Author Topic: Transport Select Committee criticism of DfT's calculation of traffic growth  (Read 2602 times)

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2  Demand

18. The DfT uses the National Transport Model (NTM) to predict future traffic levels on the road network. The NTM provides information to build the business case behind strategic road schemes. The validity of the NTM's outputs and how or whether they should be used in planning changes to the SRN are a matter of great contention between supporters and opponents of increasing capacity on our road network.

Demand modelling

19. The NTM indicates that traffic levels will rise by 46% by 2040, as a result of population growth, economic growth and a fall in the cost of fuel. The model shows congestion on the road network increasing dramatically if no capacity is added to it.[38] The Chartered Institute of Logistics and Transport (CILT) told us that the forecasts were "generally convincing".[39] The AA added that it did not "dispute the figures, because they are the best shot; I do not think they will ever be bang on, but they have not been far off."[40]

20. Critics of the policies in Action for roads rejected or questioned the outcomes of the forecasts. The Cyclists' Touring Club (CTC) felt that cycling was under-represented:

We gave a specific example of how we feel the national transport model is pretty flawed, in that at the moment it is forecasting a drop in cycling between now and 2035, despite the fact that cycling has increased by 23% in the last five or six years and is clearly on an upward trajectory. We think the model is a blunt tool; it is using very unsophisticated ways of dealing with technological and social change, which is a lot of what is driving the changes in transport at the moment.[41]

The Campaign for Better Transport (CBT) noted that the DfT's model had overestimated traffic growth in 1989, 1997 and 2009.[42] It argued that those overestimates had restricted economic development:

We would argue that the Department for Transport has been overestimating traffic growth for 20 years. That gives artificial barriers to development and the transport infrastructure that goes with it, because the argument [to a developer] is, "There will be all this traffic growth [from your development], and you have to meet that"… The forecasts and modelling that it is required that local authorities and developers take up are based on flimsy foundations.[43]

21. The DfT stated to POST that the NTM takes into account "a wide range of explanatory factors for the level of road traffic, including congestion levels, demographic changes, manufacturing growth, as well as availability and cost of alternative modes of transport."[44] However, the DfT admitted to us recently that the NTM has failed to predict changes in traffic levels in London.[45] We heard concerns that the DfT does not make available the assumptions and methodologies underpinning the NTM in sufficient detail to enable a thorough and independent assessment to be undertaken.[46] By contrast, HM Treasury and the Office of Budget Responsibility are committed to making their macroeconomic forecasts and methods as transparent as possible.[47]The DfT must immediately open the NTM to wider scrutiny, as the Treasury and the OBR have done with their macroeconomic model, to ensure that it accords due weight to all factors affecting transport demand, including economic growth, industrial development, fuel prices, vehicle ownership and demographic shifts.

Traffic volume

22. Traffic volume on strategic roads peaked in 2006, fell between 2007 and 2010 and started slowly to increase again in 2011.[48] That is important evidence in the debate between those who argue that the level of traffic has now peaked and those who support the DfT's analysis that traffic volume decreased as a result of the recession and began to increase again as the economy recovered. One argument against 'peak car' is the suggestion that traffic volume fell as a consequence of both the recession and the increased cost of fuel.[49] The newly published data show traffic volume falling before the recession started in 2008, which decouples the recession from the decline in road traffic volume.[50] This fall in traffic volume also contrasts with the number of rail journeys, which rose consistently per year throughout the recession, despite rail fares increasing more quickly than fuel prices.[51]

23. We heard that guidance on planning and parking charges, such as that in Planning Policy Guidance 13 (PPG13), is another factor that influences the volume of road traffic.[52]The PPG13 transport guidance was introduced in 2001. It was developed as part of A New Deal for Transport. On planning, it promoted development in urban, brownfield sites and discouraged greenfield developments that were only accessible by motor vehicle.[53] On parking, it required local authorities to set charges to encourage the use of other forms of transport.[54] Under PPG 13, the NTM road traffic forecasts are based on population projections from the Office of National Statistics in 2008. Those projections state that they "do not take into account any future policy changes that have not yet occurred".[55]

24. The Department for Communities and Local Government withdrew PPG13 in 2011, as part of a simplification of planning rules.[56] This recent change in planning and parking policy may well have influenced traffic growth, both from new greenfield housing developments and because driving into towns has become less expensive.[57]

25. Many witnesses to our inquiry discussed the limitations of the DfT forecasts.[58] POST stated:

The DfT's forecasts assume no change in Government policy beyond that already announced. However, researchers have stressed that car use will be shaped by future policies around land use planning and measures to reduce driving, including the viability of alternative modes of transport.[59]

Oxera also noted that the NTM does not account for changes in the availability of parking:

A potential weakness of the NTM is that it does not factor in constraints on the availability of parking spaces. Decisions on whether to make a car journey are likely to be heavily influenced by the ability to park at a destination. Consequently, better understanding is needed of how the availability of parking spaces will affect future road demand.[60]

Given that it is impossible accurately to predict local and national planning policy, demographics, types of industry and the extent to which people will want to live in urban areas, a road strategy based on forecast future growth in traffic seems questionable.[61]

26. The DfT argued that its forecasting was credible. It stated that past failures to predict the level of traffic growth were the result of events that could not have been predicted by the model:

…uncertainty is inherently part of forecasting and predicting future behaviour and trends. Traffic trends and outcomes depend on a large number of variables, economic (GDP, oil prices) and behavioural.[62]

The Minister defended the NTM and its use in strategic roads policy development:

The forecast is one that I am prepared to defend, but it is dependent on some factors that are more difficult to predict. It would be irresponsible of any Government not to use these figures, which are the best, and the National Transport Model, which is designed to forecast long-term trends.[63]

27. The DfT must develop a transparent system of road planning as part of a wider national transport strategy. This system should take into account demographic, economic and land use changes, including changes in the location of homes and parking policy. This will allow the DfT to select the most resilient options for reducing congestion or improving connectivity and to promote them across Government Departments and local authorities.

http://www.publications.parliament.uk/pa/cm201314/cmselect/cmtran/850/85005.htm#a4

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http://www.publications.parliament.uk/pa/cm201314/cmselect/cmtran/850/85002.htm

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Conclusions and recommendations

Demand

1.  The DfT must immediately open the NTM to wider scrutiny, as the Treasury and the OBR have done with their macroeconomic model, to ensure that it accords due weight to all factors affecting transport demand, including economic growth, industrial development, fuel prices, vehicle ownership and demographic shifts. (Paragraph 21)

2.  The DfT must develop a transparent system of road planning as part of a wider national transport strategy. This system should take into account demographic, economic and land use changes, including changes in the location of homes and parking policy. This will allow the DfT to select the most resilient options for reducing congestion or improving connectivity and to promote them across Government Departments and local authorities. (Paragraph 27)

An effective programme

3.  The DfT should commission integrated passenger and freight plans for strategic transport routes or regions, rather than looking at one mode of transport in isolation. Such integrated plans, which should be developed in consultation with local authorities, local enterprise partnerships and community and road user groups, must take into account how different options for the use of infrastructure and technology will impact on transport movements and on economic development. The DfT must then identify projects—including maintenance schemes—within the chosen plan for implementation within the five-year funding cycle. Every project should be subject to a post-implementation review to assess the effectiveness of the investment. We recommend that this process be set out in the forthcoming Roads Investment Strategy. (Paragraph 38)

The Highways Agency

4.  We are not convinced by the case for establishing the Highways Agency as a GoCo. Its remit will not be extended; it will not have new funding streams; and it will still be subject to changes in Government policy, while incurring ongoing oversight costs. We are not persuaded that increasing salaries will be a value-for-money way of increasing skills in the company. In that context, we note that the agency's current chief executive has worked in both the private and public sectors. The proposed benefits, including the implementation of the five-year funding plans, seem achievable through better management of the existing Highways Agency. (Paragraph 44)

5.  An advisory or oversight body reporting to the Secretary of State would not be sufficient to scrutinise the performance of the proposed Highways Agency GoCo, because the GoCo would not be accountable to it. The same argument applies to establishing a panel of experts. Any such panel or body would lack the credibility of an independent regulator. The new scrutiny body must have the power of a full regulatory authority. An expanded ORR could undertake this role. (Paragraph 48)

6.  We note that Passenger Focus has a record of successfully expanding to take on additional duties and therefore recommend extending the remit of Passenger Focus to include scrutiny of the proposed GoCo. It must be subject to a duty to represent the concerns of all SRN users to the DfT and should set up a panel of road user stakeholders to monitor its work. (Paragraph 50)

7.  The proposed new Highways Agency GoCo must have a realistic performance specification for engagement with its stakeholders. This must instil in the GoCo a view of road users as customers and other organisations as partners in developing roads for freight and passengers, as part of an integrated transport network. This specification must be agreed with local authorities, LEPs and road user groups before the GoCo is set up. (Paragraph 55)

Financing the future

8.  The Minister was very clear about the DfT's decision not to introduce charging to the road network, apart from the Heavy Goods Vehicle (HGV) user charging scheme that was recently implemented. However, if the traffic forecasts are correct, the Government will need to increase investment in the road network substantially during the next decade. Simultaneously, income from fuel duty is likely to decline as use of fuel-efficient low-emission vehicles increases. Investment in the road network will require new funding streams. This is a challenge that must be addressed. However, a consensus would be required to introduce any road user charging scheme across the SRN as an alternative to road taxation, and the many issues involved would have to be resolved. (Paragraph 62)

9.  The Government must demonstrate an integrated transport approach in developing and assessing improvements to strategic routes. It must always consider how road and rail improvements for passengers and freight can play a role together in solving problems on the SRN and its feeder roads. This should be alongside the trial of simple measures such as ride-sharing and off-peak deliveries to reduce congestion on parts of the SRN most used for local journeys. (Paragraph 63)


http://www.publications.parliament.uk/pa/cm201314/cmselect/cmtran/850/85009.htm