Hansard

The two issues that we tried to address in our study were, first, whether light rail systems in England deliver sustainable benefits at the expected cost and, secondly, what barriers exist to the further development of light rail schemes and how they might be overcome. One reason to consider the second issue was that the Government's 10-year plan for transport includes a target to build up to 25 new lines in England by 2010. Early in our preliminary work, we found that there will be significant barriers to meeting that target.To give some background, seven systems have been built in England since 1980: Tyne and Wear metro, Docklands light railway, Manchester metrolink, Sheffield supertram, Midland metro, Croydon tramlink and, most recently, Nottingham express transit. The systems are promoted by local authorities, although most were built, and are privately run, by commercial firms. One exception is the Tyne and Wear metro, which is run by the local passenger transport executive. Since 1980 around £2.2 billion—a not insubstantial sum of money—has been spent on schemes, to which central Government has contributed the largest share and more than 50 per cent of costs. When the study was carried out, there were around 138 million passenger journeys a year on light rail, although, obviously, the figure is minuscule compared with the figure for passengers travelling by bus.On the methodology of our examination, we chose several systems as case studies, to allow us to consider them in depth. We chose the systems in Manchester, Sheffield, Birmingham and Croydon and we also considered the Sunderland extension to the Tyne and Wear metro. We considered the systems in the round, including issues such as performance, cost and financial performance. We carried out a survey of all local authorities that do not have a light rail system and asked them what the main barriers to such a scheme in their area were.We consulted widely with stakeholders such as private sector investors, operators, bus companies and anybody we could think of who might have a stakeholding in the building of a light rail system. We also visited Lyon and Grenoble in France and Freiburg and Karlsruhe in Germany in order to draw comparisons with English systems. We received expert advice from promoters and private sector consultants. One of the first things that we did was to run a focus group of promoters and managers of systems from passenger transport executives in England.What did we find? The headlines were the good things about light rail, and we think that such systems are basically good. They provide fast, frequent and reliable services and comfortable, safe journeys. All the systems have easy access for the disabled. Representatives in each city that we visited said that their system enhanced the quality of life in their city and passengers were generally satisfied with the systems. We also found that light rail systems encouraged a shift from car use, but I shall not go further than that at the moment. They are perhaps the one mode of transport in English cities that could get people out of their cars and on to public transport. Light rail systems also mean less noise and less on-street pollution. Overall, we had positive views about light rail.On the deficit side, however, one of our main findings was that the benefits of light rail are not being exploited to the full. Passenger numbers on almost all the systems—all of them except Manchester metrolink—were far lower than had been expected when the schemes were being promoted. Therefore when the systems were up and running, there were far fewer overall benefits for people in those cities than expected. We found that systems were not fully integrated with other forms of transport, such as heavy rail systems and bus services. It is not easy to transfer from light rail to a bus or to heavy rail in many cities. In some cities there are no common tickets to enable people to use all forms of transport. Although, as I said, light rail systems encourage people to leave their cars at home, we found that their overall impact on congestion has been limited. We thought that that was probably because the vacant spaces created by people switching from cars to light rail systems have been filled in by other people making other car journeys for other reasons. We also found that measures that might have been taken to restrict car use were not being put in place. We also wanted to see what impact the systems have had on regeneration and social exclusion. There has not really been much research on that to date, so our finding was that it was not clear whether such systems have had an impact. Many of the systems run by private sector operators are running at a financial loss. The Department for Transport in England expects the schemes to be self-financing, so to a certain extent it is not interested in whether the private sector is making a loss on such systems. However, with losses of up to £11.4 million a year, what seems to be happening is that the private sector is putting up its prices, which is leading to an increase in the cost of building and operating the systems. The schemes running at a financial loss are Midland metro, Manchester metrolink, Croydon tramlink, Tyne and Wear metro and Sheffield supertram. The main reason for that, we think, is that patronage has been well below forecast. That has been one of the main problems. We also found that some planned features of the systems that might have increased patronage, such as park-and-ride sites, have not been built, although they had been planned for. The private sector firms that constructed the systems chucked out such proposals at the development stage to save money.As I said, the 10-year plan for transport envisages that up to 25 new lines could be built in England by 2010, but that will not happen. Cost is the most significant discouraging factor. New systems are more expensive to build, cost estimates of proposed schemes are rising and fewer firms are competing for the contracts to construct and operate systems—all those factors lead to higher costs.There are other barriers to development. The poor financial performance of many systems discourages the private sector, as does the fact that the private sector has to bear all the revenue risks. The sector does not have control over certain aspects of schemes, such as fares, in many cities, so it does not want to bear the revenue risks. Many local authorities are put off by the expense that they would incur in the promotion of schemes, some of which do not go ahead. I think that one authority told us that it was costing it up to £1 million a year to promote the scheme, without there being any certainty that the scheme would go ahead. Schemes are often dependent on central Government moneys and there are few local funds to exploit. With the exception of London, no city in England is taking advantage of congestion charging, which might offer a source of local funds.We found that the Department for Transport's planning approval process takes 8.5 years on average, which is too long. The department's targets for approval are being missed.There is a lack of local authority expertise and understanding of what works—mainly in the smaller local authorities, rather than the larger passenger transport executives. For example, authorities were uncertain about whether trams could run in their older streets—we can call them heritage streets. That is not a problem in France and Germany, where we found major differences in the way in which schemes are installed and operate. There are more systems in France and Germany. In France, 11 cities have or are installing systems. Germany has a lot more systems—around 50—partly because older tram systems that were built in the 19th and early 20th centuries were not abandoned but have been updated. In France, as in the UK, such schemes were done away with after the second world war. The French have been building systems from scratch since the 1980s.France and Germany have greater reported patronage per kilometre, but the word "reported" might be significant, because we do not know whether the figure has been audited to the extent that we audit figures in the UK. However, it is largely true to say that there are denser urban corridors in many French and German cities.Different designs are used in France and Germany. There is a greater degree of segregation than there is in England and trams, like rail vehicles, enjoy virtually 100 per cent priority over other traffic at junctions. In several English cities, light rail vehicles have to stop at traffic lights to let through road traffic.We were impressed by the extent to which the French and German systems integrate with other modes of transport. They also connect centres of activity such as hospitals and shopping centres, whereas our systems have tended to use disused heavy rail lines, which do not necessarily pass through such areas.In France, when new light rail lines are constructed, streets are redesigned and regenerated and heritage streets are preserved. Although one of our bullet points mentions"less use of disused heavy rail routes"in the French and German systems, I have to say that I did not see any disused heavy rail routes being used for light rail developments in France. They all tend to be street-based. I should also point out that French and German light rail systems are heavily subsidised and French light rail developers have access to a local transport tax.I will now outline some of the NAO's recommendations, several of which centre on realising more benefits for passengers. We want better integration and the introduction of park-and-ride schemes to be conditions of the Department for Transport grant to local authorities. We also note that there is no reason why light rail vehicles should not be given priority over other road vehicles at all junctions, which is what happens in France and Germany.Other NAO recommendations are concerned with bringing down costs. In England, each city that has built a light rail system seems to have redesigned the wheel. Each city wanted a system that was tailored to its own needs and we felt that there was much greater scope for standardising design.A lot of money is being spent on utility diversion and several consultants we spoke to questioned whether such work was always necessary. We also thought that, in the medium to long term, consideration should be given to greater track share with heavy rail. Track share has been extremely successful particularly in Karlsruhe in Germany and I am sure that the French will adopt it in the near future. We also recommend that local authorities should try to encourage take-up by building in integration and schemes such as park-and-ride.The contracts for building the systems in England are all different and the department should evaluate the procurement methods to ascertain which is the best and how financial viability can be improved. Moreover, we believe that there is scope for developing sources of local funds such as congestion charging.