Calling for connectivity Part 1: Labour’s report

In December, the Labour Party commissioned a Rail and Urban Transport Review (RUTR) to examine how a future government could accelerate connectivity within and between the UK’s key urban areas. This was led by Juergen Maier CBE, former Siemens CEO and vice chair of the Northern Powerhouse Partnership. He was supported by nine senior professionals from industry, devolved regional bodies, and the Trades Union Congress.

The RUTR was published in August after considering over 100 written submissions. This feedback showed that the opportunity public transport presents to boost economic growth, green passenger travel, and freight, and to boost social mobility is massively underestimated. It was considered that this significant level of engagement enabled the review panel to produce “an ambitious but realistic blueprint for delivering a step-change in rail and urban transport infrastructure.”

It was suggested that the lack of a long-term plan and recent unprecedented ‘chop and change’ created significant ambiguity, raised costs, and held back investment. Yet despite this, with current low confidence in public transport, both investors and passengers have a strong desire to see significant improvement.

Long-term vision needed

The RUTR calls for government to set a goal of doubling mode share of rail within a decade. As a medium term objective, it also requires the production of a Transport Strategy for England (TSE) which considers cross border links and is linked to the UK industrial strategy. This TSE also needs to be supported by sub-national transport strategies produced by regional bodies who should have devolved five-year transport budgets.

It also notes how clear, steady investment pipelines can reduce construction costs over time as was the case for high speed rail construction in France and Spain. In part, this was due to the elimination of boom-and-bust procurement. Such pipelines also help develop the capability and capacity of the rail supply chain as well as establishing crucial investor trust and confidence. This RUTR considers the Rail Minister should be the explicit responsibility for the development of the rail supply chain.

Accelerating delivery

As the RUTR shows, project timescales could be reduced by clearer responsibility for delivery as there are too many organisations responsible for overseeing projects. This creates a burden that does not add value. It also considers that there have been disproportionate delays due to government funding decisions. Furthermore, current project appraisal guidance needs to be reviewed to recognise that transport has far reaching social benefits beyond cost benefits and reduced journey times.

In this respect the RUTR considers that there is much to be gained from the Welsh Government’s new appraisal methodology. This places less emphasis on the use of Benefit-Cost Ratios (BCRs), and more on wellbeing appraisal based on the ambitions and targets in the Wales Transport Strategy. The Welsh Government believes that transport planning is about designing good programmes and projects that meet the needs of people in Wales. This is assessed by robust qualitative and quantitative evidence, including the project’s contribution to modal shift targets.

RUTR notes that the greatest opportunity for project acceleration and cost savings is during the first 10% of project lifecycle to ensure the right foundation for capital spending ahead of investment decisions. It describes a nine-step approach developed by Arup that is claimed to reduce cost by 20% and deliver 25% faster.

Other identified issues that need to be addressed to more rapidly improve public transport are reforms to bus and rail services to accelerate urban transport delivery, planning process improvements, and greater collaboration between regions, for example in respect of additional capacity between Manchester and Birmingham.

Private finance

The necessary improvements require both public and private finance. Two ways in which the private sector can invest in transport infrastructure are suggested. One is delivery partnerships, where the private sector helps deliver the project to make a direct return on its investment. Another is capturing the financial benefits created by transport investment, for example boosting revenue or asset values.

The RUTR provides a case study about financing HSL Zuid, a 96km high speed rail line between Schiphol Airport in Amsterdam and the Belgian border. This was constructed under a Public Private Partnership in which the construction consortium has to design, construct, finance, and maintain this high speed line for 25 years. In return the Dutch state pays an annual fee based on actual infrastructure availability.

Another possibility of generating private finance is land value capture. New transport infrastructure invariably increases the value of adjacent developments. Land value capture seeks to raise funds from developers for new rail infrastructure before schemes are approved.

The RUTR recommends that the British Infrastructure Council should develop a new approach to private finance by the end of 2024.

Getting structures right

Reforms to key bodies are required to accelerate project delivery. In particular, the Nationally Significant Infrastructure Projects (NSIP), Transport and Works Act, and Environmental Impact Assessment regimes need to be reviewed to enable faster and more effective project delivery.

The RUTR considers that the new National Infrastructure and Service Transformation Authority (NISTA) should advise national and regional partners on the more effective delivery of transport infrastructure and ensure government departments work together to deliver local needs. Furthermore, the newly proposed Industrial Strategy Council needs to be expanded to include supply chains for key national infrastructure projects. In addition, TSE schemes need to have a clear pipeline of priority strategic projects which should be published annually.

Listening to workforce and users

A key RUTR theme is that the views of transport users and the workforce need to be effectively incorporated in transport planning.
For this reason, it is recommended that the customer-focused elements of the Office of Road and Rail (ORR), the Rail Ombudsman, Bus Users, and Transport Focus should be combined into one organisation with the ORR’s health, safety, and performance regulatory powers remaining separate.

In addition, a transport citizens panel should be formed as part of the consultation process for transport infrastructure design together with strengthening the role of the existing Disabled Persons Transport Advisory Committee. Furthermore, the importance of constructive industrial relations across rail and urban transport infrastructure needs to be recognised.

Challenges

The feedback received by the RUTR identified three issues that impact the delivery of transport projects:

• Lack of a transport strategy – There was a near-universal view that the lack of a coherent transport strategy is a critical barrier to progress. As a result, individual projects are assessed on their own merits rather than having a comprehensive programme to achieve strategic objectives. This leads to an escalation in delivery costs, lack of investor confidence, a failure to address passengers and freight growth, as well as preventing the supply chain developing expertise and resources. It also makes major projects vulnerable to political shifts.
• Failure to get basics right and put customer first – Regional UK cities underperform European cities in respect of integrated ticketing and fares. The population share that can access the city centre in 30 minutes is also well below the European average. This negatively affects labour markets. The new government needs to overcome barriers to integrated transport including bus deregulation and rail privatisation which has resulted in poor connections between inter urban rail and urban public transport.
• Deep and growing productivity gap – London is 26% more productive than UK average. High quality affordable transport is essential if this disparity is to be reduced. Moreover, transport investment signals confidence and serves as a focal point for other investment. The productivity impact of stronger connectivity through the introduction of inter-city high speed rail is evident by the economic growth in European secondary-city regions. As an example, cities like Düsseldorf, Cologne, and Bonn have productivity levels significantly above the German average.
• Loss of expertise – A growing tide of expertise is leaving the UK to countries that better recognise the benefits of rail and urban transport. Britain is thus losing personnel to its global competitors who could otherwise be helping strengthen the economy.

Resetting transport

High quality transport is critical for businesses to move goods, forge new connections, create opportunities, and generate wealth. Thus, rail and urban transport are central to the challenge of driving economic growth. Poor transport also adversely affects social, environmental, and economic outcomes. Yet compared with continental Europe, the UK has poor connectivity within and between city regions where labour markets are too small to create a proper counterweight for London. Hence, if our cities and regions are to thrive, there is an urgent need to improve rail and urban transport.

Furthermore, the RUTR found evidence that some parts of the supply chain are looking at opportunities elsewhere in the world. Hence without a firm commitment to act soon, there is a risk that the UK will lose the resources and competence needed to deliver its transport plans.

The RUTR panel therefore considers that time is of the essence and hopes that the new Government will act swiftly to adopt the proposals in its report which are an opportunity for a major reset of rail and urban transport investment.

Image credit: David Shirres