1 london and national transport policy in a low carbon, lean public expenditure future stephen...
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London and national transport policy in a
low carbon, lean public expenditure future
Stephen GlaisterDirector RAC Foundation
London School of Economics 1st February 2010
There is a lot going on!
www.racfoundation.org 3
12 October 2009
The Prime Minister:
“sell off the assets” – inc. Dartford bridge
Mayor of London “Draft Transport Strategy”
London Population up 1.3 million by 2031
London road charging?
Committee on Climate Change “First Report”
Decarbonisation of transport
National road charging?
21 October 2009
ONS:
UK population of 61.4 million
rise to 71.6 million by 2033
31 December 2009
Delivery of High Speed 2 Report to
Secretary of State for Transport
Apparent all-party support for
“a network of new high speed railways”
Winter 2009-10
Flooding
Frost damage
to already poorly maintained roads
Cost of putting infrastructure into good condition?
January 2010
Tory policies on rail (Less than 10% of passenger and freight market: heavily loss-making.)
Reduce fares implies more capacity?Reduce crowding
Increase competitive pressure on Network RailReduce competitive pressure on train operators
Invest heavily in High Speed Rail network
Teresa Villiers, 12 January
January 2010
Tory policies on road (More than 90% of passenger and freight market: Profit-making)
Road congestion and unreliability a recognised as a problem…
Improve road works, traffic lightsMore localised decision-makingLorry road user-charging (No general road user-charging)Make Highways Agency more efficient
New road projects only “where … consistent with a responsible approach to the public finances”.
Teresa Villiers, 22 January.
After General Election
Government expenditure cuts
Transport NOT “protected”
2009 Budget Report
www.racfoundation.org 11
A need for a strategy that is:
Long term: road and rail
Makes roads safer
Deals with carbon
Affordable – how do we pay for it?
London is the focus of the strategic road network and the most congested area
Source: Eddington Review
Source: Eddington Review
Most rail travel is centred on London
Source: Eddington Review
Transport policy in London tends to concentrate on radial corridors
Source: Mayor’s Draft Transport Strategy, 2009
But a great deal of the movement is within Londonand by car!
Source: Mayor’s Draft Transport Strategy, 2009
Source: Mayor’s Draft Transport Strategy, 2009
In Greater London
60 per cent of all personal mechanised trips are by private car;
22 percent are by bus or taxi and
3 percent by cycle
so 60 + 22 + 3 = 83 percent are by road.
Only the 17 percent are by rail.
Travel in London Report No 1, TfL, 2009, Table 3.1.
Mechanised trips entirely within Outer London
76 percent are by car
18 percent by bus and
2 percent by rail.
Growth will put extra demands on road network
Source: Mayor’s Draft Transport Strategy, 2009
www.racfoundation.org 21Mayor’s draft Transport Strategy, 12 October 2009
What is the strategy for London Roads?
Funding and priorities?
The Draft MTS lacks any clear indication of priorities.
35 policies and 129 proposals
Which are the most important?
Funding will be insufficient
where will it be focussed?
National Policy
Long Term Strategy: road and rail
All parties are claiming the economy will recover
Implies return to growing demand for road and rail
We are already short of capacity on both!
www.racfoundation.org 25
Relentless road traffic growth(source: Road Statistics 2007, DfT)
Why congestion has got worse in the past
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Congestion will get worse!
Between 2005 and 2041: (RAC Foundation estimates)
Population will growMost growth in the E, S and London
Incomes will double
Road traffic demand up over 40%
Rail planning is assuming that rail growth will continue at recent rate
www.racfoundation.org 28
National Traffic Forecast (DfT, 2008)
Plans to 2015 January 2009
Hard shoulder running alternative to motorway widening,
520 additional lane miles to the national strategic road network, of which 340 lane miles through hard shoulder running.
£6bn announced in July 2008
Not much new capacity for local roads
Investment good value for money?
Sector Number of projects Average Benefit: cost
Highways Agency 93 4.7
Local Road 48 4.2
Local Public Transport 25 1.7
Rail 11 2.8
Light Rail 5 2.1
Walking and Cycling 2 13.6
Total 184
Source: Eddington (Dodgson, RAC Foundation, 2009)
Appraisal methods subject to revision
…but economic returns look very good
for the right road or rail schemes
(Eddington)
Public transport cannot help much
Public transport improvements may be good policy
BUT
They cannot make much impact on road congestion
or carbon emissions at a cost that is feasible
Rail and local bus each have 6% of passenger market
www.racfoundation.org 33
The alternatives
Let congestion continue to grow
Build & widen roads without reforming pricing
Reform pricing and heavily restrain demand
To reform pricing to improve efficiency
AND additional capacity to preserve mobility
Make roads safer
www.racfoundation.org 34
Jo Hill
www.racfoundation.org 35
Small expenditures on improving roads have very high returns!
Source: Road Safety Foundation, 2009
POPULATION UK
0
5
10
15
20
25
30
35
40
1960 1980 2000 2020 2040 2060
Pop
ulat
ion,
mill
ions
.
0 to 16 65 to 79
17 to 24 80 and over
25 to 64
Source: Mitchell, RAC Foundation, March 2010
CASUALTIES AGED 80+ PERCENTAGE OF ALL CASUALTIES 2006
0
5
10
15
20
25
1 2 3
Road user type
Pe
rce
nta
ge
of
casu
alti
es
. o
f a
ll a
ge
s .
Killed KSI All severities
Pedestrians Car drivers Car passengers
% population aged 80+
Source: Mitchell, RAC Foundation, March 2010
Deal with carbon
www.racfoundation.org 38
www.racfoundation.org 39
Committee on Climate Change, First Report, 12 October 2009
www.racfoundation.org 40
Committee on Climate Change, First Report, 12 October 2009
Carbon: Follow through principles of
Stern and Eddington
www.racfoundation.org 41
Decide what the price of carbon should be
Ensure everybody pays it
Do road and rail appraisals properly and use them!
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
0 200 400 600 800
Annua l la ne inc re ments, stra te g ic roa ds
% c
hang
e in
GB
fuel
con
sum
ption
No pric ing With pric ing
www.racfoundation.org 42
Effects on fuel consumption and carbon emissions
www.racfoundation.org 43
On current values
Congestion is a bigger problem than carbon
Carbon in transport will be reduced by Implementation of better technology Decarbonising surface transport
(see Committee on Climate Change) More sensible pricing
Picture is of more traffic
Stable transport carbon emissions
Achieved by improved vehicle technology etc.
Implication: we will need more road capacity!
www.racfoundation.org 45
Affordable: how do we pay for it?
www.racfoundation.org 46
Increase fuel duty or VED??
Roads taxation is controversial!
www.racfoundation.org 47
0
5
10
15
20
25
30
35
1975 1981 - 82 1986 - 87 1996 - 97 2006 - 07
£ b
illio
n
GB Roads: taxes (ex VAT) and government spending (2006 prices)
Fuel duty
Other taxes
Local roads National roads
National Road Charging
NOT essential, but it helps!
A means to manage demandmore efficient use of existing network
A way of generating more fundsin order to enhance the network
safety, management, physical capacity
A way of dealing with carbon
Reform ofroad investment and charging
The primary problem:
Lack of public understanding
Even if understood, lack of public trust
Nobody promotes interests of road users
With or without national road charging …
… change will require change in the institutions
Institutions and governance matter!
Institutions and governance matter!
CC in London has succeeded: why?
Leadership A properly researched proposition A clear “deal” for the electorate Political accountability Fiscal accountability and transparency
The UK regulated utilityTelecoms, Gas, Electricity, Water, Rail
Consumer pays a fee for use
Fee determined by independent regulator
publicly declared principles:
economy, efficiency, fair return on capital,
capacity investment funded
Consumer protection: eg Quality of Service is published and debated
Direct connection between value to consumer and investment in capacity
For Rail there is a coherent strategy
High Level Output Specification (HLOS)
Statement of Funds Available (SoFA)
Network Rail to promote railways
Independent Regulator to adjudicate that it all adds up
High Speed Rail proposals should fit within this framework
Water industry has many lessons?
Massive investment funded by charges to users
Improvement in water quality
Gradual acceptance of domestic metering
Benchmarking an important driver of efficiency
Statutory users’ representation
Industry has a duty to supply
Strategic Roads like other regulated utilities?
Road infrastructure provider
With an income stream
Held accountable by independent regulation
A duty to meet the needs of users
Ensure that it is able to finance its functions
Monitor its performance in relation to stewardship and service delivery; and
Defective roads governance
Byzantine confusion about who is accountable for what
The absence of a customer billing relationship between the service provider and the road user
No independently reported measure of quality of service
No independent consumer protection
No long term charging or investment strategy
Governance reform
Some lessons taken from the other public utilities ?
New and independent authorities could be a useful part of future reform.
We need better measures of quality of service
This would facilitate the necessary rebuilding of trust between accountable bodies and users.
But it must be national
To progress, a scheme …
… must offer a clear “deal”
Understandable (keep it simple) Broadly “fair” (spell out winners and losers)Credible (the arithmetic stacks up)Technologically robust Worthy of trust (can check if it’s delivered)
New charging scheme has to be national (deal on existing road taxes)?
except London, (Cambridge)….?
Corporate governance options for roads
Reform of national and local government??
More independence for HA?
Public Benefit Corporation or public trust?
Regulated private provider?
Geographical scope?
National?
Regional?
Route-based?
How does London fit
with a national reform?
Conclusions
Do nothing??
Highways Agency given [what?] corporate status
An independent regulator for roads and road safety?
Government HLOS and SoFA for roads?
Informed by input from road users, local authorities and
regional bodies?
We need a long term strategy forrailways and
especially roads!
Safer
Deals with carbon
Affordable – how it is paid for?
www.racfoundation.org 64
Roads and Reality (RAC Foundation)GB strategic roads Costs and benefits (£bn p.a. in 2041)
No extra capacity
+200 Lkm pa
+400 +600
No pricing
Gross benefit to society Base 7.5 12.8 16.4
Cost of additional capacity Base 1.48 3.0 4.4
Average benefit:cost ratio of scenario Base 5.1 4.3 3.7
Marginal benefit:cost of additional capacity
- 5:1 3.5:1 2.6:1
Efficient pricing
Gross benefit to society 22.3 28.3 32.7 36.1
Cost of additional capacity 0 1.5 3.0 4.4
Cost of charge collection 4.5 4.5 4.5 4.5
Average benefit:cost ratio of scenario 5.0 4.7 4.4 4.0
Marginal benefit:cost of additional capacity and collection
5.0:1 4.0:1 2.9:1 2.4:1
The car used by rich and poor
Lowest 2nd 3rd 4th Highest