Final LTP March 2006

Revenue expenditure is an important element of our activities in supporting the transport shared priority. 

Congestion

The significant expenditure by Centro in supporting local public transport services and providing information and marketing for all public transport is a major contribution to tackling congestion.  The marketing and promotion of  improvements to the public transport network is an important element of this work.

Similarly the ongoing maintenance of the highway network and management systems is critical to minimising congestion.

Safety

Local authorities have extensive road safety training programmes, which have played an important part in helping us achieve our LTP targets.  As well as ongoing programmes, particularly focused on vulnerable groups work in support of changes to the transport network as part of the capital programme is undertaken. 

Accessibility

To date the most important source of revenue to support promoting accessibility has been through the work of Centro.  As the Centro budget is substantial, the way it is used is set out in detail below.

Air Quality

In addition to the ongoing activities in respect of monitoring air quality, the West Midlands authorities have developed an air quality model to help understand the impact of different development and transport proposals.  The importance of transport emissions to overall air quality means we are now working on linking the air quality model with PRISM to provide a more accurate tool for future use.  This will enable us to use funds more effectively in tackling air quality problems.

Revenue Expenditure

The following sections give some details of how we effectively use revenue and link the capital and revenue programmes.  Across the individual authorities many of these activities have been subject to formal scrutiny to ensure they are providing value for money.

Revenue programmes are derived from various sources including:

1. The Passenger Transport Authority’s revenue budget

2. Local Highway Authority revenue expenditure on transport

These are described in the following paragraphs:

(a)  The Passenger Transport Authority’s revenue budget

The PTA's revenue budget is administered by Centro.  It is approximately 80% funded from a levy on the Metropolitan councils and is collected through Council Tax from residents.  The Government provides the balance to support Centro-sponsored rail services. The need for VFM is well recognised, most recently in a Best Value Performance Review Plan for 2004/05.

The PTA’s revenue budget for 2005/06 is £174 million, allocated as follows:

• 33% for concessionary fares and ticketing
• 28% for rail services
• 9% for bus services
• 4% for customer services passenger information
• 26% for other services and administration

Concessionary Fares

Centro administers three concessionary fare schemes to enhance accessibility amongst the following groups:

• people aged 60 or older
• people with specific disabilities
• children aged 5 to 15

The schemes for elderly people and people with disabilities offer better arrangements than the National Concessionary Fares Schemes ahead of the Government's target of 1st April 2006.  Travel is available free (rather than half-price as under the national scheme) on rail, Metro and bus services, from 9.30am to the end of normal services (excluding night services) on weekdays and for the whole day (24 hrs) at the weekend and on Bank Holidays.

The scheme for children provides half-fare travel, (Mon-Fri only, up to 09:30 and between 15:30 - 18:00) where such a concession is not provided on a commercial basis.  This applies to both for 5 to 15 year olds and those aged 16 to 18 who are in full-time education (defined as not less than 15 hours per week) and not in receipt of direct remuneration for their studies.

Each scheme aims to provide social inclusion for specific groups and fits with the 'improving accessibility' theme of the Transport Shared Priority.  By encouraging greater use of buses, their commercial viability is also indirectly supported for the benefit of our Area.

Bus Services

Centro provides support for local bus services that are not provided commercially but which are deemed socially necessary.  Such services assist with LTP targets aimed at improving accessibility.  Centro also procures a Ring & Ride, door-to-door service for people who find it difficult or impossible to directly access conventional transport services.  These services also interface with scheduled public transport services at key stops/stations  to enable access to a wider range of facilities, particularly by using the fully accessible services offered by metro and bus showcase routes.

Rail Services

Centro currently specifies the level of service provision through a franchise agreement with the Strategic Rail Authority (now the Department for Transport) and the National Express Group (as owner of Central Trains).  Following enactment of the Railways Bill 2005, Centro will no longer have an automatic right to be a co-signatory to the franchise.  The rail grant which Centro currently receives to cover the cost for the franchise and other relevant costs will no longer be available in the current form.  The extent to which Centro will be able to influence rail service provision under the new arrangements has yet to be determined.  Rail services, however, are an important part of the public transport network and an effective alternative to the car.  The ongoing ability of rail services to carry substantial numbers of people who have access to a car, but choose to commute by rail is critical to our efforts to tackle congestion.

Customer Services

Customer Services covers Centro's provision across all modes including information, concessionary fares, ticketing and initiatives which aim to influence travel behaviour, such as the Corporate Travel Scheme, TravelWise and Workwise.  These initiatives provide information, on ticketing, Traveline telephone enquiries, customer relations, and safety and security.  These services support our 'Smarter Choices' activities.

Passenger Information

Centro's passenger Information Strategy aims to achieve a step change in information provision, in partnership with operators.

Other services and administration

There are increased running costs associated with the implementation of the Capital Programme, debt charges and the current cost of pension liabilities.  These costs cannot be ascribed to the Capital Programme but they are essential in supporting agreed policies and priorities.  The PTA's revenue budget also funds processes for generating new initiatives and innovation, particularly associated with the Capital Programme, and detailed monitoring and project management.

Centro is continuing to develop its Performance Management and Project Management processes in order to refine and target the Capital Programme to ensure the most efficient use of resources.

The PTA Best Value Review Programme

Centro is working closely with the PTA to apply Best Value principles across its functions, even though it is not covered by Best Value legislation.  Funding comes from the revenue budget.  Several Best Value Service Reviews have been completed, each producing a detailed Action Plan aimed at improving overall services.

(b)   Local Highway Authority revenue expenditure on transport

We recognise that revenue expenditure on transport has an important role in achieving the regeneration of our Area.  It is needed not only to maintain the physical condition of the highways and associated structures but also to ensure they function efficiently and contribute to the quality of the environment.  Our revenue expenditure on highways in 2003/04 amounted to almost £90 million.  Almost three quarters of this was on the maintenance of roads and footpaths, bridge structures, traffic management and street lighting (including energy costs).  It also covered a wide range of activities including school crossing patrols and winter maintenance.  The ongoing revenue costs associated with new capital schemes also need to be recognised.

As described in Chapter ‘Implementation’, our maintenance expenditure is planned within the framework established by the District Maintenance Engineers Group to ensure it provides VFM and is linked to the capital programme.

A particular issue is that much of the work that needs to be undertaken as part of the 'Smarter Choices' initiative to promote modal change, for example when TravelWise promotion is not directly linked to capital schemes, needs substantial revenue support.  This is an ongoing problem, along with issues such as cycle training and road safety training.  With revenue budgets under pressure significant sums continue to be found by all authorities to support these important areas of work.  During 2006, the promotion of 'Network West Midlands' as a public transport brand will be linked to our ongoing work to secure a 5% modal shift by the two agencies involved sharing information, research and ideas.  By bringing these together we anticipate a much more effective use of revenue funding will be achieved.  Achieving modal switching is the most cost effective way of tackling highway congestion (WMAMMS) and we believe this is an extremely effective use of revenue funding.

The road safety programme, which has been very successful in supporting the reduction in serious accidents in the Area, is an integrated programme using capital and revenue.  Revenue funding provides ongoing training in road safety skills, targeted at vulnerable groups and key objectives such as making children and parents more confident about walking and cycling to school.  It is also used to ensure that the safety implications of new schemes are understood by residents and users, for example when new types of crossing or innovative cycling facilities such as contra flow cycle lanes are introduced.

Revenue Costs of Major Schemes

The Major Scheme programme reflects the Guidance from the Secretary of State in 2003 in respect of WMAMMS.  Hence it is set within the capital expenditure limits set out by him at that time.  In responding positively to his advice the revenue impact of the programme has been an important consideration.  For each Scheme put forward a range of options are considered and consulted on.  This includes an analysis of the associated revenue costs of each alternative.

As part of the local approval process all authorities require a detailed breakdown of revenue costs and an explanation of the impact a Scheme will have on future revenue budgets - from both the 'affordability' and opportunity cost perspectives.  For instance the UTC proposal has identified substantial revenue savings from using different communications and more modern equipment, with lower maintenance costs, compared with the current situation.  During Scheme design and construction we use a range of methods to consider whole life costs - particularly how good design and choice of materials can reduce future revenue costs.  The development of new collaborative working arrangements with contractors will assist this process.

Hence whilst our programme is substantial we are confident it can be delivered without an adverse impact on future revenue budgets and that sufficient revenue funding will be available for essential maintenance etc.  The Transport Asset Management Plans will have an important role in guiding this work.  The expansion of our Network Management Activities in recent years reflects the importance placed on this area of work.  This, together with the detailed plans set out in our Traffic Management Statement, reflects our commitment to sustaining the ongoing operational costs of Schemes.