House of Commons - Transport Committee

Transport and the Economy - Transport Committee Contents

Written evidence from the Campaign to Protect Rural England (CPRE) (TE 87)

SUMMARY

The economic impact of the recession on rural and sparse areas has led to a higher increase in unemployment than urban areas. Cutting transport spending is likely to hit rural public transport services and road conditions harder, while making it more difficult for people to live and work in the countryside without owning a car.
Tackling the "tourism deficit" is key to bringing in private spending in sparser rural areas and keeping public transport - whether for rural dwellers or rural tourists - viable.
In summer 2010, France announced plans to spend over half its transport investment on heavy rail, a third on light rail and less than a twentieth on roads. If Britain sticks to outdated priorities and legacy road schemes, its competitiveness would be damaged.
Significant cuts in expenditure and the localism agenda mean it is too early to say if the historic imbalance between capital and revenue spending for transport will continue.
The removal of the regional tier has created a significant strategic gap in planning transport and it is currently unclear how it will be filled.

RECOMMENDATIONS

The Spending Review should be rural-proofed to ensure that the condition of rural roads does not deteriorate further and that rural public transport offers a viable way to get around;
Aviation policy should be reformed so that the impact on the "tourism deficit", in particular rural jobs, of expanding regional airports can be considered as a material factor in planning decisions;
Transport forecasting and appraisal is unfit for purpose and in need of radical reform to achieve better and more transparent prioritisation of schemes.
Local authorities should be encouraged to manage demand for road space and keep public transport affordable by dedicating revenue streams from parking and other charges to improving services.
More thought is needed to create mechanisms for effective sub-national planning and co-ordination. These could include guidelines for Local Enterprise Partnership (LEP) consortia and a substantive duty to co-operate with neighbouring authorities, including it being a condition for bidding from the new Local Sustainable Transport Fund.

INTRODUCTION

1. We welcome the opportunity to submit evidence to the Transport Committee on Transport and the Economy. As a leading environmental charity, the Campaign to Protect Rural England (CPRE) has worked since our formation in 1926 to promote and protect the beauty, tranquillity and diversity of rural England by encouraging the sustainable use of land and other natural resources. We aim for a countryside that is not just beautiful but also thriving, providing local jobs. With a branch in every English county, about 60,000 supporters and over quarter of all parish councils affiliated to us, our local reach is particularly strong.

(i) 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. The economic changes since the Eddington Transport Study in 2006 are both cyclical and structural. Besides the fact that the country has been in recession there seem to be structural changes too. These include signs in National Transport Statistics that traffic increases are less than GDP. There is great potential to increase the decoupling of growth in travel and economic growth. Investing in technologies such as broadband, particularly in rural areas where connections are slowest, and managing demand, such as introducing Lorry Road User Charging, would be helpful.

3. The commitment of the coalition Government to rebalance the economy in areas where public sector jobs make up a higher proportion of employment means that the relationship of transport spending and economic growth in different regions should be considered. It would be better to share growth across the country more evenly, as this would improve social benefits, reduce economic costs of worklessness and spending on benefits, and could also bring environmental benefits.

4. It is also important to consider economic differences within regions as well as within them. 20% of the population live in rural areas (defined since 2003 as those parts of the country outside settlements of 10,000 inhabitants or more). Key economic facts include[271]:

Although unemployment levels are lower in rural areas and they have increased by 73% compared to a 39% increase in urban areas between Q2 2008 and Q4 2009[272];
Total Entrepreneurial Activity is higher, in particular a higher rate of business start ups in rural areas and greater resilience of businesses, due to the higher proportion of micro-businesses[273];
Pockets of severe deprivation in rural areas can be masked by prosperous areas and sparsely populated areas, which tend to be on the periphery, have the highest levels of income poverty[274].

5. "Transport poverty", where households spend a high proportion of income on transport, is higher in rural areas as it is becoming harder to live without a car as bus networks and local facilities are cut back. Increasing sustainable tourism can help support rural public transport by increasing passenger numbers. Since 2001, traffic levels have increased more on minor rural roads than any other type[275] but their condition has deteriorated the most rapidly[276], making them increasingly unpleasant and unsafe for walking and cycling.

6. The "tourism deficit" - the gap between what tourists from abroad spend in the UK compared to what tourists from the UK spend abroad - has averaged £18 billion over the last ten years[277]. Even though more people have been holidaying at home during the recession, it has not decreased significantly. With London gaining much from spending of foreign tourists, this deficit affects sparser areas of England disproportionately. In these areas tourism can provide a major source of employment and so reductions in spending can threaten the viability of private businesses in the service sector as communities cease to be viable. Yet the 2003 Air Transport White Paper states that this negative economic impact of increasing aviation should not be considered in planning decisions. These sorts of impact should not be ignored and the Government should formally withdraw that White Paper.

(ii) 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?

7. Public spending should be prioritised on schemes that deliver or safeguard jobs, increase productivity and deliver a low carbon society, where economic growth is shared fairly between and within regions. Making better use of existing infrastructure and services, whether by maintenance, upgrades to traffic and rail signals, national smart cards and promotion (such as Smarter Choices), offers quick wins and jobs[278].

8. In some cases there will be a need to "spend to save" as there is a real risk that severe cuts to public transport subsidies could reduce services to a point where they are no longer viable. This could create a vicious circle where higher subsidy levels are needed per passenger. Investment in Smarter Choices, "soft measures" (i.e. not hard measures like new infrastructure) such as Individualised Travel Marketing, smart cards and Travel Plans, could help attract new passengers to public transport and keep services viable on reduced levels of subsidy.

9. This will be particularly important in rural areas and the Spending Review of the DfT's budget should be rural-proofed to ensure it does not have a disproportionate impact. We very much welcome the announcement of a Local Sustainable Transport Fund as the previous proposal was for an Urban Challenge Fund that would have excluded rural schemes. Bidders for the fund should be required to show that they have considered a wide range of transport options and have listened to the views of neighbouring authorities. The Fund should be well resourced, as small schemes can offer exceptional value for money, by using significant top-slicing of the existing Integrated Transport Block and Regional Funding Advice.

10. An excellent example of the need to shift spending from legacy road schemes to innovative packages that make better use of existing assets and widen travel choices is the controversy over the A453 widening in Nottingham, which would cost up to £194 million. Identified as the top regional priority by the regional and business bodies, on the basis of it allegedly tackling congestion and creating £320 million of benefits, it was opposed by CPRE at public inquiry in November 2009 and has now been put on hold pending the Sspending Review.

11. CPRE highlighted that the Highway's Agency's own figures showed that the scheme would at best lead to the worst congestion along the A453 - the am peak into Nottingham - still being worse in 2030 that today, albeit less bad than doing nothing. This is a generic problem with using road expansion to tackle congestion. Increasing road capacity on congested corridors generates as much as 10% more traffic per year[279], so real time savings are quickly eaten away. Almost half the supposed benefits of the A453 scheme would be between 2041 and 2071, in other words the scheme would take a long time even to produce savings to meet its costs and predicted benefits beyond this could easily be wiped out by future policy changes.

12. While major investment in roads would lead only to a small reduction in the increase in congestion (i.e. journey times would be longer and less predictable in the future but not quite as bad as doing nothing) journey time improvements from investment in rail would not deteriorate in this manner. Indeed at the public inquiry, CPRE proposed an alternative package of rail electrification, minor junction changes, lower speed limits and "Smarter Choices" measures. While the A453 has a Benefit Cost Ratio (BCR) of 3.3, electrification of the Birmingham - Derby railway would have a BCR of 5.1[280] and Smarter Choices a BCR on 4.5 in terms of congestion reduction alone[281].

13. Given the Government's commitment to change appraisal (in particular the value of reducing carbon emissions) and the impact on future traffic flows of other proposed policies, (in particular Lorry Road User Charging) the difference in economic benefits between the A453 and the alternative sustainable package would be far wider than the BCR figures quoted. This further illustrates how distant benefits in outdated road schemes can evaporate as policy is updated and how a fresh look is needed at current priorities to ensure value for money.

14. Other countries are already ahead of us in terms of realigning their spending to move their transport systems beyond oil[282]. For example, the French Ministry of Ecology, Sustainable Development and the Sea published its draft National Transport Infrastructure Plan in July 2010[283]. Around €170 billion is proposed to be spent over 20 to 30 years in the following proportions: 52% rail, 32% urban public transport (metros, trams and trolley buses), 9% waterways, 4.5% roads, 1.6% ports and 0.5% air (predominantly rail connections to airports). This includes measures to make better use of existing infrastructure, such as electrification and resignalling, as well as new infrastructure.

(iii) How should the balance between revenue and capital expenditure be altered?

15. There has historically been a major issue over the balance of capital and revenue funding for local transport. The impact of cuts on capital and revenue funding following the CSR is as yet unknown and the potential for local authorities to raise funds more easily, such as through Tax Increment Financing (TIF), is likely to depend on the nature of forthcoming legislation. The extent to which this balance will continue to be a problem at different levels of government is therefore unclear at present.

16. Besides new sources of capital, there should be greater encouragement given to local authorities to secure revenue streams from charges and penalties. These can help manage demand for road space and subsidise public transport to ensure ticket prices increase less than increases in the cost of driving. Zurich, for example, has used parking charges to subsidise its world class public transport network since securing citizen approval in a 1973 referendum[284]. Proportionate increases in parking charges plus the introduction of Workplace Parking Levies, Road User Charging and decriminalised enforcement of parking and moving contraventions should be encouraged, so long as the revenue raised is reinvested in the local area to give people and businesses more travel options.

(iv) Are the current methods for assessing proposed transport schemes satisfactory?

17. It may be attractive to believe that the best transport schemes can be chosen as easily as the best buys in a supermarket but the truth is far more complex. There are fundamental problems with current systems of appraisal and forecasting, which are unfit for purpose[285]. With the Government's urgent priorities of supporting and rebalancing the economy, while cutting the fiscal and carbon deficits, the current system urgently needs radical reform.

18. Because appraisal is based on a sixty year period, it relies heavily on forecasting. Other countries, such as France, only consider thirty year periods due to the substantial uncertainty beyond this. Most benefit is from tiny time savings added up between lots of drivers over 60 years. This is a very poor proxy for economic benefits[286]. Wider impacts such as those on the natural environment or on social distribution and regeneration cannot be easily valued let alone compared objectively. A more honest and transparent approach to assessing schemes is needed rather than pretending it can all be reduced to a single magic number, the BCR.

19. There have been suggestions that the DfT will rely less on its New Approach to Transport Appraisal and instead rely more on the Treasury Green Book's five stage approach. The first stage is the strategic case, which checks to ensure that spending proposals fit with policies and priorities, the second is the economic case, which selects the proposal with the highest Net Present Value (NPV) of proposals that have passed the first stage. There is a serious risk that transport schemes whose funding has been frozen may now simply be assessed on their NPVs, without considering their strategic case, in other words their fit with wider Government priorities. Many road schemes in particular would be unlikely to have a valid strategic case, even if they may appear to have a high NPV.

(v) How will schemes be planned in the absence of regional bodies and following the revocation and abolition of regional spatial strategies?

20. There is considerable uncertainty about how transport schemes will be planned as the regional tier has been abolished without consideration about how best to carry out its strategic functions. While there were a number of problems with the regional tier, such as its use to impose top-down housing targets, it did fill a strategic gap between the local and the national.

21. In the last year or so in some areas the regional tier was getting to grips with the need for a real change in transport priorities to tackle carbon emissions and reduce the need to travel. It may take time for new structures, such as the Local Enterprise Partnerships, to develop a thorough understanding of the new transport agenda. The fact that they are to be aimed at economic growth rather than wider objectives - including but not limited to reducing carbon emissions - may lead to a disconnect with the DfT's priorities. Their focus should, CPRE believes, be on delivering "sustainable growth", defined as economic growth that can be "sustained and is within environmental limits, but also enhances the environment and social welfare, and avoids greater extremes in future economic cycles"[287]. LEP membership should be broadened to include wider civil society, including from the social and environmental sectors.

22. CPRE's recent report, The Bigger Picture, highlights the need for a level of planning between the local and national levels to:

Set a spatial framework - to manage projects with impacts across authority boundaries, such as rail schemes, and integrate planning for development around them;
Manage debate between local authorities - to resolve disputes about the level and location of development and regional funding priorities as well as balance local concerns with wider objectives;
Maintain an overview of implementation - as national monitoring may be too broad brush while local monitoring may not pick up cumulative issues.

23. Previously local authorities would normally deal with government regional offices rather than directly with departments. The combination of the abolition of government offices, regional assemblies and development agencies, and significant reductions in staff at the DfT could impact severely on the quality and timeliness of decision making. Rather than having regions agreeing among themselves on strategic spending priorities, it could mean the DfT having to decide between competing local priorities. As a result, power would be centralised rather than localised.

24. Local Enterprise Partnerships (LEPs) are supposed to fill the gap but many of the proposed LEPs are made up of two or even just one county. The fear is that rather than ushering in a new era of co-operation, the LEP bids will generate a new competitiveness between neighbouring areas, making sub-national co-ordination less rather than more likely. It is this type of regional co-ordination that, in countries such as Germany, has been crucial in providing the framework for high quality regional transport.

25. Although the Secretary of State has suggested[288] in a recent speech the possibility of strategic consortia of LEPs, there would still be a gap between strategic long-distance initiatives like high-speed rail and short-distance travel such as cycling. It is for what he described as "intermediate journeys involving complex routing across suburban and rural areas" where strategic planning is most needed, whether to provide real alternatives to driving or managing congestion.

26. A new duty to consult has been suggested as a way forward to ensure better co-ordination of local planning. The danger is that this would merely be a procedural "tick box" duty. A substantive "duty to co-operate" with neighbouring authorities is needed with a simple, swift yet transparent, process to resolve disagreements.

September 2010

271 Commission for Rural Communities, State of the Countryside, 2010. Back

272 Ibid., Figure 3.3.1 using data from Office for National Statistics, Labour Force Survey. Back

273 Ibid., pages 131-134. Back

274 Ibid., pages 86-89. Back

275 Ibid., Figure 2.4.9. Back

276 Ibid., Figure 2.4.10. Back

277 Office for National Statistics. Back

278 Ekogen, Employment in Sustainable Travel, 2010. Back

279 DfT, Roads: Delivering Choice and Reliability, 2008. Traffic generation is, however, likely to be much lower during recessions. Back

280 Network Rail, Network Route Utilisation Strategy: Electrification Strategy, 2009. Back

281 Page 8 in DfT, The Effects of Smarter Choices Programmes - Summary Report, 2010. Back