Local Transport Planning and Funding (HC 1120-i) Transport Committee 17 May 2006

Q26 Mr. David Clelland: Do you think the structures that are in place to develop regional transport planning are adequate?

Mr Scales: We are trying to embed the Local Transport Plans into the regional transport plan to make sure that it is all generally pointing in the same direction. The question Mr Stringer asked before about the regional priorities has been helpful in that. It is always the boundaries that suffer. Making sure with ourselves, and our colleagues in Manchester, for example, that the Local Transport Plans match is always difficult because there is so much to do in a very limited time. It is very difficult to get the boundaries right. We are a bit more successful in Holton because we viewed it as part of Great Merseyside but on Manchester it is the boundary issues where it is more difficult to make sure it is pointing in the right direction. The over-arching priorities set by the Department for Transport we all subscribe to. The over-arching ones point in the same direction, but it is usually the gaps. A good example is the recent move towards concessionary fares because the bus across boundaries does not work particularly well because the reimbursement mechanisms have not been thought through yet.

Q27 Mr. David Clelland: Are you talking about boundaries between local authorities?

Mr Scales: Yes.

Mr Magrath: The West Midlands authorities are taking a very proactive view about regional governance and regional transport issues figure very strongly in that. There is a city region concept at the moment which is being actively developed in the West Midlands, which will have as part of it looking out into the wider region for how to manage transport issues because of course we recognise that the metropolitan areas are not an island in themselves. A lot of the employment is provided by people who live outside the metropolitan area, so it is trying to get that joined up thinking for the journey to work area. We are taking steps to see how that can best be done.

Q28 Mr. David Clelland: Do you think there should be perhaps a regional transport authority?

Mr Magrath: I think we are doing it in a different way in the West Midlands. We are looking at a city region and the possibility of a transport authority representing that might be one of the outcomes of that, but this is all thought and work in progress at the moment.

Mr Larner: One of the problems with the regional process is that it is a fairly weak coalition of interests over a wide area in many cases. It is often easier to spread the jam thinly across the whole of that geographical area and give each of the major authorities in that something so that they can say, "We got something out of it" rather than looking at the needs of the whole region. That is one of the reasons why we are quite keen to see the city region model where it recognises that there are much stronger needs for heavy investment in transport systems in the city region areas rather than across the whole region.

Mr Vaughan: There is a tension between decisions that are appropriate to take at the regional level and decisions that are more appropriate to take at the subregional level. Those can affect the same scale of schemes in some cases. For example, it may be perfectly appropriate to place an emphasis in regional transport planning priorities on securing high quality public transport interchanges within, say, the Greater Manchester conurbation. It is much more of a subregional issue about which is the most appropriate of a long list of those to bring forward. Even though they are both major schemes, there is sometimes a debate that is best held at a subregional level about priorities rather than at the regional level.

Mr. David Clelland: Just to pick a region at random, the north east, we know that north east spending on road and rail infrastructure has increased by just 25 per cent over the past six years which is almost four times less than the national average and nine times less than London. Do you get the impression that the Department for Transport is fully signed up to the government's wider objectives of reducing regional disparities?

Q29 Chairman: Mr Larner, do you think that is possible?

Mr Larner: Yes. Certainly in our evidence we have given the spending per head that takes place in London and in each of the English regions. London is up here and all of the regions are down here. There is no gradation that recognises the fact that, say, the Tyne and Wear area is somewhere between London and the rest of England or Manchester, Liverpool, Merseyside or anywhere else. We would all like to be where London has got to obviously but London has special needs. There is this massive gap in terms of what London gets and what the other cities get.

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Q49 Mr. David Clelland: How useful and how successful has the PFI been in achieving funding for local transport initiatives?

Mr Scales: I went out on two bases for Mersey tramline one, a PFI route or a conditional funding route. The PFI route was 40 per cent more expensive. As soon as you put banks into the process, they want to net the risk off with everybody, not them. You get banking lawyers involved. Banking lawyers always give you two opinions so they charge twice, et cetera, and we can borrow money cheaper than the PFI through a local authority risk. The PFI does not do anything for me at all. I prefer just conventional funding. You know where you are. If we have to borrow money using conventional borrowing, we can borrow money through the Public Works Loan Board cheaper than we can get it from a bank anyway because we are a local authority risk.

Chairman: There is a nod from Mr Magrath. Does anybody have a different view? No. That is the generally held view.

Q50 Mr. David Clelland: As you know, Sir Michael Lyons is looking at local government functions and financing at the moment. From a transport perspective, what do you hope will come out of the inquiry?

Mr Scales: More clarity. As the city region debate moves forward, more opportunities to raise money locally that we can use for local solutions by local people with local problems, to implement our local transport plan on a city region basis. As has been said before by my colleagues, not all government experiments end in failure. Transport for London is a great example of something that has worked really well. They have control of the roads and they have all sorts of things they are able to integrate. They are able to do what the 1966 White Paper said and integrate public transport in areas. If we can add the travel to work areas to it and get control of the street bus and road networks so we can put our own bus lanes in, we are democratically controlled by the Passenger Transport Authorities in any event, so you have a level of democratic process in there and a level of delivery through the Passenger Transport Executives. We have been around since 1968. We are good at delivering things on a local basis. If you add all that together, it all works.

Mr Errington: What we would hope would come out of it is more trust in local authorities to deliver the general transport agenda and less proscription. I brought this today to demonstrate something. That was our first LTP. We did a second one in 2003 following Michael Lyons's study and with the new prescriptive guidance that is the one we have just submitted.

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Q63 Mr. David Clelland: Councillor Page is choosing his words very carefully. I would have thought the answer would be "definitely not". However, is there not room therefore for some sort of similar type of structure in the regions to what we have in London? For instance, could there be a Transport for the North East, a Transport for the West Midlands, a Transport for Yorkshire and Humberside?

Cllr Sparks: It is an extremely live issue now in relation to city regions. I am also from the West Midlands, as you know, David, but I am not a politician. As far as I am concerned one of the tasks of the developing city region in the West Midlands will be to try and make sure that transport is at the very centre of the whole project in terms of a city region, not just because of questions of congestion and movement but because it is absolutely essential.

Q64 Chairman: I am going to cheat a bit. Mr Clelland did ask you not just about city regions because within the north east that would not be a region; he asked you about a regional authority.

Cllr Sparks: I will give you an LGA answer then. The LGA answer is that the LGA does not have a policy in relation to regions and it would depend on the local circumstances as to what machinery would be adopted. It so happens that in the West Midlands it would be a subregional one based on a city region.

Chairman: We have the city region bits. Some of us who are not part of them are getting a bit worried about these city states.

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Q78 Mr. David Clelland: I assume that the LGA and TAG would argue that the £5 million threshold is too restrictive in terms of major schemes, so at what level do you think it ought to be set?

Mr Page: I cannot remember but it is many years since it was fixed so I would have thought at least double that, considerably more, but that is a personal view.

Chairman: Any advance on £10 million?

Q79 Mr. David Clelland: There is no methodology behind that?

Mr Page: No, it was an arbitrary figure then and it remains an arbitrary figure.

Q80 Chairman: It is the principle that you all accept but you are not setting a band within which the ceilings could be reapplied? Is that what we are to understand? I think a nod means yes.

Mr Page: Yes.

Mr Donaldson: Perhaps further analysis is required and we certainly do not have that information to hand today.

Q81 Mr Leech: Do you think there is an argument to say that in different parts of the country the level should be different depending on the size of the transport authority?

Mr Page: Clearly there is an argument for that. Some of us would go further and say that perhaps there should be - a point that Councillor Sparks made - a review of local government finance. We as local government are far too dependent on central government grants. We need a system that turns the whole thing on its head. We should have a system where a minority of our income comes from central government grants and we are raising more money locally from individuals, the private sector, and from regeneration, and using schemes that the Continent have used for many years and getting away from being the "grant junkies" that we currently are. We look at it far too much in terms of how much money we get from central government. Hopefully the Lyons Inquiry might enable a more radical departure and then the debate about what we are able to do might focus more on raising money locally from a variety of different sources rather than from central government. Central government's role should be in grant equalisation, in my view, and assisting those areas of the country with high levels of unemployment and other structural problems.

Q82 Mr. David Clelland: I am not having a go at London, it is just a question. Is there a similar threshold for major scheme proposals for the London boroughs and, if so, what level is it set at?

Mr Hayes: The arrangements in London are so different that there is not a threshold at which a project has to go to us or anyone else. The borough is self-financing and clearly they can do that. We allocate money through the borough spending plan process at the moment. In terms of the major projects that we take forward, because of the Mayor's powers and the Mayor's income-generating powers, effectively, we can push forward a major project if we can fund it using the things that we have access to, whether that is borrowing and that is part of the money we have and the decision processes around that.

Mr Bennett: I would like to amplify what Mr Hayes has just said in that boroughs do approach us for money from schemes that raise from £5,000 upwards. If it goes beyond the £2 million we do expect slightly more detail according to a business case development manual that we have so that we can actually explore the value for money ---

Chairman: So you do have parameters which apply to the boroughs?

Q83 Mr. David Clelland: But perhaps not as restrictive as the parameters that face the members of the Local Government Association?

Mr Bennett: I am not an expert but I understand that they are not as quite as complex as the LTP process requirements.

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Q95 Mr. David Clelland: So that would be different from the Transport for London model then?

Mr Page: Yes.

Mr Donaldson: If I can add my experience, which is not particularly of this type but working with Tyne & Wear, I have seen a lot of frustrations coming from colleagues on the LTP in terms of the delivery of bus priority measures, which we heard mentioned in the earlier evidence. I can understand their frustration but the frustration often arises because of the need for public engagement and involving the local community in the development of the proposals. I was questioning myself about the current transport plan and the proposal to introduce a bus lane in Sunderland was in the local transport plan as a proposal and yet we had not consulted local members on that in any detail. It was just there indicative as a principle. However, the process that is given to us in developing our programmes requires us to go in some significant detail and that is a clear tension.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.