The UK's ports are vital gateways for trade and travel. Over 388 million tonnes of international freight and 177 million tonnes of domestic freight moved through UK ports in 1999. Thirty-two million international passengers use UK ports each year. Another 38 million use them for domestic journeys, including river crossings. Our national economy needs a thriving ports industry.
Yet despite the overwhelming importance of ports, their role in transport policy has been neglected: a comprehensive assessment of ports policy is long overdue. That's why we have published this paper which sets out the broad policy aims of the Government and the devolved administrations for the UK's ports. These reflect an integrated approach to transport and recognise the relationship between transport and other important policies. We will implement the policies set out in the pages that follow, but we will also review them jointly as they progress. You can find a list of the specific initiatives on which we will review progress at Annex 1.
We have also included a group of case studies at the end of the paper. These were chosen from others to illustrate a variety of the integrated transport issues discussed in the paper.
The Government and the devolved administrations believe that this paper maps out a future for UK ports that will ensure they meet the demands of our economy and of our role as a trading nation.
1.1.1. The ports industry has experienced a bracing climate of change in recent years. That climate is set to stay. World trade continues to shift global markets and production lines make new demands on transport systems, and on ports in particular. We also travel more. The UK economy depends upon international trade. Our competitiveness relies upon quick, easy, economical, and safe movement of people and goods.
1.1.2. Ports serve the national interest, supporting the competitiveness of national and regional economies. It is in the national interest that our ports remain able to handle current UK trade and its potential development efficiently and sustainably. They must succeed not only to meet the immediate demands of their customers, but also to invest in new facilities, in safety, and to safeguard communities and the environment.
1.1.3. Our economy therefore needs a thriving ports industry. Customers moved over 388 million tonnes of international freight through UK ports in 1999 95 per cent of the UK's international freight tonnage movements and 75 per cent by value. Another 177 million tonnes of domestic freight moved through UK ports. Thirty-two million international passengers used UK ports in 1999. Another thirty-eight million use them for domestic journeys, including river crossings.
1.1.4. The industry faces rising expectations, not only from users, but also from local communities and the wider public. People are looking for a more open and accountable approach from those entrusted with legal duties and powers to run our ports. They demand ever higher safety and environmental standards. As workplaces, ports have changed unrecognisably. Tonnage rises year by year, but far fewer dockers handle it, doing different jobs and using new technology.
1.1.5. Britain has such a diverse ports industry because local people developed it to serve their needs. Some ports have since grown to regional and national significance, but all remain rooted in their local communities. Change has brought success and expansion for some ports. Others need a new role to replace trade which has diminished or disappeared. The Government did not create it, but the network of ports has always had a key role in the national economy, and our transport system.
1.1.6. Unlike some of our European partners, the UK has a long tradition of allowing free access to our shipping trade to vessels from all nations. We benefit in return from a major historic role in shipping trade between other countries, and in the shipping business itself whether or not our shipping companies vessels are registered in this country. As a counterpart, access to our ports is also open, subject to payment of reasonable port tariffs. There is a long-standing principle that customers may choose which UK port they use not the other way round. So ports must compete by offering long-term value, and must be allowed to do so domestically and internationally on level terms.
1.1.7. Ports have been developed and managed on the principle that users pay for the facilities. This has served the industry well. Port founders accepted and have risen to the challenge of discharging their duties from the dues they raise without subsidy. They looked ahead, treating port assets as an heirloom which increases in value as it is passed on.
1.1.8. It is a strength of the ports industry that each undertaking has statutory powers suited to its needs. Commercial decisions, as well as responsibility for port operations, lie with those who have these powers and the duties that go with them. This continues to be fundamental. It is not Governments job to run the ports industry.
1.1.9. The devolved administrations share the same broad aims for their ports. This paper sets out a UK ports policy. Where a distinctive approach is being taken by a devolved administration, for example on the issue of planning guidance, that is noted in the paper. Some matters are reserved, for example shipping policy and marine safety. In these cases, the Government will take the same approach throughout the UK. The role of Government will develop in Scotland, Wales and Northern Ireland through the devolved administrations working with the industry where they now have responsibilities. Ports businesses, and their place in the community and environment, can be developed in line with the devolved administrations needs and priorities.
1.1.10. Historically, Governments relationship with the ports industry has been confined largely to the endowment of duties and powers. There has been a strong recent emphasis on de-regulation in the industry, aiming to stimulate it by exposure to market forces. The need for an integrated transport policy has been neglected in the last twenty years, and the role of ports in such a strategy has not been adequately considered.
1.1.11. Integrated transport policy aims to meet the needs of port customers sustainably. Customers want not just port facilities, but good connections to their destinations whether by road, rail or sea. Many ports have good connections to all three forms of surface transport.
1.1.12. Transport policy is now firmly based on a partnership between the public and private sectors to improve transport, and to deliver a better quality of life for everyone. In July 2000, the Government published Transport 2010: The 10 Year Plan, which set out plans for substantially increased spending of £180 billion over the next ten years to modernise the transport system. Apart from provision for railways and road safety, the Plan focuses on land transport in England, including improvements in surface access to ports and airports. It does not cover the role of shipping, which was set out in British Shipping Charting a New Course. Nor does it look in detail at private investment in the ports industry. It does, however, take account of likely future trends in the use of ports when considering surface access issues.
1.1.13. The Government and the devolved administrations are looking for practical and achievable ways to help the ports industry to help itself, and to rise to the challenges it faces. We need to involve those who use and work in ports, local authorities, and other interests. Our aim is to build on and not replace the many sound and well-established working relationships between the industry and Government.
1.1.14. Strategic transport planning must address the role of ports, including Regional Planning Guidance, the Regional Development Agencies strategies, local transport plans and the policies of the devolved administrations. Regional strategies must be based on some assessment of the national context. A background document, Focus on Ports, being published alongside this policy paper, aims to meet this need.
1.2.1. The Government and the devolved administrations share policy aims for ports which promote:
1.2.2. The Government and the devolved administrations will work with the industry, its users and other interests, to achieve these four key objectives:
Key points
1.2.3. Responsibility for these matters is both devolved and reserved. The Government and the devolved administrations will each pursue these policies:
On reserved matters:-
This part of the paper reviews the contribution ports make to the economy, and to national and regional competitiveness. It looks at the need for capacity, and at the potential need for new port development. It then describes the relationships between the ports industry and the planning system, and the need for high environmental standards whether for port development or port management. Finally, it considers the needs port customers have for sea, road and rail connections.
2.1.1. About 100 ports are commercially active. Of these, 36 handle over two million tonnes per year. The four biggest estuary ports London, Tees and Hartlepool, Grimsby and Immingham, and Forth handle over 200 million tonnes between them. Oil and oil products account for half the tonnage handled by UK ports and seven ports handle over 25 million tonnes annually. These products make up over half the tonnage through eight of the top ten. Sullom Voe was built in the 1970s and now handles over 30 million tonnes per year of North Sea and North Atlantic oil. Felixstowe has grown in just over 30 years from a little fishing haven to a major port, handling 1.8 million containers in 1999 40 per cent of the UK total. Dover has grown over a similar period to handle 17 million tonnes of freight in 1999 the bulk in 1.5 million lorries. Dover also handles 24 million passengers.
2.1.2. In many traditional ports, coastal traffic has been replaced or now moves by other forms of transport. For example, coal shipments required a number of large ports near the coalfields. This trade has gone and some commercial ports have gone with it. Overall port tonnage grows slowly. This reflects shifts in the economy towards trade in relatively higher value but lighter manufactured goods. Tonnage is not rising at every port. Some will continue to decline in importance. Diversification will be the key to regeneration in these communities.
2.1.3. Containers and trailers have taken the place of loose cargo shipments. But they have done more than displace traditional, labour-intensive, methods. Rapid growth in these sectors is linked to the globalisation of trade. Many companies now treat the whole world as their market and their production line. Recently the container and trailer sectors have been growing at 8 per cent a year and some customers forecasts are ahead of this figure. Major retailers, for example, are making buying decisions which may double their use of containers in a single year. UK container ports are well served by direct deliveries from international lines. Shipping companies also use them for transhipping goods to or from other countries. Over 30 per cent of containers handled at Felixstowe are in transhipment. This in turn increases the range of markets available to UK customers, bringing competitive benefits to our industry and maintaining our attractiveness for inward investment.
2.1.4. Container ports which cannot meet the demands of these global shipping alliances stand to lose not only the future growth of their business, but substantial sections of their existing custom. This is because transhipments are important to the liner operations economics and the lines look to consolidate their operations at hub ports. Competition among container ports is fierce. The stakes are high, especially given the public state aids that some continental rivals get at the moment. Gateway ports have become increasingly important to their local and regional economies as their business has grown. If they were to lose this business it would have correspondingly substantial adverse consequences. This consideration is of national interest.
2.1.5. Some ports have lost trade because bigger ships cannot use them. The growth of super-tankers is a familiar story. It is matched in other sectors where bigger and more sophisticated vessels make ever-more exacting demands on port services. Ports are now needed to handle bulk carriers in excess of 300,000 gross registered tonnes (grt). Container vessels have breached the limits imposed by the Panama Canal. Post-panamax vessels carry boxes 19-abreast; and the industry talks of new giants with more than 8,000 containers in 22 rows.
2.1.6. These ships work to very demanding year-round liner timetables. They need reliably efficient port-handling hours count. They also need deep approaches, with the widest possible tidal window. Only a few major facilities can meet these demands. Providing enough space and maintaining channels without damaging the environment is a major challenge for port operators. Shippers want to send and receive goods just-in-time. There is constant pressure on the ports handling capacity.
2.1.7. Growing continental trade and travel led to the development of short-sea ferry services from several south and east coast ports. The Channel Tunnel has transformed this market. Most customers now make a straight choice between the quickest crossings the Tunnel and the ferries from Dover. They can choose at the last minute, as the services are turn-up-and-go, offsetting the uncertainty of road congestion on the way. Dover still handles 25 and 38 per cent of road vehicles and international passengers respectively. The Tunnel has about the same share of passengers and half the share of road vehicles. So there is only a fraction left for competing services and some have stopped running. South East England has to face the consequences of this concentration and of continued rapid growth in this market.
2.1.8. The recent surge in the Irish economy has brought substantial new trade for ports in all four parts of the United Kingdom Liverpool and Heyshamin England; Holyhead, Fishguard, Pembroke and Swansea in Wales; Stranraer, Cairnryan, and now Ayr and Troon in Scotland; as well as Belfast and Larne in Northern Ireland. This trade has revived traffic through Liverpool and is bringing substantial former port sites back into use without any development on new land.
2.1.9. There is a public right to use our ports for the shipping and unshipping of goods and the boarding and landing of passengers. It is called the open port duty. It is a long-standing principle that customers may choose their ports in this country not the other way round. Parliament has charged harbour authorities with ensuring that port users are able to exercise this right safely and efficiently. There is a wide variety of arrangements for the use of particular facilities, including exclusive use. Those operating port facilities must be allowed to compete on level terms. The Competition Act 1998 ensures that in common with all other businesses those who run ports, or provide services in them, do not abuse any dominant position.
2.1.10. Customers look to the transport system as a means of adding value, not just cost. They want more than a terminal where goods are switched from one form of transport to another. Many ports are potential distribution centres. Customers value viable rail connections as an alternative to congested roads.
2.1.11. Government does not run the shipping industry or the ports industry. Government does not decide the ports industry's commercial strategy, or direct or fund its investment; nor does it manage port operations. These are matters which Parliament has entrusted to local statutory authorities, who fund their investment and operations from levies on users. In general, port infrastructure can and should be commercially financed. Commercial funding for development is unlikely to be a problem where a ports business is growing.
2.1.12. The Government and the devolved administrations retain powers to set dues when port users appeal against them. This is because the public right to use a harbour depends upon payment of dues. If they are not paid, the use is not by right. On the other hand, the right could be practically extinguished if dues were unfair or unreasonable. We believe that dues must be fair and equitable. It is wrong for some users to have special treatment, and even to be exempt from dues altogether, when their competitors are paying the going rate. Harbour facilities cannot be maintained unless the users contribute properly. Harbour authorities are obliged to publish the dues tariff. These are important safeguards.
2.1.13. We believe that port developments and port operations should not in general need public subsidy. Public money is not well spent distorting competition between ports for example, where a port is seeking to win business to replace lost traffic and use surplus capacity. Subsidy tends to spread the problems caused by excess capacity. It can be damaging to otherwise healthy neighbouring ports.
2.1.14. The Government followed the white paper A New Deal for Transport: Better for Everyone by publishing a comprehensive, integrated strategy for the distribution of goods and services, Sustainable Distribution: A Strategy. The Government aims to ensure that the future of the distribution industry of which ports are a key part does not compromise the needs of our society, economy and environment.
2.1.15. The Government has proposed a national policy framework for major freight interchanges. Its four objectives are to:
2.1.16. It is important to make the most of the transport infrastructure we already have and to ensure that it works effectively. This also applies to major interchanges, where freight is transhipped from one form of transport to another including ports. The performance of these hubs is vital to promoting greater use of inland freight and the use of rail for trunk haulage. It is equally vital to efficient trading links with continental neighbours.
2.1.17. Sustainable development must recognise the importance of meeting economic, social and environmental objectives at the same time. Government has a crucial role in balancing conflicting interests. Development can threaten the delicate natural environment of shorelines and tidal estuaries, or expose many people to noise disturbance. That is why Government regulates port development, for example through the Environmental Impact Assessment, Wild Birds and Habitats Directives. On the other hand, sustainable development may safeguard jobs, reduce long-distance road haulage and cut costs and journeys to market. The Integrated Transport White Paper, A New Deal for Transport, published in July 1998, set four key aims for policy on ports:
2.2.1. Devolution in the UK provides a major opportunity for innovative policies. Ports policy is now shared between the Department of the Environment, Transport and the Regions, the Scottish Executive, the Welsh Assembly and the Department for Regional Development in Northern Ireland. The devolution settlement provides a legislative frame work and associated concordats for the Departments to work effectively together. They will do so on the basis of the policies in this paper. They will liaise regularly on matters of policy and legislation.
2.2.2. Integrated transport policy recognises that Government cannot treat any element of the transport network in isolation. There are other related policies, some of which are devolved and some reserved. The Government and the devolved administrations are committed to working closely on policy development in both areas. The reserved areas are:
2.2.3. Before 1 July 1999, the Secretary of State for Scotland was responsible for fishery harbours and marine works. The Scottish Executive is now responsible for all ports in Scotland. The Executive deals with:
The Scottish Executive is accountable to the Scottish Parliament. It will develop policies on ports and harbours which suit Scotland's needs.
2.2.4. The Scottish Parliament now has competence to legislate on ports and transport in Scotland. The Scottish Executive also continues to be responsible for financial help to Highlands & Islands passenger ferries and Scottish Ministers are the shareholders in the ferry operator Caledonian MacBrayne. The Executive is considering future arrangements for the subsidy of lifeline ferry services currently operated by Caledonian MacBrayne to ensure compliance with European state aid regulations. It will take full account of the role of the key ports serving these lifeline routes in the west coast, and to the Northern Isles.
2.2.5. The Scottish Executives transport policy draws from its integrated transport white paper Travel Choices for Scotland. It highlights the importance of ports as part of Scotland's transport system and trading links. It also describes strategies for improving freight transport. A Partnership for Scotland set out the principles for developing policies for Scotland, and Making It Work Together sets out the Executives commitment to sustainable development. Ports policy in Scotland will develop from these key strategies. The Executive will measure progress against its objective of delivering a sustainable, effective and integrated transport system.
2.2.6. Now that the Executive has responsibility for ports policy for the first time, it has an opportunity to develop an integrated ports and transport policy with other key issues including the environment, economic regeneration, fishing and Highlands and Islands matters.
2.2.7. Integration is central to transport policy across the UK. The Scottish Executives Transport Bill paves the way for an integrated transport strategy and ports policy for Scotland. Ports are expected to contribute towards, and benefit from, policies to improve freight transport.
2.2.8. Ports make a vital contribution to local and regional economies in Scotland. Scottish ports are diverse, serving the oil, fishing and passenger transport industries. Ports must also support the Executives objectives for developing the rural economy especially in peripheral and remote areas. They must respond to the changing economic structure of the Scottish central belt. Scottish Enterprise, Highlands & Islands Enterprise, their network of local enterprise companies and the relevant local authorities will contribute to both transport and economic objectives.
2.2.9. The ports industry and potential shipping operators must maximise opportunities for Scotland's sea transport and trading links. The Executives integrated transport policy leads by setting integrated transport and sustainability objectives. It is a framework for ports to develop new links to and from Scotland's east coast, where a possible ferry service to the continent is being examined, and links between Northern Ireland and the south west of Scotland and Firth of Clyde. However, Government cannot determine which ports should be used for shipping routes.
2.2.10. Sustainable development is central to the Executives policy on transport and the environment. The Executive will develop policies on ports that recognise both the economic and social needs but do not threaten the environment. The Executive looks to the ports industry to work with the Scottish Environment Protection Agency, Scottish Natural Heritage, local authorities and others within that policy framework.
2.2.11. Ports and harbours in Scotland are subject to the same constraints and opportunities for public sector finance as in the rest of the UK. The Scottish Executive plans to retain the responsibility for fishery harbours within the fisheries group of the Scottish Executive Rural Affairs Department (SERAD), but will keep the position under review.
2.2.12. The Scottish Executive recognises the vital importance of the ports and many smaller harbours serving the lifeline passenger ferry services throughout the Highlands & Islands. The lifeline ferry service is a major part of their business for many of these ports and the Executive will take full account of these special needs in its port policies. Scottish Ministers also have powers to provide grants for the improvement of piers, harbours and boat slips that serve the Highlands & Islands.
2.2.13. Capital grants are available to improve transport facilities so that ferry services are more efficient and economical. Local authorities in the Highlands & Islands support some projects and, along with some independent harbour authorities may also access the Executives piers and harbours grant scheme. In recent years, local authorities and independent harbour authorities have received just over £1m annually. The Highlands and Islands may want to have a more direct say in the management of the lifeline and other transport services. The Scottish Executive, the local authorities, and Highlands and Islands Enterprise have jointly commissioned a study of the issues involved.
2.2.14. Local authorities also provide valuable ports infrastructure in Scotland. There is a significant contribution in Orkney and the Highland Council area. Local authority ports and harbours are particularly important in the Highlands and Islands area. Local authority owned ports and harbours fall within the Scottish local government financial control system.
2.2.15. Ports policy for Wales (other than for small fishery harbours) is reserved. However, the National Assembly views the development of ports in Wales as a key element of its integrated transport policy, and its broader aim of improving economic and social cohesion. Wales is well endowed with ports. There are four ferry ports with services to Ireland:
They are on the Trans European Road, Rail and Rail Freight Networks, linking Ireland with Great Britain and mainland Europe. Ports and ferries have been upgraded in recent years, and Irish Sea traffic has been growing at around 6 per cent a year. Wales also has a number of other cargo handling ports, such as Cardiff, Port Talbot (one of only four deep water ports in the UK), Milford Haven and Mostyn.
2.2.16. In July 1998, the Welsh Office published Driving Wales Forward, a strategic review of the Welsh trunk roads programme. The core network serves all the major ports in Wales. The strategic east-west trunk roads have major port destinations. A central aim of Assembly policy is to ensure that these ports can take full advantage of the continuing growth in passengers and traffic, especially increased use of short sea freight shipping.
2.2.17. The Assembly has recently funded development of a European rail freight terminal at Wentloog. This will be well placed to handle freight travelling through South Wales ports. It supports studies by the Welsh Development Agency and the port operators to identify potential markets for ports along the South Wales coast. The studies are also looking at what infrastructure (including rail gauge enhancements and road traffic interchanges) they might need. Similar market analysis has also been undertaken in North and Mid Wales, sponsored by the Welsh Development Agency and Railtrack. This has confirmed the key role of Holyhead in generating freight flows in and across this Region and beyond, and that infrastructure needs to be improved to encourage further growth.
2.2.18. The Assembly looks to local authorities to take full account of the potential role of ports in their local transport plans. The Assembly guidance looks to provide a seamless interface between sea journey and onward travel. It is willing to fund local authority minor infrastructure developments to improve integration through transport grant. The Assembly is also responsible for administering freight facilities grant where port development needs railhead infrastructure. It expects this funding to be complemented by operators, Railtrack and the Strategic Rail Authority. It has encouraged local authorities, such as the Isle of Anglesey in respect of Holyhead, to work closely with these potential investment partners to support sustainable port development.
2.2.19. The Assembly is keen to work more closely with the Government of the Irish Republic, to predict and meet future demand for travel between the two countries. Many of the Welsh ports (both in west Wales, and Holyhead in Anglesey) fall within the Objective One region, as well as being eligible for funding from the ECs regional budget. Their further development may feature within wider projects to capitalise upon the opportunities for growth offered by the Welsh-Irish sea corridor.
2.2.20. The Department for Regional Development is responsible for ports policy and the legislative framework within which ports operate in Northern Ireland. The statutory framework is distinct; ports are regulated by the Harbours (Northern Ireland) Act 1970 and the Ports (Northern Ireland) Order 1994. Northern Irelands ports are crucial because of its separation from the rest of the UK. They serve as vital gateways, both for trade between Northern Ireland and Great Britain and further afield, as well as for passenger and tourist traffic.
2.2.21. Shaping our Future (published in December1999) provides a regional strategic framework for Northern Ireland. Its policy objectives include strengthening the economy, tackling social disadvantage and protecting and enhancing the environment. Northern Irelands limited home market makes its major ports vital gateways. Shapingour Future highlights the importance of ports for:
2.3.1. Many of our ports carry continental trade and have close links with ports there. Some have continental rivals. Few other EU member states have anything like the number and variety of UK ports. Ports are an integral part of the economies of many national and local member states, as they are of ours, but some other countries use this to justify substantial state aid. Such distortions of competition are unfair to UK ports.
2.3.2. The Government welcomed the European Commissions green paper, Ports And Maritime Infrastructure, published in December 1997. It supports applying the user-pays principle to port and maritime infrastructure to bring about fair competition. The green paper correctly identified the major issues and trends facing the ports industry. They include moves towards trade liberalisation and a developing globalisation of the world economy, containerisation and concentration of traffic. Europe needs efficient, integrated port and transport systems to compete successfully in world markets, and to encourage sustainable freight distribution.
2.3.3. The green paper also considered the possible development of a regulatory framework aimed at removing barriers to the port services market. Conditions of market access should be limited to those needed to maintain open and accountably managed safety standards and related matters. The Commission is developing more specific proposals on access to port services. Once these are public the Government will consult widely and fully on them.
2.3.4. The Commission is also considering ways of promoting transparency on port infrastructure financing. In principle, the Government supports initiatives on funding and charging to create free and fair competition in the port sector. However, it is important that any Commission initiative should avoid unnecessary regulatory burdens. The Government is opposed to complex and inappropriate interference in the ports market.
2.3.5. We must take the same approach to public finance of port projects for both domestic and European sources of funding. The Department of the Environment, Transport and the Regions co-ordinates ERDF applications for ports infrastructure in England and Wales. This function is devolved in Scotland and Northern Ireland. Each case is considered on its merits.
2.3.6. In general, commercial ventures in buoyant markets need no public funding. It is important that new trade anticipated in ERDF applications should not be relocated from other ports. Using public funds to move business in this way is unsound. Better proposals have included research into new traffic flows which promise to take more lorries off the roads. The Government and the devolved administrations will not support funding proposals if they are likely substantially to distort competition in the UK ports sector.
2.3.7. The Council and European Parliament have agreed Community guidelines to establish a trans-European network (TEN) throughout the Community. The network will be established by 2010 and will integrate land, sea and air transport networks. In December 1997, the Commission published proposals to amend the guidelines, clarifying the position of seaports. They also included some inland ports and terminals where people and freight can transfer from one form of transport to another. The Transport Council agreed the revised proposals in 1999 and they are now subject to co-decision with the European Parliament. Any inclusion of ports and terminals should limit Community funding to projects of common interest that meet specific criteria. These might include promotion of short sea shipping or links to peripheral regions, avoiding general support for port infrastructure.
2.3.8. UK ports have made little use of the TENs budget allocated to port and port-related feasibility studies. The UK will continue to participate in the programme for the maritime sector and the Government intends to apply a more rigorous sifting assessment to future schemes. Government support for anything beyond initial studies for schemes will generally depend upon a quality-assured business case. Projects that pass this test should not need substantive public funding at the development stage. There may be special cases, however, for example where there are overriding social reasons for a project in peripheral maritime areas.
2.4.1. It is not easy to measure port capacity, or whether it will meet expected growth in demand. Even within any one sector, capacity can be difficult to define. Demand shifts as trading patterns change, leaving some operational capacity not fully used and creating pressure for expansion elsewhere. Demand for port capacity may have strategic effects. These can relate to, amongst other things:
2.4.2. Which port customers use may depend not only upon ease of access to consignments and the speed with which these pass through the ports, but also upon external considerations, including the quality of transport links to inland destinations? A port works most efficiently if it can service a steady flow of large vessels. That way, the workforce and handling equipment is fully used. Expansion generates inland traffic, and particularly with deep-sea container developments may require major development in sensitive estuaries.
2.4.3. Some traditional ports have declined, but competition and flexible use of resources have absorbed growth in the industry overall. Ports have worked hard to become more efficient and have invested in new equipment. At the moment, only a few ports plan significant expansion. Ports find it difficult to identify acceptable new sites for expanded capacity. Environmental controls make exploiting new sites more challenging. They also favour redevelopment or more intensive use of existing capacity.
2.4.4. Where a port itself has surplus operational capacity, port operators need to find new, economically productive uses which meet the needs of port communities and are consistent with the wider planning and regeneration strategy for the area. This is a challenge for port management especially in the trust sector where traditional ports predominate. Proposals in this paper for more open and accountable management address this challenge.
2.4.5. Ports are most likely to be regenerated if some resources are used for some other purpose. Integrated transport policy provides a framework for assessing such uses. Port sites have special assets, including typically good access to road, rail and sea transport. The infrastructure may need to be revived, but port operators should consider new uses for port sites which exploit these connections first. Factories and distribution centres could be located on sites alongside working ports.
2.4.6. This paper does not identify the ports where expansion should be authorised. The pressure for expansion is greatest at ports handling container and roll-on roll-off traffic. The main players in these sectors feel it most. Forecasts point to a prospective shortfall in freight ferry and container port capacity, although they do not tell us how it must be met or where.
2.4.7. Some ports need to increase capacity to meet future demand. This may require substantial new port development in a relatively small number of cases. Where there is a clear need, we will support sustainable port projects, but each case must be looked at in detail on its merits. Particular cases must be considered within the strategic context provided by regional planning guidance and the regional transport strategy. We will follow established approval procedures including hearing any objections.
2.4.8. Expanding ports face the challenge of sustainably accommodating demands for extra capacity. A proven strength of the ports industry is that capacity is flexible. The efficiency and intensity of facility use and ship turnaround times can substantially influence the throughput possible with the same infrastructure. The industry must exploit this flexibility.
2.4.9. If the port industry fails to meet demand or is prevented from doing so, shipping lines may divert primary services to overseas ports. This would make it harder to meet some objectives of integrated transport policy. The primary services would no longer collect and deliver UK trade to UK ports, adding the cost of transhipment in a foreign port to UK trade. A higher proportion would arrive in or depart from this country on road trailers. There would be a significant effect on the cost of UK trade, and thus on competitiveness, as well as on the volume and pattern of road traffic.
2.4.10. It is important to have a clear overall picture of trends affecting the ports industry, and especially of the potential need for new port development. This also has implications for transport networks. We aim to make the best use of existing capacity in preference to new transport infrastructure.
Opportunities include:
These improvements are a high priority, especially as there are environmental constraints on expansion at the ports facing the greatest pressures. We need to understand the scope for this. The Government will consider with the industry and other interests how to benchmark port performance and best practice methods. The Scottish Executive is also considering how to assess information and statistics on ports alongside other transport and economic indicators.
2.4.11. We expect ports planning expansion to assess whether existing facilities and increased efficiency could cater for expected demand. They will also have to demonstrate that new capacity will produce significant additional benefits. A lot of statistics are collected on the maritime industries, including ports. Recent implementation of the EC Maritime Statistics Directive will add to them. They are a valuable source of information on the trends that shape the ports industry. The Government will consult potential users of this information on making best use of it.
2.4.12. A Better Quality of Life (published in May1999) sets out a strategy for sustainable development for the UK. Where policy responsibility no longer remains with the UK Government, the Scottish Executive, National Assembly for Wales and the Northern Ireland Assembly have the opportunity to develop policies for sustainable development which reflect their own local circumstances. Sustainable development policies aim to manage new development, not rule it out. Even where sensitive sites may be affected, regulations include procedures for approving development with appropriate safeguards. These safeguards include a proper consideration of alternatives. The regulation of special sites nationally and internationally recognised and protected is naturally very restrictive, reflecting the importance and sensitivity of our coastline. This is a challenge to port operators under expansion pressures, but it is one they should rise to.
2.4.13. A New Approach To Appraisal (NATA) sets out criteria for all transport projects, including new port developments. The Government will consult the ports industry and other interests about developing more detailed guidance specifically for ports. Guidance for all forms of transport covers five over-arching objectives:
Within each of these objectives there is a number of subordinate objectives with their own indicators.
2.4.14. NATA was developed to ensure that decisions reflect sustainable development principles. NATA also ensures that we examine the effects of projects comprehensively and appraise them clearly and consistently. The NATA indicators are a mixture of monetary values, physical units and non-quantifiable elements. The framework does not give implicit or explicit priority to any one. It provides information about each of the options appraised, but does not provide a single overall indicator which can be used to rank options. Decisions on cases are matters of judgement, not pre-determined weightings.
2.4.15. Promoters of port developments will have to show that they have considered a range of options. There is a presumption in favour of making the best use of existing infrastructure where possible. Promoters will have to show how they have sifted options using the NATA framework criteria and indicators. They must apply the NATA criteria to the performance of the most promising option and they will have to include a base case which covers the current infrastructure and any approved changes. Port developments have to be demonstrably commercially viable, regardless of the status of the port. Operational considerations may also be relevant, for example draught constraint, effect of tides and surface access limitations.
2.4.16. The economic impact of port developments can be described in terms of the different users affected cargo interests, passengers, transport providers, Government, and non-users affected by surface access and wider economic aspects. However, Government does not make or endorse forecasts of port traffic as it does for roads and airports. There are no models to estimate changes in the distribution of cargo and passengers using ports as a result of infrastructure development. Proxy measures of economic effects will be needed.
2.4.17. Development can affect the built and natural environment and human health. It can make noise and affect local air quality. Development can affect bio-diversity of habitats in sensitive areas, and it can affect water quality. There is some guidance on measuring these effects. Mitigation is also an important consideration at the design stage of a project. There is also a statutory requirement to prepare an environmental impact assessment for projects likely to have a significant effect.
2.4.18. How easy a port development is to reach can be described by either costs or times for different forms of transport. It is a policy objective to improve access by forms of transport other than road vehicles, and by public transport.
2.4.19. New transport infrastructure which would adversely affect environmentally sensitive areas must pass special tests. Sometimes an overriding public interest may allow a development which will have an adverse effect on nationally or internationally designated sites. Such proposals will not go ahead unless developers can show that net benefits including other environmental benefits clearly override the environmental disadvantages. They will also have to show that there is no other, better option and that they have taken all reasonable steps to mitigate the effect. Port developers must recognise the need for assessments at an early stage of project preparation if they are not to limit their ability to respond quickly to new customer demands.
2.4.20. Each such case will be considered on its merits, taking account of the answers to these questions:
2.4.21. As part of our commitment to the environment, the Government will carry out its full legal obligations to implement EU environmental directives. These do not rule out development, but apply demanding tests which reflect the importance of the sites they protect. If there is no alternative to a particular development, the developer will have to show imperative reasons of overriding public interest before it is allowed to go ahead. If a development is then permitted notwithstanding a negative assessment, the developer must take compensatory measures to ensure the overall coherence of the network of protected sites.
2.4.22. One possibility is that the developer could create a replacement habitat. However, this may be costly, difficult or ecologically untried. We would expect the developer to pay for compensatory measures. If creating a new habitat is specified as a compensatory measure, the quality of the area concerned would be expected to become good enough to safeguard the coherence of the network of protected sites. This would be expected to happen within a clear timescale.
2.4.23. Harbour authorities, along with other statutory undertakers, have permitted development rights under the General Permitted Development Order 1995 (the GPDO). [1] These rights enable statutory undertakers to carry out certain development without needing to make a planning application.
2.4.24. The Government has recently altered permitted
development rights so that statutory undertakers do not avoid
the requirement for environmental assessment. Local planning
authorities
and statutory undertakers believe the existing system of
permitted development rights is broadly satisfactory.
Guidance to statutory undertakers makes it clear that
whenever they consider that their proposal is likely to have
a significant effect on amenity and the environment, they
must consult the local planning authority.
2.4.25. Harbour authorities enjoy a similar freedom in relation to building regulations. This too is on the understanding that it remains good practice for the building inspector to be consulted even where the regulations do not apply.
2.5.1. Land use planning can help ports to develop sustainably. It balances the economic advantages of development with its social and environmental implications, and promotes consistent, predictable decision-making. Port development can present significant planning issues, since it tends to use significant amounts of land in itself. It may also bring with it a need for commercial development, transport infrastructure and housing for employees and their families. In some cases, heritage issues and clashes with recreational interests arise. Poorly planned ports can also damage the environment significantly, both in terms of land use and marine life.
2.5.2. The Government has published a range of planning policy guidance which is relevant to port development proposals. Some is currently under revision. The devolved administrations have their own separate national planning policy guidance in place which covers the matters discussed in this chapter.
2.5.3. The Government has recently issued updated guidance on regional planning in England in Planning Policy Guidance note 11 (PPG11).It advises on how to plan the land-use aspects of regional development. The Government recommends a similarly integrated approach in new planning guidance on transport (PPG13), which the Government is reissuing before the end of the year. It includes specific advice on planning for port development.
2.5.4. The Scottish Executive is promoting regional transport partnerships to improve co-ordination across local authority boundaries. Its Transport Bill includes proposals for Scottish Ministers to be able to direct local authorities to co-operate on reports on specific transport problems. Ports should liaise with the national economic development agencies, Scottish Enterprise and Highlands & Islands Enterprise, and their supporting network of local enterprise companies in framing locally led economic development and promotion of public/private partnerships.
2.5.5. In Wales, planning authorities have formed four voluntary groupings to identify strategic planning issues in the preparation of unitary development plans. The groupings have been encouraged to produce agreed strategic transport policies and proposals, including where appropriate policies and proposals on ports, to be included in unitary development plans and local transport plans. This work will also inform the preparation of a National Spatial Planning Framework for Wales which is a commitment in the National Assembly's first strategic plan Better Wales.
2.5.6. Regional planning guidance (RPG) is being up-dated for each English region outside London. The Mayor will be preparing a new Sustainable Development Strategy for London. Regional planning guidance is essential to sustainable port development, because it is at this level that planning the broad patterns of new development and infrastructure can be undertaken most effectively. This guidance aims to integrate the land-use aspects of economic planning with transport, housing and services to inform development plans, local transport plans and other plans and programmes.
2.5.7. Each regions RPG will include a regional transport strategy (RTS). This will offer guidance on the role and future of ports in the region and will integrate their needs with the transport infrastructure. The RTS will need to assess how port traffic fits in with the capacity of road and rail networks and the priorities for developing them.
2.5.8. The views of public/private partnerships concerned with port development will be important in assessing port needs, opportunities and constraints in each region. Partnerships should include representatives from major ports. They help bring together private capital and expertise, to get better value for public money. The RDAs in particular may be able to assist in encouraging such partnerships to happen.
2.5.9. The RDAs can advise regional planning bodies which ports have or expect pressure on capacity. They can also identify others where there may be surplus capacity and a need for regeneration. It may not be realistic or helpful to attempt to keep uneconomic ports going or to try to win back traffic. Nor do port hinterlands necessarily conform neatly to regional and other boundaries. Interests in neighbouring areas need to be considered.
2.5.10. Development plans have an important role in setting out priorities for land use and creating certainty over use, for example over which port land could be re-used. Local authorities should, where appropriate, work with the ports and shipping industries when preparing development plans and should identify and, where appropriate, protect sites and routes which could be critical in developing ports infrastructure. However, plans should only include proposals which are firm, with a reasonable degree of certainty of proceeding within the plan period; which are identified in the local transport plan; and ideally which are programmed and finance committed. Local authorities are advised to consult transport infrastructure providers early in plan preparation.
2.5.11. Local authorities should promote the role of ports in sustainable distribution, by promoting viable interchange facilities, wharves and harbours; encouraging sustainable access and full use of existing facilities; and ensuring rigorous appraisal of new facilities or expansion. They should avoid developments incompatible with nearby port operations; and for sites no longer required for port uses, they should first consider sustainable transport uses, and then uses which will promote regeneration. Applications for planning permission must be determined in accordance with the development plan unless material considerations indicate otherwise. National policy on ports is an important material consideration.
2.5.12. Port development and port operations can affect both the natural and historic environment, as well as other users and local communities. Parliament has placed duties on harbour authorities to consider this in carrying out their work whether managing and maintaining a harbour, or planning a new development. Government and local planning authorities have similar duties. Port modernisation must respect environmental safeguards such as the designations of estuaries and shores.
2.5.13. The coastline is one of our natural treasures. Even developed stretches of coast retain much of their traditional beauty and importance to wildlife. Experts have reliably estimated that three quarters of the total area of our estuaries (including bays and inlets) is of international significance for nature conservation. Coastal habitats have been protected because they are under pressure. The most sensitive wildlife sites now being identified under the wild birds and habitats directive and the Ramsar Convention on the protection of wetlands include many alongside ports.
2.5.14. We are committed to conserving biological diversity. We published a maritime volume of biodiversity action plans in October 1999 which included action plans for coastal habitat types and species. The ports industry makes a positive contribution, especially to local plans. We will encourage ports to provide for conservation in their environmental management systems and will work with them to develop good practice.
2.5.15. Ports have been created to take advantage of deep water. These deep water environments are still of high importance to wildlife, showing that port operations need not be incompatible with nature conservation. We commend those ports that take this aspect of their duties seriously, setting a good example to the rest of the industry.
2.5.16. Nature conservation and natural heritage objectives can be a significant material consideration in determining planning applications. Planning policies help to conserve the abundance and diversity of British wildlife and its habitats, or minimise adverse effects on wildlife where conflict is unavoidable. The Government will meet its international commitments and obligations for nature conservation.
2.5.17. Planners should take account of nature conservation activities. We advise local planning authorities to consider the relative significance of international, national and local and informal designations in weighing up nature conservation interests.
2.5.18. Planning Policy Guidance note 20 on Coastal Planning (PPG20) (1992) [2] identifies the key policies which deal with:
It encourages the imaginative re-use of disused commercial docks.
2.5.19. Britain's coast is rich in archaeological and historical heritage, tracing the history of our developing relationship with the sea. The sea shaped our identity as a major mercantile, industrial and imperial nation. Ports and harbours hold traces of the movement of people, goods and ideas between this country and the wider world. Port defences are also an important part of our history. Port gateways give visitors their first impressions of this country. They make an important contribution to tourism. Developments may lie beyond the seaward limit of the planning system, but planners should still apply the principles of policy guidance to other approvals and consents.
2.5.20. Many ports have seen centuries of human activity. Besides visible features of historic interest and submerged archaeological remains, ports and harbours are almost bound to hold historic wrecks. The National Monuments Records still does not contain details of all wrecks. Wrecks and other remains are vulnerable to a wide range of activities, including construction and maintenance above and below high water, and dredging.
2.5.21. Local planning authorities are encouraged to allocate adequate land and water resources for both organised sport and informal recreation. Local planning authorities should recognise that there-use, redevelopment or expansion of ports is a potential leisure resource.
2.5.22. Regeneration projects can have potential for tourism, where schemes can offer opportunities for land reclamation and environmental improvement. This applies to development proposals in and around ports, especially where commercial activities have declined.
2.5.23. Harbour authorities have a general duty to take account of nature conservation and to protect public access to features of natural beauty or historic interest. The habitats directive requires harbour authorities to take part in preparing management plans for European sites. These plans are the best way of bringing together those with interests in port activities and conservation, whether there is a European site in the harbour or not.
2.5.24. In England and Wales, the Countryside and Rights of Way Bill will place a general duty on public bodies to further the conservation, enhancement and management of sites of special scientific interest (SSSIs). Where a public body proposes to exercise its functions or to authorise operations which are likely to damage or destroy the special features of a SSSI, it first has to tell the statutory nature conservation agency and follow its advice. This means that all public bodies, including harbour authorities, will have to commit themselves to better protection and management of these nationally important sites.
2.5.25. There is a wide variety of interests and a range of regulators in the coastal zone, including harbour authorities. An integrated approach to estuary and coastal management brings regulators together. Many harbour authorities are committed to these partnerships and we welcome their contribution. Others may be constrained by a lack of resources, but coastal management in their area is impaired if they do not contribute.
2.5.26. Harbour authorities are very experienced in managing coastal activities and are primary regulators of some uses of coastal waters. Involvement brings them better communications with the local community. It should help to reconcile conflict with commercial activities. In some ports, especially where recreation is a main activity, commercial interests and harbour authorities reinforce one another.
2.5.27. Harbour authorities can seek additional environmental duties and powers, including powers to make environmental byelaws. None has done so, suggesting that existing powers are broadly adequate. The Government is considering proposals by the ports industry that would make it easier for them to assume additional environmental duties and powers.
2.5.28. Sometimes resources are a genuine problem for example where a harbour is inactive and there is no revenue. In these cases, another authority might be able to act. At the moment, a local authority cannot make byelaws where another authority has the power to do so. We will examine with the ports industry and local authorities how to manage the environment in inactive harbours.
2.5.29. Environmental duties need standards, just like navigational safety. Indeed, the two subjects overlap. We will work with the ports industry to develop appropriate standards. We will do so in consultation with the nature agencies and other interests. European Commission funding has helped conservation and research bodies to establish a joint initiative to promote implementation of the habitats directive by setting up management schemes. The project will develop guidance and good practice for practitioners across Europe, including the UK. Studies have included a high quality UK project on port and harbour operations.
2.6.1. Our integrated transport strategies look at ports as transfer points between different forms of transport. They are therefore an important means of integrating inland and marine transport networks. Ports have always provided integrated transport facilities and centres for distribution. Efficient inland transport networks in turn allow integrated ports to serve regional and national markets. Customers nowadays are less likely to rely on their local port. More and more goods and people use roads to and from larger ports.
2.6.2. Customers want speedy access to ports, to deliver goods just in time. A port with good road and rail access, handling equipment, skilled staff and storage capacity can tranship goods from sea or road to rail. Flexible working practices create more scope for integration.
2.6.3. Many industries within or close to docks rely on commodities delivered through the same port. Sites close to ports no longer needed for operational purposes including as railheads are natural locations for industry. They would otherwise need to send bulky freight by road.
2.6.4. Transport 2010: The Ten Year Plan recognises the importance of port hubs. A programme of multi-modal studies is under way in England, looking comprehensively at transport problems, and at the contribution that all modes of transport can make. Planned studies relevant to ports include the South Coast (Folkestone to Southampton), London to Ipswich (including access to Harwich), London to South Midlands (including Felixstowe), and Hull. The plan provides the resources to implement the results of the studies.
2.6.5. Freight facilities grant (FFG) can help meet the costs associated with moving goods within ports. Track access grant (TAG) can help with the access charges when traffic transfers from road to rail, as long as the environmental benefits justify it. Over the last two years, spending on freight grants in England and Wales has doubled to almost £60million in total.
2.6.6. When the Strategic Rail Authority (SRA) is formally empowered in January 2001, it will take responsibility for administering all rail freight grants in England, for TAG in Wales, and for the criteria for issuing rail freight grants in the whole of Great Britain. The grant rules are currently tied closely to lorry mileage saved, but the SRA will have greater freedom to make strategic grants for rail development. Scottish Ministers will continue administering FFG and TAG for Scottish projects. Since July 1999, they have awarded around £13million of freight grant with more awards currently in the pipeline, and a number of these awards have supported the development of port railheads.
2.6.7. FFG can help tip the balance in favour of waterborne freight over less environmentally friendly road transport. The Government and the Scottish Executive aim to improve the rules for waterfreight grants. They are bringing forward legislation to extend FFG to coastal and short sea shipping, and will consult on the details of the scheme. Options include grants covering non-capital as well as capital costs (as for rail), and paying grant directly to inland navigation authorities for providing freight infrastructure.
2.6.8. A New Deal for Transport: Better for Everyone identified four broad aims of shipping policy:
There are clear connections with ports policy.
2.6.9. Shipping is one of the most environmentally sustainable means of transport. Although port expansion is not always straightforward, shipping has the added advantage of being subject to fewer capacity constraints. Government shares with the ports industry a natural interest in exploiting the potential of shipping on coastal and short-sea routes. This would help to relieve pollution and congestion on the roads. There may be scope for operators to route ships to ports nearer the origin or destination of goods. There may also be potential for bulk and unit loads to shift to coastal highways.
2.6.10. The Government set up a shipping working group in late 1997 to identify ways of reviving the merchant fleet, including fostering greater use of short sea and coastal shipping. The Government published a policy paper, British Shipping: Charting a New Course, in December 1998. We will lead discussion with both the shipping and ports industries to explore how the ports industry might contribute to our aims for shipping.
2.6.11. Freight traffic on the inland waterways has been falling for many years. In terms of tonne km, it now accounts for less than 1 per cent of domestic freight moved. This is partly because of the increasing competitiveness of other forms of transport, and partly the decline in markets suited to waterborne transport. Much of the network is unsuited to carrying significant volumes of freight. Most canals were built two hundred years ago. Narrow canals will accept boats no wider than seven feet and historic broad canals about 14 feet. These canals carry a negligible amount of freight. We cannot expect them to be a significant part of the UK's distribution network, though they remain suitable for niche markets.
2.6.12. In contrast, some larger canals and river navigations still carry some freight and might be able to carry more. They are particularly suited to low value, bulk cargoes whose origins and destinations are directly accessible by water. Most of the freight carried on what are classified as inland waterways travels on the major tidal rivers. A large proportion of that moved on the non-tidal waterways travels to and from tidal waters. Allowing freight to move easily between the two types of waterway is crucial to increase freight movements.
2.6.13. Commercial traffic is still an important source of income for British Waterways. It exploits commercial opportunities when they arise and is involved in a number of projects designed to move more freight by inland waterways. For example, British Waterways recently re-opened the Caldaire terminal at Goole. It provides storage for freight brought in by sea-going vessels. This offers potential for increased onward shipment by inland waterway. British Waterways has also carried out a pilot study with private and public sector partners, looking at the demand for freight on the Trent, Aire and Ouse. British Waterways is also evaluating waste transportation on the River Lee Navigation in London.
2.6.14. The Government will sponsor an inland waterways freight study group. It will include representatives of:
The group will examine cost-effective and practical ways to increase freight transport on inland waterways. Scottish Ministers will take over Government sponsorship of British Waterways activities in Scotland.
2.6.15. Customers using roads to connect with ports need three things:
2.6.16. Gateway ports in fast-growing sectors, such as, containerised cargoes in boxes and trailers and some ferry ports, are likely to attract considerable extra traffic. Delays and congestion in the port significantly affect customers business. They compound working time restrictions and disrupt deliveries. Ports aiming to provide a modern service will invest to solve this problem. Growing ports must work with local authorities to ensure sufficient capacity and traffic flows. Road congestion damages port town communities.
2.6.17. Trunk roads to ports are vital arteries for our international trade. Some key routes carry heavy volumes of lorries and face substantial increases as port traffic grows. They need to be integrated into the wider transport network. All the major ports and more are already well served by the strategic road network. There are currently few new schemes directly linked to port traffic. The road network in England and Wales is also vital to the movement of Irish trade, which depends upon our Irish Sea ports for access to a continental market. Growth at these ports relies upon the continued prosperity of the Irish economy on both sides of the border.
2.6.18. In November 1999, the Scottish Executive published its review of the trunk road programme in Travel Choices for Scotland The Strategic Roads Review. The review recommended no changes to the network and it continues to serve key ports. The review used a new appraisal method, which recognises the need for good trunk road connections to ports. Three out of five major trunk road schemes proceeding to construction (on the M77, A78 and A830) will strongly benefit Scottish ports.
2.6.19. Port traffic growth will contribute to pressures at key points in the road network, but we do not expect it to have a significant effect on the network as a whole. Nevertheless, port customers are affected by general congestion. They plan their distribution centres to minimise these problems. If these centres are not in a port they use, it becomes even more vital that they can retrieve goods from port storage without difficulty. These companies are considering rail and coastal shipping as alternatives, but they still depend upon such services having good port facilities.
2.6.20. There has been long debate about increasing the general maximum lorry weight limit for six axle vehicles to 44 tonnes. These vehicles have been allowed for combined road/rail transport since 1994.In January 1999 the general weight limit in the UK was increased from 38 to 40 tonnes for five axle vehicles and from 38 to 41 tonnes for six axle vehicles.
2.6.21. In March 2000 the Commission for Integrated Transport (CfIT) completed its study of the effect of allowing 44 tonne vehicles. It concluded that these vehicles would produce a net annual saving of 100 million lorry kilometres, with consequent fuel savings and cuts in CO2 emissions. CfIT recommended that these vehicles be allowed provided they have road-friendly suspension and engines that meet Euro 2 emission standards. The Government has a target of 1 February 2001 for this change.
2.6.22. Port freight is very important to the railways dominated by bulk cargoes and containers. Customers using port rail services need the same three things as those using roads:
We want to see more freight moved by rail. Some ports could make more use of rail. Major ports are trying to do so, and the rail freight operators are keen to win more port business especially containers. Many of these loads would otherwise travel by lorry. Rail freight operators must rise to the same challenges that face ports providing efficient, reliable services to increasingly demanding customers. Transport 2010: The 10 Year Plan envisages an 80 per cent increase in rail freight, giving it 10 per cent of the domestic freight market, provided that the rail freight companies deliver performance improvements. Winning port traffic will be a key to this target.
2.6.23. The original rail facilities that remain at some ports are in many cases no longer fit for purpose. The railhead track is not up to the weight or length of modern freight wagons. Access was sometimes along public roads and no longer meets safety standards. Former railyards and connections to the network no longer match the layout of berths, or have been lost to alternative development. Potential sites have been disposed of.
2.6.24. Anyone planning port development or regeneration should consider the revival of port railheads, but this is likely to be realistic in only a few cases. Gateway ports and those with large volumes of bulk traffic such as coal and iron are most likely to achieve the economies of scale needed. Some others might win niche business. Where regeneration is an option, ports should not necessarily leave it to Railtrack. Modern rail facilities win new business and belong in port investment plans, just as ports expect to provide berths and roads.
2.6.25. Two challenges for rail freight are the networks ability to meet growing demand, and how to finance investment. Railtrack is obliged to maintain, renew, replace, improve, enhance and develop its network. It must meet the reasonable requirements of both passengers and freight, as far as reasonably practicable.
2.6.26. Railtrack, as the manager of the network infrastructure, also has a key role to play. Railtrack must work with the Strategic Rail Authority to invest in infrastructure for rail freight. Together they will agree a programme of priority freight routes, tackle capacity bottlenecks and invest in work for loading gauge enhancements to and from the deep-sea ports. Transport 2010 envisages gauge and capacity enhancements on some specific freight routes to major ports, such as Felixstowe.
2.6.27. Railtracks strategy for port traffic may involve partnerships with port authorities and other funders. Its Network Management Statement (NMS) includes proposals for a freight loading gauge upgrade on a number of key routes.
2.6.28. The new Strategic Rail Authority will aim to:
It will look at loading gauge, track capacity and access to land. Ports must be a major consideration here, given present and planned volumes of freight traffic.
2.6.29. The Rail Regulator must also promote freight growth by ensuring that Railtrack invests appropriately. The Rail Regulator and the Strategic Rail Authority will join in the development of regional planning guidance and regional transport strategies.
2.6.30. The Rail Regulator can issue licences and enforce licence conditions to maintain consistent standards and satisfy the public interest. Licences carry obligations to other operators and end users. The Regulator can approve access arrangements and can compel access on reasonable terms. He can tackle abuse of a dominant position and anti-competitive practices. These powers can extend to port rail facilities where the British Railways Board operated or managed those assets immediately before 1 April 1994.
2.6.31. Port rail facilities formerly run on this basis are subject to specific public interest obligations. They are open access facilities and the Regulator can direct entry if the owner acts unreasonably. The Government supports the European Commissions proposed directive on a trans-European rail freight network. We have proposed that it should apply to all ports connected to the rail network in Great Britain. This directive will provide that railways in ports can only be restricted if viable alternatives exist. If the Commission adopts the directive, the Government will consult the ports industry about the practical aspects of incorporating it into law in the UK.
This part of the paper describes what we and the industry are doing to promote modern management standards, especially in the trust and municipal ports sectors, and to improve regulation of the ports industry.
1.
Scotland; The Town and Country Planning (General Permitted
Development) (Scotland) Order 1992, Classes 29 and 35
2. Scotland: NPPG 13: Coastal Planning (1997); Wales:
Planning Guidance (Wales) Planning Policy First Revision
(1999).
This part of the paper describes what we and the industry are doing to promote modern management standards, especially in the trust and municipal ports sectors, and to improve regulation of the ports industry.
3.1.1. Over 600 UK ports have statutory powers. These are enormously diverse. Most no longer handle any commercial freight, and provide facilities instead for leisure and tourism. The fishing industry also makes wide use of port facilities.
3.1.2. Many ports were created to serve local markets and coastal shipping services. Some harbour authorities have never been concerned with commercial shipping. Ports should add value to their communities and to the wider economy, whether they are used for commercial shipping activities, for leisure activities, or both. This applies as much to publicly owned ports (trust ports and municipal ports) as it does to commercial ports.
3.1.3. The table overleaf shows that harbour undertakings can be classified in various ways. They are either:
However a few are privately owned. Scotland has a large number of marine works in all three sectors that provide vital facilities for inter-island ferries. Harbour authorities have powers conferred by Parliament and an obligation to use them accountably.
Only a small minority of harbours do not have them. These powers are held in trust for the future.
|
Company-owned ports Most commercial ports are now in the private sector. Companies now operate all but six of the largest20 ports by tonnage. Not all company ports are successful, but most successful ports are in this sector. These ports are subject to the full freedoms and disciplines of the commercial marketplace. They are free to seek commercial funding for investment, on commercial terms, borrowing on their assets. They are obliged to account to shareholders for their failures as well as their successes, and they can be called to account for their performance. They are expected to generate dividends and to increase shareholder value over time. To the extent that they generate retained profits, they have wide discretion over how to invest them. Privatised ports Seven former trust ports were privatised between 1992 and 1997:
Only Ipswich was compulsorily privatised, in 1997. The effects of privatisation are hard to disentangle from other economic and regulatory changes in the same period. The privatised ports were mainly members of the National Dock Labour Scheme and they have exploited the freedoms given by its abolition. There have been windfall profits from cost cutting and mergers. The privatised companies have invested substantially, but not always in port operations. Some get a lot of their income from developing and managing their estates. Cost cutting has put pressure on prices throughout the industry. New and more vigorous management has won market share. Trust ports Trust ports are independent statutory bodies. They have independent boards of trustees charged with acting in the interests of all stakeholders. Any surpluses are ploughed back into improving facilities. Only about 20 trust ports now have an annual turnover above £1million. Just eight others have an annual turnover of more than £500k. Several now register negligible income, derived in some instances from activities such as tourism and car parking. A few are important in specific markets. Dover handles almost 60 per cent of international sea borne passenger traffic, and 28 per cent of international road goods vehicles carried by ferry. Lerwick and Milford Haven have major oil facilities. Five of the biggest trust ports support the fishing industry. Municipal ports A few commercially significant ports are municipally owned. Sullom Voe and Flotta appear in the top 20 by tonnage (both because of specialised oil facilities), along with Portsmouth. Ramsgate, Sunderland, Weymouth and Workington are the most significant of the rest. Local authorities manage over two hundred minor facilities in the Scottish Highlands and Islands. These and many other facilities operated by local authorities benefit their local communities. |
3.1.4. We look to all statutory authorities to exercise their duties and powers in an open and accountable manner. Harbour authorities now have a specific duty to exercise powers with regard to the environment and its enjoyment by the public. So authorities are not simply concerned with their customers commercial interests.
3.1.5. Shareholders increasingly look not only at financial performance but also at companies relationships with local communities and the environmental impact of their operations. We will promote agreed good practice throughout the industry, taking account of the different statutory arrangements for company, trust and municipal ports. Joint groups from Government and the industry will develop:
3.1.6. The recent white paper Modern Local Government: In Touch with the People says that councils have a special status and authority as local, directly elected bodies. Local authorities and the ports industry share interests in the regeneration and growth of the local economy, integrated transport, sustainable distribution and the environment. They should consult and co-operate on their plans. There is scope for a new, productive, partnership between ports and their local authorities.
3.1.7. All ports are obliged to provide reports and accounts to the Secretary of State, or Scottish Ministers, but compliance is patchy. Public company port undertakings publish accounts but many trust ports have not taken this basic step. Some appear not even to keep proper accounts. We will enforce the requirement on every harbour authority to submit properly constructed and audited reports and accounts every year. We will consult with the industry on how to make more information public about the ways that dues are spent.
3.1.8. The Government stopped the compulsory privatisation of Tyne in 1997 and commissioned a wide-ranging review of the trust sector. It recommended that trust ports be made more open and accountable. The Government has therefore developed agreed national standards, published in January 2000 as Modernising Trust Ports A Guide to Good Governance. All trust ports are expected to plan to meet these standards. We have invited trust ports to audit their position. We will review their annual reports for compliance.
3.1.9. Many trust ports need to overhaul the appointment process and the size and composition of many trust port boards. There should be an accessible, formal, transparent appointments procedure. Trustees should be appointed on merit, not to represent special interests. We also need a wider demographic spread of candidates. The standards of the Commissioner for Public Appointments should apply.
3.1.10. Many local authorities appoint people to trust port boards. As local authorities areas have got bigger, they have not always nominated truly local people to trust port boards. Local authority appointees should see their first duty to the trust and its stakeholders. Local authorities must use their rights to nominate to trust boards in accordance with the new standards. They must use an open selection process, as they do for their own appointments.
3.1.11. There has been a separate review of trust ports in Northern Ireland. Ports policy is being developed in the light of the review findings. It is proposed to bring new legislation before the Northern Ireland Assembly in due course. This will be aimed at extending the commercial powers of trust ports while improving their public accountability. With the exception of one small port, the Department for Regional Development makes all the board appointments for trust ports in Northern Ireland under the Peach principles corresponding to those of the Commissioner for Public Appointments.
3.1.12. Commercial municipal ports compete with private and trust ports. They should do so on level terms. Local authority discussions are characteristically more open than a trust ports. But there has not been the opportunity that trusts offer to involve other stakeholders, including harbour users.
3.1.13. The Local Government Act 1999 in England and Wales will change this. It requires local authorities to carry out Best Value reviews of all their functions over a five year period. A Best Value review must look at all municipal port facilities. In Scotland the principles of Best Value are the same as in England and Wales, although the framework for delivery is different. Scottish local authorities should look at their port facilities as part of their Best Value review. They must consult local taxpayers, service users, partners, and the wider community when carrying out the review.
3.1.14. The Government wants municipal ports in England to benefit from the same changes being made in the trust port sector. We will review existing management structures and practices to make sure that municipal ports are playing a full and accountable part in the local and regional economy. In Local Leadership, Local Choice, the Government proposes a new model for local authority management. We will replace committees for most functions with a fairly small executive responsible for all functions.
3.1.15. These reforms are not specifically designed for harbours. We will review how the form of management for municipal ports compares with the standards we are setting for trust ports in particular:
In Scotland, the Executive and other bodies have been considering the recommendations of the McIntosh Report on modernising Scottish local government. This recommends the setting up of executive style councils, which has already begun in some areas.
3.1.16. Some local authorities substantially subsidise the commercial operations of their municipal ports. There are a few special cases where the harbour authority can levy a precept on local councils, where the councils in return have been very involved in the ports operation. Some other local authorities divert their ports income and capital assets to other council uses, to the detriment of the ports long term viability. They may do this directly or through additional charges for services.
3.1.17. Local authority subsidy to a commercial port potentially distorts competition. If a port operation is not self-sustaining, the local authority needs to look at the underlying causes. It may need to make structural changes. If a port would not be viable without subsidy because of, for example, excess capacity, then subsidy simply exports the difficulties to other communities. Subsidy also subjects the port to constant competition with other pressures on local authority funding.
3.1.18. Municipal ports, like any other, should fund provision and maintenance of facilities from dues levied on those who use them. Local authorities should not think of revenue from dues as general municipal revenues. If they do, it may lead to them not giving enough priority to investment and even essential maintenance. Local authorities may properly seek a dividend as sole shareholder from commercial revenues, but should ring-fence dues to protect the interests of the port and its users. Local authorities must make prudent and adequate provision for development and for replacing capital assets.
3.1.19. The previous Government stopped supplementary credit
approvals for commercial municipal ports. They have since
lapsed on fishing ports in England. This makes partnerships
with private sources of finance important and local
authorities should use them wherever possible.
The Government has agreed an initial short-term programme of
supplementary credit approvals for essential maintenance and
safety measures in municipal ports. We encourage local
authorities to bid for approvals for up to 75 per cent, but
they must find their share. Supplementary credit approvals
are not appropriate where a profitable municipal port can
fund its investment from its own revenue. In Scotland, a
separate method of expenditure planning and control of local
authority budgets applies to municipal ports.
3.1.20. We will help trust and municipal ports to realise their full potential. We recognise that in some cases this may require significant changes to their structure and status. A port might wish to consider anything from tendering for the provision of services to outright privatisation. We have made clear in Modernising Trust Ports A Guide to Corporate Governance that any such proposals would require consultation with local interests first. Where the proposals involve new powers, we will consider any proposals on their merits. Where ports managers identify sound commercial opportunities, we will help to introduce public-private partnerships to develop the port. This may, for example, take the form of concessions or long leases covering all or part of the ports assets.
3.1.21. In some cases it may be possible to use harbour revision orders under the Harbours Act 1964to make whatever changes are needed. In others, new legislation may be required, and we are willing to promote these changes where justified. It may help to draw up model schemes for public-private-partnerships for ports. These could be developed with the aid of specialist legal and commercial advice. The Government and the Scottish Executive will also support local authorities conducting Best Value reviews of harbour authority functions and develop good practice guidance with them.
3.1.22. There is no long-term benefit in having a proliferation of marginally viable ports around our coastline. Indeed, ports that fail over a long period to develop their assets can become a significant liability to local communities. They can contribute to dereliction and sap confidence in the local economy.
3.1.23. Changes in the ports industry have inevitably left some ports in difficulty. These are mainly in the trust sector, although some municipal ports have uncertain prospects. Authorities with statutory powers have the first responsibility for resolving these difficulties. Where it is clear that a ports managers are failing to grasp its potential, or standing in the way of viable commercial development, we are willing to use existing powers, or to take new ones if necessary, to reconstitute the Board and promote change.
3.1.24. A harbour maintained by a statutory authority cannot be completely closed without an Act of the Westminster or Scottish Parliaments. The exception is Northern Ireland, where a modern order-making procedure exists. Harbour authorities cannot simply abandon the duties, expenses and debts related to maintaining a port. It is therefore imperative that authorities avoid cases reaching a terminal stage.
3.1.25. Reviving the duty to submit reports and accounts will oblige all harbour authorities to take stock, and to bring difficulties into the open. The Government will look for a simpler procedure to enable ports to close where it is agreed that the statutory functions are no longer needed. We encourage those authorities which feel that their ports no longer have a viable future to consult us for early advice at national and regional level, and to consult other interested parties. We will look to the industry to help marshal practical expertise in support. We will not make decisions in these cases unless options have been discussed with all local interests first.
3.2.1. Government regulates port operations in a number of ways. There are statutory requirements for the safety of those who work in ports. Port undertakings now have various obligations to help in the Governments fight against marine pollution. Ports policy aims to maintain a modern and efficient system of regulation, developed in consultation with all to whom it applies.
3.2.2. Harbour authorities have powers devolved by Parliament. These come with rights and duties, and an obligation to use them openly and accountably to the same standards as Government itself. Government must help by ensuring that procedures for revising statutory powers work efficiently so that they do not become a barrier to necessary change and improvement. They must also be open and allow a proper opportunity for representations and objections. As a rule, it is for the harbour authority to change local powers and duties. This carries a duty to keep them up to date and suited to the current needs of the port and its users.
3.2.3. Each port has local legislation that has been amended piecemeal over many years. It has not always remained fit for purpose. Harbour orders provide an easier means of revising local port legislation than Private Bills, but they too require specialist expertise. New duties tend to be overlaid on existing requirements to produce extremely complex procedures that hold up development and management. Although some larger ports have modern powers that match those of any modern commercial enterprise, many others are still working round rather than within their legislation.
3.2.4. Byelaws and directions adopted by harbour authorities should reflect a risk assessment. They also need to be enforced effectively. Each authority needs a clear policy on prosecution. Few apply much effort to enforcement or maintenance of byelaws. Resources are a real problem and specialist advice is not cheap. Penalties are also modest for byelaw offences generally, although offences such as dangerous navigation are potentially very serious.
3.2.5. The result not only in declining ports is a set of powers implying obligations which those in charge no longer have any hope of enforcing or much incentive to change. Lord Justice Clarke, reporting on his Thames safety inquiry in December 1999, recommended that breaches of byelaws that regulate port navigation should be treated more seriously. The Government is considering how best to implement this. It will seek a co-ordinated and consistent approach to enforcement by both Government and harbour authorities.
3.2.6. The Government and the devolved administrations will work with all those with interests in the industry to spread good practice. We will develop a framework and, if appropriate, model powers. This will enable harbour authorities to assess the continued fitness for purpose of their local legislation. We look to the ports industry to contribute resources for this.
3.2.7. There are a number of regulatory regimes for controlling coastal development. Proposals which extend into the sea typically go beyond the jurisdiction of the planning system. There are also additional controls designed to safeguard other users of the marine environment. These control systems have had to adapt to reflect new environmental regulations. Protecting the marine environment is itself a complex matter and scientists are still developing some important ideas, such as managed retreat and re-charging inter-tidal zones and beaches.
3.2.8. New environmental requirements in the planning consent procedure add cost and time to project preparation. They also limit ports ability to respond quickly to new customer demands. Regulators must look more closely at the need for projects and at the alternatives. The government and the devolved administrations will work with the industry and other interests to rationalise and, where possible, simplify the consent and inquiry procedures for port developments.
3.2.9. Understanding the environmental effects of a project takes a lot of research over a long period. Neighbouring proposals perhaps from different developers are likely to interact. All these factors render decision making difficult and the results unpredictable. This is not just a problem for developers, but for regulators and the agencies which advise them on environmental effects. As a priority, we will develop guidance for port operators on development control procedures.
3.2.10. Port operators deal with a wide range of Government departments, including the Home Office, HM Customs and Excise and the Ministry of Agriculture, Fisheries and Food (MAFF). Regulatory changes continue to affect ports for example new rules on immigration and quarantine. Government departments dealing with ports need to co-ordinate their activities and we are going to look at the scope for streamlining.
3.2.11. Since the Fishery Harbours Act 1915, the fisheries Minister has been responsible for small fishery harbours in England and Wales. There are 95 small fishery harbours in total 74 in England and 21 in Wales. However, this list was last reviewed in 1951 and is now out of date. A number of ports on the list no longer have commercial fishing facilities. In others, it is no longer the principal activity. MAFF has had the same regulatory functions in relation to the statutory powers of these English harbours as the DETR for ports in general. However, commercial fishermen operate from many other harbours.
3.2.12. The Government will make regulation more consistent by transferring responsibility for regulating the statutory powers of fishery harbours in England to the DETR. This will be completed early in 2001. DETRs greater experience in these matters will give ports a better service. Other responsibilities for the fishing industry will remain with MAFF.
3.2.13. The Government has made the rating of ports fairer. Rateable values of ports, as with those of other statutory undertakings have been prescribed using a formula which the Government reviews every five years. In 1995, ports with a turnover of less than £1million moved to conventional assessment. Larger docks and harbours have continued with prescribed assessment. There is no right of appeal against a prescribed assessment. The ports formula has been based on a fixed percentage of turnover, but those ports with lower turnover have tended to pay a higher proportion of their profits as rates. Following consultation, the Government has prescribed a revised formula. This takes account of profits generated by the business, with upper and lower caps that phase in any substantial increases or decreases. Our aim is to assess all ports conventionally from the next revaluation, due in 2005.
3.2.14. For well over 100 years, users have paid for aids to general navigation through the General Lighthouse Fund. They pay for local aids to navigation through port dues. The Government remains committed to this approach. Some other countries are too, although it is by no means universal for these costs to fall on general taxation. The Government accepts that the basis of charging must be fair and that collection should be cost-effective. It is