Strategic manoeuvres

Buro Happold

10/01/2013 Written by: Philip Bates No comments

The first steps in an ambitious programme to reform the UK’s Strategic Road Network (SRN) have been mapped out. But will the UK government do what’s necessary to offer a better service to motorists and business users?

The Spending Review of October 2010 proposed a re-assessment of the approach to operating, maintaining and enhancing the SRN². Undertaken by Alan Cook, the non-executive chairman of the Highways Agency, the findings and recommendations of the review were published in November 2011.

In March 2012, Prime Minister David Cameron announced plans to investigate ways to semi-privatise parts of the road network. The announcement generated a lot of interest and comment in the media and across the transport industry. In May 2012 with Cameron’s idea still in the air, the Department for Transport (DfT) responded positively to the Cook Report reform proposals. In perhaps its most telling statement, the DfT said: “Crucially, in articulating what government wants, we will be ensuring that we are reflecting the needs of those who use and are served by this network.” Some would argue a critical failing of recent years has been the lack of articulation of what government does want from the SRN.

To further stir up interest, in July 2012 the DfT issued a press release concerning proposals to upgrade and possibly toll the A14 in Cambridgeshire, re-igniting the debate about tolls on UK roads. Although the details are unclear, it appears that the proposal is for a relatively short (20 mile) stretch of tolled expressway, with free local roads either side.

Taxation and the SRN

The debate also re-galvanised those who believe we need a new approach to road and fuel tax. The October 2011 report, Moving On: Fairer motoring taxes and investment for growth and jobs¹ by Brian Wadsworth for the Road Ahead Group, presents a valuable summary of the current situation of road taxation, and raises some interesting ideas on how a future tax system might look.

For example the report doesn’t say road taxes should be reduced; it acknowledges there may be good reasons why these taxes might be needed to pay for things like the National Health Service. However, it does highlight that as these taxes are likely to decline anyway, this is the perfect opportunity to review the role of road and fuel taxation in the overall tax mix.

The report says it’s against universal road user charging, proposing instead the introduction of what could be termed ‘congestion charging’ – paying to use busy sections of road. Furthermore, it puts forward the case for at least a proportion of road user revenues to be ring-fenced for highway improvements, which some might argue is hypothecation.

The report’s greatest value is in forcing us to ask ourselves two simple questions. Are road taxes there to cover the cost of roads (and indeed other government expenditures) or are they there for influencing behaviour? How do we balance the potentially conflicting needs and outcomes of each objective?

He who pays the piper

So, eventually we reach the question of road tolls for trucks and cars. There’s a growing trend across the rest of Europe to levy a toll for trucks using the SRN, even when other vehicles are not tolled. The UK government says road users will not be tolled for existing infrastructure but its proposed truck ‘vignette’ is arguably just that: a day charge rather than a distance charge combined with a reduction in road tax, which, it is claimed, should be largely cash neutral for most UK registered trucks.

Details remain hazy for car tolls (specifically the A14 through Cambridgeshire). The government currently appears to be most interested in pricing to manage congestion and there is a clear acknowledgement in the information released so far that the toll is being levied to provide the road user with an option that avoids congestion. Such an approach is also being promoted in the USA through the development of managed lane schemes.

Generally these schemes involve freeway-within-a-freeway facilities with the managed lanes immediately adjacent to the general purpose lanes. Their use is controlled by a combination of tools and techniques to achieve optimal conditions for users (normally free flow speed). The methods adopted are subdivided into three broad groups: pricing, vehicle eligibility, and access control.

Most managed lane schemes in the USA are well utilised because they offer free use to high occupancy vehicles (HOVs).  Consequently, total revenues are low. Furthermore, most US managed lane schemes are either on radial routes into, or orbital routes around very large urban areas, and are dominated by large commuter based peak periods meaning use off peak and by trucks is very low (this doesn’t seem to correlate obviously with the A14 in Cambridgeshire).  The USA has mainly embraced managed lanes to either boost the underutilisation of existing HOV lanes or to raise revenue in the face of declining fuel tax revenues and their hypothecation to road maintenance and construction. In the UK, HOV lanes are extremely rare and the problem is not a lack of road or fuel tax revenues, but making the decision to spend these revenues elsewhere.

There is one other issue relating to tolling, especially given the proximity and relationship between the A14 and the Port of Felixstowe. For a variety of reasons trucks won’t normally pay tolls to use short stretches of ‘congestion busting’ highways. Many truck operators cannot convert relatively small time savings into monetary savings and, as trucks travel at a slower speed than cars, time savings to avoid congestion are often a lot smaller for trucks. The real value of time is zero for small incremental savings.

Also, trucks tend to travel much longer distances than cars, and achieving a time or reliability saving over a short length of the network is of little value if you know there is still a great deal of delay and unreliability remaining in the rest of your journey. A long line of trucks exiting a motorway to travel 20 miles along a local road and then rejoin the motorway, simply to avoid a toll, is a common spectacle across the world. Let’s hope we don’t see something similar in Cambridgeshire...

Finally, there is a more philosophical issue to be addressed. You cannot solve all congestion and delay problems: if a congestion busting toll road is to work the existing free lanes have to remain slow and/or congested - you simply offer a way out for those who can afford to pay. Economists might argue that a willingness to pay reflects economic value, but the reality is that, at least in a situation like this, it actually reflects personal wealth and ability to pay. And that is a significant difference.

Conclusions

So, where does this leave us? The first thing to stress is that the UK government’s decision to review how we fund and deliver the SRN is to be applauded. It’s long overdue. However, if the process is to be ultimately successful we must have the courage to question the unquestionable, challenge the current paradigm and face up to some hard choices about priorities. We should all accept that this is an issue that will not be resolved quickly; ultimately, difficult and potentially unpopular decisions will need to be made. Finally, any decision needs to be integrated into a wider transport strategy, and we need to accelerate the delivery of the national transport network’s infrastructure plan.

The findings of the Feasibility Study on Road Reform³ by the DfT and the Treasury will show the first signs of us getting things right – it’s an eagerly awaited report…

This piece was first printed in the Traffic Technology International

Moving On Report¹

Brian Wadsworth’s October 2011 report proposed a straightforward restructuring of a familiar motoring tax: Vehicle Excise Duty.

“When the state has needed a bit more cash to balance its books, the words fuel duty have
tripped effortlessly off the Chancellor’s tongue,” he states in the opening pages. “Ironically, the more successful the government becomes in achieving one of its key public policy objectives – fighting climate change – the faster its motoring tax income will decline. We don’t advocate a return to the fully hypothecated ‘road fund’ that existed in the early years of the 20th century, but we do believe our national interests would be better served if a significant element of motoring taxes were formally tied to investment in network capacity.”

Strategc Road Network²

While relatively short in length the SRN in Great Britain carries around 90% of all passenger and freight movements undertaken by road, despite a decade of some of the fastest rail growth in our history. Even in the face of efforts to encourage non-road modes, it is clear that this balance will not fundamentally change any time soon. As a result, maintaining and, where necessary, upgrading our road network is critical if we are to retain the level of accessibility to which most of us have become accustomed, and which, many argue, remains critical to our ongoing prosperity.

The 2012 Feasibility Study³

In May 2012, the British government released the terms of reference for an internal feasibility
study on roads reform as requested by Prime Minister David Cameron. The study is to consider a range of questions, including how different models could apply to roads, the
investment needs of the road network, payments and the impact on the motorist, the role of regulation and performance frameworks, value for money, and efficiency and practical delivery issues. At the time of writing this article the report was still unavailable.