Written evidence from the Core Cites Group
(HSR 76)
1. THE CORE
CITIES GROUP
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. THE ROLE
OF CORE
CITIES IN
DRIVING GROWTH
AND REDUCING
DEPENDENCY
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. SUMMARY OF
OUR POSITION
ON HSR AND
HIGH SPEED
2 (HS2)
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. A NATIONAL
CHALLENGE: IMPROVING
COMPETITIVENESS FOR
THE LONG
TERM
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. THE EVIDENCE
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. HSR AND REBALANCING
THE ECONOMY
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. CLIMATE CHANGE
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. JOURNEY TIMES
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. CONCLUSION
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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