Written evidence from Southampton City
Council (TE 39)
This is Southampton City Council's response to the
Transport Committee's call for evidence to support their inquiry
into Transport and the Economy.
The main points of our response are as follows:
- There is a strong link between the economy and
an efficient transport system. This was evidenced by Sir Rod Eddington
in his work entitled "transport's role in sustaining the
UK's productivity and competitiveness."
- This link is particularly strong in Southampton
where its role as the UK's principle national gateway for a range
of import and export trades dominates the local economy. Road
and rail links to the midlands and further north are vitally important
to sustaining such trade. Total journey time and journey time
reliability are critical to businesses in this regard.
- There is evidence from port activity levels that
import and export trades are recovering. However, historic underinvestment
in transport in the Solent area means the transport network will
struggle to provide quick and reliable journeys without some investment
in essential infrastructure and existing assets.
- Through Transport for South Hampshire (TfSH),
the local planning and highway authorities in partnership with
transport agencies in the area coordinate their strategies and
develop initiatives to best meet the transport challenges we face.
Many of these we can address through local investment in smarter
choices, public transport and intelligent transport solutions.
- Whilst investment in infrastructure is seen as
a last resort in our strategies, the fact remains that there are
weak points within the transport system that threaten future growth
potential. Targeted investment in these locations will produce
significant cost benefit and help stimulate recovery by lessening
barriers to trade.
- Funding should be prioritised towards areas of
the UK transport network that support national economic development
as well as proposals that have good cost benefit ratios and deliver
a reduced carbon footprint.
Have the UK's economic conditions materially changed
since the Eddington Transport Study (2006) and, if so, does this
affect the relationship between transport spending and UK economic
growth?
There is no doubt that the economic climate has changed
significantly since the publication of the Eddington Report. Within
the context of Southampton these changes have had some negative
impacts on aspects of the local and regional economy. However,
the link between transport and the economy remains important and
will be critical in bringing about a speedy recovery.
The Port of Southampton has seen a decline in container
movements and vehicle imports/exports but it is expected that
the Port will see a return to growth for all traffic once the
UK emerges from the recession. The Port of Southampton's projections
for container movements are shown in Figure 1. The impact of the
recession is clearly shown with a dip in container traffic occurring
after 2008. The graph shows that the downward trend was expected
to continue until 2010, although the Association of British Ports
(ABP) have since reported that decrease was not as severe as expected.
ABP are now projecting that they will double container movements
from 1,500 TEU to 3,000 TEU by 2022.
Figure 1
FORECAST OF SOUTHAMPTON CONTAINER DEMAND
(SOURCE: ABP)
The recession has had no effect on the cruise industry
which has continued to experience uninterrupted growth. The number
of cruise calls increased together with passenger movements which
are now in the region of one million per annum. This represents
80% of the UK market. With premier terminal facilities and its
ideal strategic location, Southampton has strengthened its status
as the cruise capital of Northern Europe. Based on past years
growth rates trade could double in less than five years. The biggest
threat to this rapid growth is the capacity of the local transport
system to support the growth. This is now an urgent issue requiring
investment.
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?
The following priorities should be applied:
- In the short to medium term only the best value
for money scheme should be implemented. Typically this is likely
to mean that measures that reduce and manage transport challenges
without significant investment should be prioritised.
- Local and national road schemes previously in
regional funding programmes or Highways Agency programmes should
only proceed where they can demonstrate good benefits to costs
and that alternative transport strategies have been exhausted.
- Local transport allocations should be maintained
and enhanced with greater funding flexibility.
- National prestige projects such as high speed
rail are expensive and have generally poor benefit to cost ratios.
They should be delayed for schemes that deliver higher value and
impact in the short term.
- Investment should be prioritised in localities
where there is evidence of established transport partnerships
working together to deliver coherent and complimentary transport
and land use strategies. Large urban areas, PTAs and joint committees
covering large populations such as Transport for South Hampshire
should be prioritised.
Transport spending should be prioritised towards
low cost often small schemes that are shown to yield the greatest
benefits. Our LTP3 Strategy and Implementation Plan will seek
to focus on Smarter Choices, Bus Strategy, Intelligent Transport
Systems and Demand Management. A key example of this approach
will be the development of ITSO compatible Smart Cards for use
on the region's public transport network. It is believed that
a National lead on Smart Cards with funding support will be of
significant value for all Local Authorities. In the context of
cities, a collection of complementary small schemes delivering
a defined strategy is of greater value by far than one large highway
scheme delivering relatively localised benefit. This was a key
finding of the Sir Rod Eddington report and is a key reason why
Local Transport Plan allocations should be maintained.
Local authorities will need to look at using their
transport networks more efficiently. Whilst Southampton City Council
will aim to maximise funding from available sources we will also
"sweat the assets" in order to accommodate the City's
projected housing and employment growth. Given that available
funding for large infrastructure projects will be extremely limited
for the foreseeable future, what money is spent in this manner
will need to be carefully targeted. Priority should, therefore,
be given to investment in new infrastructure which can directly
impact on supporting national economic growth.
Infrastructure investment in local or national road
schemes needs to be rigorously challenged. Typically the BCRs
for such schemes are low and yet they have dominated regional
investment programmes for the lasts decade often to the detriment
of cheaper and higher impact schemes. There are occasions when
such investment is needed when it impacts upon the economic success
of local or wider economies and where alternative more affordable
transport strategies have been exhausted or are unlikely to meet
the local transport challenges. In some cases investment in new
capacity is needed. A key example would be the rail gauge enhancement
project which will facilitate increased container movement by
rail. This was of significant benefit to the Port of Southampton,
offering improved rail links with other parts of the country and
consequently increasing the attractiveness of the Port for its
customers. Investment should target national economic development
in this manner, diverting funding to where key economic drivers
are located.
How should the balance between revenue and capital
expenditure be altered?
Revenue based solutions to transport challenges can
be difficult to fund because many sources of funding are capital
related. Initiatives like the "smarter travel cities",
smartcards and the running of intelligent transport services which
actively manage our transport networks depend on such funding.
Typically they are also shown to deliver high value for money.
Identifying alternative revenue sources depends on
the economic buoyancy of an area. For example high land values
yield greater potential for developer contributions. Similarly
parking surpluses are more likely to occur where there is high
demand and low supply for parking. Southampton has low land value
and an oversupply of parking which dampens the ability to use
parking surpluses to implement a transport strategy. This issue
could be alleviated if there were greater flexibility in LTP allocations.
Are the current methods for assessing proposed
transport schemes satisfactory?
The current appraisal system is flawed in many areas.
This is the topic of much professional debate on which several
prominent academics have voiced opinion. There is a general agreement
that there is room for improvement with particular emphasis on
the use of "value of time" for different transport users
and the fact that road schemes are positively discriminated against
in the way it deals with fuel duty revenue to the treasury.
The process for assessing schemes is also of equal
or arguably greater importance. Local authorities, particularly
the small ones find it difficult to resource the stages and studies
necessary to submit major scheme bids. Neither do they always
have the appropriate skills and expertise. Where there are sufficient
resources, the bid for funding is made at financial risk to the
authority. The chance of funding is also very small as the potential
pot available is very small. A simpler way of prioritising schemes
at an earlier stage in the development phase is needed. This might
also include increasing the level for major schemes from to £10
to £15 million.
How will schemes be planned in the absence of
regional bodies and following the revocation and abolition of
regional spatial strategies?
Funding proposals via Local Economic Partnerships
may see transport planning become focused on local areas demonstrating
similar economic and transport challenges.
Transport for South Hampshire (TfSH) was formed
in partnership with Hampshire County Council and Portsmouth City
Council to develop sub-regional transport strategy and is widely
held as an example of good practice. TfSH has recently published
its joint LTP3 strategy for consultation (the three authorities
will produce separate Implementation Plans) and the continued
sub-regional approach should form a strong basis for targeting
available funding sources and delivering strategic outcomes.
The absence of the regional authority does not in
this case make a significant difference providing alternative
funding sources are available or that LTP funding is increased
to cater for the loss of the regional funding allocation funding
stream. The authorities believe that through TfSH we can spend
LTP funding in a way which achieves local and strategic aims.
We thank you for the opportunity to submit evidence
to this inquiry and look forward to hearing the findings of the
Transport Committee. Please note that this is currently an
officer level response only. We will notify you when it has
been formally approved.
September 2010
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