4 Future of the Severn Crossings|
69. As we have previously mentioned,
the Severn Bridges Act 1992 established the conditions under which
the concession will end. Severn River Crossing Plc will continue
tolling until "it appears to the Secretary of State that
the revenue requirement has been met",
subject to a maximum of 30 years. The Act states that the revenue
requirement is met:
... on a day if the aggregate amount of toll income
received by the concessionaire on or before that day is equal
to or greater than the amount which he is entitled to receive
in accordance with the concession agreement.
The amount the concessionaire is entitled to receive
in accordance with the concession agreement is a cumulative revenue
of £995,830,000 expressed in July 1989 prices.
The Highways Agency reviews the projected concession end date
every six months using data supplied by Severn River Crossing
Plc to gain assurance that the revenue target will be recovered
within the concession agreement. Earl Attlee, Government Spokesperson
for Transport, stated on 19 July 2010 that "the end date
is currently predicted to be the first half of 2017".
70. Jim Clune, General Manager of Severn River Crossing
Plc, commented that the company had had no discussions with the
Department for Transport regarding handover arrangements.
In contrast, the Deputy First Minister for Wales stated that "because
of the strategic importance of the bridges to Wales, there is
quite a lot of discussion with the Department for Transport":
I have had a meeting with the Secretary of State,
but I know that [...] officials have had many discussions with
the department about the bridges, the tolls, and the impact, and
what happens when the concession period and the maintenance period
end, and what happens in the future.
Toll prices following handover
71. Under the Severn Bridges Act, once the Severn
Crossings return to public ownership the Highways Agency may continue
to levy tolls for a further five years to establish a maintenance
fund for both crossings.
72. Witnesses agreed that this was an "ideal
opportunity to introduce flexibilities to the pricing structure".
The three main options for the future strategy in relation to
the toll were set out:
- Removing the toll;
- Retaining the toll at the current level with
the money earmarked for transport infrastructure improvement;
- Reducing the tollthis would offset some
of the other increases in the cost of road transport while providing
an income stream.
73. We heard a range of views regarding the future
of the toll prices. The majority of witnesses recognised the need
to retain a toll in order to ensure that the maintenance needs
of the crossings were met. The Freight Transport Association commented
that it understood:
... that once back in public ownership the integrity
of the Crossing must be maintained. The revenue for this should
rightly come from the user.
Denise Lovering, Director of Glenside Commercials
accepted that "there has to be a toll, but at a lower level,
and that is to maintain the superstructure and perhaps the people
who have to take it".
74. Witnesses commented that the Government had to
resist "the temptation of looking to cash in from revenue
from unrelated artificially high charges".
Denise Lovering agreed that the crossings should not be seen as
a "cash cow" for the Government.
75. Many of the witnesses argued that the toll should
be reduced to a "much fairer level"
or to a level that would cover the operational and maintenance
needs of the crossings. Chris Yewlett from the Chartered Institute
of Logistics and Transport (UK) Cymru Wales noted that the maintenance
of the bridge would be a "small fraction of the current toll
compared with the original construction".
Dr Andrew Potter agreed that "If you charge the toll just
to cover maintenance on an annual basis, that would keep that
out of the public purse and find a way of funding it by users".
76. Other witnesses argued for a continuation of
the current level of tolls, with the money earmarked for specific
infrastructure work in South Wales.
Robin Smith of the Rail Freight Group stated that the tolls:
... should be retained at a reasonable level
[...] and the money hypothecated towards a second rail crossing.
This is an interesting proposal which could bear
77. In addition, the National Alliance Against Tolls
and the Campaign Against Severn Tolls (CAST) argued that the tolls
should be abolished:
Tolls should be removed and the costs of [...]
future maintenance and repair should come from the £50 billion
that roads users pay in taxes.
78. The Deputy First Minister for Wales recognised
that a range of options existed and agreed that there was a debate
to be had over the future strategy of the crossings:
You could get to a point at which the toll is
pretty low, or you could say, 'This is an opportunity to have
investment in the wider transport infrastructure'. Provided that
the money was invested in the wider transport infrastructure,
and not just put into a general potwhich would, presumably,
be the Treasury potyou could have a debate about which
one of those options you would choose.
79. We discussed the possible levels that a future
toll could be set at with Jim Clune, General Manager of Severn
River Crossing Plc. He explained that the current total operating
cost made up of maintenance and toll collection, including the
toll collection infrastructure, was £12 million a year. In
addition, the Highways Agency spent an average of £3 million
a year on latent defects. Against this, over £6 million a
month was currently collected in tolls.
On this analysis, this suggested that the Government could make
a significant cut to the toll and still have sufficient funds
to maintain both bridges to the current required standard. With
running costs of £15 million a year, and a current yearly
income of £72 million, we estimate that the toll could be
reduced to a fifth of its current level, to approximately £1.50
while allowing the crossings to remain self-financing. We recommend
that the Government should seek to reduce the level of the toll
at the earliest opportunity. We recognise, however, that at this
level no "sinking fund" would be accumulated towards
any future replacement of either bridge.
80. The Minister refused to be drawn into an "individual
fiscal analysis of the bridge".
He did however, comment that:
It is not just about the maintenance of the bridge.
It is also about investment in further infrastructure around it
as well. Dartford is an example of that. For instance, at Dartford,
not only will the 50p increases over each year, or two years,
enable us to do the free flow, but they will actually allow free
use of the tolls when the congestion gets particularly bad so
they are not chargeable.
Methods of Payments
81. It was widely acknowledged that the crossings
need to adopt a 'more up-to-date' technology for the receipt of
tolls. Various options were considered. In its evidence, the Chartered
Institute of Logistics and Transport (UK) Cymru Wales set out
options for future payment methods:
Smartcardsprobably the most widespread
technology currently available, such as the Oyster system in London
and the concessionary pass in Wales. Any system may need to be
ITSO compliant to meet national standards and offer inter-operability
with other uses (e.g rail tickets);
Contactless paymentthis technology is
already entering the market with Barclaycard issuing cards capable
of this for purchases under £15; and
Automatic Number Plate Recognition (ANPR)used
to enforce the London congestion charge. If the technology can
be shown to be reliable at motorway speeds, this could enable
the removal of the toll plazas to increase the flow along the
motorways. However, consideration also needs to be given with
this technology to enforcement of the tolls, for both UK and overseas
82. In its written evidence, Cobalt Telephone Technologies
stated that the "secret to successfully taking credit and
debit card payments for the Severn Crossing is not to impede the
flow of traffic":
Any concept that involves actually plugging-in
physical cards and entering PINs is operationally weak [...] What
is required is a 'light touch' membership system where the motorist's
vehicle registration number is already associated with both their
credit card details and their mobile telephone number.
83. The Minister agreed that there was a need for
a more modern payment method at the crossings:
... I think that it is absolutely unacceptable
that, in the 21st century, we have barriers to try
and take money off of people when we need the money, but there
are much better ways of doing it and we can learn from around
the world how it has been done.
84. Jim Clune, General Manager of Severn River Crossing
Plc, recognised that free-flow technology was the "technolog[y]
of the future".
However, he stated that the possibility of automatic number plate
recognition technology had been considered, but explained that
the current vehicle toll classifications on the crossings did
not "lend themselves to automatic number plate recognition":
The best example that I can give is that of a
Vauxhall Corsa private car and a Vauxhall Corsa commercial van,
both of which return an identical footprint from the Driver and
Vehicle Licensing Agency. We could not distinguish between the
categories. In addition, our investigations have revealed that
the DVLA database is not 100% accurate. [...] Therefore, we have
investigated the issue of automatic number plate recognition.
It would need, primarily, a change in the toll classifications
that were established in the Severn Bridges Act.
85. Introducing a more sophisticated payment system
for the Severn Crossings would involve physically dismantling
two toll plazas. Jim Clune admitted that "given that the
end of our concession is now seven years away, the expense and
the difficulty of converting at this stage would be totally disproportionate
to the benefit".
He admitted that Severn River Crossing Plc would be more inclined
to invest if there was the possibility of a franchise to collect
the toll once it returned to public ownership.
86. Mike Penning MP, Parliamentary Under-Secretary
of State, Department for Transport, told us that he strongly favoured
free-flow technology. In discussing the current position of Severn
River Crossing Plc he stated:
I am concerned that there is a conflict of interest
here between the end game for them being 2017 [...] and actual
investment in free-flow tolling.
He expressed frustration that the current concession
agreement made it "very, very difficult" to force the
company to invest in free-flow technology:
I can force it on them, I understandI
think the Secretary of State could actually force it upon them,
but then there will be the up-front costs which may well have
to be incurred by the Highways Agency and my Department.
87. The Minister pointed out that introducing free-flow
technology would reduce operating costs:
... there will be substantial savings should
you have free-flow because you don't have the toll booths, you
don't have the costs of actually banking all that coin, and you
don't have the people collecting it and carrying it. It is a balance
between the two and I can see huge benefits to actually having
88. The Minister revealed that he was going to open
negotiations with the company to investigate the possibility of
introducing free-flow technology before the end of the concession
Future Ownership of the Crossings
89. Following the end of the concession, the UK Government
will have responsibility for the operation and maintenance of
the bridges. One of the bridges is entirely in England, while
another is partly in England. However, owing to their significance,
a number of witnesses argued that there should be shared responsibility
between the UK Government and the Welsh Assembly Government.
90. In its evidence, the Road Haulage Association
argued that due to the importance of the crossings to Wales and
to ensure that any future strategy benefited the Welsh economy,
the Welsh Assembly Government should "take responsibility"
for the Severn Crossings.
In its report, Aberystwyth University concluded that it was "anomalous
that the Severn Bridges Act 1992 vests sole power with the Secretary
of State for Transport:
there should at least be a co-decision
framework involving the Welsh Assembly Government (WAG) and the
Westminster Department for Transport.
Denise Lovering, Director of Glenside Commercials
also advocated "some sort of co-working".
While the Minister acknowledged that the crossings had a major
effect on the Welsh economy, he considered them a "piece
of British national infrastructure".
91. The Deputy First Minister for Wales told us that
that the Welsh Assembly Government would want to consider taking
ownership of the bridges. He stated that the Welsh Assembly Government
had raised the issue of ownership with the Department for Transport,
although their response was that "it is too early to have
92. The 2017 handover provides an unique opportunity
to re-examine the pricing policy for the Severn Crossings. Once
the bridge returns to public ownership and its current debt is
paid off, the cost of maintenance and toll operation will be a
small fraction of the current monies raised by the toll charges.
We believe there is a strong case for reducing the cost of the
toll and urge the Government to implement this when they take
ownership of the crossings. Annual accounts for the crossings
should be transparent and publicly available, so that the public
can differentiate between the operational and maintenance costs
of the crossings and any profit made. The Government must not
be tempted to use the crossings as a "cash cow" when
it takes over responsibility for the crossings.
93. While we welcome the introduction of credit card
payment facilities, the technology exists for more superior methods
of payments, such as free-flow technology. The current vehicle
classification system contained in the Severn Bridges Act does
not allow such technology to be implemented. We recommend that
the Government amends the vehicle classification system contained
in the Severn Bridges Act 1992 so that free-flow technology can
be implemented as soon as possible. We believe there is a strong
case to invest in free-flow technology now. We recommend that
the Government pays the concessionaire to implement it, with these
costs recouped from future profits when the concession has expired.
94. We welcome the UK Government's recognition
of the importance of the Severn Crossings to the Welsh economy
and its transport infrastructure. There must continue to be a
close working relationship between the Department for Transport
and the Welsh Assembly Government over the future strategy for
95. We look forward to regular updates from the
Department for Transport regarding its future strategy for the
105 See paragraph 5. Back
Severn Bridges Act 1992, Part 2, Section 6 Back
£1.8 billion at today's prices. Back
HL Deb, 19 July 2010, cols WA180 Back
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The Severn Bridge-Taking its toll on the Economy? commissioned
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