Transport and the economy - Transport Committee Contents

5  Local and regional transport planning

The regional level

A decade of regional planning

96. During the past decade, the previous Government established organisations to provide a level of strategic planning, representation and governance between central government and local authorities. In Scotland and Wales most transport functions were transferred to the devolved administrations; and in London many powers to plan and coordinate transport were devolved to the Greater London Authority. In the eight English regions outside London no such devolution occurred but regional bodies and plans were developed, backed with resources to promote regional economic growth. The new Government is in the process of abolishing the regional tier of planning and government in England. We have investigated the broad implications of these changes for transport.

97. Regional spatial strategies were introduced in the Planning and Compulsory Purchase Act 2004, bringing together the former regional planning guidance, regional transport strategies and regional economic strategies. They were intended to bring together strategic transport planning and economic growth plans and the infrastructure that such growth required. Local development frameworks and local transport plans, produced by local authorities, were required to be consistent with regional spatial strategies.

98. A regional funding allocation (RFA) process was introduced, whereby a partnership of local transport authorities, the regional assembly and regional development agency provided coordinated advice to government on their priorities for major transport schemes within each region. This also included Highways Agency non-national trunk road schemes.

99. The RDAs, established in 1998, provided resources—financial, technical and staff—to assist with the regional spatial strategies (which were being prepared by Regional Assemblies) and regional funding allocation and other regional level strategic transport functions. Precise arrangements varied across the English regions. In the north of England the three northern regional development agencies combined to form the Northern Way. Its Transport Compact has undertaken research, planning and lobbying on transport strategy and investment across the north of England. For example, in 2010 it submitted transport priorities for northern regions to HM Treasury as part of the Spending Review process.[137]


100. On taking office, the new Government moved swiftly to remove the regional tier of planning and governance. The Government announced that regional spatial strategies had been revoked—although, following a successful legal challenge to the way that this decision was made, regional spatial strategies have been re-instated, for now.[138] Regional government offices are to close from the end of March 2011;[139] regional development agencies have largely ceased to operate and are to be abolished by 31 March 2012;[140] and the local authority leaders' boards (the replacement in 2009 for the regional assemblies) are to lose their statutory functions.[141]

101. The Government has introduced a number of mechanisms to encourage strategic planning including a new duty to co-operate to be placed on local authorities. Recognising that local authority areas are too small for some strategic functions, the Government is promoting Local Enterprise Partnerships (LEPs)—partnerships between local government and business, based "functional economic areas". These are intended to:

    create the right environment for business and growth in their areas by tackling issues such as planning and housing, local transport and infrastructure priorities, employment and enterprise and the transition to the low carbon economy. [142]

LEPs, along with the Regional Growth Fund and other proposals, are intended to underpin future regeneration activity. The Local Growth White Paper said that LEPs would have a transport remit.

102. These changes are part of the Government's localism agenda which aims to decentralise powers to local authorities and communities. The Localism Bill, under which many of these changes will be enacted, was introduced to Parliament in December 2010. The Localism Bill provides the legal basis for the abolition of regional spatial strategies. The Bill does not, however, contain any reference to LEPs as these are not intended to be statutory bodies.


103. There was some concern amongst witnesses that aspects of strategic transport planning needed to be undertaken at a scale larger than LEPs and that local authorities and LEPs would not have the capacity adequately to develop regional or cross-regional transport proposals. Merseytravel said that the revocation of the RSS would reduce capacity to plan for larger infrastructure requirements and to balance competing needs within a region. It also suggested that this might lead to neglect of the economically weaker areas within a region.[143] Some aspects of strategic transport planning have evolved on a scale larger even than the outgoing government regions. The Northern Way's evidence suggests that its work at the cross-regional level may have contributed to securing the Government's commitment to the Northern Hub rail scheme[144] and to the relatively favourable decisions on investment in strategic road schemes in the north of England announced in the Spending Review.[145] Councillor Peter Box CBE, representing the Local Government Association, was more optimistic, however, and told us that the nature of investment had changed and that groups of authorities working together in those areas that have city region LEPs would be able to handle large scale transport schemes.[146]

104. There were also concerns about the loss of capacity as a result of the abolition of the RDA and government regional offices, particularly at a time when local government was experiencing severe cuts in funding. Professor Mackie described it as an "institutional deficit" creating particular difficulties for transport.[147] He said that the English regions would be less able to compete with the devolved administrations in Wales, Scotland and the arrangements in London, leading to imbalances in future funding allocations. Hull City Council raised similar concerns about the loss of regional capacity, particularly in dealings with Network Rail and the Highways Agency, and a reduction in understanding of local issues by the DfT when functions are transferred to its headquarters in London.[148]

105. We are concerned that the abolition of regional planning organisations and the lack of effective strategies at the regional level, at a time when local authorities have reduced resources, will lead to a loss of strategic transport planning capacity in some of the areas where it is most needed. The risks are that major schemes that cross LEP boundaries, important to the economic development of a region, may not be adequately investigated or promoted and that decisions on scheme prioritisation will have to be made by central government rather than by local organisations which best know the priorities of their area. This may lead to a worsening of regional imbalances and poor decision-making.

Sub-regional planning

106. Having noted the need for adequate capacity at the regional or inter-regional level, there was wide support for the city region or the journey to work area to be the spatial building block for most transport planning. The LGA criticised "the arbitrary structures of government regions" and supported their replacement by "more meaningful areas defined by LEPs."

    The LGA believes that the sub-region provides the best framework for transport governance, and that such a geography based on labour market areas is essential to move forward. [149]

107. Some areas with strong links to particular cities, such as the areas around Leeds and Manchester, supported the sub-region as the appropriate scale for most strategic transport planning and decision making. The Greater Manchester Authorities said that:

    there is clear evidence [...] that the sub-regions like Greater Manchester act as a 'functioning economic area' in their own right. As such, they provide the optimum spatial scale within which to take effective decisions on trading-off across expenditure areas to maximise local and national economic outcomes.[150]

108. South Yorkshire Passenger Transport Executive also endorsed a sub-regional approach:

    In our experience schemes have always been planned and promoted locally, not regionally. ITAs are well placed to join up planning and decision making previously undertaken by the Regional Spatial Strategies.[151]

109. This view was also supported by local authorities in the south of England, such as Southampton City Council.[152] Professor Vickerman outlined the problem in the south east region where it was "very difficult to take transport decisions" because the region excluded London which was the major driver of economic and transport trends.[153] The Northern Way, however, emphasised that a wider perspective may be necessary, noting that many of the strategic weaknesses in the north's transport system crossed city region boundaries and that the journey to work catchment areas overlapped.

110. Regarding the regional funding allocation process, Geoff Inskip, CEO of Centro, said that

    it was never really regional. It was all really controlled by central government." The appraisal process was "very heavy handed and very much controlled by government. [...] you still had to jump over hurdles and hurdles and hurdles to get release of the funding.[154]

The Transport Planning Society said that the previous regional planning arrangements were not satisfactory and the previous regional funding allocation arrangements had tended to produce lists of local schemes rather than strategic regional priorities. The schemes that the DfT was asked to fund were "a rag-bag of horse-traded individual schemes."[155] The Campaign for Better Transport made a similar point.[156] In response to questioning by our Chair, Louise Ellman MP, during a meeting of the Liaison Committee, the Prime Minister said that

    We are looking to develop less bureaucratic successor arrangements to the previous Government's Regional Funding Allocations for transport. These will give a proper voice to elected local authorities and business interests in scheme prioritisation.[157]

He agreed to take a personal interest in ensuring that regional perspectives and regional prioritisation regarding transport were not lost as a result of the changes.

Potential problems with Local Enterprise Partnerships

111. As noted above, the Government is encouraging local authorities and businesses to establish LEPs to support economic regeneration. At the end of 2010, the Department for Communities and Local Government had approved the formation of 28 LEPs, covering 70% of the English population. It is clear from some evidence we received that some organisations wanted and expected LEPs to cover the journey to work area. However, the LEPs approved to date show a wide variety of geographical bases. During our inquiry, we heard from a number of witnesses engaged in trying to establish LEPs. Councillor Box, in his capacity as leader of Wakefield Council, was working with the Leeds city region and an LEP was evolving.[158] Councillor Box emphasised that stability and adequate finance-raising powers, rather than structures, were the key to success so that planning and investment could proceed effectively.[159]

112. Despite support for the concept of planning transport at the journey to work level and a willingness to engage in LEP arrangements, we found problems, uncertainty and concern from both the public and private sectors. In Hull we heard of the difficulties of establishing an LEP for the area. The chief executive of the Hull Chamber of Commerce referred to conflicting guidance from the Department for Business , Innovation and Skills and the Department for Communities and Local Government:

    [...] one or two people may have spotted that we had a small hiccup on the LEPs issue locally, which we are looking to resolve in a multi-tier way. We feel we've all been put on a football pitch with no white lines or goalposts by Eric Pickles and Vince Cable, because the two Departments have differing views themselves. So our business perspective, looking at a pan-Humber model [...] is different from what Eric Pickles has been talking about, which was a, "Run barefoot through the grass and do what you like," sort of approach.[160]

113. The Institute of Directors, though critical of RDAs, was unhappy about the Government's insistence on the abolition of RDAs and the creation of LEPs; it favoured a reformist rather than "abolitionist" approach. It also criticised the lack of powers—particularly as they are not to be statutory bodies—and resources for LEPs.[161] The Campaign for Better Transport and the Directors of Public Health for the West of England were concerned that the LEPs would not be adequate, at least in the interim, and that planning policy risked being fragmented.[162]

114. It would seem that the DfT is not entirely clear about how strategic transport planning is expected to take place or the role of LEPs. In its written evidence to the inquiry, the DfT said:

    Local authorities remain responsible for planning transport priorities and interventions in their areas. [...]. The Department will also be looking to develop successor arrangements to the Regional Funding Allocations for transport that, over time, give a proper voice in scheme prioritisation to elected local authorities and business interests. We hope that Local Enterprise Partnerships will have an important role in this.[163]

115. We questioned transport ministers on this. On 26 July 2010, the Secretary of State suggested that the DfT would "need to create appropriate channels" to discuss sub-national funding for transport.[164] In November, he said "by the end of this Parliament, we expect to have developed arrangements for devolving local authority capital, so that decisions about how it is spent can be made sub-nationally". LEPs were "too small on a stand-alone basis to perform a strategic transport function" but "groups of LEPs working together around appropriate geographies would be the right unit with which to engage".[165] In December, Mrs Villiers explained:

    although it may be the end of the Parliament by the time a formal system is set up, that doesn't mean that in the interim we won't be engaging closely with local authorities and LEPs. The worries the Secretary of State has about LEPs at the moment is that they are relatively small geographic units.[166]

We note a recent announcement from the DfT that it now proposes to "ensure a transport presence outside London to continue [its] work with local government and other sub-national strategic interests", to be established before the closure of Government Offices for the Regions.[167]

116. It is clear that LEPs are at an early stage. The remit, powers, resources and governance of LEPs are uncertain. Much work remains for central government, local authorities and the business community to define the role of LEPs and to ensure that they succeed. The situation is made potentially more difficult by the fact that LEPs are not to be statutory bodies, thus reducing the ability of Government to influence their remit and the issues in which they engage. There is also, as yet, no certainty that the whole of England will be covered by LEPs. We are concerned that the role of LEPs in setting priorities for investment in transport projects is far from clear and may not be resolved until the end of the Parliament. This risks creating a vacuum which could impact on the development of strategic transport schemes, including those that should go forward to the next Spending Review, planned for 2014. We expect the DfT to engage with the Departments for Business, Innovation and Skills and Communities and Local Government to seek to ensure that transport is properly considered in all LEP arrangements and to engage with LEPs in developing the stability needed for transport planning and prioritisation at the sub-national level. We intend to keep a close eye on how LEPs develop and deliver transport planning functions during the course of this Parliament. We urge the Prime Minister to take a personal interest in these issues, as he indicated he would.

137   Ev 161 Back

138   Following a High Court judgement in favour of CALA Homes on 10 November 2010. Back

139   Secretary of State for Communities and Local Government, HC Deb, 22 July 2010, col 28WS, confirmed in the 2010 Spending Review Back

140   As a result, the future of the Northern Way is also unclear.  Back

141   The CLG Committee has been undertaking a parallel inquiry into the abolition of Regional Spatial Strategies.  Back

142   Letter from the Secretaries of State for Business, Enterprise and Skills and Communities and Local Government to local authority leaders and business leaders, Local Enterprise Partnerships, 29 June 2010.  Back

143   Ev w21 Back

144   The Northern Hub scheme, formerly known as the Manchester Hub, refers to the £530 million Network Rail scheme to increase passenger capacity and relieve bottlenecks on services travelling into and through the Manchester rail network. It is anticipated that funding for the scheme will be include in Control Period 5 (2014-2019).  Back

145   Ev 161 Back

146   Q 462 Back

147   Q 154 Back

148   Ev 231 Back

149   Ev 221 Back

150   Ev w109 Back

151   Ev w58 Back

152   Ev w39 Back

153   Q 482 Back

154   Q 176 Back

155   Q 394 [Keith Buchan] Back

156   Ev 208 Back

157   Letter from the Prime Minister to the Chair of Liaison Committee, 29 November 2010  Back

158   Q 464 Back

159   Q 481 Back

160   Q 138 Back

161   Institute of Directors, Big Picture, Quarter 4, 2010, No 9, pp 51-61 Back

162   Ev 192 Back

163   Ev 228  Back

164   Transport Committee, Secretary of State's Priorities for Transport, Oral evidence, 26 July 2010, Q 33 Back

165   Transport Committee, Transport and the outcome of the Spending Review, Oral evidence, 24 November 2010, Q 20 Back

166   Q 561 Back

167   DfT, Newsletter to Local authority Senior Officers, January 2011,  Back

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