Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Supplementary memorandum by the Passenger Transport Executive Group (RI 16B)

1.  DETR 10 YEAR PLAN AND RAIL INVESTMENT

  1.1  In October 2000 the West Yorkshire Passenger Transport Executive commissioned Steer Davies Gleave to undertake a brief analysis of the expenditure profiles set out in the 10 Year Transport Plan—Transport 2010. This work updates a previous analysis by the West Yorkshire Passenger Transport Executive which demonstrated that during the period 1985-95 the UK had spent significantly less (both per capita and as a proportion of GDP) on transport investment than other EU member states.

  1.2  This note summarises out findings in respect of rail investment.

2.  INTERPRETATION OF THE 10 YEAR PLAN FUNDING PROFILE

  2.1  The Plan is relatively explicit over its assumptions which is important in allowing identification of proposed infrastructure investment. Table 2.1 summarises the assumed capital spend over the 10 year period.

Table 2.1

SUMMARY OF CAPITAL SPEND
Capital Investment Nominal Private

Public

TotalAt 2000 Prices Private
PublicTotal
Rail134.314.7 249.029.612.7 42.3
Strategic Roads2.613.6 16.22.211.4 13.6
London10.47.5 17.98.76.3 15.0
Local Transport39.019.3 28.37.716.2 23.9
Other0.7 0.70.9 0.9
Unallocated9.0 9.07.1 7.1
Total56.364.8 121.148.154.6 102.7


  Notes:

  1 The figures assume that 60 per cent of this investment is funded through the farebox—therefore a proportion of this capital expenditure is actually public support.

  2 Of the £49 billion, some £38 billion is for network replacement and enhancement, £7 billion for replacement vehicles and fleet expansion, and the final £4 billion for network enhancements to accommodate freight services.

  3 The £9 billion of private investment on local transport includes some £5 billion on new vehicles (essentially buses) that are funded through increased demand for services.

3.  RAIL INVESTMENT

  3.1  The 10 Year Plan expenditure on rail investment has been analysed as a proportion of GDP, reflecting an "ability to pay". This analysis assumes future inflation at 2.5 per cent per annum and growth in GDP of 2.25 per cent per annum, in line with Government guidance.

  3.2  Figure 3.1 below shows the 10 Year Plan proposals superimposed on a graph of UK and EU member state rail investment over the period 1987-96. Figure 3.1 demonstrates that in the early years expenditure exceeds average EU member state levels of the past decade. However, the profile fails to keep pace with expectations of economic growth and reduces to past levels of investment towards the end of the Plan period. The significant peak in the graph in the early years of the Plan is most likely reflecting the significant backlog in infrastructure investment caused by under-investment over the past decade.


  3.3  It should also be noted that throughout the 1990s a similar amount was spent on rail and local transport. Rail is forecast to take a much greater share of funding than local transport throughout the 10 year Plan period. The implication of this is that the legacy of under-investment in rail may be addressed at the expense of local transport investment.

Kieran Preston

Director General, West Yorkshire PTE

December 2000


 
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