CROST: on the track of affordable tramways

Talk by Lewis Lesley

UCL 4th March 2009

National Audit Office Report etc.

In April 2004, the National Audit Office published a Report on its investigation into the performance of the publicly funded tramways that had been built since 1990:

• a. Manchester
• b. Sheffield
• c. Birmingham
• d. Croydon

This Report was scathing. Among its many criticisms were:

• a. capital costs twice as high as similar schemes in the rest of EU
• b. multiple objectives poorly framed, rarely achieved
• c. patronage forecasts over optimistic
• d. services operating at a loss
• e. promoters overly reliant on consultants, with little real tramway experience
• f. not enough in-house expertise to commission and control projects.

The two critical issues for the Government were a. and d.. In terms of value for public money, why spend larger than necessary capital sums, and then pay operating subsidies ?

Looking at these schemes, only one has been "turned around", Sheffield, where the network was "sold" for £1million (writing off £250million) to Stagecoach, which has cut operating costs and increased patronage and revenue, and is reported to make an annual profit of £1million, a very good return on its investment. The Birmingham Metro was built through the brown field sites of the Black Country, with the objective of economic regeneration. This has failed to materialise, and patronage at 4million pa is less than half that forecast. It is operated by National Express, which covers the £10million pa loss, by a cross subsidy from their profitable local bus services. This is hardly a satisfactory or sustainable state of affairs. The original Altrincham-Bury Line in Manchester generated a £5million pa surplus but this was swallowed by the loss of £10m pa from the later Eccles extension built to regenerate the derelict Salford Quays. The operator of Metrolink has been changed three times, indicating that no one has got to grips with it. This will be a struggle for Stagecoach the present operator. Croydon was a constant source of friction between the operator and TfL, including Court cases that up held the operator's complaints, that it's financial viability was being undermined by both the TfL fare policy and operating buses in competition. TfL ended up buying out the operator for nearly £100million.

With this evidence the Government has refused to fund any more new tramways, notably, Leeds Supertram, Merseytram, South Hampshire and the three London schemes: Croydon extensions, Cross River and Oxford Street. The earlier West London tramway was sunk by citizen resistance, no doubt much to the relief of the Department for Transport. The Government did however invent the tramway lottery, in the form of the Transport Innovation fund, which quickly had enough bids to exhaust 20years of funding. How is the Government to decide which are the most deserving bids ? Another twist to the story comes from the requirement to introduce congestion charging, approved by referendum, as a filtering process. Similarly competitive bidding for University grant funding, and for local authorities, shows this is now the principle way for distributing Government funds.

When Edinburgh put Congestion Charging to its electors in February 2005, it was rejected by 75%. Last December 79% of electors in Manchester, and every one of the 10 districts, voted against congestion charges. Put the other way round, only 21% voted for Metrolink, about the same proportion as those who would benefit by being able to use the expanded system, which will not now be built.