Rail and the West Midlands Economy EMTA Conference Birmingham, 11/11/11 Peter Sargant Head of Rail Development, Centro

Outline of presentation: The economies of the city regions and the West Midlands and why transport is important How rail use has grown and is expected to continue Issues influencing rail growth The need for investment The case for devolution

PTEs and the City Regions Six Passenger Transport Executives (PTEs) cover the major urban areas of England outside London and serve a total population of more than 11 million: Centro (West Midlands – 2.6M) Merseytravel (Liverpool – 1.4M) TfGM (formerly GMPTE, Manchester – 2.6M) SYPTE (Sheffield -1.3M) Metro (Leeds – 2.2M) Nexus (Newcastle – 1M) Responsible to ITAs (Integrated Transport Authorities)

Economies in the City Regions The six PTE city regions generate almost 20% of England’s wealth Birmingham, Leeds and Manchester are among Europe’s top 25 cities for business and top 20 for transport links Transport is important –Connecting people to jobs, goods and services –Connecting businesses to markets and labour forces Poor transport networks hamper growth –Poor transport links and congestion reduce business efficiency –The top two improvements businesses would like to see are improved transport links with other cities and improved public transport Investment in public transport in urban areas can generate significant benefits

The West Midlands has been badly affected by the current recession: WM has lowest per head income in UK – 16% below average Growth slower than UK average Economic output gap £15 Bn per annum Unemployment 9.8% - 2 nd highest in UK after North East Worst three wards for unemployment nationally are in Birmingham West Midlands Economy

PTE Area Rail Growth

West Midlands Rail Growth 51% increase in Rail Passenger journeys since % increase 2009 to 2010 to 40 million trips per annum

PTE Area Rail Growth has been higher than in London

Growth of Rail Use into Birmingham Rail modal share has risen from 17% to 27% since 2001

Rail industry forecasts show regional urban service growth outstripping other market sectors Source: Rail Industry Initial Industry Plan, September 2011 Strong Rail Growth Expected to Continue MarketApprox. % of national passenger km ‘Background’ passenger km growth Average rate per year London Commuter21%+40%1.3% Long Distance35%+67%2.0% Regional Urban Commuter 7%+102%2.8% London Other26%+90%2.5% Regional Urban Other 9%+116%3.0% Rural3%+90%2.5% Total100%75%2.2%

Issues influencing rail growth in city regions Economic restructuring – more service industries locating to city centres Road congestion – but driving is still an option Fuel prices and parking costs Competitive environment – buses free to compete with rail services outside London Rail network capacity – competing demands on congested network Train capacity issues Park and ride availability Rail industry costs and affordability and fares policy Investment plans – e.g. Birmingham Gateway Localism agenda can influence all the above!

Transport Investment needed in PTE areas Historic funding gap – transport funding in London almost 3 times that in North and WM Rail funding also focused on London – e.g. Crossrail Need to develop strategies for investment in PTE area rail networks Without investment local commuter services risk being pushed off network Optimistic signs that Northern Hub plans are being taken forward in North West Current rail industry plans need improving for the West Midlands Transport funding per head 2008/9

High Speed Rail HS2 proposal essential for long term economic growth in WM and North Puts WM at the heart of a national high speed network Needed to relieve capacity constraints on existing network between WM and London Will deliver major journey time benefits between WM and North Package of supporting measures needed to maximise benefits £1.5Bn annual benefits to the WM from HS2 plus local service improvements

Rail Devolution Local rail franchises are currently mainly specified and funded by Central Government PTEs believe there would be significant benefits from devolving local rail responsibilities to local transport authorities to: Be more responsive to local priorities with an improved ability to react to changing circumstances Deliver a better customer offer Provide better integration of rail with other modes Provide a more balanced view across all transport modes in order to reduce the long-run costs of the railway. PTEs believe this would help support the economies of the city regions PTEs are currently working with government on this issue

Conclusions Rail provides high quality, high capacity and fast access into our city centres Rail provides long-distance, regional and local connectivity, as well as freight All these sectors are important to support PTE area economies Without a long-term investment programme capacity constraints will become a major problem requiring difficult trade-offs A long-term investment programme in rail and High Speed Rail is essential to support economic growth This should be supported by devolving local rail responsibilities to PTEs