In the aftermath of the Spending Review, Liam Northfield of the Freight Transport Association asks if transport has become the political tool of choice to fix the economy
The logistics sector – not to mention the hundreds of thousands of businesses that rely on it – could breath out again when the UK’s Chancellor announced on 20 October that a number of key transport projects would be spared the axe. But let’s put this “win” into context.
Before the Comprehensive Spending Review was announced, it was clear to the industry that for government to make the right decisions it would need to appreciate the transport network’s role in connecting people to jobs and products to markets. As you would expect from the leading multi-modal transport trade body, the Freight Transport Association (FTA) was determined to urge policy makers to employ the joined-up thinking needed to do this.
A key theme of FTA’s detailed CSR submission and in its conversations with ministers, including a face-to-face with Transport Minister Mike Penning the day before the CSR, was to underline the value of our international air and sea hubs, which function as the gateways for international trade, and to explain the benefits of allowing them to integrate seamlessly with our inland road and rail links. Furthermore, FTA argued, government must be in no doubt that, quite apart from making our collective carbon reduction targets harder to attain, the corollary of severe cuts would be a slower economic recovery at best and, at worst, irreparable damage to the UK’s ability to compete on an international level.
Such “big picture thinking” meant that blinkers were not an option for a coalition government with one eye on retrenchment and one eye on fostering growth. Further, due to the lengthy lead times associated with transport schemes, a long-term strategy was essential.
There was, however, a concern that a cash-strapped coalition could take its axe to the perennial political whipping boy that has traditionally been the mantle of the transport sector. With the fate of key road and rail projects hanging in the balance, FTA reminded policy makers that any short-term savings to be made by curtailing investment must be weighed against the longer term costs of increased congestion and unreliability in the supply chain – a matter made more pressing by expected rises in traffic levels.
This was a crucial point. The existing transport infrastructure is already under considerable strain from the increased travel demands of individuals and the exacting requirements of many supply chains. Even during the height of the recession, when traffic levels dropped, businesses were still experiencing only marginal improvements in the frequency and extent of delays. This is why FTA commissioned MDS Transmodal, an independent strategic freight consultancy, to help establish those hot spots on the transport network where the strain has been most noticeable, and where investment is most justified.
In the run up to the spending review announcement, FTA remained cautiously optimistic that transport’s fate was far from sealed. Indeed, before Osborne stepped up to the Dispatch Box, Transport Secretary Philip Hammond had already voiced his support for “well-judged capital spending” and the pre-election manifestos of both Tories and Lib Dems seemed to value the importance of rail while not ruling out mechanisms by which to encourage private investment in our roads infrastructure. Further hopes, and indeed eyebrows, were raised when Norman Baker revealed at FTA’s fringe event at the Lib Dem conference in September that the transport sector was “certainly not going to hate everything” the government was going to reveal over the coming months. How right he was.
Along with a clear sign from government that transport is being given the respect it deserves as a driver for growth, and the publication of the first definitive National Infrastructure Plan, there have been some real results too. It would seem that our calls did not fall on deaf ears. Indeed, of the nine motorway and trunk road schemes that the Department for Transport has spared from the axe, six were identified by FTA as key priorities essential to the UK’s economic future and, as a consequence, of great import to FTA’s own membership and the logistics sector in general.
In regular meetings with ministers preceding these announcements, including a meeting with Mike Penning the day before the CSR, FTA was confident that the case for infrastructure investment was too compelling for government to ignore. Quite simply, a fit-for-purpose transport network is not an optional extra for any country with economic growth on its wish list, it is an outright necessity. So, when the green light was given to road and transport projects, including upgrades to the M1, M6 and M25, industry could be forgiven for breathing a collective sigh of relief – especially in a political landscape characterised by austerity and cuts in other departments.
While we didn’t get everything we asked for – at the time of writing we have still to discover the fate that awaits the critically important Strategic Freight Network for rail – at least transport, and more significantly freight transport has been put on the political pedestal. That’s something we can all be proud of.
Eddington Transport Study
A prevailing theme of FTA’s detailed CSR submission was its support for the Eddington Transport Study, itself a pre-eminent report that reinforces the inescapable conclusion that the transport network is inextricably linked to sustained productivity and competitiveness. Indeed, the study found that by 2025 congestion could cost freight and other road users in England alone £25 billion more per year than it did in 2003. If ever there was a case for “well-judged capital spending”, surely this was it.
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