Written evidence from ADEPT (TE 29)
1. SUMMARY
1.1 ADEPT represents local authority strategic directors
who are responsible for delivering public services that relate
to the physical environment and the economy.
1.2. We strongly support the Government's primary
aims of reducing the public spending deficit and ensuring economic
recovery. Indeed, we see sustainable economic recovery as a vital
component of deficit reduction.
1.3 We consider that in order to achieve this there
is a need to continue to invest in transport infrastructure; and
in particular to recognise the key role of local authorities in
its financing and delivery.
1.4 We support the central tenet of the Eddington
study: that the performance of the UK's transport networks is
a crucial enabler of sustained productivity and competitiveness.
However, we believe that some of his recommendations need revisiting,
in particular, to give priority to the need to address the poor
condition of existing assets, including local roads.
1.5 Priority for new transport schemes, including
investment already planned but not committed should be given to
those:
- ¾ with
strong economic benefits;
- ¾ that
support wider regeneration/growth strategies; and
- ¾ that
complete gaps in the network, where this unlocks economic benefits.
1.6 We are encouraged by Eddington's analysis which
suggests that whilst transport projects can offer remarkably high
returns generally, some of the best projects are small scale,
such as walking and cycling schemes, and schemes that tackle bottlenecks.
Therefore some degree of rescheduling of "grands projets"
would release resources for investment in network maintenance
and smaller scale projects with potentially greater returns.
1.7 There is some interchangeability between capital
and revenue spending. For highway maintenance, the most important
balance is that between planned, preventative maintenance, and
reactive repairs. If preventative maintenance on any asset is
less than adequate, this can initiate a "vicious circle"
where reactive repairs soak up an ever increasing proportion of
available preventative maintenance budgets
1.8. Whilst we acknowledge that cost-benefit analysis
provides a very useful starting point for assessment of transport
schemes, we agree with the Secretary of State that there is a
need for discretion which recognises that there are other relevant
factors affecting prioritisation.
1.9 Following the revocation and abolition of regional
spatial strategies ADEPT considers that significant changes are
needed to improve strategic planning at the national and sub-national
levels. County and unitary councils should prepare strategic spatial
plans through robust partnerships at functional geographic levels.
Investment in local infrastructure, for much of which county and
unitary authorities are responsible, will be key to their delivery
1.10 We recognise, of course, the difficult spending
decisions that lie ahead, but we also believe that through reducing
bureaucracy, eliminating inefficiencies, taking a cross-agency
approach to public spending at all levels and a willingness to
explore alternative sources of funding, there is a way forward
that balances the need for spending and investment and the need
to cut the budget deficit.
2. ADEPT
2.1 The Association of Directors of Environment,
Economy, Planning & Transport (ADEPT) represents local authority
Strategic Directors who manage some of the most pressing issues
facing the UK today. ADEPT membership is drawn from all four corners
of the United Kingdom. Operating at the strategic tier of local
government they are responsible for delivering public services
that relate to the physical environment and the economy.
2.2 At the local level, ADEPT members, with their
wide-ranging briefs, will have a key role in supporting and helping
to deliver sustainable economic growth and quality of life throughout
the country. We do this from a perspective of deep experience
in delivering services in the context of politically driven ambitions
and priorities and an understanding of the views and interests
of our communities. Our approach is to focus on efficiencies and
offer solutions rather then agonise over problems.
2.3 We strongly support the Government's primary
aims of reducing the public spending deficit and ensuring economic
recovery. Indeed, we see sustainable economic recovery as a vital
component of deficit reduction.
2.4 ADEPT considers that in order to achieve this
there is a need to continue to invest in transport infrastructure;
and in particular to recognise the key role of local authorities
in its financing and delivery. In our view, investment in local
transport infrastructure is not an option but a pre-requisite
for supporting sustainable economic growth.
3. THE ECONOMIC
IMPACTS OF
TRANSPORT
3.1 Eddington recognises that transport impacts on
the economy in a number of different ways, which can be assessed
through a series of micro economic drivers of growth: business
efficiency, investment and innovation; agglomeration economies;
labour markets; competition; trade; and globally mobile activity.
Such impacts are made by improvements to the speed, cost, reliability,
network coverage, comfort or safety of the journey.[30]
3.2 For example, he states that a 5% reduction in
travel time for all business travel on the roads could generate
around £2.5 billion of cost savings - some 0.2% of GDP. Delays
and unreliability on the network have direct costs to people and
businesses, increasing business costs and affecting productivity
and innovation. Eliminating existing congestion on the road network,
if that were ever feasible, would be worth some £7-8 billion
of GDP per annum. Although the emphasis of this paper is on economic
impacts, ADEPT would also wish to emphasise the beneficial effects
of congestion reduction on air quality and carbon reduction.
3.3 On the basis of this and other similar evidence,
ADEPT supports the central tenet of the study: that the performance
of the UK's transport networks is a crucial enabler of sustained
productivity and competitiveness. However, we would wish to emphasise
the significance of local transport in reaching this conclusion.
4. LOCAL TRANSPORT
4.1 Local authorities are responsible for local roads,
public transport, and car parks. Of the £22.6 billion spent
by central and local government on transport in 2008-09, nearly
54% was by local authorities.[31]
4.2 Their responsibility for roads embraces the construction,
improvement, management and maintenance of highways in the interests
of all road users including drivers of cars and goods vehicles,
bus passengers, cyclists and pedestrians.
4.3 Local roads carry 68% of all road traffic (measured
in vehicle km). Moreover, although the motorway and trunk road
network carries the remaining 32%, nearly all of those trips begin
or end on local roads also. In terms of road length nearly 97%
of the GB road network is the responsibility of local highway
authorities.[32]
4.4 Given the scale of the activity, it is disappointing
that local transport does not have the same high profile as national
and international transport, and its role in the national economy
and in serving travellers is often undervalued. However, without
good quality local transport infrastructure, the benefits of national
level transport investment in, for example, reducing inter-city
travel times would be undermined.
5. THE EDDINGTON
TRANSPORT STUDY:
CHANGES IN
ECONOMIC CONDITIONS
5.1 Although the role of transport in the economy
has not fundamentally changed since publication of Eddington's
report in December 2006, the demand for movement of people and
goods in the short-term is clearly being affected by changes in
the economic environment.
5.2 We therefore believe that some of his recommendations
need revisiting. In particular, he considered that because the
UK is already well connected, there were three strategic economic
priorities for transport policy where "there are clear signals
that (existing) networks are not performing"[33]:
- ¾ Congested
and growing city catchments.
- ¾ Key
inter-urban corridors.
- ¾ The
key international gateways that are showing signs of increasing
congestion and unreliability.[34]
5.3 He did not appear to give similar priority to
the need to address the poor condition of existing assets, including
local roads.
6. SPENDING PRIORITIES
TO SUPPORT
ECONOMIC GROWTH
6.1 ADEPT considers that protection for funding to
maintain existing assets, particularly the highway network and
its future resilience, is the first priority. This position would
appear to be supported by the Chancellor, who made the point in
his emergency budget statement that it does not make sense to
allow the existing infrastructure to crumble.
6.2 At a local level, highway condition and road
safety frequently feature at the top of residents' complaints
lists. The severe winter weather of 2008-09 and 2009-10 and the
consequent peppering of the nation's roads with potholes have
served to highlight this as well as the vulnerability of the network.
6.3 Priority for new transport schemes should be
given to those:
- ¾ with
strong economic benefits;
- ¾ that
support wider regeneration/growth strategies; and
- ¾ that
complete gaps in the network, where this unlocks economic benefits.
Investment already planned but not committed should
also be assessed against these priorities where necessary.
6.4 New schemes may be large or small, but we concur
with Eddington[35]
in his view that High Speed Rail and other major rail improvement
schemes should be subject to the same scrutiny and value for money
tests as any other transport investment. At the very least, some
degree of rescheduling of "grands projets" would release
resources for investment in network maintenance and smaller scale
projects with potentially greater returns.
6.5 We are therefore encouraged by Eddington's further
analysis which suggests that whilst transport projects can offer
remarkably high returns generally, some of the best projects are
small scale, such as walking and cycling schemes, and schemes
that tackle bottlenecks.[36]
6.6 Significant reductions in overall investment
would risk the loss of essential skills and capacity, both in
the public and private sector, which will be needed when the economy
allows headroom for expansion. Bearing in mind the long lead times
associated with transport schemes, loss of capacity now would
make it slower and more expensive to deliver investment later.
7. THE BALANCE
BETWEEN REVENUE
AND CAPITAL
EXPENDITURE
7.1 In 2008-09 local authority investment in transport
accounted for 24% of overall local authority capital spending
- slightly less than on housing (25%) and slightly more than on
education (23%).[37]
7.2 Approximately 56% of net local government transport
expenditure is current spending on roads, revenue support for
public transport, and concessionary fares, with some net income
generated from car parking charges. The remaining 44% is capital,
mainly invested in roads and public transport.
7.3 Although ADEPT supports the need for local authorities
to retain flexibilities between sectors, it is concerned to protect
as far as possible the overall level of local transport expenditure,
including the avoidance of leakage from the sector entirely, rather
than focus simply on the split between capital and revenue.
7.4 As we state above, ADEPT considers that protection
for funding to maintain existing assets is the first priority.
In the case of highway maintenance there is some degree of flexibility
in the definitions of capital and revenue expenditure. The key
issue here is therefore not the balance between them, which the
public may not understand or care about anyway, but between planned,
preventative maintenance, and reactive repairs.
7.5 If preventative maintenance on any asset is less
than adequate, this can initiate a "vicious circle"
where reactive repairs soak up an ever increasing proportion of
available preventative maintenance budgets, compounding the problem
by reducing still further the amount that can be spent on planned
maintenance. (See Figure 1.)
7.6 The resulting deterioration in road condition
and increase in reactive repairs have an impact on all road users
and therefore on the economy generally in terms of increased vehicle
running costs, increased journey times and decreased journey reliability,
and ability and willingness to travel.
7.7 There is international evidence of these economic
impacts and their links to inadequate road maintenance (although
some are difficult to quantify). For example, research by the
OECD[38]
on the relationship between road user costs and road condition
suggested that road user costs on a very poor condition road could
be up to double those for a comparable journey on a very good
road.
7.8 With public transport, there is similarly some
interchangeability between capital and revenue expenditure. For
example, investment in bus lanes, bus stops, real-time information
systems and indeed in the vehicles themselves can help reduce
operating costs and therefore the need for revenue support. The
appropriate balance between capital and revenue should be a matter
for local appraisal.
8. ASSESSMENT METHODOLOGY
8.1 The Department for Transport has a cost benefit
analysis model which produces for each major highway project a
net present value. Local Highway Authorities are expected to use
that model in assessing options for their major highway schemes,
if they are seeking grant aid from DfT.
8.2 The Eddington Study appears strongly to endorse
cost-benefit analysis, but expresses concern that "current
methodologies do not reflect other potentially significant impacts
on the economy. Assessments of overall benefits on a project-by-project
basis could increase by up to 50% in some cases if new evidence
concerning the importance of reliability and agglomerations were
to be included in the appraisal of transport schemes…In addition,
current methodologies do not fully encompass the environmental
impact of projects." He therefore recommends that "transport
strategy and appraisal should continue to develop as our understanding
evolves, and in particular that the full range of effects should
be incorporated into appraisal as a matter of urgency."[39]
8.3 Whilst we acknowledge that cost-benefit analysis
provides a very useful starting point and we respect these aspirations,
ADEPT's experience over many years dating back to the Roskill
Commission[40]
is that over-emphasis on cost-benefit analysis can produce outcomes
which don't necessarily reflect social and environmental impacts,
and it can be very complex. Therefore we agree with the Secretary
of State that there is a need for discretion which recognises
that there are other relevant factors affecting prioritisation,
both locally and in terms of national ranking (or indeed between
modes of transport). Public consultation and independent scrutiny
are important elements of this decision-making process.
8.4 ADEPT research[41]
shows that all areas can make a contribution to economic recovery,
and we need to ensure that growth is supported as well as investment
in declining areas. However, there is a clear risk that over-rigorous
prioritisation on the basis of cost-benefit analysis could result
in an increasing focus on a small number of areas of the country,
where for example congestion problems are greatest.
8.5 Equally, we must avoid the trap of focusing only
on under-performing city regions and other areas of the country
with economic problems. This would be counter-productive and illusory
as Eddington states[42].
9. FUTURE STRATEGIC
PLANNING ARRANGEMENTS
9.1 Following the revocation and abolition of regional
spatial strategies ADEPT considers that significant changes are
needed to improve strategic planning at the national and sub-national
levels.
9.2 A national framework for spatial planning, informed
by local government practitioners and other relevant stakeholders,
is needed to guide local areas on assisting delivery to meet national
priorities and join up Government policy in areas of crucial importance.
9.3 ADEPT considers there is a need for a single
tier of strategic spatial planning between national and local
levels. County and unitary councils should prepare strategic spatial
plans through robust partnerships at functional geographic levels.
These councils have the expertise and knowledge of cross-boundary
working on strategic matters and are also the providers of key
infrastructure. The plans would identify and co-ordinate cross-boundary
issues and provide a policy approach on key issues including transport
and other infrastructure.
9.4 There is no "one-size-fits-all" solution
to defining the geographic area of cross-boundary working, which
will vary according to local circumstances and should reflect
economic, social and environmental realities. This approach would
seem to fit well with the Government's initiative on LEPS.
9.5 Local infrastructure investment is key to the
delivery of sustainable communities and economic recovery, and
county and unitary authorities are responsible for delivering
much of it. They have developed considerable expertise in preparing
Local Transport Plans over the last decade. These are essentially
medium-term investment programmes embracing highway maintenance,
integrated transport packages and major local schemes.
9.6 County and unitary authorities often have to
rely on developer contributions to fund transport infrastructure.
Various models for securing such contributions are available,
including securing site-specific infrastructure through planning
obligations and using levies/tariffs for infrastructure that is
needed to address the cumulative impact of new development. ADEPT
supports both approaches but more needs to be done to ensure that
necessary infrastructure is delivered.
9.7 ADEPT has expressed some specific concerns about
the Community Infrastructure Levy (CIL) because in two-tier areas,
County Councils are neither Charging Authorities nor Planning
Authorities even though they provide a large proportion of the
infrastructure. In the absence of effective safeguards, ADEPT
considers that these strategic local authorities need to retain
the power to secure such contributions via Section 106 and Section
278 agreements.
10. CREATING HEADROOM
10.1 We recognise, of course, the difficult spending
decisions that lie ahead, but we also believe that through reducing
bureaucracy, eliminating inefficiencies, taking a cross-agency
approach to public spending at all levels and a willingness to
explore alternative sources of funding, there is a way forward
that balances the need for spending and investment and the need
to cut the budget deficit.
10.2 For example, there is real potential for:
- ¾ the
Government to rationalise existing agencies and funding streams
to reduce the administrative costs and central constraints on
public service organisations that lead to sub-optimal outcomes
ad inefficiency;
- ¾ a
much more collaborative "joint team" approach with Government
to deliver major transport schemes;
- ¾
better joining up of Government policy to make it possible to
deliver more efficiently in localities eg putting hospitals where
there is good access;
- ¾ greater
drive/direction for central agencies to pursue collaborative procurement
with local government;
- ¾ protecting
maintenance spend and planned asset management which will deliver
efficiency savings;
- ¾ focusing
on behavioural change to make more efficient use of the transport
infrastructure and reduce the need for investment;
- ¾ control
of utilities to prevent them undermining efforts to manage and
maintain highways and ensure full cost recovery; and
- ¾ investment
in high-speed broadband to maximise economic competitiveness,
to reduce travel demands and to tackle digital exclusion and the
growing digital divide.
September 2010
30 The Eddington Transport Study: Volume 1, Chapter
2, December 2006 Back
31
Transport Statistics Great Britain, 2009, DfT Back
32
ibid Back
33
The Eddington Transport Study: The Case for Action, December 2006,
para 9 Back
34
We have some comments to make on the approach he adopts to reach
these conclusions, in section 8 below, which could lead others
to a different set of priorities. Back
35
Eddington, ibid, paras 1.140 et seq. Back
36
Eddington, ibid, para 1.84 and paras 1.99 et seq Back
37
Source CLG 8 April 2010 Back
38
Pavement Management systems, OECD, 1987 Back
39
Eddington, ibid, para 1.25 Back
40
In 1971, the Report of the Roskill Commission on the Third London
Airport selected Cublington as the location of a proposed third
airport for London on
the basis of cost-benefit analysis. The government later rejected
the recommendation due to quality of life concerns in favour of
a site at Maplin
Sands, Foulness.
It was eventually built at Stanstead Back
41
Making the Most of our Economic Potential - Looking Beyond the
Core Cities. ADEPT/CEDOS 2007 Back
42
Eddington, ibid, para 1.32 Back
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