Welsh toll road report incorrect, says UK and Welsh governments

I'm as guilty as the mainstream media for the simple error - I didn't check official sources for the announcement that the M4 relief road in Wales could be a toll road, for both the Chancellor of the Exchequer and the Welsh government are denying it.

Multiple media outlets reported that the UK Government was to approve the construction of a major new highway in Wales as a toll road.  It was criticised by some, concerned that tolls would mean the road would not get well utilised compared to the congested stretch of motorway it is intended to bypass.

Subsequently, the Welsh government, which has devolved responsibility for major highways in Wales, was reportedly angry at claims that the UK government, not it, could decide if the new road would be tolled.  Wales Online said a Welsh government source described the idea as "unworkable" (without specifying why).   Some in Wales are upset that as the Scottish government has removed tolls and not faced pressure from the UK government to toll the new duplicate Forth Road Bridge north of Edinburgh (the existing bridge was tolled until 2008, when the newly elected Scottish National Party Government abolished tolls across Scotland), then neither should Wales be pressured to toll.

This is quite right.  The question of tolling is fully within the purview of the Welsh government, although the question of how to raise the £830 million to build the road without tolls remains when the Welsh government has very limited revenue raising powers.   The Scottish government simply decided to use general revenues to pay for the roads.

So it is clear that the Welsh government is not currently pursuing the project as a toll road.  The BBC has also reported that the Chancellor of the Exchequer said he was "misreported" as expecting it to be a toll road. He said:

We're working with the Welsh assembly government. I don't know where this idea of a toll road has come from.

"It's been mis-reported in the papers. It's certainly never anything I've considered, so I was reading about it in the press and couldn't work out where it had come from.

"But I'm clear we can work with the Welsh government to get the funding for this road and improve it.

"And of course it's up to the Welsh government whether they want to do any tolls, but it's certainly not something I'm asking for.

Meanwhile, the various reactions to the tolling proposal has been mixed according to Wales Online and the BBC:

- Conservative Welsh Assembly Member for South Wales West, Byron Davies, was concerned about tolls, given tolls exist on the Severn Crossings, and didn't want the tolls undermining the purpose of the highway project;

- Liberal Democrat Welsh Assembly Member for South Wales Central,  Eluned Parrott, simply preferred improving the railway network;

- Sustrans Cymru, an environmental transport group, was opposed to building the road at all, preferring to shift commuters to public transport (although the option of pricing the existing road to do this was not mentioned);

- Richard Hebditch of the environmentalist transport lobby group, Campaign for Better Transport, claimed that it was about shifting the cost "off balance sheet" and taxpayers would ultimately have to pay (which isn't clear in this case and certainly is not true of the M6 toll road);

- Ian Taylor, of the Alliance of British Drivers, is vehemently against all tolling.

- The Confederation of British Industry is a strong supporter of building the road, although expressed no opinion on tolls in this report.

So for now, it may not be a new toll road in the UK, although the issue of how the road is paid for has not been clarified.

Yet it will have to be.  As the Welsh government has few options to raise revenue, the matter will entirely depend on whether, and by how much the British government is willing to provide the capital grants or ongoing financial support to pay for the road.

If it isn't the full cost then tolling becomes an option, unless the Welsh government thinks it can save money or redirect existing funding it gets from the British government for other activities to the project.

UK government proposing new toll road in Wales

Several British newspapers are reporting that the British Government is prepared to back the Welsh Government (which is essentially a devolved regional administration) borrowing money to pay for a project generally called the M4 relief road.  According to Wales Online, while the debt guarantee will be provided, it will up to the Welsh government as to how much of the cost of the £830 million (US$1.26 billion) project it will recover from tolls.

However, given that without additional funding from the British Government (the Welsh Government does not essentially have taxation powers) the project will hit Welsh finances hard, tolls are being promoted for this new road.

The announcement is expected from the forthcoming Comprehensive Spending Review, which will be released in a few months time, and is expected to include support for a wide range of new road projects, most of which will not be tolled.

According to the Independent, the road is a 14 mile, dual carriageway (two lanes each way) road, connecting junctions 23 and 29 of the M4 in Wales, bypassing Newport to the south (and bypassing a regularly congested stretch of motorway, constrained by a tunnel).  A website outlining the details of the issues and the option assessment is here.

The website TunnelTalk published this image of the route, which can be seen in red at the bottom edge of the built up area:

M4 relief road which may be tolled

One interesting dimension is that most of the peak traffic causing congestion has origins/destinations around Newport, so would not be served by the new road directly.  The new road would provide a way for through traffic between Cardiff and the south-west of Wales with England to bypass that congestion (and that traffic may be seen as having a higher net GDP contribution that short car commuter trips, especially with upgrades to the parallel railway expected in coming years).  This may mean that demand for the new road will not primarily come from most users of the existing road.

Comment

This is the first solid evidence of the promotion of tolling by the current government, and may be a portent for a more generous view of using tolls to support new highway construction.

The currently preferred option is not strictly a motorway, but a major highway that would bypass the congested area, yet my view is that if you are to ask people to pay for a road, it ought to be of a high quality, and there may be arguments that it justifies going back to the original £1 billion (£1.52 billion) motorway scheme.   However, it is clear that tolling this road wont pay for it, and is likely to recover less than half of the amortised construction costs.  It would seem foolish to squander that toll revenue on building a better road that may not be necessary.  What the new road will simply have to offer is a consistent high quality experience that is good enough for users to pay for.  Beyond two two-hour peak periods, it is not likely the new road would get much usage.

Some parallels are being drawn to the much criticised M6 toll road.  Criticism that I don't believe is warranted, given taxpayers paid nothing for the road (although they pay fuel tax using it) and government widened some sections of the M6 that was bypassed (because of peak congestion).

What needs to be done for this road is to ensure that it can minimise negative publicity and to get some acceptance of the value of new toll roads.   This is what should be done:

1. Ensure it is built to a high standard, with as consistent a speed as possible throughout. 

2. Forget manual tolls, this should be an electronic free flow toll road.  Meanwhile, take the opportunity to convert both Severn Crossing toll systems to the same.  If DSRC makes sense, let's make it interoperable and easy to get accounts.

3. Ensure design of the occasional user toll payment is easy to understand, and the initial start up period incentivises good behaviour.

4. Set toll rates according to time of day.  Peak and off peak, and put prices in big electronic signs well in advance.

5. Have a one week toll free period at the start, so potential customers get used to it.

6. Offer a discount for using both Severn and the new road.  This will help avoid accusations that Wales is targeted for tolls in ways other parts of the country are not.   

The Severn Crossings are actually key to all of this.  The far eastern end of the proposed new toll road connects with them, and they are toll crossings with tolls ranging from £6.20 for a car to £18.60 for buses and large HGVs.  That's not insignificant. 

The Severn Crossings concession will expire some time after 2017, so the chance should be taken to consider whether to let it return to state ownership permanently, reduce or abolish the tolls, or to privatise it and use the capital from that to reinvest in the network.  The popular line would be to abolish tolls, but then the costs of maintaining the bridges would fall on general government revenue, which includes motoring taxes.  An alternative would be to simply recover those costs and charge the cost of capital of the crossings on toll payers, with higher tolls at peaks, and lower tolls at off peak, or to privatise the crossings with conditions around toll increases, and realise the capital value of the crossings for something else.

Yet another alternative would be to retain the present tolls, but use them to cross subsidise the new M4 relief road, on the basis that almost all users the Severn Crossings will use either the new road or the existing M4 (and so gain from the relieved congestion due to the new route). 

In all cases, this new toll road needs to be thought about strategically, alongside the Severn Crossings and with a mind not only on the financials, but on treating road users as customers.

Cardiff rules out introducing congestion charge

In August 2012, I wrote that Cardiff City Council, Wales, was investigating whether congestion pricing might have merit for the city, both to reduce congestion, and help fund transport infrastructure including improved public transport.  Given that discussion about urban congestion charging in the UK virtually died after the Manchester congestion charge referendum in 2008, it seemed promising that another city was starting to reopen discussion.  Councillor Ralph Cook said that officials had been asked to examine the merits of the idea.

However, it wasn't to be.  Wales Online now reports that Cardiff City Council "categorically rules out" introducing a congestion charge.

The report says:

having since received a paper form council officers on the controversial proposal, Coun Cook said he had “reached the conclusion that a congestion charge will not be introduced by this administration”

Such a report ought to be interesting.

Politicians are climbing over the issue, with the usually pro-environmentalism Liberal Democrats firmly against the idea.  Labour (which leads the Council) simply said it was having an open mind about all of the possible options but had no plans.

I hope to be able to source any publicly available material on this and republish it here, to see what thinking was behind what appears to be a bureaucratic rather than purely political rejection of congestion charging for Cardiff.

Cardiff Council considering congestion charging

(No I didn't simply try to create alliteration)

I wrote last year about a proposal from the Cardiff Civic Society for the Welsh capital to introduce congestion pricing, and I believed it was highly unlikely.  Indeed, beyond London, attempts to introduce congestion charging in other UK cities (notably Edinburgh and Manchester) have floundered due to widespread opposition (excluding the tiny Durham charge which is about protecting the small historic centre).   Cardiff will face the same issues of public acceptability.

Wales Online reports that Cardiff City Councillor Ralph Cook has said that Council officers have been asked to examine the merits of the idea.

The report indicates that a Cardiff congestion charge is likely to only apply at peak times and he is promoting the idea of only charging "out of town" motorists, suggesting a rather large cordon surrounding the city to capture long distance commuters. 

The purpose of the charge is apparently open, with one suggestion that it could help pay for maintaining the road network (which would mean a reduction in council tax (a tax on residents)) or pay for improved public transport.   Frankly, I think this is at the crux of the issue of public support.   

The biggest issue for most people facing congestion charging is "what am I paying for".  Toll roads that are new are accepted because they are new and motorists perceive they are using what they are paying for.   However, charging existing roads is problematic.  Giving Cardiff residents a cut in other taxes would make a big difference.

The politics are curious.  In the local elections a few months ago the Labour Party won back control of Cardiff Council from the Liberal Democrats.  Labour is promoting the idea, but the Liberal Democrats oppose it, even though the Liberal Democrats tend to be seen as the most pro-environment, pro-public transport and anti-car (the central government manifesto in 2010 pushed for a big cut in road spending to be redirected to public transport). 

Opposition is based on two points:

-  Local businesses will be harmed; and

-  Public transport isn't good enough as an alternative (an argument that is floated more often than it is valid).

A further report from Wales Online quotes "Professor Stuart Cole, from the University of Glamorgan’s Transport Centre".  He claims that it "wont work" without public transport, and that it can't be justified for revenue alone.  He also says that it would otherwise push employment to Swindon and Bristol and other cities on the main M4 motorway corridor towards London.

Really?

In itself, if it is imposed as an additional charge, he has a point.  The likelihood is that Cardiff will be seen as less attractive, especially if the money raised does not go into improving the highway network in ways that offset it.  The big risk for any city introducing congestion pricing is perception, rather than reality.  Yet of course it could raise more revenue and reduce congestion.  The goals are not mutually exclusive, rather they affect the level of pricing.  Revenue maximisation and traffic flow optimisation levels are unlikely to be the same. 

However, will it not work without more public transport?  Well this is an oft-repeated claim, because it is believed that those deterred from driving must all shift onto public transport.  This simply isn't true.   It remains a serious myth that those who used to drive into central London now mostly ride the bus.   This notion is patently absurd, as the sheer cost of parking in central London was such that it is highly unlikely that the demographic who drove would choose to ride on buses, which are significantly slower than driving.

According to research by Transport for London, what happens is more complex (see Table A.2).

Around 54% of motorists shifted to public transport, but 8% shifted to active modes, taxis or sharing rides with others.  Around 23% diverted their trips to avoid the charging area (using ring roads rather than cutting through centres).  Another 8% simply drove less frequently (took less trips) and 7% drove at different times.

A peak time only scheme is more likely to significantly increase the change in travel times.  For public transport, with congestion charging there would be more road space for buses, and the demand for private and the Council owned commercial Cardiff Bus operation to expand services.  Cardiff's suburban commuter rail service is already earmarked to be electrified in the next decade or so, providing ample scope for additional capacity.  

Yet there is unlikely to be much support from the public.  A local TV news bulletin indicates a great deal of scepticism. Certainly without either promising better roads or reduced other taxes, it is unlikely most motorists would support it.

Conclusion

Whether or not Cardiff benefits from a congestion charge depends on:

-  The design of the scheme:  The more likely it targets congestion where and when it happens, rather than be a blanket simple charge, the more likely it is to improve the city's competitiveness;

-  What is done with the money:  A significant proportion of any revenue either needs to go on improved roads or is recycled into council tax cuts.

A badly designed scheme used to direct revenue into politically totemic transport projects is unlikely to improve the competitiveness of the Cardiff economy, but a tightly defined one that is used to reduce other taxes or spend on long deferred (objectively) high value transport projects may do so.

 To do that, it actually needs to reflect on the experiences of more cities than London.

Cardiff congestion charge? No, not yet

Cardiff in Wales is not typically seen as a large city with a chronic traffic congestion problem. It has a population of around 340,000. The car is the dominant mode, but it does have an extensive bus network and diesel suburban passenger rail system.

However, Wales Online has reported that the Cardiff Civic Society has a long term vision for the city which it claims will make it more desirable. It proposes that central Cardiff be car free and that a congestion charge be imposed over as much as half of the area of metropolitan Cardiff bounded by the city’s bypass roads. It wants the city’s ring road to be finished, a park and ride network to be established and a light rail system. The objective is clearly focused on shifting transport in the city away from cars, but is also concerned about a so-called “zero Carbon” goal of reducing CO2 emissions (quite how it gets to zero is more intriguing).

View Cardiff congestion charge and car-free zones in a larger map

It is ambitious indeed, it expects a reduction in traffic in the charged area by about 25-30%, dependent in part on improvements to public transport to meet the park and ride system. The assumption is clearly based on the reductions in car traffic experienced at the start of the London congestion charge, so would need some more thought.

Responses have been mostly negative, as people “don’t understand how it could work” or believe a new road and light rail would relieve congestion anyway. However a former top city planner thinks the ideas are “profoundly thoughtful”.

As much as I am supportive of the ambitious, it is clear this has little political traction in the current economic environment. The Guardian reports that Council Leader Rodney Berman opposes it, largely because it wouldn’t get public support, but also because he believes that “At best these proposals are fanciful, but at worst they could have a disastrous effect on the economic viability of the city centre”. He obviously believes car access is important to the city, and that if it is that severely constrained, it will chase business away. If any charge is introduced as new revenue, without cutting other taxes, he may have a point, particularly in the current climate.

Some details would need to be considered. Firstly, whether the charge is an area charge (meaning all movements within it are charged) or cordon (leaving people within the area to drive as much as the like, as long as they don’t leave), as this will effect whether residents would need a discount (as large areas of suburban Cardiff would be affected). I might dare to say that the proposed idea is far too blunt for Cardiff, and that it may be better to start with such a charge in the area proposed for being car free. That would not make a lot of money, but it would reduce congestion and may prove the concept to locals. Beyond that, and I think a less blunt charge, which may have different zones or charge for distance, may be fairer and more effective.

It could also be more acceptable if there was clarity that net revenues from a congestion charge helped pay for the completion of the ring road, and perhaps offset other taxes.

This blog doesn’t exist to argue about the other transport components of the package, but I will give the Cardiff Civic Society credit for courage. For a UK association to propose congestion charging for a city in the current economic climate, and a political climate so hostile to the idea generally, is brave. Whilst I may argue over the details and may disagree with other parts of the package, it at least shows some strategic thinking about what might be done. However, I doubt Cardiff will see congestion charging for at least another ten years.