HC 473 Transport and the economy

Memorandum from Kingston upon Hull City Council (TE 106)

1. Introduction

1.1 Hull City Council welcomes this opportunity to contribute to this inquiry and would like to express strong support for the Government’s aspiration to reduce the financial deficit and prioritise those transport investment schemes which support economic growth. This submission is structured around the questions as set out in the inquiry terms of reference.

2.0 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 Obviously since the Eddington Report was written in 2006 we have entered into a major global economic recession with its associated higher levels of unemployment and lower productivity. In parallel to this we have also experienced a growing global environmental awareness with associated aspirations to achieve carbon reduction targets. In transport planning terms addressing economic decline and achieving carbon reduction would traditionally have been seen as mutually exclusive but today we need to be more creative in investing in transport to achieve ‘Sustainable Economic Growth’.

2.2 The headline findings outlined in Sir Rod Eddington’s 2006 Study Report are even more relevant in the present economic climate, these include:

· The UK Transport Infrastructure is broadly adequate

· We need to concentrate on improving existing road and rail links. There is little real need for major new infrastructure (and any such new infrastructure would inevitable be largely unaffordable anyway).

· There are still some key blockages in the transport system which need to be relieved.

· We should concentrate investment in relieving these blockages especially where these have a negative affect on International Gateways and Port Accesses which potentially offer opportunities for maximum economic growth particularly in the low carbon sectors.

2.3 This last point is now even more relevant with the prospect of growth in the emerging international renewable energy sector. This is currently being highlighted by the high levels of private sector interest in developing major new manufacturing and maintenance plants for "off shore" wind turbines. These new plants will, by necessity, need to be located in or around existing ports. As you will be aware, large areas of suitable land are available around the Humber Estuary and in the case of Hull; planning approvals are largely already in place at key sites within the Port. With relatively modest investments in the existing Transport Infrastructure we have the very real opportunity to create a European centre of activity on the Humber, with the potential for thousands of new jobs. These new jobs would help both the national economic recovery and also rebalance the local economy to give targeted relief to an area of the country particularly hard hit by the recession with some of the highest levels of unemployment and deprivation and direct exposure to significant public sector job losses.

2.4 To summarise national spending on transport needs to be maintained at an appropriate level in order to:

· Remove blockages to international gateways to facilitate efficient movement of goods to reduce transport costs and improve national economic competitiveness.

· Improve interurban links to achieve agglomeration benefits associated with affectively reducing distances between markets.

· Promote schemes which either deliver environmental benefits (reduce transport related carbon) or facilitate sustainable developments which in turn contribute to long term national carbon emission reduction.

· Stimulate employment and investment both in the construction industry, manufacturing and in the transport industry itself.

3.0 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 In general terms we should be looking to deliver schemes which:

· Allow UK PLC (particularly the North) to enter and benefit from significant new areas of economic activity including renewables.

· Promote/support economic growth (usually by relieving blockages and reducing congestion on existing routes).

· Minimise the environmental impact of travel (reduce carbon emissions, improve air quality and promote shift to sustainable modes).

· Improve Public Health

· Address Social inclusion

· Improve road safety

We do however, support the Government in its aspiration to reduce the financial deficit and prioritise those transport investment schemes which support a step change in economic growth. In order to achieve this we now need to work more smartly to promote schemes which address more than one of the above objectives.

3.2 In a more local context we have worked closely with partners in neighbouring authorities around the Humber to identify the type of priority schemes required to address our joint challenges. These include:

· Schemes which improve access to Northern Ports. These will have the dual advantage of stimulating the struggling economy of the north and at the same time provide environmental benefits by reducing unnecessary road travel through congested networks in the south to the Channel Ports. Good examples of such schemes are the A63 Castle Street in Hull and the A160 on the South Humber Bank. These schemes have the potential to help unlock over 10,000 new jobs around the Humber. Other schemes include Rail gauge enhancements which are essential to link the Humber Ports to the wider strategic rail freight network to allow them to take full advantage of their development potential and to maximise the potential to relieve the already stressed national highway network.

· Schemes which address the general geographic remoteness of Hull and the sub-region. Better inter-urban links are needed to effectively reduce travel times/costs and to generate the agglomeration benefits needed to stimulate the local economy. Examples of schemes which could deliver on this challenge are improvement to the A164, A1079 and A15. Other schemes could also include the well documented removal of the Humber Bridge debt with associated toll reduction which was demonstrated in the Buchanan Study 2009 to have a positive business case. Although we welcome the recent announcement of improved services between Leeds and Manchester in the CSR we still need improvements to passenger rail service frequencies and line speeds between Hull and Leeds on the Trans Pennine service which is currently woefully inadequate compared to comparable services to other cities.

3.3 To optimise the Eddington proposals to maximise existing infrastructure, in Hull’s case this is the re-use of Alexandra Dock for renewables which will create a quantum change in economic benefits and employment.

4.0 How should the balance between revenue and capital expenditure be altered?

4.1 In these times of funding shortfalls we need to make best use of existing assets wherever possible. This approach inevitably is revenue hungry where, for example, highway maintenance becomes a priority. There would also be little point in delivering expensive capital schemes if insufficient revenue were then to be available to cover running costs as is likely to be the case with prestige public transport schemes and has historically been the case with the Humber Bridge. On the other hand, in some cases, early capital interventions to, for example, replace a highway or structure could lead to overall long term savings in ongoing maintenance expenditure. Clearly, the relationship between capital and revenue is complex and what is perhaps required is a more locally flexible and responsive relationship between the two rather than the existing largely separate formulaic approach to revenue allocation. Hopefully, this issue will be addressed by the simplification of the transport grant system proposed by the Government and through the recently announced Local Sustainable Transport Fund.

5.0 Are the current methods for assessing proposed transport schemes satisfactory?

5.1 We welcome the advances made in the assessment process in recent years through the ‘New Approach to Appraisal’ (NATA) which goes some way to giving weightings to environmental and wider economic benefits/costs which are notoriously difficult to quantify. However, we would welcome further refinement to reflect increased weightings to be attributed to schemes which help promote the green economy or economic regeneration in especially deprived areas.

5.2 We would also welcome any further refinement which addressed the issue of car and heavy vehicle ‘values of time’ being higher than those for green modes (public transport, cycling and walking). This has historically worked against schemes designed to promote shift to green modes and has given ‘road based solutions’ an economic advantage. We would also welcome any advance in the assessment system to promote forward funding of essential transport investments needed to attract major international investors.

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

6.1 It is anticipated that in the future new major schemes will be generated through Local Economic Partnerships which will be influenced and led by the Private Sector. It is envisaged that the LEP will first agree a joint economic strategy for a functional area. A prioritised programme of transport interventions needed to facilitate the delivery of the economic strategy would then follow.

6.2 There will, inevitably, still be a role for the local authority to work outside the LEP to plan smaller more local schemes. These schemes would be generated through the Local Transport Plan (LTP) which we intend in the future to be more closely aligned and coordinated with the LTP of the neighbouring East Riding of Yorkshire Council to provide a more meaningful response to the transport needs across the functioning Hull travel to work area.

6.3 Some concerns do exist that on occasions a joint response to infrastructure planning issues will be needed at a level higher than individual LEPs and lower than the national level. Examples where this would be sensible include involvement with the Highways Agency and Network Rail in terms of network and service improvement changes. To this end the Regional Development Agencies and the Northern Way have proved useful in the past and if groups of LEPs come together to agree wider responses it is difficult to foresee whether they will have the dedicated resources and expertise to take the necessary lead on the coordination of national transport planning. This will need groups of local authorities to create a single voice.

6.4 The potential loss of local knowledge embedded in the local Government Office is also a cause for some concern and it is hoped that sufficient resources will be made available to the DFT central office to be able to respond to the needs of local authorities and to give informed guidance on transport issues at a local level.

October 2010