Central London Forward
Submission to Transport and the Economy Inquiry
Transport Select Committee
September 2010
1. Introduction
1.1 Central London Forward (CLF) welcomes this
opportunity to contribute to the Select Committee’s
Inquiry on Transport and the Economy. The linkage
between these two important aspects is perhaps brought
into sharpest focus when considering central London, Central
given the concentration of business, retail and leisure London
activities; the scale of economic output; and the capital’s
importance to the UK’s overall position. Forward
1.2 Investment in London’s transport system has historically CLF is a sub-regional
fallen short of the requirements to maintain the system as strategic organisation
“fit-for-purpose” in a dynamic and growing World City, representing the
but work over the last decade has started to address the seven central London
backlog and establish the foundations for the next stage of local authorities: City
the city’s growth. of London, City of
1.3 The indications are that the recession has had only a Westminster, Royal
modest impact on the growth in travel demand and that Borough of
strong annual growth rates are re-establishing themselves. Kensington and
CLF is extremely concerned that, despite the current Chelsea, London
public expenditure climate, investments that will Boroughs of Camden,
underpin the medium- and long-term growth of economic
Islington, Lambeth
activity are curtailed or compromised without
and Southwark.
consideration of the widespread and severe consequences
for economic success. Its primary objectives
1.4 In particular, CLF believes that it is vital that the current are :
programme of works is completed as planned including
To influence
delivery of the Crossrail and Thameslink schemes and the policy on major
upgrade of the LU system. issues affecting
Central London
To promote the
strategic
importance of
Central London
To identify and
facilitate co-
ordinated 1
working on areas
of mutual interest
to partners
2. Have the UK’s economic conditions materially
changed since the Eddington Transport Study and, if
so, does this affect the relationship between transport
spending and UK economic growth?
2.1 We would argue that the UK’s current position – and in particular the public
sector’s ability to fund transport investments – does not represent a material
change to the conditions prevailing at the time the Eddington Transport
Study was published.
2.2 Any study of major investments must inevitably take a long-term perspective
– note, for example, that two of the three projects recommended in the
Central London Rail Study in 1989 (Crossrail and Chelsea-Hackney) still
await completion – and recognise that public finances will vary over time.
The availability of funding will impact on the speed of delivery of
improvements to the transport system but does not, in itself, alter the
underlying need to maintain and improve an effective system of movement
for people and goods to underpin and sustain economic growth.
2.3 The economic importance of London to the wider UK economy is significant.
Estimates of economic output – using gross value added (GVA) as an
indicator of prosperity – show that London generates 21% of the UK’s GVA
with only 12% of the UK’s population (representing over £250Bn per annum),
with central London contributing the bulk of this economic activity. This
economic success is dispersed across the neighbouring regions and the UK as
a whole.
2.4 This success is driven by a combination of factors. However, it is evident that
high density development, enabled and sustained by London’s public
transport system, is a critical factor. This view is echoed by business leaders -
most vocally when a lack of transport capacity hampers economic growth.
Typically transport concerns head surveys of business issues.
2.5 Whilst the recession has undoubtedly had an impact on the demands placed
on the public transport system in London, the effects have been considerably
more muted than had been anticipated based on experience from previous
downturns. For example, Figure 1 illustrates the usage of the National Rail
commuter services focused on London since 2002-03. This highlights not
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only the strong growth experienced previously but also the impact of the
recession over the past two years. However, the fall in usage – around 1.5% -
is modest and the quarterly data indicates a recent return to growth (for
example, Q4 2009-10 usage was 7.5% higher than found in Q4 2008-09).
F IGURE 1 – ANNUAL P ASSENGER JOURNEYS (LONDON & SOUTH-E AST OPERATORS )
Source : National Rail Trends Yearbook 2009-10 (Office of Rail Regulation)
2.6 A similar picture emerges when considering the usage of London
Underground. Figure 2 shows data reported by TfL in May 2010 related to
usage over the previous two years. This shows that the impact of the
recession was felt from the beginning of 2009 and reached a level of -6% for
the first six months of the year. Growth in recent months has returned such
that the year-on-year change has become positive as of period 10 in 2009/10.
2.7 Accordingly, the usage of the public transport system in London has
experienced a short plateau in growth, but the indications both in terms of
usage and the medium-term projections of population and employment
growth suggest that a restoration of the trajectory found before the economic
downturn is occurring.
2.8 In light of this emerging picture, the medium to long-term proposals to
respond to this growth trend – such as the upgrade of Underground Lines, 3
the delivery of Crossrail and the lengthening of National Rail trains – remain
both robust and vital components of ensuring that the capital can achieve its
potential for absorbing population growth and enabling London to improve
the UK’s economic well-being.
F IGURE 2 - GROWTH R ATE FOR LU JOURNEYS
Source : Trends in Passenger Demand, Agenda Item 6 TfL Rail and Underground Panel 12 May 2010
3. What type of transport spending should be
prioritised, in the context of an overall spending
reduction, in order best to support regional and
national economic growth?
3.1 As the Government’s focus is on both controlling public expenditure and
freeing the private sector to generate employment, it seems most appropriate
to prioritise transport investment that will demonstrably support the
capability of a successful region to respond to growth opportunities. We
would argue that London presents such an opportunity. 4
3.2 Furthermore, the capital has a well-established programme of projects – both
in the process of construction and planned in the short to medium term –
with the structures in place to ensure timely and efficient delivery. Given the
lead times involved in delivering important infrastructure projects, it is
essential that investment is maintained and projects completed as planned.
F IGURE 3 - INVESTMENT PRIORITIES
3.3 There have been three important drivers for the key schemes in the capital as
illustrated in Figure 3 above. On one hand there is a programme of works
designed to renew the life-expired assets of the transport system, most
notably the Underground system. However, there are a series of projects
where the delivery of strategic capacity to serve London and the south-east
are planned and underway; for example, Crossrail and Thameslink. Finally,
there are projects with a more local focus which tend to address failures in
the current network or support the regeneration of opportunity areas such as
the Royal Docks, Stratford, Elephant & Castle, Vauxhall/Nine Elms/Battersea
and so on.
3.4 Many of the core projects contribute to two or more of the drivers – where,
for example, the renewal of an Underground Line’s infrastructure leads to an
increase in its capacity – and it is important to strike a balance between all
three to ensure that opportunities are maximised. However, the central core
of all these schemes is the delivery of significant new capacity at a strategic or
local level. 5
3.5 Sir Rod Eddington notes that, in his view, transport investments are unlikely
to be concerned with trying to achieve a “step change” in economic
performance, and we would concur with this view, particularly as the UK’s
mature and dense transport system few opportunities exist for such
interventions.
3.6 Whilst some would suggest that High Speed Rail schemes fall within this
category of investment, we would consider that such measures represent the
next incremental step – albeit a large one – in developing the capacity and
capability of the inter-urban rail network. Given that the Eddington Study
envisages some form of road pricing scheme emerging in the fullness of time,
then the expansion of the inter-urban rail system will be necessary to help
cater for displaced car journeys and freight movements.
4. How should the balance between revenue and capital
expenditure be altered?
4.1 It is apparent that fares have risen sharply across the public transport system
reflecting operators’ concerns regarding declining patronage, inflation and so
on. As patronage has tended to hold-up rather better than had been expected
(both as a result of the recession and the fares increases), revenue has likewise
generally been robust.
4.2 Within London the balance of funding of the system between taxpayer and
passenger is an important issue, as the fares policy for the past decade has
tended to allow real fares to fall as well as broadening access to free or
discounted travel, resulting in a significant subsidy requirement. Against a
backdrop of an increasing mode share by public transport (and walking and
cycling) and the decline in car ownership and use (in no small part due to the
planning policies prevailing in the capital for the past 20 years), it is
particularly important to continually review the relationship between the
level of fares, the pattern of the public transport network and its efficiency,
and subsidy required.
4.3 CLF would argue that capital works should generally take precedent over
revenue support, especially where revenue support is seen as a long-term
requirement rather than as a means of “pump-priming” a new service.
5. Are the current methods for assessing proposed
transport schemes satisfactory?
5.1 CLF recognises that there is considerable debate regarding the appraisal
framework applied to transport schemes. Rather than focusing on any
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specific issues with regard to the technical aspects of such appraisals, we
would simply state that the objective of the appraisal frameworks should be
to:-
Be modally agnostic as far as is possible i.e. to allow a balanced judgement to
be made between alternative schemes on a reasonably comparable basis;
Fairly and completely represent externalities (such as environmental impacts)
whilst accepting that estimating such factors is difficult and likely to be
imprecise; and
Be capable of consistent application by different bodies and consultants.
5.2 There should also be an appropriate level of post-implementation monitoring
to inform the appraisal framework, in particularly by providing greater
certainty to the assessment of externalities.
6. How will schemes be planned in the absence of
regional bodies and following the revocation and
abolition of regional spatial strategies?
6.1 London continues to benefit from a unique transport and planning
framework which provides the clarity of a regional spatial (and transport)
strategy as well as a structure for specifying, co-ordinating and controlling
the delivery of transport services and investments. Accordingly, this issue is
not one which the CLF will comment on in detail.
6.2 However, the co-ordinated delivery of investments across all sectors
inevitably involves strategic planning and interaction with neighbouring
administrations. London’s relationship with the regions requires effective
engagement if the benefits generated by the capital are to help fuel economic
development further afield.
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