Centre for Cities

Drop congestion charging for now

Two years ago, when the world looked a bit different, the Government invited cities to come up with local schemes to tackle congestion - with the offer of £1.4bn from the Transport Innovation Fund.

But the Government's plans to encourage city-level congestion-charging haven't worked. About 2 million people signed that Downing Street petition in 2007, then Greater Manchester voted "no" last December, and now the recession is making the whole idea of congestion-charging look totally unrealistic. Cities like Cambridge and Bristol are now unlikely to go for the congestion element of TIF - which probably won't be spent, and could be clawed back by the Treasury in next year's Spending Review. 

We support congestion-charging in principle, and the Central London scheme in particular. But the Government's strategy for more congestion charging in other cities just isn't working, and the timing is awful.

When I gave evidence to the Transport Committee on the TIF in May 2007, we doubted whether the congestion bit of TIF would be big enough to persuade Greater Manchester and Cambridge. Ministers looked like they were forcing cities to do congestion-charging via the back door, and weren't championing the case for congestion-charging strongly enough. They ended up leaving it to cities, and cities have ended up saying "no thanks".

We now think the Government should drop the congestion bit of the TIF, by the end of this year, and use the available £1 billion to kickstart a new Urban Transport Investment Fund next year. Our latest report sets out more details - and the Guardian covered it this morning.

This new Fund would be able to lend to stalled transport schemes, like the extension of the Midland Metro tramline from Birmingham city centre to the Black Country and Birmingham International Airport. It would also be able to support Birmingham's plans for a transport-based Accelerated Development Zone.

Longer-term, we will need to return to the thorny issue of congestion charging. Over 70% of commuters in England's six largest cities outside London still travel to work by car. That's not sustainable, so some form of demand management will need to be introduced.

But now, in a recession, it doesn't make sense to require congestion charging. Better to free up that £1 billion and invest in good-to-go transport schemes that will help us on the road to recovery.

Pennine Lancashire

I've just spent a long weekend in Pennine Lancashire - mainly to see the family, near Clitheroe - but I also popped in to see Blackburn with Darwen Council this afternoon.

Blackburn has recently joined forces with five other councils - Burnley, Hyndburn, Pendle, Ribble Valley and Rossendale - to form the new Pennine Lancashire Multi Area Agreement. The MAA was signed in Downing Street in January, and is one of the ten now up and running. Pennine Lancashire was the brainchild of the late Tony Wilson and his partner, Yvette Livesey.

Pennine Lancashire has a population of around 520k, but has seen a net outflow of people in recent years. Its economy is over reliant on a declining manufacturing base - 25% of all employment in the area is in manufacturing, and over 20k manufacturing jobs were lost there between 1995-2005.

The area has high levels of benefit dependency, concentrations of worklessness and under-performance on higher-level skills. The 2007 Indices of Multiple Deprivation showed that the area is performing relatively less well now, compared to 2004 - mainly because of poor housing stock and over 30% worklessness.

Despite this under-performance, Pennine Lancashire does have some reasons to be cheerful - for example, its high-value aerospace sector includes major employers like BAe Systems and Rolls Royce. And other growing sectors have done well recently, including advanced engineering and electronics. 

Critically, transport connectivity between Blackburn, Burnley, etc and the rest of the North West is inadequate, and a significant barrier to economic growth. This is something we pointed out last year, in our City Links report - which highlighted the need for better transport links between e.g. Burnley and Greater Manchester. Currently, only 2.6% and 3.6% of resident employees in Burnley and Blackburn commute into Manchester - partly because the rail links are so rubbish. It takes about 90 minutes to get from Burnley to Manchester by train.

So it's good to see that Pennine Lancashire's MAA includes plans to upgrade the Clitheroe-Manchester Raillink, East Lancashire Railway and Todmorden Curve with new and improved rail services. These will provide better connections from e.g. Blackburn and Burnley to Manchester, over 2009-14, allowing Blackburn and Burnley residents to access job opportunities in Greater Manchester - once the recession is over, of course. The funding for these improvements would need to be sourced by the local authorities, but the amounts involved aren't that big - about £9m for the Clitheroe-Manchester upgrade.       

One of the main purposes of the Centre for Cities is to put forward practical policy proposals that can actually be implemented. So I was pleased to see this one taken up by the Pennine Lancashire councils. And glad that the Department for Transport has agreed to explore these options. I understand that big-hitters like Jack Straw have given their personal backing to these rail improvements. And all six councils in Pennine Lancashire are behind the plans.

So, despite the recession and the real challenges facing Blackburn and Burnley, this is a good example of how councils can work together and prioritise some much-needed transport improvement. 

Greater Manchester says NO to congestion charge

So, Greater Manchester has said no to congestion charging - and by a very large margin. All ten local authorities rejected it (by about 8 to 2). Even in Manchester city, where the vote was closest, only 28% said "yes". And turnout was high - a massive 1 million people (53%) voted.

This is a disappointing result, and a missed opportunity for Greater Manchester. A "yes" vote would have triggered £3bn of new investment in an extended tram network and better buses, commuter rail and park-and-ride schemes. That £3bn will not happen now. 

But the result was not a surprise. In a recession, the short-term costs outweighed the long-term benefits - the £5 charge was just too much. As I reported in September, Ministers were never able to put their full support behind the scheme. And the Greater Manchester business community was split, with most coming out against the charge.

So what happens next?

First, Greater Manchester won't be getting its planned £3bn of new transport investment. The Department for Transport has said consistently that there is no "Plan B". Friday's "no" vote means that the people of Greater Manchester will have to rely on mainstream DfT funding for improvements to their transport network.

Second, DfT will surely have to rethink its congestion charging plans. The £1.5bn from its Transport Innovation Fund (TIF) will be put back into a central pot, and will officially wait for other congestion charging schemes. But after Friday's result, it is highly unlikely that other cities - including Bristol, Leeds and Cambridge - will now come forward with their own schemes. In a recession, the Government will need to think of other ways to spend that £1.5bn.

Third, the use of referenda for congestion charging must now be in question. Earlier this year, 67% of people in West London voted against the western extension of the capital's congestion charge. Unsurprisingly, when asked "Would you like to pay more for better transport?", voters say "No". Referenda for congestion charging just look unwinnable. The only example of congestion charging getting the nod was as part of the London mayoral election in 2000. Opponents of directly elected mayors, take note.

Transport Secretary, Geoff Hoon, needs to get real. Although we support congestion charging schemes, the Government's approach is not going to work - especially in a recession. Instead of earmarking £200m per year for congestion schemes that are not going to win public approval, the Government should instead divert that cash into a major transport infrastructure fund. See Andrew Rawnsley on this, in today's Observer.

Congestion charging: West London consultation ends

Consultation ended yesterday on the future of the western extension to London's congestion charging zone. Any major changes would have to wait until the end of 2009, at the earliest. There are three main options:

• Keep it
• Drop it
• Change it

Possible changes include: (1) a charge-free period in the middle of the day - for the western zone only, (2) making it completely free for residents, throughout the whole charging area, (3) making it easier to pay, with direct-debit account-based payment.

Boris recently hinted that he's in favour of changing the scheme, rather than ditching it altogether. The proposed changes would be a good idea, but they would reduce revenues. In 2007-08, £73m of the £268m total revenues came from drivers paying late (and higher) charges. The new account-based payment system would eliminate most of that £73m. And if West London residents get a charge-free period in the middle of the day, those in the original zone will want the same.

Meanwhile, consultation in Greater Manchester ends this Friday 10th, on its Transport Innovation Fund package - and its proposed congestion charging scheme. All ten Greater Manchester councils will vote on the package in December. Seven need to say "yes", otherwise it won't happen.

We've just published this note on congestion charging. It sets out the economic benefits and costs - and shows that these are finely balanced, and will vary from city to city. It highlights that certain groups - e.g. SMEs and those with poor access to public transport - are less likely to benefit. And it argues that congestion charging is primarily an economic, rather than an environmental, one.

On balance, we support the Greater Manchester package - because it will trigger almost £3bn of new and much-needed transport investment. But advocates of the scheme have got their work cut out, and will need to make their case very effectively in the weeks ahead.

Roma Bike and congestion charge update

I was on holiday in Rome last week, just in time for the launch of their new bike-sharing scheme, by mayor Gianni Alemanno.

Roma Bike has started small, with just 200 bikes dotted around the centre as part of a 6-month initial experiment. It will be expanded to 20,000 bikes, if successful. The scheme will not cost the city council, and has instead been sponsored by Cemusa - a street furniture company, apparently.

London Mayor Boris Johnson also wants any London scheme to be privately funded. He says that Transport for London is still working out the feasibility of a Central London bike hire scheme. In answer to a question from Nicky Gavron on 18 June (Question 1172, on page 59), he said:

"TfL is working with the Clear Zones Partnership (comprising the London Borough of Camden, City of Westminster and the City of London) and the Royal Parks on the feasibility of a Central London bike hire scheme. Further work is underway to consider a range of options for planning and financing this scheme so as to ensure value for money for the taxpayer. A definitive date for the introduction of any scheme is dependent on the outcome of this work."

As promised during his election campaign, Mayor Boris yesterday announced a consultation exercise that will probably end up scrapping the western extension of the congestion charge - which was introduced by former mayor Livingstone in Feb 2007. The consultation will start in September, and the western extension could be dropped by the end of 2009.

Meanwhile, formal consultation on Greater Manchester's proposed congestion charge scheme starts on Monday 7th - and runs through to 10 October. The Association of Greater Manchester Authorities (AGMA) will decide later this month, whether to hold a public referendum. Manchester leader, Sir Richard Leese, now says a referendum is the most likely way forward.

What happens if Greater Manchester votes "no"? The Government has promised £1.5 billion of cash from the Transport Innovation Fund, for public transport improvements - part of the overall £2.8 billion package - but only if the charge is introduced in 2013. Ruth Kelly has got some tricky decisions ahead, if the vote goes the wrong way...

On your bike, Bristol

Bristol is to become the UK's first "cycling city", with £23m of new investment to promote more bike use in the city - including a major on-street bike rental network, like the Velib scheme in Paris. This will happen as Bristol and its neighbouring authorities continue to consider a congestion scheme, along the same lines as Greater Manchester.

The Paris scheme is massive. Started almost a year ago, there are 1,500 bike racks dotted around the city - and over 20,000 bikes. Here's how it works...For one week, you pay a €5 subscription by credit card at your nearest rack. Your first half hour is free every time, the second half hour is €1, the third half hour is €3, and every other half hour is €4. Longer-term users pay a deposit of €150. Sounds like a complete bargain to me...Paris is now launching a green car-hire scheme, to provide electric cars that you can pick up and drop off anywhere in the city.

But Paris is a lot bigger than Bristol, so Bristol might be better learning from bike schemes in similar-sized cities like Munich. Its "Call a bike" scheme was initially started in 2000 - but it didn't work at first, because many of the registered users didn't actually use it. Re-introduced in 2001, alongside schemes in Berlin (2002), Frankfurt (2003) and Cologne, etc, "Call a bike" is now successful and profitable - with 1,100 bikes on offer in Munich alone. But it took a while for it to reach critical mass.

There are a couple of lessons for Bristol. First, it might want to adopt the simple booking system of "Call a bike" - rather than the expensive GPS technology in Paris, cyclists in Munich just call a security hotline when they rent a bike. Second, Bristol could team up with Bath, and run its scheme across the two cities, to attract more users. One problem, though - Bristol is very hilly!

Other UK cities will be following Bristol - including York, Cambridge and Blackpool. And last year, Ken Livingstone asked Transport for London to examine the feasibility of a bike hire scheme for London. Not sure where that's got to, but I'm sure Boris will be a fan.

Manchester's congestion charge

Ruth Kelly today approved Manchester's congestion charging scheme - but as I reported last month, final approval of the scheme does still hang in the balance.

If fewer than seven of the ten AGMA authorities back the scheme, then the whole thing will need to go to a Greater Manchester-wide referendum. Three authorities - Stockport, Trafford and Bury - have already said they won't support it. And Bolton's councillors have promised their voters a separate referendum, once all the facts are available. If Bolton votes "no", that would trigger the full-on referendum.

And guess where Ruth Kelly's seat is? Bolton West. That's why she put out this press release today, urging local people to support the scheme....

In Washington, we talked transport with Brookings today. The US has clearly got a few lessons to learn from the UK on transport policy - that's one of the things we'll be saying in our paper with Brookings, to be released later this week.

A forthcoming report from Robert Puentes will say that US transport infrastructure is suffering from physical neglect and congestion - roads and transit systems are aging and in dire need of repair, tens of thousands of bridges are structurally deficient, and traffic delays are pervasive.

The spike in gas prices is today's top story, but could provide an opportunity for much-needed reform. Between March 2007 and March 2008, the rise in gas prices triggered a significant drop in car use - with Americans travelling 11 billion fewer vehicle miles. This is piling pressure on the already-stretched public transit system, and making the need for new investment all the more urgent. As a result, there is a real appetite among the policy community here to learn from international best practice.

So what can we teach the US on transport? London's congestion charge - and maybe Manchester's - could offer useful lessons for US cities. So could the 2006 Eddington Study - which set out a clear case and evidence base for smarter transport investment, based on rigorous appraisal and evaluation. Here, federal funding of transport projects is driven by "pork-barrel" politics, rather than objective analysis. Our paper with Brookings later this week will call for smarter, evidence-based federal transport investment in key corridors and gateways of national travel and international trade.

This is just one example of how the US could learn useful lessons from the UK. More examples like this coming up...   

Business rate supplements get the go-ahead

The Chancellor has just announced the introduction of Business Rate Supplements - just what we've been calling for. See our recent comment and report.

This will give local authorities in England a new power to raise and retain local supplements on the national business rate, to fund economic development projects. A White Paper is published today.

Here are the details - Government will consult on these before finalising:

• Only highest tier authorities can levy business rate supplements.
• Supplements will be no more than 2p in the pound.
• Small businesses will be exempt - those with rateable value of £50k or less (v generous).
• Businesses will get a vote if the supplement is more than one-third of the total cost of a project.
• Local authorities will decide on the duration of any supplement.

PS The White Paper does not allow councils to lower business rates. Govt will discuss this further with the LGA and others.

This is a very firm (and welcome) commitment from Government. It's clearly targeted at Crossrail for now - and will allow Ken to levy a 2p supplement across Greater London, from April 2010, to pay for Crossrail. This will raise nearly £180 million per year.

Big question: will other cities follow London, and go for their own business rate supplement? Manchester leader Richard Leese has said he's not interested - he's busy trying to implement a road-user charging scheme. But once London goes for it, I bet others will follow.

Businesses will see there is no automatic vote for them on this. Instead, the White Paper provides appropriate protection for businesses (2p limit, exemption for smaller businesses, statutory consultation, etc).

Finally, I see it's "Business Rate Supplements" and not "supplementary business rates". This is deliberate wording from the Treasury, designed to be not another new tax but a revenue option for local councils.

Crossrail

So, Crossrail finally gets the go-ahead. About time, too, after 18 years. And a nice pre-election announcement for Gordon. Ken was delighted, and London First's Jo Valentine said it was a "great, great day" for the capital.

Construction will start in 2010, and the first trains will hit the track in 2017. The 118 km line will include 38 new stations and carry 200 million passengers a year. Here's the full route.

I'm most interested in (1) how Crossrail is going to be funded, and (2) the reaction up north.

(1) Funding: The project will cost £16bn. The funding will come in three chunks. Roughly one-third from central government, one-third from borrowing against future fares, and one-third from a supplementary business rate on London businesses. City corporates, BAA and Canary Wharf have also chipped in an extra £350 million. Full details will be revealed in next week's Comprehensive Spending Review.

This will be the first, and biggest, use of supplementary business rates. Our recent report showed that a London SBR could raise up to £6bn. Ken is likely to charge only London's biggest businesses. The extra levy will be around 3p, possibly 4p. And I don't expect Ken to give businesses a vote. This will annoy the CBI and British Chambers of Commerce, who have been insisting on a business vote.

(2) Up north: Meanwhile, Crossrail is likely to reignite arguments up north that London is getting an unfairly large share of transport funding. Manchester leader Richard Leese said last week that he welcomed Crossrail, but the north needs new infrastructure too. The three northern RDAs last month published a report showing that rail improvements could bring £10bn of economic benefits.

London needs Crossrail, but the rest of the transport cake will inevitably be smaller for the rest of the country. Next week's CSR will set out just how much transport funding is left over for other cities. It's bound to be less than enough - which makes other alternatives like supplementary business rates even more important. London's use of SBR will be uniquely large, but if it goes well it will make the use of SBRs elsewhere more likely in the medium term.   

Manchester leads the way on road pricing

Just days after publication of last week's Draft Local Transport Bill, Greater Manchester has announced plans for its own road pricing scheme.

Manchester's scheme is different from London's congestion charge - it would charge motorists between £2 and £5 per day for travelling into and out of Greater Manchester, during two peak times only (weekdays 7.00-9.30am and 4.00-6.30pm), and on 15 of the most congested roads into the city centre.

If approved by a public consultation and central government, the scheme could be up and running by 2012. That would make Greater Manchester eligible for up-front funding from the Transport Innovation Fund - which I mentioned last week. They have bid for £1 billion of TIF money, and also aim use road pricing revenues of £118m per year to borrow a further £2 billion. This would help them expand Metrolink and improve rail and bus services.

It's not in the bag yet. Nine other councils in England are competing for major TIF funding, but I reckon Greater Manchester are in with a good chance. 

This is a really significant development. The Association of Greater Manchester Authorities (AGMA) is leading the way on this one. As AGMA leader Peter Smith says: "The Greater Manchester economy is the most successful city region outside London. If we fail to address road congestion, Greater Manchester could miss out on 30,000 jobs over the next 15 years. Doing nothing is not an option."

Ministers will be relieved, following the recent Number 10 petition against road charging - which risked stalling all efforts to get on with any local schemes. But Ministers can't just sit back and leave this entirely to local councils. As I said to the Transport Committee last week, they need to do a better job of explaining and championing road charging.