Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Memorandum by the Department for Transport, Local Government and the Regions (TYP 28)

  The Plan makes a number of assumptions including factors such as motoring, public transport and fuel costs and land use policy.

    —  What assumptions should be modified or challenged?

    —  How important are the assumptions to the outcome of the plan? What remedial action is necessary if assumptions or targets need to be changed?

  1.  The 10 Year Plan provides the overarching framework for securing real improvements to our transport system over the next decade, across all transport modes, and the resources needed to deliver them. The long-term perspective taken in the Plan represents a significant departure from previous practice and has been universally welcomed. But any long-term Plan needs to have the flexibility to adapt to changing circumstances.

  2.  As envisaged in the document itself, we will be undertaking a first review of the Plan later this year, alongside the forthcoming biennial Government spending review. This first review of the Plan will take account of progress and events since its publication, and their possible implications for the delivery of the targets and objectives it set out.

  3.  The projected outcomes set out in the 10 Year Plan and the analysis of its impacts were inevitably dependent on a wide range of assumptions. These cover both underlying trends over the next decade and changes due to implementation of the Plan. The assumptions used were described in some detail in the supporting document Transport 2010: The Background Analysis.

  4.  Since the Plan was produced we have been developing a new multi-modal National Transport Model to replace the National Road Traffic Forecasts and other models previously used. This new integrated model is still under development, but should be available to inform the forthcoming review.

  5.  A description of the new model and details of the assumptions applied, both in the model and elsewhere in the Plan review, will again be made explicit in supporting documents. The new model will include new, up-dated assumptions on the factors mentioned where appropriate, including on GDP growth. On fuel costs, however, although these fluctuate from month to month as the price of oil changes, we do not at present see any reason to change the original long-term assumptions. Sensitivity testing of the key assumptions will be included as part of the review work.

In particular, will the expected number of congestion charging and workplace parking levy schemes be implemented and when?

  6.  The 10 Year Plan included a working assumption about the number of local road user charging and workplace parking levy schemes that would be operating in towns and cities across the country by 2010. Modelling of the Plan outcomes assumed that such schemes would be making a small contribution, alongside other more significant measures, to reduced levels of congestion and pollution in 2010. The modelling made no assumption about the timing of any such schemes within the 10 year period, although the experience of authorities such as Bristol and Nottingham suggests that it will take four or five years to develop and implement an urban congestion charging scheme. The congestion charging powers in the Transport Act 2000 are of course permissive, and the actual outcome is therefore ultimately dependent on decisions taken by individual local authorities. At this stage we have no reason to change the assumptions in the Plan, but we will be re-examining these in the forthcoming review.

Are the skills and capacity available to deliver the improvements suggested?

  7.  There are concerns within the transport sector and elsewhere about actual and potential skills shortages in certain areas. The new levels of investment set out in the 10 Year Plan will certainly increase the demand for skilled workers throughout the transport sector, as well as in the construction industry and in some local authorities. Changes within the transport industry are also demanding new types of skills—in management, customer care and ICT for example.

  8.  These new demands require a new approach to training and recruitment. As part of the delivery of the 10 Year Plan we need to move away from the short-term perspectives of recent years and towards long-term planning and skills improvement across the transport sector.

  9.  Part of the solution lies within the 10 Year Plan itself. Feedback from employers suggests that one of the main barriers to better practice has been the lack of longer term investment framework for transport. By providing such a framework and putting an end to stop-go funding patterns, the 10 Year Plan should provide employers with the greater certainty they need to invest in recruitment, training and skills development for the longer term.

  10.  My Department is already taking action in a number of specific areas in collaboration with the Department for Skills and Education, transport operators, National Training Organisations, the education sector, trade unions, professional institutions and others. There is a wide range of initiatives now under way. Examples include new programmes to improve skills within the rail industry and to produce more and better-qualified transport planners. Other initiatives are being led by the Freight Transport Association, the Institute of Civil Engineers and the construction industry. We will be bringing all the various interests together at a seminar in February, hosted jointly with the DfES and the CBI, to pool experience and consider further steps.

Implementation of the Plan depends on the provision of a mixture of public and private sector finance.

    —  How will the current situation in the railway industry affect the need for provision of private and public sector finance?

  11.  The Plan envisages the need for substantial public and private sector investment in the Railways, and the current situation in the industry has not altered that requirement.

  12.  Railtrack plc was taken into administration by the courts because the company was insolvent or likely to become so. The Government stands behind the rail system and is prepared to commit substantial new investment through the 10 Year Plan to ensure a radically improved rail network. But it is not prepared to fund the poor performance of individual companies and the interests of their shareholders. A review of railway regulation is being carried out as part of the long-term aim of achieving a more efficient and responsive railway. This in turn will make it easier to attract private finance. The Government also believes that, if Railtrack's successor is a company limited by guarantee, further efficiencies could be achieved. These considerations will feed into the review of the 10 Year Plan.

  13.  The Government has already committed an extra £4 billion of public funding since the 10 Year Plan was published, bringing the total for rail to £33 billion over 10 years. The Government is confident that sufficient levels of private sector investment will be available to the industry going forward, and it will look to the Strategic Rail Authority (SRA) to lever that investment in. More details of the SRA's strategy for attracting private sector funding for the railway will be set out in their strategic plan, due to be published on 14 January. The SRA will send copies of the plan to the Committee when it is published.

Is the balance and phasing of investment across funding areas correct? Should the plan represent a better balance between large and small schemes, and between infrastructure, management and operations?

  14.  The funding allocations and profiles in the 10 Year Plan represented the Government's then best assessment of what was needed to secure delivery of the outcomes set out in the Plan.

  15.  The Plan envisaged that the balance and profile of funding in the Plan would be reappraised periodically, as specific projects emerge and policies are developed (see paragraphs 5.5, 5.9 and Annex A3). Such reappraisal will be part of the forthcoming review.

  16.  Approximately one third of the funding in the Plan is allocated to local transport schemes for use by local authorities in accordance with their own local transport plans. Although some of this will be used for larger local road and public transport schemes, most will go to fund tens of thousands of smaller projects over the next decade—for example, schemes to facilitate walking and cycling and to improve road safety and traffic management. It is for local authorities to determine in detail the appropriate mix of investment locally in accordance with their local transport plans, but we have made it clear that, on the basis of the local transport plans received covering the first five years of the Plan period, we expect that the majority of local transport funding will be spent on smaller schemes and improved maintenance.

  17.  Inevitably the 10 Year Plan itself included more detail on major national infrastructure projects. This reflects the fact that final decisions on these are made at national level, and also the scale of some of the individual projects involved. However, even where the national rail and strategic roads networks are concerned, significant amounts of funding will be devoted to relatively small schemes—for example through the Highways Agency's current programme of safety and congestion improvements and the SRA's Rail Passenger Partnership Scheme—and to maintenance.

Are more flexible financing arrangements required to deliver major local schemes?

  18.  The current arrangements for the financing of major local transport capital projects provide a range of options for local authorities.

  19.  The most common are projects financed through a mixture of credit approvals and specific grants (Transport Supplementary Grant given under Section 87 of the Local Government Finance Act 1988; and Public Transport Facilities Grant, issued under Section 56 of the Transport Act 1968).

  20.  Other existing mechanisms include procurement through the Private Finance Initiative or through specific public-private partnerships such as those established for the procurement of large light rail schemes. These involve a mix of funding sources: credit approvals and grants during the construction phase, and PFI credits to support availability payments during the operations phase.

  21.  Funding for transport improvements can also be secured through agreements under Section 106 of the Town and Country Planning Act 1990, which provides the opportunity for authorities to facilitate transport improvements through the development process.

  22.  The recent Local Government White Paper Strong Local Leadership—Quality Public Services set out our plans to abolish credit approvals and replace them with a new local prudential regime. This will allow authorities to decide for themselves how much to borrow, provided that they can afford to service the extra debt without Government support. However, the Government will continue to provide support for the major part of authorities' capital programmes.

  23.  We have also provided local authorities with the powers to introduce road user charges and workplace parking levies, revenues from which are required to be spent on improving local transport.

How do the emerging multi-modal studies affect the 10 Year Plan?

  24.  As the Plan made clear, the recommendations from the programme of multi-modal studies will be a key element in determining which solutions and packages of measures are chosen to tackle the problems on many of our major transport corridors. The studies seek to provide long-term strategies for these corridors; the 10 Year Plan provides the resources to implement agreed schemes arising from the strategies over the period to 2010.

  25.  Decisions have now been announced on two of the studies. Recommendations have been produced by two others, and most of the remainder are due to report over the next 18 months. The studies' recommendations will have a significant impact on the selection and prioritisation of major transport schemes over the next decade and beyond.

The Plan sets a number of targets for growth in areas such as travel by rail and bus and reductions in factors such as congestion and vehicle emissions.

    —  Are the targets and the dates for their achievement well designed (eg is reducing congestion the right objective)?

    —  What other targets, if any, should be included (eg modal shift, walking, traffic levels?)

    —  Should a more regional approach be adopted for target setting?

  26.  The Government stands by the targets and objectives set out in the Plan. Although these will fall within the compass of the review, we would not expect any major alteration of the existing targets at this early stage.

  27.  The targets set out in the Plan are, in the main, national ones. It is open to regional bodies, as well as local authorities and the Mayor of London, to develop their own targets in the context of the transport strategies for their areas. Indeed all highway authorities outside London have set targets for their areas as part of their Local Transport Plans.

The 10 Year Plan is the investment plan to deliver the Government's integrated transport policy.

    —  How well does the Plan balance social and environmental policy with efficient investment?

    —  Does the Plan set out a balanced approach to all modes (eg walking)?

    —  Are there any conflicts between the Plan and the policies in the White Paper—A New Deal for Transport?

  28.  The Plan aims to address all transport impacts, including environmental and social ones. It also seeks to ensure that transport policy promotes sustainable development and contributes fully to the achievement of other Government objectives, in particular those listed at paragraph 1.9 of the Plan.

  29.  The Plan represents a departure from previous practice in adopting a multi-modal approach to transport investment. As such it seeks to secure an appropriate overall balance between investment in different modes, taking account of its underlying objectives. In many cases, however, the balance is not determined in detail within the Plan, but will be decided by local authorities through their Local Transport Plans, through the London Mayor's Transport Strategy, and through the recommendations of the multi-modal studies. It will be for local authorities to determine the appropriate mix of investment for schemes within their areas, including measures to promote walking.

  30.  The 10 Year Plan is based on the policies set out in the earlier Integrated Transport White Paper. It aims to provide the resources and the improvements in transport infrastructure and services needed to put those policies into practice.

What impacts will policies in the European White Paper on Transport have on the Plan?

  31.  The analysis of transport problems set out in the European Commission's White Paper on Common Transport Policy is broadly similar to that in the 10 Year Plan. We are currently conducting a consultation exercise on the policies the Commission proposes to tackle these problems. The consultation closes at the end of January and we will not reach final conclusions on the proposals until we have analysed the responses. However, we will be looking to ensure that any legislative proposals that emerge from the White Paper are consistent with, and where possible contribute to, the delivery of our 10 Year Plan objectives.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 27 May 2002