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Transport strategy and the economy Dr Iain Docherty Department of Management University of Glasgow

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Presentation on theme: "Transport strategy and the economy Dr Iain Docherty Department of Management University of Glasgow"— Presentation transcript:

1 Transport strategy and the economy Dr Iain Docherty Department of Management University of Glasgow

2 Structure of Presentation Objectives from first principles What is transport infrastructure actually for? Targeting investment strategically Some conclusions

3 Disclaimer Personal views… … which are deliberately provocative … and do not represent the corporate position of Transport Scotland (!)

4 What are our strategic objectives? Economic, environmental and social policy objectives should be our top level drivers –The National Purpose and the sustainability triangle –Do we really mean it when we say the economy is our priority? –The National Transport Strategy also helps focus minds We need to raise the level of analysis and strategic planning –Focus on achieving positive economic outputs rather than obsession with projects –Transport infrastructure investment is probably the most important short-medium term economic lever available to the Scottish Government There has been a real paucity of genuine economic analysis and strategy since we need to do better Objectives from first principles

5 Hard choices? Everybody cannot win in transport policy –(whatever happened to opportunity costs and the notion of the public good?) Many projects inherited by the 2007 Government were politically inspired and not well prioritised Real accountability requires honesty, transparency and consistency about the links between strategy, policy and spending decisions We need to get the clarity back in transport policy making SACTRA and Eddington told us to have reasonable confidence in our economic planning tools for transport Which comes first? Planning or transport?

6 Transport per se is not the issue –Thinking in transport terms inevitably leads us immediately to focus on pet projects –The real issue is economic performance, and the ability of connectivity outcomes to support and enhance this performance Transport prioritisation must be part of a higher level, coherent economic and spatial strategy The key (planning) question is: what are the transport outcomes (not projects) that would achieve these desired strategic (economic) policy objectives? A broader perspective?

7 Transport investment should be about achieving the outcome of increased GDP growth (and/or reduced carbon footprint, etc) Transport investment needs to support trips that make a real contribution to economic performance –Facilitating longer commuting is (often) pointless –… unless it makes a real difference to labour market performance –… i.e. high value journeys or ameliorating genuine labour market constraints There is not enough focus on non-commuting business trips –Face-to-face business transactions are where value is generated… –… this is the new economic geography… –… which also focuses on the role of freight and logistics… –… which together are place connectivity The real role of transport investment

8 Key Locations are created and sustained by quality transport infrastructure and services –Only the UK doesnt understand (or wilfully ignores) the need for infrastructure investment *before* embedding economic activity –Are we happy that weve invested 40% less than our competitors for 40 years? –(The NTS doesnt support the UK Treasury view - it talks about quality being important, and should be praised for this stance) We need to focus transport investment on those locations that are genuinely of national significance, and where transport can make a difference –Revised National Planning Framework needs to be (much) clearer on this –New research suggests agglomeration economies can add as much as 40% additional value –… this means prioritising the two major city regions (and lets be honest about this) Transport infrastructure matters

9 The balance between capital and revenue spending in Scotland is wrong –Capital investment should be about reducing future revenue exposure –Current capital investment does little if anything to address the scale of ongoing revenue subsidy requirement (e.g. Edinburgh Tram) –Building pet scheme add-ons rather than investing in the core network doesnt help –Continuing down this path jeopardises future transport investment (and, by implication, future economic prosperity) The colour of money

10 We need a framework for option identification and sifting based on genuinely strategic (economic) objectives Previous strategy has been a combination of politics, spatial and organisational boundaries and luck Strategy cannot be generated effectively from the bottom up –local objectives are often parochial and short-termist We have not focused sufficiently on the real value for money of the overall transport programme in the past (Former Executive tacitly acknowledged the reality of the situation in its justification for the Strategic Transport Projects Review) Targeting investment strategically

11 Appraising projects properly STAG is sound in principle (although it could be improved) –Need to think about bundles of projects The problem lies in applying it to political reality –Retro-fitting (!) So we need a new set of rules defining how to apply STAG…

12 Prioritising projects properly … a sort of Strategic STAG that generates and sifts options for prioritisation … and is more clearly focused on delivering economic benefit … and integrates with the new National Planning Framework … and takes the concept of the carbon balance sheet seriously

13 The risks of not getting it right The transport budget is already under pressure from project cost inflation and other external influences If we cannot demonstrate real, explicit and consistent links between our strategy, planning and funding then other services will notice … and if we continue to build the wrong projects then the subsidy bill will continue to rise and reduce our capacity to build capital projects in future… … and this means the economy will suffer (significantly)

14 Some conclusions We cannot afford not to invest (substantially) in our transport infrastructure if our economy is to become more competitive The current budget round is extremely tight, and it will be an achievement to deliver the current set of projects by 2011/12 Scheme prioritisation has been more to do with politics and luck than good planning in the recent past It will be important to keep pressuring the Scottish Government to deliver the right level of investment, and the right project choices As SACTRA and Eddington reminded us, 40 years of transport economics are not all wrong

15 Transport strategy and the economy Dr Iain Docherty Department of Management University of Glasgow

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