A FAIR DEAL FOR THE MOTORIST

COOKING UP THE NEXT

HIGHWAY ROBBERY?

COOK REPORT REVIVES DANGER

OF NATIONAL ROAD PRICING

BACKGROUND

The scope of the 2011 report is the strategic road network (SRN) – basically the major roads in England, currently managed by the Highways Agency (HA).

Former Transport Secretary Philip Hammond agreed to an independent review of the SRN. The ‘independent’ report was written by Alan Cook who joined the HA as Non-Executive Chairman in January 2011 and is a Board Member in Department for Transport (DFT).

The RAC Foundation is not exactly a ‘grass roots’ organisation that stands up for the motorist – its leading light, Prof. Stephen Glaister is an addict of road pricing, and was seen as politically correct enough for Ken Livingstone to appoint to the Board of Transport for London. It criticised the Government decision to dissuade the Cook review from considering any form of pay-as-you-go driving.

DFT’s ‘FAQ’ notes on the report say it doesn’t recommend national road pricing or privatisation – that’s being economical with the truth? The Cook report duly recommends ‘consideration’ of tolling, both for new connections and existing major roads that are currently free.

The euphemism ‘developing route-based strategies’ (‘RBS’) is used. It recommends that RBS are co-ordinated with ‘equivalent plans’ for local road infrastructure, creating suspicion of a local monopoly/cartel. (p66, p75).

This would fit in with an EU vision of tolling main roads first, then local roads that take displaced traffic – removing chances of avoidance. European Commission proposals (COM(2011)144 and COM(2008)436 final) seek the gradual imposition of charges on all vehicles and on the whole road network.

SWEATING ASSETS OWNED AND PAID FOR BY THE PUBLIC

The report shows its asset-sweating intentions. It regrets a current lack of means of ‘delivering maximum economic value from the asset’ and suggests ‘attractive new investment options for ministers’ (p26).

It suggests refashioning the HA as a new organisation, formally separate from the DFT. Perhaps as a government-owned company (‘GoCo’), but with ‘an independent Board’ with commercial freedom and outsourcing practically everything to contractors, including possibly even local authorities, for cash.

It recommends that the Transport Secretary should ‘consider’ transferring ownership of the network to the new company after 5 years, and in the long term devolving asset management responsibility to the supply chain (p74, p76, p80). Then what?

COMMERCIAL FREEDOM OR ‘DEMOCRACY BYPASS’?

Traffic management may be outsourced with ‘asset management’. The refashioned HA sounds little more than a holding company. (p81).

Although the DFT assures us that privatisation is not planned, the Board’s envisaged ‘commercial freedom’ might result in something that falls little short of it. Large scale outsourcing is to be encouraged.

This could encompass the ability to at least offer long leases of parts of the network. The report encourages long term contracts (cautionary note: if road pricing were to be introduced by one government on such a contract, like the tie-ups between TFL and Capita/IBM for the London Congestion Charge, it could be difficult and expensive for a future government to unpick the arrangement).

The refashioned HA would provide information about the network (e.g. traffic levels) not to drivers but to third parties to exploit commercially (p78-9; this would fit into the EU blueprint for control of drivers and vehicles – ‘Intelligent Transport Systems’ or ITS. The planned FM radio switch off might also help generate demand for information services?). Other opportunities might include advertising (mentioned) and the resale of trend data based on tracking personal movements (not mentioned, but was an aspiration of the previous government with the ID card project).

The refashioned HA would be modelled on a ‘successful infrastructure business’, even though roads are a ‘natural monopoly’ and there are marked differences with utilities.

The ‘independent Board’ might be flooded with new Non-Executive Directors from outside who could outvote the existing HA Executive Directors. There is talk of appropriate commercial perks (p71, p72, p43-5).

Another facet of privatisation would be that ministers would ‘no longer accept responsibility or accountability for specific incidents or local environmental issues’. (p73).

DRIVERS – CASH COW OR CUSTOMERS?

The government is to be trusted to specify the interests and expectation of road users, taxpayers and the economy. DFT should produce a specification reflecting ‘expert advice’ from the ‘independent Board’ (which may gain commercially, so is not truly ‘independent’?).

The specification should feature financial targets, network capacity and performance, safety and environmental standards – and the outsourced contractors are asked to deliver. However any complaints once outsourced are to be dealt with by the contractors not the Board or the government! (p77, p64-5).

Coincidentally, performance targets are a key aspect of EU plans for a Trans European Network, a network of major roads, including much of the English SRN. The EU has ambitions for applying a common approach to management, for instance, the use of the financially-challenged Galileo satellite for road pricing.

Although there is lip service towards ‘putting road users and taxpayers first’, the report seems to do down road users by saying that they are passive rather than active or demanding customers (p26). Its attitude towards drivers is best summed up by the phrases ‘ensure smarter road user behaviour’ and ‘taking a proactive approach towards influencing road user behaviour’.

Successive governments’ attitudes to drivers have seen them consistently milk the driver for £45-50Bn a year in taxes, but only invest back £7-9Bn a year. Promises to end tolls and cut back on ‘cash cow’ camera partnerships are yet to be kept.

There is currently little awareness that the government deals with a National Road Users’ Committee (NRUC), and a Google search was unable to find any webpages featuring this term.

The report will also set out to ‘drive better enforcement’ on the network and take action where there is ‘insufficient enforcement’ (p78). The report doesn’t go into too much detail, but a little imagination might reasonably include seizing commercial opportunities and tie-ups, for instance with companies operating lucrative speed cameras and profiting from driver awareness courses.

THE DANGER OF ‘DEMAND MANAGEMENT’

This implies ‘demand management’ to meet a performance target - e.g. the refashioned HA, along with its contractors, being free to influence the behaviour of road users... encouraging travel at less busy times or on quieter routes is mentioned. (p77-8). However, this begs the question as to whether pricing would be used as a blunt instrument to beat drivers with, or whether an environmental excuse would be used to penalise those who drove say, older vehicles.

There is a danger that the government plans restrictions on the basis of a prediction of a large growth in population (although it also wishes to give the impression it is vastly reducing the scale of immigration). Plans also appear to be based on a massive expansion of journeys. Previous DFT forecasts have not always been right, for instance, underestimating conditions between 2007-9. Some commentators are already seeing a tendency for travel demand to saturate. There are also questions as to the impact of rising fuel costs and depressed economic conditions.

‘Improved capacity and reliability’ (p84) sounds great in theory, but capacity could imply more managed motorways with depressed speed limits and hard shoulder running as well as new roads (which might be built more with operator profit in mind than public wishes). ‘Reliability’ might encompass forcing journey times to correspond to an ‘average’ profile at the expense of driver freedom, or be a euphemism for perhaps pricing drivers off the road to ‘flatten’ demand towards an average level. A variant of this would be charging set to force drivers to travel at particular times, or take less favoured routes.

SAVINGS TO THE GOVERNMENT

The report talks of cost savings to the government ‘shareholder’ of maybe £200m p.a. (p61, 20% of half of its £2Bn a year budget that is not PFI or major projects) although these would take some years to achieve, and these figures are only justified in ballpark terms for what has been done in other industries.

Cost savings could indeed be made through contracts, although contractors might seek to charge less to the government on the strength of new revenue streams paid for by a captive travelling public.

There is however - without any moves to commercialisation - currently scope for some economies of scale, and objectively better practices, like longer term planning. The report highlights some inflexibilities in public sector practice, but the HA is already supposed to use quality management techniques such as ‘Lean’, and could be made more effective without a change of status.

The Transport Secretary, Justine Greening, showed she could stand up for the travelling public, before taking office. But will she have what it takes to reject more creeping ‘Highway Robbery’?

See our follow-up article on the Government’s response.

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