Viewpoint

A different track?

In a new discussion paper, the Institution of Civil Engineers explores the impact of Covid-19 on public transport networks, and how the funding model will need to adapt to changing behaviours and demand, Jonathan Spruce, ICE Policy Fellow explains

September traditionally sees the return of children to school and adults to work, which for many people – up until very recently – meant a return to their commute by train. The brief respite in the school holidays when peak hour services weren’t packed would be a diminishing memory and the sniffles and coughs that signal the onset of autumn would become a little more audible in carriages everywhere. But not necessarily this year, and maybe even any other year.

The remaining legal Covid-19 restrictions have been lifted across the UK over the last few months and the ‘work from home’ guidance has been quietly dropped. However, the way people now view how, when and with whom they travel may well have been permanently altered. As society continues to open back up again, it’s important to look to the future and start thinking about how the pandemic has changed things in the long-term.

When lockdown restrictions were put in place, the entire public transport sector effectively became unviable –it has survived in the UK through the Government offering emergency funding, to pay for services that are no longer being used to the extent they were planned for. While there will undoubtedly be a need for Government subsidies to continue on a short-term basis, a continuing operating subsidy may be an unpalatable option to taxpayers, and a route to a declining service.

With restrictions easing, patterns of use on public transport may begin to change once again. However, given the shift away from a traditional 9-5 working model, revenue models based on peak time travel will require rethinking. Fares need to strike a balance between providing revenue and re-invigorating patronage growth – just a few weeks ago, there were calls by rail groups for a freeze on rail fares, after the Office of National Statistics suggested they could rise by 4.8 per cent in January on the basis of the agreed formula for non-regulated fares, but with an anomaly in terms of inflation caused by Covid-19. With more people likely to continue working from home, it’s not surprising fares may need to rise, but is it fair and sustainable?

The costs of uncertain, shortterm bailout packages without a clear transition plan could begin a spiral of decline and cuts to both public transport services and capital projects that would take years to recover from. Achieving our carbon emission reduction targets will be made so much harder by any decline in services.

There is no credible route to net zero without an effective, yet financially sustainable, public transport system – simply converting to electric vehicles will not achieve the levels of carbon reduction required, so moving some journeys away from cars will still be necessary. Rail plays a role in providing an alternative for local and longer distance passenger journeys as well as freight, and whilst recent investment decisions have started to reflect this key role as well as the more simplistic approach to journey time savings that has been adopted in the past, the change in behaviour and potentially patronage will mean that the rial industry will need to advocate its clear and obvious advantages to a net zero transport system more coherently.

The need for an urgent debate around funding models for transport systems has been highlighted by the Institution of Civil Engineers on more than one occasion, but the importance of having such a debate and developing a new model has never been more critical. This shift in thinking needs to happen at just the time when we need to be promoting sustainable modes if we are to achieve net zero, as well as the time when the rail industry is moving towards a new means of securing passenger services following the publication of the Williams-Shapps Plan for Rail.

The most straightforward long-term solution is a stable agreement between the Government and public transport operators to fund the gap, recognising the contribution that public transport makes to achieving wider societal goals. However, such an approach could be expected to meet with public and political opposition if passenger numbers do not significantly increase. Up until 2020, passenger journeys on Britain’s rail network were at an all-time high, having doubled over the past 20 years to almost 1.8 billion. While there is uncertainty about the extent to which people will return to using public transport longterm, an immediate return to pre-Covid levels of use is unlikely.

It is possible that the public will demand a different offering from public transport networks in the future. Rail may support longer, less frequent journeys for commuting, and shorter, more frequent journeys for shopping and socialising. The structure of fares and ticketing offers needs to reflect this, an area that the introduction, in late June, of flexible train passes, started, although there has been some debate on the actual value offered on some journeys.

There are clear opportunities for rail to become more dominant as a transport option for leisure purposes, potentially aligned with behavioural changes driven by factors such as net zero, but this may also require a change in how rail services are marketed. Therefore, the rail industry will need to think about new funding models, including policies like road user charging and land value capture, how to fund and finance services on a systemsbasis, and more diversified revenue sources.

A recent ICE paper does not prescribe a one-size-fits-all approach – it needs to be done with a mind to local circumstances and in line with an increasing devolutionary approach to urban transport in the UK. The rail industry clearly has a large part to play in this – being used not just by the public for commuting or travelling purposes, but for transport of goods/services.

Road user charging as a means to solely obtain more funding is a difficult and thorny issue, and one unlikely to be accepted by the wider public. However, recent polling from Ipsos MORI shows that support for road user charging in the UK has increased significantly since 2007 – then it was about 33 per cent whereas now it is approaching double that. Support increases further if the revenues are then used to improve public transport or to tackle climate change or air pollution. This suggests that there may be scope to consider this within larger urban areas where the scope to improve local rail services may be more immediate.

Land value capture is already in play as part of the development of the business case for the re-opening of the Northumberland Line, and there have been a number of attempts to quantify the spin-off benefits to urban areas of improving key rail stations. How such benefits are realised in practice as part of any new model remain unresolved, for example, studies have found, however, that there is an estimated land value uplift of £5.5 billion within one kilometre of a Crossrail station, with the revenue-based Community Infrastructure Levy associated with it capturing only just over ten per cent of that value.

A recent ICE paper does not prescribe a one-size-fitsall approach – it needs to be done with a mind to local circumstances and in line with an increasing devolutionary approach to urban transport in the UK. The rail industry clearly has a large part to play in this – being used not just by the public for commuting or travelling purposes, but for transport of goods/services. Further, with the looming 2050 net zero target, moving more vehicles off the road is essential, and looking for more carbon-friendly travel methods, means the rail industry needs to think now about how it can respond best.

How much do we value our public transport network? That is the question we all need to try and answer.

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