The Department for Transport’s Annual Report 2008 (HC 1148-i) Transport Committee 29 Oct 2008

29 October 2008
The Department for Transport’s Annual Report 2008 (HC 1148-i)
Evidence given by
2.45 Department for Transport Rt Hon Geoff Hoon MP, Secretary of State Robert Devereux, Permanent Secretary, DfT.

Q26 Mr. David Clelland: Just to return to your statement, Secretary of State. They say it is an ill wind that blows no-one any good and certainly in the north-east we look upon the possibility of having improvements to our transport infrastructure as a very bright silver lining in a very dark cloud. What I am concerned about is the process as to how these transport infrastructure projects might be identified. The problem with the current regional funding allocation is that the amount of funding which is available in the north-east, for instance, is not sufficient to cover the major projects which we think are a priority, so therefore they are not identified within the plans. In the past the Department has used that against us by saying the dualling of the A1 from Newcastle to Edinburgh cannot be a priority because it is not in the plan and it is not in the plan because there is not enough money to cover it. I am just wondering whether or not when we come to identify the priorities in the regions that might be dealt with under this new system, whatever it might be, these are going to be outwith the normal regional funding allocations and planning within that structure?

Mr Hoon: Not in the short-term, no, because clearly we will have to live within the spending envelope that has been agreed across Government in the CSR. That is not to say there are not ways of bringing forward spending that has been committed because by doing that sometimes there are savings to be made in any event. Although at the moment the construction industry as far as public sector projects are concerned is busy, clearly we might even be able to take advantage of some slack in the industry to drive down prices. There are opportunities there that we will be fully exploring. Robert, I do not know whether you want to talk about the more general organisation of the regional plans?

Mr Devereux: We have extended the regional funding allocation right out to the course of the Ten Year Plan for which we have got our own budget from the Treasury, so we have provided as much certainty as we can in that. Some of the things we are talking about are really quite long-term, so the fact we are talking about medium-term budgets, if you call that ten years, does not of itself preclude questions about where might you be going beyond that. The first step is to work out what are the additional projects or where would we most want it to be going in terms of the National Transport Strategy and then think about which period that will fall in and then you come back to the budget question after that.

Q27 Mr. David Clelland: On the high speed rail question, I was interested to see you were talking about the possibility of providing new lines. Does that mean that the Department’s mind is no longer closed to the idea, for instance, of a maglev line, or is it still closed to that idea?

Mr Hoon: It is certainly not closed to it, although I think the Committee will be aware that the track costs are something like three times as much for a maglev line as for a conventional line. We are certainly not closed to it but we have got to be realistic about what we can afford.

Mr. David Clelland: You do recognise that the north does not end at Leeds?

Q28 Mr Martlew: Or Nottingham!

Mr Hoon: I have a son who spent four years at Durham University so I am quite used to going beyond Leeds.

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Q43 Mr. David Clelland: What action have you taken to alleviate the concerns of local authorities regarding the funding arrangements for Local Transport Plans?

Mr Devereux: This goes back to the question that ---

Q44 Mr. David Clelland: Well, some local authorities have raised concerns about the funding arrangements of the Local Transport Plans.

Mr Devereux: About their ability to borrow against public revenue.

Q45 Mr. David Clelland: Yes.

Mr Devereux: I fear I am going to give you the same answer I gave you last time.

Mr Hoon: I reckon that is a good idea!

Mr Devereux: In every case we have provided a provision for each local authority for capital spending. They have also had revenue support grant provision made to them which by common consent they do not want attributed to any particular use of revenue support. The question then comes back as, "I would like some more revenue in order to support some of this borrowing in certain circumstances to do with floors and ceilings".

Q46 Mr. David Clelland: Do you have plans to simplify the arrangements? They are quite complicated.

Mr Devereux: I feel we are in a position where people want two different things simultaneously. On the one hand they do not want their revenue support grant hypothecated to particular things and it would be in the Secretary of State’s gift, if he wanted to, to hypothecate this and say, "This is for the revenue support for that capital". That is universally not required by local government who reasonably enough want to make their own choices. There is a disjunction between those two. The Department for Transport is, indeed, putting on the table the ability to spend the capital money in that fashion if that becomes the choice of local government.

Q47 Mr. David Clelland: What impact do you feel that the revised funding arrangements will have on local authorities on your urban congestion PSA targets?

Mr Devereux: The urban congestion PSA targets, as I understand it, each one of the ten areas for which there is a target has both a constructive delivery plan that they stand by and has been rewarded for the efficacy of the plan and, indeed, for some early progress. All the signals I have are that they are standing behind the commitments they have made.

Q48 Mr. David Clelland: On the question of urban congestion, I notice in the Secretary of State’s statement that we are talking again about the possible wider implementation of hard shoulder running. What impact might that have on one of the ten worst congested roads in the country, namely the A1 Western Bypass around Gateshead which is only a two-lane motorway and does not have any hard shoulder at all? What plans does the Government have to deal with this heavily congested road?

Mr Hoon: Hard shoulder running necessarily requires there to be a hard shoulder, so I think the start of the question is probably a red herring in terms of its conclusion. I do want to say something about it because the alternative hitherto has been quite a costly programme of motorway widening, costly both financially but also in terms of disruption. Finding a scheme, trialled now for more than a year on the M42, that can avoid financial as well as the physical cost of widening seems to me wholly sensible. The reports that I have read about the experiences of the M42 are very positive and we now have quite a long list, but I cannot remember whether the A1 is included in that.

Mr Devereux: No.

Mr Hoon: The answer is no. The result of that means that we can then focus the money that we might otherwise have expected to spend on widening into those areas where widening is genuinely needed. It seems to me that this is one illustration of that. I think there is a programme for the A1.

Q49 Mr. David Clelland: The A1 motorway is a three-lane motorway apart from the stretch which runs through the north-east of England where it is two-lane.

Mr Hoon: I am sure that is in the plan somewhere. I am looking for guidance.

Mr Devereux: What is in the plan is for a while now the Highways Agency has been working with the local councils to identify what is the best way to ensure that stretch of road operates well.

Mr. David Clelland: I know to my certain knowledge they have been working on it for 20 years now. I first raised this with the Conservative Transport Minister, that is how long ago that was. How long is it going to take to resolve this problem?

Q50 Chairman: We hope we can get a resolution to that.

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Q63 Mr. David Clelland: Can I ask you some questions on concessionary travel? When will you have data on the impact of the national concessionary fare scheme on bus patronage?

Mr Devereux: About nine or 12 months after it started.

Q64 Mr. David Clelland: It started in April this year, so we are expecting it by the end of this year, are we?

Mr Devereux: At the end of the financial year. We are getting information now. The answer to the question as to when will we actually know anything about where it is going is that that will be after we have analysed the data.

Q65 Mr. David Clelland: Does the Department think that the current allocation of concessionary travel special grant to local authorities is satisfactory and do you intend to review it?

Mr Hoon: In the sense that we do not have the data, I accept that we cannot be absolutely precise. What we are really confident about is that there is enough money there to allow local authorities to do the job. It is costing something like £212 million this financial year in addition to the considerable support we already give to local authorities for transport. There should been enough money. I accept that in some areas there appears to be some anecdotal concern that there is not, and we need to look at that in the light of the data that you referred to in your previous question.

Q66 Mr. David Clelland: Can I ask you a question about the possible extension of concessionary travel? Many young people find it very expensive to travel back and forth to college, training, et cetera. Is there any intention of the Government to look at whether it might be extended to young people?

Mr Hoon: I have already mentioned the figure that the scheme brought in in April cost. One of the practical consequences - and I do not have a closed mind to this; I well understand the benefits of extending these schemes - is that if you are a young person going to college, you need to travel in peak time. That will necessarily have a much bigger impact. One of the advantages, if you look at it from a transport policy perspective, of concessionary fares is that after 9.30 we are using what is often surplus capacity. So, in a way, this is helping the bus network to develop, perhaps allowing some routes to prosper that might have been marginal had they depended on the revenue only at peak times. In policy terms, that is a good thing. We would have to look at any extension to young people in policy terms if that meant, and it must mean for young people, that they are travelling at peak times. What are the consequences in terms of cost which is going to be perhaps significantly more than the £212 million because they will be paying peak fares as well? In addition, what are the consequences for the bus operators? I am not wholly sure that they would welcome a significant influx of free travellers in peak times and it would be something we would have to look at in the round. It is something that I am certainly prepared to discuss, not least if the Treasury is prepared to fund it.

Q67 Mr. David Clelland: Is there any intention to look at extending the concessionary travel scheme to other modes of public transport - light rail, local rail services?

Mr Hoon: Some local authorities of course already do that. It is wholly within their discretion to do so. Some local authorities do have comprehensive passes that allow that kind of inter-modal transport.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.