Written evidence from Central London Forward
(CLF) (TE 86)
1. INTRODUCTION
1.1 Central London Forward (CLF) welcomes this
opportunity to contribute to the Select Committee's Inquiry on
Transport and the Economy. The linkage between these two important
aspects is perhaps brought into sharpest focus when considering
central London, given the concentration of business, retail and
leisure activities; the scale of economic output; and the capital's
importance to the UK's overall position.
1.2 Investment in London's transport system has
historically fallen short of the requirements to maintain the
system as "fit-for-purpose" in a dynamic and growing
World City, but work over the last decade has started to address
the backlog and establish the foundations for the next stage of
the city's growth.
1.3 The indications are that the recession has
had only a modest impact on the growth in travel demand and that
strong annual growth rates are re-establishing themselves. CLF
is extremely concerned that, despite the current public expenditure
climate, investments that will underpin the medium- and long-term
growth of economic activity are curtailed or compromised without
consideration of the widespread and severe consequences for economic
success.
1.4 In particular, CLF believes that it is vital
that the current programme of works is completed as planned including
delivery of the Crossrail and Thameslink schemes and the upgrade
of the LU system.
2. 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?
2.1 We would argue that the UK's current position
- and in particular the public sector's ability to fund transport
investments - does not represent a material change to the conditions
prevailing at the time the Eddington Transport Study was published.
2.2 Any study of major investments must inevitably
take a long-term perspective - note, for example, that two of
the three projects recommended in the Central London Rail Study
in 1989 (Crossrail and Chelsea-Hackney) still await completion
- and recognise that public finances will vary over time. The
availability of funding will impact on the speed of delivery of
improvements to the transport system but does not, in itself,
alter the underlying need to maintain and improve an effective
system of movement for people and goods to underpin and sustain
economic growth.
2.3 The economic importance of London to the
wider UK economy is significant. Estimates of economic output
- using gross value added (GVA) as an indicator of prosperity
- show that London generates 21% of the UK's GVA with only 12%
of the UK's population (representing over £250 billion
per annum), with central London contributing the bulk of this
economic activity. This economic success is dispersed across
the neighbouring regions and the UK as a whole.
2.4 This success is driven by a combination of
factors. However, it is evident that high density development,
enabled and sustained by London's public transport system, is
a critical factor. This view is echoed by business leaders -
most vocally when a lack of transport capacity hampers economic
growth. Typically transport concerns head surveys of business
issues.
2.5 Whilst the recession has undoubtedly had
an impact on the demands placed on the public transport system
in London, the effects have been considerably more muted than
had been anticipated based on experience from previous downturns.
For example, Figure 1 illustrates the usage of the National Rail
commuter services focused on London since 2002-03. This highlights
not only the strong growth experienced previously but also the
impact of the recession over the past two years. However, the
fall in usage - around 1.5% - is modest and the quarterly data
indicates a recent return to growth (for example, Q4 2009-10 usage
was 7.5% higher than found in Q4 2008-09).
Figure 1
ANNUAL PASSENGER JOURNEYS (LONDON & SOUTH-EAST
OPERATORS)
Source: National Rail
Trends Yearbook 2009-10 (Office of Rail Regulation).
2.6 A similar picture emerges when considering
the usage of London Underground. Figure 2 shows data reported
by TfL in May 2010 related to usage over the previous two years.
This shows that the impact of the recession was felt from the
beginning of 2009 and reached a level of -6% for the first six
months of the year. Growth in recent months has returned such
that the year-on-year change has become positive as of period
10 in 2009-10.
2.7 Accordingly, the usage of the public transport
system in London has experienced a short plateau in growth, but
the indications both in terms of usage and the medium-term projections
of population and employment growth suggest that a restoration
of the trajectory found before the economic downturn is occurring.
2.8 In light of this emerging picture, the medium
to long-term proposals to respond to this growth trend - such
as the upgrade of Underground Lines, the delivery of Crossrail
and the lengthening of National Rail trains - remain both robust
and vital components of ensuring that the capital can achieve
its potential for absorbing population growth and enabling London
to improve the UK's economic well-being.
Figure 2
GROWTH RATE FOR LU JOURNEYS
Source: Trends in Passenger
Demand, Agenda Item 6 TfL Rail and Underground Panel 12 May 2010.
3. 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?
3.1 As the Government's focus is on both controlling
public expenditure and freeing the private sector to generate
employment, it seems most appropriate to prioritise transport
investment that will demonstrably support the capability of a
successful region to respond to growth opportunities. We would
argue that London presents such an opportunity.
3.2 Furthermore, the capital has a well-established
programme of projects - both in the process of construction and
planned in the short to medium term - with the structures in place
to ensure timely and efficient delivery. Given the lead times
involved in delivering important infrastructure projects, it is
essential that investment is maintained and projects completed
as planned.
Figure 3
INVESTMENT PRIORITIES
3.3 There have been three important drivers for
the key schemes in the capital as illustrated in Figure 3 above.
On one hand there is a programme of works designed to renew the
life-expired assets of the transport system, most notably the
Underground system. However, there are a series of projects where
the delivery of strategic capacity to serve London and the south-east
are planned and underway; for example, Crossrail and Thameslink.
Finally, there are projects with a more local focus which tend
to address failures in the current network or support the regeneration
of opportunity areas such as the Royal Docks, Stratford, Elephant
& Castle, Vauxhall/Nine Elms/Battersea and so on.
3.4 Many of the core projects contribute to two
or more of the drivers - where, for example, the renewal of an
Underground Line's infrastructure leads to an increase in its
capacity - and it is important to strike a balance between all
three to ensure that opportunities are maximised. However, the
central core of all these schemes is the delivery of significant
new capacity at a strategic or local level.
3.5 Sir Rod Eddington notes that, in his view,
transport investments are unlikely to be concerned with trying
to achieve a "step change" in economic performance,
and we would concur with this view, particularly as the UK's mature
and dense transport system few opportunities exist for such interventions.
3.6 Whilst some would suggest that High Speed
Rail schemes fall within this category of investment, we would
consider that such measures represent the next incremental step
- albeit a large one - in developing the capacity and capability
of the inter-urban rail network. Given that the Eddington Study
envisages some form of road pricing scheme emerging in the fullness
of time, then the expansion of the inter-urban rail system will
be necessary to help cater for displaced car journeys and freight
movements.
4. How should the balance between revenue
and capital expenditure be altered?
4.1 It is apparent that fares have risen sharply
across the public transport system reflecting operators' concerns
regarding declining patronage, inflation and so on. As patronage
has tended to hold-up rather better than had been expected (both
as a result of the recession and the fares increases), revenue
has likewise generally been robust.
4.2 Within London the balance of funding of the
system between taxpayer and passenger is an important issue, as
the fares policy for the past decade has tended to allow real
fares to fall as well as broadening access to free or discounted
travel, resulting in a significant subsidy requirement. Against
a backdrop of an increasing mode share by public transport (and
walking and cycling) and the decline in car ownership and use
(in no small part due to the planning policies prevailing in the
capital for the past 20 years), it is particularly important to
continually review the relationship between the level of fares,
the pattern of the public transport network and its efficiency,
and subsidy required.
4.3 CLF would argue that capital works should
generally take precedent over revenue support, especially where
revenue support is seen as a long-term requirement rather than
as a means of "pump-priming" a new service.
5. Are the current methods for assessing proposed
transport schemes satisfactory?
5.1 CLF recognises that there is considerable
debate regarding the appraisal framework applied to transport
schemes. Rather than focusing on any specific issues with regard
to the technical aspects of such appraisals, we would simply state
that the objective of the appraisal frameworks should be to:-
- Be modally agnostic as far as is possible i.e.
to allow a balanced judgement to be made between alternative schemes
on a reasonably comparable basis;
- Fairly and completely represent externalities
(such as environmental impacts) whilst accepting that estimating
such factors is difficult and likely to be imprecise; and
- Be capable of consistent application by different
bodies and consultants.
5.2 There should also be an appropriate level
of post-implementation monitoring to inform the appraisal framework,
in particularly by providing greater certainty to the assessment
of externalities.
6. How will schemes be planned in the absence
of regional bodies and following the revocation and abolition
of regional spatial strategies?
6.1 London continues to benefit from a unique
transport and planning framework which provides the clarity of
a regional spatial (and transport) strategy as well as a structure
for specifying, co-ordinating and controlling the delivery of
transport services and investments. Accordingly, this issue is
not one which the CLF will comment on in detail.
6.2 However, the co-ordinated delivery of investments
across all sectors inevitably involves strategic planning and
interaction with neighbouring administrations. London's relationship
with the regions requires effective engagement if the benefits
generated by the capital are to help fuel economic development
further afield.
September 2010
| 
