Written evidence from North Lincolnshire
Council (TE 107)
SUMMARY OF
THE KEY
POINTS RAISED
IN THE
FORMAL SUBMISSION
- ¾ As
stated in Sir Rod Eddington's investigation into the relationship
between transport and the UK's long-term economic growth, the
priorities for investment are, "reducing congestion in urban
areas, on key inter-urban corridors and at key international
gateways (major ports and airports).
- ¾ The
Humber Ports is the UK's busiest in terms of tonnage, (66 million
tonnes in 2008) and home to the UK's biggest Refinery Cluster,
providing 27% of total UK production. The advantages of the Humber
does not stop there, the south bank of the Humber is also the
largest remaining development site in the North of England fronting
a deep water estuary, covering four square miles and potentially,
the biggest job creator in the Region, or indeed the North with
the prospect of 20,000 private sector jobs. It is the best
opportunity in the North of England to rebalance the UK economy.
- ¾ Given
the location of the Humber Ports, it is easy to see that it has
the advantage of being accessible to most areas of the UK, with
it being within the four hours' drivers' time directive - so the
Humber's assets need to be reflected in Government transport policies.
However, at the present time, given the recent DfT announcement's
this week regarding the A160 to the Port of Immingham and the
A63 scheme to the Port of Hull, this does not seem to be the case.
- ¾ The
importance of providing the road and rail infrastructure in serving
the Port of Immingham, given the annual tonnage highlighted above,
should be obvious. The South Humber also has 20% of all UK rail
freight passing through it.
- ¾ Relating
these points back to the Government's focus on transport and the
economy and in particular, providing the infrastructure to stimulate
private sector investment and jobs, the construction of these
major roads and rail schemes needs to be timed accordingly. Without
it, the Ports will not be able to achieve its full employment
potential. The implications for the Humber if this is the case,
will be far reaching and against the overall objectives that the
Government are trying to achieve.
IN SUMMARY
Nationally, investment in transport infrastructure
needs to be at a level commensurate with maximising the economic
benefits that such investment generates. Judged against the key
indicators of this, principally as contained in the Eddington
report, investment in the Humber ports will deliver, whether measured
regionally or nationally, significant economic benefits. Additionally,
the nature of the proposed South Humber port developments will
provide the type of sustainable developments, both economically
and environmentally, that will lead the way to achieving national
carbon-reduction targets. The substantial private sector investment
the area is already attracting clearly demonstrates its potential
to boost the local and regional economy, creating an estimated
20,000 jobs over the next five to ten years. Critical to maximising
the success of the South Humber is the provision of adequate transport
infrastructure, both road and rail.
HUMBER BRIDGE
- ¾ While
the Humber and its business community welcomes the recent announcement
of a Treasury study into the impact of the tolls, there is a degree
of frustration and impatience at the delay that this inevitably
engenders. How many more studies are genuinely needed? We have
already seen the 2008 and 2009 Buchanan study, phases one and
two (which showed that, of all the policy instruments to support
economic development in the Humber region, action on the tolls
is likely to be the simplest and most effective); the £150,000
DfT commissioned study, which is due to report in the next couple
of weeks and which the Treasury has had a watching brief over;
and now the prospect of a Treasury led study, of which we have
no details regarding its remit, start date or duration. What is
now needed is action, not more good intentions or further studies.
- ¾ The
Buchanan findings showed that toll abolition would bring economic
benefits to the Humber of £1.1 billion by 2032, or £580
million if the toll is reduced to £1 for a car each way with
corresponding reductions for all other classes of vehicle;
- ¾ There
is a cross-party and business consensus, which extends to the
wider region, that action on the actual level of the Humber Bridge
tolls is a policy necessity. The high Humber Bridge tolls prevent
the Humber sub-region realising its economic potential, with little
labour mobility across both banks, creating two separate job by
markets;
FURTHER THOUGHTS
- ¾ We
envisage that many future decisions on transport may come through
a Local Enterprise Partnership or similar function. We will work
with our public and private sector partners in the Humber to prioritise
areas of funding that will drive the economy, both regionally
and nationally, and restructure local economies. North Lincolnshire
Council, the Hull and Humber Chamber of Commerce, the Humber Chemical
Focus, the FSB and the majority of the Humber's MPs support a
pan-Humber LEP. At the present time, unfortunately there is no
cross-estuary agreement on this among the four Humber unitary
councils. Business though is unequivocal in its support for pan-Humber
working through a single LEP.
1. Introduction
1.1 This is North Lincolnshire Council's formal response
to the inquiry into Transport and the economy, in addition to
the oral evidence given on Tuesday 2 November 2010.
1.2 In the present economic climate, and given recent
announcements on future transport investment, North Lincolnshire
Council welcomes the opportunity to respond and support the Government
in its support for transport schemes that will rebalance the UK's
economy.
1.3 The following response is structured around the
questions as outlined in the Terms of Reference and Call for Evidence.
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 The UK's economic conditions have substantially
changed since the Eddington Study in 2006 and, as such, it is
more important than ever that transport spending is invested in
schemes that will support economic growth.
2.2 Of course, it is also fair to say that, whilst
supporting economic growth is vital, there is also an increasing
awareness of environmental issues and climate change and transport's
role in addressing both issues. It is particularly crucial now
that both should be addressed in unity rather than as two separate
issues. This is the only way we will achieve real sustainable
economic growth.
2.3 In the current economic climate, Sir Rod Eddington's
study into the relationship between transport and the UK's long-term
economic growth stated that the priorities for investment should
be, "reducing congestion in urban areas, on key inter-urban
corridors and at key international gateways (major ports and airports)."
This has never been more important in stimulating economic growth.
Further, where Eddington refers to maximising economic growth
whilst also responding to the challenge of climate change, this
is of particular importance to the Humber, as detailed below.
2.4 The Humber Ports is the UK's busiest in terms
of tonnage, (66 million tonnes in 2008) and home to the UK's biggest
Refinery cluster, providing 27% of total UK production. The advantages
of the Humber do not stop there. The south bank of the Humber
is the largest remaining development site in the North of England
fronting a deep-water estuary, covering four square miles and,
potentially, the biggest job creator in the Region, or indeed
the North, with the prospect of 20,000 private sector jobs. It
is the best opportunity in the North of England to rebalance the
UK economy.
2.5 Considering the economic potential with the low
carbon, sustainable sectors, the south bank of the Humber has
plans for the biggest environmental and port developments involving
renewable energy, in the UK. A £400 million Marine Energy
Park and a 1,600 quay will create the infrastructure for the offshore
wind sector bringing with it up to 20,000 jobs. It will provide
the facilities for manufacturing, commissioning and the installation
base for offshore wind turbines and become the largest energy
cluster in the UK. In addition it is worth noting that, due to
the proximity to three offshore wind farms, delivery costs will
be significantly lower than the rest of the UK and Europe. But
the Government, too, has to play its part in helping us to rebalance
our economy. The uncertainty created by a delay to the A160 scheme
is perhaps not the best example of a supportive relationship.
2.6 Given this and the location of the ports to the
rest of the mainland in the UK (most areas are within the four
hours' drivers' time directive), the Humber's assets clearly reflect
Eddington and Government's transport policies. Therefore, recent
DfT announcement's regarding the delays to the A160 scheme to
the port of Immingham and the A63 scheme to the port of Hull,
are baffling to comprehend. An explanation is sought.
2.7 In the previous Government's November 2008 Pre-Budget
Statement, up to an extra £30 million was awarded by the
DfT to enhance the quality of the A160 scheme. This was part of
a programme aimed at removing bottlenecks at key UK airports and
ports (in line with Eddington). And yet two years later, we find
the scheme has been put back to start "at the earliest"
in 2015. This is in marked contrast to the Yorkshire and Humber
Regional Transport Advisory Board's intentions in February 2010
(with DfT present), where it was identified as a key priority
and the scheme's start date was brought forward by ten months
(to early 2013).
2.8 Given the Government's focus on providing the
infrastructure to stimulate private sector jobs, the construction
of these major road schemes needs to be timed accordingly. Without
it, the Humber ports will not be able to achieve their full economic
potential. The implications for the Humber if this is the case,
will be far reaching and against the overall objectives that the
Government are trying to achieve. The Humber is absolutely united
and clear, with the unequivocal support of business, that an early
start on its two strategic road schemes to the ports of Immingham
and Hull - the A160 and A63 respectively - are vitally important
and inextricably-linked to any serious attempt to help rebalance
its economy and improve its economic performance.
2.9 In Summary
Nationally, investment
in transport infrastructure needs to be at a level commensurate
with maximising the economic benefits that such investment generates.
Judged against the key indicators of this, principally as contained
in the Eddington report, investment in the Humber ports will deliver,
whether measured regionally or nationally, significant economic
benefits. Additionally, the nature of the proposed South Humber
port developments will provide the type of sustainable developments,
both economically and environmentally, that will lead the way
to achieving national carbon-reduction targets. The substantial
private sector investment the area is already attracting clearly
demonstrates its potential to boost the local and regional economy,
creating an estimated 20,000 jobs over the next five to ten years.
Critical to maximising the success of the South Humber is the
provision of adequate transport infrastructure, both road and
rail.
3. What Type of Transport Spending Should
be Prioritised, in the Context of an Overall Spending Reduction,
in Order to Support Regional and National Economic Growth?
3.1 We recognise that in the current economic climate
tough decisions have to be made on transport investment. Therefore,
we feel that transport spending has to be prioritised in those
areas that offer the greatest benefits in terms of:
- ¾ Facilitating/supporting
economic growth, particularly from the private sector.
- ¾ Promoting
sustainable growth (reducing carbon emissions, supporting investment
in the renewables sector, opportunities for sustainable travel
and so forth).
- ¾ Improving
road safety,
- ¾ Offering
best value for public sector money; and
- ¾ Creating
jobs.
3.2 With this in mind, the points raised above, in
answer to the previous question, are also relevant here. In addition,
we would like to offer the following comments looking at our work
on a Humber-wide level:
3.3 The A160 scheme for the port of Immingham (using
DfT's methodology) has a benefit cost ratio of over 10. This is
the highest of any scheme in the Yorkshire and Humber and one
of the best in the country.
3.4 Providing rail infrastructure is vitally important,
given the points above (particularly on sustainability). The South
Humber has 20% of all UK rail freight passing through it. Gauge
enhancements from the South Humber Ports (Immingham and Grimsby)
to the East Coast Mainline (to W10 and W12 standard, allowing
the passage of large containers) cost approximately £5.5
million and will provide significant economic benefits to the
region and indeed nationally. In the absence of such investment,
by 2014, the Humber ports will be the only major port in the UK
without the benefits of these improvements.
3.5 There has long existed a cross-party and business
consensus, which extends to the wider region, that action on the
actual level of the Humber Bridge tolls is a policy necessity.
This is, manifestly, not a transport spending demand, but a financial
issue for Government. The infrastructure is in place and has been
for almost thirty years. It is not the estuary that is the problem
- simply the level of the tolls. Set at an unrealistically high
level from the outset, the tolls prevent the Humber sub-region
from realising its economic potential. As a result, there exists
little labour mobility across both banks, creating two separate
job markets. It is essential, with the prospect of significant
offshore wind investment, that both sides of the bank can reap
the benefits.
3.6 While the Humber and its business community welcomes
the recent announcement of a Treasury study into the impact of
the tolls, there is a degree of frustration and impatience at
the delay that this inevitably engenders. How many more studies
are genuinely needed? We have already seen the 2008 and 2009 Buchanan
study, phases one and two (which showed that, of all the policy
instruments to support economic development in the Humber region,
action on the tolls is likely to be the simplest and most effective);
the £150,000 DfT commissioned study, which is due to report
in the next couple of weeks and which the Treasury has had a watching
brief over; and now the prospect of a Treasury led study, of which
we have no details regarding its remit, start date or duration.
What is now needed is action, not more good intentions or further
studies.
3.7 The Buchanan findings showed that toll abolition
would bring economic benefits to the Humber of £1.1billion
over the period 2009 to 2032, or £580 million if the toll
is reduced to £1 for a car each way (with corresponding reductions
for all other classes of vehicle).
3.8 Annual operational and routine maintenance costs
amount to around £3.5 million a year. The Bridge Board receives
over £21 million a year in toll revenue. At the last public
inquiry (March 2009), the Bridge Board confirmed that toll income
over the period 1981 to 2008, amounted to £342.3 million.
Interest and capital paid to the Government, excluding grant over
the same period, was £292.2 million. The Humber Bridge toll
is nothing other than a brake on the Humber's competitiveness
and a local tax on businesses and individuals. It is hoped that
the recently announced Treasury-led review into the impact of
the tolls on the Humber's prosperity will recognise the heavy
price paid by business and individuals since 1981 - and act accordingly.
3.9 The Humber, after years of poor economic performance,
now has the opportunity, through Ports, logistics and offshore
wind investment, to transform its economic base and the life chances
of its residents on both banks. Of course, the two major road
schemes need to be given the go ahead, but the issue of the prohibitively
high Humber Bridge tolls must be addressed if the Humber is to
realise its potential. We must have a skilled and mobile workforce
able and willing to take advantage of job opportunities on either
bank. With the tolls at their present level, this will not happen.
4. How Should the Balance Between Revenue
and Capital Expenditure be Altered?
4.1 Whilst, given the reasons above, there are obvious
benefits to funding major capital schemes, particularly those
that stimulate sustainable economic development and private sector
investment, we also need to ensure that we can maintain the assets
we already have and of course, should new capital schemes be built,
we need to ensure we have the level of funding available to be
able to maintain them. The relationship between the two is interlinked
and complex.
4.2 To some degree, it is possible that a decision
on where funding is spent (on smaller levels of funding), should
be made at a local level in an informed way based on current assets
and local needs. Therefore we welcome any changes to a more simplified
transport funding system and await the outcomes on the recent
transport allocation consultation from DfT.
5. Are the Current Methods for Assessing Proposed
Transport Schemes Satisfactory?
5.1 In this economic climate, we would welcome
a process that takes further account of the scheme's ability to
drive economic recovery and rebalance the UK's economy. It also
seems relevant at this time to take account of predicted levels
of private sector investment and job creation. Fundamental to
all assessment of schemes is a value for money factor and the
use of the benefit cost ratio methodology (BCR).
5.2 As mentioned earlier in paragraph 2.7, the Regional
Transport Advisory Board, in February 2010, viewed the A160 as
such a key regional priority that members agreed to bring forward
the proposed start date for the scheme by ten months to start
construction in early 2013. In the current assessment mechanism,
no account appears to be taken of the Region's intentions. Dependent
on the government's intentions with regards to regional tiers
or indeed local prioritisation mechanisms, it is fundamental to
include this in methods of assessment.
5.3 Whilst it is understood that assessment criteria
for assessing proposed transport schemes can be complex, taking
into account these economic benefits appears to be fundamental
in the current economic circumstances.
5.4 We do also recognise that environmental issues
should be taken into account, particularly in the government's
drive to reduce greenhouse gas emissions and transport's key role
in achieving the targets. Schemes should also therefore, be considered
on their ability to reduce these emissions and options be considered
that promote the use of sustainable modes of transport. We do
acknowledge and welcome that, through the "New Approach to
Appraisal" (NATA), some of these steps have already been
taken both from an environmental and economic perspective.
6. How Will Schemes be Planned in the Absence
of Regional Bodies and Following Revocation and Abolition of Regional
Spatial Strategies?
6.1 We envisage that many future decisions on
transport may come through a Local Enterprise Partnership or similar
function. We will work with our public and private sector partners
in the Humber to prioritise areas of funding that will drive the
economy, both regionally and nationally, and restructure local
economies. North Lincolnshire Council, the Hull and Humber Chamber
of Commerce, the Humber Chemical Focus, the FSB and the majority
of the Humber's MPs support a pan-Humber LEP. At the present time,
unfortunately there is no cross-estuary agreement on this among
the four Humber unitary councils. Business though is unequivocal
in its support for pan-Humber working through a single LEP.
6.2 Further explanation would be welcomed on
how some of the issues that fall between the local priorities
and issues of national significance will be dealt with without
the presence of regional bodies providing the wider knowledge
and expertise often needed on these types of schemes. It is felt
that on some issues, including major transport infrastructure,
a regional perspective (or equivalent) is needed to allow appropriate
strategic decisions to be taken on a wider scale, such has been
provided by the Regional Transport Advisory Board in the past.
However, as also mentioned in paragraph 5.2, should such a body
be in place, the government should recognise and assess schemes
against criteria that takes the decisions of the region into account.
November 2010
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