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Executive Summary CM 6234

Transport is vital to the economy and the way we live. Decisions that we take now will have an impact for decades to come. It is essential that we take a long term view.

The challenge

1. The ability to travel offers all of us very real benefits and extending mobility is important in building an inclusive society. The transport system helps to underpin the international competitiveness of the economy. But mobility comes at a cost, whether financial, social or environmental. We need to ensure that we can benefit from mobility and access while minimising the impact on other people and the environment, now and in the future.

2. The UK is the fourth largest economy in the world and the economy is growing. This benefits all of us. However, experience suggests that as the economy grows, people's need and desire to travel, for business or leisure, will also increase. As people become better off they can afford to travel further and more often. We need to recognise this, and the pressures it can create, and plan ahead to get the best out of our transport system without damaging our overall quality of life.

3. We also need to take into account the ways in which travel is changing. People today are becoming more accustomed to travelling further. Where once people lived and worked in the same place they now often commute long distances to work, some by choice and some because of circumstances beyond their control, such as shortages of affordable housing near their place of work.

4. Demographic changes and choices about where to live will continue to have a significant effect. If current trends continue, over the next 20 to 30 years the population will continue to grow and people will generally be living longer. And people are living in smaller households, are less tied to the location of their jobs and more willing to travel further in exchange for a better lifestyle. And as the population increases and we become better off, so our demand for goods grows. Our transport strategy has to recognise that demand for travel will increase in the future.

5. All of these challenges are compounded by decades of under-investment. Transport requires long term planning. We need to anticipate and manage the pressures that we will face over the next 20 to 30 years.

A transport network for 2030

6. We need a transport network that can meet the challenges of a growing economy and the increasing demand for travel, but can also achieve our environmental objectives. This means coherent transport networks with:

• the road network providing a more reliable and freer-flowing service for both personal travel and freight, with people able to make informed choices about how and when they travel;
• the rail network providing a fast, reliable and efficient service, particularly for interurban journeys and commuting into large urban areas;
• bus services that are reliable, flexible, convenient and tailored to local needs;
• making walking and cycling a real alternative for local trips; and
• ports and airports providing improved international and domestic links.

The strategy

7. Our strategy builds on the progress that has already been made since the implementation of the 10 Year Plan for transport. It extends our investment plans to 2014-15. We need to anticipate and manage the pressures that we will face over the next 20 to 30 years.

8. We must manage the growing demand for transport. While additional infrastructure will be necessary, simply providing ever more capacity on our roads and railways, ports and airports is not the answer in the long term. The damage to our environment, landscape, towns and cities and our quality of life would be unacceptable. The strategy sets the policy framework and provides more information and better choices for local authorities, businesses and individuals.

9. The strategy builds on the progress that has already been made since the implementation of the 10 Year Plan for transport. Our investment plans have been extended out to 2014-15 but the strategy also looks even further ahead, at the challenges we face over the next 20 to 30 years and where we want to be. This reflects the approach taken in the Air Transport White Paper ¹ .

10. Our strategy is built around three central themes.

• First, sustained investment over the long term. The spending review settlement honours this Government's commitment to deliver sustained improvements to transport networks. Spending by the Department for Transport will rise by an annual average of 4.5 per cent in real terms between 2005-06 and 2007-08. This includes an additional £1.7 billion transport reform package for the railways, over and above 10 Year Plan provision. 10 Year Plan spending has also been increased by £0.5 billion each year from 2006-07. This higher level of spending will then grow in real terms (by 2.25 per cent each year) through to 2015. Meanwhile, the other reforms we are putting in place will ensure that each pound of investment works harder for the British taxpayer.
• Secondly, improvements in transport management. We are reorganising the rail industry to improve performance, drive down costs and get better value from public spending. To put our plans into effect, we will legislate to put in place a structure where Government sets the strategy and controls public expenditure. Better traffic management will ease congestion on our road network. Where it makes sense, economically and environmentally, we will add capacity to our road network. Where we do so, we will take steps to ensure that the benefits are locked in, and that the design is sympathetic to the environment. Options we are exploring include, for example, measures such as tolling on new roads and the introduction of carpooling (High Occupancy Vehicle) lanes, where these make sense. We are also encouraging local authorities to procure bus services through Quality Contracts, where this is linked to a wider strategy including bold measures to reduce congestion, or modification of rail services.
• And thirdly, planning ahead. The long term trends in travel are evident to all. We cannot build our way out of the problems we face on our road networks. And doing nothing is not an option. So Government will lead the debate on road pricing. We will work with stakeholders to establish how and when pricing might provide the reliability and standards road users want. And we will work to ensure that the choices we face, together with their full costs and benefits, are well understood. We are also committed to sharing decision-making with regional and local stakeholders, and to ensure that regional and local planning is based on a shared view of priorities, deliverability and affordability. And at all levels of Government - national, local or regional - we will ensure that transport decisions are taken alongside decisions on liveability, sustainable communities and other policy areas.

11. Underlining these themes, and an important underlying objective of our strategy, is balancing the need to travel with the need to improve quality of life. This means seeking solutions that meet long term economic, social and environmental goals. Achieving this objective will clearly contribute to the objectives of the UK sustainable development strategy ² . For example, we are working hard to deliver improvements in design and technology to improve air quality and reduce greenhouse gas emissions; and we will ensure that the wider impacts of future developments are reflected in appropriate appraisal methodologies.

12. The strategy charts a course over the next 30 years, founded on the following.

Road networks enhanced by:

• new capacity where it is needed, assuming that any environmental and social costs are justified;
• locking in the benefits of new capacity through various measures including some tolling and carpool lanes where appropriate;
• Government leading the debate on road pricing and its capacity to lead to better choices for motorists;
• better management, exploiting the potential of new technology to avoid problems and deal with them rapidly if they occur; and
• using new technology to keep people informed both before and during their journey.

Railways where:

• Government sets the strategy, working with the industry to get the costs under control and with the Office of Rail Regulation ensuring that it pays the proper price for what it is buying;
• the structure of the industry is improved, with clear lines of responsibility that focus the industry on delivering for its customers;
• there is a single point of accountability for performance to improve standards across the industry; and
• local and regional stakeholders are involved in decisions on the balance between rail and other forms of transport.

Local travel enhanced through:

• freer flowing local roads delivered though measures such as congestion charging;
• more, and more reliable buses enjoying more road space;
• demand responsive bus services that provide accessibility in areas that cannot support conventional services;
• looking at ways to make services more accessible so that people have a real choice about when and how they travel;
• promoting the use of school travel plans, workplace travel plans and personalised journey planning to encourage people to consider alternatives to using their cars; and
• creating a culture and improved quality of local environment so that cycling and walking are seen as an attractive alternative to car travel for short journeys, particularly for children.

A balanced approach to aviation:

• working with all those involved to implement the conclusions of the Air Transport White Paper;
• ensuring that, over time, aviation meets its external costs; and
• ensuring that the impact on environment and communities is minimised, with appropriate mitigation and compensation measures put in place.

Reflected in our shipping policy:

• reviewing the policy framework for ports development by late 2005; and
• working with the European Union and global bodies to maintain high quality in the shipping industry.

Sustainable freight transport that:

• focuses on approaches which offer the best outcomes for our economy, society and the environment.

Supported by effective decision making that:

• gives local and regional stakeholders more influence over transport investment in their area, including the rail network;
• ensures that choices on transport are made alongside other decisions that have an impact on transport, particularly housing and regeneration, at the national, regional and local level; and
• ensures the social, economic and environmental costs and benefits are fully recognized when decisions are taken using the New Approach to Appraisal and our developing value for money analysis.

While improving safety and security though:

• new technologies that can reduce the risk of an accident;
• promoting safer vehicles that protect both passengers and pedestrians;
• informing drivers about the risks of dangerous driving and the legal penalties; and
• co-ordinating security measures at the international level, including making the most of new security technologies.

And respecting the environment:

• there will continue to be a strong presumption against schemes that would significantly affect environmentally sensitive sites or important species habitats or landscapes;
• by keeping the environmental impacts of new and existing transport infrastructure to a minimum, ensuring that mitigation measures are implemented to a high standard;
• working across government to ensure that we can deliver carbon savings in line with our domestic and international commitments and reduce the impact of other emissions which pollute the environment;
• reducing the impact of all forms of transport, including encouraging the development, introduction and take- up of new vehicle technologies and fuels;
• ensuring that the noise impacts of transport are reduced and mitigated;
• making progress towards the inclusion of aviation in the European Union emissions trading scheme a priority during our presidency in 2005; and
• by investing in public transport to provide alternatives to the car.

13. We face real challenges over the next 30 years. These measures lay the foundations of a strategy that rises to those challenges.

The Spending Review 2004 (Sr04)

We are committed to providing a stable, long term financial framework within which to plan. Consistent with this, the spending plans set out in Annex A identify the resources available to support our strategy over the next three years, and to 2014-15.

The Interim Review ³ , published by the ORR in December 2003, revealed the true costs of the legacy of under- investment in the railways. A step change increase in maintenance and renewals expenditure has been provided to deal with this legacy. The review also demonstrated the need to get costs in the industry under control. It called on Network Rail to increase efficiency by over 30 per cent, the equivalent of around £1.5 billion a year.

It will take time to do this. So, over the next three years extra short term funding has been provided to support the rail industry as it works to bring costs under control.

Additional public spending is also being provided for strategic road schemes and we have also found resources, from within existing provision, to support the provision of motorway traffic managers, not catered for under original 10 Year Plan spending.

The plans for local authorities will allow continuing investment in major projects. A separate fund to support transport schemes in growth areas is being established. This makes a start on developing a Community Infrastructure Fund.

Efficiency and value for money
The Government is committed to getting the most out of planned increases in spending over the next 10 years. The Rail Regulator and Sir Peter Gershon's reviews of spending have identified a number of measures to greatly improve efficiency. And the Department has developed, and will continue to improve, appraisal techniques that ensure that only projects offering the best value for money secure public funding. See the text box 'Making informed decisions - appraising transport schemes' in Chapter 9.

Making resources work harder

Pressures on the transport budget are growing, driven both by increasing costs and growing demand. We should not just react to these pressures with more public spending. We must also bring costs back under control and make the resources we have work smarter and better.

This requires action on two fronts.

• First, we must make better trade-offs across different modes of transport, and across the parallel agendas of regeneration and housing. Some major road and rail investments are of such national significance that they should continue to be decided centrally. But, below this national strategic level, we can promote better decision-making by publishing guidelines for the level of spending on transport within each region. This would make more transparent the choices that national, regional and local partners have in each region between investment by the Highways Agency, the major investments of local authorities and investment in regional railways and public transport subsidy. We intend to publish guideline budgets for English regions, following consultation, in Budget 2005.
• Second, we want to give our delivery partners incentives to develop and deploy coherent, innovative, local and regional transport strategies that rise to the challenges set out in this document. We know how local travel and traffic patterns can be influenced to the benefit of everyone. But these policies involve change for individuals - in finding new ways or times to make the journeys they have to make. We want to work alongside forward looking authorities and areas, to help put in place packages of measures which tackle these problems. We also want to make sure that the contribution that some regional and local schemes make to our national productivity is recognised in national funding decisions. We will therefore establish a new Transport Innovation Fund, to support the costs of such packages - which will include road pricing, modal shift, and better bus services. And we will also support innovative mechanisms which raise new funds locally. Mechanisms for deciding on allocations from this Fund will be published alongside regional guideline budgets in Budget 2005.

¹ The Future of Air Transport, Cm 6046, December 2003. Also available for download at www.dft.gov.uk/aviation/whitepaper

² The development of The Future of Transport has been informed by detailed modelling and analysis. Further technical details will be published in the autumn alongside a sustainable development appraisal.

³ Access Charges Review 2000: final conclusions, Office of the Rail Regulator, December 2003. Available at www.rail-reg.gov.uk