Rail and the West Midlands

Economy

EMTA Conference Birmingham, 11/11/11

Peter SargantHead of Rail Development,

Centro

Outline of presentation:• The economies of the city regions and the

West Midlands and why transport is important• How rail use has grown and is expected to

continue• Issues influencing rail growth• The need for investment• The case for devolution

PTEs and the City Regions

Six Passenger Transport Executives (PTEs) cover the major urban areas of England outside London and serve a total population of more than 11 million:

• Centro (West Midlands – 2.6M)• Merseytravel (Liverpool – 1.4M)• TfGM (formerly GMPTE, Manchester – 2.6M)• SYPTE (Sheffield -1.3M)• Metro (Leeds – 2.2M)• Nexus (Newcastle – 1M)

•Responsible to ITAs (Integrated Transport Authorities)

Economies in the City Regions• The six PTE city regions generate almost 20% of England’s

wealth• Birmingham, Leeds and Manchester are among Europe’s top 25

cities for business and top 20 for transport links• Transport is important

– Connecting people to jobs, goods and services– Connecting businesses to markets and labour forces

• Poor transport networks hamper growth– Poor transport links and congestion reduce business efficiency– The top two improvements businesses would like to see are improved

transport links with other cities and improved public transport

• Investment in public transport in urban areas can generate significant benefits

The West Midlands has been badly affected by the current recession:

•WM has lowest per head income in UK – 16% below average•Growth slower than UK average•Economic output gap £15 Bn per annum•Unemployment 9.8% - 2nd highest in UK after North East•Worst three wards for unemployment nationally are in Birmingham

The West Midlands Lags the UK in Growth

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2000 2001 2002 2003 2004 2005 2006 2007

Year

Nom

inal

Grow

th R

ate

National Growth Rate West Midlands Growth Rate

West Midlands Economy

PTE Area Rail Growth

Cross-Cityline created

Oil crisis

SnowHill

opens

Chaselinef irst

trains

Cross-Cityelectrif ication

JewelleryLine opens

Chase linefullyopen

Cross-City6tph

StourbridgeP&R

expansion

Recordoil price

Recessionand rising

unemployment

Recession(Savingsand Loan)

Class 323reliability

Hatf ield disruptionplus 9/11 impacts

and dotcom bubble

Creditcrunch

0

5

10

15

20

25

30

35

40

45

74/7

5

75/7

6

76/7

7

77/7

8

78/7

9

79/8

0

80/8

1

81/8

2

82/8

3

83/8

4

84/8

5

85/8

6

86/8

7

87/8

8

88/8

9

89/9

0

90/9

1

91/9

2

92/9

3

93/9

4

94/9

5

95/9

6

96/9

7

97/9

8

98/9

9

99/0

0

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

West Midlands Rail Growth• 51% increase in Rail Passenger journeys since 2000• 6.4% increase 2009 to 2010 to 40 million trips per annum

PTE Area Rail Growth has been higher than in London

Growth of Rail Use into Birmingham

• Rail modal share has risen from 17% to 27% since 2001

• Rail industry forecasts show regional urban service growth outstripping other market sectors

Source: Rail Industry Initial Industry Plan, September 2011

Strong Rail Growth Expected to Continue

Market Approx. % of national

passenger km

‘Background’ passenger km

growth 2008-2034

Average rate per year

London Commuter 21% +40% 1.3%

Long Distance 35% +67% 2.0%

Regional Urban Commuter

7% +102% 2.8%

London Other 26% +90% 2.5%

Regional Urban Other 9% +116% 3.0%

Rural 3% +90% 2.5%

Total 100% 75% 2.2%

Issues influencing rail growth in city regions

• Economic restructuring – more service industries locating to city centres

• Road congestion – but driving is still an option• Fuel prices and parking costs• Competitive environment – buses free to compete

with rail services outside London• Rail network capacity – competing demands on

congested network• Train capacity issues• Park and ride availability• Rail industry costs and affordability and fares policy• Investment plans – e.g. Birmingham Gateway• Localism agenda can influence all the above!

Transport Investment needed in PTE areas• Historic funding gap – transport

funding in London almost 3 times that in North and WM

• Rail funding also focused on London – e.g. Crossrail

• Need to develop strategies for investment in PTE area rail networks

• Without investment local commuter services risk being pushed off network

• Optimistic signs that Northern Hub plans are being taken forward in North West

• Current rail industry plans need improving for the West Midlands

Transport funding per head 2008/9

High Speed Rail

• HS2 proposal essential for long term economic growth in WM and North

• Puts WM at the heart of a national high speed network

• Needed to relieve capacity constraints on existing network between WM and London

• Will deliver major journey time benefits between WM and North

• Package of supporting measures needed to maximise benefits

• £1.5Bn annual benefits to the WM from HS2 plus local service improvements

Rail Devolution• Local rail franchises are currently mainly

specified and funded by Central Government

• PTEs believe there would be significant benefits from devolving local rail responsibilities to local transport authorities to:

• Be more responsive to local priorities with an improved ability to react to changing circumstances

• Deliver a better customer offer

• Provide better integration of rail with other modes

• Provide a more balanced view across all transport modes in order to reduce the long-run costs of the railway.

• PTEs believe this would help support the economies of the city regions

• PTEs are currently working with government on this issue

Conclusions• Rail provides high quality, high capacity and

fast access into our city centres

• Rail provides long-distance, regional and local connectivity, as well as freight

• All these sectors are important to support PTE area economies

• Without a long-term investment programme capacity constraints will become a major problem requiring difficult trade-offs

• A long-term investment programme in rail and High Speed Rail is essential to support economic growth

• This should be supported by devolving local rail responsibilities to PTEs