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Regional devolution: A new future for UK light rail?

TUK Chancellor of the Exchequer George Osborne inspects one of Metrolink's trams during a visit to Manchester on 3 November 2014.

Transport policy and decision-making in the UK’s city regions look set for sweeping changes following a series of announcements and agreements by Chancellor of the Exchequer George Osborne, Deputy Prime Minister Nick Clegg and Labour Leader Ed Miliband. This would end a century of Whitehall centralisation.

An independent report by Volterra Partners released in November 2014 entitled Investing in City Regions: The case for long-term investment in transport found that just 5% of taxes raised in Britain are controlled by UK cities, compared to 30% in Germany and 37.5% in the USA. The report states: “Changing the rules and providing cities with more economic freedom would allow new projects to get off the ground and deliver benefits far more quickly than is currently the case.”

Current policy is for the Treasury to set the Department for Transport (DfT) a three-year capital and revenue spending total; DfT then organises a series of competitive bidding rounds with councils bidding for funds for projects. Research carried out by the Local Government Association suggests it costs UK councils GBP30 000 (EUR38 000) to prepare a bid for funding, with around 60 different competitive processes existing to access financial support for local growth. Some change had been planned for this year with LEPs (Local Enterprise Partnerships) and LTBs (Local Transport Bodies) taking responsibility for deciding local transport schemes.

So it seems that Chancellor George Osborne’s ‘Devo Manc’ agreement with the ten leaders of the Combined Greater Manchester Authority on 3 November 2014 has let the ‘devolution genie’ out of the bottle. It creates the role of a directly-elected Mayor with responsibility for a multi-year transport budget, responsibility for franchised bus services and integrated smart ticketing across all local modes of transport. With this agreement comes GBP1bn (EUR1.25bn) of devolved spending including a GBP30m (EUR38m) annual earn-back deal that gives Greater Manchester the funds to extend Metrolink to Trafford Park.

Mr Osborne said: “This is a massive moment for the north of England and our plan to build the Northern Powerhouse… I want to talk to other cities who are keen to follow Manchester’s lead.”

The Greater Manchester deal was followed by a similar deal, though without a directly-elected Mayor, for the Sheffield City Region announced by the Deputy Prime Minister Nick Clegg on 12 December. He said: “It’s a historic moment for the great city of Sheffield, and I’m pleased to be bringing more power to the people of Sheffield. Gone are the days of Central Government controlling all local decisions.”

The deal gives the city region the opportunity to roll out ‘Oyster-style’ smart ticketing and secures the future of the Tram-Train Trial from Sheffield to Rotherham with increased funding and pushing forward the introduction of the service.

Labour Leader Ed Miliband has also announced his party’s plans for devolution, promising an English Devolution Act that would transfer GBP30bn (approx. EUR38bn) of resources to local government over five years. This Act would allow cities and county regions that form combined authorities to take control of buses, local train services and trams. He said: “For too long, the other regions of England have been unable to plan ahead or join up their transport networks to help secure the prosperity they need.”

Devolution has been backed by a survey of medium-sized businesses in the North carried out by Grant Thornton. Local control of investment in transport infrastructure and skills was seen as the strongest driver for economic growth in the region. The Institution of Civil Engineers (ICE) has also backed plans for greater devolution calling for the process of devolution to city regions to be speeded up, backed by an ‘overarching’ national transport strategy for England.

Not everyone is happy with these proposals, however. Stagecoach Group Chief Executive Martin Griffiths has warned that handing more power to the regions could see a reintroduction of state control of private assets. Speaking on BBC Radio 4’s World Tonight programme in early December, Griffiths said that enhancing regional transport powers could usher in nationalisation that would undo the good work achieved since transport shifted to the private sector. As the UK’s biggest bus operator and a major player in the heavy rail market, Stagecoach also runs Sheffield’s Supertram network and has been involved in a bruising and acrimonious battle with the North East Combined Authority on its plans to regulate the bus network.

Local Government leaders in non-metropolitan areas throughout the UK have been quick to call for a similar devolution of powers not just from Westminster but also from the other national assemblies in Holyrood (Scotland), Stormont (Northern Ireland) and Cardiff (Wales).

In Hampshire, which like Liverpool and Greater Manchester had its tram scheme scrapped by the then-Transport Secretary Alistair Darling, County Council Leader Roy Perry said: “Following the devolution referendum in Scotland… and the requests from the so-called Core Cities… this is to remind Government that the shires of England are equally competent… and if powers are to be devolved, there needs to be consideration to the shire counties as well as the core cities.”

This is a fluid and rapidly evolving story. Expect more announcements in the run up to the UK General Election on 7 May. With the genie out of the bottle we should see more European-style transport planning – and perhaps approval for more light rail schemes?

This feature originally appeared in Tramways & Urban Transit – February 2015 issue (926).