TAPAS.network | 17 October 2023 | Editorial Opinion | Peter Stonham

Transforming British Transport: a genuine opportunity?

Peter Stonham

WHAT WAS Government thinking when it produced the Network North policy document? Was it thinking at all, beyond creating a cover position for the HS2 cancellation?

Either way, it is arguably worth a careful read of what is effectively a pasted-together set of several significant elements of Government thinking on transport, which could have been far better presented and titled.

Indeed, the emergence of the Network North Plan — both in concept and detail — was not an impressive example of considered policy presentation, and had all the hallmarks of a rush job, thrown together at very short notice.

Illogically, the document is in fact entitled Network North: Transforming British Transport, and the Prime Minister opens the text with the statement, “Ours is a long-term plan for every region of the country”, claiming “unprecedented levels of investment in our towns, cities, and rural areas”.

Even the actual release of the 36-page document was a shambles. The existence of the document was barely alluded to in the Prime Minister’s speech at the Conservative Party conference, and its arrival later that afternoon came without much clarity as to its status and purpose. Within a day, a number of factual errors had required the insertion of a digital correction slip to the online version.

All of that having been said, however, it does seem worthwhile to seek to understand the significance of the document, and its potential implications in guiding transport policy — at least for the time that the current Administration remains in place.

The foreword from the Prime Minister, explains why he believes “we need a new approach to transport”, especially in respect of what the North and Midlands “needs, uses, and wants” in terms of improved transport provision, although it goes a lot further than that.

But, of course, its first job was to dispatch the old signal policy as embodied in the plan for HS2, and one with a voracious appetite for resources and deep emotional commitment. The scheme had become something of a national icon. The document deconstructs that position, pointing out that the cost-benefit case for HS2 has fallen considerably, as costs have significantly increased, and the relative benefits have dwindled.

The original assessment suggested HS2 would return £2.30 in economic value for every £1 invested. But now, it was forecast that there will be less value coming out than money put in: possibly as little as 80 pence for every £1 invested by the taxpayer. Whilst the estimated benefits fall disproportionately on London and the South East.

The Covid-19 pandemic has also changed how we travel, the document adds - affecting the demand picture on which the case was first made. Rail journeys are down by more than 20% compared with pre-pandemic levels. And while 53% of the benefits of HS2 identified in its 2019 business case were due to business travel, rail travel for business purposes is only around half of what it was before the pandemic.

Meanwhile, investment in the transport that people in the North and Midlands really want, need and use, from buses to potholes, has been crowded out by HS2, the Government says. “Therefore, in its current scope and scale, HS2 is part of the problem and not the solution: a single, outsized investment at the expense of hundreds of others.”

The document then goes on necessarily tidying up the loose ends, including how the London-Birmingham HS2 section will still be completed, and the link from Old Oak Common to Euston delivered, the Manchester-Liverpool element preserved, and the HS2 East connection with the West Coast Main Line delivered to allow onward through services northwards on existing track.

All of the above, in other circumstances, might have been quite enough to digest in one go. But once the Government had bitten the HS2 cancellation bullet, the No 10 spin doctors presumably wanted some good news to be available, and so it fell to the Network North document to do that job, and detail what amounts to a significant new policy approach to local and regional transport in the North, Midlands and beyond: One that prioritises towns and cities and local transport.

This proposition is supported by a list of goodies that were showcased in a shower of a dozen regionally-focused media releases on the afternoon of the Prime Mister’s speech , explaining how the policy would benefit people all over the country, despite the name of the policy document.

Thus, the list of schemes in the document went well beyond what could logically be described as ‘The North’, not only also embracing the Midlands too, but in its own words, “our commitment to transport across the nation” and even “our commitment to the Union”, with dollops of money extending to Scotland and Wales. Not unexpectedly, the figures used in each of the DfT news releases involved a considerable amount of double counting, reannouncement of existing schemes and hopeful promises, generating suspicion and scepticism where confidence in a new policy direction was importantly needed.

But this, nonetheless, does appear to be a material re-boot of transport policy, making this all a significant re-pitch of the nation’s transport prospectus. Indeed, Rishi Sunak acknowledges that in the past too much investment went to what he calls “Westminster’s transport priorities”. Instead, investment would now go into the transport “that really matters to people – the roads, buses, and railways they use every day”.

Outside London, “our great cities and our smaller towns are not achieving their potential because their transport networks are so poor”, he adds.

This is surely a significant statement from the Government and its leader. One could even imagine this section of the Network North policy paper actually being the introduction to the long-awaited new Local Transport Plan guidance. Perhaps it even should be. Take, for instance, the following statements that are made in the document:

“Travel within towns, suburbs, and cities is too slow; only 4 out of 10 people in Leeds can reach the city centre within half an hour, compared to 9 out of 10 in Marseille, a similar-sized French city,” the document states.

“The great majority of journeys are local,” it continues. “So, we need to improve the everyday local transport people want and use the most. Buses are the most popular form of public transport, yet we spend three times as much on trains. Outside London, many rely on cars, yet our local roads are congested and poorly maintained.”

In what appears to be a very candid moment of self-criticism of Conservative policy to date, the Prime Minister remarks that “these problems have been well known for decades. Yet for our biggest investment priority, taking up a third of the entire transport investment budget, we chose HS2: a scheme for long-distance rail journeys between a handful of cities and London.”

“This does not just mean long-distance links across the UK. Making it easier to travel within cities and from surrounding towns is crucial to boosting productivity and prosperity. It puts many more jobs in reach of the people in those towns and cities, making it easier for them to find a job that makes the most of their skills. This deeper pool of workers also attracts more businesses to locate in those cities. The clustering of businesses supports more productive use of the existing infrastructure, as well as the sharing of productivity-improving ideas.”

The document even quotes a recent paper from former Government minister Ed Balls at the Kennedy School of Government and colleagues. They highlighted that “in several non-London cities, high congestion on roads, and a combination of high crowding and poor reliability on trains, suggest... that improving road and rail infrastructure in congested cities would likely bring significant economic returns. These facts in particular make the case for intra-city transport improvements to enable greater commuting flows and increase effective city sizes.”

It adds that this call was echoed by the CEO of the National Infrastructure Commission, who noted that improving the economic performance of our cities “should prioritise intra-city improvements to enable greater capacity and commuting flows”.

The document further observes that this point is also recognised in the Transport for the North Strategic Plan, which stresses the “need to invest in improving local connectivity, to help address the extent to which our current transport system too often acts as a barrier to opportunities”.

Meanwhile, the Rail Needs Assessment for the Midlands and the North by the National Infrastructure Commission is quoted as finding that packages focusing on regional travel could deliver £2.5-£4.5bn more in productivity benefits than ones focusing on links between regions — a 20-25% difference.

A study by Henry Overman, Chair of the What Works Centre for Local Economic Growth, is also referenced as estimating that even a 20-minute reduction in train journey time between Leeds and Manchester could increase average wages in both cities by between 1% and 2.7%.

These improvements not only benefit cities, but also the towns and rural areas that surround them, says the document. It points to the fact that in 2018, the OECD noted that “large cities can support growth and catching-up momentum in smaller cities and rural areas”, arguing they serve as markets, transport links and service centres for the areas around them, as well as consolidating functions that would lack the market to exist in smaller places.

Smaller transport schemes of this nature can also demonstrate high returns on investment, the document says. It reports that Government analysis had demonstrated that 33 major bus-related schemes which qualified for funding had a combined benefit-cost ratio of 4:2.

The analytical study for the Eddington review of national transport priorities back in 2006 estimated that urban transport investments have an average benefit-cost ratio of 3:1, while inter-urban schemes generated £2 in benefits for every £1 in expenditure, rising to just under £5 once heavy rail infrastructure options are removed from the average.

This detailed referencing of the value of local transport improvements is not something that has been much presented by the Government hitherto, and taken at face value is significant, but rather lost in the wider context of the Network North document and the justification for the HS2 cancellation, which unsurprisingly grabbed the headlines.

Likewise, the way the so-called Network North strategy redefines priorities and redistributes the £36bn money saved by cancelling the remainder of HS2 around the country, comes across as a jumble of random schemes, peppered almost without rationale across Britain. They are poorly presented on a largely indecipherable map that the document bears on its cover, and are listed within it without an obvious underpinning logic as to who have been the winners (and losers) from the cancellation and resource redistribution.

So, what are we to make of all this? If it is to be given at least some credibility as a meaningful re-examination of transport policy, the message is stark: what are the criteria that should now be the future basis of resource allocation between and within the local transport authorities around the country, how will they be empowered to reflect this thinking in their transport strategies, and what will be the rule book used by the DfT in authorising them to act accordingly?

Perhaps we should all now hold the Transport Secretary and his department to account against the Prime Minister’s own words, in stating that “the decisions a country makes about where to invest taxpayers’ money say everything about the priorities of those who govern it. And for too long, we have been getting those decisions wrong”. In saying this, the Prime Minister appears to be acknowledging that there must be something rather flawed in the existing transport assessment and appraisal process.

It is something that most LTT readers will already hold to be true. Our regular contributors have repeatedly argued against the existing investment appraisal practice, as indeed David Metz again asserts in this issue. Also in this issue, we are pleased to give space to a thoughtful review of the Network North paper by Chris Todd of the Transport Action Network, who offers further valuable insights about both the useful elements of it, in terms of local transport policy, whilst expressing understandable exasperation at the flaws and inconsistencies it contains. He would probably agree that at least there is now an important debate begun about the shape of local transport policy.

There seems to be general political agreement that the country is looking for change, and that next year’s election should deliver it. Rishi Sunak appears to have realised that his only chance of re-election is to represent that change himself, and to break with the Conservative legacy. Sir Keir Starmer and the Labour Party are also seeking to be seen as the agents of change, but appear concerned not to frighten people too much with radicalism and financial profligacy.

In this strange situation, reading the mis-titled Network North policy paper with a dispassionate perspective might lead to a judgement that the Prime Minister seems to be wanting to himself represent an anti-establishment position, challenging the status quo. If he does indeed want to do so, the institutions of state, and particularly the Civil Service and its practices and processes they operate, are surely the closest thing to the establishment in action, and therefore are in need of change.

Both Rishi Sunak and Sir Keir Starmer have just 12 months to codify and clarify their positions on transport matters, as with their wider policy agendas. Neither has been very forthcoming about the guiding principles they would use, with Labour again this year at its conference disappointingly unwilling to say much at all about its local transport policies. At least Rishi Sunak has now put on the table some new approaches in the Network North paper, scrappily presented as it is. It would now thus be helpful to see where Labour also stands on that core proposition: that the way things have been done over the past few decades has not been fit for purpose, and change is due.

Peter Stonham is the Editorial Director of TAPAS Network

This article was first published in LTT magazine, LTT878, 17 October 2023.

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