Can Prescott conjure up cash for transport?

A year ago, John Prescott announced a major plan for new communities in four areas of the South East which, he emphasised would not repeat the mistakes of the past. They would not be designed around the need for motor cars, but instead would be ‘sustainable’, with an emphasis on public transport and other environmentally-friendly forms of transport, such as walking and cycling.

The new communities plan is a typical governmental ‘big idea’ with large amounts of money and huge numbers of homes associated with it. The basic concept is that growth in the South East should be channelled on the four areas set out in the plan – Ashford (Kent), Milton Keynes, the M11 corridor and Thames Gateway. But the precise scope and cost is rather nebulous. The money – some £22bn for the whole country is promised, £1bn alone for Thames Gateway – mostly consists of the reannouncement of existing funds rather than new cash. And the total number of extra homes for the four areas is given as 200,000 above and beyond existing plans. But since those plans had not been finalised, the precise details are unclear as councils are discovering. Essex, for example, had suggested 28,000 new homes for Harlow, which the council thought was ambitious enough, but Lord Rooker the planning minister insisted that there should be 18,000 along the corridor and the council is now in discussions with the local government office on where they will be sited.

The attitude of the local councils to having to cope with such growth is varied. Ashford and Milton Keynes, for example, seem to accept that there is no alternative and are buckling down to it because there is plenty of space for expansion. Essex, however, is more concerned given that large swathes of the county are built up already and, as a spokesman put it, ‘lots of people come to live here because there is still a lot of green space’.

That begs the question of what precisely ‘sustainable’ means? Sustainable is one of those portmanteau words that sound positive like motherhood and apple pie but are difficult to pin down. The key area is transport. If the newcomers bring in the same car-dependent habits as the existing population, several areas will either find themselves permanently gridlocked or will require such massive increases in transport infrastructure, mainly new roads, that the very character of the area will change. And that does not appear fall within any normal definition of ‘sustainable’.

Indeed, the numbers of new homes to be built in relatively small and well-defined areas are so large that the impact goes beyond most people’s definition of sustainable. Take Ashford, for example where the additional 31,000 homes by 2030 will more than double the size of the existing town. Thames Gateway alone is supposed to have 120,000 new homes and Milton Keynes 133,000, both by 2016. (These numbers add up to more than 200,000 because they include existing and additional plans.)

In practice, there are two ways to make these schemes generate fewer than average car trips – either site them near good public transport or ensure that the new housing is near where people are going to work. A report, Relationship between Transport and Development in the Thames Gateway, commissioned by the Office of the Deputy Prime Minister argues, ‘there is the opportunity to structure much of the development in the Thames Gateway in a way that reduces the overall proportion of travel that is undertaken by car, thereby minimising the environmental “footprint” of this scale of growth.’

But, the report says, that requires building high density developments and putting in a lot of resources to provide good local transport systems. Otherwise everyone is going to just get in their cars, or head to London on overcrowded trains.

In Essex, which houses part of two of the growth areas, there is a feeling that the county is being overwhelmed. It is already Britain’s second most populous county after Kent, and over the next quarter of a century, it could mean adding as many as 250,000 people to its current population of 1.6million, about a third more than the council had projected before Prescott’s plan was launched. In all, that could mean over 1 million extra journeys per day in a county already beset by crippling congestion problems.

The two ‘sustainable community’ areas within the county pose different challenges. The M11 corridor, which is now to be extended out beyond Cambridge to Peterborough, largely consists of rural land where it is difficult to envisage anything other than car-based development. Sure, there will be attempts to create local jobs and to provide some public transport but the planners face an uphill struggle. In the Thames Gateway, the possibilities for sustainable development are greater because there is more existing rail infrastructure. Both the Docklands Light Railway and the c2c train services could, for example, be expanded to meet demand. And there is the prospect of Crossrail (about which more below). Moreover, Essex is keen to ensure that the newcomers are not all going to commute to London.

But again, it is difficult to see how the transport needs of the new developments can be accommodated without very substantial investment. The roads, notably the A127 from Southend to London, are in a constant state of near gridlock and just to maintain existing levels of congestion, there would have to be a 50 per cent modal shift. Currently around 60 per cent of journeys in the area are by car and to meet that target the proportion using other forms of transport would have to increase by 50 per cent, a target which appears impractical. Therefore, one key aspect of the new developments must be that only a relatively small proportion of the incomers will work in the capital.

Essex also has to consider the impact of the expansion of Stansted where the number of passengers is expected to go up by a factor of five from the current level of 17m per year. The council’s head of highways and transportation, Tony Ciaburro, says: ‘That needs a whole new railway line. The existing one, with a single track tunnel, is completely inadequate.’ Moreover, such an expansion would also require considerable more road capacity, despite the recent improvements.

The council is trying to consider the transport problem in a holistic way. The council reckons there is a need for some £6bn worth of transport infrastructure investment in the county, about a fifth of which would be expected to be paid for by the council through the traditional funding method of getting permission from the government to borrow the money. However, that is far more than the council could normally expect: ‘We estimate that it would take 150 years to fund that programme through the conventional financing methods’ says Ciaburro. ‘Therefore we have to look at alternative forms of funding’.

So Essex is trying to think out of the box. A strategy paper drawn to be presented to the council later this month is expected to suggest new ways of funding these schemes need to be developed. Conventional methods such as trying to squeeze Section 106 money out of developers or going cap in hand to the ODPM are unlikely to address the scale of the task. Instead, the council would like the freedom to raise money in innovative ways.

Ciaburro explains: ‘Transport is a big business for us, representing £130m for year taking into account both capital and revenue. If there were some way of securitising that, we could raise considerable amounts of capital in order to invest in these schemes’. Securitising effectively involves raising a capital sum against the guarantee of projected future income flows. This would be a first for a local authority, but Ciaburro is unapologetic about seeking novel solutions given the huge nature of the task.

Another alternative, which would require a high level of joined up thinking is to put all the available money for Essex in one pot from such diverse sources as the Highways Agency, the ODPM and the SRA and use that as the basis to raise a large capital sum. The money might then, first, be focussed on roads, and later on railways: ‘That would be a genuine integrated transport policy’, says Ciaburro.

But the prevailing sentiment in local authorities is that if the government wants the projects to be genuinely sustainable then it has to put its money where its mouth is. As one local authority planner put it, ‘at the moment it looks as if the sustainable bit means trying to get in as much new housing as possible without paying for any extra transport infrastructure’. That may be a bit cynical but finding committed plans for extra transport spending as a result of the new communities plan is like trying to find a parking space near a soccer stadium on match day. For Thames Gateway, there is new bridge over the Thames, but that is not due to be completed until 2014 at the earliest and while the government has given the go-ahead in principle, the funding remains uncertain.

The big public transport project is Crossrail. While the route has not been determined, the basic concept is for a rail tunnel under London connecting the networks out of Paddington in the West and Liverpool Street in the East. This would add considerable capacity to existing services, and relive congestion on the Central Line which is used by many Essex commuters. The second Crossrail scheme, linking Hackney with West London – again there are various versions – would also provide new journey opportunities for some of the additional population, especially those in the M11 corridor. But these schemes are big ticket – perhaps £8-10bn each. The Cabinet committee, Misc 22, dealing with the Thames Gateway plans has long been deadlocked over Crossrail. The Prime Minister is very supportive but Treasury is wary of spending money on the railways given their current ability to absorb almost unlimited amounts of subsidy for what seems little return.

There are various other big projects which would help make these communities sustainable but seem to have little chance of funding. For instance, Milton Keynes, where the modal share of public transport is just 4 per cent, is considering a light rail scheme which would cost £200m but trams are currently out of favour with the Treasury which deems them too expensive. There is, too, a long established aspiration to reopen the Oxford to Cambridge railway which passes through the area but the Strategic Rail Authority has rejected the idea. It also turned down a scheme in Essex, a railway from Benfleet to Wickford, that would help rail users to by-pass London on trips to the north, thus relieving the M25.

In Kent, the SRA’s proposal for a new franchise, taking into account domestic services on the new high speed line, suggests the reduction to a peak hour service for stations like Charing which are expected to serve some of these new homes in the area. Although the SRA claims to be talking to government about these issues, it has neither the money nor, it seems, the intention of skewing its investment plans towards the sustainable communities. The same lack of coordination occurred with the much-touted multi-modal studies launched by Prescott when he was Transport Secretary. As the results were published, it became clear that there was only ever money available for the road schemes – and even then not always – and the SRA simply had no money even to do feasibility studies on many of the ideas put forward.

With transport likely to be short changed in the forthcoming spending review, the only solution would appear to be to fund such schemes through road charging. At least one council is considering a scheme but is so worried about the electoral implications that it would only mention it off there record. There is no doubt, however, that if these new communities are to be sustainable, a lot of radical thinking and innovative financing methods will be required both by local authorities and central government. Otherwise, the sustainability will prove as elusive as those weapons of mass destruction.