http://www.nwda.co.uk/pdf/Productivity%20rail%20study%20-%20final%20report by Northwest Regional Development Agency

North West Productivity Rail Study Final Report

Northwest Regional Development Agency July 2008

In association with

North West Productivity Rail Study Final Report

Project No: 139871 July 2008 Newcombe House 45 Notting Hill Gate, London, W11 3PB Telephone: 020 7309 7000 Fax: 020 7309 0906 Email : London@cbuchanan.co.uk

Prepared by:

Approved by:

____________________________________________

Kieran Arter

Paul Buchanan

Status: Final

Issue no: 0

Date: 03 July 2008

nwda final report v13 (C) Copyright Colin Buchanan and Partners Limited. All rights reserved. This report has been prepared for the exclusive use of the commissioning party and unless otherwise agreed in writing by Colin Buchanan and Partners Limited, no other party may copy, reproduce, distribute, make use of, or rely on the contents of the report. No liability is accepted by Colin Buchanan and Partners Limited for any use of this report, other than for the purposes for which it was originally prepared and provided. Opinions and information provided in this report are on the basis of Colin Buchanan and Partners Limited using due skill, care and diligence in the preparation of the same and no explicit warranty is provided as to their accuracy. It should be noted and is expressly stated that no independent verification of any of the documents or information supplied to Colin Buchanan and Partners Limited has been made

North West Productivity Rail Study Final Report

Contents Executive Summary

Introduction

2 2.1 2.2 2.3 2.4 2.5 2.6 2.7

Background Introduction Economic policies Recent employment trends NW RUS and rail trends Likely future trends Background on WEBs Summary

2 2 3 4 7 9 11 12

3 3.1 3.2

Methodology Schemes to be assessed Agglomeration modelling

14 14 15

4 4.1 4.2 4.3

Results Central scenario Sensitivity tests Summary

23 23 24 29

Transport Innovation Fund

6 6.1 6.2 6.3

Costs and deliverability RUS Costings Scheme Deliverability NW RUS Schemes

33 33 34 35

7 7.1 7.2 7.3

Other schemes Other NW RUS schemes Stakeholder discussions Future RUS documents

39 39 40 40

Conclusions

Appendix 1 – Assumptions register

Appendix 2 – Employment forecasts

Appendix 3 – References

Appendix 4 – Glossary

Tables Table 3.1:

RUS schemes included in CB modelling

Table 3.2:

RUS schemes excluded from CB modelling

Table 3.3:

Selection of NW productivity differentials

North West Productivity Rail Study Final Report

Table 4.1:

Assumptions used in agglomeration modelling

Table 4.2:

Wider economic benefits in central scenario, £m PV

Table 4.3:

Wider economic benefits with different growth scenarios, £m PV24

Table 4.4:

Wider economic benefits in crowding sensitivity tests, £m PV 25

Table 4.5:

Wider economic benefits in productivity sensitivity test, £m PV26

Table 4.6:

Wider economic benefits in employment density sensitivity tests, £m PV 27

Table 4.7:

Wider economic benefits in elasticity sensitivity tests, £m PV 28

Table 4.8:

Wider economic benefits in rail share sensitivity test, £m PV 29

Table 4.9:

Wider economic benefits with further peak lengthening, £m PV30

Table 6.1:

Scheme Estimations

Figures Figure 2.1:

Employment Density in the North West 2006, Railway lines shown in grey 3

Figure 2.2:

Employment in the North West 1991 to 2006, and scaled forecasts to 2025 with a fitted linear trend through the history 5

Figure 2.3:

Employment in the North West 1991 to 2006 for Experian and ONS data sources, Indexed to 2000 values 6

Figure 2.4:

Forecast growth for Manchester, Liverpool and Preston and each of the North West sub-regions 7

Figure 2.5:

Geography of NW RUS

Figure 2.6:

Percentage change in rail trips between 1999-00 and 2004-05 9

Figure 2.7:

Ratio of commuting in-flows to out-flows

Figure 3.1:

Crowding Deterrence Function

Figure 3.2:

Process for calculating M2MPJ benefits

Figure 3.3:

Middle layer super output areas included within the analysis 20

Figure 3.4:

Process for calculating pure agglomeration benefit

North West Productivity Rail Study Final Report

Executive Summary This summary sets out the findings of a study undertaken by Colin Buchanan and Volterra, commissioned by the Northwest Regional Development Agency (NWDA). The aim of the study is to investigate the wider economic benefits (WEBs) of schemes that were recommended in the North West Route Utilisation Strategy (NW RUS), providing an evidence base for future rail investment. Wider economic benefits (also known as agglomeration benefits) are beginning to play an increasingly important role in transport appraisal, particularly in the context of rail. There are two main types of WEB: -

Move to more productive jobs (M2MPJ): providing additional capacity on routes into growing city centres can help to relieve crowding constraints and enable workers to access jobs where productivity levels are higher

Pure agglomeration: by either increasing city centre employment or improving accessibility, the effective density of the central business district (CBD) is increased. There is a positive relationship between density and productivity, so an increase in effective density leads to workers becoming more productive.

The NWDA aims to close the output gap relative to the average for England; increasing average productivity will be key to achieving this. WEBs are likely to be relevant for the NW as there has been a trend of growth in employment in key city regions such as Manchester, Liverpool and Central Lancashire (Preston) which is likely to continue, leading to an increase in rail demand. The NW RUS is a Network Rail document that identifies gaps in the existing network and analyses schemes over a ten-year period that could help to address those gaps. Analysis of WEBs played no part in the selection of the NW RUS schemes. Several of the schemes that are recommended in the RUS are not suitable for WEBs; those that are either provide additional capacity during the peak period (via lengthening of selected trains) or increase accessibility between key CBDs (schemes that increase linespeed or off-peak capacity). Table S 1 shows the WEBs of the schemes that have been assessed. Unless otherwise stated, benefits are Present Value totals over a 60-year appraisal period. Table S 1:

Wider economic benefits in central scenario, ÂŁm PV

Scheme

Peak lengthening Blackpool â&#x20AC;&#x201C; Manchester linespeed Additional platforms Salford Central Chat Moss linespeed Liv-Manc off-peak services (10-year appraisal) Blackpool off-peak service (10-year appraisal) Blackburn - Manchester off-peak (10-year appraisal) Glossop triangle linespeed Through trains to Salford Crescent

Transport benefits 323.3 60.3 22.8 17.3 3.8 3.3 2.6 4.7 18.5

Wider economic benefits 23.3 4.0 2.5 0.6 0.4 0.3 0.3 0.2 0.1

Many of the schemes in Table S 1 are likely to be deliverable within Control Period 4. Others will be developed as part of the forthcoming Manchester Hub Study which will inform investment plans for Control Period 5 and High Level Output Statement 2.

North West Productivity Rail Study Final Report

The main recommendations that arise from this study are as follows:

The highest priority should be to provide increased rail capacity into Manchester by lengthening peak trains – this is the scheme with the highest WEBs. Our assessment, based on the NW RUS analysis of providing 47 additional vehicles, shows that this would provide £23.3m of wider benefits over the appraisal period as a present value.

Further work should be undertaken to study the factors that will affect future rail demand. Our assessment of the WEBs of peak lengthening may be conservative if rail captures a higher share of trips in the future. That seems likely given the constraint on highway capacity and possibility of congestion charging in Manchester. Our sensitivity tests indicate that a comparatively small shift in mode share to rail would lead to a case for further peak lengthening beyond that which is included in the RUS scheme.

Other schemes in the NW RUS that will lead to WEBs are those that increase accessibility between key central business districts (Manchester, Liverpool, Preston and Leeds). The scheme to provide additional platforms at Salford Central also performs well. WEBs are about providing links between high-productivity jobs so there needs to be a focus on connecting the key city regions. However, it is important not to overstate the case for WEBs of those schemes that provide modest time savings.

When looking at future scheme options, contenders for WEBs will be one of two types: -

Those that relieve capacity constraints into growing city centres Those that link key CBDs within the region

Schemes that address capacity constraints will tend to perform better because they provide both a move to more productive jobs and pure agglomeration benefit. Those that increase accessibility between cities within the region are unlikely to have a significant impact on the BCR of the scheme unless they offer a substantial reduction in average generalised costs of travel and have a high rail mode share for those trips. As a result the White Paper scheme to improve journey time between Liverpool and Manchester is likely to be strong in terms of WEBs.

North West Productivity Rail Study Final Report

Introduction

1.1.1

Colin Buchanan (CB) has been commissioned by the Northwest Regional Development Agency (NWDA) to investigate the wider economic benefits (WEBs) of rail schemes in the North West. The study has also been supported by the North West Regional Assembly (NWRA) and Network Rail (NR).

1.1.2

WEBs are playing an increasingly important role in transport appraisal. In 2005 the Department for Transport (DfT) issued guidance (Transport, Wider Economic Benefits, and Impacts on GDP, DfT 2005) outlining a methodology for quantifying and valuing agglomeration benefits – the productivity benefits that arise from undertaking economic activity in a dense area. The link between transport improvements and agglomeration is now well recognised and CB has assessed which of the schemes that were recommended in the North West Route Utilisation Strategy (NW RUS) may offer WEBs. The focus is on passenger rail schemes rather than freight, since it is passenger schemes that are most closely related to agglomeration and several of the freight schemes recommended in the NW RUS are already being funded.

1.1.3

This study has been undertaken with Volterra Consulting. The rest of the report is structured as follows: Chapter 2: Background – summary of relevant information on the NW economy, rail issues and WEBs; Chapter 3: Methodology used for calculating WEBs of NW rail schemes; Chapter 4: Results of the agglomeration modelling and sensitivity tests; Chapter 5: Transport Innovation Fund – how a potential TIF bid for one of the NW schemes would need to be approached; Chapter 6: Costs and deliverability – an assessment of the feasibility of each scheme and any other enabling work that would be required; Chapter 7: Discussion of other NW schemes that could offer WEBs; and Chapter 8: Conclusions.

1.1.4

The Appendices provide more details on some of the assumptions used in the modelling, the employment forecasts available, references used and a glossary of terms.

North West Productivity Rail Study Final Report

Background

2.1

Introduction

2.1.1

The North West is a diverse region, from the National Parks of Cumbria to the hustle and bustle of central Manchester. The concentration of activity in the centre of the region is demonstrated by considering the location of employment, as mapped in Figure 2.1.

2.1.2

Recent years have seen significant growth, with a resurgence of activity in central city areas in particular. This has been driven by the growth of service industries locating in the accessible centres of cities.

2.1.3

Economic policy in the region focuses on the need to support improved productivity, particularly by taking advantage of the growing city regions, and enabling the clustering of activities.

2.1.4

Rail investment has an important role in this mix, since it enables large volumes of people to access central areas. In order to estimate what the value of rail investment is for economic growth we first need to understand the economic prospects of the region and the challenges it faces.

2.1.5

This background section introduces the key issues, while further details of employment forecasts are provided in Appendix 2.

North West Productivity Rail Study Final Report

Figure 2.1:

Employment Density in the North West 2006, Railway lines shown in grey Carlisle Carlisle

Employment Density 2006 Jobs per sq km

Penrith

Workington

Whitehaven

5,000 to 30,500 (22) 1,500 to 5,000 (164) 500 to 1,500 (318) 400 to 500 (58) 300 to 400 (70) 200 to 300 (71) 100 to 200 (82) 0 to 100 (114)

Kendal

Barrow-in-Furness

Lancaster Lancaster

Preston Preston

Bolton

Salford Salford Manchester Manchester Liverpool Liverpool

St. St. Asaph Asaph Chester Chester

N.B. Numbers in brackets within the key denote the total number of Lower Layer Super Output areas that fall within each category.

2.2

Economic policies

2.2.1

The most important document underpinning economic policy for the North West is the Northwest Regional Economic Strategy 2006 (NWDA 2006). It highlights the North Westâ&#x20AC;&#x2122;s output gap relative to the average for England, which is due to lower productivity (particularly in the service sector) and fewer people working per head of population.

North West Productivity Rail Study Final Report

2.2.2

The RES identifies three major drivers for closing the output gap: i) improving productivity and growing the market; ii) growing the size and capability of the workforce; and iii) creating and maintaining the conditions for sustainable growth. A series of actions are listed that are linked to the drivers for growth. Of particular relevance for this study are the following actions: -

2.2.3

Action 54: Capitalise on the strengths and key assets of the cities of Manchester, Liverpool and Preston as key drivers for city regional growth Action 67: Identify and deliver necessary capacity improvements to the Manchester Rail Hub Action 69: Enhance public transport services between Liverpool / Manchester / Central Lancashire / Leeds / Sheffield Action 78: Secure improved public transport links between East Lancashire and employment growth potential in Manchester and Preston Action 80: Deliver the designated strategic regional sites as regional investment sites, knowledge nuclei or intermodal freight terminals Increasing transport capacity to overcome constraints into busy city centres can bring about benefits that are additional to the benefits calculated in a conventional transport appraisal, as can an improvement in links between key central business districts (CBDs). This is explained in more detail later in the report. The actions listed above in the RES are designed to help bring about this process, thereby helping to reduce the NWâ&#x20AC;&#x2122;s output gap.

2.2.4

The output gap is also the key consideration of the Northern Way. The three Northern Regions have produced combined strategies which particularly focus on the need to develop the city regions and to ensure integrated transport between them and to key gateways including ports and airports across the regions.

2.2.5

On a more local level there are now City Region Development programmes for Manchester, Liverpool and Central Lancashire, which include detailed economic strategies and transport priorities.

2.3

Recent employment trends

2.3.1

Employment in the North West has seen some dramatic changes in the past thirty years. Large employment losses until the early 1990s, mainly due to losses in manufacturing, have now been turned around with large gains, particularly in business and public services. The past decade has seen sustained growth in employment.

2.3.2

An examination of employment trends by sector is shown in Appendix 2.

2.3.3

A number of employment forecasts have been prepared for the North West region, and these are also detailed in Appendix 2. These include two sets of forecasts from Experian. The first set (which dates back to 2005) was produced for the baseline to the Regional Economic Strategy and used to inform the Regional Spatial Strategy (which used a combined scenario). A second forecast was produced in May 2008. Additionally there are the TEMPRO planning scenarios produced by the Department for Transport (DfT). At the time that the RUS was produced TEMPRO 4 was being used, although a newer version TEMPRO 5 is now available. All four forecasts are shown here as a comparison.

2.3.4

The forecasts appear to be very pessimistic in comparison with historic trends. Volterra have therefore produced an economic projection based simply on the continuation of historic trends, taking the lower of long term (since 1991) and medium term (since 1998) trends in each district in order to be conservative. This provides an opportunity to examine what would happen if recent economic growth continues, and the role that rail might have in this circumstance.

North West Productivity Rail Study Final Report

2.3.5

Figure 2.2 below compares the employment forecasts at a North West level, alongside the historic employment levels since 1991. The dotted line shows a fit through the long term trend from 1991. Figure 2.2:

Employment in the North West 1991 to 2006, and scaled forecasts to 2025 with a fitted linear trend through the history

3,800,000 3,600,000 3,400,000 3,200,000 3,000,000 2,800,000 2,600,000 2,400,000 2,200,000

ABI/AES History

Volterra Conservative

Experian Combined

Experian 08

TEMPRO 4

TEMPRO 5

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

2,000,000

Linear (ABI/AES History)

Sources: ABI, AES, Rescaled AES, Volterra, TEMPRO 4 and 5, Regeneris Evidence base for the RES and Experianâ&#x20AC;&#x2122;s May 2008 forecasts. Experian and TEMPRO forecasts have been scaled to match 2006 ABI employment levels. The dotted line shows a fit through the long term trend from 1991.

2.3.6

It appears that part of the difference between the Volterra and Experian forecasts may be due to the measurement of the historic employment levels in the region. Experian have their own historic data series of Full Time Equivalent jobs which shows higher employment levels in the early 1990s. The Volterra linear trends use full time employment from ABI and AES sources, which climb from a lower base, and therefore show stronger historic growth and imply that future growth is likely to be higher. The two data series are compared in Figure 2.3.

2.3.7

Experian forecasts, however, are still below the rate of growth that would be implied by a long time linear trend from 1991.

North West Productivity Rail Study Final Report

Figure 2.3:

Employment in the North West 1991 to 2006 for Experian and ONS data sources, Indexed to 2000 values

110 108 106 104 102 100 98 96 94 92

Indexed Experian

Indexed AES and ABI

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

2000 index

Sources: ABI, AES, Rescaled AES, Volterra, and Experianâ&#x20AC;&#x2122;s May 2008 forecasts.

2.3.8

At a local level there has been a range of experiences, with the big cities tending to grow more quickly than the region as a whole as they benefit from the changes in economic structure. Figure 2.4 compares the forecast employment growths by district. The Experian and TEMPRO forecasts do not seem to be as optimistic regarding growth in Manchester, Preston and (particularly) Liverpool as may be expected given recent trends. Local forecasts are shown in the Appendix.

North West Productivity Rail Study Final Report

Figure 2.4:

Forecast growth for Manchester, Liverpool and Preston and each of the North West sub-regions

ABI Base Employment (2005)

Growth from 2005 to 2025 Volterra Conservative

Experian Combined

Experian 2008

TEMPRO 4

TEMPRO 5

Manchester

303,682

23%

11%*

14%

-14%

12%

Liverpool

226,017

21%

1%*

-3%

Preston

92,454

33%

7%*

18%

Cumbria

201,005

26%

-6%

-13%

Lancashire

604,117

15%

-1%

Greater Manchester

1,163,718

15%

11%

10%

Merseyside

539,906

14%

-2%

-1%

Cheshire

479,028

21%

17%

10%

2,987,774

16%

TOTAL North West

*Experian Combined forecasts only available at a sub regional level, district levels assumed equal to sub-region level growth rates

2.4

NW RUS and rail trends

2.4.1

The NW Route Utilisation Strategy is one of a set of RUS documents being produced by Network Rail. The aim of the RUSs is for: “the effective and efficient use and development of the capacity available, consistent with funding that is, or is reasonably likely to become, available during the period of the Route Utilisation Strategy and with the licence holder’s performance of the duty”

2.4.2

The NW RUS covers the period 2007 to 2017. It is worth noting that it does not include the whole of the North West. The area that is focused on in the RUS is broadly as shown in Figure 2.5 below. Manchester is a particularly important city within the geography of the NW RUS, with twelve of the thirteen corridors in the RUS serving either Victoria or Piccadilly station.

North West Productivity Rail Study Final Report

Figure 2.5:

Geography of NW RUS

Source: Network Rail

2.4.3

For many of the potential schemes that are assessed in the RUS, a business case has been produced and therefore the assumptions relating to future demand growth are important.

2.4.4

The version of the RUS that went out to consultation in 2006 contained a ‘reference’ and ‘alternative’ scenario, which forecast growth in passenger demand of approximately 6% and 14% over the ten year period of the RUS. Feedback from stakeholders 1 during the consultation led to those forecasts being revised upwards, since short-term trends seemed to indicate that growth would be higher in the next few years. If this proves to be the case there could be considerable strain on some parts of the rail network in the next few years, given the existing gaps.

2.4.5

Appendix A of the RUS provides useful information regarding the recent growth of rail demand. Figure 2.6 below shows the percentage change in rail trips between 1999-00 and 2004-05. The data for this table was sourced from the LENNON database.

Stakeholders included Northern Rail, TransPennine Express, English Welsh and Scottish Railway, Freightliner, the Association of Train Operating Companies, Greater Manchester PTE, Merseytravel and the Department for Transport.

North West Productivity Rail Study Final Report

Figure 2.6:

Percentage change in rail trips between 1999-00 and 2004-05

Source: NW RUS, Appendix A

2.4.6

Figure 2.6 shows that overall growth for the NW was 13% over the five-year period, equivalent to annual growth of approximately 2.5%. Trips to and from locations such as Greater Manchester had higher growth than this, for instance trips from Merseyside to Greater Manchester increased by 39% and trips within Greater Manchester increased by 24%. Trips between stations in the rest of the study area remained flat.

2.4.7

A direct comparison with national trends was not possible as national data from the same source was not available. However, data published by the DfT (Transport Statistics Great Britain 2007) indicates that overall trips in the UK increased by approximately 12% over the same period, slightly lower than the average for the NW and well below the average for destinations such as Greater Manchester and Merseyside.

2.5

Likely future trends

2.5.1

How strong is growth in city centre employment and the associated rail demand likely to be? Are recent trends likely to continue, or is it more likely that growth will slow significantly as per the Experian and TEMPRO forecasts?

2.5.2

Rail demand in the region seems likely to continue to increase due to a combination of ‘push’ and ‘pull’ factors. The former relates to factors that may lead to people switching modes from e.g. car to rail; the latter refers to increasing employment in city centres and the likely increase in rail demand that will result.

2.5.3

Evidence from a report 2 by the Centre for Sustainable Urban and Regional Futures (SURF, 2006) suggests that pull factors will continue to be strong. The report identifies Manchester, Liverpool, Preston and Chester as four key nodes in the NW (and a fifth node – Leeds – with important links to the NW), pointing out that Manchester and Leeds are: 2

Strengthening the Evidence Base of Key Economic and Spatial Strategies in the North West

North West Productivity Rail Study Final Report

“amongst the best examples in the country…of extended urban areas that contain the density and mix of physical, institutional and cultural assets and the level of connectivity that are necessary for creating and sustaining high level, knowledge-rich economic activity. The Liverpool city-region shares a number of these characteristics, whilst the areas centred upon Chester and Preston, in different ways, exhibit substantial strengths, albeit on a smaller scale” 2.5.4

The conclusion is that the five nodes will grow in importance in the future, and that economic and spatial strategies for the NW should focus on these nodes and the connections between them.

2.5.5

Another issue drawn out by SURF is the increased propensity of professional workers to commute long distances. Figure 2.7 is taken from the SURF report and shows the ratio of commuting in-flows to out-flows. A ratio greater than 1.0 means that there is a net in-flow of workers. Figure 2.7:

Ratio of commuting in-flows to out-flows

Source: SURF

2.5.6

Figure 2.7 shows that commuting in-flows of professionals are high for cities such as Manchester, Preston and Liverpool. If these cities are to continue to attract workers into high-skilled jobs, it therefore seems likely that the number of commuting trips will increase significantly, with rail accounting for at least some of this growth.

2.5.7

The tendency towards increased city centre employment is also reflected in the demand for office space, which has increased significantly in Manchester recently – by 20% in 2007 according to a report by Colliers CRE 3 , with the amount of occupied Grade A office space increasing by 55% over the past two years. Similarly, the amount of office space let out in Liverpool’s central business district increased by 17% in 2007 4 .

2.5.8

It is also worth noting the significance of Action 80 within the NW RES and the aim to deliver the strategic regional sites. Several of the sites that are described in the NWDA’s 3

http://www.choregus.co.uk/servicedoffice-blog/manchester-office-space-take-up-on-the-up-940.html http://www.ldpbusiness.co.uk/commercial-property-liverpool/commercial-property-news/2008/02/26/17increase-in-liverpool-s-lettings-in-2007-96026-20528153/ 4

North West Productivity Rail Study Final Report

Strategic Regional Sites Annual Monitoring Report 2006 are within the key city regions in the North West, including Central Park (Manchester) and Liverpool University Edge. These will support high-skilled jobs in knowledge industries and are likely to lead to an increase in commuting trips. Any additions or revisions to the list of strategic regional sites is likely to see further sites of this nature located within cities. 2.5.9

2.5.10

2.5.11

Push factors that could see a switch in demand from car to public transport relate, in particular, to increasing costs of motoring such as: increases in petrol prices increases in car parking charges highway congestion potential congestion charge to enter Manchester These factors could have a particularly large impact in the North West, since car accounts for approximately 65% of all commuting trips (according to 2001 census data) whereas London, for instance, already has a very high public transport mode share. Another factor potentially leading to more rail trips in the North West is Manchester Airport’s recently published Masterplan to 2030. This recognises that: “Surface access…plays a crucial role in providing economic connectivity with the local areas, the Manchester City Region and the wider North West”

2.5.12

The Masterplan aims to increase rail’s mode share for trips to and from the Airport to 15% by 2015 and possibly 25% by 2030, with a long-term target that 40% of passengers and staff will be using public transport.

2.5.13

As of 2006, rail’s mode share for Manchester Airport trips was 7.4% according to a 5 survey by the Civil Aviation Authority . To achieve even the shorter-term aims would mean a significant additional number of rail trips.

2.6

Background on WEBs

2.6.1

Initial work aimed at capturing the wider benefits of rail schemes stemmed from the realisation that some of the benefits of such rail schemes were not being picked up in conventional transport appraisal methodology. This was indicated by the fact that three London Underground / Docklands Light Railway lines had been built since the 1960s despite having a forecast Benefit/Cost Ratio (BCR) of less than 1:1.

2.6.2

To understand more about the wider benefits that were not being included in appraisals, it is necessary to consider why cities exist. A key reason is that the productivity benefits of undertaking economic activity in high-density areas outweigh the costs of other factors such as paying for the additional transport. Even though businesses have to pay higher rents, wages etc. when they locate in a city centre, they still find it worthwhile to do so.

2.6.3

Why do such productivity benefits come about? Four specific examples can be identified of why clustering enhances productivity. It leads to: 5

A larger, deeper, labour market – providing employers with more choice of skills and more competition for jobs; More competing and complementary businesses and institutions – providing additional pressure for innovation and efficiency and enabling greater specialisation amongst support services; A larger, deeper, client market – London’s Finance and Business Services (FBS) sector for instance is a global player attracting business from around the world; and CAA Passenger Survey Report 2006, http://www.caa.co.uk/docs/81/2006CAAPaxSurveyReport.pdf

North West Productivity Rail Study Final Report

2.6.4

2.6.5

Greater potential for contact and knowledge sharing – both informally via social interaction and more formally via conferences. A process was developed whereby the productivity – or agglomeration – benefits could be quantified and valued. This was incorporated and updated in the DfT guidance note referred to in paragraph 1.1.2. The two key wider benefits are the move to more productive jobs and pure agglomeration; these are described below.

Move to more productive jobs (M2MPJ) 2.6.6

This benefit relates to the way in which a new transport scheme can relieve constraints on demand for travel into areas (typically city centres) where productivity is higher. If some workers are able to access more productive jobs who previously could not due to a transport constraint, then the total output that they produce will be higher when they move to the new job.

Pure agglomeration 2.6.7

In situations where there is a constraint on employment within a city – for instance, crowding off of demand on peak period rail services due to insufficient capacity – a lifting of that constraint will enable more workers to find employment in the central area of the city, where productivity tends to be highest.

2.6.8

In itself, that move to more productive jobs is captured as M2MPJ (see above). However, it also brings about a further ‘agglomeration’ benefit.

2.6.9

The reason for this is that moving more workers into the same area will deepen the existing cluster of employment. As explained above, clustering of employment leads to a number of productivity benefits (knowledge spillover effects, wider / deeper labour market etc). Because of these reasons, the further clustering of employment causes the existing city centre workers to become more productive. This latter effect is the agglomeration benefit.

2.6.10

The definition of ‘density’ is an important issue. When work on WEBs was initially developed, it was simply defined as employment density – so if the number of city centre workers increased by 10%, then the density of the city centre was increased by 10%.

2.6.11

Current guidance is based on ‘effective density’. As well as employment impacts, it also takes into account accessibility by including generalised costs in the calculation of density. This means that, even if the distribution of employment remains unchanged, an increase in effective density for a particular area could come about if it became easier for jobs elsewhere to access that area. Pure agglomeration benefits can therefore also arise from transport schemes that lead to an increase in accessibility between certain areas.

2.7

Summary

2.7.1

A key part of achieving the vision set out in the NW Regional Economic Strategy will be to increase average productivity levels. This will be best achieved by continuing the recent trend of increased city centre employment.

2.7.2

Although there is inevitably uncertainty regarding future trends, it seems likely that employment growth will continue to be strong in cities such as Manchester and Liverpool and that commuting by car will become more expensive, time consuming and unpleasant. This is also likely to mean that recent strong growth in rail demand will continue. The right

North West Productivity Rail Study Final Report

type of transport scheme can help to support this growth and lead to agglomeration benefits and the associated boost to productivity levels.

North West Productivity Rail Study Final Report

Methodology

3.1

Schemes to be assessed

3.1.1

Our starting point was to make an assessment of which of the recommended schemes from Figure 5.2 of the NW RUS could and should be taken forward for a more detailed assessment of the wider benefits. Table 3.1 lists those schemes that have been assessed in more detail in the rest of the report, and Table 3.2 provides a justification for excluding the remaining RUS schemes. Some of the excluded schemes are discussed in more detail in section 7. Table 3.1:

Scheme Peak lengthening

Additional platforms Salford Central Through trains to Salford Crescent Chat Moss linespeed 6 Liverpool-Manchester offpeak services Glossop triangle linespeed Blackpool off-peak services Line speed improvement Manchester - Blackpool Blackburn-Manchester off-peak services 3.1.2

RUS schemes included in CB modelling Impacts Increases capacity of peak trains along a number of corridors into Manchester and Liverpool (including Bolton, Calder Valley, Chat Moss, CLC, Hadfield, Marple and Stalybridge). The RUS analysis assumes that the associated necessary platform lengthening is also undertaken. Enables passengers from Liverpool to alight at Salford Central rather than continuing to Manchester Victoria Improves connectivity between Leeds and Salford Faster journeys between Liverpool and Manchester Increase from one to two trains per hour between Liverpool and Manchester on the Chat Moss line Slight improvement in performance of trains on Hadfield corridor Increase from 3 to 4tph in the off-peak, thus improving generalised journey time between Preston and Manchester Faster journeys between Preston and Manchester Increase from one to two trains per hour between Blackburn and Manchester in the off-peak

Wider Benefit provided Move to more productive jobs and pure agglomeration

Pure agglomeration

Pure agglomeration Pure agglomeration Pure agglomeration

Pure agglomeration Pure agglomeration

The Blackburn-Manchester off-peak scheme is not amongst the recommended schemes in Figure 5.2 of the NW RUS; however, NWDA requested that CB investigate this as a special case.

The scheme assessed here is in line with that outlined in the NW RUS, although the time saving could be higher as per the Government White Paper (which would lead to the journey time for Lime Street â&#x20AC;&#x201C; Oxford Road being reduced to 30 minutes). The latter scheme would therefore lead to higher WEBs.

North West Productivity Rail Study Final Report

Table 3.2:

RUS schemes excluded from CB modelling

Scheme

Likely impact

Airport station third platform Bootle branch W10 Olive Mount chord

Improved performance Enable larger freight containers to be accommodated Increased freight capacity Increased freight capacity

Rainhill headway Remodel Buxton East Manchester gauge East Manchester Route Availability

CLC interchange with Metrolink at White City or Cornbrook

Increase freight capacity and improve performance Increase freight capacity and improve performance Increase freight capacity and improve performance New station with Metrolink interchange, providing better links with Salford Quays More trains calling at Eccles, and improved interchange with Metrolink

Eccles integration with Metrolink Develop Newton-le-Willows as an interchange Stalybridge interchange Edgeley - Hazel Grove line speed increase Extra off peak service Stalybridge corridor

Salford Crescent remodelling

Improved station and car parking facilities, improves journey quality Improved journey time through the junction Improved journey time Increase off-peak frequency to 3tph Does not directly provide WEBs, but could act as an enabler for other schemes (see chapter 7) Improved performance

Bolton additional platform

Guide Bridge interchange

Develop the station with suitable car parking and station facilities to use as a park and ride site Improved journey time

Chat Moss electrification

Reason for excluding from WEBs modelling Scheme is already going ahead Scheme is already going ahead Scheme is already going ahead This study is focusing on benefits to passenger services rather than freight Does not impact on links between key CBDs in the NW Largely a freight scheme rather than affecting passenger services Largely a freight scheme rather than affecting passenger services This scheme could potentially offer wider benefits, but at present there is insufficient transport data to make a further assessment This scheme could potentially offer wider benefits, but at present there is insufficient transport data to make a further assessment Does not impact on links between key CBDs in the NW Does not impact on links between key CBDs in the NW Does not impact on links between key CBDs in the NW Does not impact on links between key CBDs in the NW Does not directly provide WEBs

Insufficient scheme information available Does not impact on links between key CBDs in the NW Insufficient scheme information available

3.1.3

We therefore have a shortlist of schemes that have been assessed for WEBs. The method for undertaking the assessment is described in section 3.2.

3.2

Agglomeration modelling

3.2.1

Separate spreadsheet models were developed to calculate the benefits of the move to more productive jobs (M2MPJ) and pure agglomeration. As indicated in Table 3.1, it is only the combined peak lengthening scheme that has an M2MPJ benefit as it is the only one that increases capacity on busy peak trains. However, all of the schemes do have a pure agglomeration impact.

North West Productivity Rail Study Final Report

Move to more productive jobs 3.2.2

The M2MPJ benefit is about overcoming crowding constraints that will enable people to take jobs in central business districts where they will be more productive, thus increasing output. A key requirement is therefore to know what the level of crowding will be, with and without the proposed rail scheme.

3.2.3

In order to do this, we used the same base data (for year 2005/06) on lineloads that was used in the NW RUS. This shows, for each train, the number of passengers boarding and alighting at each station.

3.2.4

Future demand was then obtained by applying the appropriate employment growth rates for demand at each station. Several different growth scenarios can be used, as outlined in chapter 2. Our central scenario uses the TEMPRO 5 forecasts, as these are most likely to be accepted by the DfT. However, as noted elsewhere in the report, there may well be a case for arguing that growth will be higher than forecast by TEMPRO.

3.2.5

Future demand was calculated for 2009 (the assumed opening year of the scheme), 2015 and 2025.

3.2.6

Data on the capacity of the train was also available from Network Rail, and therefore crowding levels for each train at each station were calculated, for the Do Minimum and Do Something scenarios.

3.2.7

Once crowding levels have been calculated, the extent to which trips are deterred by crowding needs to be estimated, and therefore how much ‘crowding off’ is relieved when capacity is increased.

3.2.8

For our core estimate of WEBs, the approach has been to apply a ‘crowding deterrence function’ (CDF). This is represented in Figure 3.1. Figure 3.1:

Crowding Deterrence Function

North West Productivity Rail Study Final Report

3.2.9

The CDF says that, up to a level of crowding of 100%, trips are not deterred and all potential growth is achieved – there is no crowding off. When crowding exceeds 100%, there begins to be crowding off of additional trips, such that when crowding reaches 150% all trips are deterred.

3.2.10

We can therefore use the CDF to determine the number of trips that are crowded off in both the Do Minimum and Do Something scenarios. Fewer trips are crowded off in the Do Something, because of the extra capacity which reduces crowding levels to some extent.

3.2.11

The difference between crowding off in the Do Minimum and Do Something allows us, once trip patterns have been taken into account, to determine how many workers are able to move to more productive jobs in Manchester and Liverpool due to the crowding constraint being relieved.

3.2.12

To value the M2MPJ, it is necessary to know the difference in average productivity levels between Manchester / Liverpool and the areas where those workers would have been located if the crowding constraint had not been lifted 7 .

3.2.13

Data on output per worker by district is not readily available. As a result, we have used data on earnings from the Annual Survey of Hourly Earnings (ASHE), and applied an uplift to convert it into output per worker. The uplift is derived by taking the ratio between total output and total earnings in the North West.

3.2.14

More on the specific productivity differentials can be found in the Appendix; however, Table 3.3 gives some examples of the values that have been used. Table 3.3:

Selection of NW productivity differentials

District Manchester Liverpool Salford Preston Bolton Blackburn with Darwen Wigan Blackpool Carlisle Burnley

Implied output per head 2005 £43,729 £35,660 £34,610 £34,595 £33,078 £32,865 £32,020 £30,261 £28,798 £28,692

Relative to Manchester 0% -18% -21% -21% -24% -25% -27% -31% -34% -34%

3.2.15

The implication is that someone moving from a job in Bolton to one in central Manchester would, on average, produce additional output worth just over £10,000 a year.

3.2.16

Once this exercise has been undertaken for all the jobs moving from the various districts, the total amount of additional output is obtained. In line with DfT guidance, only 30% of this total can be claimed as a welfare benefit within the transport appraisal.

3.2.17

The process is summarised in Figure 3.2.

Our analysis assumes that, if they are deterred from travelling to Manchester or Liverpool, workers will instead work in their ‘home’ district.

North West Productivity Rail Study Final Report

Figure 3.2:

Process for calculating M2MPJ benefits

North West Productivity Rail Study Final Report

3.2.18

The benefit is calculated in 2009, 2015 and 2025 with straight-line growth assumed for years in between. After 2025, there is assumed to be no further employment growth, so the annual benefit is constant (except for the increase that comes about from annual productivity growth).

Pure agglomeration 3.2.19

As pure agglomeration is related to changes in effective density – determined by changes in employment and generalised costs of travel – typically a detailed transport network model would be used to model the impact of each scheme and this would feed into the pure agglomeration calculation.

3.2.20

However, that detailed level of modelling was not available for this study; we have therefore set up our own simplified spreadsheet model.

3.2.21

The basis of the model is that the most important links are those between key central business districts (CBDs). We have therefore included the following cities in the model: Manchester 8 Liverpool Preston Leeds (not in the NW but a key link with Manchester) Blackburn (not perceived as a key CBD, but needs to be included in order to assess the Blackburn – Manchester off-peak scheme) The first element of effective density is employment. Although we know the level of employment in each city, it is important to know how much of that is accounted for by the CBD. It is the CBD jobs that will benefit, in terms of agglomeration, by linking with CBDs in other cities. -

3.2.22

3.2.23

To determine the size of the CBDs, our approach was to map employment by middle layer super output area (MSOA) using ONS data. A series of minimum employment densities was tested, in order to calculate which level of density mapped most sensibly as a CBD (the most sensible level being one that leads to a cluster of super output areas included in the CBD, rather than lots of different super output areas scattered around the city).

3.2.24

It was concluded that super output areas with an employment density greater than 5,000 9 10 employees per square kilometre should be included as part of the CBD . The map in Figure 3.3 represents the areas that are included, with super output areas marked in red forming the CBDs in Leeds, Manchester, Liverpool and Preston.

For the two Salford schemes, the model is adjusted to take Salford into account. It should be noted that other parts of the NW do also have MSOAs with employment density of this magnitude (e.g. Chester, Wigan and Lancaster), but they are not included as key CBDs within the model used for this study. 10 The map marks up MSOAs with a density over 8,000 employees per sq km rather than 5,000 as this prevents Chester, Wigan etc from being marked on the map 9

North West Productivity Rail Study Final Report

Figure 3.3:

Middle layer super output areas included within the analysis

North West Productivity Rail Study Final Report

3.2.25

The assumptions register in Appendix 1 shows the proportion of total employment that is accounted for by the CBD in each case.

3.2.26

The second element of effective density is the generalised cost of travel. This needs to be determined for trips between each of the CBDs. A base matrix was therefore produced, expressing generalised costs in terms of time, and taking into account the following factors: -

walk time from the origin CBD to the origin station, and from the destination station to the destination CBD wait time at the station in-train time fare (converted into time by applying a value of time)

3.2.27

More information on the generalised costs is provided in Appendix 1.

3.2.28

The base employment and generalised costs are then used to calculate the Do Minimum effective density. For each CBD this takes into account employment in other CBDs and the generalised cost of travelling to each one. Our model also includes ‘own-zone’ employment and generalised cost – so, for instance, the effective density of Manchester takes into account CBD employment in Manchester as well as Leeds, Liverpool, Preston and Blackburn.

3.2.29

Do Something effective density is determined by: -

3.2.30

Do Something CBD employment: the only scheme where this differs from the Do Minimum is the peak lengthening one, as this is the only scheme that has a M2MPJ impact. Do Something generalised costs: only the in-vehicle time element of generalised costs varies in the Do Minimum. Information on this was available from Network Rail’s MOIRA modelling of the schemes. The next step is to calculate the percentage change in effective density for each CBD in each scheme. The agglomeration elasticity is then used to determine the percentage change in workers’ productivity as a result of the change in effective density.

3.2.31

Care needs to be taken when applying the increase in productivity, as it would not be valid to apply it to all workers. As described above, it is only CBD workers who should benefit from the increase in effective density. A further adjustment is that it is only workers who use rail to access the other CBDs that should benefit. An assumption has been made about rail share of trips and this is discussed in more detail as a sensitivity test in chapter 4.

3.2.32

Unlike the M2MPJ, all of the increase in output as a result of the pure agglomeration can be included as a welfare benefit. The overall process for calculating the pure agglomeration is summarised in Figure 3.4.

North West Productivity Rail Study Final Report

Figure 3.4:

Process for calculating pure agglomeration benefit

North West Productivity Rail Study Final Report

Results

4.1

Central scenario

4.1.1

A large number of parameters within the modelling work can be altered, and the results of doing this are covered in the sensitivity tests, with a description of various parameters provided in Appendix 1.

4.1.2

Table 4.1 shows the assumptions that have been used in the ‘central’ scenario. Table 4.1:

Assumptions used in agglomeration modelling

Parameter / variable Employment growth Crowding off Productivity growth Agglomeration elasticity CBD employment

Rail share of trips

4.1.3

Value in central scenario TEMPRO 5 growth rates CDF function is used, with lower limit 100% and upper limit 150% 1.13% a year 0.125 CBDs are based on employment density over 5,000 employees per square kilometre Assume 2001 levels throughout

Volterra and CB calcs using ONS middle layer super output area data 2001 census journey to work data

Table 4.2 shows the wider economic benefits of each scheme and compares this with the conventional transport benefits that were presented in the NW RUS. Unless otherwise stated, all values are presented as a Present Value over 60 years, discounted to the base year 2002. Table 4.2:

Wider economic benefits in central scenario, £m PV

Scheme

Transport benefits

Peak lengthening Blackpool – Manchester linespeed Additional platforms Salford Central Chat Moss linespeed Liv-Manc off-peak services (10-year appraisal) Blackpool off-peak service (10-year appraisal) Blackburn - Manchester off-peak (10-year appraisal) Glossop triangle linespeed Through trains to Salford Crescent

4.1.4

Source DfT CB assumptions, discussions at Steering Group meeting Volterra estimate of long term trends Graham 2006

323.3 60.3 22.8 17.3 3.8 3.3 2.6 4.7 18.5

Wider economic benefits 23.3 4.0 2.5 0.6 0.4 0.3 0.3 0.2 0.1

Table 4.2 shows that the peak lengthening scheme has the highest WEBs. This is unsurprising as it is the largest project and has an impact both on pure agglomeration and M2MPJ.

North West Productivity Rail Study Final Report

4.1.5

For consistency with the RUS, the WEBs of the three off-peak service schemes have been calculated over ten years rather than 60. A ten-year appraisal was used in the RUS as those schemes are not infrastructure ones where a longer appraisal period would be appropriate in line with DfT guidance.

4.1.6

Of the corridors that are covered by the peak lengthening scheme, by far the strongest performers are Bolton, Calder Valley and Stalybridge. These corridors account for almost 90% of the move to more productive jobs element of the WEBs for that scheme. An important reason for this is the extent to which additional capacity is to be provided on trains on these corridors. The peak lengthening scheme involves the provision of 47 additional vehicles in total. That total is made up of 21 trains being allocated one additional vehicle, and 13 trains being allocated two additional vehicles. The corridors listed above account for eight of the 13 trains that receive two additional vehicles. This provides a more substantial boost to reducing overcrowding and hence higher WEBs.

4.1.7

This indicates that there may be a case for further peak lengthening beyond that included in the RUS. This is discussed in more detail in section 4.3.

4.2

Sensitivity tests

4.2.1

A series of sensitivity tests have been undertaken in order to understand the impact that they have on the results. These are outlined below.

Demand growth 4.2.2

The results in section 4.1 above are based on the forecast employment growth rates from TEMPRO 5. Two other scenarios have been tested: -

4.2.3

Volterra scenario, based on long term employment trends since 1991 ‘Experian’ scenario, based on the forecasts that were produced for the NW Regional Economic Strategy 2006 Table 4.3 shows the results if those growth scenarios are used instead of TEMPRO 5. Table 4.3:

Wider economic benefits with different growth scenarios, £m PV

Scheme

4.2.4

WEBs in central scenario (TEMPRO 5) 23.3 4.0 2.5 0.6 0.4 0.3

WEBs in Volterra scenario

WEBs in Experian scenario

55.3 4.8 2.9 0.7 0.4 0.3

26.1 4.3 2.8 0.7 0.4 0.3

0.3 0.2 0.1

The peak lengthening scheme has much higher WEBs in the Volterra scenario. This is driven by the higher Manchester employment in the Volterra forecasts – an overall increase of 27% between 2001 and 2025, compared with 16% and 18% in the TEMPRO 5 and Experian forecasts respectively.

North West Productivity Rail Study Final Report

4.2.5

The results for the other schemes are broadly similar. The M2MPJ is driven by the growth between Do Minimum and Do Something employment, but the pure agglomeration benefit is related to total employment which is much more stable.

Crowding function 4.2.6

The central scenario assumes that the crowding deterrence function begins to take effect when crowding reaches 100%, and all growth is deterred when crowding reaches 150%. In reality the limits of the CDF could be different, so a variety of combinations of lower and upper limit have been tested.

4.2.7

A different way to approach the issue of crowding off would be to follow the methodology suggested in the Passenger Demand Forecasting Handbook (PDFH). This suggests that a crowding penalty should be calculated for each train based on the level of crowding, and an elasticity then applied to determine the extent to which demand is crowded off. A crowding off factor is then applied to all passengers on the train, regardless of whether they join the train at a point where crowding is very low.

4.2.8

It therefore seems likely that this method overstates the extent of crowding off; nonetheless, a test based on this approach has also been carried out. The results of all the crowding tests are shown in Table 4.4. Table 4.4:

Scheme

Wider economic benefits in crowding sensitivity tests, £m PV WEBs in central scenario

Peak lengthening Blackpool – Manchester linespeed Additional platforms Salford Central Chat Moss linespeed Liv-Manc off-peak services (10-year appraisal) Blackpool off-peak service (10-year appraisal) Blackburn - Manchester off-peak (10year appraisal) Glossop triangle linespeed Through trains to Salford Crescent

Lower limit 100%, upper limit 180% 16.8 4.0 2.5 0.6

Lower limit 100%, upper limit 200% 14.6 4.0 2.5 0.6

Lower limit 80%, upper limit 120% 55.9 4.0 2.5 0.6

Lower limit 80%, upper limit 150% 37.6 4.0 2.5 0.6

PDFH method

23.3 4.0 2.5 0.6

Lower limit 100%, upper limit 120% 38.9 4.0 2.5 0.6

0.4

0.3

0.3 0.2 0.1

392.4 4.0 2.5 0.6

4.2.9

Changing the crowding function only affects the M2MPJ benefit, and therefore it is only the results for the peak lengthening scheme that change with these tests. Table 4.4 indicates that the WEBs for peak lengthening could be more than twice as high if the crowding function is ‘tightened’ such that the lower limit becomes 80% and the upper limit 120%.

4.2.10

The result for the ‘PDFH method’ test (the £392.4m reported in Table 4.4) probably represents an unrealistic maximum. In reality, the demand factors that it produces should be different because i) the elasticity is based on in-vehicle time rather than total generalised time and ii) it seems unrealistic that demand will be crowded off even on parts of the route where crowding is low enough for all passengers to be seated.

North West Productivity Rail Study Final Report

Productivity growth 4.2.11

The central scenario assumes productivity growth of 1.13% a year, based on long term trends. If more recent trends are used instead, this value would be 0.86%. Table 4.5 shows the effect of changing the productivity assumption. Table 4.5:

Wider economic benefits in productivity sensitivity test, ÂŁm PV

Scheme

Peak lengthening Blackpool â&#x20AC;&#x201C; Manchester linespeed Additional platforms Salford Central Chat Moss linespeed Liv-Manc off-peak services (10-year appraisal) Blackburn - Manchester off-peak (10-year appraisal) Blackpool off-peak service (10-year appraisal) Glossop triangle linespeed Through trains to Salford Crescent

4.2.12

WEBs in central scenario (productivity of 1.13% a year) 23.3 4.0 2.5 0.6 0.4

WEBs with lower productivity (0.86% a year)

0.3 0.3 0.2 0.1

21.4 3.7 2.3 0.6 0.4

As would be expected, the reduced productivity growth does have a downward impact on the WEBs, although not as significant as the effect of changing some of the other parameters.

Size of Central Business District 4.2.13

As outlined above, the central case is based on the assumption that the CBD is made up of employment in areas where employment density is greater than 5,000 employees per square kilometre.

4.2.14

Two further tests have been undertaken, whereby the CBD definition changes to i) greater than 8,000 employees per square kilometre; ii) 10,000 employees per square kilometre. Table 4.6 shows the results for these tests.

North West Productivity Rail Study Final Report

Table 4.6:

Wider economic benefits in employment density sensitivity tests, £m PV

Scheme

WEBs in central scenario

4.2.15

23.3 4.0 2.5 0.6 0.4 0.3

WEBs if CBD > 8k employees per sq km 23.0 3.8 2.5 0.6 0.4 0.3

WEBs if CBD > 10k employees per sq km 23.0 3.8 0.0 0.6 0.4 0.3

0.3 0.2 0.1

0.0 0.2 0.1

0.0 0.2 0.0

The results for most of the schemes are broadly unchanged if a different definition is used for the CBD. The benefits becomes slightly lower as the density limit is made higher, since fewer employees are affected. The two schemes where the effect is larger are the Blackburn – Manchester off-peak scheme and the two Salford schemes, because Blackburn does not have any super output areas with a density greater than 8,000 employees per square kilometre and Salford does not have any super output areas with a density greater than 10,000 employees per square kilometre, meaning that the size of the CBD (and therefore the benefit) is zero for the sensitivity tests where the density limit is set higher.

Elasticity 4.2.16

The agglomeration elasticity is an important part of the pure agglomeration calculation. It is used to relate changes in effective density to changes in productivity.

4.2.17

The central scenario uses an agglomeration elasticity of 0.125 – this is an average for all industries derived in Wider economic benefits of transport improvements: link between agglomeration and productivity (Graham 2006). This value means that an increase in effective density of 10% will lead to the productivity of affected workers increasing by 1.25%.

4.2.18

More recent DfT work indicates that an appropriate value for financial services in the NW may be 0.116. If an overall average is used, the elasticity may be as low as 0.036. The effect of using both of these values has been tested, with the results shown in Table 4.7.

North West Productivity Rail Study Final Report

Table 4.7:

Wider economic benefits in elasticity sensitivity tests, ÂŁm PV

Scheme

4.2.19

WEBs in central scenario 23.3 4.0 2.5 0.6 0.4 0.3

WEBs if elasticity = 0.116 22.2 3.7 2.3 0.6 0.4 0.3

WEBs if elasticity = 0.036 12.4 1.2 0.7 0.2 0.1 0.1

0.3 0.2 0.1

0.1 0.1 0.0

The results are directly proportional to the elasticity 11 , so changing the elasticity from 0.125 to 0.036 leads to a 70% reduction of benefits.

Rail share of trips 4.2.20

The central case assumes that rail retains the same share of trips between districts throughout the course of the appraisal; the shares are based on 2001 census data.

4.2.21

In reality, given that there is unlikely to be any significant expansion of highway capacity, it is more likely that rail will have a higher share of future growth of trips. This will be particularly true if the planned road pricing scheme as part of the Manchester TIF bid comes to fruition.

4.2.22

More on the assumptions regarding base rail shares can be found in Appendix 1. The sensitivity tests adjust the rail share so that it is either 2%, 5% or 10% higher than the 2001 proportion. The results of those tests are shown in Table 4.8.

With the exception of the peak lengthening scheme, which includes an element of M2MPJ as well as pure agglomeration.

North West Productivity Rail Study Final Report

Table 4.8:

Wider economic benefits in rail share sensitivity test, £m PV

Scheme

WEBs in central scenario

23.3 4.0 2.5 0.6

Rail proportion of trips 2% higher 62.0 4.5 2.8 0.7

Rail proportion of trips 5% higher 107.8 5.3 3.3 0.8

Rail proportion of trips 10% higher 115.3 6.5 4.1 1.0

0.4

0.5

0.6

0.3

0.4

0.5

0.3 0.2 0.1

0.4 0.3 0.1

0.5 0.3 0.2

4.2.23

For the peak lengthening scheme it can be seen that the incremental benefit when the proportion of trips is 10% higher as opposed to 5% higher is much smaller than when the share moves from 2% to 5%. This is because demand is so high in the ‘10% higher’ scenario that the additional capacity does not do enough to ease crowding off.

4.3

Summary

4.3.1

The results in our central scenario show that several of the NW RUS schemes provide WEBs, with the peak lengthening scheme offering over £20m of additional welfare benefits to the conventional transport appraisal.

4.3.2

The results are sensitive to changes to parameters within the models. In particular, the benefits of the peak lengthening scheme could be much higher depending on the assumptions relating to i) the crowding function and ii) rail share of trips. It seems particularly likely that rail will have a higher share of trips in the future, given that there is unlikely to be a substantial increase in highway capacity over the next few years and that large parts of the system already have high levels of congestion. DfT forecasts from 2007 suggest that average highway delays will increase 12 by 22% in the North West by 2015 (relative to 2003 levels), with average vehicle speeds decreasing by 3%.

4.3.3

It is certainly the case that the peak lengthening scheme is likely to have the highest WEBs as it plays an important role in addressing crowding constraints that prevent workers from accessing jobs in key CBDs. Is there a case for going further and providing even more additional capacity on those trains?

4.3.4

For the peak lengthening scheme, we tested the impact of adding one or two additional vehicles to each train, further to the 47 additional vehicles that were recommended in the RUS. Table 4.9 below shows the impact on the WEBs of the scheme for a range of scenarios.

http://www.dft.gov.uk/foi/responses/2007/february07/regionaltrafficforecast/regionaltrafficinformation. N.B. this does not take into account the potential impact of TIF schemes.

North West Productivity Rail Study Final Report

Table 4.9:

Wider economic benefits with further peak lengthening, £m PV

Central scenario Crowding function 100% - 120% Crowding function 100% - 180% Crowding function 100% - 200% Crowding function 80 – 120% Crowding function 80 – 150% Rail share 2% higher Rail share 5% higher Rail share 10% higher

4.3.5

With the 47 additional vehicles as per the RUS 23.3 38.9 16.8 14.6 55.9 37.6 62.0 107.8 115.3

With 1 extra vehicle on each affected train 23.3 38.9 16.8 14.6 59.4 39.6 72.5 125.6 179.6

With 2 extra vehicles on each affected train 23.3 38.9 16.8 14.6 59.4 39.6 72.7 135.7 202.4

These results indicate that in some circumstances it may be worth providing even more additional peak capacity beyond the recommendations in the RUS. This is particularly true of the cases where rail’s share of trips increases in the future. That would put a substantial strain on capacity, and additional rolling stock would be required to capture the potential wider benefits. For instance, by adding one additional vehicle on each train beyond the RUS recommendations, an additional £10m of WEBs could be realised if rail has a 2% higher share of trips. If rail’s share of trips increases by 10%, the WEBs could be as much as £65m higher with one additional vehicle per train, or £85m higher with two additional vehicles per train. This would have to be balanced against the cost implications, such as the platform lengthening that would need to be implemented to accommodate the longer trains.

North West Productivity Rail Study Final Report

Transport Innovation Fund

5.1.1

Guidance on the TIF 13 (DfT 2006) was first published in 2006. The fund was set up to support regional, inter-regional and possibly local schemes that are beneficial to national productivity. At that time a stream of funding from 2008-09 to 2014-15 was announced. Schemes were able to apply for either ‘congestion’ or ‘productivity’ TIF. The former is mainly about road pricing schemes whereas the P-TIF is applicable to a wider range of schemes. The TIF guidance itself says: “Examples of schemes...having the potential to deliver significant productivity gains at the national level include improved road or rail access to ports and airports of national significance which are important for international trade and promote competitiveness, and improved inter-urban connections which have strong mobility and business cost reduction benefits”

5.1.2

Schemes that have been awarded P-TIF funding include the following: -

5.1.3

Gauge and capacity enhancements on the Gospel Oak – Barking route in North London (£18.5m, announced in July 2007); Gauge and capacity enhancements on the Peterborough – Nuneaton freight route (£80m, October 2007); Gauge enhancement on the Southampton – Nuneaton rail corridor (£43m, October 2007); Capacity improvement on the link between the Humber Ports and the East Coast Mainline (£8m, October 2007); and Reinstallation of the Olive Mount Chord and works on the branch to Liverpool docks (£1.7m, October 2007). At present it is not clear whether P-TIF is going to continue to be an available source of funding. Nonetheless, it does seem likely that the government will continue to support schemes that can demonstrate that they provide productivity benefits.

5.1.4

The list above shows that it has principally been freight schemes that have been successful with P-TIF. However, in theory any scheme that can demonstrate a good transport case, coupled with wider benefits as measured using the DfT guidance, should be in a strong position to bid for government funding be it TIF or another source.

5.1.5

Typically a submission document when applying for TIF funding would be expected to provide the following information: -

Introduction: outlining the objectives of the scheme and problems that it overcomes; Policy context: an assessment of which local and national government policies the scheme addresses; Scheme options: if appropriate, a demonstration that a number of options have been considered and justification for taking forward the selected option, detailing any necessary enabling works and overall scheme costs; Appraisal framework: an outline of the methodology used to calculate benefits and costs in the appraisal, and a summary of the key assumptions used; Transport appraisal results: a summary of the scheme benefits and costs with resulting BCR; Productivity benefits: a summary of the wider benefits that the scheme provides (this may be quantitative, qualitative or both);

Transport Innovation Fund: Guidance January 2006

North West Productivity Rail Study Final Report

5.1.6

Combined appraisal results and sensitivity tests; Timetable for delivery and consideration of risks to the scheme; Funding summary: a demonstration that other sources have funding have been considered and, where appropriate, how much of the scheme costs will be funded by the alternative source; and Commercial arrangements. Schemes would almost certainly need to be at a more advanced stage of development than they are in the RUS documents in order to be successful with a TIF bid. The RUS has highlighted a number of schemes that are recommended to be investigated in more detail. The cost and business case would need to be developed further. Similarly, the case for showing that the scheme provides productivity benefits could be made stronger by developing a full network model that could be used as an input to the agglomeration calculations.

North West Productivity Rail Study Final Report

Costs and deliverability

6.1

RUS Costings

6.1.1

The costings for schemes in the NW RUS are mostly Network Rail in-house estimates to GRIP level 0 or 1, although the Salford Crescent remodelling scheme has been costed to GRIP 2. At these levels, it is reasonable to expect that the costs reflect known unit costs for track and signalling components. It is also reasonable to expect that the likely costs for standard engineering solutions for changes to station platforms, bridges and other structures will be based on recent similar examples. However, taking rail engineering projects from the initial pre-feasibility assessment through option selection to design and implementation is a costly, intensive and time consuming process which can often result in significant changes to scheme costs.

6.1.2

CB has not assessed in detail the build up of costs assumed in the NW RUS. We have discussed the costing approach with NR and are satisfied that standard methodologies have been applied. We recognise that the nature of the RUS process and cost of assessing options, feasibility testing and identifying preferred solutions demands an approach that is fit for purpose and allows the benefits of schemes to be assessed in order to allow the most effective solutions to be prioritised for further development.

6.1.3

We are abundantly aware that the forthcoming Manchester Hub Study will have a significant impact on scheme development and implementation. While a number of the schemes reviewed here fall within the HLOS and will see commencement of implementation in Control Period 4 (CP4) between 2009 and 2014, any major infrastructure changes will fall under the Manchester Hub Study and will not be delivered before CP5.

6.1.4

Table 6.1 summarises envisaged timescales for selected schemes and the estimated costs.

North West Productivity Rail Study Final Report

Table 6.1:

Scheme Estimations

Scheme

Estimated Time Scale for Scheme

Peak lengthening combined scheme

Additional platforms at Salford Central Salford Crescent remodelling Through trains to Salford Crescent Glossop triangle line speed Additional off-peak service to Blackpool Line speed improvement Chat Moss

Liverpool – Manchester additional off-peak services Blackpool – Manchester linespeed Blackburn – Manchester offpeak services

HLOS commits some peak lengthening in CP4 i.e. in the next 2 years. At the route and service level, timescale depends on extent of services to be lengthened as that in turn determines the number of platforms, depots and stabling points which require physical work. Given recent rapid growth in demand, this scheme is the highest priority. A phased approach could deliver some lengthened services within 2 years, with the aim of 2 further phases to be completed by 2012. 2-3 yrs

Estimated Cost (if available) for Scheme HLOS identifies the need and provides funding for additional vehicles. Northern Rail, NR and DfT work underway to allocate the committed additional vehicles to meet demand growth.

£5-10m

2-3 yrs

£15-20m

3 yrs, post Salford Crescent remodelling

Opex approx £250-500k pa

2-3 yrs 3 years, post Salford Crescent remodelling

£1-3m Opex approx £2m pa

Potential for implementation in CP5

Cost dependent on preferred solution, including whether the line is to be electrified and whether speed is to be 90 or 100mph. Approx £15-20m, but could be up to £90m with electrification. Opex approx £3m pa

Likely to be subsumed within Manchester Hub project assessment but could be delivered in 3-5 years Likely to be addressed in Manchester Hub project assessment Dependent on Salford Crescent remodelling and prioritisation within Manchester Hub Study. CP5

£3m Opex up to £2m pa

6.2

Scheme Deliverability

6.2.1

The RUS process involves consultation with stakeholders from an early stage. The involvement of Local Authorities and Passenger Transport Executives as well as rail industry bodies including freight and passenger operators is designed to ensure that schemes included in the RUS process have been considered before being put forward. Essentially, before consideration in the RUS context, the vast majority of schemes will have been assessed at least in outline for the benefits that they are likely to provide and their deliverability. Many of the schemes considered through this process will have been promoted previously, in some cases over many years.

6.2.2

The NW RUS presents a number of recommended schemes, all of which are considered to be deliverable by 2017. Although there will be particular issues relating to political support, the environment, planning consents and conservation none are expected to be

North West Productivity Rail Study Final Report

exceptional. Some schemes will have more local political support than others. The NR Strategic Business Plan (SBP) indicates which schemes can be funded in CP4, i.e. before 2014, but may not have included every scheme considered a local priority. Schemes not included in the SBP or RUS may have been excluded due to long lead times, rather than poor value for money or feasibility. The Manchester Hub study will develop a longer-term view of what rail infrastructure investment is required in and around Manchester. This is intended to report in 2011 so as to inform HLOS2 and CP5 investment plans. 6.2.3

Key issues which constrain deliverability, aside from availability of funding, can be summarised as follows:

6.3

Network impact – can the existing network accommodate the new service without suffering deterioration in functionality and performance? The rail network is national and complex. A change to service pattern or network performance at one location can affect train paths and performance over a long distance. Passenger capacity – does the scheme create overcrowding on trains and at stations? Disruptive engineering possessions – can the scheme be implemented with minimal disruption to the existing rail service? Network Rail is moving towards a seven day operational railway meaning shorter possessions and therefore less access. Interaction with NR maintenance and renewals programme – incremental adjustments to signalling may, in many cases, be technically challenging if not undertaken while signalling renewal is taking place. Planning processes – is a Transport and Works Order required before the scheme can be implemented? The process is costly and time consuming, but not a deterrent to developing major schemes with significant benefits. The key issue here is the timescale impact rather than absolute deliverability.

NW RUS Schemes Peak Train Lengthening Combined Scheme

6.3.1

6.3.2

Lengthening existing services is technically and operationally feasible in that available rolling stock types allow coupling to lengthen trains. Significant constraints could apply however: platform lengths across the network capacity at terminating stations depot and maintenance capacity. The former can be resolved at many locations by extending the platforms to accommodate the longest train formation, although this is not always straightforward. Some stations may be constrained due to having been built between two road overbridges, which prevent the platform being extended. Land ownership adjacent to the railway can also be an obstacle. Location of signals may in some cases mean that, even if there is sufficient land available to lengthen the platform, the need to relocate signals could have technical and cost implications which impair the business case.

6.3.3

A debate has taken place over a number of years regarding the feasibility of overlength trains serving short platforms. The safety culture in the UK rail industry is a significant obstacle, but Selective Door Opening on newer types of rolling stock may allow longer trains to serve shorter platforms, subject to safety approval.

6.3.4

Lengthening platforms or providing additional platforms at terminating points, in particular Manchester Piccadilly, Manchester Victoria and Liverpool Lime Street, is a major constraint. Platforms which will accommodate three trains of three vehicles will not hold

North West Productivity Rail Study Final Report

three trains of four cars. A further issue to consider is having a complex set of services with varying train lengths; this can occasionally result in overlength trains being signalled into platforms which are not long enough, causing delay and disruption. 6.3.5

The NW RUS assumes that Northern Rail will deploy 47 additional vehicles daily in the North West from around 2012. Exactly how the additional capacity is deployed will be significant. To gain most effective use of the additional capacity, it may be appropriate to lengthen short distance local services rather than longer distance services, as this is likely to enable the longer trains to make more than one effective peak trip.

6.3.6

Increasing the size of the fleet may require remodelling of maintenance depots. If the current Newton Heath depot, for example, is unable to stable more than the current fleet requirement, it will be necessary to develop a maintenance and stabling strategy which ensures that trains are stabled at remote locations which may need investment in additional secure facilities. Alternatively, additional depot infrastructure will be required.

6.3.7

Overall this scheme performs well in terms of WEBs and should be given the highest priority of the schemes assessed. It is the only NW RUS scheme that leads to an increase in rail capacity in the peak period and therefore relieves crowding for commuters travelling into Manchester.

Additional platforms at Salford Central 6.3.8

There is an opportunity to provide two additional platforms on the Liverpool (Chat Moss) lines with the option of a new curve to connect Victoria to Piccadilly at grade, as identified in work produced for the Northern Way. This latter scheme was primarily aimed at removing TPE services from Manchester Piccadilly throat to resolve junction conflicts. Salford Central is adjacent to the Spinningfields employment area so enhancing access by rail at Salford Central opens up the employment market to passengers from Liverpool and points along the Chat Moss Lines.

6.3.9

Although this scheme is not strong in terms of meeting government targets to increase capacity and improve reliability and safety, there may still be a case for considering it given the WEBs that it is likely to provide.

Through trains to Salford Crescent 6.3.10

If a bay platform were built at Salford Crescent, this would allow a current Caldervale service to run through instead of terminating at Manchester Victoria, with a consequential easing of capacity at Manchester Victoria. This would have a performance benefit to NR and Northern Rail. It is likely that this scheme could be delivered with minimal disruptive possessions.

6.3.11

The scheme has the lowest WEBs out of all those that were assessed and would need to be justified on other grounds.

Glossop triangle linespeed 6.3.12

The current twenty minute service interval on the Glossop / Hadfield line is difficult to timetable without causing conflicts with the fifteen minute interval TPE service at Guide Bridge and Piccadilly. Resolving this by moving to a fifteen minute interval to Glossop and Hadfield has performance benefits.

6.3.13

The existing infrastructure and method of operation on the Hadfield Line, especially in the vicinity of the Dinting triangle, makes a fifteen minute pattern of services impossible. Northern and Network Rail believe that there may well be a solution involving changes to

North West Productivity Rail Study Final Report

both methods of operation and infrastructure. For example alterations to the speeds and signalling in the Dinting area that would allow a fifteen minute pattern for peak services on the Hadfield line. 6.3.14

The results in chapter 4 indicate that this scheme provides low WEBs; ÂŁ0.2m over 60 years. This is because the average time savings are comparatively low.

Additional off-peak service to Blackpool 6.3.15

This service should be assessed for operational and performance impacts throughout. Capacity on the route between Salford Central and Preston may not be a major concern, but interaction with services in Manchester and at Preston will need careful assessment, including performance modelling.

6.3.16

Table 4.2 shows that the WEBs for this scheme are relatively modest (although a 10-year appraisal period has been used) and it is unlikely that it should be a high priority in terms of WEBs.

Linespeed improvement Chat Moss 6.3.17

Improving journey times between Liverpool and Manchester was identified in the HLOS as a high priority. Achieving a 30 minute non-stop journey time from Liverpool Lime Street to Manchester Oxford Road via the Chat Moss Line would generate much higher WEBs than the Chat Moss linespeed scheme that has been assessed for the results in Chapter 4 since the latter offers a comparatively small reduction in average generalised journey time.

Liverpool-Manchester additional off-peak services 6.3.18

A thorough assessment of capacity and performance of the infrastructure and rolling stock options will be required to establish the case for additional off peak services. It is unlikely that additional services outside the peak will require investment in infrastructure or rolling stock.

6.3.19

One major issue affecting the ability to operate additional services is constrained capacity between Manchester Piccadilly platforms 13/14 and Oxford Road. While not included in the NW RUS, a scheme to re-route Freightliner trains to and from Trafford Park would ease this capacity constraint. A possible solution could be to reinstate the disused link from Glazebrook via Culcheth to the Chat Moss Line. It would enable trains from Trafford Park to access the West Coast Main Line at Earlstown as well as gaining rapid access to the key Trans Pennine freight corridor between Liverpool, Manchester and the North East. Further assessment of this option should be included within the remit for the Manchester Hub Study. Liverpool and Manchester are two of the key city regions in the North West so providing improved accessibility between the two is likely to be beneficial.

Blackpool â&#x20AC;&#x201C; Manchester linespeed 6.3.20

The proposed scheme to improve linespeeds between Blackpool and Manchester in the NW RUS is comprised of several elements. Our WEBs assessment is based on the part of the scheme that would raise the overall speed to 90mph between Manchester and Euxton Junction. This is a strong scheme that is likely to be developed further; it improves accessibility between Manchester and Preston and hence has relatively high WEBs.

North West Productivity Rail Study Final Report

Blackburn – Manchester off-peak 6.3.21

There is currently a service running from Clitheroe to Manchester via Blackburn that consists of one train into Manchester in the morning peak and one train out of Manchester in the evening peak. Adding off-peak services will increase business to business accessibility and deliver WEBs, albeit on a modest scale. It should be noted that one of the factors driving the WEB results is the rail share of trips for journeys. The source used for this is census journey to work data which puts the Blackburn – Manchester rail share at 25%. However, the census data is largely a peak period value; the off-peak rail share is likely to be lower than this 14 and hence the WEBs would also be lower.

6.3.22

There would also be an increased performance risk if extra trains were introduced as they go over the single line Bolton to Blackburn section. Having just the two trains per day means that the timetable has time to recover however additional trains could increase reactionary delay throughout the day.

This is an issue that could also affect the WEBs of some of the other schemes, although as indicated in Table A 1 Blackburn – Manchester has the highest rail share from the peak data used.

North West Productivity Rail Study Final Report

Other schemes

7.1

Other NW RUS schemes

7.1.1

Many of the schemes recommended in the NW RUS have been excluded from this study because it is felt that they are unlikely to offer significant WEBs. However as outlined in Table 3.2, there are two schemes that may lead to WEBs but have not been assessed due to a lack of available information at present. These are as follows:

7.1.2

Chat Moss Option 7: Eccles interchange with Metrolink CLC Option 2: Cornbrook or White City new station and interchange The Eccles interchange scheme would have two main impacts: -

7.1.3

improve Eccles as an interchange with better DDA access, facilities and signage more trains would stop at Eccles This would lead to improved access to Salford Quays, which is becoming an increasingly important employment area. There would therefore be an increase in effective density for Salford and corresponding increase in productivity.

7.1.4

An increase in effective density for Liverpool may also be expected, although any calculations would need to be careful when taking into account i) the number of trips affected; ii) the negative impact on journey times for through passengers travelling to Manchester.

7.1.5

The second Metrolink scheme would create an interchange between trains on the CLC corridor and Metrolink services. The two sites considered are i) adjacent to the Metrolink station at Cornbrook; ii) further west at White City.

7.1.6

In terms of WEBs, the Cornbrook option would probably be stronger as it offers better connections â&#x20AC;&#x201C; providing a link with Salford Quays, Altrincham and (after the implementation of phase 3B of Metrolink) Manchester Airport without passengers having to travel in to central Manchester and back out again. However, it is considered that construction would be easier for the White City option.

7.1.7

There may potentially be slightly longer journey times for some trains, and this would need to be taken into account in a calculation of potential WEBs. It is recommended in the RUS that business case work for this scheme could be developed once further empirical evidence is available (e.g. from the Eccles interchange scheme).

7.1.8

Another scheme recommended in the RUS is to remodel Salford Crescent. It may be possible to relocate the station to Frederick Road to provide four longer platforms. The existing island platform is too short for the six-car Transpennine trains which currently call there. There is a case for investment of ÂŁ25m at Salford Crescent to capture significant performance benefits as well as the benefits of access to employment. The disbenefit to the University of relocating the station away from the campus is a significant stakeholder concern. Other options will also be considered that better address those concerns.

7.1.9

While the remodelling of Salford Crescent station is a significant scheme, it appears to be a technically sound project. The possession plan and alternative service arrangements during construction will need careful staging to ensure that disruption is kept to a minimum. The scheme has not been assessed for WEBs; however, it will act as an enabler for other schemes including the Blackpool off-peak service and through trains to Salford Crescent.

North West Productivity Rail Study Final Report

7.2

Stakeholder discussions

7.2.1

As part of the study, CB met with some of the NW RUS stakeholders to seek their views on the relevant rail issues. Some of the points that arose were as follows:

Metrolink is becoming increasingly important within Manchester; the ‘central’ area of the city is expanding beyond the Manchester district itself and so people are increasingly making multi-leg journeys to get to work rather than being able to walk to work from a central station. This also helps to highlight why the Metrolink interchange schemes outlined above may be useful.

A high priority for Manchester is to lengthen peak trains and enable the associated platform lengthening, since there is crowding on many parts of the Greater Manchester network and hence additional trips are either being made by road (thus adding to traffic congestion) or suppressed altogether. Providing four trains per hour between Manchester & Leeds and Manchester & Liverpool as per the Network Rail Business Plan is viewed as very important. This is considered to be a significant constraint on development in the NW and would therefore have a major impact on the economy of North England.

7.2.2

Off-peak capacity was also highlighted as an important issue for Liverpool, in particular on the City Lines. In particular the Liverpool – Wigan route via St Helen’s Central is very busy. The 4tph schemes would be very likely to offer WEBs. They would lead to both an increase in capacity and accessibility (by reducing generalised journey times) between key CBDs. We would recommend that WEBs for these schemes are explored in the future.

7.2.3

Off-peak capacity schemes can also provide WEBs, as shown in the results for this report. However it is important to focus on those schemes that provide a link between key CBDs. Improving the Liverpool – Preston link would provide WEBs and there could also be a case for improving accessibility to Wigan.

7.3

Future RUS documents

7.3.1

Our brief was to assess the schemes recommended in the NW RUS; however, it is recognised that there are a number of other proposed rail schemes in the North West that could also lead to wider economic benefits. The NW RUS identifies additional schemes that will need to be revisited at ‘an appropriate defined point in the future’, and the RUSs for Merseyside / Lancashire & Cumbria / West Coast Main Line / Yorkshire / Wales will have further relevant schemes.

Merseyside RUS 7.3.2

Work is currently ongoing on the Merseyside RUS. It will cover the following routes: -

7.3.3

New Brighton, West Kirby, Chester and Ellesmere Port to Liverpool James Street via Liverpool Central (Wirral Line) Hunts Cross to Southport, Ormskirk and Kirkby via Liverpool Central (Northern Line) Liverpool James Street to Liverpool Central (stock interchange line) Aintree to Bootle Junction (North Mersey branch) The RUS will review two issues addressed by other RUSs, mainly to ensure consistency within the Merseyside RUS: -

peak crowding on the City Lines out of Liverpool Lime Street; and

North West Productivity Rail Study Final Report

7.3.4

connectivity between Liverpool and Preston. Improving connectivity between Liverpool and Preston would be likely to be a strong contender for WEBs due to the increase in productivity arising from increased effective density. Overcoming peak crowding out of Lime Street may also provide WEBs, although more would need to be known about destinations of affected trains and the extent to which it would be valid to claim a benefit in terms of a move to more productive jobs.

Lancashire and Cumbria RUS 7.3.5

The Lancashire and Cumbria RUS is currently at consultation stage. Although many of the schemes are likely to be about social deprivation-related gaps rather than schemes that will lead to agglomeration, there are still some schemes that will address Liverpool – Preston connectivity that could be suitable for WEBs.

Chat Moss electrification 7.3.6

Only 40 per cent of the UK rail network is electrified. Tough emission targets for diesel engines will come into force in 2012 and this, along with concerns over the future cost of fuel, may provide a stronger business case for further electrification. The DfT have said recently that they see great potential for a rolling programme of electrification 15 , recognising that electric trains can offer additional carrying capacity and improved passenger comfort compared to diesels. In this context, they have set up a cross-industry working group to re-examine the business case for electrification and agree priority schemes.

7.3.7

In 2005, Merseytravel commissioned a pre-feasibility study on electrification between Liverpool and Manchester 16 . The study found that a number of routes would be feasible, with connections between Edge Hill and Earlestown and Newton-le-Willows to Castlefield junction (i.e. the Chat Moss line) offering the strongest potential advantages. This is particularly given the forthcoming expiry of local train operator leases for diesel multiple unit stock. The study estimates that electrification could cost around £2m per double track kilometre with the Chat Moss route costing around £87m – taking into account that some short sections of the route are already electrified.

7.3.8

Electrification of the Chat Moss route would enable faster journey times to be achieved and would allow alternative train service patterns to be developed, including linking Liverpool to the West Coast Main Line northbound at Earlestown. Where electrification has been delivered on local networks, such as Leeds North West and Birmingham Cross City, additional demand has been generated beyond standard industry forecasts.

7.3.9

The scheme is likely to be feasible in engineering terms. Achieving a 90 or 100mph linespeed throughout will require detailed surveys and assessment of whole life costs to establish a robust business case in addition to cost and feasibility. This scheme is likely to be assessed within the Manchester Hub Study.

7.3.10

It is worth noting however that some stakeholders feel that it is more important to have a properly co-ordinated timetable with a high level of reliability.

7.3.11

Nonetheless, the faster journey times would result in improved accessibility between Liverpool and Manchester, and hence provide WEBs as per the Chat Moss linespeed 15

Speech by Secretary of State for Transport Ruth Kelly at the Transport Times conference ‘Action on Climate Change: A Role for Transport’, transcript available at: http://www.dft.gov.uk/press/speechesstatements/speeches/lowcarboneconomy 16 Pre Feasibility Study: 25kV AC Overhead Line Electrification of Routes Between Liverpool and Manchester, Parsons Brinckerhoff Ltd

North West Productivity Rail Study Final Report

improvement scheme in the NW RUS. It may therefore be worth exploring the scheme in more detail.

North West Productivity Rail Study Final Report

Conclusions

8.1.1

This study has investigated the potential WEBs of rail schemes in North West England. The link between rail investment and economic performance is important within UK transport appraisal and with an increasing trend towards employment in city centres, the North West will be well placed to benefit from those wider benefits.

8.1.2

We have assessed which of the schemes in the NW RUS are likely to provide WEBs if the Department for Transport guidance is applied. There are likely to be more schemes in forthcoming documents (such as the Merseyside RUS and Lancashire & Cumbria RUS, and looking further ahead the Manchester Hub Study) that could offer WEBs.

8.1.3

Our results suggest that several of the NW RUS schemes could provide wider benefits in addition to the conventional transport benefits. The results could be conservative for a number of reasons, in particular: -

8.1.4 8.1.5

Rail share of trips is likely to grow in the future given the levels of highway congestion experienced in the NW. Our central case uses the TEMPRO 5 employment forecasts, which show very low growth for Liverpool, contradicting expectations of a trend towards higher employment in city centres such as Manchester and Liverpool. The sensitivity tests described in chapter 4 show the impact on the benefits of allowing for these changes. The recommendations that arise from this study are as follows:

When looking at future scheme options, contenders for WEBs will be one of two types: -

Those that relieve capacity constraints into growing city centres Those that link key CBDs within the region

Schemes that address capacity constraints will tend to perform better because they provide both a move to more productive jobs and pure agglomeration benefit.

North West Productivity Rail Study Final Report

Those that increase accessibility between cities within the region are unlikely to have a significant impact on the BCR of the scheme unless they offer a substantial reduction in average generalised costs of travel and have a high rail mode share for those trips. As a result the White Paper scheme to improve journey time between Liverpool and Manchester is likely to be strong in terms of WEBs.

North West Productivity Rail Study Final Report

Appendix 1 – Assumptions register Table A 1:

Assumptions

Assumption Employment growth Crowding function

Productivity growth Discount rate Discounting base year Productivity levels Agglomeration elasticity Journey time savings from RUS schemes Scheme opening year CBD employment as % of total

Rail % of trips

Value

Source

TEMPRO 5 forecasts used Lower limit = 100% Upper limit = 150%

DfT CB assumptions, discussions at Steering Group meeting suggested this assumption was reasonable Volterra estimate of long term trends WebTAG

1.13% a year 3.5% a year for first 30 years, 3.0% thereafter 2002 See separate table below 0.125 See separate table below 2009/10 Manchester district: 52% Liverpool: 44% Leeds: 38% Preston: 37% Blackburn: 28% Examples include:

WebTAG Annual Survey of Hourly Earnings (ONS) Graham 2006 MOIRA modelling from Network Rail NW RUS Volterra and CB calcs

2001 census journey to work data

Manchester – Liverpool: 16% Liverpool – Manchester: 15% Preston – Manchester: 18% Leeds – Manchester: 18% Blackburn – Manchester: 25%

Table A 2 shows the productivity levels that were derived for the NW districts. A value is also provided for Leeds and Birmingham by using the same method, to act as a comparison with major cities elsewhere in the UK.

North West Productivity Rail Study Final Report

Table A 2:

Base output per head assumptions

District Allerdale Barrow-in-Furness Birmingham Blackburn with Darwen Blackpool Bolton Burnley Bury Carlisle Chorley Congleton Copeland Crewe and Nantwich Eden Ellesmere Port and Neston Fylde Halton Hyndburn Knowsley Lancaster Leeds Liverpool Macclesfield Manchester Oldham Pendle Preston Rochdale Rossendale Salford Sefton South Lakeland South Ribble St Helens Stockport Tameside Trafford Vale Royal Warrington West Lancashire Wigan Wirral Wyre

Implied output per head 2005 £28,892 £31,427 £39,538 £32,865 £30,261 £33,078 £28,692 £31,927 £28,798 £29,215 £32,048 £43,046 £34,266 £31,087 £42,425 £44,872 £38,628 £32,598 £37,669 £36,636 £41,468 £35,660 £44,887 £43,729 £30,533 £29,060 £34,595 £32,745 £26,568 £34,610 £31,519 £30,801 £34,242 £32,976 £35,940 £30,479 £39,991 £36,641 £38,322 £37,442 £32,020 £31,212 £27,259

Figure A 1 shows the base generalised costs that are used to calculate effective density. This is expressed as a generalised journey time (in minutes). It takes into account walk time to / from the CBD at each end of the journey, the in-vehicle time and fare. The matrix changes in the Do Something

North West Productivity Rail Study Final Report

when a new scheme is introduced, eg the Chat Moss linespeed improvement reduces the Manchester â&#x20AC;&#x201C; Liverpool generalised journey time and this then impacts on effective density. Figure A 1:

From:

Base generalised journey time

Manchester Liverpool Manchester 22 187 Liverpool 187 20 Preston 171 186 Leeds 291 377 Blackburn 188 244

To: Preston 171 186 11 300 84

Leeds 291 377 300 25 225

Blackburn 188 244 84 225 11

North West Productivity Rail Study Final Report

Appendix 2 â&#x20AC;&#x201C; Employment forecasts

North West Rail Productivity Study Employment Forecasts

May 2008

Volterra Consulting Ltd

Contents Employment forecasts for the North West

Introduction .............................................................................................................3

Available Employment Forecasts ......................................................................... 4

Comparison of Forecasts at a Northwest Level ................................................. 5

Comparison of forecasts at a more local level .................................................... 8

Cumbria Forecasts.................................................................................................10

Forecasts by Sector ...............................................................................................11

Conclusions ............................................................................................................14

March 2008

Employment forecasts for the North West 1

Introduction

In order to estimate the likely benefits of investing in rail in the North West we need to understand how demand for trips is likely to grow into the future. Clearly there are a number of interacting pressures that will impact on the growth: • The success of industries in the North West and their requirements for extra employees; • Whether growth occurs in out of town business parks or City Centre developments; • Where workers choose to live in the region; • Changes in modal share between rail and road, whether passengers start to shift to rail away from car. One of the strongest available starting points is to examine the history of employment in the area and to look for forecasts of how this employment might change into the future. Given the uncertainty that is present in all economic forecasting, it is desirable to make use of a range of possible forecasts to explore a range of possible futures. From a policy point of view it is also very strongly desirable to use forecasts which have been used in other planning documents to ensure consistency and comprehensibility. We have therefore searched for a range of forecasts to present within this work: A. Experian Forecasts, developed for the Regional Economic Strategy (RES) and used in the Regional Spatial Strategy (RSS); B. Experian May 2008 forecasts, which were released by the NWDA as this report was being finalised; C. Tempro Forecasts, as used in the Route Utilitisation Strategy (RUS) and the North West Regional Planning Assessment for the Railway; D. Our own projections based on local historical employment trends. These sources are discussed and compared in this note.

March 2008

Available Employment Forecasts

There are a number of different employment forecasts which are available for the North West and which have been used in planning documents, and ones which Volterra can produce specifically for this analysis. A. Experian Forecasts for the North West Experian produced a set of three employment forecasts that were used in the evidence base for reviewing the Regional Economic Strategy (RES): Longer term trends; Recent Employment Success; and Regional Productivity Transformation. While the RES does not include any employment forecasts, the Regional Spatial Strategy (RSS) did use these forecasts. It used a ‘combined scenario’ of values from the Recent Employment Success scenario for Cumbria, and used values from the Regional Productivity Transformation scenario for all other areas. This combined scenario is therefore the most compatible with regional economic policy documents. The Experian forecasts were included as an appendix to the Regeneris baseline report however they were only presented at a NUTS2 (sub regional) level. Since district level forecasts are needed in this analysis, assumptions about the distribution of growth through the sub regions are needed for these forecasts to be used. The most transparent assumption is that all districts will grow at the same rate, with growth therefore being distributed between boroughs dependent on their current employment levels. This assumption is weak, since it will not capture any redistribution of growth towards more central areas if this is happening, but it is a useful and transparent starting point. B. Experian May 2008 Forecasts As this report was being finalised, new forecasts were produced by Experian for the North West Development Agency. These are available at a district level, and include the historic data series of employment used by Experian. C. TEMPRO Forecasts Tempro forecasts are produced by the Department of Transport for planning purposes. There are now two sets available. TEMPRO 4, which dates from 2002, and uses trend based assumptions, and TEMPRO 5, developed in 2006 which uses ‘policy based’ forecasts. The North West Regional Planning Assessment for the Railway and the Route Utilisation Study (RUS) used the TEMPRO 4 forecasts as a starting point for their demand forecasts. TEMPRO 4 is therefore the most compatible with past rail planning documents.

March 2008

TEMPRO 4 and TEMPRO 5 data are both available at a district level. D. Volterra Forecasts The recent employment history in the North West indicates that employment is actually growing significantly faster than that predicted by either the TEMPRO or Experian forecasts. There is therefore a strong possibility that employment growth will surpass that in either of the ‘economic policy’ or ‘rail planning’ estimates. This would have considerable implications for the use of the rail network in the North West, and on the returns from investment which would be available for new rail infrastructure. Volterra can provide productivity trend based forecasts for the North West, which would show what would happen if trends over the past 15 years were to continue. The advantage of these forecasts is that they allow us to examine what could happen, and provide a believable higher estimate for this analysis. They also allow us to incorporate evidence from the past few years which was not available at the time the other forecasts were produced. They can be produced at a district level. We would recommend using a ‘conservative scenario’ which would choose the more conservative out of medium and long term trends for each district.

Comparison of Forecasts at a Northwest Level

We start by comparing the history of employment in the Northwest with the available forecasts and a fitted linear trend through the history. In Figure 3.1 the TEMPRO and Experian forecasts have been scaled so that in 2006 they are in line with ABI employment estimates.

March 2008

Figure 3.1 Employment in the Northwest 1991 to 2006, and scaled forecasts to 2025 with a fitted linear through the history 3,800,000 3,600,000 3,400,000 3,200,000 3,000,000 2,800,000 2,600,000 2,400,000 2,200,000

ABI/AES History Experian 08 Linear (ABI/AES History)

Volterra Conservative TEMPRO 4

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

2,000,000

Experian Combined TEMPRO 5

Sources: ABI, AES, Rescaled AES, Volterra, Tempro 4 and 5, and Regenis Evidence base for the RES, and Experian May 2008

The history of employment in the North West tells a striking story. After low growth in the early 1990â&#x20AC;&#x2122;s rapid growth has broadly continued until the latest available data. If growth were to continue in line with this history, as indicated by a simple linear fit to the data, we would see much fastest growth than that indicated by the published forecasts. The combined Experian forecast and both TEMPRO editions see ongoing, but modest, employment gains. Experian is higher than both TEMPRO values, with the more recent TEMPRO 5 above the TEMPRO 4 values. The conservative Volterra scenario is in between the published numbers and the linear fit. For each district, this scenario takes the more conservative of a long term fit in productivity trends from 1991 and a medium term fit from 1998. The Volterra scenario therefore provides an indication of the range of growth that could be experienced in the region.

March 2008

Table 3.1

Employment forecasts for the Northwest, 2005 to 2025 Volterra Conservative

Experian Combined

Experian May 2008

TEMPRO 4

TEMPRO 5

2005 Employment

2,987,800*

2,796,000

3,376,100

3,052,100

3,148,700

2025 Employment

3,478,500

2,981,000

3,529,400

3,207,300

3,304,700

16%

Growth

Sources: *ABI, Volterra, Regeneris evidence base for the RES (for Experian), TEMPRO 4 and 5

An examination of the historic data provided by Experian, alongside their May 2008 forecasts indicates that some of the reason for the difference between the forecasts is due to the different historic estimates. Experian estimate a â&#x20AC;&#x2DC;Full Time Equivalentâ&#x20AC;&#x2122; data series, while the Volterra analysis is based on Full Time employment data from the Annual Business Inquiry (ABI) and the Annual Employment Series (AES). The two data series show quite different levels in the early 1990s. These are compared in Figure 3.2. The two series are shown as an index of their 2000 prices. This is to enable an easier comparison. Figure 3.2 Employment in the North West 1991 to 2006 for Experian and ONS data sources, Indexed to 2000 values 110 108 106 104 102 100 98 96 94 92

Indexed Experian

Indexed AES and ABI

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

2000 index

Sources: ABI, AES, Rescaled AES, Volterra, and Experian May 2008

A linear trend through the Experian history falls between the Volterra Conservative trend and the Experian May 08 forecast.

March 2008

Comparison of forecasts at a more local level

We now show the employment forecasts at a more detailed level, for each of the NUTS2 sub regions and also for Preston, Manchester and Liverpool districts. A word of caution is needed when looking at the estimates for the Experian Combined district level forecasts. Because we do not have access to their district level projections, we have assumed that each district has the same growth rate as the sub region they are in. This means that the estimate we present may be higher, or lower, than the actual forecast they produced. The Experian May 2008 forecasts were provided at a district level, so this caution does not apply there. Table 4.1 Forecast growth for Manchester, Liverpool and Preston and each of the Northwest sub-regions. ABI Base Employment (2005)

Growth from 2005 to 2025 Volterra Conservative

Experian Combined

Experian 2008

TEMPRO 4

TEMPRO 5

Manchester

303,682

23%

11%*

14%

-14%

12%

Liverpool

226,017

21%

1%*

-3%

Preston

92,454

33%

7%*

18%

Cumbria

201,005

26%

-6%

-13%

Lancashire

604,117

15%

-1%

Greater Manchester

1,163,718

15%

11%

10%

Merseyside

539,906

14%

-2%

-1%

Cheshire

479,028

21%

17%

10%

2,987,774

16%

TOTAL North West

*Assumed equal to sub-region level growth rates More locally then, the five sets of forecasts again tell very different stories. TEMPRO 4 forecasts significant decline in both Manchester and Liverpool, while the Experian forecasts and TEMPRO 5 see growth in Manchester and stagnation in Liverpool. The trend based Volterra scenario is much more optimistic about growth prospects for all three major cities. Clearly then there is a great deal of uncertainty over what to expect in the coming years. In order to explore the trends we show the history of employment in Liverpool, Manchester and Preston and the range of forecasts available for each of these. For each,

March 2008

the Volterra Conservative forecast uses the long term trend since it was lower than medium term fits. Figure 4.1

Employment in Manchester 1991 to 2006, and scaled forecasts to 2025

400,000 380,000 360,000 340,000 320,000 300,000 280,000 260,000 240,000 220,000

History

Figure 4.2

Volterra Conservative

Experian Combined

Experian 2008

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

200,000

TEMPRO 4

Employment in Liverpool 1991 to 2006, and scaled forecasts to 2025

290,000

270,000

250,000

230,000

210,000

190,000

170,000

History Experian 2008

March 2008

Volterra Conservative TEMPRO 4

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

150,000

Experian Combined TEMPRO 5

Figure 4.3

Employment in Preston 1991 to 2006, and scaled forecasts to 2025

130,000

120,000

110,000

100,000

90,000

80,000

70,000

History

Volterra Conservative

Experian Combined

Experian 2008

TEMPRO 4

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

60,000

TEMPRO 5

Finally for comparison, we present the full set of Experian forecasts which formed the baseline behind the RES in Table 4.2. These are only shown at the NUTS2 level for which they are available. Table 4.2

Experian scenarios from baseline to the RES % Change from 2005 to 2025, Experian Scenarios

2005 Experian base employment

Longer term trends

Recent employment success

Regional productivity transformation

Combined

Cumbria

185,000

-14%

-6%

-10%

-6%

Lancashire Greater Manchester

581,000

1,085,000

11%

Merseyside

537,000

-5%

Cheshire

408,000

2,796,000

-1%

TOTAL North West

Source: Regeneris Baseline for the RES

Cumbria Forecasts

One other area for concern is the huge discrepancy between forecasts for Cumbria. We present comparison charts showing the history and forecasts for Cumbria below.

March 2008

The high forecast from Volterra is driven by the upward job creation trend that is observable despite the fluctuating employment levels in Cumbria. The three published forecasts look considerably downbeat in comparison with the observed history. Overall however, the level of change occurring makes the future all the more uncertain. Figure 5.1

Employment in Cumbria 1991 to 2006, and scaled forecasts to 2025

310,000

260,000

210,000

160,000

110,000

History

Volterra Conservative

Experian Combined

Experian 2008

TEMPRO 4

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

60,000

TEMPRO 5

Forecasts by Sector

We examined sectoral trends at the North West level, in the long, medium and short term, and used these to show the range of variation in employment change. With the exception of construction and Financial Services, most sectors followed similar trends in the long, medium and short term. The employment forecasts for manufacturing and wholesale had the widest ranges. The charts demonstrate very forcibly the difference in performance between different sectors of the economy and particularly the shift from Manufacturing to Business services, Health and Education.

March 2008

Figure 1.7:

Sectoral employment: history (1991-2005) and simple linear projections (2006-2026) Manufacturing 600000 200000

jobs

30000 1990

0 10000

jobs

50000

Primary

2000

2010

2020

1990

2000

150000 50000

jobs

150000

50000 1990

2020

Wholesale

jobs

Construction

2010

2000

March 2008

2010

2020

1990

2000

2010

2020

HotelsRestaurants

1990

200000

jobs

100000

300000 0 100000

jobs

500000

300000

Retail

2000

2010

2020

1990

2000

120000 80000 40000

jobs

150000

50000

jobs

1990

2000

2010

2020

1990

2000

2010

2020

PublicAdmin

jobs 1990

50000

200000

jobs

150000

600000

Business

2000

2010

2020

1990

2000

2020

150000

jobs

50000

4*10^5 0 1990

2010

OtherServ

8*10^5

HealthEdu

jobs

2020

Financial

250000

TransComms

2010

2000

2010

2020

1990

2000

2010

2020

Data Source: ABI, AES, rescaled AES, Volterra

March 2008

Conclusions

A number of forecasts of employment are available for the Northwest region. These include Experian forecasts, from the evidence base from the RES and quoted in the RSS and new forecasts produced as this report was being finalised, and TEMPRO forecasts, as used in rail planning documents. We have also generated forecasts based directly on the recent history of employment in each of the districts in the Northwest. These forecasts show considerably higher growth than any of the published sources, due to the strong observed levels of growth. It is important that this study recognises the possibility of strong growth in the cities of the Northwest. If growth is assumed not to happen then the benefits of investing in rail will appear to be low, since demand on the railways would also not increase. Underestimating the possibility of growth in the region may therefore bias policy against the investment that may allow it. .

March 2008

North West Productivity Rail Study Final Report

Appendix 3 â&#x20AC;&#x201C; References Civil Aviation Authority, 2006, CAA Passenger http://www.caa.co.uk/docs/81/2006CAAPaxSurveyReport.pdf

Survey

Report

2006,

Department for Transport, 2003, The Future of Air Transport Department for Transport, 2004, The Future of Transport: A Network for 2030 Department for Transport, 2005, Transport, Wider Economic Benefits, and Impacts on GDP Department for Transport, 2006, North West Regional Planning Assessment for the Railway Department for Transport, 2006, Transport Innovation Fund: Guidance January 2006 Eddington, R, 2006, The case for action: Sir Rod Eddingtonâ&#x20AC;&#x2122;s advice to Government Graham, D, 2006, Wider economic benefits of transport improvements: link between agglomeration and productivity Lancashire Economic Partnership, 2006, Central Lancashire City Region Development Programme Manchester Airport, 2008, Manchester Airport Master Plan to 2030 Manchester Enterprises, 2006, The Manchester City Region Development Programme 2006: Accelerating the Economic Growth of the North MDS Transmodal, 2005, North West Ports Economic Trends & Land Use Study Mersey Partnership, 2006, Liverpool City Region: Development Programme Report 2006 Network Rail, 2007, North West Route Utilisation Strategy Network Rail, 2007, Strategic Business Plan Control Period 4 Northern Way Steering Group, 2004, Moving Forward: The Northern Way (First Growth Strategy Report) Northwest Regional Assembly, 2006, The North West Plan: Submitted Draft Regional Spatial Strategy for the North West of England Northwest Regional Development Agency, 2006, Northwest Regional Economic Strategy 2006 Office of the Deputy Prime Minister (now Communities and Local Government), 2001, Planning Policy Guidance 13: Transport Parsons Brinckerhoff Ltd, 2005, Pre Feasibility Study: 25kV AC Overhead Line Electrification of Routes Between Liverpool and Manchester Regeneris, 2005, North West Economic Baseline: Final Full Report SURF (Centre for Sustainable Urban and Regional Futures, University of Salford), 2006, Strengthening the Evidence-Base of Key Economic and Spatial Strategies in the North West

North West Productivity Rail Study Final Report

Appendix 4 – Glossary Agglomeration – the way in which productivity can be increased by undertaking economic activity in denser areas Control Period – five-year regulatory period for which the amount of money Network Rail receives to operate, maintain, renew and enhance rail infrastructure is determined. CP4 will run from 2009 – 2014. Effective density – a measure of the density of an area that takes into account employment and accessibility Generalised cost – measure of the costs of travel taking into account not only in-vehicle time but walk / wait time etc. GRIP – Guide to Railway Investment Projects (Network Rail’s project development and delivery process) HLOS – High Level Output Statement MOIRA – A rail model that uses standard industry elasticities to project future demand and revenue based on timetable changes Opex – operational expenditure i.e. ongoing costs PDFH – Passenger Demand Forecasting Handbook. A research-based document setting out techniques for modelling passenger demand Super Output Areas (SOAs) – a geographic hierarchy used by the ONS to report small area statistics TEMPRO – Trip End Model Presentation Programme. A system providing forecast data on trips for transport planning purposes TIF – Transport Innovation Fund. A fund set up to support schemes that are beneficial to national productivity TOCs – Train operating companies TPE – Transpennine Express