Integrated transport delivery - is it working across Government departments?

Annex A: Case study evidence

1. Emerging issues from status quo (desktop) studies
2. Key lines of enquiry
3. Hearing attendance and summary of proceedings

1. Emerging issues from status quo (desktop) studies

Milton Keynes South Midlands (MKSM)

Meeting sustainable communities objectives

There is a concern that the objective will become increasingly focussed on meeting housing completion targets. Whilst Community Infrastructure Funding (CIF) has been provided to support some of the transport investment it is unclear how this is being justified in terms of its contribution to wider objectives.

Sub- regional prioritisation

The role of Regional Transport Boards in determining priorities at a sub-regional level is unclear. Despite prioritisation approaches being adopted at a regional level it is unclear how priorities are being determined for the sub-region given the MKSM area cuts across three Regions. It is also unclear to what extent priorities are being driven by growth area objectives.

Governance

The MKSM approach based around Local Delivery Vehicles (LDVs) each focused on an urban area which provides a strong local focus to delivery. This is perhaps seen as a strength of the MKSM approach, however, as delivery agencies the LDVs are dependent on strategic decision-making functions at central and regional levels.

Funding issues

There is an increasingly large funding gap between what is required to fund transport investment and what is available.

Securing investment is not helped by funding arrangements being fragmented with budgets for transport at local and regional levels unlikely to provide a step change in development.

Conflicting stakeholder interests

The Highways Agency's concern over development traffic impacts on the strategic road network is leading to it taking a tougher stance on new developments as evidenced by the Section 14 Directive that is preventing development around Kettering.

The availability of funds for new rail infrastructure looks bleak set against the current policy focus of making better use of existing capacity. However, east/west rail proposals are seen as key in providing for a reduced dependence on north/south commuting and in better connecting existing MKSM urban areas (the focus for growth).

Actions to address emerging issues

The Milton Keynes South Midlands Sub-Regional Strategy (March 2005) has been prepared in response to Government's request to the three Regional Planning Bodies (whose areas cover MKSM) to develop proposed alterations to Regional Planning Guidance for the South East, East Midlands and East of England.

The MKSM Strategy has sought to provide strategic guidance on the scale, location and timing of development and associated employment, transport and other infrastructure to 2021, and the necessary delivery mechanisms. It provides a longerterm perspective for the sub-region to 2031 in the form of uncommitted planning assumptions subject to later review. MKSM has already provided revisions to the 3 Regional Spatial Strategies and is providing strategic guidance for Local Planning Authorities in preparing Local Development Plans. It also informs the preparation and reviews of Community Strategies, Regional Economic Strategies and Regional Housing Strategies.

The MKSM approach based around Local Delivery Vehicles (LDVs) each focused on an urban area which provides a strong local focus to delivery.

The issue of funding and, specifically, the co-ordination of developers' contributions on an area-wide scale, have been addressed within the Milton Keynes area in conjunction with English Partnerships (EP) through a mechanism based on strategic application of Section 106 TCPA, 1990.

The Section 106 based tariff differs from the Planning Gain Supplement (PGS) being considered by the Treasury and Department for Communities and Local Government (DCLG) as set out in a paper published in July 2005. The PGS in theory will enable the benefit from the increase in land values to be better captured but is difficult to operate in practice and at worst could be an obstacle to development.

Milton Keynes and English Partnerships have taken a lead on this. Private and public sectors (MK Council) jointly agree a list of regional and local infrastructure required to support growth proposals. A 'roof tax' is then negotiated as a flat tariff to be contributed by landowners/developers towards the agreed schedule of infrastructure. The tariff is most probably indexed in line with house prices. The gap in funding needs to be met by Government or other funds along with funding the cash flow lag between when infrastructure is required and the flow of 'roof tax' funds is sufficient. EP has agreed to fund the gap and act as 'ringmaster' in the negotiations between the parties. The total being raised in MK is £310m, £111m of which is for transport. The 'roof tax' would contribute about 19% of the total funding (including Highways Agency (HA), PCT, LTP, Bucks CC,etc).

Bibliography

• The Milton Keynes South Midland Sub-Regional Strategy (March 2005) Alterations to RSS's covering East of England, East Midlands and South East England
• Milton Keynes South Midlands Study (September 2002)
• Growth Area Assessments (GAAs) (2002)
• North Northants Together (Feb 2005)
• Sustainable Communities Plan, ODPM (2003)
• The Regional Spatial Strategies (RSSs):
• East Midlands Plan (March 2005) - RSS8
• Draft South East Plan (July 2005) - RSS9
• East of England Plan (Dec 2004) - RSS14

Regional Economic Strategies (from the Regional Development Agencies)

• East Midland Economic Strategy 'Destination 2010' (March 2003)
• South East Economic Strategy
• East of England Economic Strategy

Integrated Regional Strategy (from Regional Assemblies)

• East Midland Integrated Regional Strategy (January 2005) - provides sustainable development framework for the East Midland Spatial Strategy

Housing Strategies

• South East Housing Strategy (2005) - South East Regional Housing Board

Provisional 2nd Local Transport Plans (LTP2's)

• Milton Keynes
• Northamptonshire
• Bedfordshire
• Buckinghamshire
• Luton and Dunstable

Thames Gateway South Essex (TGSE)

Development targets and transport infrastructure

Large regeneration schemes are already underway in the Thames Gateway where factors including good or planned transport links, waterfront locations, reasonable environment, social and community infrastructure are positive. Examples are Woolwich Arsenal, Greenwich Peninsula, Isle of Dogs, Deptford and Lewisham. Housing completions in the London Thames Gateway (2001-04) are virtually at the required average annual rate to meet the 2016 target. However, in TGSE where accessibility is poor and there are less attractive sites, completions over the same period are at less than 80% of the rate required to hit the 2016 target.

Spatial strategy

Tempro forecasts suggest that patterns of population and job increases will encourage commuting between Thames Gateway growth areas and particularly into London. The 50% target for affordable homes will attract many London based key workers. Others with growing families, will trade more space and a less crowded environment for longer work journeys.

The results of the recent London and South East Commuter Study show that in TGSE there is a projected increase of 18% in Rail/London Underground passenger -kilometres, and this has serious implications for severely congested London commuter lines. Peak period trains arriving at London terminal stations serving the Thames Gateway are already 40-50% overcrowded.

Delivery agencies and transport infrastructure investment

The Government has carefully avoided a 'top down' single agency approach to delivering the Thames Gateway growth and instead has sought to establish local delivery partnerships that work through established statutory bodies and executive agencies. However in Thames Gateway the situation is confusing. In the words of the Urban Task Force:

'The plethora of overlapping, but differently funded and monitored, area based regeneration bodies has reduced the delivery effectiveness of public sector led regeneration schemes. This has been exacerbated by the disconnection of regeneration expenditure between Government Regional Offices, Regional Development Agencies and English Partnerships and the huge number of new ineffective partnerships at local and sub-regional levels, particularly in areas like the Thames Gateway.'

Locally it is felt that transport investment priorities are not consistent between the Sustainable Communities Plan, the Interregional Planning Statement, the East of England Plan and the Thames Gateway South East Business Plan, and that this detracts from the credibility of these plans and results in tensions which will detract from delivery in TGSE.

Funding issues

TGSE faces a huge funding gap between what its Business Plan identifies as being essential infrastructure investment to meet Government's housing allocation and what is likely to be available, essentially through the LTP allocation.

Local experience has found transport infrastructure funding to be complex and fragmented. The Community Infrastructure Fund is limited and tied to regeneration schemes while the much greater funding that will be available from the Transport Innovation Fund (TIF) will be tied to demand management and economic development criteria. Future capital funding through HA and the Department for Transport's (DfT) Rail Division is expected to be very limited. Meanwhile the flow of funds and processes for mobilising them through EERA, EEDA, DCLG, DfT, GOEast is complex. .

Action to address emerging issues

TGSE has recognised the need for a step change in investment in transport infrastructure and its Business Plan sets out the requirement for investment. However, as the investment identified goes well beyond the priorities recognised in the Sustainable Communities Plan and the Interregional Planning Statement there is much to be done to secure funding and achieve implementation.

TGSE has established a Transportation Delivery Board to deliver the transport proposals. It is comprises Essex County Council, Southend Borough Council and Thurrock Borough Council (the Local Transport Planning authorities) with representatives from the Highways Agency, DfT (rail) and Essex Economic Partnership. Its role is to set priorities, prepare schemes, lobby fund holders and mobilise private sector participation.

The Business Plan considers ways of addressing the funding gap, among which the levels of potential 'roof tax' developer contributions have been identified as necessary and possible. Were a tariff of £10,000 per dwelling secured through section 106 Agreements, then the minimum short term expenditure required to 2010 could be covered, though by 2020 there would still remain a funding gap of £1.45billion to be met from other sources. TGSE is also considering the contribution that demand management could make to reducing the investment required.

Bibliography

• Sustainable Communities: Building for the Future, ODPM, 2003
• Growth and Regeneration in the Thames Gateway - Interregional Planning Statement by the Thames Gateway Regional Planning Bodies , ODPM on behalf of EERA, EEDA, Mayor for London, 2004
• The London Plan - Spatial development Strategy for Greater London, GLA, February, 2004
• The South East Plan, SEERA, Nov 2005 (consultation draft)
• East of England Plan (Draft revision to the RSS for the East of England), EERA, December 2004 (consultation draft)
• Surface Infrastructure of National Economic Importance (SINEI) Faber Maunsell & Ecotec, Joint Regional Assemblies, January 2004
• RPG9a - The Thames Gateway Planning Framework, DoE, June 1995
• Creating Sustainable Communities: Delivering the Thames Gateway, ODPM, March 2005
• RPG - 9 Regional Planning Guidance for the South East, ODPM March 2001
• Delivering the Future - Thames Gateway South Essex, July 2003
• 'Gearing Up for Growth - Delivering a shared vision: the regional economic strategy for the East of England in TGSE', SEEDA
• Creating Sustainable Communities - Delivering the Thames Gateway, ODPM, March 2005
• Draft RPG 14 Sub-Regional Strategy for Thames Gateway/South Essex
• Thames Gateway South Essex Business Plan for Transport, TGSE Transportation delivery Board, November 2005
• London - Southend Movement Study (LOTS) (Hyder Consulting) 2003 TGSE Partnership
• Transport and Development in the Thames Gateway (LASER), Mott MacDonald, February 2003
• People, Places and Prosperity - delivering Government Programmes at the Local Level, Audit Commission, 2004
• London and South East Commuter Study, Cambridge Econometrics, WSP
• Towards a Strong Urban Renaissance - an independent report of the Urban Task Force chaired by Lord Roger of Riverside, November 2005
• Gateway People - The aspirations and attitudes of prospective and existing residents of the Thames Gateway, Jim Bennett and James Morris, IPPR, January 2005

Northern Way

Integration of levels of governance

The Northern Way encompasses various levels of Government relevant to the connectivity/transport objectives of the Northern Way - local Government, which itself is divided into Unitary, County and Borough Councils, three Regional Assemblies (RAs), three Regional Development Agencies (RDAs), three Government Regional Offices (GOs) representing Central Government and the Passenger Transport Authorities (PTAs). In addition, other key stakeholders are the Treasury, the transport operators for freight, bus and rail, the business agencies such as the Chambers of Commerce and the other Government agencies/departments such as the Highways Agency and the DfT. This inevitably leads to issues relating to achieving consensus of a common agenda and the integration of governance, delivery and funding. In addition, there are eight City Regions.

Role of the city regions v the regions

At present, the City Regions have no statutory position. The RDAs deliver the Regional Economic Strategy, the RAs deliver the Regional Spatial Strategy, including the Regional Transport Strategy, the Local Authorities produce the Local Transport Plans and the PTEs develop and implement the public transport provision. There is, therefore, an issue related to the role of the City Regions vis- a- vis the other agencies.

Role of the PTEs, the Regional Transport Boards, the Regional Assemblies/Local Highway Authorities and the Northern Transport Compact

In relation to regional transport planning there are also potentially contentious issues. . The Passenger Transport Executives (PTEs) only deal with public transport and their boundaries do not include large parts of northern England; for example Tees Valley and Cumbria. The boundaries are essentially the old Metropolitan boundaries and in some cases do not reflect current journey to work patterns. Also, PTEs do not currently have powers to plan the roads system. This is done by the Highways Agency, at the strategic level and Local Government at the local/regional level. This does not make integration of modes an easy thing to achieve.

Action to address emerging issues

Many of the projects key to the Northern Way are pan-regional, crossing two or three regions. Under current arrangements the planning of such projects is not easy. Thus, the Northern Transport Compact has been formed; a voluntary body with a pan-northern focus on the key priorities linked to closing the output gap.

Bibliography

• Moving Forward: The Northern Way First Growth Strategy Report, September 2004
• Moving Forward: The Northern Way Action Plan Progress Report, January 2005
• Moving Forward: The Northern Way Business Plan 2005-2008, June 2005

2. Key lines of enquiry

Objectives

• How are local delivery vehicles approaching transport from the point of view of delivering wider economic and social objectives?
• Is there an issue related to the link between economic development and productivity and connectivity? (On the one hand the evidence is mixed and difficult to measure and on the other hand the Government are promoting it as a measure of importance with respect to the prioritisation of funding).
• Is there is a need to strengthen the evidence base and help regional/local agencies to square this circle so that it is not put in the "too difficult" box?

Strategy and planning

• Are those tasked with leading on the transport agenda working sufficiently within the broader planning, economic development and housing policy contexts?
• Is there a tendency for each local development area to plan separately and be in competition even within the region?
• How confident can we be that current levels of and approaches to integrated planning (given the multi-agency involvement) will lead to sustainability objectives being delivered in practice?
• Do the regional strategies and planning guidance provide a sufficiently clear and consistent framework in which local delivery agencies can operate?
• For example, are there discontinuities between RSS and RES /economic growth plans and in the Northern Way, planned growth around airports as economic hubs in contrast to RSSs zoning the land around airports as Green belt).
• Is there is a mismatch between the role that (local or national?) strategic planners see being played by rail in the Northern Way and MKSM areas and the lack of priority/investment for rail?
• How effective are the various approaches to prioritisation in reflecting commitments to delivering growth at inter-regional, regional and local levels?
• How are agencies dealing with the link between economic development and productivity and connectivity with respect to the prioritisation of funding? Are they content with the tools, procedures required and what can be done to make this less problematic?

Funding

• How are the interrelationships handled to optimise funding allocations?
• How does Government determine the balance between different funding pots (e.g. Community Infrastructure Fund (CIF), and Transport Innovation Fund (TIF) )?
• How is funding being pursued through different pots and to what extent is the fragmented approach to funding hindering progress by creating uncertainty. How might this be improved?
• What is the best way to capture planning gain to ensure the private sector contributes to bridging the funding gap for infrastructure development?
• To what extent can new approaches to capturing planning gain be developed into models for delivering infrastructure that draw on private finance?

Governance

• What is the future role of city regions and growth area agencies with respect to existing Government and regional governance?
• Is the balance between Governance, control of finances and delivery responsibilities right?

Delivery

• How compatible are current governance arrangements with responsibilities for delivery?
• How can national transport delivery agencies (road, rail and ports) best work within the policy frameworks for growth areas to deliver growth?
• How can any conflicting interests be better managed?
• Are Sustainable Communities an aspiration that will not happen?
• If so, how is this risk being mitigated?
• Do agencies have a grip on how sustainable plans and committed developments are progressing and how are they measuring this?
• Is there is a concern that the overriding objective in the TGSE and MKSM areas will become housing completions only?
• How should we best move forward to a practical solution across growth areas?
• To what extent can lessons be learned by other growth areas from MKSM as to the role of Local Delivery Vehicles and the role of English Partnerships (or other agencies) as a co-ordinator of planning gain funds?
• Where is the relative balance of support by delivery agencies for the Planning Gain Supplement proposals, Section 106 'roof tax' or other approaches?

3. Hearing attendance and summary of proceedings

Hearing at Milton Keynes South Midlands

This was held at Milton Keynes on 15 March 2006 and attended by the following:

Garrett Emmerson - CfIT
Ros Scott - CfIT
Catherine De Marco - CfIT Secretariat
George Hazel - MRC McLean Hazel
Liz Silcock - Atkins
Tim Higginson - GOSE
Sue Flack - Northampshire County Council
Mike Hayes - West Northampshire Development Corporation
Andrew Longley - North Northampshire Together
Kathryn Askew-Smith - Renaissance Bedford
Stephen Jolly - English Partnerships
Gary Bartlett - Buckinghamshire County Council
Richard Walker - DfT Rail
Kevin Wrightside - MK Council

Milton Keynes South Midlands - summary of proceedings

Objectives

The apparent disconnect was emphasised between the objectives of the 3 regions, and the growth area. It was felt that the infrastructure needs of the growth area had not been fully taken into account by the Regional Development Agencies (RDAs). Some stakeholders were also thought to see growth as primarily a means to justify more road building, and this was in direct conflict with sustainable objectives. Rail was seen to be very much market led and in its own silo. However, the East of England RDA was welcomed as a first attempt to fit objective setting and rail planning into the wider economic agenda.

Strategy and planning

Delegates felt that overall, there was a positive story to tell in MKSM with regard to strategy and planning. The Transport and Planning Sub Group is a strategic umbrella for the growth area. The sense was that the group has operated well in its co-ordination of CIF bids, although it was also felt that a lack of resources was preventing consideration of the wider strategic / regional level. The Government Office is seeking to strengthen the group and to bring on board Local Delivery Vehicles.

Attendees acknowledged the limits of partnership working, in that each member organisation has its own structure and accountability, and that it is therefore not possible to compel through this working structure. Attendees also felt that there were capacity constraints for unitary councils, in terms of day-to-day business, which acted as a barrier to their officials' participation at the strategic level.

The reference point in the growth area is the sub-regional strategy, which promotes the idea of a network of complementary places and connectivity, and includes a strategic set of transport priorities which are used as a reference point for LDVs. It also allows local authorities to align transport priorities with the RSS. The issue of prioritisation was seen as significant, and it was felt that an appropriate process to prove the value for money of individual schemes was lacking.

At the regional level, it was felt that the general direction was the right one, although the Regional Assemblies should work to ensure greater continuity between the Regional Spatial Strategy and the Regional Economic Strategy.

In MKSM, it is the inter-regional issues which are the greatest concern. This is exemplified in the issue of the A421, which is a cross regional scheme, with 2 different regional prioritisation methods at work. These prioritisation methods were considered neither to be joined up, nor to be strongly aligned to economic growth.

The Regional Funding Allocation process was felt to highlight the need to strengthen regional links. The hope was expressed that these issues would be addressed in future by means of bi-lateral discussions with the two regions, the Highways Agency and other stakeholders.

Attendees generally felt that being on the edge of a region was a disadvantage in terms of regional prioritisation.

Funding

The view was expressed that the four funding streams (Section 106 tariffs, Growth Area Fund Communities Infrastructure Fund, Transport Innovation Fund) all have different objectives and that the bidding processes were inefficient. It was often difficult to get bids in on time, particularly with CIF, and this often led to schemes being timescale rather than objectives led.

Whilst CIF was considered useful, it was considered small when compared to the extent of TIF funding. The general feeling was that CIF funding needs to be increased. There were many instances where transport infrastructure was needed to support growth, yet could not be justified in terms of Benefit Cost Ratios.

There was a general feeling that partners (including the Highways Agency) need to work together to find a pragmatic solution which would enable them to full take advantage of the opportunities offered by CIF and TIF.

The Regional Funding Allocations process was seen as extremely useful in building regional capacity, and it was felt that this would stand the growth area in good stead for future developments. However, there was some concern that all of the schemes identified in the sub regional strategy have not emerged in the regional prioritisation system.

A major difficulty in MKSM was seen to be the "difficult" geography, with the natural pull being away from the growth area towards the centre of each region. The A421 was raised in this context, as "competing" against larger schemed in the South-East, such as the A3.

The Planning Gain Supplement was not seen as an effective means of capturing private sector development gain and was seen as running the risk of discouraging developers. However the Roof Tariff approach being applied in MKSM was viewed positively, as having greater clarity and certainty, plus the fact that it is raised and administered locally. However, this mechanism is still new and initial thoughts were that it would be unlikely to generate sufficient funding.

Governance

It was felt that there was little appetite for any whole sale changes in governance. The appropriateness of city regions in what is seen as essentially a polycentric area was questioned, although some merit was perceived in wider transport functions for major urban areas. One Stakeholder advocated a bi-polar city region (Northampton and Milton Keynes) in the long term.

Delivery

There was some divergence of opinion on the deliverability of the Sustainable Communities. The challenges were seen to be in delivering the infrastructure, and in making sure that the right structures are in place to make sure it works. This necessarily involves joined up thinking and working, irrespective of the political landscape.

However, the concept of Sustainable Communities was felt to have been of overall benefit to spatial planning, although the Government was thought to have raised expectations too high, and this had caused political difficulties.

In addition, it was felt that not enough attention had been given to the economy as a driver for Sustainable Communities.

The general feeling was the MKSM has the "basics" right. The local level is working well, and clear aspirations are emerging at the sub regional level. The inter urban strategic level was perceived as working less well.

Local Delivery Vehicles were seen as a success, but needed more powers to make things happen.

The rail industry was felt to need a better understanding of spatial planning.

Hearing at Thames Gateway South Essex

This was held on 20 March 2006 at Southend and attended by the following:

Garrett Emmerson - CfIT
Sir Michael Hodgkinson - CfIT
Catherine De Marco - CfIT Secretariat
Andy Southern - Atkins
Liz Silcock - Atkins
Alex Fortune - Atkins
Brian Stewart - East of England Regional Assembly
Alistair Pollock - East of England Regional Assembly
Tony Ciaburro - TG South Essex Delivery Board
Cllr Rodney Bass - TG South Essex Delivery Board
Will Mckee - Thurrock Thames Gateway DC
Nigel Hebdon - Thurrock Thames Gateway DC
David Watts - Southend-on-Sea Borough Council
Bill Newman - Thurrock Borough Council
Ed Volkes - Thurrock Borough Council
Theo Steele - Renaissance Southend URC
Murray Foster - Renaissance Southend URC
Gwyn Drake - Highways Agency
Gary Sullivan - Essex Business Link
Mary Spence - Thames Gateway South Essex Partnership

Thames Gateway South Essex - summary of proceedings

Objectives

Attendees emphasised that RPG 9 first designated TGSE as a national priority area for regeneration. There was a feeling that the housing and growth agenda have been "grafted" onto this without due consideration. The feeling was that regeneration needs to be employment led and aimed as much at assisting existing communities to gain access to jobs as providing housing and supporting facilities for new communities. The view was that transport investment is not being addressed with these objectives in mind and appears to be contained within its own silo, focused on reducing congestion.

Strategy and planning

There was a feeling that central Government (planning) had become fragmented and that there was a need for one integrated vision to overcome this. This vision should be focused on regeneration.

The "Miliband" Strategic Framework was seen as a means of realigning and refocusing on the big picture.

The formation of the Thames Gateway South Essex Transport Delivery Board and the production of a Business Plan in late 2005 (which covers a 20 year time frame) is a means to seek a more strategic and cohesive approach to both planning and delivery at the sub-regional level, and to engage the private sector.

In the absence of this strategic framework, attendees felt there has been a piecemeal approach to planning which has manifested itself in a tendency for stakeholders to promote their flagship schemes as opposed to promoting what is best for regeneration and a lack of understanding as to the overall transport deficit for the sub-region which resulted in difficulties in matching DfT's productivity criteria with the value of wider and future benefits.

Attendees felt that the timeframe for local transport plans (i.e. 5 years) was too short, and that the links to land use are unclear. It was felt that there is a tension between RSS policies and the economic policies and the economic potential of the sub region.

There was a recognition that outward migration needed to be managed. It would not be possible to prevent commuting, and that in fact much of the wealth generated by this sector would be spent locally and therefore bring local benefit.

Funding

There was a general feeling that the available pots of funding were not capable of delivering regeneration. It was felt that CIF had encouraged some schemes in the TGSE to focus on housing growth, as opposed to regeneration. Productivity TIF was seen as favouring the buoyant areas, rather than regeneration areas. The LTP process was considered inappropriate for funding major schemes and long term infrastructure. It was also felt that Government has an unrealistic expectation of what the private sector can afford.

There needed to be a realistic use of the Planning Gain Supplement - houses cannot be built for commuters unless those homes contribute to investment in the affected corridors. However, whilst off-site costs can be explained to developers, the costs of wider infrastructure were more difficult.

There was a view that the LTP system is flawed. Government need to take a much longer view. There is also a need for better linkages between planning horizons and certainty of funding. Major schemes and long term infrastructure should not come out of and/or be funded by the LTP process. There are a series of visionary processes in operation and there needs to be a better understanding of how regeneration fits into these. What makes the LTP 'real' is its program, which takes time and effort to evolve. Major strategic schemes should follow a similar process. Everyone is working to deliver the same objectives; it's the scale of the problem that is the real issue at hand.

The Thames Gateway bill is more than twice the new spend in the whole of the East of England. It needs to be more creative in terms of how it accounts for those bills by changing the boundaries between housing, economic development and transport. Some stakeholders questioned why the Government created these sub-pools in the first place.

There is no physical impediment to do any of the schemes in Thames gateway. The first hurdle to overcome is to obtain funding for scheme design. Therefore it needs at least £25m to get scheme preparation underway.

The concept of Government money following private sector investment was considered a good idea (the example of Shell Haven was raised here). However, it was noted that eventually an absence of macro planning would deter developers.

The notion of incentives for private investment should be actively pursued.

One view raised was that strategic investment should have been put in place at a national level, and that TGSE should have its own ring fenced funding block.

Governance

On the whole, attendees felt that structures are largely irrelevant, and that the key is to work with TGSE's existing institutions. For example, Essex, Southend and Thurrock work well together and delivery is a key part of the agenda. Any attempt to restructure local Government will meet with opposition. TGSE is trying hard to work closely with other agencies and it is at the point now where delivery is becoming possible. There is no reason to change this.

In Essex, the mismatch between District and Borough Councils has been removed and it now works well within the 2 tier structure. In other parts of the East of England, there is a strong defence of the 2 tier structure. Schemes across administrative boundaries can be delivered (the example of the A13/A127 was cited). Funding was seen as the main barrier to delivery.

Stakeholders however felt that the RDA has insufficient focus on the sub-region.

Delivery

Attendees felt that considerable progress has been made on regeneration projects. There was a feeling that (local) delivery vehicles are not effective, however the TGSE partnership board will be focusing on given aspects of delivery. It has tried to feed into the main developments in transport and demonstrate that the delivery agencies of principal parties could co-ordinate activities and work together, and involve the private sector in understanding of issues.

There was general consensus on the need to continue to work together and speak as one voice both to address the fragmented approach to delivery and to lobby Government for funding through the numerous funding pots.

Hearing at Northern Way

This was held on 29 March 2006 at Leeds and attended by the following:

Garrett Emmerson - CfIT
Stephen Joseph - CfIT
George Hazel - MRC McLean Hazel
Catherine De Marco - CfIT Secretariat
Brian Corbett - CfIT
Alex Fortune - Atkins
John Jarvis - Northern Way
Andrew Johnson - Government Office of the North East
David Owen - Government Office for Yorkshire and the Humber
Nicki Mailey - Government Office for the North West
Roy Newton - Manchester City Council
Michael Padgett - Yorkshire & Humber Assembly
Michael Gallagher - Northwest Regional Assembly
Jonathan Brown - Yorkshire Forward

Northern Way - summary of proceedings

Objectives

Attendees felt that the value of the Northern Way is that it is beginning to change the perception of the North. In the past it was difficult to argue for growth as people believed that the North is in decline. In reality it is hugely vibrant, and faces many of the same issues as the south, such as the need for affordable housing and new transport infrastructure.

A key role for the Northern Way is to argue the case that transport investment can increase productivity. The Northern Way steering group therefore needs a clear set of objectives and priorities based upon economic activity.

A major weakness however, especially as it makes it bid for 2007 funding, is the fact that quantifying the economic benefits of transport, as opposed to making assertions, is currently still difficult.

Key to the Northern Way is the importance of international connectivity from ports and airports, and connectivity between the city regions.

It is now broadly accepted that city regions are important to regional economies, but in transport terms they may not be the priority. Investment should be directed into the international gateways and the strategic inter-urban infrastructure.

On the issue of how Government objectives relate to this, the group was of the view that a slight re-alignment may be necessary (to reflect the productivity agenda) and that this is a key question for Eddington.

There has been a concern in the North that DfT programmes are focussed solely on congestion, and do not take account of economic issues and regeneration. There are now fears that productivity improvements in the south east are assumed to be good nationally whereas other regions (i.e. the north) have to prove their productivity benefit.

Strategy and planning

The Northern Way recognises that London is a world city which brings enormous benefits. It therefore needs to look at how the North can play a role in continued economic growth of the country and close the gap, not necessarily only with the rest of England but with other European regions as well. This partly drives the importance of the East Coast Main Line (ECML) railway as it links Leeds and Newcastle with London, in the same way as the West Coast Main Line (WCML) railway links with the Northwest.

The Northern Way should begin to lead agendas (such as managing road and rail space) if it is to be successful in closing the output gap especially in the long term. In addition, it is soon going to have to address the issue of demand management.

It is very important to get engagement and views from the regions but it is often very difficult for the regional bodies to know exactly what they want. Bodies such as Northern Way should take the lead and provide an overview. They can then recommend what is best for the region as a whole.

What is needed is a national spatial strategy - although the Government does not want it. A plan for the railways must tie into the plans for the roads, ports etc. It would also be useful to identify the strengths and weaknesses of each mode.

Rail links to London are important, however from a regional perspective more priority should be given to the local franchises.

In the wider context, there are locations in the North (which are not even the core city regions) that are key economic drivers. An example is Chester and its growth in the financial services sector. Firms establish themselves there because of its UK location. They would probably locate in Europe as opposed to the South. This gets forgotten about - the north can be a UK location for certain businesses and transport becomes key here.

However, the strategy cannot be totally market driven which means a balance needs to be struck between objectives and national priorities. Investment cannot solely be put into Manchester and Leeds for example, which is why a spatial plan is required to invest in deprived areas, such as Merseyside. Otherwise these areas will decline further.

The main opportunities are in relation to container traffic in Liverpool, Tees and Humber. Three key transport recommendations for the Northern Way to look at are the Trans Pennine rail route - benefit all three ports; an assessment of East Coast connectivity (Tees and Humber) to markets in Midlands and South; and short sea links - e.g. Southampton to Tees/Humber and northern Europe. Most traffic today into North Eastern ports is from Belgium and Netherlands.

The Northern Way is looking at a number of projects via the growth fund in terms of accessibility to Hull Docks. In addition, Network Rail is delivering improvements into Immingham (which accounts for 25% of UK rail freight) and is working at reopening a chord into Liverpool docks. However, it is difficult to match up DfT's productivity criteria with the value of wider benefits and future benefits.

Links to sustainability are also important. There have been lots of early wins with rail projects in Northern Way. The connectivity to London, and the quality and capacity of the Transpennine and Northern rail franchises cannot be underestimated if urban renaissance is to become a reality.

A sophisticated exercise was needed to prioritise a limited pot of money for transport investment, and to work out the best use of existing resources and land use planning to make sustainable communities.

The impact of congestion on economic growth was discussed, and the group was in general agreement that it is difficult to establish at what point congestion begins to affect economic growth, e.g. London has far more congestion than the whole of the North and yet still growing.

Manchester airport connectivity is a key driver of economic growth in North England which then highlights the importance of pan regional connectivity - M62, and links to Newcastle. There are however tensions with Green Belt (National legislation) and ancillary activities (local economy), and conflicts with strategies to reduce congestion.

There is no collective position on road user charging but it is noted as an option. People are very cautious around this policy and it is viewed as a political hot potato. There is also a concern that charging may stop growth and regeneration. Manchester's future growth predictions may be able to avoid this.

Funding

Attendees felt that there is a lack of flexibility between the various funding pots, and also a lack of flexibility between capital and revenue at the local level.

Whilst the Government's Public Service Agreement (PSA) productivity target was seen as important, other targets were seen as equally so, however there was a feeling that much (of the initiative) was focussed exclusively on productivity.

Attendees felt that the Regional Funding Allocation prioritisation process had been problematic.

Governance

There has been a concern in the north that DfT programmes are focussed solely on congestion, and do not take account of economic issues and regeneration. There are now fears that productivity improvements in the South East are assumed to be good nationally, whereas other regions have to prove their productivity benefit.

Recent work has demonstrated that growth in Northern ports will benefit the UK as a whole. This will hopefully influence future ports policy and surface access. The movement of container traffic from Felixstowe and Harwich to the north will have clear benefits in terms of road and rail congestion in the south.

The view was that PTEs needed to change as the powers and functions were not consistent between them. The opinion was expressed that major investment (Transport for London (TfL) - style) is needed, and a share of the farebox income. The view was that this is why London has much better integration than Manchester.

It was felt that local structures did not need to change, but a national fare structure was advocated.

It was felt that delivery should occur at a variety of levels - the Secretary of State for Transport should concentrate on schemes of national importance. Smaller local schemes should be planned and financed at the appropriate local level. This should be accompanied by finance raising powers.

In order for city regions to work, politics must be distanced from the structure [e.g. in Manchester (Lab) and Macclesfield (Con)].

However it was noted that there would be difficulties with functionality if the Northern Way operated at a statutory level. Airport and Ports are of National importance, and therefore decisions should be made at a national level. 'Regions' should be based upon function.

There would also be issues of weighting (the Northwest has half the population in the Northern Way) and difficulties of electing regional assemblies.

Overall it was felt that the present voluntary approach to the Northern Way initiative was the best, and that this would not conflict with any plan to increase powers of the city regions plan.

Delivery

It was felt that current DfT appraisal methodologies do not adequately take account of productivity benefits. The example quoted was a potential saving on the unemployment benefit bill as a consequence of a new transport scheme which creates jobs and delivers access to work benefits.

The serving of an Article 14 notice has caused some tension in Newcastle where the Highways Agency has used its powers to delay local development that, as a consequence, will lead to congestion.

At an early meeting of Northern Way discussions had centred on the potential relaxation of DfT's development control issues across the north to try to stimulate job growth and economic development. In the Northeast the major issue is the A1 in Gateshead. Local Authorities and businesses want to develop here and have pointed out the benefits for jobs etc. Local Authorities are generally supportive of this approach as the sites are brownfield, in urban centres, and next to majors transport routes etc.

There was some feeling in the group that there may be a case for the 1988 decision regarding the removal of highways powers to be reviewed. The example of Leeds was raised, where most of the new development is not in the town centre but in the peripheral areas, causing local congestion hotspots because access is primarily by car. This local experience suggested that in practice, growth tended to conflict with articulated transport policy.

Similarly, the airports are nodes for development and growth as they are huge economic generators, yet they are all mainly greenbelt development and often difficult to get to by any other mode than car.

The group, however, cautioned against over simplification. For example, the fact the Greater Manchester Metropolitan area is an enterprise site, and development is taking place on brownfield land, does not necessarily mean that the developments are sustainable. Similarly, on the rail network, the West Coast Main Line is viewed as a national route, however this ignores the fact that for the Northwest it is also the local network serving a string of important towns.

It was felt the Office of Rail Regulation should take account of this, but it was felt that priority seems to be given to the intercity traffic. The Northern way is seeking to influence transport agencies and delivery bodies as it is felt that these can identify and deliver priorities more effectively than central Government.

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