 "A New Deal for Transport" ODPM 1998. Back
36 "Transport's
role in sustaining the UK's productivity and competitiveness"
Eddington Sir R. TSO December 2006 Back
37 "Trunk
Roads Assessment" Standing Advisory Committee on Trunk Road
Assessment (SACTRA) Reports 1980 (HMSO) and 1999 (TSO). Back
38 "Sustainability
of Rural Transport Projects" Countryside Agency/Sheffield
Hallam University 2004. Back
39 One
of the Campaign for Better Transport's five principles - Rail
Magazine 28 July 10. Back
40 "Employment
and sustainable transport" CBT August 2010 (commissioned
by PTEG - Rail Magazine 28 July 10). Back
41 Enabled
by the Local Transport Act 2008 and now to become a government
pilot scheme in Rural areas. Back
42 "Integration
- are we getting there?" Challis G and Fawcett P, RPC for
NW England May 2003. Back
43 In
line with government's coalition accord as reported in Local Transport
Today 28 May 10. Back
44 Transport
Act 1985. Back
45 "Sustainability
of Rural Transport Projects" Countryside Agency/Sheffield
Hallam University 2004. Back
46 "Improving
Bus Passenger Services through the Regulatory Framework":
TWNW's Response to DfT April 2010. Back
47 Local
Transport Today No 527 28 August 09 "consultants claim current
appraisal models have intractable problems". Back
48 "A
New Deal for Transport" ODPM, TSO 1998. Back
49 Decentralisation
and Localism Bill TSO 2010. Back
50 PTEG
favour "single capital pot" funding in newly created
city regions, where it anticipates its member ITAs will be subsumed
into "combined authorities". Local Democracy etc Act
2009 TSO 2009. Back
51 Guardian
6 August 10. Back
52 Decentralisation
and Localism Bill TSO 2010. Back
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