The UK transport sector in 2013
January 24, 2013 at 11:40 AM
Three issues dominate the UK’s transport sector – rail, road and aviation.
Other sectors, such as ports and marine, as well as local transport issues, are vital to the UK economy, but rarely attract the same level of political or media interest.
Rail policy was thrown into confusion in the latter half of 2012 when the award of the strategically important and high profile West Coast Main Line franchise to First Group was cancelled, following a legal challenge by the incumbent franchisee, Virgin Trains. The competence of the Department for Transport was thrown into question, and an inquiry into the matter revealed considerable weaknesses in the department’s approach to this particular procurement. Major changes will now be made to the department’s railways directorate and steps are being taken to substantially improve its commercial and procurement skills.
However, a second inquiry into the wider issues around franchise policy concluded that rail franchising was not broken. Indeed the inquiry gave it a clean bill of health, pointing to a 94% increase in patronage since British Rail was privatised, with passenger satisfaction levels over reliability and punctuality at an all-time high and well in excess of satisfaction levels in countries like France and Germany. The UK also enjoys the second-best safety record among European railways.
There will be changes made to the way franchise procurement is conducted, and some relatively modest and programmatic changes to the basis on which companies bid for franchises and the way their bids are assessed. But the reality is that while the cancellation of the West Coast award to First Group was certainly dramatic, the fundamentals of rail franchising in the UK remain intact. As evidence of this, the franchise re-letting programme will soon be back under way.
More controversial will be the government’s plans for a high speed railway from London to the midlands and the north. The government is pressing ahead in the face of huge opposition in its Tory heartlands in the Chilterns, through which the railway will go. There is more support for the project north of the midlands, but those northern towns and cities which won’t be served by the railway may be as unhappy as those communities which will be uprooted as a result of it. Legislation is planned later this year and the government looks set to have a major battle on its hands.
Rail transport is not alone in producing controversy at the moment - roads policy looks set to give rise to a great deal of debate in 2013 too. A major review of the way roads are funded and owned is under way, and all the indications are that the government will put forward proposals to privatise the motorway network, heralding the prospect of road tolling. A consultation paper is expected shortly.
This will be highly controversial, but the reality is that reform is inevitable. Revenue from motoring taxation is in long-term decline, and the Treasury is simply unable to afford the kind of road-building programme that is necessary to sustain the economy. The road programme is hopelessly underfunded, so privatisation looks inevitable. This is likely to be one of the most controversial aspects of transport policy during 2013.
Aviation, or more specifically airport capacity, is also high on the agenda. The reality is that new runway capacity in the south east is urgently needed, but there is no consensus on where this should be. A major policy White Paper was due in 2012 but was shelved as a result of political nerves amid fears that whatever was proposed would attract huge opposition, just as the planned third runway at Heathrow did. So the government decided to kick the matter into the long grass and set up a new commission to look into the issues all over again – with a remit not to report in full until summer 2015, conveniently just the other side of the next General Election. The issue won’t go away, however, and at some point a government will have to take a decision on the location for new runway capacity – and accept the wrath of the communities affected.
Transport may be one of the more junior departments in Whitehall, but it has to grapple with some of the most complex and controversial policies of any government department. 2013 looks set to be a tough year for transport ministers!