London and national transport policy in a
low carbon, lean public expenditure future
Stephen Glaister
Director RAC Foundation
London School of Economics
1st February 2010
1
There is a lot going on!
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?
www.racfoundation.org
3
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 Rail
Reduce 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 lights
More localised decision-making
Lorry 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
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?
www.racfoundation.org
11
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 London
and 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
What is the strategy for London Roads?
Mayor’s draft Transport Strategy, 12 October 2009
www.racfoundation.org
21
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!
Relentless road traffic growth
(source: Road Statistics 2007, DfT)
www.racfoundation.org
25
Why congestion has got worse in the past
Congestion will get worse!
Between 2005 and 2041:
(RAC Foundation estimates)
Population will grow
Most 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
27
National Traffic Forecast (DfT, 2008)
www.racfoundation.org
28
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
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
www.racfoundation.org
33
Make roads safer
www.racfoundation.org
34
Small expenditures on improving roads
have very high returns!
Jo Hill
Source: Road Safety Foundation, 2009
www.racfoundation.org
35
POPULATION UK
40
Population, millions .
35
30
25
20
0 to 16
65 to 79
17 to 24
80 and over
25 to 64
15
10
5
0
1960
1980
2000
Source: Mitchell, RAC Foundation, March 2010
2020
2040
2060
Percentage of casualties .
of all ages .
CASUALTIES AGED 80+
PERCENTAGE OF ALL CASUALTIES 2006
25
Killed
KSI
All severities
20
15
% population aged 80+
10
5
0
1
Pedestrians
2
Car drivers
Road user type
Source: Mitchell, RAC Foundation, March 2010
3
Car passengers
Deal with carbon
www.racfoundation.org
38
Committee on Climate Change, First Report, 12 October 2009
www.racfoundation.org
39
Committee on Climate Change, First Report, 12 October 2009
www.racfoundation.org
40
Carbon:
Follow through principles of
Stern and Eddington
Decide what the price of carbon should be
Ensure everybody pays it
Do road and rail appraisals properly and use them!
www.racfoundation.org
41
% c hang e in G B fuel c ons um ption
Effects on fuel consumption and carbon emissions
10.0
5.0
0.0
-5.0
0
200
400
600
800
-10.0
-15.0
-20.0
Annua l la ne inc rements, stra teg ic roa ds
No pric ing
With pric ing
www.racfoundation.org
42
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
www.racfoundation.org
43
Picture is of more traffic
Stable transport carbon emissions
Achieved by improved vehicle technology etc.
Implication: we will need more road capacity!
Affordable: how do we pay for it?
www.racfoundation.org
45
Increase fuel duty or VED??
www.racfoundation.org
46
Roads taxation is controversial!
GB Roads: taxes (ex VAT) and government spending (2006 prices)
35
Local roads
30
£ billion
25
National roads
Other taxes
20
Fuel duty
15
10
5
0
1975
1981 - 82
1986 - 87
www.racfoundation.org
1996 - 97
2006 - 07
47
National Road Charging
NOT essential, but it helps!
A means to manage demand
more efficient use of existing network
A way of generating more funds
in order to enhance the network
safety, management, physical capacity
A way of dealing with carbon
Reform of
road investment and charging
The primary problem:
Lack of public understanding
Even if understood, lack of public trust
Nobody promotes interests of road users
Institutions and governance matter!
With or without national road charging …
… change will require change in the
institutions
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 utility
Telecoms, 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 for
railways and
especially roads!
Safer
Deals with carbon
Affordable – how it is paid for?
Roads and Reality (RAC Foundation)
GB strategic roads Costs and benefits (£bn p.a. in 2041)
No extra
capacity
+200
Lkm pa
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
capacity
-
5:1
3.5:1
2.6:1
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
capacity and collection
5.0:1
4.0:1
2.9:1
2.4:1
+400
+600
No pricing
of
additional
Efficient pricing
additional
www.racfoundation.org
64
The car used by rich and poor
Lowest
2nd
3rd
4th
Highest