UK scheme shows the future for urban transport

A £3 billion scheme in the UK is set to redefine the way in which urban transport and congestion pricing programmes are designed and implemented.

“The UK needs to overhaul its transport infrastructure and address the threat that rising congestion poses to economic competitiveness”
-Lewis Atter, KPMG

A funding deal recently announced between the UK Government and the Greater Manchester Authorities has opened the way for a combined investment and congestion pricing package that could become a blueprint for other schemes around the world. The Greater Manchester package combines what will be one of the world’s largest and most sophisticated congestion charging schemes with the largest public transport investment programme ever delivered in the UK outside London.

Subject to a final consultation period, work should shortly begin on delivering all elements of the package. Only in the summer of 2013 – when the large majority of the public transport investment elements of the package will be in place – will the congestion pricing scheme come into force. The package includes more than 20 separate initiatives such as extensions to the light rail network, a heavy rail investment programme and an extensive bus priority network.

“Greater Manchester’s investment and charging package can be considered groundbreaking in that it has been designed as an integrated package, targeting a clear set of economic, social and environmental objectives, not as a series of standalone measures,” says Lewis Atter, Director of KPMG’s Global Infrastructure & Projects Group. “This means that the package recognises both the critical importance of delivering real alternatives to the car in advance of charging being introduced and addresses the financial challenges that doing these things in the right order represents.

“Throughout the design process, two objectives were paramount. Firstly, the scheme had to help promote greater growth in the long-term by breaking the link between growth and rising congestion. Secondly, it had to be ensured that these long-term benefits were not delivered at the cost of a short-term hit to the competitiveness of the local economy or at the expense of disadvantaged or vulnerable communities.”

The scheme is promoted as a fully funded and integrated transport package, incorporating a sophisticated but cost-effective road pricing scheme (that is designed to send subtle rather than blunt price signals to road users whilst also minimising running costs) alongside transformational investment in public transport alternatives delivered in advance. Accordingly, Atter believes this could well become the blueprint for other cities around the world looking to address the transport constraints they face.

At the heart of the Greater Manchester Passenger Transport Executive’s (GMPTE) strategy – on which KPMG was the lead advisor – was a bid for funding from the UK government’s Transport Innovation Fund (TIF). The TIF represents a pool of central government funding available for transport projects that demonstrate innovation and contribute to economic growth. The UK Government allocated £1.44 billion of TIF funding to GMPTE’s package. The bulk of the remainder of the package will be financed through local borrowing against charging revenues.

“It’s widely accepted that, in common with other parts of the world, the UK needs to overhaul its transport infrastructure and address the threat that rising congestion poses to economic competitiveness,” continues Atter. “Nor is it a secret that congestion charging, although potentially an effective tool in addressing these issues, brings with it very real economic and social challenges. What the Greater Manchester model shows is that a package approach supported by innovative analytical and financial techniques – and with the right kind of central government support – can address these challenges. I’d be surprised if we didn’t shortly see this model being adopted as leading practice elsewhere.”