Projects With No Benefit – Rotherhithe Bridge and HS2

When evaluating capital projects, it is wise to estimate the benefit/cost ratio (“BCR”), i.e. the likely value attached to the benefits divided by the overall costs. That is the best way to evaluate differing projects so one can pick the best ones. Those with a negative ratio are clearly not worth doing.

The DfT’s “Value for Money” guidance says a project will generally be regarded as “medium” value if the BCR is between 1.5 and 2; and “high” if it is above 2. The Eddington transport study of 2006 said the BCR for trunk roads was 4.66, local roads 4.23 and light rail schemes a measly 2.14. When there are so many possible projects that give high benefit/cost ratios, why bother with lesser ones? It’s just a misuse of public money to do so.

Transport for London (TfL) have published their response to the results of their public consultation on the proposed new Rotherhithe/Canary Wharf river crossing. This is a vanity project of the latest Mayor, rather like Boris’s “garden bridge” – it was covered in a previous blog post here: https://abdlondon.wordpress.com/2017/11/11/new-thames-river-crossing-at-rotherhithe/

This bridge would only be useable by cyclists and pedestrians and the favourite plan now is for a bridge rather than a tunnel or a ferry. However the bridge would need to have a lifting section to allow for river traffic. How the bridge might be funded is still not clear (possible costs of well over £300 million for a “navigable” bridge was previously estimated including discounted running costs over the life of the bridge). The latest report simply says they are investigating a number of funding options.

More information on costs is given in this document: https://consultations.tfl.gov.uk/rivercrossings/rotherhithe-canarywharf/user_uploads/r2cw—background-to-consultation-report.pdf

When it comes to the benefit/cost ratio for the proposed bridge it is estimated to be between 0.7:1 to 1.97:1. In other words, it might actually be negative and will be unlikely to be a “high” return project. Even those figures assume very high usage of the bridge by cyclists and pedestrians but it is justified on the encouragement to cycling and walking that it would provide – and hence is consistent with the Mayor’s “healthy streets” policy.

In summary, this bridge is not justifiable in relation to other transport projects and knowing the Mayor’s budget problems it is simply unaffordable anyway. Time to kick it into the long grass surely before more money is wasted on it?

The latest report on this project from TfL is present here: https://consultations.tfl.gov.uk/rivercrossings/rotherhithe-canarywharf/

HS2

In comparison to the aforementioned bridge, the HS2 high-speed rail line is a mega-project of the first order. Likely cost is now more than £80 billion with major disruption in London and many other parts of the country. Local Transport Today (LTT) have published details of a leaked report by Paul Mansell, a Government-appointed advisor. It’s a very damning assessment of the value of the project. It seems his report was not shown to Government ministers before Parliament voted to proceed with the project.

Back in 2013, the benefit/cost ratio of HS2 was calculated by the Government to be 2.3. What it is now, after a major escalation in costs, is not at all clear. But it seems that the only justification for continuing with it is the possible boost to the economy that might be needed if a “hard” Brexit is the outcome.

Surely this is another project that should be canned sooner rather than later, simply because there are better things to spend the money on – and that includes not just railway lines.

It is of course fortunate that we have some benefit/cost information on the above two projects. TfL (and the Mayor of London) now often fail to provide such information. Figuring out whether the ULEZ scheme is worth doing for example is not easy. But in reality it’s wildly negative – see http://www.freedomfordrivers.org/Cost-of-the-ULEZ.pdf

It is unfortunately a symptom of the modern trend to make major public policy decisions on irrational grounds. They just need to sound appealing to a few segments of the population (preferably those who might vote for the politicians backing the proposals), when economics should be the key decision basis.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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The Cost of Khan

Gareth Bacon, leader of the GLA Conservatives, has published a very interesting document entitled “The Cost of Khan”. It supplies a half-term report on the regime of Mayor Sadiq Khan and the negative impact he has had in certain areas (crime, planning, parking, housebuilding for example). In essence he suggests one of the key problems is financial mismanagement.

Of particular interest to our readers will be his comments on the activities of TfL (Transport for London) and the budget for that organisation. It covers:

  • Cancellation of new tube trains for the Jubilee and Northern Lines that would have provided much needed extra capacity. That might have saved £600 from the TfL budget but that’s desperately needed after Khan’s expensive promise to freeze public transport fares which cost at least £640 million in foregone revenue. Even that promise was only partly kept.
  • The pay of executive staff in TfL. The number who are paid more than £100,000 p.a. increased by 25% last year so there were 576 such employees. Is the Mayor really cutting the flab out of TfL budgets as he promised to do?
  •  The “T-Charge” which was introduced last October and will cost Londoners £23 million a year despite the Mayor’s own Impact Assessment saying it will have only a negligible impact on pollution (and that has been borne out by real data since).
  •  Nominee passes which you may not be aware of are highlighted. These allow TfL employees to nominate family members and anyone who resides in the same household to obtain free travel. Even flatmates qualify! There are 39,884 people who are nominees and the cost might be equivalent to £32 million in lost revenue per year.

Those and other reports show how the Mayor has been so wasteful of financial resources with the result that he is desperate to raise money from the T-Charge and the ULEZ charge which will impose major unnecessary costs on Londoners. In the personal view of this writer TfL continues to be a massive and very expensive bureaucracy which is unaccountable to the public. It formulates transport policy that will increase the bureaucracy and then does public consultations designed to get the right answers. TfL needs major reform but the Mayor does not seem to have it under control.

The “Cost of Khan” Report is present here: https://www.glaconservatives.co.uk/uploads/1/1/7/8/117899427/final_cost_of_khan__2_.pdf

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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More on the ULEZ Expansion

Apart from the lack of any proper cost/benefit justification for the ULEZ expansion as I explained in my previous blog post on the subject (see https://abdlondon.wordpress.com/2018/06/08/mayor-proceeds-with-expansion-of-ulez/), there are other very good reasons why you should see this as a very dangerous step.

As I have already pointed out, once the infrastructure is put in place for this scheme it will enable the Mayor to introduce congestion charging schemes in future over most of London. But there are lots of other possible negative scenarios.

You may say, I am not too concerned because I don’t drive an old diesel vehicle or I can afford to buy a new vehicle that is exempt. But once the Mayor obtains this power to obtain money from vehicle owners in London he can easily vary the rules so that everyone is paying a lot more money in taxes.

For example, he could claim that come 2022, the new ULEZ has proved to be less effective than expected in reducing air pollution. Indeed that is very likely to be the case. Or he might simply say that air pollution is still not good enough. He could justify charging all vehicle users accordingly, even the latest petrol and diesel vehicles. Indeed he could argue that even electric vehicles should be included as they generate particulates from brake and tyre wear. So it could be not just £12.50 per day for older diesel vehicles, but for everyone!

In addition as we saw with the central London Congestion Charge (a.k.a. Tax) this was initially set at £5 per day but is now £11.50, i.e. it’s more than doubled but has not proved any more effective. It now generates significant revenue for TfL above operating costs. So instead of the ULEZ charge being £12.50 it could soon be moved to £15, £20 or even £30 per day and for everyone.

Do you think that the Mayor and TfL have no such intention and have not even looked to the future prospects for this scheme? Think again. The ULEZ is being driven by the desire for more income by the Mayor. Follow the money as always in politics. Discouraging motor vehicles by high charges on everyone who owns one would be perfectly consistent with his objective, as stated in his Transport Strategy, to reduce car usage to a fraction of what it is at present.

A particularly sickening aspect of this matter is the involvement by the Mayor of very young schoolchildren to promote his policies and his politics. He announced the latest extension at Netley Primary School in Euston. This “photo opportunity” was covered by the national media extensively. But what do schoolchildren know about this subject? And why should their teachers be allowing this kind of politicking in their schools? Netley Primary School is close to the Marylebone Road, one of the most polluted roads in London, but even so this hardly justifies the involvement of young children. Mayor Sadiq Khan is a serial offender in this regard as he has done this previously. Children should not be used by politicians to promote their financial policies.

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MTS Campaign Meeting Report

On Saturday the 28th April we held a meeting for supporters of the ABD’s campaign against the Mayor’s Transport Strategy (MTS) in central London. I chose to drive to the venue as I was carrying quite a weight of equipment and papers, but it turned into a typical nightmare trip on London’s roads. It ended up taking 2 hours to drive the 15 miles there. We were doing well until we hit a closure of Upper Thames Street and The Embankment with all traffic being diverted across Southwark Bridge south of the river – the exact opposite direction to where we wanted to go. So I turned round and aimed to take a route around to the North via City Road and the Angel, Islington. But that route was also closed by apparent crane work. There was no advance notice or signs of these closures on two of the key routes in London. Even on a Saturday they are now very busy. What a dreadful way to run a transport network of a major world city!

I did eventually manage to get there in time to give my presentation, but one or two people didn’t make it perhaps because of the traffic congestion. Here’s a brief summary of what was said at the meeting. The Powerpoint presentation slides are available here: http://www.freedomfordrivers.org/MTS%20Meeting%20Presentation%202018-04-28.pdf

After a brief explanation of the objectives and background of the Alliance of British Drivers I explained the key themes of the Mayor’s Strategy. These are to turn streets into places for “active travel and social interaction”, and to reduce “car dependency”. The latter is of course an emotive phrase when nobody talks about “cycle dependency” or “public transport dependency”. Why should it be used to describe people’s rational choice of transport mode? Such phrases are just part of the “spin” put on these policies and the graphic I showed taken from the Mayor’s document demonstrates how unrealistic are the depictions of London in the future. Such graphics often ignore the needs for local transport deliveries of goods and services in London. In addition the Mayor has ignored the needs of the growing proportion of elderly and disabled people in London, many of whom have responded to our campaign as they are dependent on private cars or PHVs.

I talked about the Mayor’s problems which the Strategy aims to counter. This includes a rapidly growing population in London which is putting a stress on public transport capacity and road congestion, and also leading to higher air pollution (and not just from traffic). These of course result from past policies adopted by London Mayors. But one of his key problems is shortage of money with a massive budget deficit looming. This results from public transport fare freezes which he promised to get elected, increasing subsidies and general financial mismanagement.

I explained that the answer from the Mayor are policies that will extract more money from Londoners (and those who visit London from outside) and restrict private travel in the name of making the population healthier. There are a number of ways the Mayor can implement these policies, via the encouragement of the London boroughs if not directly.

What alternatives could the Mayor have proposed? Obviously one of the key factors has been the growing population of London and he could have reduced that by encouraging redistribution of business activity and population as was done in the 1960s via New Towns, or by not promoting it as “more open” to immigration as he has done recently. The implementation of cycle superhighways in the manner done, road space removal (road closures, removal of gyratories, etc) and other detail policies emanating from TfL have also contributed. I suggested that it was possible to improve the road network for cyclists and for road safety without such damaging impacts on the road network.

There was a brief explanation of the Ultra Low Emission Zone (ULEZ) and the misleading claims made about deaths from air pollution in London (as one member of the audience put it: “40,000 deaths a year in London”, which shows how spurious statistics are being propagated). There is no major health crisis, Londoners are living longer and air quality is improving! We then had a session from Howard Cox of FairFuelUK. He explained what his organisation has been doing to obtain 1.7 million supporters for a campaign that is well worth supporting. He has been good at obtaining both media and political support as a result. He questioned why the Government have not looked at alternative ways of improving air quality and looked at other sources of emissions rather than just focussing on vehicle owners. FairFuelUK are working with others to produce better scientific evidence on the real health impact of emissions and the cost of ignoring alternative solutions to reducing emissions.

I explained what the campaign against the MTS had been doing and what we will do going forward. The audience was encouraged to support us in several ways to enable us to generate more supporters and more funds to fight the campaign.

Lastly there was a session on how to defeat the MTS. This can be done in local boroughs (for example I explained earlier how the ABD had defeated a proposed congestion charge in Greenwich promoted by Ken Livingstone over ten years ago), or perhaps by ensuring Sadiq Khan does not get re-elected as Mayor in two years’ time. As he is doing a good job of becoming unpopular for other reasons, just like Ken Livingstone at the end of his reign, perhaps the slogan should be similar to the popular one in that era – namely “anyone but Khan” for Mayor at the next election.

It was noted that the ABD can give assistance with local campaigns in several ways – you just need to ask for it.

We covered how supporters can help the campaign. Recruiting more supporters is one key aspect over the next few months, ensure that people find out what is being done in their local boroughs (a member of the audience suggested that people ask if there are any proposals for a local congestion charge) and provide funds to fight the campaign. It is important to ensure that more London residents, and those in surrounding areas, know what is being proposed because there is general ignorance on the subject – few people have actually read the Mayor’s Transport Strategy document but it will dictate many aspects of travel and parking in London over the next few years.

There was plenty of time for questions from the audience. Two particular subjects that arose was the status on Cycle Superhighway 11 (CS11) and Bank Junction closure in the City. On the former, which was proposed to result in the closure of Regent’s Park to vehicles, it seems that it may be being held up by objections from affected borough councils after all. CS11 is a good example of how local opposition can delay or thwart unreasonable proposals. On Bank this is an experimental scheme but will be subject to a review in a few months’ time and I explained what representations the ABD had made on this topic.

The key as always if you want to have an impact on politicians is not just to moan in private or on social media, but to directly contact the political decision makers – the Mayor London, London Assembly Members, your local M.P, local Councillors, et al. It is also necessarily to respond to relevant public consultations and get the vote out when necessary.

In my experience politicians do listen, particularly when it seems they might be at risk of losing an election by pursuing unpopular policies! Please bear that in mind. That was perhaps one of the most important points communicated at this event.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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The Real Profits from the ULEZ

In January we published a note on the likely profits that Transport for London (TfL) would make from the Ultra Low Emission Zone. That was based on our own estimates of the income they would receive (based on TfL data) as TfL had disclosed some information on budgets in response to an FOI Act request but it seemed to be grossly misleading.

We have now received more information which is given in this note: http://www.freedomfordrivers.org/ULEZ-Profits.pdf . This shows that the income they would be receiving after extension to the North/South Circular would be over £125 million per year which is even higher than our own previous estimates.

However, the profits after operating costs would be lower than from the central London Congestion Charge zone alone presumably because the operating costs over the wider area, with many more vehicles affected, would be higher. We do not yet know the implementation cost for the wider area. Can TfL afford the capital cost is one question yet to be answered, bearing in mind that they are heading for a deficit of £1 billion per annum.

But the key point is that the £125 million will be taken out of the London economy every year, plus there is the cost to vehicle owners in upgrading their vehicles to be compliant with the ULEZ which we previously estimated at over £200 million (see our previous note on the cost/benefit ratio of the ULEZ here: http://www.freedomfordrivers.org/Cost-of-the-ULEZ.pdf

We also pointed out in that note that so far as NOX emissions go, which is one of the main concerns, that these are rapidly falling anyway. Is the ULEZ, particularly the extension to within the North/South Circular, really justified? Despite what the Mayor says, there is no major public health crisis in London from air pollution. There are some localised problems which can be fixed by local measures. But extracting hundreds of millions of pounds in what are effectively taxes from Londoners for the ULEZ when it would be better spent on other useful and productive public health measures makes no sense.

The ULEZ will just move money from Londoners pockets to the scheme operators (private organisations) and the bloated bureaucracy that is TfL.

However one looks at it, the economics of this scheme and the justification for it in relation to the benefits to be obtained, when there are surely better solutions to the air pollution problem in London, seem dubious in the extreme. Both the Conservative Party and FairFuelUK have suggested alternative policies to tackle air pollution – you can see the latter’s stance on it here: https://www.fairfueluk.com/Survey-Background.html

Please make sure you oppose these irrational policies.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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TfL to Lose £1 billion per Year

 “TfL expects £1bn deficit by next year”. That was the headline in an article in today’s Financial Times. Apparently they have seen an internal email written by finance director Patrick Doig that the organisation faced an operating loss of £968 million in 2018/19 which he said was “clearly not a sustainable position…”. The deficit in the current financial year is expected to be £785 million this year which shows how rapidly its position is being eroded.

There are several reasons given for this erosion in their financial position – the Mayor freezing public transport fares (estimated cost £640m) did not help, but the big problem is falling revenue from users. Both bus and underground journey numbers have been unexpectedly falling.

Is this because more people are not travelling, e.g. doing internet shopping and working from home? Or is it because they have chosen to travel by bike (usage is growing), or find it is as cheap and a lot more comfortable to call Uber? Or perhaps it’s because some London residents are selling up and moving to the country with house prices peaking in London, or returning to homes in the rest of Europe. Perhaps those French, Polish, Romanian and other residents are worried about their future after Brexit? Perhaps they just got tired of life in London, unlike Dr Johnson who did not have to suffer the mediocre standards in TfL’s public transport provision.

The Mayor has only recently published his Business Plan for the years to 2022/23 (see this article: https://abdlondon.wordpress.com/2018/01/17/tfl-business-plan-mayor-sadiq-khan-wants-more-money/ ). But you can see exactly why the Mayor is so keen to raise as much as £300 million from Londoners via the Ultra Low Emission Zone (ULEZ) charges. As we have said before, the ULEZ is about money, not about improving the health of the population or cleaning up London’s air.

A comment in the FT article was by Gareth Bacon, London Assembly Conservative Members, who said there was now “serious cause for concern” about Mr Khan’s “cavalier” financial stewardship of TfL.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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More Money For Cycling

Sadiq Khan, Mayor of London, has announced a commitment to spend £142 million on new cycle routes. He claims this will benefit cyclists and pedestrians, but why the latter is not clear.

These are the routes where money will be spent:

  • Lea Bridge to Dalston – This 3km route would link the City and Waltham Forest by filling the gap between Lea Bridge Road and Cycle Superhighway 1 at Dalston
  • Ilford to Barking Riverside – This 8km route would link two bustling outer London town centres and a major growth area with up to 10,800 new homes and a new London Overground connection – while enhancing access to the Elizabeth line and London Overground services
  • Hackney to the Isle of Dogs – This 8km route would stretch from Hackney to the Isle of Dogs via Canary Wharf, Mile End and Victoria Park
  • Rotherhithe to Peckham – This 4km route would link Peckham with key and growing destinations such as Canada Water and Surrey Quays, and connect up other cycling routes such as Quietway 1 and the proposed Cycle Superhighway 4
  • Tottenham Hale to Camden – This 8km route would connect major town centres and will cover seven junctions identified as being among the 73 with the worst safety records
  • Wembley to Willesden Junction – This 5km route would be north-west London’s first major cycle route, connecting Wembley, Stonebridge Park and Willesden Junction. Future sections will connect to planned infrastructure in west London such as CS9 and CS10.

The Mayor has also committed to providing a new river crossing between Rotherhithe and Canary Wharf for pedestrians and cyclists. Note that we commented on this project previously here: https://abdlondon.wordpress.com/2017/11/11/new-thames-river-crossing-at-rotherhithe/ . It is surely a financially unjustifiable project, but needless to say the Mayor says the initial analysis of the consultation results shows substantial support – surely a case of folks voting in favour of something when they think they don’t have to bear the cost.

Note that the Mayor has committed to spend similar sums on cycling, if not more, over the next 5 years – an average of £169 million per year. Meanwhile budgets for road maintenance have been cut and projects put forward by local boroughs are being cut back. As usual these days, there is no cost/benefit justification provided for this expenditure.

It is not clear what the nature of these cycle routes will be. Will they be fully segregated as are the Cycle Superhighways or simply minor improvements such as blue paint and junction improvements. It seems some of the routes may be partly on “Quietways” (i.e. back roads with little traffic).

But one thing is for sure from past experience of similar projects. Road space will be removed from motorised traffic and traffic congestion will increase as a result.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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