For more than 20 years transport policy has stated one thing, and transport delivery has gone a different way. Governments have said they want to improve transport to make a wealthier, healthier, more inclusive, smarter, greener and stronger society. However national statistics show that road congestion has grown, transport emissions have risen, people have become more obese, and people spend an increasing proportion of their income on travel.
The value for money case for spending more than £2bn per year of public funds on transport is that things would have been even worse without the spending. This is the Alice in Wonderland approach that if we run twice as fast then we will fall behind more slowly. Scotland can do better. The lessons from the last 20 years are clear that if we try to patch holes in the sinking ship we will fail and carry on sinking. However if we set out to fund and deliver better transport we succeed.
So why don’t we make better progress? The main reason seems to be that people are more motivated by avoiding failure than delivering success. Fear of failure affects every aspect of transport. Over 90% of transport spending is by businesses and consumers who have little incentive to change their spending habits. Even small shifts in the £20bn+ spent directly or indirectly on transport and related activities per year in Scotland is risky and disruptive. Although public authorities have a broad remit to address these market failures, accountability for people, places and transport are defined in separate community planning, land use planning and transport legislation. It is the separate legislation rather than the policy goals that determines public priorities. Patching the existing transport systems has tended to be a sensible approach for survival.
However if the transport industry and authorities do not lead change on behalf of users, they will end up defending the status quo when things go wrong. A topical example is the flexible transport industry covering: taxi, private hire, dial a ride, community transport and lift sharing. This part of the transport industry attracts more household spending than bus and rail put together, yet for decades transport authorities have had other priorities than improving consumer protection and management of shared trips. Despite the poorest in society often being totally reliant on these services for even basic transport needs like getting groceries home from the shops, current regulation and management does nothing to manage costs, and fails to protect customers. These regulatory failures have caught up with the flexible transport industry, and faced with rapid growth of the collaborative economy, the industry is now demanding changes. Already lengthy and expensive court battles are taking place in the UK such as between Transport for London and ride sharing company Uber. These legal cases drain public authorities and the transport industry of funding that could have been used to deliver better transport. Will government help its flexible transport industry to be more collaborative, or simply patch the existing system? Hopefully long overdue regulatory changes to flexible transport will also be made, but reacting to problems does not build the new transport economy.
Government has never been good at technology, but transport investment and regulation has concentrated on protecting the industry, rather than protecting customers. In 2015 not all travellers in Scotland yet realise that the trips they make are being monitored and analysed by many large commercial organisations, with little protection on how the data can be used. The so called “Internet of Things” has greater impacts for transport consumer protection than perhaps any other sector. Each time we move with our car, phone, smart watch or other device we reveal something about our preferences. New regulatory frameworks are needed on what might comprise unacceptable use of this data. Despite consumers being widely tracked for commercial benefit, the buses and other public vehicles they travel in are not yet tracked by the regulatory authorities to check they run on time and as advertised.
Similar issues apply for payment systems. Aviation and car parking have the lightest regulation so have raced ahead with smart tickets, but for rail and bus which are much more closely regulated and funded by Government, attempts to set up a government sponsored parallel payment system seem only to benefit the service providers in this payment industry. The people of Scotland just want to be able to buy good value transport in the most efficient way. When Transport for London allowed ordinary contactless bank cards to be used to pay for buses and trains, their separate Oystercard payment system was quickly abandoned by a majority of users who found integrated payment systems more convenient.
Transport investment consistent with policy is currently suppressed by a lack of transparency and accountability covering who pays and who benefits. Better future transport delivery depends critically on our public authorities creating an equitable framework within which people, businesses and agencies can get what they pay for. As a result, businesses and individuals are investing in transport largely for private benefit. If authorities enabled viable social investment packages then everyone could share in the benefits of a more inclusive approach.
Within our democratic systems, only public authorities can enable the packaging of integrated solutions through: access fees, joint development, land taxation, planning and development charges, and licencing. The returns on big schemes like High Speed Rail may be sufficient for some investors, but are lower than the returns achievable through cross sector packages, organised through access plans and for smart towns and cities. Returns on transport delivery could increasingly replace taxation as a means of funding Scotland’s transport sector.
An overhaul is long overdue of transport regulation, taxation and funding. Fear of protest and failure has been holding back successive governments back from making the changes they know they need to make. We have reached the point that a failure to act could be more threatening than the risk of change. Regulation protects established providers but the market is changing demanding a stronger protection for citizens and consumers. Taxation dependency delays new approaches but changes to car fuel duty, air passenger duty, vehicle excise duty, and land taxation could make paying for transport politically stable and affordable. Funding needs to be directed at the organisations that deliver improvements, rather those who lobby most.
We know from leading practice that people are willing to pay for more socially optimal solutions when attractive, achievable solutions are organised. It is time to organise these solutions in Scotland.
Derek Halden
Loop Connections
Derek Halden spent 10 years in the Civil Service including transport policy and research postings before founding a transport data, technology and consultancy business in 1996. He is Chair of Scotland’s transport think tank STSG and Past Chair of the Chartered Institute of Logistics and Transport. A fuller version of this paper was published in 2015 at http://stsg.org/connecting-scotland-new-ways-to-fund-better-transport.