Transport
Scottish Policy Forum Paper no. 10
Dear Colleague,
I am pleased to be presenting the tenth Scottish Policy Forum paper on Transport.
As the Party’s Infrastructure, Capital Investment, Housing and Transport Spokesperson, I have now become the first MSP to introduce two papers. After reading your responses to SPF 2 on Housing last year I am sure you will send in submissions of the highest quality and I know they will help me in making informed policy decisions on transport in the future.
Transport policy can be an incredibly complex policy area. Not simply because we are talking about several different forms of transport, but also because it is embroiled in a myriad of legislative regulations, complicated subsidy regimes and is linked to other policy areas like the environment, infrastructure or even health.
This paper tries to simplify and condense these issues into a succinct document and we will appreciate comments of whatever length and detail you wish to make.
I look forward to reading what you have to say.
The deadline for submissions is 30April 2013.
Yours faithfully,
Alex Johnstone MSP
- Road
a)Cars
Latest statistics show that, on average, Scots travelled 7,010 miles per person per year within Great Britain in the two-year period 2009/2010, according to the National Travel Survey (NTS). The main mode of transport, by far, was the car – accounting for three-quarters of the distance travelled: 5,049 miles.[1]The total number of motor vehicles licensed in Scotland was 2.7 millionat the end of 2011.
Road Infrastructure
Our road infrastructure is perhaps the most fundamental issue in the Transport portfolio. On a local level some of the most common residents’ complaints are about potholes or disruptive road works. However, we also need to look at the road network as a whole and ensure that it is suitable for both personal and business use.
As of 1 April 2011 there were 55,768 kilometres of public road in Scotland.[2] In terms of legislative responsibility, local authorities are in charge of the vast majority of Scotland’s roads, some 94%. The Scottish Government is responsible for the remaining 6%; these are trunk roads and most of the main A roads.
Any upgrade to road infrastructure is extremely costly. For reference, the Forth Replacement Crossing project is projected to cost between £1.45 billion to £1.60 billion,after being revised down significantly. Dualling the A9 between Perth and Inverness is projected to cost up to £3 billion[3]. Finally, the Aberdeen Western Peripheral Route, after major legal delays, is now estimated to cost £653 million – for 28 miles of road.[4]
Private sector involvement
Pressures on public finances have been a running theme across all SPF papers. In all policy areas different and innovative approaches are discussed and sometimes adopted to find the best balance between public and private investment to achieve a desired outcome.
Private sector involvement beyond its present levels (procurement contracts) has been mooted in the UK for years. From the available evidence it would seem that the general public are rather hostile to this idea – when Labour examined it in 2007 almost 1.7 million people signed a petition opposing any such measures.
In March 2012 the Prime Minister suggested that some form of road privatisation would be considered and was in fact necessary to upgrade the UK’s road network.[5]For example, it is estimated that the cost of congestion to businesses could rise to £10-£12 billion by 2025.
Increasing private sector involvement can take several forms:
- Government could lease existing roads to successful bidders under specific conditions (improvements or extensions) who would in turn receive a proportion of road tax receipts.
- As above, but with the introduction of tolls and a potential reduction in road tax.
- Government could sell existing roads to bidders and use receipts for other infrastructure projects.
- Government could incentivise the building of new roadsby allowing private investors to set up tolls.
David Cameron made it clear that he does not favour tolls on existing roads, but would be open to it as a way to fund or part-fund new infrastructure projects. Private investment models are common in continental Europe, with most major roads in Italy, for example, funded through tolls.
Environmental Issues
Transport issues, especially road and air transport, are inextricably linked to environmental considerations due to the amount of carbon emissions released into the atmosphere. On road transport, environmental campaignersconsistently lobby policy makers to introduce measures, both incentivising as well as punitive, to reduce car use or make the switch to more environmentally-friendly cars.
Environmental issues come up in virtually every transport policy debate, be it on extending infrastructure, congestion charges, parking, speed limits or public transport. We deal with all of these across several sections of this document.
Congestion charges
The Electronic Road Pricing System in Singapore is perhaps the best known congestion control system in the world; it was the first one of its kind. In the UK, London is the most prominent example.
While congestion charges are fundamentally measures to improve the flow of traffic, they have also been used to meet environmental ends. Ever since the inception of the congestion charge in London a debate has been ongoing on whether to structure it around fuel efficiency or car type. The Mayor of London has in the past refused to introduce a progressive element based on engine size arguing that it would only incentivise people to ‘downsize’ to avoid paying the charge and actually increase the number of smaller cars and traffic pollution.
A scheme does exist, however, which offers discounts to cars with fuel efficient engines. A consultation is currently underway on whether to remodel it to offer discounts purely to electric and some hybrid cars.
Electric/Hydrogen Cars
The last few years have seen a rapid expansion in the electric and hydrogen car market. The most significant public costs associated with ‘green cars’ is the development of an infrastructure of charging points.
The Scottish Government, in cooperation with the Department for Transport, is investing £2.6 million into developing a network of charging points for electric vehicle use. Under the scheme electric vehicle drivers will never be further than 50 miles away from a charging point. Furthermore, individuals will be able to get up to 100% funding support if they want to install a charging point at home.[6]
It has been pointed out that while electric cars reduce emissions directly, they may well have the opposite effect indirectly. Electricity generation is still largely dependent on coal and gas powered stations and an increase in electricity demand might actually increase carbon emissions.
The second most popular ‘green car’ option is hydrogen fuel cell vehicles. They are effectively carbon neutral – the fuel cell by-product is water. Developing a hydrogen infrastructure, however, is significantly more expensive than the above since it requires facilities for the production of hydrogen as well as its transport, be it on tankers or via pipelines. Germany has invested considerable amounts of money (ca. 1.4 billion EUR) and time into achieving their hydrogen fuel strategy and is on target to build 50 hydrogen stations by 2015.
Others
Parking charges
The debate on parking charges in towns and cities has also been used in an environmental context. In February 2013, during the budget negotiations at Edinburgh City Council, the Green Party outlined several measures to discourage car use, including a hike in parking charges and second car permits, cuts to the infrastructure budget and an end to free parking during festivals.[7]
Scottish Conservatives, on the other hand, have suggested that high parking charges are one of the main reasons for ailing town centres. With free parking at major shopping centres outside of towns, it is almost impossible for High Street retailers to get enough customers through the door.
Speed limits
The Scotland Act 2012 devolves powers over the variation of the national speed limit for motorcars, but not other classes of vehicle. The Act devolves a broader regulatory power – for instance, the ability to vary the limit for roads which are currently classified in a single way for speed limit purposes. In other words, specific speed limits can now be designed for specific roads.
British speed limits have been considerably criticised in the past.[8] The House of Commons Transport Committee noted in 2002 that speed limits are often not appropriate for the roads in question and that the system of road classifications is out of date. The UK Government intends to consult on the national speed limit and review several options.
Scottish Conservatives have previously argued that it is crucial that we maintain consistency across Great Britain. The UK Government has intimated that it would be open to considering an 80 mph maximum national speed limit. Predictably, the then Cabinet Secretary for Government Strategy Bruce CrawfordMSP reacted as follows:
“On speed limits, these powers will enable the Scottish Government to make the right decisions for Scottish roads rather than have any changes imposed by Westminster. Road safety is our first priority and we have no current plans to increase speed limits.”[9]
b)Buses
The vast majority of bus services in Scotland are operated privately on a commercial for-profit basis, with the only exception being Lothian Buses jointly owned byEdinburgh, East Lothian and Midlothian Councils. Presently, the role of the public sector is in providing grant funding to meet specific ends – be it support for the elderly and disabled or environmental incentives.
The most prominent public initiative in Scotland is the National Concessionary Travel scheme which ensures free bus travel for the elderly. We have covered the scheme in our SPF 3 Social Care paper, where the vast majority of respondents argued that it should be aligned with the pension age to prevent its use by daily commuters.
Rural bus network
Due to the economic downturn, public transport links have been under pressure particularly in rural communities. A small reduction in urban routes and times can be offset a lot easier than in rural areas, some of which have lost their only means of transport. People on low incomes, who can not afford to run a car, are especially affected.
Scotland does have a community bus network which depends solely on local authority funding. Established third sector organisations help deliver some schemes on the ground, but for the most part community transport links are run by local volunteers who bid for council funding. Each year approximately 2.6 million journeys are made in Scotland under such schemes.[10]
Environmental measures
Public funding is also provided to incentivise bus operators to renew their bus fleet with more environmentally friendly vehicles. In August 2012 the First Minister announced a £3.3 million package for a ‘green bus’ scheme in Aberdeen. The money comes from several sources including the EU, Scottish Government, Scottish Enterprise as well as Aberdeen City Council. The funding will be used to build a large hydrogenrefuelling station as well as the introduction of 10 hydrogen fuel cell buses in Aberdeen to operate from 2014 – making it the largest fleet of hydrogen buses in Europe.[11]
The Bus Service Operators Grant (BSOG) is a payment to bus operators which offsets a high proportion of the fuel duty cost they incur and is designed to help passengers by making travel more affordable and by incentivising bus operators to keep less economical routes running. Payments to Operators are calculated on the eligible kilometres run on local bus services, the total volume of fuel used and a pre-determined payment rate set by Transport Scotland (currently 41.21p per litre for all fuel types apart from bio-fuel which is 57.19p per litre).[12] The BSOG is currently being reviewed and it has been intimated it will be tied further to environmental objectives.
c)Cycles
Promoting active travel hasmany individual and collective benefits - environmental, financialas well as health. The biggest issue in most urban areas is the lack of an appropriate cycling infrastructure. There are stark differences when comparing Scotland to some continental countries where active travel has been promoted for decades, most famously Denmark and the Netherlands.
Cycling route funding is the responsibility of local authorities, which in Scotland are under significant financial pressure due to both real terms central grant cuts as well as the council tax freeze.
Q1: Do you think we should increase private sector involvement in road infrastructure projects?
Q2: Are there specific projects you would like to see delivered in your area?
Q3: What is your view on parking and congestion charges?
Q4:Should the Government do more to support ‘green transport’ like electric or hydrogen cars and buses? Should we focus on promoting active travel?
Q5: Do you have a view on speed limits on Scotland’s roads?
Q6: Do you have any policy suggestions that could improve Scotland’s bus network, both commercial and community buses?
- Rail
Scotland’s rail network has350 railway stations and2,776 kilometres of track. Over78.3 million passenger journeys are made on the network each year.[13] The rail network is vital to Scotland’s transport system, with multiple commuter routes as well as freight routes supporting individuals and businesses.
a)Franchise system
The present franchise system has evolved from a self-sufficient fully private model pre-1948 through a fully nationalised rail network until 1993. Since 1993 the system has changed even further. Presently, rail infrastructure across the UK is owned by National Rail, which is run as a not-for-profit company (any profits are reinvested in infrastructure). Rail operations itself are tendered out to private companies under conditions set by the Government. The Scottish rail network is currently run by First ScotRail which was awarded the contract in 2004, due to expire in 2015. The contract is worth around £2.5 billion.
The privatisation of rail services was controversial and political party positions, especially our opponents’ views, have varied throughout the last two decades. Most recently, Ed Milliband suggested he would be open to including rail re-nationalisation in Labour’s 2015 General Election Manifesto. In Scotland, the SNP has argued for nationalisation in the past as well and has recently stated it would be one of the options they would look at should Scotland become independent.
Those who broadly support the current model point to the fact that privatisation has been an overall success, with passenger levels returning to pre-nationalisation levels and significant service improvements. The number of journeys across the UK has increased by 60% since 1996, and there have been significant improvements in punctuality as well as high investment levels.[14]
Other options for reform have been suggested though. There are 19 franchises across the UK, with ScotRail being the only one in Scotland. An option would be to break it up into smaller contracts to achieve area-specific targeted outcomes. Last year the Scottish Government announced its plans to separate the Caledonian Sleeper Service into a new franchise to “obtain more focused management of the Sleeper operation”.[15] Train Operating Companies have also argued that longer (15-20 year) contracts would provide better investment confidence.
b)High Speed 2
Rail infrastructure, as mentioned above, is a reserved matter for the UK Government. However, we felt that due to the magnitude and controversy of High Speed 2 it should be included in this paper.
The HS2 project has been officially announced in January 2012 following an extensive consultation process throughout 2011. It has been billed as “the most significant transport infrastructure project in the UK since the motorways were built in the 1950s and 1960s”.[16]It is due to start construction in 2017 and first trains of Phase 1 between London and Birminghamare due to operate in 2026. It is expected trains could travel at up to 250 mph, making them faster than the French TGV or Japanese Bullet trains.
Phase 2 would extend the route to Manchester, Sheffield and Leeds, with future phases considered would include extensions to Glasgow and Edinburgh. In November 2012 the Scottish Government announced its intention to build a high speed line connecting Glasgow and Edinburgh, potentially cutting journey times to less than 30 minutes. High speed trains can travel on old infrastructure as well meaning that, following Phase 2, journey times for Scots travelling South will be significantly cut regardless of further extensions. Journey times between London and Edinburgh or Glasgow are estimated to fall by an hour.
The UK Government argued that the HS2 project will be a major boost to the UK economy. The costs are significant, it was estimated that the entire Phase 1 and Phase 2 network may cost up to £30 billion. Proponents of the scheme, however, argue that wider economic benefits will mean an investment return of 2:1.[17]
c)Rail fare structure
The rail fare structure in Scotland is based on four main ticket types: advance, anytime, off-peak and season tickets. In addition to this concessionary travel schemes for young and elderly people are in operation, providing 33% discounts for £28 per year.[18] The franchise renewal process over the next two years offers an opportunity to review the fare structure.
The complexity and inflexibility of the current system has been criticised in the past. Some ScotRail fares are regulated by the franchise agreement, while others are set on a purely commercial basis.
As part of their contract, First ScotRail must limit ticket price rises to just above the inflation level (RPI +1%). In comparison, some companies in England have agreed contracts that limit fare increases to RPI +3%, in exchange for other service improvement conditions. It could be argued, however, that in Scotland, where the rail franchise is cash negative and is dependent on public subsidy, higher fares would be offset by lower tax subsidies and vice versa. It is therefore a matter of finding the right balance between a taxpayer and fare-payer funded system.