High Speed Rail - Transport Committee Contents

Written evidence from the Core Cites Group (HSR 76)


1.1  The Core Cities Group is a network of the local authorities of England's eight largest city economies outside London: Birmingham; Bristol; Leeds; Liverpool; Manchester; Newcastle; Nottingham; and Sheffield. These cities drive their local economic areas and make a very significant contribution to the national economy. Working in partnership, we aim to enable each Core City to enhance its economic performance and make them better places to live, work, visit and do business. We work in partnership with Government both to influence policy and to develop new ideas, based on knowledge of what works on the ground, to improve economic performance and reduce dependency. The Core Cities Group has a track record of more than 10 years, led by the City Leaders across all parties.

1.2  England's Core Cities are the main drivers of the country's economy outside London and the South East. Together their primary urban areas deliver 27% of the national economy,[13] more than London, and contain 16 million residents.

1.3  All eight Core Cities have expressed strong support for High Speed Rail (HSR) as being in the national economic interest, including those that are not completely central to the proposed route, because they see clear benefits in terms of rebalancing the national economy, and related benefits to their cities from the release of capacity on the classic network.

1.4  The Core Cities therefore see HSR as a central component of a coherent national rail strategy, which will release capacity, rebalance the economy and support growth in important economic sectors, which would otherwise be constrained through a lack of connectivity.


2.1  The role of cities and other urban areas is central to delivering national economic outcomes, reducing dependency (and therefore public spending), and in driving growth and increasing productivity (and tax revenues). The Core Cities have repeatedly demonstrated their commitment to these objectives and are able to drive faster, increased growth in private sector jobs if given the tools to do so. Supporting growth in the Core Cities is vital to help in rebalancing the UK economy.

2.2  With more decentralised institutional arrangements around governance and public finances, England's Core Cities would be able to deliver greater economic outcomes for the UK. Other European and international cities have far greater powers, local autonomy and ability to raise revenue locally than UK cities, and even our counterparts in Scotland have enjoyed greater freedoms, evidenced by the early introduction of Tax Increment Financing by the Scottish Parliament. The impetus to devolve powers, localise spending and revenue raising and extend the influence over wider functional economic areas must continue and this will only enhance the ability of cities and their economic areas to achieve faster economic growth outside of London.

2.3  Recent independent forecasts[14] have demonstrated that the new Core Cities' Local Enterprise Partnership areas are capable of producing an additional one million jobs and £44 billion of GVA over the next 10 years, dependent on a number of factors that will influence competitiveness and growth. A vital factor in supporting growth and competitiveness is investment in infrastructure, including transport, both within and between the Core Cities.

2.4  The evidence from the modelling that has been done strongly suggests that economic growth will occur as a result of such investment. We are initiating work to review the evidence base for investment in transport infrastructure both within and between Core Cities, in work led by Volterra and Arup, and including Oxford Economics, Greenguage21 and KPMG. We would be glad to make this available to the Transport Select Committee upon its completion, which for the initial stage of work will be mid June.


3.1  Our business partners and councils believe that there is a compelling economic and environmental case for HSR and we are committed to bringing it to our cities. A national HSR system is currently (perhaps conservatively) estimated to:

(a)  directly create 30-40,000[15] jobs and support up to a million more;[16]

(b)  reshape and rebalance the economic geography of Britain, closing the gap between the South East and the rest of the country;

(c)  deliver £125 billion[17] of economic benefits over 60 years (£111 billion direct benefits, £14 billion wider economic impacts);

(d)  cut carbon by 1 million tonnes a year and safeguard the environment;[18] and

(e)  allow Britain's economic infrastructure to compete with the rest of the world for business.

3.2  A scheme of this ambition means there will be some tough decisions, but this is a moment to think big about the future of our country and economy. If we want growth for the long term, we need this infrastructure to deliver.

3.3  The Core Cities will drive Britain's economic recovery, but need to have the infrastructure to be able to do so. Businesses will lead the economic recovery and they need good connectivity to reach their markets. For major business to prosper it needs speedy, reliable access to other cities, London and international gateways. Businesses serving the local economy need access to more broadly focused companies in other cities if they too are to prosper. Business location and expansion decisions are based on a long term view; there is value to business in knowing that there is an agreed plan for the future, and this is highly likely to influence investment decisions by global companies prior to HSR completion.

3.4  HSR and as an initial step HS2 are critical components of achieving our "best case" growth scenarios. Our collective view is that this investment should take place, but that two additional elements of investment need to be explicitly factored in to the national strategy.

3.5  Firstly, the network must also make significant improvements in the connectivity to those Core Cities that will not initially be served by HSR, both through electrification where it does not currently exist, and through improved capacity and rolling stock between them and the other Core Cities / London.

3.6  Secondly, local transport investment within the Core Cities urban areas must not be jeopardised by HSR and should continue in such a way as to make the improvements that will be necessary both to deal with improved links to and from HSR hubs, and to greatly improved commuting capacity within the travel to work area. Investment in city region transport networks is vital in order to ensure that the benefits of HSR are maximised and spread across each city region. This investment will also benefit the majority of journeys that take place principally within city regions, and which are the lifeblood of these economies. HSR needs to be part of an on-going improvement in the UK national rail network.

3.7  This will require a creative approach to investment, exploring the use of new financial instruments like Tax Increment Financing, the devolution of transport funding and the pooling of capital finance at the local level to create greater efficiency and greater leverage on private sector investment to generate economic growth. It also means that the available investment should be focused on those places that can deliver economic growth, using the potential for jobs and increased economic output as a clear metric in investment decisions.

3.8  Tax Increment Financing has been linked to the Local Government Resource Review. Although we understand the reasoning behind this, we believe that there is no reason why we should wait to implement a first wave of TIF projects, some of which will include a local transport element.

3.9  The Core Cities Group is tabling an amendment to the Localism Bill which would provide a route for ministerial delegation that could be used for a number of purposes, including the delegation of elements of transport funding to local areas. This is an enabling amendment which creates reserved powers expressly for decentralisation. We would be happy to share further information on this and will make it available to the Department for Transport.

3.10  The decision making process for local transport investment will also need to be simplified. We give as an example the tram system in the city of Nottingham. It is an excellent example of how transport investment can help to transform local economic prospects. However, it has taken more than 14 years to build one and approve a second tram route in Nottingham, whilst its twin city, Karlsruhe in Germany, has built 11 tram routes within the same period around an existing system, due to the greater levels of local freedom in decision making and investment in transport infrastructure. If we want our cities to compete on a level playing field internationally, this situation cannot continue.


4.1  Britain faces a long term economic challenge to move into recovery and growth, and in creating a sustainable economy for the future. The UK is competing on an international stage under increasing pressures from both EU and new emerging economies, who have more decentralised public finances and see investment in infrastructure as critical to their success. Reduced funding to the public sector in the UK places an emphasis on private sector jobs and growth, which our cities can deliver. Britain needs the South East's economic contribution, but we can also unlock greater growth elsewhere by investing in HSR. These are important local and national issues, but the importance of investment in HSR can only really be understood in a global context; if we do not invest, we will quickly fall even further behind the current leaders.

4.2  It is our cities that will drive this growth outside the South East and underpin the national economy. The Core Cities and their primary urban areas alone produce 27% of England's economic output, more than London. They could do more with the right infrastructure in place. Our view is based on evidence, set out below.

4.3  Nations across Europe are investing in HSR, and this is both a threat and an opportunity: it makes other countries a better location for investment, but it offers the prospect of getting multiplier benefits from our own investment by linking to European networks.

4.4  The nation has a massive infrastructure deficit—£500 billion[19] over the next decade on Government estimates—and we lag behind our closest competitors. The UK ranks only 34th in the world for its infrastructure, behind Saudi Arabia and Malaysia, and 6th amongst the G8 countries.[20] 1.5% of UK GDP is spent on infrastructure compared to 6% in Japan and 3% in France, contributing toward France having 20% greater productivity despite its less flexible labour markets.[21]

4.5  This is not a situation that can continue if we want to be globally competitive. The OECD states that infrastructure investment should be one of the top three priorities for the UK over the medium term, and this has been highlighted as a priority for many years. The Centre for Policy Studies' "Conditions for Growth" report focuses on how government policy can help to improve the UK's emergence from the recession. It identifies infrastructure as one of the most important areas where continued investment can support future economic growth and recovery. The CBI has repeatedly called for continued investment in infrastructure, and particularly transport, to help drive private sector growth and wider economic growth. Other economies are quickly catching up and we stand to lose out in an economically critical period.


5.1  A recent study by Oxford Economics[22] showed that the newly designated "Local Enterprise Partnership" areas around the eight Core Cities alone could produce an additional one million jobs and £44 billion economic output over the next two years, dependant on a number of growth factors, including infrastructure investment. Congestion costs business £23.3 billion a year. HS2 is an important first step to avoiding this costly problem. An additional £125 billion in growth will result from a national HSR network.

5.2  Carbon emissions are growing and oil prices are rising, with "peak oil", the moment at which production will decline, around the corner. HSR will move 30 million journeys from other modes to rail and save one million tonnes of carbon, every year.

5.3  Therefore HS2 is a vital first step to unlocking massive economic and environmental improvements locally and nationally, making us globally more competitive. We will shortly reach capacity on existing lines and simply upgrading what we have is not sustainable, and neither is just building more roads; there is no plan B.

5.4  Investment in a national HSR network will:

(a)  strengthen existing and generate new economic and business flows and interactions, worth £125 billion[23] to the economy over 60 years (£111 billion direct benefits, £14 billion wider economic impacts);

(b)  at £69 billion, more than pay for itself in a relatively short period of time;

(c)  decrease congestion and travel-time wasted, which costs £23.3 billion[24] a year, improving productivity and performance;

(d)  increase rail and decrease air and car journeys respectively by 30 million passenger trips and 13 million car journeys by 2055;[25]

(e)  widen labour pools and increase employment opportunities, creating 30-40,000 jobs directly and supporting a million more;[26],[27]

(f)  provide a catalyst to improve local public transport networks;

(g)  enable new business and economic flows between cities;

(h)  reduce carbon emissions by 1 million tonnes a year, improve air quality and achieve targets;[28] and

(i)  bring UK infrastructure up to competitive international standards.

5.5  We are calling for the UK to follow China, Spain, Japan and France—world leaders in HSR—and implement a comprehensive high speed network serving the whole of the country. Earlier this year President Obama made a commitment to improving America's transport system through promoting a HSR network and earlier this week the transportation secretary has re-emphasised the commitment to modernising the nation's infrastructure. A new high speed line serving the length of the UK is capable of providing capacity for 15,000 passengers an hour each way: twice the capacity of the West Coast, East Coast and Midland mainlines together. The use of double-deck trains would also increase the capacity of the line by 40%. A new high-speed line would not only significantly boost the national infrastructure itself, but also release capacity on the existing network when long distance services transfer to the new line. This radically opens up the opportunity to provide new services where previously there were none and to improve the quality of existing services, expanding business and employment potential through improved commuter networks.


6.1  The Prime Minister has stated that the rebalancing of the economy, by geography and by sector, is a top Government priority. The South East has benefitted from significant transport investment, above and beyond that in the Core Cities when measured either by population or by GVA output per head of population.[29] England's Core Cities require an improved national transport network in order to complete their economic restructuring away from more manufacturing based economies toward knowledge and service based industry. London has had specific advantages in this respect, and although we all need London to succeed, HSR would support the move toward a more "multi-centric" national economic model, supporting further growth in sectors and geographies that require improved connectivity. This is fundamentally an issue of greater national competitiveness, achieved through the improved competitiveness of our big wealth producing urban areas. Understanding which sectors of the economy are likely to grow in different cities and in which parts of the city regions this growth is likely to take place, will all be crucial factors in planning appropriate transport investment.

6.2  HSR has the potential to radically transform the economies not just of major cities, but also of surrounding connected towns and cities, extending advantages far beyond the stations that it directly serves. Ensuring that HSR is properly integrated into the classic rail and public transport networks in the city regions will mean that the maximum number of people benefit from the advantages of the network, reducing journey times for business and leisure. The regeneration benefits of HS2, the first stages of a full network, will ripple out into a much wider catchment area, creating jobs for people living in towns, villages and cities in the surrounding areas.

6.3  The country's existing rail infrastructure is currently reaching capacity; to date we have responded by upgrading what is already there. This is no longer sustainable, nor is it good value for money. Modernisation of the West Coast Mainline was due to cost £2 billion, take six years, and deliver maximum speeds of 140mph. In fact the final scheme cost £8.8 billion, took nine years, and provided for maximum speeds of 125mph. Despite this work, the line is expected to reach full capacity by the early 2020s, and some sections much earlier than this. In addition to the West Coast Mainline there are capacity problems on the East Coast, Midland and Great Western Mainlines. It is clear that given the strategic importance of these lines to the economy, we cannot suffer years of disruption and delay for upgrades which will not deliver what is needed, and must instead plan for a new high speed rail line which runs in addition to the existing classic network.

6.4  According to The British Chamber of Commerce, congestion costs business £23.3 billion a year. A full HSR network linking the major cities of the UK would cost up to £69 billion and would generate over £125 billion of economic benefits. These benefits are derived from improvements in journey times, and crowding, reductions in road congestion, environmental improvements and the economic benefits arising in the release of capacity on the conventional rail network. It also includes the beneficial effect on the productivity of businesses through changes to employment patterns and agglomeration effects.

6.5  Furthermore, we believe that the existing methods of appraisal are likely to underestimate the potential benefits of HSR to the UK economy. Analysis of the economic impact of High Speed One (HS1)[30] showed that even if only 5% of the regeneration benefits and growth around stations on the HS1 route were considered to be additional and as a direct result of the HS1 investment, then this would amount to £10bn of regeneration benefits which would more than double the estimates based on existing evaluation guidance (which arrived at estimates of £7.6 billion of benefits), highlighting the potential scale and scope of benefits associated with HSR in this country. This is mission critical to UK PLC, seeking to compete in a global market place in the 21st Century with a currently fragmented infrastructure that will not match that of our closest economic competitors.


7.1  We believe that HSR, and HS2 as a first step, has considerable environmental as well as economic advantages. At a time of increasing concern over climate change and carbon emissions, HSR has the potential to assist in the meeting of the UK's carbon reduction and air quality targets by attracting passengers from domestic air services and private car journeys.

7.2  At average loadings, high speed rail emits 30g of carbon per passenger kilometre, compared to 120g for aviation, and 105g for car (new car average) meaning that for every journey transferred from plane to rail CO2 emissions are reduced by 75%, and 71% for car to train transfers. However, rail, being electrically powered, is only as clean as its energy source; which at present is some of the most carbon intensive in Europe. The Climate Change Act 2008 committed the country to an 80% reduction in greenhouse gasses by 2050 on 1990 levels. With these proposals put it place it is conceivable that HSR could reduce its carbon output by 96% by 2055 to 1.3g of carbon per passenger kilometre. Measures to reduce the environmental impact of plane, and improvements in electric car technology could see their carbon emissions reduced to 51g for planes and 4g for car.

7.3  Forecasts suggest that by 2055 a full HSR network could be carrying 30 million journeys which would otherwise be made by air, and 13 million from car journeys. This would indicate that high speed rail could deliver carbon saving of around one million tonnes per year, but a full national network is needed to create this modal shift.

7.4  Our final point is that high speed railways are high capacity railways (for example the TGV offers up to 1090 seats in twenty coaches compared with the 439 seats that the nine-cars of a Pendolino can offer) and this will result in significant carbon savings.


8.1  Evidence from elsewhere in Europe has shown that where a journey can be made in under three hours, rail can capture 50-60% of the market from airlines—a figure that grows to 90% if the journey takes less than two hours. And in a country the size of the UK, no two major cities need be more than three hours apart via high speed rail. In Europe, the introduction of a high speed service between Madrid and Barcelona saw rail increase its share of the market from 16% to 48%, with a further rise to 70% forecast.[31] High speed services between Paris and Brussels quickly took a 95% market share.[32]

8.2  Whilst aviation will always have an important role in economic development; significant modal shift from plane to train will also free up slots at airports which can then be used for more valuable international journeys, reducing development requirements at and around airports, and strengthening the UK's competitive position.


9.1  Our cities and business partners believe the time has come to recognise the step change in economic and environmental performance that can be brought about through high speed rail. We are supporting the implementation of HS2 as a first step toward a comprehensive high speed rail network linking all our cities, to provide the UK with the domestic infrastructure necessary to compete in the international marketplace. HSR has already demonstrably achieved the required results elsewhere in Europe and across the globe, and can work here in Britain.

9.2  With HSR the goal of a united, strong and sustainable British economy, allowing growth to happen in many places and delivering benefits across the whole of the country can be realised. Although only part of the economic and environmental solution, the view of these cities is that without it we will fall short of meeting both our ambitions and our needs, and increasingly be perceived as a less attractive international business location.

May 2011

13   NUTS3 data Back

14   Oxford Economics in, Our Cities, Our Future, Core Cities 2011 Back

15   "HSR in Britain: Consequences for employment and economic growth", KPMG for Greengauge 21, 2010 Back

16   "Our Cities, Our Future", Core Cities Group 2011 www.corecities.com NB, dependent on local and global economic influences Back

17   "Fast Forward: A High-Speed Rail Network for Britain" Greengauge21, 2009 Back

18   "Fast Forward: A High-Speed Rail Network for Britain" Greengauge21, 2009 Back

19   "Delivering a 21st Century infrastructure for Britain", Helm, D, Wardlaw, J & Caldecott B, Policy Exchange, 2009 Back

20   World Economic Forum's Global Competitiveness Report (WEF 2009-2010) Back

21   "Avoiding the Infrastructure Crunch", Association for Consultancy and Engineering, 2010 Back

22   "Our Cities, Our Future", Core Cities Group 2011 www.corecities.com  Back

23   "Fast Forward: A High-Speed Rail Network for Britain" Greengauge21, 2009 Back

24   British Chamber of Commerce Back

25   "Fast Forward: A High-Speed Rail Network for Britain" Greengauge21, 2009 Back

26   HSR in Britain: "Consequences for employment and economic growth", KPMG for Greengauge 21, 2010 Back

27   "Our Cities, Our Future", Core Cities Group 2011 www.corecities.com Back

28   High Speed Rail Development Programme Principal Consultant Final Report, SYSTRA-MVA, August 2009 for Greenguage21. Back

29   The pteg Funding Gap Report, 2010 Back

30   The Economic Impact of High Speed One, Colin Buchanan and Volterra Consulting, January 2009 Back

31   "Fast Forward: A High-Speed Rail Network for Britain" Greengauge21, 2009 Back

32   "Threats and opportunities for High Speed Rail transport in competition with the low cost air operators", CENIT (Center for Innovation in Transport, Barcelona, Spain 2003 Back

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© Parliamentary copyright 2011
Prepared 8 November 2011