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Must do better:

Government gets the blame for stifling light rail progress

UK new generation tramway operators can be massively successful - but only if they are given the tools to do the job The Governments current policy is a mess, and needs a thorough shake up.

This is the verdict of the National Audit Office (NAO) whose 23 April report on “Improving public transport in England through light rail” was widely - and totally wrongly interpreted in the national media as a nail in the coffin for new schemes.

Many newspapers sought to sensationalise the negative points, while failing to give any prominence to the reports many positive recommendations for securing the development of promising future systems.

Typical was The Guardian which headlined tram systems as 'too costly and underused'. It went on to cherry-pick the findings by presenting an unduly negative picture of existing tram and light rail systems.

pteg (the Passenger Transport Executive Group) was forced to react strongly. The paper’s assertion that light rail has somehow failed because schemes were not profitable was particularly curious, given the wider recognition of the need for subsidy for other forms of public transport, particularly the heavy rail network and all forms of transport in London.

National Audit Office view on light rail
The failings:
The planning and operating framework is the problem, not light rail itself:
  • Planning and approving systems takes too long and is uncertain.
  • Guidance on business cases has changed frequently.
  • Cost cutting measures and legislative changes impact on ability to achieve targets.
  • Cost of moving utilities.
  • Costs inflated by applying heavy rail standards to light rail.
  • Costs inflated due to contractors bearing risks out of their control.
  • Lack of standardisation.
  • Poor integration with other modes both physical and fares structures.
Barriers to success:
Five barriers identified that hinder the wider take up of light rail:
  • Cost – 43% of local authorities consider light rail is too costly when compared to other options such as bus.
  • Financial performance – poor performance of some systems is discouraging interest and leading to increased costs to cover risk.
  • Securing funds – inability to secure sufficient funds at local level to promote systems and pay for construction.
  • Extended timescales – inability to deliver legal powers and funding quickly.
  • Expertise – insufficient in-house expertise in local authorities to develop light rail, matched by lack of steer from DfT.
The recommendations:
The NAO has made these constructive suggestions to the government:
  • Assess whether value for money is being achieved by comprehensive cost benefit evaluation.
  • Realise more benefits for passengers by Integration with other modes, integrating park-and-ride schemes and junction priorities.
  • Improve financial viability through cost effective procurement methods.
  • Reduce costs of implementing schemes by greater standardisation of construction and development of specific safety standards for light rail.
  • Get adequate risk management, particularly over the cost and necessity for utility diversions.
  • Development of a grant regime for innovative energy saving technologies.
  • Get the SRA more invoved in determining benefits from track sharing or conversion of heavy rail.
  • Developing sources of funding other than the taxpayer by the DfT reassessing the extent to which it has held back implementation by lack of resources.
  • Adopt a more strategic approach to the development of light rail by prioritising business cases to transport need, population density and likely usage.

Lessons to be learned

The NAO report provides a more balanced assessment, finding that light rail has encouraged a shift away from car use, has enhanced the image of host cities and towns, and carries 140 million passengers a year, a total that has increased by 47% since 1999.

It is clear that lessons can be learned from both UK and continental schemes which in future will enable light rail schemes to be built faster, better and cheaper. To do this the government needs to formulate powers that ensure bus and light rail services are coordinated rather than, as at present, frequently operating in competition.

The report states that modern light rail systems, such as Croydon Tramlink and Manchester Metrolink, have brought significant benefits to passengers. They deliver fast, frequent and reliable services and provide comfortable and safe journeys. Their modern looks enhance the image of those cities where they have been built. However, since 1980 this only amounts to seven systems, and even these are not attracting as many passengers or delivering as many benefits as they should. Indeed, several are running at a financial loss and construction costs are rising as companies are not prepared to take financial risks as part of joint venture contracts.

Although the Department for Transport expects systems to be self--financing, the report found four systems to be running at a financial loss, mainly because passenger numbers, and hence revenues, have been well below those forecast. Passenger numbers are 38 per cent short of expectations on Midland Metro and 45 per cent on Sheffield Supertram. The perpetuation of a justification process that encourages over-stating of potential benefits is considered responsible for generating losses that discourage the private sector from investing in further lines.

The report also highlights other problems. Systems are not fully integrated with other forms of public transport, especially buses and in real terms have had little impact on reducing road congestion because their networks are truncated or incomplete. Through-ticketing arrangements are inadequate and not enough use has been made of complementary facilities such as park and ride schemes.

Processes take too long

Also heavily criticised is the length of time needed for systems to be put in place. It takes on average nearly two years for local authorities to be granted the required legal powers. Approval for an extension to the Leeds Supertram system took almost four and a half years. While the Department for Transport has increased staff resources for handling applications for legal powers and is taking steps to speed up statutory procedures, it can still take over eight years from commencement of the formal process to opening. This would be entirely unacceptable in other countries.

The NAO points out differences between systems in England and those in France and Germany, where there are more systems carrying more passengers. French and German tramways have been designed to connect city centres with major places of activity, such as hospitals and universities. They are also normally fully integrated with other forms of transport. Buses feed the light rail systems as well as serving non-light rail routes and there is often a direct linkage to heavy rail commuter services that have been replaced and enhanced by dual running light rail vehicles. Without exception, systems in Europe are heavily subsidised by local transport authorities. In France, local authorities also have access to local employee taxes that are specifically ring-fenced for transport projects such as light rail schemes.

The NAO concludes that the Department for Transport should work with the industry to reduce the costs of light rail systems. It suggests greater standardisation in the design of systems, vehicles and methods of construction. The Department should also require promoters to integrate their schemes better with other modes of transport; encourage more passengers to use their systems through, for example, park and ride schemes; and make speed and punctuality more attractive by, for example, giving priority to trams over road vehicles at key junctions.

Sir John Bourn, head of the NAO, says: "Light rail systems have improved the quality and choice of public transport, by offering fast, reliable and frequent services. Systems need to be better integrated with other modes of transport, however, to attract more passengers and help to reduce urban congestion. And if more systems are to secure private sector investment, construction costs must be brought down and operations placed on a sound financial footing."

The full report can be purchased through The Stationery Office for £9.25 or can be viewed and downloaded from the NAO website at www.nao.org.uk.


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