A recent expert panel event hosted by Addleshaw Goddard and Arup discussed the main challenges facing London's transport network as the population continues to grow to record levels
Paul Hirst, partner and Head of Transport at Addleshaw Goddard highlighted in his opening remarks the key challenges London faces. London is the biggest it has ever been and is growing. Its population is set to be 10 million by 2030. It is thought to be one of the most expensive cities in the world in which to work and live, which leads to huge pressure on transport, both in terms of capacity and distance travelled. There is also the issue of air quality and high pollution levels which breach EU directives. There is a need to prioritise investment to address these issues.
The other panellists: Professor Stephen Glaister CBE, non-executive director of the Office of Rail and Road; The Rt Hon. The Lord Andrew Adonis, Shadow Infrastructure Minister; Stephen Hammond MP, former Parliamentary Under Secretary of State for Transport; Alexander Jan, director at Arup; and chairman Professor Tony Travers, Director of LSE London, then discussed the issues in more depth.
A number of themes emerged.
Tony Travers warned that the forthcoming spending review may not be good news for transport because of the pressure from other sectors, notably in London housing, which also faces an acute need for funding, together with emerging pressure from the Northern Powerhouse agenda. Funding (or lack of it) was the key issue raised by all the panellists but there were a variety of solutions suggested.
Stephen Glaister pointed out that TfL and Network Rail are largely dependent on the Treasury for capital funding. Rail and road projects are expensive and they only happen if they are approved by the Treasury. There are new projects that require new sources of funding but at the same time revenues from fuel duty are falling in real terms. Over the next six years there will be a need to provide for a new £3-4bn a year to fund HS2; a new £2-3bn a year to fund the strategic road network in addition to the nearly £4bn a year in settlement for the operation and maintenance of the national railway.
He warned that local and national government should not be giving away additional revenue, for example by freezing rail fares, which need to go up not down. We should also give consideration to charging for road space, as this is another key issue London faces.
Lord Adonis made suggestions for exploiting new sources of finance, including the potential sell-off of some of Transport for London's estate. He gave some surprising statistics: TfL owns 5,800 acres (nine square miles) of land (equivalent to an area the size of the London Borough of Camden). A lot of it is land which could be developed for housing or commercial use - for example it owns 61 car parks which could be built on or over. The Earls Court development, of which TfL's land is a third of the 85 acres, will release c.£800m-£1bn. There is massive potential to sell off, say, Network Rail's surplus estate in South London if the "Turning South London Orange" (TfL taking over national rail franchises) project goes ahead.
Competition for road space
A key solution to London's overstretched infrastructure is making the most efficient use of the limited space available. Eighty per cent of all journeys in the whole of London are still made by road, and 43% are made by car (with 24% by walking). Stephen Glaister warned that we need to be very careful about taking road space out without proper justification, and called the East-West cycle highway a "profligate waste of very valuable space" – a point with which Lord Adonis disagreed strongly. Both did agree that London needs more river crossings (which could also be a way of raising additional revenue if vehicles were charged for using them) and more underground roads.
We need to be open to new ways of getting around. Uber was mentioned by several panellists as an example of how this is starting to happen. There is a move towards "mobility on demand" which should lead to a reduction in car ownership in London whilst mobility on the roads remains roughly constant: 15% of London's land mass has cars parked on it but Uber's average 5 minute waiting time in outer London is, according to Lord Adonis, "transformational". As Stephen Hammond put it, "we live in a Sky society not a BBC society". In other words, we pay and we decide where we want to go, rather than we pay and are told where to go.
London vs. the Northern Powerhouse
Tony Travers remarked that "London is seen by the rest of the country as a place in which stupendous sums of money have been invested in transport in recent years and that now perhaps it's some other part of the country's turn" . HS3 (the proposed new high speed rail link between Liverpool and Hull) is getting more debate in Parliament than Crossrail 2 as the Chancellor seeks to rebalance the economy and build up the Northern Powerhouse. Big infrastructure projects in London that have up to now been funded by HM Treasury may find themselves competing for that funding with projects in the North.
Alexander Jan pointed out that the growth pressures faced in London and the South East are unique. For example, five years' population growth in the city of Liverpool is equivalent to just ten days' in London; the corresponding figure for the city of Manchester is just ten weeks. We should not forget this when talking about London versus the Northern Powerhouse and the case for investment in schemes designed to boost growth and deal with the pressures that it brings.
There was also lively discussion by the panel and during questions about how we show that investing in London is investing in the UK as a whole? It is always a challenge to prove how investing in infrastructure generates wealth, but the large investment in London's infrastructure in recent years appears to show this, as wages in London are on average 30-40% higher than those in the rest of the country: London is a wealthy city. We should be bringing the Northern cities up, not trying to bring London down. London's competitors are other world cities like Barcelona, Paris, Frankfurt, Shanghai, New York, not Manchester and Birmingham.
Even in London's case there seemed to be consensus that in future, it would need to pay for a greater proportion of the cost of infrastructure schemes than has previously been the case, and there was a general feeling that cities should be more self- funding (by having more control over the taxes that they raise) rather than rely on Treasury grants.
It is clear that there is a clear challenge faced by London to raise the funds required to make the necessary investments to ensure it has a transport system that effectively services a growing population and enables it to continue to compete as a global city. Imagination and innovation are key both in terms of the development of transport solutions in future (whether it be behaviour change (less car ownership, a continued shift to public transport), better use of road space or new technologies (such as driverless cars) and an approach to funding based more on leveraging assets, unlocking development value and harnessing private capital as part of a mix of funding less reliant on restricted Government funds. Many of the panellists believed firmly that fiscal devolution should form part of this mix.