BIRMINGHAM CITY COUNCIL
SUSTAINABILITY AND TRANSPORT OVERVIEW AND SCRUTINY COMMITTEE
TUESDAY, 08 JANUARY 2019 AT 14:30 HOURS IN COMMITTEE ROOM 2, COUNCIL HOUSE, VICTORIA SQUARE, BIRMINGHAM, B1 1BB
A G E N D A
1 NOTICE OF RECORDING/WEBCAST
The Chairman to advise/meeting to note that this meeting will be webcast for live or subsequent broadcast via the Council's Internet site (www.civico.net/birmingham) and that members of the press/public may record and take photographs except where there are confidential or exempt items.
2 APOLOGIES
To receive any apologies.
3 REQUEST FOR CALL-IN: BIRMINGHAM CLEAN AIR ZONE 3 - 366 SUBMISSION OF FULL BUSINESS CASE AND REQUEST TO PROCEED WITH IMPLEMENTATION - PUBLIC
To consider the 'Request for Call-In'. (The portfolio holder and the Lead Officer identified in the report have been summoned to attend the meeting). The following documents are attached in respect of the public papers: - (A) The public Executive decision record. (B) The relevant form for the 'Request for Call-In' lodged by Councillors Robert Alden and Timothy Huxtable. (C) The public report considered by the Cabinet in reaching its decision
4 REQUEST(S) FOR CALL IN/COUNCILLOR CALL FOR ACTION/PETITIONS RECEIVED (IF ANY)
To consider any request for call in/councillor call for action/petitions (if received).
5 OTHER URGENT BUSINESS
To consider any items of business by reason of special circumstances (to be specified) that in the opinion of the Chairman are matters of urgency.
Page 1 of 366 6 AUTHORITY TO CHAIRMAN AND OFFICERS
Chairman to move:-
'In an urgent situation between meetings, the Chairman jointly with the relevant Chief Officer has authority to act on behalf of the Committee'.
7 EXCLUSION OF THE PUBLIC
That in view of the nature of the business to be transacted which includes exempt information of the category indicated the public be now excluded from the meeting:-
Exempt Paragraph 3
P R I V A T E A G E N D A
1 REQUEST FOR CALL-IN: BIRMINGHAM CLEAN AIR ZONE SUBMISSION OF FULL BUSINESS CASE AND REQUEST TO PROCEED WITH IMPLEMENTATION - PRIVATE
Item Description
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Status: Decision Subject To Call In
Title: Birmingham Clean Air Zone Submission of Full Business Case and request to proceed with implementation
Reference: 005939/2018
Urgent Decision - Not in Forward Yes No Plan:
Details for Agenda Sheet:
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Report of the Corporate Director of Economy
To Follow
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Implementation Date (not before Tuesday, 11 December, 2018 meeting on):
Purpose:
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Decision Maker: Cabinet
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Relevant Documents:
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Decision Type: Portfolio Officer Committee
Committee: Cabinet
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Is Private: Yes No
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On 11 December 2018, Cabinet:-
(i) Approved the Options Appraisal (OA) and the Recommended Option for the Clean Air Zone (report Appendix B).
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Birmingham City Council
PUBLIC OR PRIVATE REPORT (not for publication)
Report to: CABINET Exempt information paragraph number – if private report:
Report of: CORPORATE DIRECTOR, ECONOMY Date of Decision: 11th December 2018 SUBJECT: BIRMINGHAM CLEAN AIR ZONE SUBMISSION OF FULL BUSINESS CASE AND REQUEST TO PROCEED WITH IMPLEMENTATION Key Decision: Yes Relevant Forward Plan Ref: 005642/2018 If not in the Forward Plan: Chief Executive approved (please "X" box) O&S Chair approved Relevant Cabinet Member(s) or Councillor Waseem Zaffar, Transport & Environment Relevant Executive Member: Relevant O&S Chair: Councillor Liz Clements, Sustainability & Transport Overview & Scrutiny Committee Wards affected: ALL
ATE REPORT * To be completed for all late reports, ie. which cannot be despatched with the agenda papers ie. 5 clear working days’ notice before meeting.
Reasons for Lateness
The Clean Air Zone programme is extremely complex and has involved a great deal of ongoing iterative dialogue with Government. This has resulted in late revisions to the economic and financial work which have been required to be reflected in the detailed modelling.
Further there is a need for detailed due diligence in order to ensure the final documents are as robust and accurate as possible prior to submission to Cabinet and Government. .
Page 11 of 366
Page 12 of 366 Public Report Birmingham City Council Report to Cabinet Date: December 11th 2018
Subject: BIRMINGHAM CLEAN AIR ZONE SUBMISSION OF FULL BUSINESS CASE AND REQUEST TO PROCEED WITH IMPLEMENTATION Report of: CORPORATE DIRECTOR, ECONOMY Relevant Cabinet Councillor Waseem Zaffar, Transport & Environment Member: Relevant O &S Chair(s): Councillor Liz Clements, Sustainability & Transport Overview & Scrutiny Committee
Report author: Phil Edwards Assistant Director, Transportation and Connectivity. T: 0121 303 6467. E: [email protected]
Are specific wards affected? ☐ Yes ☒ No – All wards affected
If yes, name(s) of ward(s):
Is this a key decision? ☒ Yes ☐ No If relevant, add Forward Plan Reference: 005642/2018
Is the decision eligible for call-in? ☒ Yes ☐ No
Does the report contain confidential or exempt information? ☐ Yes ☒ No
If relevant, provide exempt information paragraph number or reason if confidential: Information has been made exempt from this report as it contains commercially sensitive details which could prejudice the planned procurement activities which are required to deliver the proposals contained herein. The exempt information is detailed in a Private report.
1 Executive Summary 1.1 The purpose of this report is to seek approval to submit a Government Full Business Case (GFBC) and Clean Air Fund (CAF) bid to Government for the
Page 1 of 19 Page 13 of 366 implementation of a Clean Air Zone (CAZ) in Birmingham. The proposed CAZ has previously been discussed by the Cabinet and approval was granted to consult on a CAZ (June 27th 2018) and to submit a Preferred Option Business Case (POBC) (September 10th 2018) to Government. 1.2 Upon approval of this report the City Council will proceed to appoint contractors and agree a Target Cost for the main civil engineering works, enabling the submission of a firmed up project cost to Government, anticipated to be in January/February 2019. The City Council will also proceed with the drafting of a Charging Order for the Clean Air Zone and the appointment of the necessary staff (subject to further approvals) to manage the implementation and operation of the CAZ. 1.3 Appendix A of this report, the Government Full Business Case (GFBC) provides an indication of the funding and funding profile required and to be requested for the implementation of a CAZ D plus Additional Measures and Mitigation Measures and Exemptions. The final estimated costs and profile are to be agreed following the conclusion of the procurement process and agreement of a Target Cost for the main civil engineering works. The current estimate of total project cost is £68.706m. The cost of the CAZ programme is to be funded via a funding grant which will be provided by Government. This grant will be made up of a combination of revenue and capital; split between revenue and capital to be confirmed in the final funding request. 1.4 The City Council’s governance process requires an Options Appraisal (OA) report to be submitted for approval by the Cabinet which sets out the options available for the delivery of a project and requests approval to proceed with project development. Appendix B of this report is the OA for the CAZ Programme. This report seeks approval to the OA and the Recommended Option, CAZ D plus Additional Measures, and to proceed with project development in line with Appendix B. 1.5 Approval is also requested for the release of interim development funding from the Transportation & Highways Capital Budget at a total value of £0.440m. This funding is required to enable progress with elements of the programme to GFBC stage, in advance of the receipt of grant funding from Government and will be repaid following the submission of the final funding request and subsequent receipt of grant, anticipated to be March 2019. 1.6 It is estimated that a core team of 10 staff will be required to manage and administer the CAZ on an ongoing basis, including mitigation measures and exemptions with the size peaking at 27 during mid-2019. A subsequent report and business case will be submitted for approval when the staffing requirements have been finalised, in line with Recommendation 2.12. The purpose of this team is to manage and administrate the mitigation measures and exemptions, funding for this will be via a Government grant and is included in the funding request being made in the GFBC. This team will continue to manage the business as usual (BAU) operation of the CAZ when the mitigation
Page 2 of 19 Page 14 of 366 measures and exemptions have expired, the BAU activities will be funded via the CAZ generated revenue. 1.7 A Project Management team of approximately 13 people is required throughout 2019 to manage the implementation of the project. A subsequent report and business case will be submitted for approval, in line with Recommendation 2.12. Funding for this team with be through Government grant and current estimated costs are included in the funding request being made via the GFBC.
2 Recommendations 2.1 Approves the Options Appraisal (OA) and the Recommended Option for the Clean Air Zone (Appendix B). 2.2 Approves the final proposals as detailed in Section 4 and Appendix A and authorises the submission of the Government Full Business Case for the Clean Air Zone (see Appendix A) to Government. 2.3 Approves the Procurement Strategy as set out in Appendix B2. 2.4 Approves the final proposals as detailed in Section 4 and Appendix C and authorises the submission of the Clean Air Fund Report (Appendix C) to Government. 2.5 Notes that the funding and the funding profile requested in Appendix A is an estimate, and that the City Council is required to confirm costs and profile upon the confirmation of the Target Costs for each work stream. 2.6 Delegate’s authority jointly to the Cabinet Member, Transport & Environment, the Corporate Director, Economy and the Corporate Director, Finance & Governance to submit a subsequent report to Government, in line with 2.4 above. 2.7 Delegate’s authority to the Cabinet Member, Transport & Environment, the Corporate Director, Economy and the Corporate Director, Finance & Governance to accept the funding from Government subject to Secretary of State approval of the GFBC. 2.8 Notes that a City Council Full Business Case (FBC) will be brought forward for separate CAZ work streams in line with the Council’s governance procedures and Gateway and Related Financial Approval Framework. Details of the BCC FBC’s which will be brought forward are given in the Options Appraisal (Appendix B, Section 11). 2.9 Delegate’s authority to the Corporate Director, Economy jointly with the Corporate Director, Finance & Governance to approve the City Council FBCs in line with 2.7 above up to a value of £2.00m, subject to confirmation of funding. 2.10 Delegate’s authority to the relevant portfolio holders jointly with the Corporate Director, Economy and the Corporate Director, Finance & Governance to
Page 3 of 19 Page 15 of 366 approve the City Councils FBC’s in line with 2.7 above up to a value of £10.00m, subject to confirmation of funding. 2.11 Approves the release of interim development funding of £0.440m through the Transportation & Highways Capital Budget to progress individual projects to Full Business Case stage, in advance of the receipt of grant funding from Government, and delegates authority to incur expenditure to Assistant Director Transportation & Connectivity in accordance with the Council’s governance procedures and Gateway and Related Financial Approval Framework, (see Section 7.3.7 for further information). 2.12 Delegates approval to award the contracts as listed in Appendix B2 to the Corporate Director, Economy, the Director of Commissioning and Procurement, the Corporate Director of Finance and Governance (or their delegate) and the City Solicitor (or their delegate). 2.13 Notes that the Order for the CAZ to enable implementation of the recommended option, in line with the GFBC, will be submitted to Cabinet for approval. The Order is scheduled to be produced by April 2019. 2.14 Delegate’s authority to the Cabinet Member, Transport & Environment jointly with the Corporate Director, Economy to approve subsequent FBC’s for the recruitment of staff resources required for the implementation stage and ongoing business as usual stage, subject to confirmation of funding.. Recruitment of any staff will be in line with the existing City Council recruitment process and internal City Council sign off processes. Authorises the City Solicitor to negotiate, execute, seal and complete all necessary documentation to give effect to the above recommendations.
3 Background 3.1 The proposal contained in Appendix A, Appendix B and Appendix C is for a Class D Clean Air Zone which would be implemented in response to National and European requirements for Birmingham to achieve compliance with the EU Directive on legal Nitrogen Dioxide (NO2) limits in the shortest possible time (see Section 7.2). 3.2 Several reports have previously been submitted to the Cabinet for approval of various stages of the CAZ programme, each report being a development upon the last. The list below summarises the reports which have received Cabinet approval thus far: 3.2.1 Tackling Air Quality in Birmingham, Cabinet Report, June 26th 2017 – approval to consult on the CAZ proposals; 3.2.2 Birmingham Clean Air Zone submission of a Preferred Option Business Case to Government, 10th September 2018. 3.3 The GFBC Appendix A is required by Government to set out Birmingham’s case for implementing a CAZ and to act as the mechanism for requesting the necessary funds.
Page 4 of 19 Page 16 of 366 3.4 The Options Appraisal (OA) Appendix B sets out the appraisal of options, and proposes the Recommended Option for how the project is to be implemented (in line with the Council’s Gateway and Related Financial Approval Framework). It sets out the programme and strategy for delivering the CAZ and will be followed by a series of FBCs for each work stream (see Section 12.0 of Appendix B).
4 Options considered and Recommended Proposal 4.1 The options appraisal for Birmingham’s CAZ D plus Additional Measures has been detailed in previous reports (see Section 3.3) and is set out in Section 2.2 of Appendix A. Since approval of the September 10th 2018 report (see Section 3.2.2) the modelling of the proposed CAZ has been finalised and further stakeholder engagement has been undertaken which has informed decisions on charging and the final proposals for mitigations. 4.2 Charging Levels 4.2.1 Further work commissioned by the Council into behavioural responses to the CAZ charges and feedback from the public consultation has informed the final decision on charging levels. The work undertaken shows that the charges now being proposed will act as a significant incentive to individuals and companies to upgrade their vehicles. 4.2.2 The final proposed charging levels are set out in Table 1.0 below Table 1.0 Vehicle type Charge Cars, Taxis (Hackney Carriages & £8.00 per day Private Hire), LGV’s HGV’s, coaches and buses £50.00 per day
4.2.3 The charging levels will be kept under review to ensure that the CAZ is delivering the expected improvements in air quality. Any potential future amendments to the charging level would be subject to gaining the necessary approvals via the City Councils governance process. 4.3 Exemptions and Mitigations 4.3.1 In order to mitigate the impacts to certain socio-economic groups a package of mitigation measures and exemptions are also being proposed. These have been developed in light of the Distributional Impact Analysis Report (September 18), the responses to the public consultation and were initially set out in the report to Cabinet on the 10th September 2018. 4.3.2 Since the submission of the report of the 10th September 2018 further refinement of the proposed measures has been undertaken. A deliverability and viability assessment of each of the mitigation measures was undertaken. These assessments made it clear to the City Council that the initially proposed measures would be difficult to manage and administer. The revised suite of
Page 5 of 19 Page 17 of 366 measures being proposed are thought to be realistically deliverable in the timescales and will also create a reduced administrative burden for the City Council. Table 2.0 below sets out the upper salary limit for ‘low income’ and therefore the point at which individuals become eligible for mitigations and exemptions.
Table 2.0 Group Individual salary Individuals who work within the CAZ £30,000 Residents of areas outside of the CAZ £20,000
4.3.3 Further details together with the rationales for the measures can be found in Appendix C Clean Air Fund Report. A summary of final proposals are presented in Table 3.0 below. Table 3.0 Exemptions from the Clean Air Zone Target Group Exemption Duration Commercial Vehicles LGV/HGV/Coaches registered within 1 year registered within the the CAZ will receive an exemption CAZ (max 2 vehicles per company). Commercial Vehicles LGV/HGV/Coaches registered in the 1 year with an existing Birmingham area travelling to the finance agreement CAZ with an existing finance agreement beyond 2020 (max 2 vehicles per company). Private vehicles Individuals with non-compliant 2 years registered within the vehicles registered in the CAZ will be CAZ exempted. Individuals travelling Individuals with a non-compliant 1 year into the CAZ for vehicle who work within the CAZ and work. satisfy the income criteria. Visitors of key Visitors to select medical facilities in Duration of hospitals the CAZ, GP offices and care homes. stay (exemption will run for 1 year) Community and Vans and mini buses registered as All years schools and disabled providing essential community and vehicles school transport services and those classified as section 19 operators, registered for operation in Birmingham.
Table 4.0 Mitigation Measures (funded through the Clean Air Fund) Target Group Description
Page 6 of 19 Page 18 of 366 All Engagement and marketingcampaign to provide information on the CAZ and reach out to groups eligible for support through the mitigation measures package. Individuals who work in Choice of mobility credit or scrappage scheme the CAZ offered to non-compliant car owners working within the CAZ. Key workers will be prioritised and the remaining availability will be prioritised by those of low income. Residents of areas Scrappage scheme offered to non-compliant car outside of the CAZ owners in West Midlands, allocated by distance to the CAZ and income Hackney carriages Birmingham licenced Hackney carriage drivers can: - Purchase an EV taxi to receive an operational financial support package; - Receive funding towards retrofitting an eligible vehicle. Hackney carriages Birmingham City Council to purchase 50 ULEV taxis to lease out to the most vulnerable taxi drivers. Private Hire Vehicles Private hire vehicle owners who upgrade to a upgrade support compliant vehicle which goes beyond the minimum BCC’s 2020 licencing criteria (i.e. is a hybrid or ultra-low emission vehicle) and is under 3 years of age will receive financial aid. Van/LGV ULEV van drivers can register to receive credit on Birmingham’s public charging network. HGV/Coach Fleet operators within the West Midlands will be able to apply for a cash payment towards retrofitting technology/compliant vehicle. Residents located Parking measures implemented to manage any around the CAZ displacement parking around the outside of the CAZ. This scheme will be introduced on an ‘as required’ basis.
4.3.4 The availability of all mitigation measures is dependent on funding from Government, as such the volume of mitigation measures available will be capped at the amount of funding provided. Government approval of the City Councils application for CAF funding will determine the need for a review into the prioritisation of measures. Implementation of mitigation measures will be subject to submission and approval of specific FBCs through the relevant City Council governance procedures and Gateway and Related Financial Approval Framework and in line with the delegations being sought. 4.1 CAZ Order and Network Management 4.1.1 An Order for the CAZ to enable implementation of the recommended option, in line with the GFBC, will be submitted to Cabinet for
Page 7 of 19 Page 19 of 366 approval. This will include consideration of diversions on the road network and any incidents that lead to official diversions. The Order is scheduled to be produced by April 2019.
5 Consultation 5.1 A statutory public consultation was undertaken by the City Council between July and August 2018 (6 weeks total), a detailed explanation of the process and summary of the response to the consultation was given in the report approved by Cabinet on the 10th September 2018 (see 3.2.2). That report is publicly available and can be accessed via the City Council’s website www.birmingham.gov.uk/caz 5.2 To summarise, the public consultation received a record number of responses for any consultation ever carried out by the City Council (in excess of 10,000). Careful and meaningful consideration was given to the response, in the context of the duty to ensure that compliance is achieved in the shortest possible time, and shaped the package of mitigation measures and exemptions which are being proposed. Appendix C Clean Air Fund Report provides further details of the mitigation measures being proposed. The response to the consultation has also informed rework to the design for the CAZ proposal. 5.3 In addition to the consultation which has been undertaken for the overall CAZ proposals, further statutory consultations will be required for the implementation of the Additional Measures. 5.4 In addition to the external consultation as outlined above, internal consultation has been carried out with all key stakeholders including Councillor Brett O’Reilly (Cabinet Member- Finance & Resources), Cabinet Members and Senior Management Team. A communications campaign is planned to begin in early 2019 which is intended to inform all members of staff of how they will be impacted and what they can do to prepare.
6 Risk Management 6.1 Air Quality and the risk of fines as a result of non-compliance with legal limits was included on the Corporate Risk Register in May 2017. 6.2 A risk identification, mitigation and management process is employed on this programme to capture the risks around the relevant policy and delivery activities, Section 7.0 of Appendix B provides full details of the Risk Register which is maintained as a live document. 6.3 A quantitative risk assessment has been undertaken for the risks identified in Appendix B4 associated with project implementation in order to establish the current required contingency allocation. In some areas of risk a quantitative assessment could not be carried out and therefore an Optimism Bias (OB) has been included to account for the uncertainty. The level of OB has been refined since the Preferred Option Business Case (POBC) submission (10th September
Page 8 of 19 Page 20 of 366 2018). Whilst at 15% the OB is higher than the Green Book guidance recommends for FBC stage, the level of OB has been deemed appropriate as procurement activities are ongoing. The level of OB will be reduced when the final costs are confirmed in January/February 2019. 6.4 Specific risks which should be noted are below: 6.4.1 The implementation funding will not be agreed until the Civils Design and Build contract is awarded and target costs can be confirmed. However, initial expenditure incurred in advance of formal approval will in the main be to develop the CAZ proposals in order to provide a more robust cost estimate as required by Government. These development costs are a pre-requisite for the final submitted programme costs and as they will be known and evidenced costs they will be included within the final costings. It is deemed unlikely that these would not be funded; 6.4.2 The project costs could overrun the amount of funding provided by Government. As above, the City Council have allowed for Contingency and OB in the cost estimate to mitigate the risk of overrun and as stated in the Appendix B, the works which are being implemented under this programme are not complex in nature and are considered to be ‘standard’ highway infrastructure improvements; 6.4.3 Only a proportion of the requested Clean Air Fund funding will be granted, Government have indicated that some measures will be challenged and may not be funded. However, should the City Council still want to proceed with the non/partially funded measures then, as detailed within the Section 7.3 below, the CAZ net operating income may be used to support the implementation of the measures, subject to City Council approval and net income being sufficient; 6.4.4 The Government central charging system isn’t fully operational in time for the CAZ to ‘go live’. Should this risk materialise there may be an operational cost to the City Council as no income can be generated until the charging system is operational. The City Council have ongoing communication set up with Government to manage this risk and plan for the system interface. Government have a project team in place with sufficient resource and are proactively managing to achieve successful delivery.
7 Compliance Issues: 7.1 How are the recommended decisions consistent with the City Council’s priorities, plans and strategies? 7.1.1 The recommendations of this report support the City Council’s corporate priorities as set out in the “Council Plan 2018-2022” and summarised below: Birmingham is an entrepreneurial city in which to learn, work and invest in; Birmingham is an aspirational city to grow up in;
Page 9 of 19 Page 21 of 366 Birmingham is a fulfilling city to age well in; Birmingham is a great city to live in. 7.1.2 The Birmingham Health and Wellbeing Strategy and supports the delivery of policies included in the ‘Birmingham Connected Transport White Paper’, which in turn, supports delivery of the adopted Birmingham Development Plan and Movement for Growth 7.1.3 The Health and Social Care Act 2012 requires Local Authorities in England to have a Health and Wellbeing Board (HWBB). A key responsibility of the HWBB is to develop a Health and Wellbeing Strategy (HWBS). Improving air quality is a key ambition of the Birmingham Health and Wellbeing Strategy. 7.1.4 The proposals given in this report are supportive of the emerging Clean Air Strategy which is due for publication in the winter of 2018/2019. 7.2 Legal Implications 7.2.1 Government issued a Ministerial Direction in December 2017 which required the Council to submit a Business Case to the Government by 15th September 2018 for measures to deliver compliance with legal Nitrogen Dioxide (NO2) limits in the shortest possible time. 7.2.2 The Clean Air Zone will be introduced pursuant to the Transport Act 2000. A Charging Order is being produced which will be submitted for approval in a subsequent report, as per 4.1.1 above. 7.2.3 The full extent of the legal implications for the City Council are detailed in the Cabinet Report (Tackling Air Quality in Birmingham – Clean Air Zone) approved on the 26th June 2018. 7.3 Financial Implications 7.3.1 The submission of the GFBC, including the financial implications, is the mechanism by which the City Council will apply for the required funds to implement the CAZ D plus Additional Measures and the package of Mitigation Measures being proposed; drawing down from the two separate funding streams, the Implementation Fund and the Clean Air Fund (CAF) as required. The funding is being requested under a Section 31 grant. 7.3.2 The financial implications provided in the report to Cabinet on September 10th 2018 were an estimate, accurate at the time of writing. Since then further detailed financial modelling has been undertaken to determine the financial implications included within the GFBC, based on a set of informed assumptions. The modelling was undertaken by specialist technical consultants, in conjunction with officers from the City Council, and as a part of the work undertaken the modelling has been subject to their internal quality assurance and testing processes to ensure robustness. In addition an independent review of the draft GFBC financial case including the financial model has been undertaken as part of JAQU’s role in supporting development of the FBC. The City Council has taken account of matters arising during the course of the
Page 10 of 19 Page 22 of 366 review process in finalising the GFBC and financial model in producing this report. JAQU will carry out a further review of the updated costs and profile referred to under ‘CAZ Implementation’ below following completion of the procurement process. 7.3.3 The Sections below provides high level summaries of the revised financial implications. Please note that full details have been excluded due to the potential for prejudicing upcoming procurement activities and are instead shown within the Private report.
CAZ Implementation 7.3.4 The CAZ Implementation costs shown in Table 5.0 indicate the current estimated cost and profile of the main CAZ programme or works. The costs of implementation will in the main be capital in nature however there may also be an element of revenue expenditure. The final estimated cost and profile including the capital and revenue combination will be firmed up following completion of the procurement activities, anticipated to be by January/February 2019. The costs will be funded via an Implementation Fund grant which will be provided by Government, with the final combination of capital and revenue resources being in line with the final estimated cost and profile defined within the final funding request. 7.3.5 A quantitative risk assessment has been undertaken for the risks identified in Appendix B4 in order to establish the current required contingency allocation. In some areas of risk a quantitative assessment could not be carried out and therefore an Optimism Bias (OB) has been included to account for the uncertainty. The level of OB has been refined since the Preferred Option Business Case (POBC) submission (10th September 2018). Whilst at 15% the OB is higher than the Green Book guidance recommends for FBC stage, the level of OB has been deemed appropriate as procurement activities are ongoing. The level of OB will be reduced when the final funding request is made in January/February 2019. 7.3.6 Further details for each separate CAZ programme implementation work stream will be provided in subsequent FBC reports in line with the City Council’s Gateway and Related Financial Approval Framework. Interim Implementation Development Funding 7.3.7 Government have indicated that the timescales for review and approval of the GFBC (Appendix A) and the associated funding request will be a minimum of 8 weeks from receipt. If the Council were to wait for such approvals before progressing with development, the programme will be subject to delay, impacting on overall delivery and achievement of compliance. Recommendation 2.10 of this report seeks approval for the release of development funding from the existing Transportation & Highways Capital Budget until the receipt of
Page 11 of 19 Page 23 of 366 Government grant funding, currently anticipated to be March 2019, at which point the resources will be repaid.
This expenditure will in the main be to develop the CAZ proposals in order to provide a more robust cost estimate as required by Government. These development costs are a pre-requisite for the final submitted programme costs and as such they will be included within the final costings.
The estimated funding and associated work streams are detailed below:
Work stream December January February March Total 2018 2019 2019 2019 £m £m £m £m £m Main CAZ 0.030 0.060 0.060 0.060 0.210 (Civils) Back office 0.000 0.020 0.020 0.020 0.060 Charging System Network 0.020 0.020 0.020 0.020 0.080 Changes Parking 0.010 0.040 0.020 0.020 0.090 Restrictions Totals 0.060 0.140 0.120 0.120 0.440
CAZ Mitigation Measures 7.3.8 Section 4.3 and Table 4.0 above details the proposed package of mitigation measures. Table 5.0 below indicates the current estimated cost and profile of providing these measures which it is anticipated will be both capital and revenue in nature. The costs will be funded via a Clean Air Fund grant provided by Government and as such the volume of mitigation measures available will be capped at the amount of funding provided. Feedback from Government on the Council Clean Air Fund application will determine the need for a review into the prioritisation of these measures. 7.3.9 As detailed in Section 4.3 the Residents Parking Scheme measures will be introduced as and when required. As such the funding for this scheme will be held in a Council ring fenced reserve until required. In the event that the funding required exceeds the amount received, it is proposed that the shortfall will be funded from the net CAZ operating income, which is in line with regulation, (please see Operating Income and Expenditure Section below).
Page 12 of 19 Page 24 of 366 7.3.10 Further details for each separate CAZ programme mitigation work stream will be provided in subsequent FBC reports in line with the City Council’s Gateway and Related Financial Approval Framework.
Page 13 of 19 Page 25 of 366 Table 5.0 Implementation Costs and Funding
Budget Information – Implementation Costs and Funding 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Total £m £m £m £m £m £m £m £m Project Costs: CAZ 4.270 12.915 0.395 0.244 0.020 0.000 0.000 17.845 Implementation CAZ Mitigation 3.914 18.255 20.762 4.192 2.070 1.556 0.113 50.861 Measures
Total 8.184 31.170 21.157 4.436 2.090 1.556 0.113 68.706 Funded by Government Grants: Implementation 4.270 12.915 0.395 0.244 0.020 0.000 0.000 17.845 Fund Clean Air Fund 3.914 18.255 20.762 4.192 2.070 1.556 0.113 50.861
Total 8.184 31.170 21.157 4.436 2.090 1.556 0.113 68.706
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CAZ Operating Income and Expenditure 7.3.11 CAZ Income and Expenditure - The Clean Air Zone will be introduced under Part 3 of the Transport Act 2000. CAZ revenue income will be generated through a combination of CAZ Charges raised and Penalty Charge Notices issued and, in line with requirements of the Act, will first be used to cover ‘’the expenses incurred for and in connection with the scheme which are so attributable’’. The City Council expenses have been identified as the costs of maintaining and operating the assets installed under the CAZ project and ongoing operations and processing costs in line with its responsibilities (illustrated in Appendix B1), summarised below:
Assets include signs, ANPR cameras, air quality monitoring equipment and assets installed as part of the Early Measures element of the project are also eligible expenses, (details of the Early Measures project can be found in the Joint Cabinet Member/Chief Officer report “Joint Air Quality Unit Early Measures Fund for Local NO2 Compliance – Application for and acceptance of funding” 19 September 2018);.
Costs of ongoing operations include human resources required for validation and enforcement processing, JAQU processing costs, penalty charge processing and postage, office accommodation costs and communications.
Table 6.0 below indicates the current estimated operating income and expenditure.
7.3.12 CAZ Net Proceeds – Table 6.0 below indicates the current estimated ‘net proceeds’ balance carried forward. Part 3 of the Transport Act 2000, schedule 12 para 8, requires that the ‘net proceeds’ of a charging scheme shall be applied by the authority “for the purpose of directly or indirectly facilitating the achievement of local transport policies of the authority”. The ‘Tackling Air Quality in Birmingham, Cabinet Report, June 26th 2017 also states that net proceeds will be invested in transport infrastructure measures to benefit the public and to improve air quality. In addition to new schemes that are identified that meet these requirements there are a number of schemes within the existing Capital Programme which could potentially be funded, in whole or in part, either through a direct contribution or to fund borrowing costs. The existing programmes identified are shown below:
The Big City Plan;
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Local Cycling Walking Initiative Programme;
Journey Time Improvement;
Rail and Rapid Transit.
In should be noted that all programmes, both existing and new, will be selected in order to directly or indirectly facilitate the Council’s transport policies following a prioritisation process and will be subject to approval in line with the City Council’s Gateway and Related Financial Approval Framework.
7.3.13 Car Parking Income – In addition to the income generated directly from the CAZ Charges and Penalty Charge Notices the City Council is also introducing a range of additional Car Parking measures as a part of the overall implementation of the CAZ, supporting delivery and in furtherance of the City Council’s strategy to dis- incentivise private car use. The associated setting of parking tariffs and charges will generate additional income and the second section of Table 6.0 below indicates the current estimated level of income. Any resulting net surplus income remaining after the deduction of operating costs and other eligible expenditure will be used in accordance with the Road Traffic Regulation Act 1984 Section 55 para 4.
Page 16 of 19 Page 28 of 366 Table 6.0 Operating Income and Expenditure
Budget Information – Operating Income and Expenditure
2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 Totals
£m £m £m £m £m £m £m £m £m £m £m £m £m £m
Income
CAZ 0.000 (11.451) (43.096) (32.264) (23.052) (18.697) (14.343) (10.572) (8.552) (6.533) (4.513) (2.249) 0.000 (175.322)
CAF Administration Grant (0.382) (1.353) (0.682) (0.174) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 (2.591)
Total Income (0.382) (12.804) (43.778) (32.439) (23.052) (18.697) (14.343) (10.572) (8.552) (6.533) (4.513) (2.249) 0.000 (177.913)
Expenditure
CAZ 0.000 1.656 6.340 5.197 4.230 3.771 3.292 2.869 2.661 2.441 2.209 2.367 2.542 39.577 CAF Administration 0.382 1.353 0.682 0.174 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 2.591 Total Expenditure 0.382 3.010 7.021 5.372 4.230 3.771 3.292 2.869 2.661 2.441 2.209 2.367 2.542 42.168
Net (Income)/Expenditure 0.000 (9.795) (36.756) (27.067) (18.822) (14.926) (11.050) (7.703) (5.891) (4.091) (2.304) 0.119 2.542 (135.745)
To/(From) Sinking Fund 0.000 0.373 1.426 1.169 0.952 0.849 0.741 0.493 0.000 0.000 0.000 (1.501) (4.502) 0.000
Net (Inflow)/Outflow 0.000 (9.422) (35.330) (25.898) (17.870) (14.077) (10.310) (7.210) (5.891) (4.091) (2.304) (1.382) (1.960) (135.745)
Balance Brought Forward 0.000 0.000 (9.422) (44.752) (70.649) (88.519) (102.596) (112.906) (120.116) (126.007) (130.099) (132.403) (133.785)
Balance Carried Forward 0.000 (9.422) (44.752) (70.649) (88.519) (102.596) (112.906) (120.116) (126.007) (130.099) (132.403) (133.785) (135.745)
Budget Information – Car parking income 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Totals £m £m £m £m £m £m £m £m £m £m £m £m On-street (0.481) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.443) (19.247) Off-street (0.258) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (0.774) (10.332) Total Income (0.739) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.217) (29.570)
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Miscellaneous 7.3.14 The City Council will be responsible for reporting to JAQU on a monthly basis and JAQU reserve the right to reclaim unspent or misspent funding. The City Council through its management of the project will put in place relevant monitoring processes and controls to ensure that project costs are managed and expenditure is in line with the grant conditions. I the event that the project is delivered within the grant resources allocated, unused grant will be retained within reserves for re-payment in line with the grant conditions.
7.3.15 The GFBC (Appendix A) contains a financial model for the Implementation and Clean Air Fund based on estimated costs and cost profiles which have been benchmarked against similar projects. It is however a requirement that the final estimated cost and cost profile is built up from quotes or agreed contracts from the supply chain. As the procurement activities are still underway, the project team have been unable to include actual costs and, as noted under CAZ implementation above, a subsequent report will be submitted to Government clarifying the project costs, cost profile and the associated funding request as soon as all information is available, anticipated to be January/February 2019. See Recommendation 2.5. 7.4 Procurement Implications (if required) 7.4.1 The Procurement Strategy (see Appendix B2) sets out necessary procurement activities required to deliver the CAZ project including routes to market, contract terms and tender evaluation processes. To summarise, each work stream under the project has its own requirements which will be delivered by procuring goods and/or services. The goods/services required will be delivered using existing framework arrangements available to the City Council, the key procurement activities are as follows: Civils work (signs, poles, gantries, ground works) – West Midland Highways and Infrastructure Works Framework; Technology work (cameras, back office) – Capita ICTDS Framework; Additional Measures - West Midland Highways and Infrastructure Works Framework (or its replacement, framework expires in September 2019);
Mitigation Measures – Various, as per Appendix C. 7.5 Human Resources Implications (if required) 7.5.1 In order to manage the implementation and ongoing business as usual phases of the CAZ, it is anticipated that the City Council will need to recruit additional staff and/or amend the roles and responsibilities of existing staff resource and/or amend existing staff resource roles and responsibilities. This will be in line with existing City Council human resource policies, subject to staff consultation (where required) and subsequent approvals in line with the City Councils
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governance procedures and Gateway and Related Financial Approval Framework. 7.5.2 An update of the Council’s staff Travel Plan is currently underway. This will seek to encourage staff to travel to work and where practical undertake work related business using sustainable forms of transport. 7.6 Public Sector Equality Duty 7.6.1 An Integrated Impact Assessment (IIA) has been undertaken as part of the feasibility study. The IIA assesses and analyses the economic and health impacts of introducing a CAZ and maps out the spread of impact in terms of scale and significance, identifying the most vulnerable groups and the ways in which they are impacted. The findings of the IIA have been used by the City Council to develop the proposed set of measures, in particular the mitigation measures and exemptions. 7.6.2 This has identified that there are potentially impacts for a number of protected characteristics. An Equality Impact Assessment has been undertaken and is provided at Appendix D and provides further narrative around the proposed exemptions and mitigations proposed.
8 Background Documents 8.1 Tackling Air Quality in Birmingham, Cabinet Report, June 26th 2017; 8.2 Birmingham Clean Air Zone submission of a Preferred Option Business Case to Government, Cabinet report 10th September 2018. 8.3 Joint Cabinet Member/Chief Officer report “Joint Air Quality Unit Early Measures Fund for Local NO2 Compliance – Application for and acceptance of funding”19 September 2018. 8.4 List of Appendices accompanying this Report (if any): Appendix A Government Full Business Case; Appendix B Options Appraisal Report; o Appendix B1 Charging Infrastructure Diagram; o Appendix B2 Procurement Strategy; o Appendix B3 Delivery Schedule; o Appendix B4 Risk Register; Appendix C Clean Air Fund Report; Appendix D Equality Analysis.
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9 Birmingham Clean Air Zone
Click here to enter client
Birmingham Clean Air Zone Title Full Business Case
Date Version 4th December 2018
Rev Originator Approved Date 1 Cameron McGlennon 14th November 2018 2 Cameron McGlennon 23rd November 2018 3 Cameron McGlennon 4th December 2018
© Birmingham City Council.
1 Version: 4th December 2018 Page 33 of 366 Birmingham City Council Clean Air Zone PRIVATE AND CONFIDENTIAL
Contents 1 Strategic Case 6
1.1.1 Organisational Overview 6 1.1.2 Policy Context 6 1.1.3 European Context 6 1.1.4 National Context 7 1.1.5 Regional and Local Context 7
1.3.1 Drivers for Developing a Robust Baseline 9 1.3.2 Air Quality Baseline: Traffic modelling inputs 13 1.3.3 Air Quality Baseline: 2016 baseline 14 1.3.4 Air Quality Baseline: 2020 baseline 16 1.3.5 Air Quality Baseline: Specific sources of exceedance 17
1.4.1 Public health and regulatory context 19 1.4.2 Drivers for change in Birmingham 19 1.4.3 Need for targeted action 20 1.4.4 Other key considerations 21
1.5.1 Spending Objectives 23 1.5.2 Critical Success Factors 23
1.6.1 Developing and shortlisting CAZ options and additional measures 24 1.6.2 Selection of CAZ D Inner Ring Road 24 1.6.3 CAZ D Inner Ring Road Price Sensitivities 26 1.6.4 Need for additional measures 26 1.6.5 Need for further mitigation measures and exemptions 28
1.8.1 Benefits 29 1.8.2 Risks 30 1.8.3 Constraints and inter-dependencies 30 1.8.4 Stakeholder Engagement 31 2 Economic Case 32
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2.1.1 Summary of Findings 32
2.2.1 Critical Success 34 2.2.2 Additional Measure Optioneering 34 2.2.3 Shortlisting of CAZ Options 35 2.2.4 Proposed CAZ Boundary 36
2.4.1 Key assumptions 38 2.4.2 Uncertainties 38
2.6.1 Non-compliant user options 39 2.6.3 Cost of upgrading to compliant vehicle 41 2.6.4 Impact of non-compliant vehicles moving to outside the CAZ 42 2.6.5 Costs of paying charges 42 2.6.6 Note o 43 2.6.7 Impact o 43 2.6.8 Loss of Welfare from Changing Travel Behaviour 44
2.8.2 Health Impacts 47 2.8.3 Schools and Distribution 49 2.8.4 Health Impacts related to Behavioural Change 52 2.8.5 Environmental Impacts of Air Pollution 54 2.8.6 Monetised Benefits: CAZ D scheme 54 2.8.7 Summary of Health and Environmental Benefits 56
2.9.1 Mitigation measures 57 2.9.2 Exemptions 62 2.9.3 Interrelations between mitigations and exemptions 65 2.9.4 Mitigations and exemptions impact on compliance 65 2.9.5 Mitigations’ and exemptions’ Value for Money 65
2.10.1 Scaling factor 68
2.11.1 Monetised Costs and Benefits 69
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3 Financial Case 71
3.2.1 Units of account 73 3.2.2 Project costs 73 3.2.3 Assumptions and limitations 73 3.2.4 Treatment of risk and market engagement 73
3.3.1 Additional Measures 77
3.4.1 Decommissioning 80 3.4.2 Sinking Fund 80
3.7.1 CAZ Charges 84 3.7.2 Penalty Charges 86 3.7.3 Parking Revenue 86 3.7.4 CAZ Revenue 88
3.8.1 Funding 91
3.9.1 CAZ 92 3.9.2 Clean Air Funding 92
4 Commercial Case 94
4.2.1 Works and/or Services to be ‘procured’ 95 4.2.2 Procurement Routes to Market 97 4.2.3 Contractor Delivery Model 98 4.2.4 Procurement Delivery Models 98 4.2.5 Tendering Model Options 99
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4.3.1 Main CAZ Works 100 4.3.2 Additional Measures 101
4.4.1 CAZ Design and Development 102 4.4.2 CAZ Implementation (Civil Engineering) Works 102 4.4.3 CAZ Implementation (Technology) Works 102
4.9.1 Contractor Share Percentage 112
4.11.1 CAZ 112 4.11.2 Clean Air Funding 112
5 Management Case 114
5.9.1 Mitigation Measures 130 5.9.2 Exemptions 132 5.9.3 Mitigation Measures and Exemptions – delivery team 134
6 Appendices 139
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1 Strategic Case Context
This Case sets out the final case for change and the preferred way forward in terms of spending objectives, short-listed options and the preferred option for Birmingham Clean Air Zone, in light of the additional baseline traffic and air quality modelling which developed as part of the Preferred Option Business Case. It is worth noting that there has been only one key change in the Strategic Case since the submission of the Preferred Option Business Case (POBC). This key change relates to identification of the preferred option for Birmingham CAZ, which is subsequently appraised in the Economic Case. That said, in accordance with the JAQUs guidance this Strategic Case for the Full Business Case (FBC) stage considers the following:
. An outline of the strategic context, in particular the European, national and local policies which either influence or will be impacted by the project
. Local traffic and air quality modelling for the project’s counterfactual case, using the agreed target determination values
. Final position regarding the project’s case for change (including the logic map), spending objectives and critical success factors
. Project’s short-listed options which are appraised in detail in the Economic Case of the OBC, and the preferred option which is appraised in the Economic Case of this FBC – see section 2
. Summary views of the project’s benefits, risks, constraints and dependencies, with further details presented in subsequent Cases of this FBC
. Stakeholder engagement to date and next steps. 1.1.1 Organisational Overview Birmingham City Council (BCC) is the largest urban local authority in the UK and the largest council in Europe with 101 councillors representing 69 wards. It has a population of over 1 million residents spread over an area of approximately 26,777 hectares (103 square miles). It has a population density of 36.5 persons per hectare, which makes it the most densely populated of the West Midlands local authorities.
The city has a very complex road network with about a dozen major radial roads and two ring roads traversing the city. In addition, there are three heavily trafficked motorways, M5, M6, M6 Toll and M42 forming a box around the city with a section of the A38M running through the city.
BCC declared itself an Air Quality Management Area in respect of Nitrogen Dioxide (NO2) in 2010. The Council has recognised the importance of environmental health on its residents for many years. The commitment to improving the environment for all residents is encapsulated within its strategic and community plans.
1.1.2 Policy Context Growing concern regarding air quality and health related problems have motivated legislative bodies at all levels to implement air quality standards to be achieved through actions and policies which must be transversal and aligned across institutions. This case presents the key policy drivers which will inform the development of the project. It is worth noting that some of these policies will also impact the project.
1.1.3 European Context In 2008 the EU issued the ambient air quality and clean air for Europe Directive, which set out emissions limits which member states must comply with. The European Union standards have been evolving since 1990 through 6 standard levels (from EURO 1 to EURO 6) having reduced the limit standards of some pollutants up to 96% from the release of EURO 1, thanks to technology advancements. European emission limits are associated to Carbon Monoxide, Hydrocarbons, Particulate Matter, and lately more focused on Oxides of Nitrogen concentrations. Many European Countries are struggling to reach the objectives set by the EU, including the UK, finding major difficulties alongside some of the busiest roads.
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1.1.4 National Context Air quality legislation was first introduced in the late 1990s as part of the Environmental Act (1995), in which was defined the concept of local air quality management. In 2007, DEFRA published the Air Quality Strategy which sets the national objectives for further improving air quality and how they would be achieved. Related to the Air Quality Strategy, the UK set its own Air Quality Standards Regulations in
2010 which limit the concentrations of NO2 for being harmful for the environment and having serious health implications. The concentration limits are aligned with the World Health Organization guidelines:
. Hourly mean limit value not exceeded more than 18 times in a calendar year: 200 µg/m3 . Annual mean limit value: 40 µg/m3.
To tackle roadside NO2 concentrations, DEFRA proposed in 2015 a series of measures which were related to current infrastructure management and supply, the implementation of new technologies and incentives. These included:
. Charging measures: creation of Clean Air Zones. 5 cities excluding London have been required to implement a CAZ, one of them being Birmingham.
. Infrastructure measures: investment in national and local road network to relieve congestion, improve safety and promote sustainable modes of transportation.
. Vehicles and technologies: Investment in low and ultra-low emission busses and retrofit technology schemes aimed to the oldest vehicles.
. Programmes and incentives: promoting fuel efficient driving styles, encouraging the use of alternative fuels, grants towards purchase of new ultra-low-emissions vehicle (ULEV) and tax incentives for ULEVs. 1.1.5 Regional and Local Context
For the West Midlands region, air quality issues are addressed at two different levels.
At a metropolitan level, in 2016, the West Midlands Combined Authority (WMCA) launched the WMCA Strategic Transport Plan ‘Movement for growth’ to support the improvement of the transport system, economic growth and regeneration, and environment and social inclusion. In relation to environment implications, the WMCA aims to improve air quality, reducing carbon emissions and improving road safety. The objectives of this Plan are aligned with the European Union emission limits and the national levels for
NOx. Specific measures include the improvement of public transport services, transport capacity, parking management to support intramodality and ULEV promotion and the associated infrastructure and facilities.
The Low Emissions Towns and Cities Programme (LETCP) was born as a partnership between seven West Midlands local authorities with the objective of producing various regional strategies to improve air quality, with a view to meeting national air quality objectives. The outcomes are a Low Emissions Strategy focused on Low Emission Zones (LEZ) which discourage the most polluting vehicles to access defined boundaries and a Good Practice Guidance on Planning and Procurement.
At a local level, Birmingham City Council key outcomes are related to the implementation of the Clean Air Zone Programme and allow benefits to be realised. These are consistent with four out of five of the outcomes in the City Councils plan 2018-2020:
. Outcome 1 – Birmingham is an entrepreneurial city in which to learn, work and invest in; . Outcome 2 – Birmingham is an aspirational city to grow up in; . Outcome 3 - Birmingham is a fulfilling city to age well in;
. Outcome 4 – Birmingham is a great city to live in. Improving air quality as soon as possible, consistent with other statutory responsibilities is a key ambition of the Birmingham Health and Wellbeing Strategy and supports the delivery of policies included in the
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‘Birmingham Connected Transport White Paper’, which in turn, supports delivery of the adopted Birmingham Development Plan and Movement for Growth. The Health and Social Care Act 2012 requires Local Authorities in England to have a Health and Wellbeing Board (HWBB). A key responsibility of the HWBB is to develop a Health and Wellbeing Strategy (HWBS). Improving air quality is a key ambition of the Birmingham Health and Wellbeing Strategy
Air quality competences are transferred to local authorities through the Localism Act (2011). The City Council is responsible for assessing whether air quality standards and objectives are achieved locally and identify those spots where pollutants exceed the maximum levels. To comply with the legislation, the City Council must:
. Designate an Air Quality Management Area (AQMA) to monitor air pollution and to predict how it will change in the next few years.
. Prepare an Air Quality Action Plan (AQAP), proposing measures to improve air quality in the area ensuring the compliance of National Air Quality Objectives. The measures outlined in Birmingham are maximising national levers, promoting local policies and programmes, developing local infrastructure and promoting positive behaviour change through organisational actions. In parallel with the AQAP, in the context of growth and development of the city centre, the Council is working towards the Birmingham Development Plan (BDP). In line with the general vision of the Council, this plan seeks to define a sustainable way of growth to meet the needs of its population and strengthening its global competitiveness comprising the period from 2011 to 2031. The global objectives are to design sustainable environments to ensure high-quality of life, build around a diverse base of economic base of economic activities supported by a skilled workforce and enhance the cultural heritage of the city. Improving air quality is set as one of the main actions to meet the goals of the Plan.
Also, the Big City Plan is focused on the transformation of the city covering every aspect of the built environment. One of the objectives is to ensure construction companies are keeping emissions to a minimum and that they deliver sustainable developments aligned with the sustainable growth planned in the BDP. Currently, the Snow Hill Development is identified as one of the City’s most valuable assets creating thousands of new jobs and becoming a principle transport hub. However, the adjacent highway network is constrained by the current level of traffic and is at risk of affecting the development of the area. By implementing LEZ or CAZ frameworks, it is expected to improve the air quality in the area and increase the capacity of the network, enabling the growth and supporting a healthy environment in the district.
As a result of these plans, some of the policies regarding the development of the city have air quality as key consideration and are supported by local programmes and initiatives:
. Brum Breathes – Tackling Air Quality in Birmingham. This programme is committed to improve the quality of life and well-being in the city, tackling health inequalities and increasing life expectancy by making people aware of the air quality issues and building sustainable environments.
. Birmingham Connected (Moving Our City Forward). It is focused on the development of a mass transit network, the establishment of Green Travel Districts and the promotion of a city Centre Low Emissions Zone. Since its implementation the major improvements include the redevelopment of the New Street Station, the extension of the metro through the city centre, the implementation of bus priority measures, cycling network, speed limits and the improvement of congestion hotspots. Clean Air Zone
Moving forward on the process to meet the objectives set across institutions within the shortest time possible and in the context of Birmingham’s future growth, makes it necessary to address the challenge by implementing more restrictive and concise measures. The BDP forecasts an increase of 30,000 people living in the city centre and 51,000 new jobs, leading to an increase of 30% trips to and within the city centre by 2031. According to the National Air Quality Plan, 5 cities were identified to require urgent action in terms of air quality, Birmingham being one of them, and a Clean Air Zone Framework has been proposed to the local authorities.
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A Clean Air Zone (CAZ) defines an area where targeted action is taken to improve air quality and resources are prioritised in a way that delivers improved health benefits and supports economic growth and the low- emission economy. A charging system is defined according to the vehicle emission standards to enter the CAZ area. Compliant vehicles will not be subject to charge.
The main objectives are to improve the vehicle type profile in the city of Birmingham, encouraging people to buy compliant vehicles and drive a model shift diverting demand to public transport or other sustainable modes as an alternative of a charging CAZ.
The expected outcome is to reduce NO2 levels below the standards within the shortest possible time and accelerating the transition to a low emission economy. Revenues from the Birmingham CAZ will be a source of investment to enhance the development of the city towards a more sustainable environment and will help decoupling growth and pollution.
Assessment of Baseline Air Quality 1.3.1 Drivers for Developing a Robust Baseline Air quality is a term used to describe the air that we breathe, and the level of pollutant concentrations that are considered to be reasonably ‘safe’ from a health perspective1. The main pollutants of concern in the UK are nitrogen dioxide (NO2) and fine particulate matter (PM). Specific health impacts for these pollutants reported in the literature2 are summarised as follows:
. NO2: At high concentrations, NO2 causes inflammation of the airways. Long-term exposure is associated with an increase in symptoms of bronchitis in asthmatic children and reduced lung development and function
. PM: Long-term exposure contributes to the risk of developing cardiovascular and respiratory
diseases, including lung cancer. Research shows that PM10 particles with a diameter of 10 microns
and smaller (PM10) are likely to be inhaled deep into the respiratory tract. The health impacts of
particles with a diameter of 2.5 microns or smaller (PM2.5) are especially significant as smaller particles can penetrate even deeper. Preliminary work undertaken in 2015 as part of the West Midlands (LETC) Programme3 provided estimates of the current impacts of NO2 pollution on Birmingham City Centre and the wider West Midlands Conurbation4.Table 1.1 presents the 2011 and 2018 estimates of deaths per year that are attributable to
NO2 pollution. In 2011, it was estimated that 906 deaths in the West Midlands Metropolitan Districts were attributable to NO2 pollution, including 371 in Birmingham. Section 4.4 – “Health impacts associated with air pollution”, of the West Midlands Low Emission Zones: Technical Feasibility Study4, provides details of the approach adopted to estimate deaths attributable to NO2 pollution.
The data forecasts that, under the counterfactual case, the number of deaths attributable to NO2 pollution would reduce notably across all West Midlands Metropolitan Districts by 2018. That said, the forecasts demonstrate that between 2011 and 2018 the number of deaths attributable to NO2 pollution would reduce at a slower rate in Birmingham compared to the wider West Midlands Metropolitan area.
1 It can also relate to impacts on eco-systems, but this is beyond the scope of this Preferred Option Business Case. 2 Ambient (Outdoor) Air Quality and Health Fact Sheet. World Health Organisation (2016). Accessed February 2018. 3 West Midlands Low Emissions Towns and Cities (LETC) Programme. Accessed February 2018. 4 HYPERLINK "https://go.walsall.gov.uk/Portals/0/Uploads/PollutionControl/west_midlands_letcp_low_emission_zones_- _technical_feasibility_study_wp2_economic_and_health_impacts-2.pdf" West Midlands Low Emission Zones: Technical Feasibility Study. Economic and Health Impacts of Air Pollution Reductions. Ricardo-AEA. February 2015. Accessed February 2018.
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Table 1.1 Numbers of Deaths, Asthmatic Children with Bronchitic Symptoms and Respiratory Hospital Admissions Attributable to NO2 Pollution: 2011 and 2018 estimates
Deaths per year Deaths per year
Local Authority attributable to NO2 attributable to NO2 pollution: 2011 pollution: 2018
Birmingham 371 175
Coventry 70 21
Dudley 72 21
Sandwell 147 71
Solihull 62 24
Walsall 107 43
Wolverhampton 78 29
West Midlands Metropolitan Districts 907 384
Since the publication of this report, it has been established that for many diesel vehicles the predicted emissions used in these estimates was lower than the measures real-word emissions. That would make these figures an underestimate.
Table 1.2 presents the estimated burden on local mortality attributable to man-made particulate air pollution for 2011 and 2018. In particular, it presents the annual numbers of attributable deaths to PM2.5 air pollution. Section 4.4 – “Health impacts associated with air pollution”, of the West Midlands Low Emission Zones: Technical Feasibility Study4, provides details of the approach adopted to estimate deaths attributable to PM2.5 pollution. It is estimated that there were 1,359 deaths attributable to particulate air pollution in 2011 in the West Midlands Metropolitan Authorities, including 486 in Birmingham. The counterfactual case forecasts indicate that the number of deaths attributable to PM2.5 air pollution would only reduce marginally across all West Midlands Metropolitan Districts by 2018. It is worth noting that the rate of reduction of deaths attributable to PM2.5 air pollution between 2011 and 2018 is considerably lower than that forecast for deaths attributable to NO2 pollution across all seven local authority areas.
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Table 1.2 Local Mortality Burden Associated with Particulate Air Pollution in West Midlands Local Authorities
Annual Deaths Per Annual Deaths Per Year Attributable Year Attributable Local Authority to PM2.5 Particulate to PM2.5 Particulate Air Pollution: 2011 Air Pollution: 2018
Birmingham 486 441
Coventry 156 142
Dudley 158 142
Sandwell 178 161
Solihull 103 94
Walsall 147 133
Wolverhampton 131 118
West Midlands Metropolitan Districts 1,359 1,231
The preliminary assessments undertaken as part of the West Midlands (LETC) Programme also estimate other indicators including:
. Asthmatic children with bronchitic symptoms attributable to NO2,
. Respiratory hospital admissions attributable to NO2 pollution and
. Life years lost per year attributable to PM2.5 air pollution These indicators for the seven West Midlands Metropolitan Districts are presented in the Birmingham Clean Air Zone Feasibility Study: Air Quality Modelling Report.
Review of Birmingham specific data presented in Table 1.1 and 1.2 indicates that in 2011, 857 deaths annually were attributable to NO2 and PM2.5 air pollution in the City. The data suggests that annual deaths attributable to NO2 and PM2.5 air pollution in Birmingham would reduce to 616 by 2018. Department for Transport’s WebTAG Data book June 2018 version 1.10.1 presents estimates for average (economic) value of prevention per fatality by element of cost. In particular, Table A 4.1.1 estimates the economic costs per fatality (including lost output and human costs, excluding medical costs) at £1,547,190 in 2010 prices and
2010 values. Applying this ready reckoner to deaths annually attributable to NO2 and PM2.5 air pollution suggests that the economic implications of air quality in Birmingham was at least £1.3 billion (in 2010 prices) in 2011. The same approach suggests that air pollution driven economic implications in Birmingham would reduce to £0.95 billion (in 2010 prices) by 2018.
Despite the forecast reduction between 2011 and 2018, the fatalities attributable to poor air quality and subsequent economic costs, when measured in terms of monetised value of deaths annually attributable to NO2 and PM2.5 air pollution, remains considerably high in Birmingham. Such evidence, along with the City’s policy ambition summarised earlier in the Strategic Case and the regulatory requirements outlined below, act as the key drivers for developing a robust baseline position for the City’s air quality.
Driven by such public health priorities, the Air Quality (Standards) Regulations 2010 set legal limits (called ‘limit values’) for concentrations of pollutants in outdoor air. These are based on the EU Air Quality Limit Values5. The UK government is currently responsible to the EU for ensuring that it complies with the
5 Taken from: ec.europa.eu/environment/air/quality/standards.htm. Accessed February 2018.
11 Page 43 of 366 Birmingham City Council Clean Air Zone provisions of the EU Air Quality Directives6, which are legally binding. However, under the Localism Act (2011), the UK government has discretionary powers to pass on any fines (or a proportion) to local authorities.
The UK government is currently in negotiations with the EU over breaching Limit Values for NO2 and PM10. On the UK government’s behalf, the Department for Transport (DfT) and Department for Environment Food and Rural Affairs (DEFRA) are responsible to ensure that the UK meets the EU Air Quality Limit Values. The UK makes use of DEFRA’s Pollution Climate Mapping (PCM) model, in addition to monitoring, as its approved means of reporting air quality information to assess legal compliance across the different zones. To model air quality, Birmingham City Council use the Airviro modelling software produced by the Swedish Meteorological and Hydrological Institute (SMHI) and Apertum. Further details regarding Airviro and its alignment with PCM are presented in the Birmingham Clean Air Zone Feasibility Study: Air Quality Modelling Report.
The legal limits for pollutants of most concern for the West Midlands Urban Area (including Birmingham) along with the 2016 compliance assessment are shown in Table1.3.
6 Ambient Air Quality Directive 2008/50/EC and Directive 2004/107/EC. Accessed February 2018.
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Table 1.3 Legal Limits for Pollutants of Most Concern in the West Midlands Urban Area, Including Birmingham
Compliance assessment for Number of Concentration 2016 in the Averaging Target and Limit permitted Pollutant (limit value) West Midlands Period Values exceedances µg m-3 Urban Area each year (Including Birmingham)7
Target value came into force on 1 January 2010 Limit PM 258 1 year n/a Compliant 2.5 value came into force on 1 January 2015
Limit value came into force on 1 50 24 hours January 2005 (time 35 Compliant9 extension granted
PM10 to June 2011)
Limit value came 40 1 year into force on 1 n/a Compliant January 2005
Limit value came 200 1 hour into force on 1 18 Compliant January 2010
NO2 Limit value came 40 1 year into force on 1 n/a Non-Compliant January 2010
In 2015/16, most of the 43 air quality reporting zones were in exceedance of the statutory annual mean limit value for NO2 emissions in the UK, including the Birmingham urban area. This NO2 emissions non- compliance also drives the need for robust baselining, development of interventions and ongoing monitoring for air quality in Birmingham.
1.3.2 Air Quality Baseline: Traffic modelling inputs
Developing a robust air quality baseline requires a series of sequential steps, including modelling of the City’s road network, not least to calculate the emissions from traffic into NO2 concentrations. The traffic modelling was undertaken using a variety data sources, research and existing modelling platforms to fully comply with DEFRA’s Joint Air Quality Unit (JAQU) guidance. The road network modelled is outlined in Figure 1.1. Further details regarding the modelling approach and tools adopted are presented in the Birmingham Clean Air Zone Feasibility Study: Transport Modelling Report and summarised in the Birmingham Clean Air Zone Feasibility Study: Air Quality Modelling Report.
7 Air Pollution in the UK 2016. DEFRA (2016). Accessed February 2018. 8 An obligation to reduce exposure to concentrations of fine particles also came into force from 2015. 9 Following the subtraction of natural sources in accordance with the directive
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The primary purpose of the transport modelling is to estimate traffic for the base year and develop reference case and intervention case forecasts, which ultimately feed into air quality modelling. Traffic forecasting utilised the 2016 base year Birmingham City Council’s SATURN model, which was calibrated against 2016 traffic data. The 2016 model results were audited by JAQU in August 2017 and approved for use within subsequent calculations.
The analysis of the 2020 reference case (the do-minimum scenario) involved an evaluation of how base year traffic flows would change by 2020 in the absence of any interventions. That said, the modelling of this scenario included a consideration of planned transport improvements to the local road network, demographic and development implications, regional traffic growth and changes to the traffic fleet.
Table 1.4 presents a summary comparison between 2016 base traffic estimates and the 2020 do-minimum scenario forecasts. The table highlights that the growth rate of car / taxi traffic in Birmingham City Centre between 2016 and 2020 is forecast to be considerably higher than that estimated for the rest of the City or the wider West Midlands. The data also indicates that LGV traffic across all geographies analysed is forecast to grow by more than 10% between 2016 and 2020. Lastly, the modelling results indicate that HGV based traffic growth would be highest in Birmingham City Centre.
Table 1.4 BCC Traffic Growth 2016 to 2020
Sector AM Peak Inter Peak PM Peak
Car/ LGV HGV Car/ LGV HGV Car/ LGV HGV Taxi Taxi Taxi
City Centre 7.9% 10.8% 3.5% 8.0% 10.8% 3.6% 7.4% 10.8% 3.6%
Rest of 3.7% 10.7% 3.2% 3.7% 10.7% 3.1% 3.7% 10.7% 3.1% Birmingham
Birmingham 4.2% 10.7% 3.2% 4.2% 10.7% 3.2% 4.1% 10.7% 3.2% (Total)
Rest of West 4.4% 10.6% 2.9% 5.3% 10.7% 2.9% 4.6% 10.8% 3.0% Midlands
Total 4.3% 10.7% 3.0% 4.7% 10.7% 3.0% 4.4% 10.7% 3.0%
Such traffic modelling results have been adopted as a key input for developing air quality baseline for the City.
1.3.3 Air Quality Baseline: 2016 baseline Whilst utilising the traffic modelling and other inputs, air quality modelling requires to follow the process of target determination which has been specified by the JAQU. Further details of the air quality modelling approach and key inputs, which follow the target determination process, are presented in the Birmingham Clean Air Zone Feasibility Study: Air Quality Modelling Report. This section summarises the 2016 baseline results generated using Birmingham City Council’s Airviro model, which includes a total of 124 receptors that have been included to represent the PCM road links. A further 54 sites have been included to represent local hotspots beyond the PCM network.
Birmingham is currently compliant with legal limits for PM. However, further reductions are needed
(especially to PM2.5 levels) to protect human health. Annual average PM10 and PM2.5 concentrations are well within the legal limit values of 40 and 25 μg/m3 respectively. Although compliance has officially been achieved, by reducing PM concentrations even more, the health benefits will be even greater.
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Birmingham City Council believes that even with compliance with the legal limit there will remain a health burden i.e. there is no recognised safe limit for PM at this point in time.
In contrast, annual average NO2 concentrations still exceed the legal limit on several road links in and around Birmingham City Centre. Meeting the NO2 legal limit poses a huge challenge for many cities in the UK and across Europe. One of the key reasons why ambient levels of NO2 remain higher than had been previously expected is the driving conditions in urban areas and concerns over the performance of the more recent Euro emissions standards for some diesel vehicles (see Appendix A of the Birmingham Clean Air Zone Feasibility Study: Air Quality Modelling Report for more information on Euro standards). In general, 10 Euro standards have failed to reduce oxides of nitrogen (NOx) emissions from light-duty diesel vehicles
(e.g. cars and vans), despite tightening emissions standards for NOx. However, Euro VI (for heavy vehicles) is performing well and the standard for light vehicles is still bringing about a significant reduction, albeit not as much as it should.
Whilst air quality remains a problem across Birmingham and the wider West Midlands conurbation, there are areas of the city centre where the problem is more pronounced than others. The 2016 baseline position for Birmingham is clearly illustrated in Figure 1.1.
Figure 1.1 - Air quality baseline – 2016 baseline
10 Vehicle emissions are measured in terms of total NOx. NOx is made up of nitrogen oxide (NO) and NO2, although the NO is subsequently converted into additional NO2 by interaction with ozone in the atmosphere – this reaction being dependent on the availability of ozone.
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Figure 1.1 highlights that most exceedances in Birmingham in 2016 were within and around the City Centre, bounded by the ring road. Figure 1.1 also identifies some significant exceedances on the A38 approaching the City Centre. Other locations of significant exceedances are identified on the motorway in the northern part of Birmingham. Figure 1.1 also highlights some exceedances on the A47 approaching the motorway.
1.3.4 Air Quality Baseline: 2020 baseline Following a similar approach as identified for 2016 baseline analysis, this section summarises the 2020 baseline results generated using Birmingham City Council’s Airviro model. Again, a total of 124 receptors have been included to represent the PCM road links. A further 54 sites were selected to represent local hotspots beyond the PCM network.
A summary of the Airviro results for 2020 baseline is presented in Table 1.5, and the full results for each of the 178 locations are presented in the Birmingham Clean Air Zone Feasibility Study: Air Quality Modelling Report. The analysis indicates that 15 PCM sites are estimated to exceed the statutory annual mean limit value for NO2 emissions in 2020. A further 26 local network sites, not identified on the PCM network, are also estimated to exceed the statutory NO2 emissions limits in 2020.
Table 1.5 - Summary of Local and PCM Modelling Results
3 Site Type Number of sites > 40 µg/m Maximum NO2 Concentration µg/m3
PCM sites (PCM output) 11 50.5
PCM sites (Airviro output) 15 48.8
Local network sites (Airviro 26 49.4 output)
The 2020 baseline position is clearly presented in Figure 1.2. A comparison between 2016 and 2020 baseline indicates that Birmingham’s air quality is expected to improve, although further and more urgent action will be required. Like the improvement across the wider City, the proportion of Birmingham City
Centre where annual average NO2 concentrations exceed the legal limit is expected to decrease by 2020, due to anticipated reductions in background concentrations, ongoing upgrade of the local vehicle fleet and other local interventions. However, modelling indicates that, if nothing further is done, concentrations will continue to exceed the limit on some major roads in and around the City Centre, including the A38, A38M, A4400, A452 and A4540.
In particular, as with the 2016 analysis, the 2020 baseline highlights that most locations of exceedances are forecast to be within the City Centre, bounded by the ring road. Outside this area, highlighted with a redline boundary in Figure 1.2, other notable exceedances are located on A38 approaching the City Centre and the motorway in the north of the City. Such locational specific analysis forms part of key evidence for identifying the boundary of Birmingham’s Clean Air Zone and any additional measures.
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Figure 1.2 - Air quality baseline – 2020 baseline
1.3.5 Air Quality Baseline: Specific sources of exceedance
Nitrogen oxides is a generic term which includes both NO and NO2. According to the National Atmospheric Emissions Inventory (NAEI) estimates, around a third of the UK NOx emissions in 2015 arose from road transport, most of which came from diesel vehicles (NAEI, 2017).11. Some disparities exist due to the increase in the proportion of NOx emitted directly as NO2 (also known as primary NO2) from the exhausts of modern diesel vehicles, as a result of emission control systems that aim to reduce total NOx and particulate matter emissions.
The starting point of establishing a robust baseline regarding Birmingham’s air quality in relation to NO2 emissions is to establish the specific sources of exceedances. The majority of this pollution is typically associated with combustion emissions, including from road transport, rail, aircrafts, industry and domestic activities.
An assessment of NOx emissions, which are a combination of nitrogen oxide (NO) and NO2, was undertaken for Birmingham. The findings were presented across the following two key categories:
. Road NOx: NOx emissions resulting from road traffic
. Background NOx: NOx emissions made up of a contribution of remote road traffic emissions and other sources including industrial, domestic, air transport and rail transport. This assessment highlights that road traffic (Road NOx. in Birmingham is the predominant source of total oxides of nitrogen in the City. The assessment also confirms that remote road traffic emissions are a significant proportion of the Background NOx. The findings of this assessment across a number of key
11 NAEI, Air Quality Pollutant Inventories for England, Scotland, Wales, and Northern Ireland: 1990-2015 (August 2017)
17 Page 49 of 366 Birmingham City Council Clean Air Zone locations is summarised in the table below. The data below highlights that road based NOx in Birmingham, which includes Road NOx and remote traffic emissions in Background NOx, is considerably higher than the national average estimated in NAEI assessment.
Table 1.6 - Road NOx and Background NOx for key locations in Birmingham: 2020 estimates (reference case)
2020 Modelled 2020 Modelled Census Receptor Position Easting Northing Road Road NOx Background ID µg/m3 NOx µg/m3
Inside Ring A4400 Suffolk PCM_0 406752 286515 81490 49.2 44.5 Road St. Queensway
Inside Ring A38 PCM_2 407477 287785 56394 48.5 40.8 Road Corporation St.
A4540 Watery Outside PCM_6 408473 286918 27736 Lane 53.6 37.9 Ring Road Middleway
Inside Ring Non_PCM_10 407458 286475 N/A Moat Lane 47.5 43.8 Road
The reference case analysis summarised in Table 1.6 highlights the need to focus effort on reducing Road
NOx and background NOx resulting from remote traffic. These emissions are dependent on the type of vehicle both in terms of size and age. A breakdown of vehicle emissions or ‘source apportionment’ was undertaken for 2020 baseline at a number of specific receptor points in and around Birmingham City Centre, the key location of exceedances, to provide specific information on the emission sources.
The respective source apportionments indicate significant contributions from a number of vehicle classes as summarised in Table 1.7. The table highlights that in 2020 diesel cars will be the single largest contributor of NO2 emissions at most locations in and around the City Centre. Diesel LGVs and Rigid HGVs are also envisaged to be notable contributors of NO2 emissions. In certain locations, buses and coaches are forecast to be the key driver of NO2 emissions. Petrol cars, petrol LGVs and Arctic HGVs are forecast to be amongst the smallest contributors of NO2 emissions across in and around the City Centre. Such analysis provides evidence around vehicle categories which would need to be considered for Clean Air Zone interventions.
Table 1.7 - Road NOx and Background NOx for key locations in Birmingham: 2020 estimates
A38 (Between A540 Lawley Children’s Hospital Suffolk St Queensway Vehicle Type A4100 Digbeth Middleway - and Dartmouth (Near Bank st) Garrison Circus Circus)
Diesel Cars 54% 53% 25% 42%
Petrol Cars 6% 6% 3% 5%
Buses/Coaches 3% 0% 49% 0%
Artic HGVs 2% 2% 2% 4%
Rigid HGVs 13% 14% 13% 28%
Diesel LGVs 22% 25% 8% 21%
Petrol LGVs 0% 0% 0% 0%
Case for Change
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1.4.1 Public health and regulatory context Humans can be adversely affected by exposure to air pollutants in ambient air. As such the real driver for tackling pollution is the benefit to public health. It is also a social justice issue for more vulnerable people as well as a health and environmental concern, particularly given the exposure of poor air quality on disadvantaged communities and social infrastructure such as schools, hospitals and care homes. NO2 and PM, the two pollutants identified earlier in this document, are primary causes of air quality related public health concerns in Birmingham and other major cities across the UK.
Over the years the European Union and the UK Government have developed an extensive body of legislation which establishes health based limits for a number of pollutants present in the air. These limits apply over differing periods of time because the observed health impacts associated with the various pollutants occur over different exposure times. Part IV of the Environment Act (1995) and resultant initial Air Quality Strategy, in the late 1990s, introduced the concept of Local Air Quality Management (LAQM) in the UK. It was expected that the forthcoming vehicle emissions standards for road vehicles and industrial permitting would deliver, if not all, then the majority of the air quality improvements needed to meet legislation.
Birmingham inability to meet the legislation, lead to the whole of Birmingham being declared an Air Quality Management Area (AQMA) for nitrogen dioxide in January 2003. Pursuant to the AQMA declaration Environmental Health led on the development and publication of an Air Quality Area Plan (AQAP) in 2006, which was updated in 2011. The original plan focused on a wide selection of actions, which were narrowed down to be more targeted for the 2011 plan.
In 2010, the Air Quality (Standards) Regulations 2010 set legal limits (called ‘limit values’) for concentrations of pollutants in outdoor air. These are based on the EU Air Quality Limit Values12. The UK continues to fail to meet air quality limit values for nitrogen dioxide set at an annual mean limit value of 40 µg/m3. This was to have been achieved by 2015 following an extension from the original deadline of 2010.
Currently, the UK continues to have significant exceedances of the annual mean legal limit for NO2 and the EU has indeed started infraction proceedings in the European Courts of Justice where as a result fines may be imposed.
1.4.2 Drivers for change in Birmingham
Poor air quality in Birmingham is acknowledged as a major public health burden and Public Health England suggest that it is the fourth largest risk to public health, behind cancer, obesity and cardiovascular disease. It is estimated that poor air quality was responsible for around 900 premature deaths a year in Birmingham and in excess of 2,000 attributable deaths across the West Midlands per year (based on 2011 estimates). This results in a significant economic cost burden on the City and the wider region.
The Council is responsible for ambient air quality and cleaner air under the Air Standard Regulations. The Council undertook an Air Quality Survey in March 2017. Among the 1,104 responses to the survey:
. 87% thought air quality is a ‘serious issue’ to be tackled now . 88% said air quality has a very serious impact on health
. 67% said air quality is an important consideration when making travel choices. The top three contributors to air pollution were considered by respondents to be (1) congestion, (2) vehicles idling in queues and (3) lorries, vans, and diesel cars. As with the wider UK, the two pollutants of most concern in Birmingham are nitrogen dioxide and fine airborne particulate matter. Both pollutants contribute to the health burden.
The air quality baseline analysis presented in the earlier section highlights that NO2 emissions exceedances in parts of the City are in excess of 20% of the legal limits. Meeting the NO2 legal limit poses a huge challenge for many cities in the UK. Birmingham is no different in this aspect. Although Birmingham’s air quality is forecast to improve by 2020 under the counterfactual case, the predicted reductions in pollution concentrations of NO2 are not forecast to reduce rapidly enough to achieve compliance levels.
12 Taken from: ec.europa.eu/environment/air/quality/standards.htm. Accessed February 2018.
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Failure to reduce the NO2 emissions (and PM) will continue to expose the City to significant economic cost burden associated with public health on the City, which were estimated at nearly £1 billion for 2018. Equally, failing to take action towards achieving nitrogen dioxide compliance could lead to legislative issues for the Council. In particular, the City Council would be exposed to legal challenge for a failure to meet its statutory duty to comply with the Ministerial direction. Furthermore, the legal challenges could also relate to its obligation under air quality legislation to achieve compliance with legal NO2 limits in the shortest possible time.
Within the above context, the Preferred Option Business Case concluded that this NO2 compliance in the shortest possible time in Birmingham needed to be taken forward as the project’s primary spending objective. In addition, the Outline Business Case also concluded that other public health driven economic and legislative drivers outline the wider rationale for intervention in Birmingham. These driver of change still valid as part of this Final Business Case for Birmingham Clean Air Zone.
Birmingham has poor health outcomes for many of the causes of death that poor air quality contributes to. Compared to the England average and adjusted to take into account demographic differences of the population, Birmingham has more deaths per 100,000 population under 75 from cardiovascular disease [1], respiratory disease [2] and deaths considered preventable [8].
[1] PHOF indicator 4.04i “Under 75 mortality rare from all cardiovascular diseases” 2014-16 [2] PHOF indicator 4.07i “Under 75 mortality rate from respiratory disease” 2014-16 [3] PHOF indicator 4.03 “Mortality rate from causes considered preventable” 2014-16
1.4.3 Need for targeted action As summarised above and in the POBC, lack of action to achieve compliance would result in public health driven economic and regulatory implications for Birmingham City Council. The air quality baseline analysis outlined earlier in this document highlights road traffic as a primary source of harmful emissions in the city, with diesel vehicles, including private cars, taxis, buses, LGVs and HGVs, as the most significant contributors to nitrogen dioxide emissions.
The Government issued the UK Plan for Tackling Roadside Nitrogen Dioxide Concentrations in July 2017 which identified Birmingham as one of the areas experiencing the greatest problem with nitrogen dioxide exceedances. The Government’s Plan requires the Council to deliver the best Clean Air Zone option to achieve statutory nitrogen dioxide limit values within the shortest possible time.
The 2016 and 2020 air quality baseline assessments highlight that most locations of exceedances are forecast to be within the City Centre, bounded by the ring road. Outside this area, other notable exceedances are located on A38 approaching the City Centre. This drives the need for CAZ around the City Centre, which is bounded by the A4540 Ring Road. In particular, a CAZ defined by the ring road would not only tackle exceedances within the City Centre, it would also indirectly mitigate the other notable exceedances located on A38 approaching the City Centre.
The air quality baseline analysis also identifies that there are notable exceedances on the motorways in the north of the City. It is understood that Highways England are addressing such exceedances as part of their national plan.
Considering the source apportionment analysis, a CAZ around the city centre would need to consider restrictions or charges for all vehicle categories, including private cars. Furthermore, considering that the annual mean NO2 concentrations remain above the legal thresholds consistently following the implementation of various restriction and complementary measures in Birmingham, there is a need to bring about a significant shift in local behaviours in the City. The stated preference analysis undertaken highlights the need for a charging CAZ to achieve such behavioural change.
That said, early modelling undertaken as part of the development of the project’s Strategic Outline Case clearly highlights that achievement of the required improvement in air quality is unlikely to be feasible in Birmingham if only charging options are considered. This inference was reinforced as part of the additional
20 Page 52 of 366 Birmingham City Council Clean Air Zone analysis carried out as part of the Outline Business Case. Consistent with the conclusions of the OBC, this continues to drive the need for inclusion of additional measures.
1.4.4 Other key considerations
Given its statutory equality duty, Birmingham City Council wants to ensure that compliance of NO2 emissions will not create any significant dis-benefits to disadvantaged groups. In particular, the OBC concluded that depending on the preferred option for a Clean Air Zone, there could be some impacts on people on lower incomes and those in minority ethnic communities that need to be recognised and mitigated where possible, in order to avoid any particular group being disproportionately affected.
The OBC also indicated that there could be an impact on local small and medium sized enterprises who employ Birmingham residents. Within this context, the OBC concluded that any scheme-specific equalities issues will be identified and mitigation measures (and / or exemptions) would be designed to reduce any negative impacts as far as possible. Further work carried out as part of this Full Business Case adopts this approach to underpin the rationale for relevant mitigation measures and exemptions. An overview of the key findings is presented later in the Strategic Case, with further details outlined in the Economic Case.
On a different note, as summarised earlier in this document and in the OBC, Birmingham has strong growth forecasts. A significant proportion of the City’s growth is envisaged to be delivered around the city centre. This growth is currently constrained by the current capacity of the city’s transport infrastructure in the short to medium term. Within this context, the Council expect that the emerging CAZ will act as an enabler of development and growth in the city centre. In particular, a city centre based CAZ can facilitate capacity on the city centre’s road network, which can unlock development and growth locally. Whilst enabling such developments, like the mixed-use plans for Snowhill Station and surrounding areas, the OBC concluded that the Council will need to ensure that their transport demand is multi-modal and any vehicle based demand is met through modern fleet of low-emission vehicles. This conclusion remains valid as part of the updated case for change presented in this Full Business Case.
The above outlines the project’s case for change, to achieve compliance with legal limits of NO2 emissions and outlines the potential for Birmingham to further improve air quality. This rationale for intervention, which was first established as part of the Strategic Outline Case and advanced further as part of the Outline Business Case, informed the development of the project’s spending objectives and critical success factors. This Strategic Case prepared as part of the Full Business Case reinforces the project’s case for change which developed as part of the Outline Business Case. Furthermore, the project’s spending objectives and critical success factors stated in the Outline Business Case remain unchanged as part of this Full Business Case.
The spending objectives and critical success factors acted as key inputs for short-listing the options for detailed economic appraisal at the Outline Business Case stage. These remain unchanged as part of this Full Business Case and are summarised in the subsequent section of this Strategic Case.
Furthermore, as stated in the Outline Business Case, whilst determining the preferred option for the project, the Council will ensure that the identified air quality exceedances are not displaced elsewhere in the City. This principle
The project’s logic map which captures its core aspects of case for change is presented in the
Table 1.8.
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Table 1.8 - Logic Map of Birmingham CAZ and Additional Measures (including mitigation measures and exemptions)
Inputs Outputs Outcomes Impacts
Implementation Fund Clean Air Zone (geography Change in journey Improved air quality and price structure by characteristics: journeys vehicle category) made in less polluting vehicles, cancelled or Clean Air Fund diverted journeys Increased physical activity
Infrastructure to monitor and enforce the Clean Air Other local funding Zone Increased mode share of Improved human health public transport
Local Plan Additional measures Loss of some economic Increased mode share of activity (supply side effects) active travel modes
Equality Duty Mitigations and exemptions Enable economic growth in Changes to vehicle fleet the City Centre
Cost of compliance
Behaviour change
Reduction in local NO2 concentrations
‘Neutralised’ negative impacts on SMEs / micro businesses and disadvantaged groups
Additional capacity on the network in the City Centre
Scheme Objectives and Success Factors
Underpinned by the rationale for intervention outlined as part of the assessment of Case for Change, BCC have defined its spending objectives to shape a clear way forward. The spending objectives will also allow Birmingham to deliver the outcomes sought by the national Air Quality Plan and support the wider policies set out in the Birmingham Development Plan, Clean Air Zone Framework and Brum Breathes.
Following the identification of spending objectives, JAQU’s Options Appraisal Package guidance requires determination of Critical Success Factors (CSFs). The guidance states that a list of CSFs is required to
22 Page 54 of 366 Birmingham City Council Clean Air Zone conduct a high-level comparative assessment of the options. This process is considered to result in a shortlist of options which are envisaged to be appraised in greater detail as part of the development of the Full Business Case.
Building on the above context, this section presents the project’s spending objectives and CSFs.
It is worth noting that project’s spending objectives and critical success factors were first established as part of the Strategic Outline Case, and subsequently refined as part of the Outline Business Case. The spending objectives and critical success factors presented in the final Outline Business Case remain valid and are adopted as part of this Final Business Case.
1.5.1 Spending Objectives
Following JAQU’s guidance the spending objectives are presented across two categories: primary objectives and secondary objectives. Birmingham City Council’s primary spending objective for Birmingham is to:
13 . SO1 Compliance - Deliver a scheme that leads to compliance with NO2 concentration limits in the shortest possible time. Birmingham City Council also has a series of supplementary spending objective that support solutions:
. SO2 Value for money - Demonstrate value for money for Birmingham City Council and, where central government funding is required, for the Government.
. SO3 Evidence based - Are driven by need, are based on real-time local evidence of air quality, emission sources, and levels of air pollution in Birmingham or in specific pollution hotspots, and where necessary the potential benefits and impacts are capable of being modelled.
. SO4 Fair and proportionate - Are targeted to minimise the impacts on local residents and businesses, including on disadvantaged groups, such that:
. there are no unintended consequences,
. ordinary working families who bought diesel vehicles in good faith are not unfairly penalised,
. support is made available to owners of affected vehicles where access restrictions or charging prevents certain vehicles from using particular roads at particular times, and
. SO5 Transition to Low Emission and healthier economy - Contribute to, and not compromise, Birmingham City Council’s ambition to half the level of all pollutants by 2030 whilst supporting Birmingham’s growth and accelerating the transition to a low emission economy, and creating a healthy place to live, visit and work. 1.5.2 Critical Success Factors
JAQU’s Options Appraisal Package guidance also suggests that local authorities need to identify two types of CSFs: primary CSF and secondary CSF. The project’s CSFs, which were defined as part of the Strategic Outline Case (SOC) for shortlisting the options, and their relationship with the above-mentioned spending objectives is summarised below. Further details regarding the CSFs and their relationship with the spending objectives are set out in Appendix 1B.
JAQU require that local authorities appraise their options against one primary (pass/fail) CSF and any options which do not meet this CSF should be rejected. Building on the guidance provided in the Options Appraisal Package document, the primary CSF for the Plan is:
. CSF1 Compliance: Deliver a scheme that leads to compliance with NO2 concentration limits (annual mean NO2 concentration of 40µg/m2) in the shortest possible time. This CSF directly supports Spending Objective SO1.
13 The NO2 annual mean value may not exceed 40 micrograms per cubic metre (µg/m3) as defined in the air quality directive (2008/EC/50) and as reported in Air Pollution in the UK report.
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JAQU’s Options Appraisal Package guidance highlights that there is a need to define other secondary CSFs to further differentiate amongst options. In particular, options that meet the primary CSF are required to be considered against the secondary CSFs. A number of secondary CSFs were defined against which options have been assessed, these are:
. CSF2 Value for money: This CSF considers the full range of costs and benefits to society of the proposed option (such as the health benefits of improved air quality and the costs to the public in complying with a measure) rather than just looking at the financial impacts to determine if the measure is viable within an economic context. This CSF directly contributes to Spending Objective SO2.
. CSF3 Evidence based: This CSF considers to what extent, the case for an option is based on real-time local evidence of air quality, emission sources, and levels of air pollution in Birmingham or in specific pollution hotspots, and (where applicable) the potential benefits and impacts are capable of being modelled. This CSF directly contributes to Spending Objective SO3.
. CSF4 Distributional impacts: This CSF considers the potential impacts on key groups of the proposed option, in order to determine whether there is likely to be a disproportionate impact on one or more particular groups. This CSF directly contributes to Spending Objective SO4.
. CSF5 Strategic and wider air quality fit: This CSF considers how the proposed option interacts with other local policies already in place, in particular the transitioning to a low emission and healthier economy by 2030 This CSF directly contributes to Spending Objective SO5.
. CSF6 Supply side capacity and capability: This CSF considers whether or not there is sufficient commercial capacity or capability in the supply chain to successfully deliver the proposed option and whether or not this is available. This CSF reflects the considerations made in the Commercial Case.
. CSF7 Affordability: This CSF considers if the option can be delivered given the potential resources available (for example staffing levels) and management structures in place as outlined in the management case. This CSF reflects the considerations made in the Financial Case.
. CSF8 Achievability: This CSF considers if the option can be delivered given the potential resources available (for example staffing levels) and management structures in place as outlined in the management case. This CSF reflects the considerations made in the Commercial and Management Cases. Optioneering
This section summarises the optioneering process adopted to determine the shortlist of options for Birmingham CAZ as part of the Outline Business Case. The shortlisted options were subsequently appraised in the Economic Case of the Outline Business Case to determine the preferred way forward.
1.6.1 Developing and shortlisting CAZ options and additional measures
Driven by the project’s spending objectives a long-list of CAZ options were identified. The initial CAZ optioneering took place based on sifting using the primary and secondary Critical Success Factors. The results qualitative and quantitative analysis was used to determine the shortlist of CAZ options. More detail of the long to shortlist sifting can be found in Appendix 1A, Table 6.1.
1.6.2 Selection of CAZ D Inner Ring Road As identified earlier in this document, early modelling undertaken as part of the development of the project’s Strategic Outline Case clearly indicated that achievement of the required improvement in air quality is unlikely to be feasible in Birmingham if only CAZ charging options are considered. In particular, the modelling indicated that under the counterfactual case, where no CAZ is imposed, nearly 207,000 vehicles will enter the area bounded by inner ring road on a daily basis in 2020. This area, within and around the City Centre, includes most locations of NO2 exceedances in the City. It requires targeted action not least because some 57,400 non-compliant vehicles are forecast to enter this area every day by 2020, resulting in more than 40 locations of NO2 exceedances.
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Modelling for a CAZ C for inner ring road indicated a marginal reduction in the number of vehicles entering the proposed charging zone by 2020 every day. In addition, the introduction of CAZ C for inner ring road, is forecast to reduce the number of non-compliant vehicles entering the proposed charging zone by more than 16,000 vehicles daily by 2020. Despite such forecasts the modelling estimates that there will be 19 locations of NO2 exceedances in 2020. A CAZ C option for inner ring road achieves the NO2 emission compliance level across all exceedance locations much after 2022. Based on this analysis, CAZ C for the inner ring road was discounted from the optioneering process.
Considering the results for CAZ C for the inner ring road, CAZ A and CAZ B options for the inner ring road were also discounted, as they would not be able to achieve compliance at the earliest possible time.
Modelling for a CAZ D for inner ring road indicated a notable reduction in the number of vehicles entering the proposed charging zone by 2020 every day, when compared to the counterfactual case. In addition, the introduction of CAZ D for inner ring road, is forecast to reduce the number of non-compliant vehicles entering the proposed charging zone by more than 50,000 vehicles daily by 2020, when compared to the counterfactual case. Despite such forecasts the modelling estimates that there will be 12 locations of NOx exceedances in 2020. A CAZ D option for inner ring road is estimated to achieve the NO2 emission compliance level across all exceedance locations post 2022.
The transport and air quality modelling results for the reference case, CAZ C for inner ring road and CAZ D for inner ring road options are summarised in Table 1.9.
Table 1.9 - Modelling results for Counterfactual Case, CAZ C and CAZ D inner ring road options
Percentage of No of non- vehicles Total vehicles compliant No of location entering CAZ, CAZ Option Geography entering CAZ vehicles of exceedances which are non- (2020) entering CAZ (2020) compliant (2020) (2020)
No CAZ – Inner Ring Road 206,900 57,400 27.7% 41 counterfactual case
CAZ C Inner Ring Road 205,100 41,300 20.1% 19
CAZ D Inner Ring Road 190,900 6,500 3.4% 12
Although the CAZ charging options for outer ring road failed to meet the requirements of the primary Critical Success Factor due to significant deliverability risks related to physical implementation and enforcement, initial transport modelling was undertaken for a CAZ D outer ring road option to assess its ability to reduce the number of non-compliant vehicles beyond those delivered by CAZ D inner ring road option discussed above.
This analysis indicated that a CAZ D for the outer ring road would result in some 197,500 vehicles entering the charging zone, of which some 16,800 vehicles would be non-compliant. Furthermore, the analysis indicated that the number of non-compliant vehicles entering the area bounded by the inner ring road, the location of most NO2 exceedances in Birmingham, CAZ D outer ring road option is only marginally lower than those forecast for the CAZ D inner ring road option. This demonstrates the diminishing returns for expanding the CAZ boundary in terms of reducing the number of non-compliant vehicles, a key driver for
NO2 emissions in Birmingham.
Based on these results, it was concluded that the performance of the CAZ D outer ring road option would only be marginally better than that of the CAZ D inner ring road option in terms of reducing NO2 emissions. This marginal change was considered not to be sufficient enough to ensure that NO2 compliance in Birmingham would be achieved earlier if CAZ D outer ring road option was delivered rather than the CAZ D
25 Page 57 of 366 Birmingham City Council Clean Air Zone inner ring road options. Considering the diminishing returns to limit non-compliant vehicles from approach locations of exceedances and its inability to provide any improvements in regarding NO2 compliance, CAZ D outer ring road was again discounted from the optioneering process.
1.6.3 CAZ D Inner Ring Road Price Sensitivities Based on the analysis summarised in the section above, options which integrate CAZ D inner ring road option were considered to be an appropriate way forward. That said, some additional price sensitivity analysis was undertaken to determine the appropriate level of charging. Lower levels of charges, compared to the proposed rates, were deemed inappropriate as they continued to encourage significant volume of non-compliant traffic into the charging zone. Furthermore, transport modelling results indicated that significantly higher charges, compared to the proposed rates, still resulted in large volume of traffic, including a notable number of non-compliant vehicles. These traffic modelling results for various price sensitivities are summarised in Table 1-10.
Table 1.10 - Modelling results for Counterfactual Case, CAZ C and CAZ D inner ring road options
No of non- Percentage of Price Sensitivities Total vehicles compliant vehicles entering CAZ Option Geography (as discussed entering CAZ vehicles CAZ, which are non- with TOM) (2020) entering CAZ compliant (2020) (2020)
Ultra-high – 200% CAZ D Inner Ring Road 197,200 1,300 0.7% of proposed charges
High – proposed CAZ D Inner Ring Road 190,900 6,500 3.4% charges
Medium – 50% of CAZ D Inner Ring Road 193,800 17,200 8.9% proposed charges
Low – 25% of CAZ D Inner Ring Road 196,800 23,800 12.1% proposed charges
Achieving compliance for NO2 emissions requires significant reduction in traffic volume in the zone, not just a reduction in the number of non-compliant vehicles entering the zone. As summarised in Table 1.10, there is only marginal difference in traffic volume between the high (proposed charges) and ultra-high (200% of proposed charges) CAZ D inner ring road options. Considering the diminishing returns to reduce number of vehicles entering the zone by significantly increasing the charges and the inability of increased charges to provide any improvements in regarding NOx compliance, CAZ D inner ring road ultra-high charges option was discounted from the optioneering process.
1.6.4 Need for additional measures The above analysis demonstrates that CAZ D inner ring road high charges (proposed) option was considered to be the appropriate way forward. That said, the option is estimated to achieve the NO2 emission compliance level across all exceedance locations post 2022. Within this context, there was a need to identify a long-list of complementary additional measures.
In order to identify the additional measures that could be considered in conjunction with a CAZ to achieve compliance, a desk top study has been undertaken to review existing evidence on local, regional and national measures to improve air quality. In addition, Birmingham City Council, Transport for West Midlands and key local stakeholders were consulted to identify further measures to take through an initial sifting process. This generated a longlist of 104 potential options. The longlist of additional measures is set out in Table 1 (p3-26) of the “Birmingham Clean Air Zone Feasibility Additional Measures Study”.
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The long-list of additional measures (104 in total) went through a three-phased short-listing process. Phase 1 involved assessing a longlist of additional measures against some high-level criteria to eliminate those that clearly do not contribute to the Critical Success Factors. A total of 31 options were identified within the context of contributing to the primary objective.
Phase 2 involved developing and applying a Multi Criteria Analysis (MCA) framework to rigorously appraise each option taken forward from Phase 1 to identify those that should be taken forward for further development. This involved assessing each option against multiple criteria and scoring each measure. A total of 18 options were recommended for further development and assessment in Phase 3. In addition, a further 14 additional measures have been identified that have the potential to contribute to further improving air quality post 2020 in support of the wider spending objectives and local air quality policy.
Following the completion of Phase 3 assessment, a shortlist of 11 additional measures / packages of measures were taken forward for quantitative traffic and air dispersion modelling. The results of this modelling were analysed to determine the package of additional measures, which includes:
. All BCC controlled parking which is currently free will have a charge applied. . Banning traffic travelling northbound on Suffolk Street Queensway (A38) that exits onto Paradise Circus to then access Sandpits Parade and southbound traffic from Paradise Circus accessing the A38.
. Close Lister Street and Great Lister Street at the junction with Dartmouth Middleway. The above mentioned additional measures are deliverable by 2020. Additional measures which can be delivered in 2021 and 2022, are presented in Appendix 1D. The modelling results indicate that a CAZ D inner ring road plus additional measures option indicates that NO2 compliance will be achieved at all but one location by 2021. However, Suffolk Street Queensway is forecast to achieve compliance by 2022. BCC will continue working on to see if compliance can be achieved before 2022 at this one location (see table below for further details).
Table 1.11 – Exceedance by location (intervention case)
Road name Site 2020 NOx 2021 NOx 2022 NOx 2023 NOx Model ID Description µg/m3 µg/m3 µg/m3 µg/m3
A4400 Suffolk Inside CAZ S PCM_0 42.1 40.6 39.0 37.5 Street PCM Queensway
A38 Inside CAZ N PCM_2 40.3 38.7 37.1 35.5 CORPORATION PCM STREET
A4540 Ring Road PCM_6 40.6 38.8 37.0 35.2 WATERY LANE East MIDDLEWAY
M6 M6 PCM_21 41.0 39.4 37.7 36.1
A38 St Chads Inside CAZ N PCM_158 40.5 38.9 37.3 35.7 Queensway PCM
A38 Inside CAZ S PCM_161 40.5 39.1 37.7 36.3 Queensway PCM (Tunnel)
Digbeth Digbeth ObjectID_15_@4m 40.6 39.2 37.8 36.4
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1.6.5 Need for further mitigation measures and exemptions Responding to the final distributional impacts assessment of CAZ D inner ring road option a long list of mitigation measures was developed. These were appraised against primary and secondary CSF to determine the final proposals for mitigation measures, summarised in the table below.
Table 1.2 – Final Proposals for Mitigation Measures
Ref Measure Group impacted Geographic scope
Mobility support for Private car/van Not restricted to geographic area for vehicle owner M1a individuals working owners who work or (place of work in CAZ) within the CAZ (20c) live within the CAZ
Mobility support for Private car/van M1b individuals residing West Midlands owners outside of the CAZ (20c)
Hackney carriage M2a Hackney carriages support package (20b)
Council Hackney Birmingham and surrounding areas (licenced BCC M2b carriage leasing scheme Hackney carriages drivers) (20b)
Private Hire Vehicle M2c Private Hire Vehicles upgrade support (20b)
‘Free miles’ for ULEV M3 Van fleets Birmingham LGVs (20b)
HGV & Coach M4 HGV and Coach fleets West Midlands compliance fund (20b)
Marketing and Owners of non- M5 engagement campaign - compliant vehicles) (20b)
Resident parking Residents living close M6 Areas surrounding CAZ scheme to the CAZ
On a similar note, community groups that would be negatively impacted by a CAZ D inner ring road option were identified and a long list of exemption categories were identified. This was then used to inform an initial sifting of the longlist to remove those measures which would impact the compliance date, relative to a scenario where there were no exemptions. The increased number of trips, in AADT terms, was estimated for each of the twelve exemptions on the longlist. The next level of sifting was to eliminate areas of overlap between the different exemption options to ensure the most efficient package is created.
The final proposed exemptions include the following categories: CAZ HGVs and coaches; HGVs with existing finance agreements; SME Vans; Vans with existing finance agreements; CAZ residents; Income deprived working within the CAZ; Key workers working within the CAZ; selected medical locations; Section 19 registered community and school transport.
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Further details of the options development and short-listing process is summarised in the Economic Case. Details regarding State Aid Compliance of the proposed mitigation measures and exemptions are presented in Birmingham City Council’s Clean Air Fund Report (November 2018).
Shortlisted options
Following the process summarised above, three options were short-listed for detailed economic appraisal as part of the final Outline Business Case. Building on the baseline evidence base and short-listing process, all shortlisted options include a charging based CAZ for entering the City Centre, bounded by A4540 Ring Road (inner ring road).
The three options shortlisted at the
. Option 1 - CAZ D inner ring road: non-compliant class D vehicles (i.e. buses, coaches, taxis, heavy goods vehicles, light goods vehicles and private cars) would be charged to enter the CAZ
. Option 2 - CAZ D plus additional measures package: . All on-street free parking in CAZ becomes paid for. . Banning traffic travelling northbound on Suffolk Street Queensway (A38) that exits onto Paradise Circus to then access Sandpits Parade and southbound traffic from Paradise Circus accessing the A38.
. Close Lister Street and Great Lister Street at the junction with Dartmouth Middleway. . Option 3 - CAZ D plus additional measures, mitigation measures and exemptions package:
. Same package of additional measures as identified for Option 2 . Mitigation measures and exemptions as identified in Section 1.6.5. Due to data limitations, only Option 1 (CAZ D inner ring road) and Option 2 (CAZ D plus additional measures package) were appraised and reported in the Economic Case of the Outline Business Case. Of the two options appraised, Option 2 was considered to deliver better value for money. That said, considering the Council’s equality duty, other legislative requirements and a need to minimise the negative distributional impacts, the Outline Business Case highlighted the need to include a final package of mitigation measures and exemptions along with the additional measures to define the preferred way forward for Birmingham Clean Air Zone project. This forms the scope of Option 3 (CAZ D plus additional measures, mitigation measures and exemptions package).
This Economic Case of the project’s Full Business Case revisits the value for money position of Option 2 (CAZ D plus additional measures package) and compares it with that of the preferred option, Option 3 (CAZ D plus additional measures, mitigation measures and exemptions package).
Benefits, Risks, Constraints and Inter-Dependencies 1.8.1 Benefits The implementation of a CAZ and additional measures in Birmingham presents an opportunity to deliver a wide range of benefits. JAQU has provided guidance and supporting data to ensure consistent assessment of quantified and non-quantified impacts of the project.
Core benefits of the project relate to the Public Health and the environment due to the reduction of NO2 and other pollutants.
. Reduced impacts on human health measured through reduction in health expenditure (hospital admissions, mortality impacts and chronic bronchitis impacts)
. Increased productivity which is evaluated through work absenteeism caused by ill-health . Reduced damage on built environment (residential dwellings and historical and cultural buildings) measured by the surface cleaning costs and amenity costs.
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. Reduced impact on ecosystems (nature conservation and green spaces within the boundary) . Reduced emissions having an impact on climate change. Other benefits reflect the improvement of the use and performance of the transport network:
. Impact on journey times for both private and public transport due to reduction of traffic load and consequently more reliable over-ground PT services.
. Increased travel by sustainable modes such as walking, cycling and public transport as an alternative to CAZ charges.
. Reduced operating costs due to traffic congestion mitigation. . Reduction in accident rates on road.
Further benefits generated by potential revenue streams will include:
. Reinvestment in local transport policies which aim to improve air quality and support the delivery of the ambitions of the Plan.
The above presents an overview of the project’s impacts. A detailed assessment of the project’s preferred option’s economic impact is presented in the Economic Case. Impact assessment of other two short-listed options is presented in the Outline Business Case.
1.8.2 Risks The key risks, as identified as part of the Outline Business Case, are associated to social acceptance, economic and human resources and traffic and emission impacts.
. The level of acceptance within the population which can be translated into dissatisfaction around the charging scheme. Health and environmental benefits should be the main discussion around the CAZ in the Communication Plans and programmes to get recognition from stakeholders and citizens.
. Disproportional penalization to vulnerable groups in the society by geographical location, scale and structure of vehicle compliance standards.
. The transition from diesel vehicles (which produce high levels of NO 2) to petrol vehicles to be compliant with the CAZ framework could lead to increase the levels of carbon dioxide.
. The potential impacts on the network, displacing traffic going to or through the city centre and re-routing and consequently displacing negative outcomes to other areas of the city.
. The availability of economic and human resources is also key to fund and run the implementation of the CAZ and the posterior management, monitoring and enforcement of the required initiatives.
. Severity on the impact of economic activity in the city centre, where significant proportion of jobs are located and the ability to mitigate. These risks continue to remain valid for the project as it progresses through the Full Business Case stage. 1.8.3 Constraints and inter-dependencies
The most significant constraint on the Plan is to meet the national air quality standards in the shortest time possible. The priority in the optioneering and appraisal process is the capacity to deliver the expected outcome in a quicker way rather than in a cheaper way. This time constraint is dependent on many factors at a national, regional and local level which contribute to lead the change towards a more sustainable and clean environment. These factors can be governmental institutions, local entities and public and private companies which through their programmes and policies, projects and transparency processes can make the progress effective.
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The reduction of NO2 emissions is achieved by transforming the road vehicles fleet structure to be compliant with the emission standards. The success on influencing users to uptake cleaner vehicles is highly related to the availability of new vehicles in the market (private companies producing Low Emission Vehicles), the provision of the appropriate infrastructure and facilities to support this type of vehicles, and promotional programmes and incentives to buy low emission vehicle (LEV).
To improve the performance of the implementation and operation there is also a great dependency on those organizations that own data which are key to understand the CAZ operation and the regional air quality challenge, such as data bases provided by taxi levy, transport operators, national data base of vehicle compliance and monitoring data. Operating the CAZ at a local level or from a central operations centre might have influence in the way data is effectively transferred.
Furthermore, CAZ is not the only measure which contributes towards the achievement of the objectives. It is the sum of actions, plans and specific projects and developments which are responsible for enhancing sustainable and healthy environments. Birmingham is currently growing support by a group of connectivity packages such as Snowhill Development and HS2 arriving to the city. Both are working together with relevant authorities to maintain air quality, especially where construction or operations may have significant air quality effects such as air quality management areas or zones with plans or measures directed at compliance with national standards. Then, the delivery of these schemes will be crucial to improve the air quality.
1.8.4 Stakeholder Engagement The Council has identified a preferred plan for implementation of a Clean Air Zone and a key part of that will be consultation with residents, businesses and other stakeholders. Whilst the legislation does not prescribe the consultation requirements, the Council has sought Counsel’s advice on the approach for the CAZ consultation process.
There is a high prospect of challenge with regard to any action the Council decides to take, from either environmental interest groups who do not consider that the proposals go far enough or / and from specific individuals or groups that may be especially adversely affected by the proposals.
Travel patterns and behaviours continue to be a key part of the challenge in tackling air quality and there is a need to continue to encourage the use of more efficient forms of transport and where possible reduce the overall demand for travel.
The Council undertook a six-week consultation process on the preferred option between July and August 2018. This public consultation received a record number of responses for a Birmingham City Council consultation (exceeding 10,000 responses). This included a number of stakeholder events, including targeted focus group meetings with taxi and Hackney Carriage drivers. The consultation responses were used to inform the scope of mitigation measures and exceptions outlined in Section 1.6.5 earlier.
The Council continues to engage with key stakeholders. Officers and Cabinet Members have taken part in a number of events to build awareness of the issues with air quality and explain the rationale behind introducing a CAZ in Birmingham. The Council will shortly commence organising a press conference and subsequent release as part of the publication of the Full Business Case. Furthermore, a marking and communication campaign is also being planned for the New Year, which will focus on raising awareness of the CAZ and the final package of mitigation measures and exemptions
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2 Economic Case Introduction
This document sets out the Economic Case for the preferred option to implement the Birmingham Clean Air Zone (CAZ). Defined as the option that achieves compliance with the EU limit values for air quality in the shortest possible time.
The Birmingham Clean Air Zone Scheme, referred to as CAZ D plus Additional Measures consists of:
. CAZ D – all non-compliant class D vehicles must pay a charge when entering the Clean Air Zone (buses, coaches, taxis, heavy goods vehicles, light goods vehicles and private cars);
. Three additional measures to increase health and environmental benefits: . All BCC controlled free parking in the CAZ becomes charged.
. Banning traffic travelling northbound on Suffolk Street Queensway (A38) that exits onto Paradise Circus to then access Sandpits Parade and southbound traffic from Paradise Circus accessing the A38.
. The closure of Lister Street and Great Lister Street at the junction with Dartmouth Middleway. This allows more green time on the A4540, apart from buses.
. Mitigation and exemptions packages created for groups identified as adversely impacted from scheme implementation.
The Do Minimum used for comparison recognises changes in accordance to exogenous factors, such as fleet composition, and assumes no new local or national policies are implemented targeting air quality.
A cost-benefit analysis has been undertaken based on five distinct, but related, assessments:
. Costs to BCC – associated with setting up and operating a CAZ and additional measures.
. Costs to transport users – associated with complying with the CAZ.
. Health and environmental benefits –from the reduction in NO2, PM10 and CO2 emissions generated for each option.
. Mitigation and exemptions – costs and benefits associated with certain groups being exempt from CAZ charges or receiving compensation through mitigation schemes.
. Distributional impact assessment – analysis, following JAQU guidance, of the potential distributional and equality impacts on different groups.
The economic assessment in this Economic Case has been conducted in accordance with JAQU guidance. Impacts are presented for the central case, however sensitivity tests are also performed.
2.1.1 Summary of Findings The CAZ D plus Additional Measures scheme was selected through an optioneering process where a long list of options was assessed and reduced to a short list of potential options. These potential options were then assessed in the Outline Business Case where the preferred scheme was selected. This process is discussed in Section 2.2.
The CAZ D plus Additional Measures scheme delivers substantial benefits in terms of reduced emissions, many of which have been monetised. In addition, the CAZ will lead to non-monetised impacts, including the following.
. Reduced material damage (particularly to historical and cultural buildings). . A positive effect on nature conservation/green sites within the CAZ boundaries. . A positive effect on climate change through reduced greenhouse gas (GHG) emissions, measured
in CO2 equivalent tonnes.
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The monetised value of environmental benefits for the CAZ D plus Additional Measures scheme over the appraisal period is £50m. This figure is broken down in Table 2.1. It is notable that the damage cost estimates from DEFRA do not account for all the improved health outcomes associated with improved air quality and behavioural changes associated with the CAZ. For example, they do not account for the impact of NO2 on hospital admissions, and therefore, morbidity impacts are potentially underestimated.
Table 2-1 Total health and environmental benefits of reduced NO2 and PM10 emissions and CO2 (£m, 2018 discounted prices)
CAZ D plus Pollutant Additional Measures
NO2 and PM10 46
CO2 4 Total 50
Traffic and Air Quality modelling indicate that air quality compliance, defined as all receptors forecast to 3 measure an annual average NO2 level below 40 µg/m , is not achieved in 2020 by the CAZ D plus Additional Measures scheme. However, the modelling does forecast that compliance will be achieved in 2021, apart from one location that BCC will continue working on to see if compliance can be achieved before 2022.
The traffic modelling shows that the introduction of Additional Measures reduces the AADT (Average Annual Daily Traffic) accessing the CAZ area by 1.5%. As a result, the inclusion of the Additional Measures increases the health and environmental benefits by £13m. This is a significant benefit, particularly when viewed with the £1.25m cost estimated to implement the Additional Measures.
Table 2-2 summarises the economic impacts of the CAZ D plus Additional Measures scheme over the 10- year appraisal period. The table shows that along with health benefits the scheme delivers benefits in the form of journey time savings and reduced vehicle operating costs. These benefits arise from the reduction of non-compliant vehicle traffic lowering congestion levels.
This disbenefit associated with the implementation of parking charges if offset by corresponding gains in the form of government and private sector revenue. Although these offset, they are not treated as a transfer as a resource (parking space use) is used.
The disbenefit associated with individuals accelerating their vehicle upgrades to have a compliant vehicle and from individuals changing their travel behaviour are significant. Exhibiting this, prior to the introduction of mitigations for impacted users the scheme generated a negative Present Value of Benefits (PVB). However, the inclusion of Clean Air Fund (CAF) mitigation measures within the scheme offsets a portion of disbenefit arising from scheme implementation. The combined result is the scheme producing a positive present value of benefits (PVB).
The present value of costs (PVC) for the scheme is negative as the revenue generated from the CAZ charges is considered a transfer and is not included in the appraisal. Therefore, only scheme costs and government parking revenues are considered. The PVCs are greater than the PVBs, resulting in a Benefit Cost Ratio of 0.30 and a NPV of negative 64.
Further descriptions of each monetised benefits and dis-benefits is provided in the Section 2.6.
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Table 2-2 Scheme Net Present Value, £m 2018 discounted prices CAZ D plus Analysis of Monetised Costs and Benefits (AMCB) Additional Measures Benefits - health and non-health, damage costs 46 Benefits - reduced CO2 emissions 4 Benefits to transport users - changes in journey time and vehicle operating costs 60 Benefits from CAF 44 Cost to Transport Users - Parking charges -38 Cost to Transport Users - upgrading -53 Transaction Cost - vehicle upgrade -0.1 Transaction Cost - paying CAZ charge -10 Welfare (trips foregone) -15 Welfare Remoded -18 Parking welfare loss -22 Private Sector Benefits - Parking revenues 30 Present Value of Benefits (PVB) 28 Costs to BCC capex 19 Costs to BCC opex 35 Cost from CAF Grant 46 Revenues from Parking Charges -8 Present Value of Costs (PVC) 92 Net Present Value (NPV) -64
Clean Air Zone scheme option appraisal
As part of the Strategic Outline Case (SOC), a longlist of options that are likely to be effective in countering the specific sources of NO2 exceedances in Birmingham were considered and assessed against a set of Critical Success Factors (CSFs).
2.2.1 Critical Success Factors Please refer to section 1.5.2 of the strategic Case for full details of the primary and secondary critical success factors.
2.2.2 Additional Measure Optioneering
A desktop study was undertaken reviewing existing evidence on local, regional and national measures to improve air quality to identify the additional measures that could be considered in conjunction with a CAZ to achieve compliance. In addition, BCC, Transport for West Midlands and key experts from the Birmingham CAZ work stream were consulted to identify further measures to take through an initial sifting process. This generated a long list of 104 potential options. The long list of additional measures is set out in Table 1 (p3- 26) of the Birmingham Clean Air Zone Feasibility Additional Measures Study.
2.2.2.1 Sifting As explained Appendix 1B, the additional measures were sifted through 3 phases. Several different tests were run to select the package of additional measure options that would be shortlisted. Review determined that some measures would not be practical to implement by 2020, these were excluded prior to full modelling.
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Through this process, a shortlist of 11 additional measures/packages of measures were taken forward for quantitative traffic and air dispersion modelling. The 11 additional measures reviewed as part of the short- list were the following.
. Increase LPG refuelling for Hackney Carriages, the installation of rapid EV infrastructure for taxi and private hire vehicles, retrofitting of black taxis to LPG and zero emission buses/retrofitting of public transport fleet.
. Parking Strategy – remove free parking, parking charging and permits graded by vehicle standard or zone charges.
. Speed Enforcement – average speed enforcement along the A38 and near Dartmouth Circus to manage traffic and smooth flows.
. Speed reduction – reduce speed limits on certain routes and use variable speed limits. . Public Transport Improvement Measures - Highway/infrastructure improvements to bus services to make them more viable and accessible to the public and increase bus priority schemes, to restrict traffic on Moor Street Queensway to bus, taxi and cycle only and to close Park Street to all traffic.
. Incentivise or subsidise sustainable travel by up to 50% to improve public transport patronage. . Ban the route of traffic travelling northbound on Suffolk Street Queensway that exits onto Paradise Circus to then access Sandpits Parade.
. Ban the route of traffic travelling northbound on Suffolk Street Queensway that exits onto Paradise Circus and St Chads.
. Close junction on Dartmouth Middleway between Lister Street and Great Lister Street to all traffic except buses; avoid stop start traffic and reduce congestion.
. Re-signing and rerouting scheme for the A38 and banning all through traffic (and HGVs) on the A38 around Paradise Circus, diverting traffic to A4540.
. Enhanced bus partnership with the wider area of Birmingham. The modelling results were analysed to determine the optimal package, which includes:
. All BCC controlled free parking in the CAZ becomes charged. . Banning traffic travelling northbound on Suffolk Street Queensway (A38) that exits onto Paradise Circus to then access Sandpits Parade and southbound traffic from Paradise Circus accessing the A38.
. The closure of Lister Street and Great Lister Street at the junction with Dartmouth Middleway. This allows more green time on the A4540, apart from buses. The optimal additional measure package consists of works that are deliverable by 2020. Additional measures that can be delivered in 2021 and 2022 are presented in Appendix 1C.
2.2.3 Shortlisting of CAZ Options To begin the option appraisal process, a long-list of CAZ options was identified. These included nine CAZ variants.
. Four charging CAZ options (class A, B, C and D). . CAZ A included buses, coaches, taxis and private hire vehicles.
. CAZ B added heavy goods vehicles. . CAZ C added also large vans, minibuses, small vans/light commercials. . CAZ D added cars. . A packages of additional measures considered in conjunction with each CAZ scheme variant (class A, B, C and D);
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. A non-charging CAZ with a package of measures. In order assess the longlisted options against the primary CSFs, traffic and air quality modelling was undertaken on the CAZ C and CAZ D options to determine their relative positions in achieving compliance. These model runs demonstrated that the implementation of a charging ‘class C’ or ‘class D’ Clean Air Zone, would be insufficient to achieve compliance with the defined air quality in 2020. As CAZ D has great impacts on traffic volumes, due to including the car vehicle class, it will achieve compliance in the shortest possible time and was brought forward.
Although the CAZ A and CAZ B schemes have not been explicitly modelled, it is clear that if a ‘class C’ or ‘class D’ CAZ would be insufficient to ensure compliance, then a CAZ A or CAZ B scheme would also be insufficient.
Under a CAZ D scheme (where non-compliant cars are subject to charging), concentrations of NO2 reduce by an additional 1.8 µg/m3 inside the CAZ, beyond the CAZ C scenario. There are still places, however, where the legal limits are predicted to be exceeded during the scheme’s initial years of operations.
The modelling conducted forecasts that neither a ‘class C’ nor a ‘class D’ CAZ alone will achieve compliance with the NO2 concentration limits in all locations in Birmingham by 2020. The modelling does show that a CAZ D results in the largest improvement in air quality, indicating that a CAZ D scheme will likely achieve compliance in the shortest possible time. Consequently, the short-listed schemes assessed in this economic case are the CAZ D scheme and the CAZ D scheme plus the identified Additional Measures.
Full details of the method, data, and models used by BCC to estimate the impact of CAZ options on vehicle emissions and the resulting concentrations of NO2 are set out in the Transport Modelling Forecasting Report. The Air Quality Modelling report provides a summary of where additional reductions in emissions from road traffic would be required to achieve compliance.
2.2.4 Proposed CAZ Boundary The Clean Air Zone is proposed to be the area within the A4540 Ring Road around the city centre. A zone boundary at the ring road would provide a sensible and logical decision point for traffic to avoid the CAZ by using the ring road as the alternative route. The location of the proposed CAZ is shown in Figure 2-1
Figure 2-1 Proposed CAZ boundary
Although the CAZ charging options for outer ring road failed to meet the requirements of the primary Critical Success Factor due to significant deliverability risks related to physical implementation and
36 Page 68 of 366 Birmingham City Council Clean Air Zone enforcement, initial transport modelling was undertaken for a CAZ D outer ring road option. As per section Error! Reference source not found. of the strategic case, it was concluded that the performance of the AZ D outer ring road option would only be marginally better than that of the CAZ D inner ring road option in terms of reducing NO2 emissions. This marginal change was considered not to be sufficient enough to ensure that NO2 compliance in Birmingham would be achieved earlier if CAZ D outer ring road option was delivered rather than the CAZ D inner ring road options.
Determining the preferred option
The option identification and shortlisting process identified two potential CAZ schemes, summarised in Table 2-3.
Table 2-3 Shortlisted Options
Option Commentary
Class D Clean Air Zone A charging CAZ D (CAZ D) Class D vehicles (buses, coaches, taxis, heavy goods vehicles, light goods vehicles and private cars) that do not meet Euro emission standards would be charged.
Class D Clean Air Zone plus A charging CAZ D with the identified Additional Measures Additional Measures
The traffic modelling shows that the introduction of Additional Measures reduces AADT accessing the CAZ area by 1.5%. Consequently, the Additional Measures increase the health and environmental benefits by £13m. Accounting for the Additional Measures’ impacts on other benefit area, such as travel time, the cumulative impact is a £12m improvement of the scheme’s NPV. This is a substantial improvement, particularly considering the £1.5m cost of the Additional Measures. Due to an improved NPV and improved health and environmental benefits, the CAZ D scheme plus Additional Measures was put forth as the preferred option at OBC stage.
The modelling results indicate that a CAZ D within the ring road plus Additional Measures option will achieve
NO2 compliance at all but one location by 2021. The air quality at the Suffolk Street Queensway monitoring unit is forecast to achieve compliance by 2022. BCC will continue work to see if compliance can be achieved before 2022 at this location or at least consider measures which could reduce exposure.
Subsequent to the determination of the preferred option, two updates were performed.
. The results from the OBC’s Distributional Impact Assessment report identified groups that were going to be negatively impacted by the CAZ and in need of support in the form of mitigation measures. Accordingly, a long list of mitigation measures was generated and refined. Following the OBC, delivery plans for the mitigation measures and proposed exemptions were designed and their impacts were quantified and included in the traffic modelling and cost-benefit analysis. The main findings, as well as the corresponding decision process, can be found in the CAF Report delivered in conjunction with this business case.
. The charge price of the CAZ was reduced. Steer produced the Birmingham CAZ Behavioural Research report14 assessing drivers’ price sensitivity to various charge levels. The Steer paper noted that research in Bristol indicates that the propensity to pay to enter the proposed Bristol CAZ decreases as the charge levels increase up to £7, and then remains relatively stable at higher charge levels. London stated preference surveys found that the proportion of respondents who were willing to pay the charge decreases swiftly (from approx. 50% at £3.00 to 25% at £8.00), and thereafter, decreases at a slower rate to reach just under 20% at £12.50.
14 Birmingham CAZ Behavioural Research, Steer (2018)
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Accordingly, the final charge scenario modelled for the full business case was reduced from £12.50 to £8.00 The CAZ D plus Additional Measures scheme assessed for FBC includes the mitigations and exemptions and the lower CAZ charge. A comparison of the benefits of the CAZ D plus Additional Measures scheme at OBC and the CAZ D plus Additional Measures scheme at FBC is shown in Table 2-4. The change in benefits is further assessed and discussed in Section 2.9.5.
Table 2-4 Impact of mitigation and exemptions CAZ D plus CAZ D plus Additional Additional Analysis of Monetised Costs and Benefits (AMCB) Measures Measures (OBC) (FBC) Present Value of Benefits (PVB) -75 28 Present Value of Costs (PVC) 41 92 Net Present Value (NPV) -116 -64
Cost-Benefit Analysis Framework
The cost-benefit analysis undertaken to assess the options and the final scheme is based on five distinct, but related, assessments:
. Costs to BCC . Costs to transport users. . Health and environmental benefits . Mitigation and exemptions
. Distributional impact assessment (DIA) The Economic Case combines the results of the first four assessments to derive the Net Present Value (NPV) of the shortlisted options. The distributional impact assessment considers the impact on key groups to determine whether there is likely to be a disproportionate impact on one, or a number of, particular groups. NPV and DIA outputs were assessed in conjunction to determine the preferred option.
2.4.1 Key assumptions The CAZ area is assumed to be the area within the A4540 Ring Road, around the city centre. The opening year for the CAZ scenario is assumed to be 2020, the year for which traffic modelling has been conducted. The options have been appraised over the ten-year period from 2020 to 2029.
All figures presented are in 2018 prices and have been discounted to 2018 present value, unless noted. Additional assumptions underpinning the forecast impacts are presented in the Economic Assessment Methodology Report and are discussed in detail in the relevant appendices.
Full details on the method, data sources and results of the traffic modelling is presented in the Transport Model Forecasting Report.
2.4.2 Uncertainties The key uncertainties related to this assessment include the following.
. Behavioural responses are based on a number of sources which are further detailed in the Birmingham CAZ Behavioural Research Report as per 2.3.
. The exact number of vehicles impacted by the CAZ is not known due to gaps in existing ANPR data.
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. Current trends in car purchasing behaviour are changing, with fewer diesel cars being bought and fewer cars being bought in general. Future purchasing patterns may differ from underlying assumptions.
. The emissions rates of vehicles in the real world may differ from those modelled. Sensitivity tests have been performed to assess the potential impact of these areas of uncertainty. Section 2.10 presents the sensitivity ran through the economic modelling suite while the Traffic Model Forecasting Report and Air Quality Modelling Report test many of the above as well as additional scenarios.
Costs to Birmingham City Council
Costs and revenues to BCC are presented in the Economic Case in market prices (including VAT). This is to maintain a consistent unit of account in market prices across all costs and benefits.
Optimism Bias (OB) and contingency are applied to the capital costs. Contingency accounts for known risks where OB is included for unforeseen circumstances. An OB rate of 15% for road projects is applied to the majority of implementation cost items. This is the WebTAG recommended OB levels for projects at the Outline Business Case stage (OBC). However, as procurement for implementation is ongoing there is a higher level of uncertainty regarding project costs than that normally experienced for a project at FBC stage. Accordingly, it is appropriate to use the level of OB commiserate to the current specificities.
A quantified risk assessment (QRA) was undertaken and 52 risks associated with implementation costs were identified and quantified. The risks identified in the QRA cover various aspects of the implementation stage and a wide range of technical disciplines. Each risk was assessed based on their likelihood, cost impact and time impact.
Table 2-5 shows the impact to public funds with ongoing operation of the CAZ over the appraisal period.
Table 2-5 Costs to BCC (£m 2018 discounted values)
CAZ D plus Additional Measures
Implementation costs 19
Operation costs 35
Revenue (parking) -8
Net Present Value 46
In addition to the costs incurred, the scheme is also forecast to generate a surplus of revenue over operational costs. It is anticipated that the revenue generated will be invested in initiatives to realise the vision set out in ‘Movement for Growth’ for a greatly improved transport system which supports economic growth and regeneration, social inclusion and improves air quality and the environment.
Costs to Transport Users 2.6.1 Non-compliant user options The number of transport users that would already be compliant with the CAZ emission standards in 2020 was estimated using automatic number plate recognition (ANPR) surveys undertaken in 2016 and assuming a constant fleet age to update to 2020 based on guidance from JAQU. This method forecasts that 93% of vehicles would be compliant with the CAZ emission standards by 2020.
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The analysis of costs to transport users has therefore focused on the remaining 7% of users that are expected to be non-compliant in 2020. The nature and scale of the impacts on these transport users ultimately depends on the actions that users take to meet or avoid the CAZ standards. Figure 2-2 provides a schematic of the possible responses drivers may have to the CAZ vehicle standards.
Figure 2-2 Schematic of possible responses to CAZ
The proportion of non-compliant vehicles that choose different behavioural responses was estimated initially using stated preference survey data from the London Ultra Low Emission Zone expansion, with modifications to make it appropriate for use in the Birmingham context. The behavioural assumptions were then further refined with the recommendations set out in the Steer’s Birmingham CAZ Behaviour Research report.15 More information on the behavioural assumptions is provided in the Economic Assessment Methodology Report and the Traffic Model Forecasting Report.
2.6.2 Impact of mode shift of public transportation The behavioural model predicts that 20% of personal journeys impacted by the introduction of the CAZ would be shifted to other modes. This category includes public transport as well as other active modes. While capacity on local public transportation is currently constrained, we have not modelled the impacts of additional ridership due to mode shift. It is anticipated that the additional trips will be supported by the public transportation network. Bus operators have also been engaged with regards to providing additional capacity. Work is being undertaken by TfWM to increase network capacity and the following schemes are under development.
By 2020
. Increased park and ride capacity for the West Midlands rail network: expansion at Tipton, Sandwell and Dudley, Whitlock’s End and Longbridge. . Metro tram extensions:
. Wolverhampton city centre . Westside extension to Centenary Square
. Bus fleet environmental enhancements through retrofitting existing buses, new Euro VI buses and hydrogen powered buses.
. Core bus corridor and central Birmingham bus priority improvements including the Bartley Green - Harborne – Birmingham corridor By 2022
15 Steer. 2018. Birmingham CAZ Behavioural research – Draft report.
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. New suburban rail stations at Moseley, Kings Heath, Hazelwell, Darlaston and Willenhall . Increased suburban rail capacity: 20,000 extra rail seats am peak into central Birmingham . Metro tram extensions: . Edgbaston Five Ways . Birmingham Eastside
. Wednesbury – Brierley Hill extension Phase One to Dudley . three new Bus Rapid Transit routes:
. Birmingham – Perry Barr – Walsall . Birmingham – Solihull/Birmingham Airport . Birmingham – Langley/Peddimore – Sutton Coldfield By 2026
. Metro tram extensions:
. Wednesbury – Brierley Hill extension Phase Two to Brierley Hill by 2023 . East Birmingham Solihull Extension by 2026 . Further new Bus Rapid Transit routes:
. Birmingham – Halesowen . Birmingham – Dudley . Birmingham – Longbridge Hall Green – Solihull
2.6.3 Cost of upgrading to compliant vehicle This economic appraisal uses the consumer surplus approach recommended by JAQU to estimate the welfare loss to users who choose to change from their preferred non-compliant vehicle to a compliant vehicle in response to the CAZ. The cost to upgrade early is calculated as half of the difference in depreciation between the baseline vehicle and the upgraded vehicle in the CAZ scenario. This analysis assumed that:
. The vehicle owner would purchase a compliant vehicle in the do-minimum by the year 2029. . Each owner would upgrade to the cheapest possible vehicle that is at least one Euro standard higher than their current vehicle.
. For buses, coaches, and taxis, retrofitting options exist and are assumed to be used for a portion of the fleet. Retrofitting is assumed for all buses and coaches, and the Hackney carriages eligible for LPG retrofitting.
There would also be a transaction cost to users for the effort required to find and purchase a new vehicle. This was estimated using JAQU’s recommended methodology.
Table 2.5 shows the number of vehicles predicted to be upgraded or retrofitted due to the scheme. The majority of vehicles that would upgrade as a result of the scheme are cars, with 9,856 upgrading in the CAZ D plus Additional Measures scheme. PHVs make up the next largest group with 3,060 upgrading. Taxis make up the next largest group with1, 185 upgrading. Over 700 HGVs are expected to upgrade and 460 LGVs are expected to be upgraded.
Taxis have the largest upgrading costs, with a loss of £24m. This is mostly due to high cost of new electric taxis and new diesel euro 6 taxis. The impact on HGVs and LGVs is expected to be approximately £9m and £2m, respectively. The low upgrading cost borne by LGVs is explained by the relatively few LGV users who would choose to upgrade, according to behavioural modelling. The total economic cost of upgrading to compliant vehicles is £52.9m.
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Table 2-6 Number of vehicles upgraded or retrofitted and economic impact (£m, 2018 discounted values)
Cars LGVs HGVs PHVs Taxis Buses Coaches Total (Hackney)
Vehicles impacted 9,856 460 717 3,060 1,185 0 451 15,278
Economic -10 -2 -9 -8 -24 0 -9 -57.9 impact, £m
It is assumed that by 2020 all buses serving the CAZ will be compliant through new vehicles (purchased through alternative funding), retrofits or fleet redistributions. Thus no buses are estimated to upgrade due to the scheme.
2.6.4 Impact of non-compliant vehicles moving to outside the CAZ Users that travel into the CAZ w upgrading to compliant second-hand vehicles will likely result in their non- compliant vehicles being sold on to individuals not impacted by the CAZ. Therefore, pollutants from these vehicles will continue to be emitted in areas external to the CAZ. As many cities are employing a CAZ to combat air pollution, it is likely that second hand non-compliant vehicles be purchased by those living in rural areas of the UK.
DfT analysis shows that 64% of car miles, 66% of LGV miles, and 88% of HGV miles travelled are on rural roads and motorways.16 Air quality is a location-specific issue and concentrations in rural areas are unlikely to reach levels where impacts would be comparable to urban areas. Accordingly, increasing the proportion of older vehicles on extra-urban roads is unlikely to have a significant impact on local air quality.
2.6.5 Costs of paying charges User charges would be collected from users each day that they enter the CAZ with their non-compliant vehicle. It was assumed that following the second modelled year (2022) the non-compliant fleet will continue to upgrade to newer, compliant vehicles at the same rate as predicted by the modelling for the Do Minimum scenario. Thus, the costs of user charges will decrease over time, as fewer vehicles will pay the charge due to increasing rates of compliance.
Scheme revenue is forecast in the Financial Model and calculations are described in the Financial Case. Per section 5.1.5 of CAZ Option Appraisal Guidance, these payments are considered transfers and not included in the value for money assessment. However, the user charges by vehicle class are provided in Table 2-7 in nominal terms.
Table 2-7 Cost of CAZ Charges by vehicle class over the scheme period (£m, nominal)
CAZ charge PCN
Car 40 14
Taxi/PHV 0 0
LGV 59 22
HGV 25 2
16https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/722302/road- traffic-estimates-in-great-britain-2017.pdf
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Coach 0 0
Total 124 39
Table 2-7 shows that LGVs are expected to pay the most in user charges, paying nearly 50% of the total user charges.
Along with paying an access fee to enter the CAZ, users of the CAZ driving non-compliant vehicles will also incur a time cost related to payment of the CAZ charge on the online platform. It is assumed that each transaction requires five minutes.
Revenues and welfare disbenefit associated with CAZ implementation fall in line with non-compliant unique vehicle cordon crossings, as shown in Figure 2-3. Two modelled years (2020 and 2022) were used for creating a non-compliant vehicle profile, where a year to year percentage changed was interpolated for year 2021, and from 2022 onwards figures were extrapolated assuming a constant fleet age.
Non-Compliant Vehicle Cordon Crossing AADT
6,000
5,000
4,000
3,000
2,000
1,000
0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Car LGV HGV
Figure 2-3 Non-compliant vehicle cordon crossings 2.6.6 Note on Taxis
The CAF report produced by Element Energy (EE) describes the mitigation measures relevant to taxis. The analysis monetises the expected cost to taxi operators based on CAZ implementation. To counter the proposed cost to taxi operator’s, mitigations will offer impacted taxi operators financial assistance as part of the CAZ programme. The mitigation measure M2 describes mitigation measures targeting taxis (refer to section 2.9 for more detail)
2.6.7 Impact of parking charges Parking charge impacts were estimated for cars only (i.e. potential impacts to LGV users were not estimated). The behavioural impacts of parking charges were estimated by applying the average cost of a parking stay in Birmingham, calculated to be £4.94, to a subset of trips to the CAZ zone that currently use on-street parking, found to be 15%. This results in behavioural responses from compliant and non- compliant users who may elect to cancel or re-mode their trip, or to pay the charge. There is also a slight impact on upgrade rates, because non-compliant users who may have upgraded in the CAZ D plus Additional Measures scenario, now choose to forego journeys to the CAZ (through cancellation or re-mode response) and thus no longer upgrade their vehicles.
The cost to users and revenue to BCC and to private off-street car parks have been estimated.
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Table 2-8 Revenues and costs to users of parking charges (£m 2018, discounted values)
CAZ D plus Additional Measures
Revenue to BCC -8
Revenue to Private Car 30 Parks
Cost to Car users -38
2.6.8 Loss of Welfare from Changing Travel Behaviour Car owners who change their behaviour in response to the CAZ incur a disbenefit. The new action is favoured less than their baseline behaviour, otherwise they would have been doing it already. Hence these vehicle owners will incur an additional cost, termed welfare loss in economics.
The loss of welfare from changing travel behaviour was estimated using the rule of half for trips foregone (cancelled), and trips re-moded (i.e. change to public transport). This method assumes that the disbenefit to the users fall along a continuum between £0 and the price of the charge. The midpoint is taken to be the average dis-benefit and is multiplied by the number of trips foregone and re-moded to determine the overall welfare loss. This effect would only be felt by non-work car users as it was assumed that business user trips would be replaced.
The full effect of welfare loss would be incurred in 2020, and then would reduce in future years as more vehicles become compliant and trips re-instated. For trips diverted around the CAZ, the welfare impact would be captured in the journey time and vehicle operating cost appraisal. In theory, the user will balance all the costs and benefits of the trip and therefore the estimated loss in welfare should capture the utility change as well as changes in fuel cost, operating cost, and travel time.
Table 2-9 shows the number of trips cancelled or re-moded and their forecast welfare losses.
Table 2-9 Impact of trips foregone and re-moded CAZ D plus Additional Measures
Number of trips cancelled 4.5 (millions)
Number of trips re-moded 5.5 (millions)
Consumer surplus (welfare) loss -33 (£m)
The introduction of a CAZ in Birmingham would result in a change in travel patterns that could impose additional costs or benefits on transport users in terms of journey times and vehicle operating costs (VOC). With the introduction of the Birmingham CAZ a reduction in traffic overall results in less congestion, and hence time savings (i.e. a benefit to transport users). However, there may be instances of vehicles changing route to avoid the zone causing congestion and increasing journey times (i.e. a cost to transport users) in certain route segments. Changes in these costs were estimated using Department for Transport TUBA software. Full details on the method used to estimate the impact of each CAZ option on journey times and vehicle operating costs, and the results, are presented in the Economic Assessment Methodology Report. The travel time and VOC numbers output are presented in Table 2-10.
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Table 2-10 Summary of travel time and vehicle operating cost impacts (£m, 2018 discounted values)
CAZ D plus Additional Measures
Travel Time 75
Vehicle Operating Costs -14
Total 60
Travel time and VOC benefits are expected to be £60m for the proposed Birmingham CAZ. These benefits are due mostly to lower congestion throughout Birmingham and the region as a result of fewer trips entering the CAZ due to non-compliant vehicle owners cancelling or re-moding journeys.
Distributional Impact Assessment Summary
A Distributional Impact Assessment (DIA) was undertaken on the preferred scheme proposed in the Outline Business Case, the CAZ D plus Additional Measures scheme. The first version of this report (Revision 1.1) was issued as an appendix to the Outline Business Case. The report has subsequently been updated to account of some additional analysis of some of the potential impacts, together with some information from the consultation that was undertaken for the Birmingham CAZ project
The development of mitigation proposals has taken place since the Outline Business Case as a separate work stream, taking into account distributional impacts as well as other types of impact such as broader economic and implementation issues, which are beyond the scope of distributional appraisal. The final mitigation proposals, and their estimated costs, have now been taken into account as part of the Full Business Case reported for the proposed Birmingham CAZ.
An updated version of the report, Revision 2, is issued as a background document for the Full Business Case. However, it should be noted that it has not been comprehensively updated since its purpose, to inform selection of the preferred option and where to target mitigation, has been served. It is therefore provided for information only. The following summarises the DIA findings of CAZ impacts. These findings were a fundamental basis for creating the mitigations and exemptions that compose the proposed Birmingham Clean Air Zone.
The impacts of the CAZ D plus Additional Measures scheme, without mitigations, can be summarised as:
. Large beneficial impact to the most deprived communities in terms of improvement in air quality;
. Large adverse impact to Accessibility for Community Transport Dependent Groups;
. Large adverse impact to Accessibility for taxi dependent wheelchair users;
. Moderate adverse impact to personal affordability; and, . Moderate adverse impact to business affordability for SMEs and PHV drivers and Large adverse for hackney taxi drivers. The impact of CAZ D plus Additional Measures scheme is likely to affect affordability (personal and business) more than a CAZ D alone due to the increased cost in parking, although this is not indicated in the quantified impacts on affordability since the increased cost of parking is not factored into the method.
A summary of key distributional impacts across the various CAZ levels are summarised in table 2.11.
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Table 2-11 summary of distributional impacts
Scenario Impact Affected Groups Suggested Mitigation
Increase in cost or decrease in Disabled people Sunset period for vehicles availability of community registered under Section transport Elderly people 19 of the Transport Act 1985 Children
Increase in cost or decrease in
availability of school transport
Increase in cost of business SMEs within the CAZ who Exemptions for business
travel through requirement to maintain a vehicle vehicles registered to pay CAZ charge/upgrade to SMEs which enter the CAZ compliant vehicle SMEs supplying businesses CAZ on regular (e.g. within the CAZ (locations twice or more per week) currently unknown) basis
CAZ C High CAZ Increase in cost of travel via Residents of the CAZ and None suggested private vehicle due to loss of surrounding areas, an area
free parking in Birmingham City of high income deprivation, Council controlled areas who have more limited
CAZ C High with AdditionalMeasures with C High CAZ ability to avoid the CAZ Increase in cost of travel via Sunset period to allow private vehicle due to residents of the CAZ time requirement to pay CAZ to make the necessary charge/upgrade to CAZ financial adjustments if compliant vehicle needed
People with religious beliefs Travel plans to help who attend the large places congregants to modify
of worship within the CAZ their travel mode area
Guardians of children Time limited and/or undergoing treatment at means tested exemptions Birmingham Children’s for long stay patients (as Hospital currently in operation for parking)
Disabled people who have Sunset period to allow limited alternative modes residents time to make of transport the necessary financial
adjustments if needed
Fare increase/reduction in Financial incentive availability of hackney taxis and package for hackney taxi PHVs Women drivers to retrofit vehicles where possible or alternatively upgrade Increase in cost of business Hackney taxi owner/drivers their vehicles to travel and PHV owner/drivers wheelchair accessible ULEVs
CAZ D High and CAZ D High with AdditionalD Dwith and CAZ High MeasuresHigh CAZ
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Health and Environmental Impacts 2.8.1 Introduction The key driver for action on air quality in Birmingham, through implementation of a CAZ, is the effect of poor air quality on human health. There are economic and social costs associated with the health and environmental impacts of poor air quality which are summarised in the following sections, drawing upon a variety of evidence and research. Secondary to this, there are also economic and social costs associated with the health impacts of physical inactivity and poor mental health. This chapter considers both the health and environmental impacts of a CAZ arising from changes in air quality within Birmingham, and also those health impacts that are not directly related to changes in air quality which may occur as a result of changes in traffic patterns and flows and their influence on the use of active travel modes and social cohesiveness. Where possible these have been described quantitatively, and elsewhere a qualitative approach has been used.
Defra’s Impact Pathway model has been used to provide monetised values of the air quality impacts of the proposed CAZ option. This was applied to the options considered at the Outline Business Case (OBC) stage and is also being applied for the FBC. This is the recommended methodology for use in cases where the estimated impacts, using damage cost methodology, are valued at over £50 million. The impact pathway approach considers variations in pollutant concentrations and population density across the UK and uses pollution concentration response coefficients, to assess the effects on health.
The application of the impact pathway method to date has resulted in relatively modest health benefits from the proposed CAZ. However, the method only quantifies the following impacts:
PM10 Chronic mortality – the impact on life expectancy of long-term exposure to average levels of pollutants in the air NO2 Chronic mortality – the impact on life expectancy of long-term exposure to average levels of pollutants in the air PM10 Respiratory hospital admissions – emergency admissions to hospital due to pollution induced respiratory problems PM10 Cardiovascular hospital admissions – emergency admissions to hospital due to pollution induced cardiovascular problems PM10 Productivity – the impact on the efficiency with which an input is used in the production process e.g. labour, human capital, natural capital.
There are many other positive health outcomes linked to reduced concentrations in air pollution, which are not captured in the impact pathway approach. For example:
cognitive decline and dementia, which have been linked to traffic-related air pollutants (Power et al., 2016); lower lung function in early life which has been associated to exposure during pregnancy (Morales et al., 2015);
self-reported life satisfaction has been linked to NO2 (after controlling for other economic, social and environmental factors) (Knight and Howley, 2017).
It is likely that the full health benefits are not captured in the business case, however there is currently no approved methodology for valuing these health outcomes for use in a FBC.
It is proposed to prepare a Health Impacts Addendum to support the FBC. This is in acknowledgement that the approved Impact Pathway approach used in the FBC only captures some health benefits and that there are other tools, such as the Public Health England’s (PHE) air pollution tool, which can be applied for the project to provide further monetised values of health impacts. Whilst these other techniques are not approved for use in business cases, and have their own limitations, the inclusion of some of the results in the addendum will illustrate that the valuation of health benefits is an emerging field and that any decisions on the financial benefit or costs of the CAZ are done so on limited understanding of the likely overall value of health benefits.
2.8.2 Health Impacts Associated with Air Quality Air pollution is linked to a wide range of illnesses and health conditions. The air pollutants from traffic emissions of most concern in terms of health impacts are particulate matter (PM) and nitrogen dioxide
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(NO2). Long term exposure to air pollution can lead to the development of some of these health conditions, whilst short-term exposure can exacerbate existing conditions. Health conditions associated with air pollution are as follows:
. Respiratory diseases – including asthma and chronic obstructive pulmonary disease (COPD)17 . Cardiovascular disease (heart disease and stroke)18 . Diabetes19 . Cognitive decline and dementia20 . Low birth weight, still births, infant death and poor organ development in children 21 Children are particularly susceptible to the health impacts of poor air quality. This is because their immune system and lungs are not fully developed, and also because they tend to spend a larger proportion of the day outdoors and have higher metabolic rates. There is evidence to suggest that for children the health impacts of poor air quality can be initiated prior to birth through a mother’s exposure to pollutants, with potential for life long consequences. Children living in high pollution areas are four times more likely to have reduced lung function when they become adults.22
Other groups that are at increased risk of exposure to poor air quality include car commuters, taxi drivers, and bus and lorry drivers, all of whom spend a higher than average amount of time in close proximity to traffic pollutants 23,24.. In addition, people living in areas of deprivation tend to be more susceptible to the health impacts of air quality as a result of living in poor housing conditions with greater exposure to pollutants and experiencing greater stress, which reduces the body’s resilience to toxicants present in polluted air23.
The link between mortality and long-term exposure to air pollution is also well evidenced25. Cohort studies looking at the effects of air pollution on health over several years have shown that the deaths from respiratory and cardiovascular causes, in combination with other factors, increase with long term exposure to air pollution. This occurs at both high and low levels of pollution and relates mostly to fine particulate matter, such as particular matter of less than 2.5 μm diameter (PM2.5). Research by Public Health England conducted in 2014 suggested that exposure to fine particles from road transport emissions was contributing to 1,460 premature deaths per annum in the West Midlands conurbation and 520 within the city of Birmingham.26
The impacts of air pollution on human health, in turn, have a number of social and economic impacts such as impacts on quality of life, school attendance, reduced productivity (resulting from absence from work or sub-optimal performance at work due to ill-health), and increased health expenditure due to increased hospital admissions as well as prescribed medication to manage health conditions. The full monetary costs of these impacts are as yet unknown, but some techniques have been applied to calculate some costs associated with air pollution. These are set out in 2.8.5 and also include environmental damage costs.
17 Anderson, Z. (2010) Chronic Obstructive Pulmonary Disease and Long-Term Exposure to Traffic-related Air Pollution. A Cohort Study. American Journal of Respiratory and Critical Care Medicine. 183:4 18 Newby, D.E. et al. (2015). Expert position paper on air pollution and cardiovascular disease. European Heart Journal. Vol. 36(2), pp. 83–93b. 19 Wang, B. et al. (2014). Effect of long-term exposure to air pollution on type 2 diabetes mellitus risk: a systematic review and meta-analysis of cohort studies. Available at: https://www.ncbi.nlm.nih.gov/pubmed/25298376 20 Power, M.C. et al. (2016). Exposure to air pollution as a potential contributor to cognitive function, cognitive decline, brain imaging, and dementia: A systematic review of epidemiological research. Neurotoxicology. Vol 56, pp.235-253 21 Morales, E. et al. (2015). Intrauterine and early postnatal exposure to outdoor air pollution and lung function at preschool age. Thorax. Vol. 70, pp.64-73. 22 Royal College of Physicians. (2016). every breath we take: the lifelong impact of air pollution. Report of a working party. London: RCP. 23 Wargo, J. 2002. Children’s Exposure to Diesel Exhaust on School Buses. Environment and Human Health. Available at: http://www.ehhi.org/reports/diesel/ 24 Johns, T. 2016. How much diesel pollution am I breathing in? Available at: http://www.bbc.co.uk/news/magazine- 35717927 25 COMEAP. 2016. Long-term Exposure to Air Pollution and Chronic Bronchitis. A report by the Committee on the Medical Effects of Air Pollutant. 26 Public Health England. 2014. Estimating Local Mortality Burdens Associated with Particulate Air Pollution.
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2.8.3 Schools and Distribution of Nitrogen Dioxide Improvements As children are particularly susceptible to the health impacts of air pollution, some spatial analysis has been carried out of the likely benefits of the preferred CAZ option at locations of key importance to children.
Figure 2-4 shows NO2 concentrations across Birmingham under the ‘Do Minimum’ (i.e. if no CAZ were implemented) relative to the locations of nurseries and schools for children aged under 16. Those nurseries 3 and schools that fall within areas where NO2 concentrations are greater than 30 μg/m (as indicated by the orange and red contours) are considered to be most risk of experiencing NO2 concentrations which exceed 3 the legal limit of 40 μg/m NO2. In the absence of a CAZ there would be 135 schools within Birmingham within this higher risk category, of which 57 are located within the CAZ area itself.
It should be noted that air quality can differ considerably over very short distances and periods of time, and 3 therefore whilst schools located in areas where average NO2 levels are below 30 μg/m are at lower risk of experiencing NO2 exceedances this does not mean that exceedances could not occur at these locations, and 3 the converse is true for those located in areas where average NO2 levels are below 30 μg/m . Furthermore, there is no safe level of air pollution.
Figure 2-4 NO2 concentrations across Birmingham under the ‘Do Minimum’ scenario
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Figure 2.5 shows the degree of increase or decrease in NO2 concentrations modelled following implementation of a CAZ D ‘High’ relative to locations of nurseries and schools as described above. Air quality modelling data is not currently available for the preferred option; however, it is not anticipated that the results discussed in this chapter would differ significantly between a CAZ D High scenario and the preferred option. Modelling work undertaken for the CAZ D ‘High’ scenario suggests that all of the nurseries and schools at highest risk of NO2 exceedances as shown in Figure 2.5 would experience a reduction in NO2 concentrations as a result of the CAZ.
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Figure 2-5 Changes in NO2 concentrations across Birmingham under a ‘CAZ D High’ scenario
In approximately half of cases this improvement would be relatively small, between 0 and -0.5 μg/m3, but others would experience reductions in excess of 6.5 μg/m3. Figure 2.6 shows the frequency distribution of improvements in NO2 concentrations. Approximately 20% of those schools which fall within the higher risk banding for NO2 exceedances in the absence of a CAZ would no longer do so with a CAZ in place. Current air quality modelling results suggest that one educational facility within the Birmingham area would experience a slight increase in NO2 concentrations, and further work will be undertaken to validate the modelling and identify potential mitigation for this receptor.
Figure 2-6 Number of schools mapped within zones of 30 µg/m3 nitrogen dioxide concentrations in ‘Do Minimum 2020’ which be within areas of where NO2 concentrations are predicted to decrease in a CAZ D ‘High’ scenario
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35
30
25
20
15 Number of schools of Number 10
5
0
>0
>-6.5
0 to -0.5 to 0
-4 to to -4 -5.5
-4.5 to -5 to -4.5
-5 to to -5 -5.5
-5.5 to -6 to -5.5
-6 to to -6 -6.5
-1 to to -1 -1.5
-1.5 to -2 to -1.5
-2 to to -2 -2.5
-2.5 to -3 to -2.5
-3.5 to -4 to -3.5 -1 to -0.5 -3 to to -3 -3.5 Modelled change in nitrogen dioxide concentrations (ug/m3) from ‘Do Minimum’ 2020 scenario compared with CAZ D ‘High’ scenario
Overall this analysis suggests that the preferred option would have a widespread beneficial impact on air quality at locations of key importance to children.
2.8.4 Health Impacts related to Behavioural Change 2.8.4.1 Relationship between traffic patterns, travel modes and health Daily physical activity is hugely important for maintaining health27, and inactivity directly contributes towards one in six deaths in the UK28. It is estimated that physical inactivity costs the UK approximately £7.4 billion per year when the impact on NHS, social care, sickness absence from work and other factors are taken into account29. The costs to business of absenteeism and presentism (working whilst sick can cause productivity loss and further poor health) are significant. In 2014 the cost of absences was approximately £14 billion30, of which approximately £5 billion can be attributed to physical inactivity31. The costs of presentism may be even more32.
27 Department of Health. 2011. Start Active, Stay Active: A report on physical activity from the four home countries’ Chief Medical Officers. Available at: https://www.gov.uk/government/publications/start-active-stay-active-a- report-on-physical-activity-from-the-four-home-countries-chief-medical-officers 28 Lee I. M. et al. 2012. Effect of physical inactivity on major non-communicable diseases worldwide: an analysis of burden of disease and life expectancy. 29 Public Health England. 2016. Working Together to Promote Active Travel: A briefing for local authorities. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/523460/Working_To gether_to_Promote_Active_Travel_A_briefing_for_local_authorities.pdf 30 Confederation of British Industry/Pfizer.Fit for purpose. 2013. Absence and workplace health survey 2013. Available at: https://www.centreformentalhealth.org.uk/managing-presenteeism 31 Sustrans: The Role of Active Travel in Improving Health. Toolkit Part 1: How active travel can improve health and wellbeing in the workplace. Available at: https://www.bma.org.uk/collective-voice/policy-and-research/public-and- population- health/transporthttps://www.sustrans.org.uk/sites/default/files/activetraveltoolbox_healthandwellbeing_part1v3.pdf 32 Centre for Mental Health. 2011. Managing presenteeism. Available at: https://www.centreformentalhealth.org.uk/managing-presenteeism
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For most people, the easiest forms of physical activity are those that can be built into daily life, for example by using walking or cycling as an alternative to motorised transport for everyday journeys such as commuting to work or school29. Traffic speeds and volumes are known to influence how individuals choose to travel, with higher volumes of walking and cycling where traffic is less and vice versa33. Active forms of travel, such as walking and cycling, are associated with a range of health benefits. These include improved mental health, reduced risk of premature death and prevention of chronic diseases such as coronary heart disease, stroke, type 2 diabetes, osteoporosis, depression, dementia and cancer34. Research also suggests that countries with highest levels of active travel generally have amongst the lowest obesity rates35
High traffic volumes and speeds can reduce opportunities for positive contacts with other residents in a neighbourhood, contributing towards increased social isolation and reduced community cohesion3637. Individuals who are socially isolated are more likely to make use of public services due to lack of support networks and have increased likelihood of developing certain health conditions such as depression and dementia38. They are also more likely to be physically inactive, which is again linked to increased likelihood of developing certain diseases as discussed above. People experiencing high levels of social isolation have significantly higher mortality levels than those with low or average levels of isolation39. It has been estimated that better community cohesion could save the UK around £530 million per year40.
2.8.4.2 Health in Birmingham The health of the people in Birmingham is generally worse than the national average as evidenced by several markers. Life expectancy is lower than the national average, and is heavily influenced by neighbourhood area. The city experiences higher rates of death than the national average from preventable diseases such as coronary heart disease, stroke and certain cancers, as well as high levels of diabetes amongst its resident’s41. All of these can be improved by increased levels of physical activity41. The proportion of people who are overweight or obese is also higher than the national average, as is the proportion of people with severe mental illnesses. In contrast, the proportion of adults who regularly undertake physical activity is relatively low42.
2.8.4.3 Anticipated Behavioural Changes as a result of a CAZ The introduction of a CAZ will increase the cost of travelling in and out of Birmingham centre for non- compliant HGVs, Coaches vans and cars, both as a result of the CAZ charge and through the loss of free parking within the CAZ area. It is anticipated that following implementation of the CAZ, a significant proportion of non-compliant HGVs, LGVs and cars (between 29 and 47% depending on vehicle type) would either change their travel patterns to avoid the zone or cancel their trip altogether. It is anticipated that approximately 2 % of journeys made by car would instead by undertaken by public transport, cycling or walking. Whilst public transport is not a form of active travel in itself, many public transport users walk or cycle to points of access as part of their overall journey.
2.8.4.4 Benefits of a CAZ
33 Appleyard, D. and Lintell, M. 1972. The environmental quality of city streets: The residents’ viewpoint. Journal of American Institution of Planners. Vo. 38: pp84-101. 34 British Medical Association. 2012. Healthy transport = Healthy lives. Available at: https://www.bma.org.uk/collective- voice/policy-and-research/public-and-population-health/transport 35 Bassett D, Pucher J, Buehler R, Thompson D and Crouter S. (2008) Walking, cycling, and obesity rates in Europe, North America and Australia. Journal of Physical Activity and Health. Vol. 5, pp795-814. 36 Appleyard, D. 1981. Liveable Streets. University of California Press. 37 Hart, J and Parkhurst, G. 2011. Driven to excess: Impacts of motor vehicles on the quality of life of residents of three streets in Bristol UK. World Transport Policy and Practice, 17 (2). pp. 12-30. ISSN 1352- 7614. 38 Social Finance. 2015. Investing to tackle loneliness. A discussion paper. Available at: https://www.socialfinance.org.uk/sites/default/files/publications/investing_to_tackle_loneliness.pdf 39 Steptoe A et al (2013) Social isolation, loneliness, and all-case mortality in older men and women. Proceedings of the National Academy of Sciences of the United States of America vol 110 no 15, 5797– 5801, doi: 10.1073/pnas.121968611 40 Public Health England. 2017. Promoting active travel. Available at: https://trl.co.uk/reports/2017-academy- symposium-presentation-carl-petrokofsky-public-health-england-4-6 41 Birmingham City Council. 2015. A means to an end – increasing participation in sport and physical activity. Available at:https://www.birmingham.gov.uk/download/downloads/id/424/increasing_participation_in_sport_february_2015.pdf 42 Public Health England (2017). Better mental health: JSNA toolkit. Available at: https://www.gov.uk/government/publications/better-mental-health-jsna-toolkit
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An increase in the number of journeys made on foot or cycle would be expected to have a beneficial impact on public health. The proportion of journeys anticipated to be re-moded to public transport, walking or cycling (2 %) appears small, but when considered against the population of Birmingham (over one million) the number of journeys and people affected are potentially significant. Reductions in traffic flows within the city centre and across the wider Birmingham area of changes to traffic patterns may also have a beneficial impact on health by further encouraging people to walk or cycle in preference to using a car, particularly for short journeys. Reductions in traffic flows may also help to improve social cohesiveness and reduce social isolation.
Whilst impacts of this nature cannot currently be quantified or monetised, it is anticipated that there would be beneficial health impacts associated with increased use of active travel modes and improved social cohesion. Most changes to traffic flows and increases in active travel journeys would likely occur within those areas within and in close proximity to the CAZ, however the CAZ would be important in contributing towards other Birmingham City Council initiatives in initiating a step change in the approach and mentality surrounding active travel with consequential improvements in public health.
2.8.5 Environmental Impacts of Air Pollution
NOx, NO2 and PM10 emissions not only affect human health but also have adverse impacts on the built and natural environment:
. PM10 and Soiling - Soiling of buildings by combustion particulates is one of the most obvious signs of pollution in urban areas. Soiling is an optical effect (a visual darkening of exposed surfaces) by deposition of atmospheric particles. The soiling of buildings includes both residential dwellings and historic/cultural buildings and causes economic damages through cleaning costs and amenity costs;
. NOX, NO2 and Damage to Cultural Heritage and Ecosystems - Emissions of NOX are linked with damage to building materials, historic buildings and objects of cultural value. Material corrosion occurs from acidic deposition and affects almost all materials. Increased nitrogen deposition in the form of NOX and NO2 also pose a risk to biodiversity, through increased nitrogen deposition and overloading by nitrogen favourable species, reducing plant diversity in natural and semi- natural ecosystems. In addition to reducing NOx and PM10 emissions, the introduction of a CAZ would result in reduced greenhouse gas – including carbon dioxide (CO2) – emissions from road transport. These reductions would be generated as a result of actions by vehicle owners to replace or upgrade their vehicles to comply with the CAZ standards.
2.8.6 Monetised Benefits: CAZ D scheme
The introduction of a CAZ in Birmingham, therefore, is expected to generate a range of benefits:
. reduced costs from ill health;
. beneficial impact on productivity;
. reduced material damage (particularly to historical and cultural buildings);
. a positive effect on nature conservation/green sites within the CAZ boundaries;
. a positive effect on climate change through reduced greenhouse gas (GHG) (measured in CO 2 equivalent tonnes) emissions.
DEFRA’s updated damage cost estimates are used to monetise these impacts for the Birmingham CAZ scenarios43. The Economic Methodology Report sets out full details on the methodology that has been used to quantify and monetise these benefits for each CAZ option.
It is noted that the damage cost estimates from DEFRA do not account for all the improved health outcomes associated within improved air quality and behavioural changes associated with the CAZ. For example, they
43 The damage cost values used reflect the JAQU national data inputs for local economic models
54 Page 86 of 366 Birmingham City Council Clean Air Zone do not account for the impact of NO2 on hospital admissions and therefore the morbidity impact is potentially underestimated.
Implicit in this analysis is the comparison against the “do minimum” scenario, where costs due to the impacts listed above are incurred by society.
Table 2-12 presents the total estimated reduction in NOX and PM10 emissions and the monetised benefits of reduced emissions in the first year and over the lifetime of the scheme. This table deals with the mass emissions changed as a result of the scheme (i.e. the total change measured in tonnes). The legal targets for air quality are set in terms of a level of concentrations of pollutants that must not be exceeded. Thus, the legal limits cannot be expressed in terms of tonnes and are not directly comparable.
The monetary benefit shown here is attributable to the behavioural change that results from the CAZ. The CAZ is expected to result in users upgrading to cleaner vehicles or changing travel behaviour to result in less emissions from transport.
Table 2-12: Total Health and Environmental Benefits of Reduced NOX and PM10 Emissions (2018 discounted values)
CAZ D plus Pollutant unit Additional Measures
NOx tonnes 4,240
£m 34
PM10 tonnes 79
£m 11
Total £m 46
Table 2-12 shows that CAZ D plus Additional Measures provides significant total health and environmental benefits resulting in a reduction of roughly 4,240 tonnes of NOx emissions and 79 tonnes of PM10 emissions over the appraisal period.
DEFRA’s updated damage cost estimates have been used to monetise some of these impacts for the Birmingham CAZ scenarios. However, the damage cost estimates from DEFRA do not account for all the improved health outcomes associated within improved air quality and behavioural changes associated with the CAZ. For example, they do not account for the impact of NO2 on hospital admissions and therefore morbidity impacts are potentially underestimated
Figure 2-7 shows the monetised value of the reductions in emissions of NOx and PM10 over the appraisal period. From this it can be seen that the opening year results in around £8m of benefits from reductions from NOx and around £3m in benefits from reductions in PM10. These benefits decline steadily over time reaching about £0.5m for NOx and £0.1m for PM10 in 2029.
Figure 2-7 Forecast emissions reductions over appraisal period CAZ D plus Additional Measures
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Forecast Emission Reductions £9.00 £8.00 £7.00 £6.00 £5.00 £4.00 £3.00 £2.00 £1.00 £0.00
Emissions Emissions Reductions Benefit (£m) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
PM10 NOx
Table 2-13 also presents the total estimated reduction in greenhouse gas (GHG) emissions and the monetised benefits of reduced GHG emissions in the first year and over the lifetime of the scheme. This was assessed based on the change in total vehicles kilometres driven, as well as the change in terms of fleet, having been upgraded to newer cars with lower carbon emissions. Table 2-13 shows that over the appraisal period the CAZ D plus Additional Measures scheme would result in a net reduction of around 79,261 tonnes of greenhouse gas emissions. In monetary terms this amounts to around £4m over the appraisal period.
Table 2-13 Total Quantified and Monetised Benefits of Reduced GHG Emissions (£m, 2018 discounted values)
Pollutant unit CAZ D plus Additional Measures
Greenhouse Gases Tonnes 79k
CO2e
£m 4.3
2.8.7 Summary of Health and Environmental Benefits Reductions in air pollution and travel behavioural changes will bring a number of social, environmental and economic benefits. These include:
. benefits to human health;
. improved productivity (as a consequence of health improvements); . Reduced material damage (particularly to historical and cultural buildings);
. a positive effect on nature conservation/green sites within the CAZ boundaries;
. a positive effect on climate change through reduced greenhouse gas (GHG) (measured in CO 2 equivalent tonnes) emissions. Given the strong links between both air pollution and travel mode and a variety of health impacts, particularly on children, all reductions in air pollutant concentrations associated with the implementation of the CAZ D ‘High’ with Additional Measures are expected to bring benefits. Although initial changes in pollutant concentrations by 2020 may be modest and the predicted modal shift towards active travel relatively small, the accumulation of small changes, when considered across the population, is likely to
56 Page 88 of 366 Birmingham City Council Clean Air Zone bring benefits to public health outcomes in Birmingham. The results of ongoing air quality modelling will be reported in the Distributional Impact Appraisal Report which will be submitted to support the business case.
Mitigation and exemptions
Given its statutory equality duty, BCC wants to ensure that compliance of NO2 emissions will not create any significant dis-benefits to disadvantaged groups. Mitigations and exemptions have been created for groups identified by the Distributional Impact Assessment (DIA). The following describes the processes for creating the mitigation and exemption packages.
2.9.1 Mitigation measures Designing mitigation measures to request funding from the Clean Air Fund (CAF) involved the following steps:
. Creation of a longlist of measures: A wide range of measures were considered which could mitigate the negative impacts of the CAZ introduction. This list was deliberately broad and considered all options that could be enacted to help targeted user groups.
. Assessing the longlist measures: Each measure on the longlist was assessed against the primary and secondary Critical Success Factors (CSF) described in Appendix 1A.
. Reviewing the shortlist of measures: All measures were compared assessed against the CSFs mentioned above and a qualitative decision was made whether to progress the measure to the shortlist. During this process the details of the measure in question was finalised.
. The short list measures were then analysed and quantified before a final decision was made on the items taken forward to the final package of mitigations seeking CAF allocation.
The decision process evaluation the longlist of mitigations and creating the shortlist is summarised in Table 2-14.
Table 2-14 Mitigation measure of longlist leading to the shortlist summary
Mitigation Primary CSF: delay Secondary CSFs Decision to bring forward to measure reaching compliance short list
Mobility package No: encourages use of Unless scheme is Yes – but limit package to low for private vehicle the public transport targeted cost will income residents of the CAZ and owners become excessive low-income individuals working within the CAZ
Scrappage No: in some instances, Logistical and feasibility Yes – but limit package to low- scheme for this will result in a issues relating to the income residents of Birmingham and private vehicle compliant trip rather proof of scrappage, target at those who regularly enter owners than a cancelled/re- must be targeted to limit CAZ routed trip, however cost the modelling suggests this does not impact the compliance date
ULEV taxi grant No: encourages State aid and double No transition to ULEV funding issues vehicle
ULEV taxi leasing No: encourages the Would require significant Not in this form. Edited to include a scheme transition to ULEV funding or, alternatively, limited number of taxis for the vehicles a large loan amount council to lease on a ‘Try before you buy’ basis
Taxi scrappage No: encourages the Feasibility and logistical No scheme transition to ULEV issues, objection from vehicles the taxi trade
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Mitigation Primary CSF: delay Secondary CSFs Decision to bring forward to measure reaching compliance short list
ULEV taxi No: encourages Satisfies all secondary Yes – Combined award where drivers operational transition to ULEV CSFs and positive receive equal funding for either support package vehicle feedback received from retrofit solution or ULEV operational trade support package
Taxi retrofit fund No: encourages Satisfies all secondary transition to a CSFs and positive compliant vehicle feedback received from technology trade
SME grant for No: encourages State aid and double Not in this form. Edited to include a HGVs/LGVs transition to a funding issues fund for HGVs only where fleets can compliant vehicle apply for a funding award to aid with technology either retrofit technology or the upfront cost of a compliant vehicle. Retrofit scheme No: encourages Issues with technology Coaches added to this scheme. for HGVs/LGVs transition to a readiness for HGVs, for compliant vehicle LGVs the cost of retrofit technology compares poorly with cost of new vehicle
Freight No: would reduce the Would require significant No consolidation amount of CAZ entries investment, negative centre from freight vehicles feedback from Birmingham fleets, not feasible in the timeframe available
Free public No: encourages Satisfies all secondary Yes charging transition to ULEV CSFs electricity credit vehicle for LGVs
Marketing and No: encourages Satisfies all secondary Yes engagement transition to ULEV CSFs campaign vehicles
Residents parking No Satisfies all secondary Yes scheme CSFs
Improving No: encourages Costs and timeframe are No (could be developed at a later Birmingham’s residents to walk and not considered feasible date outside of the CAF framework) cycling and cycle in relation to CAF walking infrastructure
From this assessment eight mitigation measures were brought forward to the final package of mitigation measures. Table 2-15 describes the mitigation measures proposed, including how the group is impacted by the scheme and the proposed budget required for the mitigation measure. Funding for the mitigations measures is sought through the Clean Air Fund.
The cost of the mitigation measures is £48.3m in 2018 prices. An additional £2.2m has been added to the mitigation measure cost to account for administering the mitigation and exemption measures. Adding this administration cost brings the total to £50.4m and nominalising the administrative cost profile in accordance with it’s spend profile brings the total CAF allocation request to £50.9m. This results in a total cost of £46.0m in 2018 discounted prices.
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Table 2-15 Mitigation package summary
Ref Measure Type Group Geographical Summary of mitigation Distributional analysis (how group is Cost impacted scope measure impacted)
M1a Mobility 20c Private car/van Not restricted to Individual can access the choice of £10.84 support for owners who work geographic area a £1000 mobility credit offered in million individuals or live within the for vehicle form of SWIFT travel card or a (5,420 x working CAZ owner (place of £2,000 package (Swift credit or £2,000) within the work in CAZ) contribution to compliant vehicle) CAZ in return for scrapping a non- compliant vehicle card Class D CAZ will force residents to either upgrade vehicle or pay charges if they wish to enter. For M1b Mobility 20c Private car/van With evidence of scrapping a non- £6.50 million many individuals, public transport may be the only support for owners compliant car individual receives (3,250 x alternative, these measures decrease the cost of individuals either: £2,000) that switch or facilitate the purchase of a compliant who reside vehicle. outside of . £2,000 cash payment toward the the CAZ West Midlands purchase of a compliant car (not eligible for PiG).
. £2,000 mobility credit. Credit to be supplied on a SWIFT card with no expiration for use.
M2a Hackney 20b Hackney Drivers offered £5,000 as: £5.0 million carriage carriages (1000 x support support payments to be paid £5,000) package towards operational expenses of Changes in licencing conditions will force over 90% ULEV vehicles (4 annual Birmingha of the 1280 vehicles currently operational to change instalments of £1,250) m and (upgraded/retrofit). All options on the market surrounding require significant capital expenditure, this helps support for an LPG retrofit of areas drivers to switch to a compliant vehicle. their current or newly purchased (licensed vehicle As above, changes in licencing conditions are BBC expected to result in 95% of the 4,321 current M2b Council 20b Birmingham drivers) BCC bulk purchase 50 ULEV taxis vehicles needing to be upgraded to continue £2.75 million hackney (licenced BCC through public procurement tender operation (50 x carriage drivers) and lease them to the drivers who £55,000) leasing are most vulnerable as well as on a scheme try-before-you-buy basis
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Ref Measure Type Group Geographical Summary of mitigation Distributional analysis (how group is Cost impacted scope measure impacted)
Private hire vehicle owners who Private Hire upgrade to a compliant vehicle £7 million M2 Vehicle Private Hire where the priority will be beyond 20b (3,500 x c upgrade Vehicles the minimum BCC’s 2020 licencing £2,000) support criteria i.e hybrid or ultra-low emission vehicles.
M3 ‘Free miles’ 20b Van fleets Birmingham ULEV van drivers receive £1000 £0.75 million for ULEV credit to spend on BCC public (750 x £1000) LGVs charging network SMEs operating coaches/HGVs/LGVs or relying on M4 HGV & 20b HGV and Coach West Fleets compete for £15,000 funding road transport will be disproportionately impacted. £10.05 Coach fleets Midlands package to contribute towards: Vehicle capital costs are high, and many fleets must million (670 compliance enter CAZ as part of business operation. This helps x £15,000) fund . Installing a retrofit solution fleets change to a compliant vehicle.
. Upfront or lease costs of a compliant vehicle
M5 Marketing 20b Owners of non- Marketing and engagement £0.38million and compliant campaign to provide information on Ensures maximum uptake/knowledge of measure, to engagemen vehicles (All the CAZ and reach out to groups minimise negative impact and maximise t campaign types) eligible for support through effectiveness of the mitigation measure package mitigation measures
M6 Resident n/a Residents living Areas Implementation of residents £5 million parking close to the CAZ surrounding parking schemes to prevent Prevents vehicle overcrowding on residential streets scheme CAZ overcrowding on margins of CAZ; on the margins of the CAZ will be deployed only if issues arise
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2.9.2 Exemptions This report section describes the process to identify the exemptions included in the final CAZ scheme. The first stage of the identification and evaluation mitigation options was to develop an initial longlist solution to moderate the impact groups identified as disproportionately impacted by the CAZ. In practise this involved identifying groups impacted by the scheme, then identifying a mechanism for lessening their disbenefit from CAZ implementation. This was based on the conclusions of the distributional impact analysis (DIA) report. The groups and targeted exceptions that comprised the longlist are shown in Table 2-16.
Table 2-16 Groups impacted by the CAZ
Group Description
CAZ HGVs and coaches HGVs and coaches registered within the CAZ
HGVs travelling to the CAZ HGVs registered within the Birmingham City area with existing finance agreements
SME van and LGV owners Vans and LGV registered to SMEs within the CAZ
Vans within Birmingham City area Vans registered within the Birmingham City area travelling to the CAZ with an existing finance agreement
Residents inside the CAZ All residents in the CAZ
Workers whose job is inside the CAZ Workers whose job is inside the CAZ and live outside the CAZ
Income deprived Income deprived living in the CAZ
Income deprived Income deprived living outside the CAZ, travelling inside the CAZ to work (commute)
Income deprived All income deprived travelling inside the CAZ
Key workers whose job is inside the CAZ Key workers living within the CAZ
Key workers whose job is inside the CAZ Key workers living outside the CAZ, travelling inside the CAZ to work (commute)
Hospital visitors All visitors of Birmingham Children’s hospital
Community and school transport All holders of Section 19 permits
Night workers All travelling inside CAZ for work purposes during unsocial hours
Faith groups All travelling to larger or more unique places of worship within the CAZ
Disabled vehicle owners Vehicles with a 'disabled' or 'disabled passenger vehicles' tax class
To evaluate the potential to exempt these groups from paying the CAZ charge, the increased number of trips, in AADT terms, was estimated for each of the exemptions on the longlist. This volumetric assessment was used to inform an initial sifting of the longlist to remove those measures that would impact the compliance date. The eligibility for the exemption for CAZ workers has been given a salary cap, as if the exemption were to include all CAZ workers this would result in delayed rate of compliance.
The next level of sifting, evaluation the shortlist, involved eliminating areas of overlap between the different exemption options to ensure the most efficient package is created. Table 2-17 summarises which exceptions are included in the overall package, and the rationale for including or excluding each option.
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Table 2-17 Description of longlist exemption leading to a decision on whether to take each measure forward to the shortlist. The exemption duration and groups are summarised in the Mitigation measures and exemptions section in the financial case chapter (Section 3.4).
Group Description of exemption Included in Rationale package
1 Commercially owned LGVs, HGVs Commercial vehicles and coaches registered within the Businesses with HGVs/LGVs or registered within the CAZ. Limited to 2 vehicles per coaches registered within the CAZ CAZ. company (companies two cleanest Y are not numerous and they will CAZ HGVs/LGVs and non-compliant vehicles). have little time to upgrade their coaches vehicles.
2 Finance agreements will limit an Commercially owned LGVs, HGVs Commercial vehicles organisations ability to upgrade and coaches with finance with pre-existing vehicle. Jacobs ‘Freight and agreements that extend beyond Y finance agreements Logistics’44 report showed that 2020 will be given a 1-year many fleet operators have lease exemption arrangements into the early 2020’s.
3 Individuals with vehicles registered within the CAZ will have a limited ability to avoid the charges and will Private vehicles Private vehicles registered within be disproportionately impacted. registered within the the CAZ are exempted for a 2-year Y Areas within the CAZ have been CAZ exemption shown to have high levels of income deprivation compared to Birmingham as a whole
4 Individuals travelling Individuals with a non-compliant Low income individuals will be into the CAZ for work who work within the CAZ will be disproportionally impacted by the exempt from paying the CAZ CAZ, especially those that must regularly enter the zone for work. charges. (A salary eligibility cap of £30,000 will be applied). Y Key works provide essential services and BCC wants to ensure that their employment is retained within the CAZ
5 Income deprived Income deprived living in the CAZ N Overlaps with option 3 so excluded
6 There is little opportunity to change behaviour to avoid the CAZ. In Income deprived living outside the addition, the insecure nature of Low wage CAZ, travelling inside the CAZ to N income deprived individuals means work (commute) their access to employment should be protected
7 Some groups will be particularly impacted, as their quality of life is dependent on traveling into the CAZ. This will be limited to a small All income deprived travelling inside number of exemptions as there is the CAZ (limited number of opportunity to change behaviour to Income deprived N exemptions, address and income avoid the CAZ charges, i.e. mode dependent) shift. In addition, the mobility and vehicle upgrade mitigation measures also offers some relief to those not covered by the exemption.
8 Key workers whose job Key workers living within the CAZ N Overlaps with option 4 so excluded
44 Jacobs: Clean Air Zone - Freight & Logistics, 2017
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Group Description of exemption Included in Rationale package
is inside the CAZ
9 Birmingham Children’s hospital is a regional specialist so there is little opportunity to change behaviour to All visitors of Birmingham Children’s Hospital visitors Y avoid the CAZ. The vulnerable hospital nature of patients mean family members should not be dis- incentivised from visiting them
10 Community and school transport are often provided by small operators and local charities that Community and school All holders of Section 19 permits Y provide important access to transport services (health and social care, education and training) for people who may otherwise be isolated.
11 The DIA only identifies key workers as those who work unsociable hours as a group who should be protected All travelling inside CAZ for work from the costs. Night workers N purposes during unsocial hours As income deprived workers are covered in option 4, this exemption was not taken forward for packaging.
12 Vehicles with a 'disabled' or There is little opportunity to change Disabled vehicle 'disabled passenger vehicles' tax Y mode to access the CAZ. owners class
Table 2-18 presents the final exemption package with the forecast increase in AADT for each exemption. Exemptions from paying the CAZ charge for non-compliant vehicles meeting the requirements will last through 2020 (1 year) for most exemption measures, with the exception of E5 which will last 2 years and E9b will last through the entire CAZ period.
Table 2-18 Final mitigation package ref Exemption Increase in CAZ D plus Additional Measures over OBC (AADT)
0.05% AADT increase overall E1 CAZ HGVs/LGVs and coaches 1.35% increase of HGV AADT
0.15% AADT increase overall E2 HGVs/LGVs with existing finance agreements 3.50% increase of HGV AADT
0.20% AADT increase overall E3 SME Vans/LGV within the CAZ 1.65% increase of LGV AADT
0.45% AADT increase overall E4 Vans/LGV with existing finance agreements 4.10% increase of LGV AADT
0.85% AADT increase overall E5 CAZ residents 1.10% increase of car AADT
1.30% AADT increase overall E6 CAZ workers 1.65% increase of car AADT
E7 Key workers working within the CAZ 0.75% AADT increase overall
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ref Exemption Increase in CAZ D plus Additional Measures over OBC (AADT)
1.00% increase of car AADT
0.05% AADT increase overall E8 Hospital and GP visits 0.07% increase of car AADT
Community and school transport and vehicles 0.25% AADT increase overall E9 registered with disabled status 0.65% increase of LGV AADT
Not modelled – increase in non-compliant E10 Two wheeled vehicles vehicles entering CAZ expected to be negligible
Note that the full forecast fleet impacts of the mitigations and exemptions are provided in the Economic Appraisal Methodology Report.
2.9.3 Interrelations between mitigations and exemptions The exemption and mitigation measures that have been proposed are both designed to minimise the negative impacts identified by the distributional impact analysis. As such, there is expected to be overlap between the groups targeted by the mitigations and those eligible for exemptions. Details of how exemptions are integrated into the implementation of the mitigation measure are covered in detail in the delivery plan of each mitigation measure (See CAF Report). However, each follows a general approach, as set out below.
. Receiving support through one of the mitigation measures proposed in no way affects an individual’s/organisation’s eligibility for an exemption, and vice versa. . The implementation of the mitigation measures will be extended through early 2021 this allows individuals/organisations to continue to use their vehicle during the exemption period and is organised so that the mitigation measure is available at the end of the exemption.
. Those that are eligible for mitigation measures but are not eligible for exemptions can receive the mitigation packages/funding to coincide with the implementation date of the CAZ. 2.9.4 Mitigations and exemptions impact on compliance The first year of compliance will be 2022, which is the shortest possible time in which Birmingham can achieve compliance. The mitigation measures are shown to not negatively impact the date of compliance, they also deliver a number of other benefits.
. The mitigations measures are designed to help individuals and organisations switch to cleaner compliant vehicles earlier than they normally would.
. For commercial fleets, especially in the case of taxis and HGVs, it is assumed that the vast majority would switch their vehicle as a result of the CAZ irrespective of any mitigation measures. Therefore, the measures should not impact the rate of compliance but instead make it financially easier for those who are forced to switch their vehicles.
The mitigations and exemptions have been processed through the traffic model and AQ modelling suites and do not impact compliance dates. This is due to the fact that impacted participants only make up a small proportion of daily traffic, under 6% of AADT. Additionally, as most of exemptions are only valid through 2020, these will not impact compliance being achieved in 2021.
2.9.5 Mitigations’ and exemptions’ Value for Money This section of the report provides an overview of the method used to calculate how the proposed mitigations independently would impact consumer surplus and the value for money assessment of the CAZ scheme. Overall the implementation of a CAZ scheme impacts users by changing their consumer surplus. The following table provides and overview of the value for money assessment for each of the mitigations. This analysis is further elaborated in the CAF Application delivered with this FBC.
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Ref Measure Description
M1a Mobility support for individuals Mobility credit or scrappage payment to recipients directly working within the CAZ offsets consumer surplus loss due to scheme implementation at a 1 to 1 ratio.
This mitigation is anticipated to increased public transport mode share. However, as a conservative assumption of no impact on vehicle trip rates was made in the traffic modelling.
M1b Mobility support or cash payment Mobility credit or scrappage payment to recipients directly toward the purchase of a new car offsets consumer surplus loss due to scheme implementation with evidence of scrappage at a 1 to 1 ratio.
The additional traffic resulting from this mitigation is ran through the traffic model and the traffic impacts are reflected in
Table 2-19
M2 Hackney carriage and Private Hire The mitigation payments made to taxi and PHV drivers Vehicle support package directly offsets consumer surplus loss due to scheme implementation at a 1 to 1 ratio.
All taxis and PHVs are assumed compliant in the traffic model therefore impacts are not included in the modelled outputs.
M3 ‘Free miles’ for ULEV LGVs The mitigation payments made to LGV drivers directly offsets consumer surplus loss due to scheme implementation at a 1 to 1 ratio.
The mitigation is aimed to encourage the uptake of ULEV LGVs. However, as a conservative assumption of no impact on vehicle ownership rates was made in the traffic modelling.
M4 HGV & Coach compliance fund The mitigation payments made to HGV and Coach drivers directly offset consumer surplus loss due to scheme implementation at a 1 to 1 ratio.
HGVs are assumed to have a fixed trip matrix. Although some HGVs may not re-route due to the mitigation measure now making their vehicle compliant, these are forecast to be small numbers and no change in HGV traffic is assumed in the traffic modelling.
M5 Marketing and engagement No benefit assumed campaign
M6 Resident parking scheme The mitigation cost is assumed to directly offset consumer surplus loss due to scheme implementation at a 1 to 1 ratio.
The following table summarises modelled outputs of the cost-benefit assessment of CAZ D plus Additional Measures, CAZ D plus Additional Measures with Exemptions and CAZ D plus Additional Measures with Mitigations and Exemptions. As noted, these modelled outputs represent the impact of the M1b scrappage scheme.
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Table 2-19 Mitigation impact allocation, (£m, 2018 discounted) CAZ D plus CAZ D plus CAZ D plus CAZ D plus Additional Additional Analysis of Monetised Costs and Benefits Additional Additional Measures - Measures (AMCB) Measures Measures Medium w/Mitigations (OBC) w/Exemptions charge & Exemptions Column Number 1 2 3 4 Benefits - health and environmental 43 50 46 46 Benefits - reduced CO2 emissions 6 5 4 4 Benefits to transport users - changes in journey 11 81 70 60 time and vehicle operating costs Benefits from CAF 0 0 0 44 Cost to Transport Users - Parking charges -36 -37 -38 -38 Cost to Transport Users - upgrading -61 -50 -53 -53 Transaction Cost - vehicle upgrade -0 -0 -0 -0 Transaction Cost - paying CAZ charge -11 -18 -11 -10 Cost to Transport Users - welfare (trips foregone) -21 -21 -16 -15 Welfare Remoded -4 -25 -20 -18 Parking welfare loss -30 -22 -22 -22 Private Sector Benefits - Parking revenues 30 30 30 30 Present Value of Benefits (PVB) -73 -7 -10 28 Costs to BCC capex 19 19 19 19 Costs to BCC opex 29 41 33 35 Cost from CAF Grant 0 0 0 46 Revenues from Parking Charges -6 -6 -8 -8 Present Value of Costs (PVC) 42 54 44 92 Net Present Value (NPV) -115 -61 -54 -64
As the scheme progressed post-OBC, a second modelled year was introduced into the economic appraisal process. The second modelled year, 2022, exhibited less traffic than the default proportion of non-compliant vehicles to intervention year. Additionally, behavioural assumptions were updated and responses were altered by the lowering of the CAZ charge levels. Specifically, the proportion of trips remoded increased significantly. The combined impact resulted in higher disbenefit associated with changed trip patterns and significant journey time and vehicle operating cost savings due to less congestion on the road network. These changes are shaded in the second table column where the combined impact of the second modelled year and behavioural changes is seen to have a substantial impact on journey time savings and vehicle operating costs. The increased traffic stemming from the lower CAZ charge has also increased the transaction costs associated with paying the CAZ charge.
The figures shaded in the third column are the benefit areas where allowing for certain groups to have their non- compliant vehicles exempt from CAZ charges had a significant impact. The introduction of exemptions is shown to reduce the disbenefit associated with cancelling trips and changing transport modes by £10m. Travel time savings and vehicle operating cost benefits also reduce as more vehicles are on the road, increasing congestion and vehicle operating costs when compared to the without exemptions scenario. The disbenefit associated with time required to pay the CAZ charge also drops as few non-compliant vehicles are required to pay the charge.
The introduction of the mitigations, is shown in the fourth column. The most notable result is that as the mitigation measure funds distributed to impacted groups directly offset consumer surplus loss at a 1 to 1 ratio the PVB turns positive. This indicates that the mitigations are of an adequate size to allow the scheme to be beneficial to society, as prior to mitigation inclusion the scheme had negative benefits. There is a moderate decrease in the scheme’s NPV due to increased road congestion reducing travel time and vehicle operating cost savings, as well as the administrative cost of the CAF spend not accounted for in the CAF costs, but not the CAF benefits.
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Additionally, there are many non-monetised benefits that arise due to the introduction of the mitigation measures. The numbers represented here only reflect outputs form the traffic modelling suite where information was available to change modelled assumptions. The breadth of non-monetised benefits is described in the CAF Report delivered in conjunction with this document.
Sensitivity Testing
A sensitivity testing was performed to test the impact of altering assumptions underpinning the economic appraisal. A multitude of scenarios and sensitivities were run through the traffic and AQ modelling suites and are discussed in their respective reports. The vast majority of assumptions in the economic model are provided in JAQU guidance where no sensitivity testing is recommended. A test has been performed flexing the fleet scaling factor used to determine fleet size as this is an uncertain assumption used in the economic modelling.
2.10.1 Scaling factor The fleet scaling factor used to uplift the number of vehicles impacted by the Birmingham CAZ scheme from AADT figures forecast by the traffic model to total fleet figures. This figure is used to determine the size of the fleet that would upgrade their vehicles due to the introduction of the BCC CAZ. At £53m, the welfare disbenefit associated with the cost of upgrading is over 1/3rd of the total scheme disbenefit.
The fleet scaling factor is calculated as a direct proportional relationship between populations surrounding and the number of vehicles entering the BCC CAZ and London’s Low Emission Zone. A sensitivity test had been undertaken on the CAZ D plus Additional Measures scenario to explore how sensitive the estimated cost to upgrade for transport users is to the fleet scaling factor. The test is set up to vary the scaling factor by intervals of ±20% between -100% (no non-compliant vehicles) and +100% (doubling the number of compliant vehicles).
Figure 2-8 plots changes in cost to upgrade for transport users versus percent changes to the assumed scaling factor. The cost of parking charges, CAZ charges and welfare costs are not impacted by the scaling factor since these are estimated as a function of observed and forecast AADT (this captures frequency of entry to the CAZ). The cost of upgrading varies proportionally with the scaling factor, a 20% change in the scaling factor is found to drive a 5% change in the cost of upgrading.
However, overall this assumption has minimal impact on the overall cost to transport users where the doubling of the scaling factor increases costs by less than 20%, or just over £10m. This indicates that changes in the scaling factor have a low impact on overall benefits
Figure 2-8 Upgrade Cost Sensitivity for the CAZ D plus Additional Measures (£m, 2018 discounted values)
Fleet Scaling FactorSensitivity Test £- -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% -£10
-£20
-£30
-£40
-£50 cost cost upgrading of
-£60
-£70 change in fleet scaling factor
Parking charges Cost of upgrading Cost of trips foregone
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Cost Benefit Analysis 2.11.1 Monetised Costs and Benefits Table 2-20 summarises the economic impacts of the CAZ D plus Additional Measures scheme over the 10-year appraisal period. The table shows that along with health benefits the scheme delivers benefits in the form of journey time savings and reduced vehicle operating costs. These benefits arise from the reduction of non- compliant vehicle traffic lowering congestion levels.
This disbenefit associated with the implementation of parking charges if offset by corresponding gains in the form of government and private sector revenue. Although these offset, they are not treated as a transfer as a resource (parking space use) is used.
The disbenefit associated with individuals accelerating their vehicle upgrades to have a compliant vehicle and from individuals changing their travel behaviour are significant. Exhibiting this, prior to the introduction of mitigations for impacted users the scheme generate a negative Present Value of Benefits (PVB). However, the inclusion of Clean Air Fund (CAF) mitigation measures within the scheme offsets a portion of disbenefit arising from scheme implementation. The combined result is the scheme producing a positive present value of benefits (PVB).
The present value of costs (PVC) for the scheme is negative as the revenue generated from the CAZ charges is considered a transfer and is not included in the appraisal. Therefore, only scheme costs and government parking revenues are considered. The PVCs are greater than the PVBs, resulting in a Benefit Cost Ratio of 0.30 and a NPV of negative 64.
Table 2-20 Scheme Net Present Value (£m 2018 discounted prices, central values) CAZ D plus Analysis of Monetised Costs and Benefits (AMCB) Additional Measures Benefits - health and non-health, damage costs 46 Benefits - reduced CO2 emissions 4 Benefits to transport users - changes in journey time and vehicle operating 60 costs Benefits from CAF 44 Cost to Transport Users - Parking charges -38 Cost to Transport Users - upgrading -53 Transaction Cost - vehicle upgrade -0.1 Transaction Cost - paying CAZ charge -10 Welfare (trips foregone) -15 Welfare Remoded -18 Parking welfare loss -22 Private Sector Benefits - Parking revenues 30 Present Value of Benefits (PVB) 28 Costs to BCC capex 19 Costs to BCC opex 35 Cost from CAF Grant 46 Revenues from Parking Charges -8 Present Value of Costs (PVC) 92 Net Present Value (NPV) -64
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Summary of Key Points and Conclusions
. The initial traffic and air dispersion modelling undertaken by BCC has demonstrated that implementation of a Clean Air Zone and additional measures in Birmingham would not be sufficient to ensure compliance
with NO2 concentration limits in all locations by 2020 in any of the modelled scenarios. AQ modelling of the CAZ D plus Additional Measures high charge scenario forecasts that compliance will be achieved in 2021, apart from one location that BCC will continue working on to see if compliance can be achieved before 2022.
. The CAZ D plus Additional Measures scenario is the preferred option as it is most likely to achieve compliance in the shortest possible time, which remains the primary critical success factor.
. The Cost Benefit Analysis (CBA) forecasts that the CAZ D plus Additional Measures and mitigation and exemptions would generate a NPV of -£64m.
. Although the quantified health and non-health benefits are significant for CAZ D plus Additional Measures
(valued at approximately £50m) and there are additional benefits and savings in terms of reduced CO2 emissions, journey times and vehicle operating costs. These benefits are outweighed by the projected costs to the public, BCC, and Government.
. The analysis presented in this Economic Case rests on some key assumptions, some of which are uncertain. Additionally, a number of potentially significant health and non-health impacts that have not been quantified or monetised.
. The distributional impacts appraisal show that the following groups have been identified as potentially experiencing a disproportionate or differential adverse impact as a result of the implementation of the scheme.
a) Residents of the CAZ, and also surrounding areas (CAZ D scenarios only) b) Disabled people (all scenarios) c) Children (all scenarios) d) People with religious beliefs (CAZ D scenarios only)
e) In terms of impacts on business affordability, the following groups would be most adversely affected:
. SMEs within the CAZ . Suppliers to SMEs within the CAZ
. Taxi drivers A package of mitigations and exemptions has been introduced to mitigate the impacts of the scheme on groups receiving disproportionate disbenefit. This package of mitigations and exemptions is shown to have a significant impact on impacted users. This is shown as the Present Value of Benefits changes from negative to positive following their introduction (+£44m NPV improvement, excluding admin), indicating that overall the combined scheme benefits to society outweigh its disbenefit.
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3 Financial Case Introduction
The Financial Case assesses the potential financial impacts to Birmingham City Council (BCC) of setting up, running and enforcing a Clean Air Zone (CAZ) in Birmingham City Centre.
As discussed in the Economic Case, the results of the traffic and air quality modelling conducted indicate that a CAZ D scheme plus Additional Measures is most likely to deliver compliance with the EU limit values for air quality in the shortest possible time. The Financial Case focuses on this option.
The CAZ D plus Additional Measures scheme implements charges on all class D vehicles (buses, coaches, taxis, heavy goods vehicles, light goods vehicles and cars) entering Birmingham’s inner Ring Road that do not meet the defined emission standards. The additional measures assessed in the preferred scheme are:
. All BCC controlled free parking in the CAZ becomes charged.
. Banning traffic travelling northbound on Suffolk Street Queensway (A38) that exits onto Paradise Circus to then access Sandpits Parade and southbound traffic from Paradise Circus accessing the A38.
. The closure of Lister Street and Great Lister Street at the junction with Dartmouth Middleway. This allows more green time on the A4540, apart from buses. Mitigation and exemptions targeted at groups impacted by the introduction of the CAZ D plus Additional Measures scheme have been added to the preferred scheme. The resultant scheme, a CAZ D plus Additional Measures scheme with mitigations and exemptions, is assessed in this Financial Case. Purpose
The purpose of this Financial Case is to support the application for drawdown from the DEFRA Implementation Fund and the Clean Air Fund (CAF). The bid for the Clean Air Fund grant drawdown is set out in more detail in the CAF Report delivered in conjunction with this business case. The Financial Case for the implementation fund grant assesses the potential affordability of the costs to BCC of setting up and operating CAZ D plus Additional Measures scheme, and the potential revenues that would be generated through the scheme’s operation.
The intention is that any surplus CAZ charging revenues generated would be spent on future City Council initiatives to improve air quality.
The Financial Case also presents identified mitigation measures toward targeted groups impacted by the implementation of the CAZ scheme. Funding from the Clean Air Fund (CAF) is requested for these mitigations.
The Financial Case is structured as follows:
. section 3.3 and 3.4 estimate the capital and operating costs for the CAZ D scheme and the additional measures;
. section 3.5 describes the mitigations and exemptions costed with the scheme:
. section 3.6 summarises the scheme’s total cost impact; . section 3.7 estimates the revenues that would be generated through scheme operation, where section 3.7.4 discusses potential use of revenue surplus;
. section Financial SummaryError! Reference source not found. combines the costs and revenue streams to present a financial appraisal;
. sub-section 3.8.1 identifies potential funding sources;
. section 0 describes the accounting treatment of costs and revenues associated with the CAZ; . section 0 discusses sensitivity tests performed; and, . Sub-section 3.11 presents key findings.
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The appendices include a full set of financial statements. Additional information on the mitigations applying for the Clean Air Fund can be found throughout the FBC and in the appended document, the CAF Report, which provides all of the CAF information in a single location.
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3.2.1 Units of account The figures presented in the Financial Case are in nominal values, unless otherwise stated.
3.2.2 Project costs The costs for introducing and maintaining the CAZ are split into two categories: implementation costs (capital costs) and operating and maintenance costs (O&M). Where available, costs were estimated using local information and local data. Some of the costs (e.g. costs of signs and ANPR cameras) were derived from per item cost estimates and a forecast number of assets required, based on an analysis of the estimated CAZ boundary area and the required infrastructure that would likely need to be introduced. In other cases, costs were estimated on the basis of additional analysis, simplifying assumptions, professional judgement or relevant cost information from similar local schemes.
Information on how each cost was estimated is provided in the Financial Case and further details are set out in the Financial Model. The majority of the costs are determined by the area of the CAZ. However, some operational costs, Penalty Charge Notice Processing fees for example, are calculated from forecast traffic volumes. It was assumed that BCC can reclaim any Value Added Tax (VAT) that it incurs, therefore, all costs presented here are in factor costs (excluding VAT).
3.2.3 Assumptions and limitations Scheme costs are largely calculated with bottom up estimates where a per item cost is applied to an estimated required quantity. Per item costs are taken from similar schemes, technical advisor market intelligence, or market data where it was available from market soundings. These costs have been reviewed by BCC while they are concurrently undertaking market engagement. The costs will be refined through the procurement process and detailed design development as the scheme progresses. Assumption sources and further details are set out in the assumptions sheet of the financial model.
Scheme revenues are calculated from traffic model outputs. The traffic model behavioural assumptions are taken from similar schemes and modified to the local context. Local user responses to the implementation of a charged CAZ may differ from the forecast values.
It should be noted that at the time of submitting this FBC the City Council has not been able to procure the works and or services required to deliver the implementation phase of the project. As such, costs from the procurement activities are not yet known and therefore the costs included in this FBC are an estimate. The City Council has reached an agreement with Government that a revised cost will be supplied to Government in the form of a written report when the costs have been firmed up. The costs for the main civil engineering works Design and Build contract and the ‘Technology’ works will be confirmed in January 2018. The costs for the Additional Measures are unlikely to be confirmed until later in 2019.
In order to avoid delaying the implementation of the additional measures Government have agreed that the City Council can include an estimate in this FBC which is comparative to similar works undertaken by the City Council. Government have also indicated that there will be a minimum of eight weeks required to review the FBC and Evidence Reports. Subsequently this means that there will also be a minimum of eight weeks before the funding of the project can be agreed. In light of this the City Council has agreed to draw down an interim amount of funding from their corporate reserves to enable the implementation phase to begin straight away. When Government funding is agreed and received by the City Council the interim funding drawn down from reserves will be replenished in full.
3.2.4 Treatment of risk and market engagement Optimism Bias (OB) and contingency are applied to the capital costs. Contingency accounts for known risks where OB is included for unforeseen circumstances. An OB rate of 15% for road projects is applied to the majority of implementation cost items. DfT’s WebTAG recommends that this level of OB is applied to the risk-adjusted scheme cost estimate at the Outline Business Case stage (OBC). However, as procurement for implementation is ongoing there is a higher level of uncertainty regarding project costs than that normally experienced for a project at FBC stage. Accordingly, it is appropriate to use the level of OB commiserate to current project characteristics.
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A quantified risk assessment (QRA) was undertaken and 52 risks associated with implementation costs were identified. The risks identified in the QRA cover various aspects of the implementation stage and a wide range of technical disciplines. They are similar in nature to those recommended in the Supplementary Green Book guidance on financial cost estimates of infrastructure projects and the treatment of uncertainty and risk. Individual risks were assessed based on their likelihood, cost impact and time impact. The risk categories are presented in Table 3-1. Multiplying the potential cost impacts with the likelihood provided the cost impacts associated with the risk categories. The total cost of risk is estimated at £2.3m, which is equal to 19% of base capital costs before the application of optimism bias.
Table 3-1 : Results of QRA for implementation cost, £’000 2018 prices Cost of risk Risk categories (£ 000's)
Approvals and Procedures 135.5
Change/Uncertainty of Design/ Scope 87.0
Unforeseen Conditions 602.5
Construction Activities 366.5
Statutory Authorities/ Services/ Others 545.5
Program 470.3
Third Parties/PR 2.5
Commissioning/Handover 18.0
The largest risk (£602.5k) is allocated to unforeseen conditions, which includes risk of works on congested footways and junction that may impact the installation of poles, signs, cameras and power supply. This represents a 9% risk adjustment on the total implementation cost (£6,5m) related to signs and cameras.
Birmingham City Council is currently engaging the market to attain implementation and operating cost quotes. One supplier has provided indicative pricing for the installation and maintenance of the ANPR cameras. The quote received provides an implementation cost 36% below the ANPR camera acquisition and installation capex estimate. However, the quote provided assumes that all equipment will be mounted on existing posts and that all connections will be made available at installation points by BCC. Comparing the operational and maintenance cost indicates that the ANPR camera opex forecast is reasonable.
CAZ D and Additional Measures Implementation Costs
Implementation costs are the expenses required for the initial design and set-up of the CAZ. BCC will procure the civil engineering contractors and technology suppliers via existing Framework Agreements. This enables BCC to go to market with proven contractors who know and have experience undertaking works on BCC’s road networks. The existing framework procurement routes are further explained in the Commercial Case.
In the Procurement Delivery Model, it has now been decided that separately contracted contractors for the civil works (i.e. civil engineering, sign installation etc.) and technology will be the most effective way to deliver the works, recognising the specialist nature of the technology design. It is proposed that the supply and installation of each technology aspect (i.e. ANPR Cameras) will be by the specialist contractor that will then be a Nominated Subcontractor within the Main Contract (Civil Package). The civils contractor will manage the technology contractor within their contract with the risk associated with delivery passed directly to themselves. For civil related works BCC will use the NEC3 Engineering and Construction (Option C) contract for the works delivery.
Table 3-2 identifies seven broad categories of installation costs and the contingency overlay:
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. Detailed Design - this includes the costs of designing the CAZ (including the costs of scoping/feasibility studies to produce local plans) and the marketing costs. Behavioural change support (mitigation efforts) in response to CAZ measures may also be needed but have not been estimated at this stage.
. Air Quality monitoring - the CAZ will require the installation of additional air quality monitoring stations.
. Signs - signs will be required on main (strategic) roads and entry points along local (distributor) roads crossing the CAZ boundary. Main road signs have higher costs as they include power supply and communication infrastructure.
. ANPR cameras – there will be costs associated with the purchase and installation of ANPR cameras that are required to enforce the CAZ. The cameras capture the number plates of vehicles and check vehicle details to identify those that fail to meet the required emissions standards.
. Back office payment and enforcement function (IT and staff office accommodation) – IT includes the provision of a back office to monitor the camera network, IT equipment for staff and staff recruitment costs. Costs are currently based on a BCC standalone system with BCC in ongoing discussions with JAQU regarding system specificities.
. Implementation of Additional Measures – costs associated with implementing the parking and network change additional measures.
. Project management of implementation – includes the provision of staff (programme manager, project managers, assistant PM, site supervisors and others) required to set up the CAZ and the mobilisation cost associated with staffing and training the operational team. Costs are based on the grade and utilisation of each staff member.
Table 3-2: Derivation of implementation cost estimates
Cost Item Description Costing Method Key assumptions
Detailed Design Outline Design Actual costs Cost assumed to be incurred in the period post-FBC prior to funding award.
Detail Design Bottom up assessment of Design, Quantity Surveying, labour requirements for Technical and Planning teams detail design works accounted for in estimate.
Marketing and BCC marketing and Assumes portion for initial Communications communication teams marketing and communications costs estimate campaign and continued spend throughout the scheme life.
Air quality Air Quality Assumed number of sites A specified value, based on monitoring set up previous experience, for AQ costs monitoring for station is used.
Signs Number of main Bottom up per unit cost Along each major route feeding road (strategic) assumption based on into entering CAZ area signs proposed CAZ area
Cost per main Costs taken from similar Cost of equipment, installation, road (strategic) schemes power supply and sign communications
Number of local Bottom up per unit cost 2 signs for each camera road (distributor) assumption based on signs proposed CAZ area
Cost per local Costs taken from similar Cost of equipment and road (distributor) schemes installation, assumed unlit and sign no communications
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Cost Item Description Costing Method Key assumptions
ANPR cameras Number of Bottom up per unit cost One per each lane of entry and cameras assumption based on exit across cordon. Includes two proposed CAZ area cameras at each outer ring crossing for monitoring flows.
ANPR Camera Costs taken from similar Cost of equipment, installation, cost schemes power supply and communications. Assumes that cameras are installed on new poles, though may be possible to use existing poles for some
Back office Control room Provisional estimate Based on similar schemes and payment and discussion with Birmingham bus enforcement lane enforcement scheme. function (IT and This is an area of uncertainty staff recruitment due to the need to agree final and mobilisation) arrangements with JAQU.
Staff recruitment Bottom up estimate Recruitment and IT set up cost assumed at £5k (£2k for IT and £3k for recruitment)
Cost of training Based on estimated staff Prior to opening date, senior CAZ staff required for 2020. managers are required for 3 months, supervisors for 2 and rest of staff for 1 month for onboarding and training purposes.
Remove all free Provisional estimate Capital construction costs parking from BCC estimate. Costs include controlled areas allowance for new meters, and Additional and replaced with signage Measures – paid parking Parking and spaces Network Changes Network Changes Provisional estimate for Capital construction costs described in associated infrastructure estimate Section 3.3.1. works and signage
Work associated Bottom up estimate based Grade, utilisation and period for Project with managing on scheduled hours for each each FTE was established. Staff management of the CAZ activity. include project managers, implementation implementation administration team and others.
Risk assessment Bottom up estimate Based on likelihood, cost impact Contingency on civil design and time impact. and build risk
Table 3-3 shows a summary of the estimated costs for each of the implementation cost items. In accordance with DfT’s WebTAG guidance Optimism bias (OB) has been added to each item. The total implementation cost is estimated £17.8m for the CAZ D plus Additional Measures scheme implementation. £1.1m of DEFRA grant funding (Feasibility Grant, Air Quality Grant and National Clean Air Grant) has already been made available to BCC for feasibility works. An additional £1.4m of funding has been awarded to the City Council for feasibility development; neither of these costs are not included in these estimates.
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Table 3-3: Implementation cost estimate
Cost Cost (£) Optimism Bias (%) Total w/OB
Design & Installation -7,600,888 15% -8,741,021 IT -1,500,000 100% -3,000,000 Staff resourcing -1,937,492 15% -2,228,115 Additional measures -1,080,992 15% -1,243,141 Contingency -2,289,130 15% -2,632,499 TOTAL implementation costs -14,408,501 -17,844,777
3.3.1 Additional Measures
Additional schemes are included in the proposed clean air zone, these are referred to as Additional Measures. The Additional Measures costed are the following.
. Implementation of charged parking - Remove all free parking from BCC controlled areas with the implementation of paid parking spaces.
. Network changes . Banning the route of traffic travelling northbound on Suffolk Street Queensway (A38) that exits onto Paradise Circus to then access Sandpits Parade. Ban southbound traffic from Paradise Circus accessing the A38.
. Closing Lister Street and Great Lister Street at the junction with Dartmouth Middleway. This allows more green time for buses on the A4540.
The capital cost of the additional measures is forecast at £1.2m. As these local measures will improve air quality in the CAZ, funding is sought from the DEFRA national funding for locally implemented CAZ schemes.
CAZ and Additional Measures Operating and Maintenance Costs
Operating and maintenance costs are the ongoing costs required to maintain the CAZ on an annual basis. Table 3-4 identifies multiple broad categories of operating costs, including the following.
. Sign maintenance – required maintenance for road signs. It has been assumed that these assets will be transferred to the PFI operator for maintenance and the costs reflect the charges for such assets under the PFI scheme.
. ANPR camera maintenance – required maintenance for ANPR cameras. . IT support and maintenance – annual maintenance charge to support IT back office. . Air quality monitoring – continual monitoring if air quality sites. . JAQU processing fees -cost estimate based on JAQU assumptions for their review of ANPR data to identifying non-compliant-vehicles and match and process payments.
. PCN DVLA cost - the cost to check number plate registration data.
. PCN transaction costs – accounts for the credit card transaction charges for collection of penalty revenue.
. Staffing – staff required to issue penalty charge notifications, assess representation and appeals, overall scheme supervision and benefit realisation monitoring.
. Office accommodation – rental costs of physical office location CAZ staff. . PCN postage – cost of posting PCNs. . Communication costs – marketing and communication costs
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. CAF fund – costs associated with granting funds and their associated administrative burden. . Sinking Fund - Fund created for risk mitigation and to cover decommissioning. . Decommissioning - Costs associated with removing scheme infrastructure.
Table 3-4: Derivation of operating costs estimate (see financial model for additional details)
Cost Description Costing Method Key assumptions
Sign maintenance Annual maintenance Bottom up per unit Based on maintenance costs for similar per main road cost assumption assets managed by the Amey PFI (strategic) sign scheme.
ANPR camera Annual maintenance Bottom up per unit Based on information provided for maintenance per camera cost assumption camera maintenance for similar schemes. This is consistent with Section 5.11.
IT support and Annual maintenance Bottom up cost Based on maintenance costs for similar maintenance charge to support assessment assets. Includes support for hardware, the IT back office. applying an software and data storage. Hardware and average cost per software and data ANPR camera handling and storage
Air quality Analysis of air Bottom up staffing Staffing required for additional 6 monitoring quality testing assessment monitoring sites, equivalent to 1 Grade 5 FTE.
This cost will be updated as the ongoing monitoring and evaluation plan is further developed.
JAQU processing Cost for reviewing Applied to all CAZ 5% of revenue from CAZ charges, ANPR data and revenue collected assumption provided by JAQU. identifying non- by JAQU compliant-vehicles and matching and processing payments
PCN Processing Fees paid to check Cost applied to Birmingham bus lane enforcement pays number plate non-compliant £0.11 per number plate query with the -DVLA database registration data vehicles that JAQU Driver and Vehicle Licensing Authority. query and has informed have Transaction fees not paid the CAZ charge.
Fees paid to Cost as a Transaction fee of 1% based on payment facilitators proportion of assessment of current market revenue transaction processing fees.
Staffing Cost of running CAZ Based on agreed PCN review – staff to issue PCN, rate of operating/handling review of 15 per hour taken from rates and non- current Bus Lane Enforcement compliant vehicles operations. and number of Representation staff – rate of dealing PCN, with PCN initial disputes estimated as 1 representations per hour.
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Cost Description Costing Method Key assumptions
and appeals. Appeal staff – rate of dealing with appeals on representation outcomes is one per day as this involves a larger administrative process.
Supervisors and senior managers to manage of staff are assumed at a staff ration of 5:1 and 25:1.
Cost of Bottom up 100sq ft. per employee and average Office accommodating BCC assessment based Birmingham office space rental costs. accommodation staff responsible for on staffing levels CAZ
PCN postage Cost of posting PCNs Based on unit cost Postage cost per mail is 67 pence. Based on Birmingham Bus Lane Enforcement data.
Marketing and Marketing and Birmingham Annual marketing cost estimated based communication Communications marketing and on anticipated marketing and costs communications communication strategy. teams
CAF funding Costs per mitigation Based on Based on fleet analysis to right size the mitigations measure, detailed in applications measures for intended impact. Section 3.5
CAF funding Staff costs related to Based on FTE for application set up, help desk, administration mitigation measures established staff assessment and implementation. cost schedule Include employees from grades 2-5.
Sinking fund Fund created for risk Accrual to sinking An additional 22.5% is added to O&M mitigation and to fund is calculated costs and is accrued during the first six cover as a proportion of years of scheme operation. Fund grows decommissioning O&M costs to cover decommissioning and a year of annual operating costs as a risk mitigation measure.
Decommissioning Costs associated Bottom up Removal cost per item applied to all with removing assessment or scheme related infrastructure. scheme removing scheme infrastructure related infrastructure
Operation of the technology-related aspects of the CAZ scheme will be under the remit of Service Birmingham who will be compensated by BCC. Maintenance of infrastructure will be under the remit of BCC. Air quality monitoring will be conducted by BCC. It is assumed that the control room and billing system for the CAZ charges will be highly automated. Staffing and overhead costs, such as office space, will be the responsibility of BCC. It is assumed that a proportion of revenue collected will be paid to intermediary financial services providers (i.e. credit card transaction services fees). It is assumed that delinquent payments that are sent to an external collections agency for collection will be revenue neutral (i.e. cost of employing collections agency paid for by the fee). It is assumed that parking schemes will be under the remit of BCC and that the operating costs of the parking schemes will be covered by penalty charge notice revenue.
Birmingham City Council has a contract with Amey that includes the maintenance of signs on the BCC network, this is referred to as the Birmingham PFI contract. The signs currently being maintained are almost identical to those being installed. The PFI agreement will be expanded to include the CAZ signs.
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Table 3-5 provides a summary of the estimated costs for each of the items included in the operating costs in 2020. Do note that CAF related spend is primarily in this year. Without this spend the opex cost is £6.6m and drops to £2.0m in the final year due to variable costs decreasing with the reduction of non-compliant vehicle traffic. The total O&M costs over the life of the scheme, not including CAF funded items, is forecast at £36.2m.
Table 3-5: Annual operating cost estimate (2020)
Optimism Bias Cost Cost (£) Total w/OB (%) Maintenance -895,990 15% -1,030,389 Processing -2,191,827 15% -2,520,601 AQ monitoring -81,613 15% -93,855 Staff resourcing -2,544,579 15% -2,926,267 Communications -47,680 15% -54,832 CAZ sub-total -5,761,689 -6,625,943 CAF funding - mitigations -18,245,250 0% -18,245,250 CAF funding - admin -831,233 0% -831,233 2020 annual operating costs -24,838,172 -25,702,425
Operating cost are assumed to be incurred in each year from 2020-2029 (with the exception of mitigation costs and CAF funding being incurred in 2019). All costs include real price growth where staff wages are grown at Average Wage Earnings (AWE) and all other costs are grown at the retail price index (RPI).
3.4.1 Decommissioning
It is assumed that the CAZ infrastructure will be decommissioned at the end of the ten-year scheme period, in 2030. Decommissioning costs relate to removing scheme infrastructure and are forecast from a per item cost build up. This results in a forecast decommissioning cost of £3.4m.
3.4.2 Sinking Fund
A sinking fund will be established to provide mitigation against potential realised risks during operation. The fund’s target capacity was determined as the cost of decommissioning and a year of operating costs. The yearly contribution to reach this amount was calculated by multiplying the forecast annual operating costs by 22.5% to be accrued over the first six years of scheme operation. The sinking fund will be ring-fenced within the Clean Air Zone accounts to ensure its availability as a contingency fund for realised risks and decommissioning costs. The details of the sinking fund management are being considered but may follow the principles adopted by BCC for its PFI schemes.
Mitigation measures and exemptions
Mitigation measures are proposed to help target groups with the transition to the Clean Air Zone scheme. Table 3-6 describes the mitigation measures proposed, including how the group is impacted by the scheme and the proposed budget required for the mitigation measure. Funding for the mitigations measures is sought through the Clean Air Fund.
The total cost of the mitigation measures is £48.3m in in 2018 prices, an additional £2.2m is included to cover the management and administration costs of delivering the mitigation measures and exemptions. Adding this administration cost brings the total to £50.4m and nominalising the administrative cost profile in accordance with it’s spend profile brings the total CAF allocation request to £50.9m.
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Table 3-6 Mitigation measure summary table
Ref Measure Type Group Geographical Summary of mitigation Distributional analysis (how group is Cost impacted scope measure impacted) (2018 prices)
M1a Mobility 20c Private Not restricted to Individual can access the choice £10.84 million support for car/van geographic area for of a £1000 mobility credit offered (5,420 x individuals owners who vehicle owner in form of SWIFT travel card or a £2,000) working within work or live (place of work in £2,000 package (Swift credit or the CAZ within the CAZ CAZ) contribution to compliant vehicle) in return for scrapping a non- compliant vehicle card Class D CAZ will force residents to either upgrade vehicle or pay charges if they M1b Mobility 20c Private With evidence of scrapping a non- wish to enter. For many individuals, public £6.50 million support for car/van compliant car individual receives transport may be the only alternative, (3,250 x individuals owners either: these measures decrease the cost of that £2,000) who reside switch or facilitate the purchase of a outside the . £2,000 cash payment toward compliant vehicle. CAZ West Midlands the purchase of a compliant car (not eligible for PiG).
. £2,000 mobility credit. Credit to be supplied on a SWIFT card with no expiration for use.
M2a Hackney 20b Hackney Drivers offered £5,000 as: £5.0 million carriage carriages (1000 x support . support payments to be paid £5,000) package towards operational expenses of ULEV vehicles (4 annual instalments of £1,250) Changes in licencing conditions will force Birmingham over 90% of the 1280 vehicles currently and . support for an LPG retrofit of operational to change (upgraded/retrofit). surrounding their current or newly All options on the market require areas (licensed purchased vehicle significant capital expenditure, this helps BBC drivers) M2b Council 20b Birmingham BCC bulk purchase 50 ULEV taxis drivers to switch to a compliant vehicle. £2.75 million hackney (licenced BCC through public procurement (50 x £55,000) carriage drivers) tender and lease them to the leasing drivers who are most vulnerable scheme as well as on a try-before-you- buy basis
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Ref Measure Type Group Geographical Summary of mitigation Distributional analysis (how group is Cost impacted scope measure impacted) (2018 prices)
M2c Private Hire (20b) Private Hire Private hire vehicle owners who As above, changes in licencing conditions £7.0 million Vehicle Vehicles upgrade to a compliant vehicle are expected to result in 95% of the (3,500 x upgrade where the priority will be beyond 4,321 current vehicles needing to be £2,000) support the minimum BCC’s 2020 upgraded to continue operation licencing criteria i.e hybrid or ultra-low emission vehicles.
M3 ‘Free miles’ for 20b Van fleets Birmingham ULEV van drivers receive £1000 £0.75 million ULEV LGVs credit to spend on BCC public (£1000 x 750) charging network SMEs operating coaches/HGVs/LGVs or relying on road transport will be M4 HGV & Coach 20b HGV and West Midlands Fleets compete for £15,000 £10.05 million disproportionately impacted. Vehicle compliance Coach fleets funding package to contribute (670 x capital costs are high, and many fleets fund towards: £15,000) must enter CAZ as part of business operation. This helps fleets change to a . Installing a retrofit solution compliant vehicle. . Upfront or lease costs of a compliant vehicle
M5 Marketing and 20b Owners of West Midlands Marketing and engagement £0.38 million engagement non-compliant campaign to provide information Ensures uptake/knowledge of measure, to campaign vehicles (All on the CAZ and reach out to minimise negative impact and maximise types) groups eligible for support effectiveness of the mitigation measures through mitigation measures
M6 Resident n/a Residents Areas surrounding Implementation of residents £5.0 million parking living close to CAZ parking schemes to prevent Prevents vehicle overcrowding on scheme the CAZ overcrowding on margins of CAZ; residential streets on the margins of the will be deployed only if issues CAZ arise
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The total Clean Air Fund request, including the administrative cost, is summarised in Table 3-7.
Table 3-7 Clean Air Fund request
Cost
Capital -24.8
Revenue -26.1
Total -50.9
A package of exemption measures will be implemented for targeted groups to lessen the impacts of the CAZ on them. Aside from the administration costs accounted for in the preceding text, there are no costs associated with these exemptions. However, the mitigations will result in certain vehicles not being charged to enter the CAZ and will result in an associated drop in revenue.
A summary table of the exemptions measures is provided in Table 3-8.
Table 3-8 Package of exemption measures
Ref Vehicle Group Description Length
E1 & E3 Commercial Commercial LGVs/HGVs/Coaches registered within the CAZ 1 year vehicles vehicles will receive an exemption (max 2 vehicles per registered within company) the CAZ
E2 & E4 Commercial Commercial LGVs/HGVs/Coaches registered in the 1 year vehicles vehicles with an Birmingham City area travelling to the CAZ with existing finance and existing finance agreement beyond 2020 agreement (max 2 vehicles per company)
E5 Car Residents of the All private car and van owners who are residents 2 years CAZ of the CAZ, as defined by DfT registration information
E6 Car Individuals Individuals traveling into the CAZ for work (no 1 year working within geo limit). Eligibility will be limited through a the CAZ salary cap of £30,000.
E7 Car Residents who A limited number of exemptions offered, 1 year live outside the allocation based on distance to CAZ and income CAZ
E8 Car Hospital visitors Visitors to select hospitals in the CAZ, GP offices 1 year and care homes
E9a Van/LGV Community and Vehicles classified as Section 19 operators, 1 year school registered for operation in Birmingham
E9b Car Disabled vehicles Vehicles with disabled or disabled passenger tax All class years
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Total Financial Costs
The total financial cost for CAZ D plus Additional Measures over the period 2018-2030 is estimated to be £108.3m in nominal prices. Table 3-9 summarises the breakdown of the total financial costs. This table excludes the sinking fund as this is a contingency reserve also used for decommissioning.
Table 3-9: Financial costs of CAZ D plus Additional Measures £m nominal
CAZ D and Additional
Measures
Implementation Costs -17.8
CAF capital costs -24.8
Total Implementation Costs -42.6
O&M Costs -36.2
CAF revenue funded items -26.1
Decommission Cost -3.4
Total -108.3
Project Revenues
This section describes the revenues forecast from charging non-compliant vehicle owners who enter the CAZ. The intention is that revenues will be utilised for future City Council initiatives aimed at improving air quality in the city.
3.7.1 CAZ Charges Charging CAZ schemes are based on charging an entry fee to vehicles that do not meet the required emission standards. Multiple charge levels were tested and the behavioural changes that would result at different charge levels can be seen in the Transport Modelling Forecast Report. Table 3-10 sets out the charges used in the traffic model to estimate the impact of the CAZ D plus Additional Measures scheme.
Table 3-10: CAZ Charge and Penalty Charge by vehicle type
Vehicle Car LGV HGV Bus Taxi
CAZ Charge £8.00 £8.00 £50.00 £50.00 £8.00
Penalty Charge £120.00 £120.00 £120.00 £120.00 £120.00
Penalty Charge (discounted) £60.00 £60.00 £120.00 £120.00 £60.00
The charges are set at different levels for different vehicle types to reflect the contribution each type of vehicle makes on a per-vehicle basis to air pollution and to ensure that vehicles with the highest emissions are incentivised to comply with the standard. The car and LGV charges have been set at this level to enable those people making infrequent trips to continue to do so if they do not want to change their vehicle.
This charge structure also reflects the fact that while cars make up the majority of the traffic, they make a smaller contribution to air pollution on a per vehicle basis. In contrast, HGVs, coaches and buses make a large contribution to air pollution on a per vehicle basis. A daily charge of £50 reflects this and is intended to deter older more polluting vehicles. Charges may be adjusted to reflect additional research as work is progressed.
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It is assumed that the charge levels remain constant in current prices (i.e. £8.00 in 2020 and £8.00 in 2029) and, hence, fall in real terms. The charge is planned as a daily charge, so vehicles that have entered will not have to pay twice for re-entering on the same date. The behavioural response of users was estimated based on a stated preference survey data modified to be applicable to the Birmingham context.
The traffic for 2020 and 2022 modelled years was used to forecast the number of non-compliant cordon-crossing flows in the Do Minimum and the CAZ D plus Additional Measures scenarios. The number of non-compliant cordon-crossing flows in the CAZ D plus Additional Measures scenario, minus the number of exemptions, was multiplied by the charge level per vehicle to determine the revenue. Table 3-11 displays the Average Annual Daily Traffic (AADT) of CAZ based area crossing flows output from the traffic model in the Do Minimum scenario. Table 3-12 displays the number of CAZ based area crossing flows output from the traffic model in the CAZ D plus Additional Measures scenario. These are unique crossing figures where each unique vehicle is counted only once.
Table 3-11: AADT entering CAZ area crossing flows in Do Minimum scenario, by vehicle type (2020)
Car Taxi /PHV LGV HGV Bus
Compliant 127,152 2,691 13,232 4,651 3,269
Non-compliant 37,584 6,470 9,299 2,496 2,196
Total 164,736 9,161 22,531 7,146 5,465
Table 3-12: AADT entering CAZ area crossing flows in CAZ D plus Additional Measures scenario by vehicle type (2020)
Taxi / Car LGV HGV Bus PHV
5,466 Compliant 134,170 9,448 14,455 5,839
Non-compliant charged 4,622 - 4,872 569 -
Non-compliant exempt 5,992 - 1,274 331 -
5,466 Total 144,784 9,448 20,601 6,739
The number of non-compliant vehicles entering the CAZ is expected to reduce over time as a result of two major factors:
. With the introduction of a charge, owners are incentivised to exchange their non-compliant vehicle for a compliant vehicle earlier than they would have done without the scheme.
. Older, non-compliant, vehicles dropping out of the fleet as they are exchanged at the normal replacement rate with compliant vehicles. As a result, the revenues collected are expected to decrease. The revenue analysis was conducted for the modelled years for 2020 and 2022 and factors were applied to the subsequent years to account for this decrease.
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3.7.2 Penalty Charges Penalty charges are charges paid by users who do not pay the daily CAZ charge within a pre-determined timeframe. These users are subject to a penalty charge notice (PCN) and required to pay a fine. The assumed penalty charge rates are found in Table 3-10, with discount penalty charge rates applicable if the penalty is paid within a pre-determined timeframe.
If a user receives a PCN but believes they have received it in error (i.e. they have paid the charge or were exempt) they have the opportunity to make their case as a representation online or in writing. A decision will be made whether to accept this representation or reject it. Users then have an option to appeal the rejection, which will be taken to an independent adjudicator.
Compliance rates and penalty payment rates are sourced from London congestion charge data. London congestion charge requires next charging day by midnight and allows 14 days for discounted PCN rate.
Based on data from the London congestion charge, we have made the following assumptions about penalty charges based on TfL congestion charge data where it is available:
. Rate of unpaid charges that receive a penalty charge notice is 5%. . Rate of penalty charges paid is 70%. . 30% of PCNs go unpaid. Non-payment includes non-paying delinquent charges, as well as charges that successfully represent or appeal their case and have penalty charges dropped. No revenue is assumed to be collected from either.
. Rate of appeals on PCNs is 1% of all PCNs. . Rate of PCNs paid within discount time period is 80%.
3.7.3 Parking Revenue The removal of free on street parking (which is controlled by BCC), to be replaced with charged parking, would result in the scheme generating additional revenue for BCC. This revenue stream was based on a study of parking spaces and charges, the ULEZ behavioural response model, and assumptions regarding payment options by users. Although parking revenues change as part of the impact of changes associated with the CAZ, the revenues form part of BCCs parking revenue stream rather than the CAZ income stream for financial management and reporting purposes.
Based on analysis of parking spaces within the CAZ area, approximately 15% of trips ending in the CAZ use free of charge on-street parking spaces. These users will face a new decision after the parking charges are introduced; whether to pay the charge or change their behaviour. This decision falls to both compliant and non-compliant users. User responses were forecast using the London ULEZ stated preference survey and a calculated average parking charge.
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Table 3-13 shows the behavioural responses expected of the slightly over 22,000 cars that utilise the free parking spaces on a regular basis. It shows that the majority will continue to park in the CAZ area and pay for parking. The next largest group will avoid the zone, choosing to make a trip elsewhere. Fewer will cancel their trip and the smallest response group is those who choose to shift travel modes.
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Table 3-13: Behavioural responses of those impacted by new charging on-street parking (average day users)
Non-compliant Compliant
Pay Charge 420 14,860
Avoid Zone 49 719
Cancel Trip 156 2,310
Mode Shift 191 2,824
Total 816 20,713
In order to convert these parking paying users into revenue figures, they were split into three categories of parking users based on assumptions:
. 40% of these users continue to park on-street . 60% park in off-street lots . Of which 20% are owned by BCC, the remaining being privately owned On-street and BCC owned off street parking will result in revenue to BCC. Off-street private parking was calculated as a benefit to private operators in the economic case, and is not included in the financial case.
The average rate for parking was calculated to be £4.94 per user per stay for off-street parking and £1.93 per user per stay for on-street parking. The off-street parking rate is derived from a study of current off-street parking charges for longer stays. The on-street parking rate is taken an independent study Jacobs’ performed, the Birmingham City Centre Parking Review. The assumptions applied to factor the revenue results were as follows.
. Annualisation factor of 250 was applied to account for a larger proportion of revenue accruing to weekdays.
. It was assumed 40% of on-street users pay for an annual permit, resulting in a fee discounted by 80%. . It was assumed that 60% of off-street users will purchase a season ticket/monthly pass, resulting in a fee discounted by 20%.
3.7.4 CAZ Revenue
In the financial year 2020/21, the scheme’s first full financial year of operations, CAZ revenues are forecast at £43.1m. This includes CAZ charge revenue and Penalty Charge Notice revenue. This figure drops to £4.5m in 2028/29, the scheme’s last full financial year as a greater number of vehicle achieve compliance with the emission standards. Revenue from parking charges remain relatively stable at £3.0m throughout the ten-year assessment period. It is anticipated that the revenue generated will be invested in initiatives to realise the vision set out in ‘Movement for Growth’ for a greatly improved transport system that supports economic growth and regeneration, social inclusion and improves air quality and the environment.
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Table 3-14 shows that CAZ D plus Additional Measures is expected to generate £204.9m over the appraisal period.
Table 3-14: Total revenue forecast, £m nominal
Total revenue forecasts
CAZ revenue 175.3
Non-CAZ revenue 29.6
Total 204.9
The Clean Air Zone will be introduced under Part 3 of the Transport Act 2000, and schedule 12 para 8 of the Act requires that the ‘net proceeds’ of a charging scheme shall be applied by the authority “for the purpose of directly or indirectly facilitating the achievement of local transport policies of the authority”. From the Capital Programme, some programmes have been identified which could potentially be part or whole funded, or a local contribution could be given to support, from the CAZ revenue. All programmes are subject to full business case approval and will be selected following a prioritisation process. The programmes identified are:
. The Big City Plan;
. Birmingham Development Plan, growth and sustainable transport area; . Local Cycling Walking Initiative Programme; . Journey Time Improvement; and, . Rail and Rapid Transit.
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Financial Summary
Table 3-15 provides the financial profile for the CAZ D plus Additional Measures scheme. Operating costs remain relatively stable throughout the scheme while revenues experience a significant decrease due to increased user compliance with the defined emission standards. However, revenues exceed costs throughout the forecast period, resulting in net positive cash flows throughout the scheme evaluation period.
Table 3-15 CAZ D plus Additional Measures scheme financial profile, £m nominal
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Capex -32.7 -26.5 -5.2 -2.1 -2.0 -0.2 0.0 0.0 0.0 0.0 0.0
CAZ revenue 45.8 35.0 24.1 19.8 15.4 11.1 9.1 7.0 5.0 3.0
CAF grant -15.7 -26.1 -4.9 -2.1 -2.0 -0.2 0.0 0.0 0.0 0.0 0.0
Parking revenue 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0
O&M 0.0 -6.6 -5.5 -4.3 -3.9 -3.4 -2.9 -2.7 -2.5 -2.3 -2.0
CAF spend 15.7 26.1 4.9 2.1 2.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0
Decommissioning costs -3.4
Sinking fund -1.5 -1.2 -1.0 -0.9 -0.8 -0.7 0.0 0.0 0.0 0.0 6.0
Net cash flows exc 2.6 parking revenue -32.7 11.2 23.0 16.7 13.0 11.1 7.5 6.3 4.5 2.7 1.0
Net cash flows -32.7 14.2 26.0 19.7 16.0 14.1 10.5 9.3 7.5 5.7 3.9 2.6
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3.8.1 Funding Based on the current available funding guidelines issued by DEFRA, BCC will be applying for funding to support the CAZ and other transport initiatives to aid improving air quality in Birmingham. Delivery of this scheme is not dependent on any other funding requirements
BCC is applying for the DEFRA implementation fund dedicated to funding locally implemented CAZ schemes. It is assumed the full fund drawdown of £17.8m will occur at the beginning of 2019. BCC is also requesting allocation from the Clean Air Fund to provide mitigation measures to those impacted by the scheme. The total Clean Air Fund request is £50.9m.
Table 3-16: Summary funding request, £m nominal summarises the total funding request for the Birmingham Clean Air zone, separated by capital and revenue funded allocations. The spend profile is indicated in Table 3-17.
Table 3-16: Summary funding request, £m nominal
Total values
Capital funded
Implementation costs 17.8
CAF capital costs 24.8
Total capital funded items 42.6
Revenue funded
CAF funding - mitigations 23.5
CAF funding - administration 2.6
Total revenue funded items 26.1
Total funding request 68.7
Table 3-17 Implementation fund and CAF spend profile, £m nominal
2019 2020 2021 2022 2023 2024
Implementation Fund -17.845
Clean Air Fund -15.656 -26.051 -4.894 -2.085 -2.025 -0.150 total -33.500 -26.051 -4.894 -2.085 -2.025 -0.150
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Accounting Treatment 3.9.1 CAZ The initial cost to establish the Clean Air Zone (implementation measures) will be treated as capital and related assets depreciated in accordance with BCC accounting policies. Certain assets purchased by BCC will be accrued schedule of maintained asset and maintained under BCC’s PFI contract to agreed standards for an annual charge. The assets are on balance sheet and the revenue costs accounted for as a charge, along with other PFI operational costs.
The grant will be held on balance sheet and amortized (taken to revenue) over the life of the relevant asset.
Operating costs are expensed.
3.9.2 Clean Air Funding Although nearly all of the CAF mitigations will not create either an asset used by the Council or a future economic benefit which the Council controls, there is a statutory exemption available for Revenue Expenditure Funded by Capital Under Statute (REFCUS). This allows items that commonly require revenue funding to be funded through a capital grant.
Each mitigation measure has been assessed to determine the capital and revenue funding split. Mitigations that will not generate assets (ex. free miles for ULEV LGVs) and those where it is uncertain the level of asset to be generated (ex. choice between mobility credit and payment toward purchase of a compliant car) are requesting revenue funds. The mitigations anticipated to generate assets are requesting capital funds. Revenue funded items will be treated as revenue for accounting purposes. Capital funded items will use REFCUS to be expensed in the year of expenditure although they are capital funded.
The REFCUS allows BCC a certain degree of agency when determining capital and revenue grant allocations. Accordingly, BCC is open to coordinating with JAQU to determine the optimum split between capital and revenue funding to secure the funding allocation requested.
The CAF mitigations and their related funding type is summarised in Table 3-18.
Table 3-18 CAF mitigations and funding type Mitigation Funding Description measure type M1a Mobility support for workers Revenue M1b Mobility support for residents outside the CAZ Revenue M2a Hackney carriage support package Revenue M2b Council Hackney Carriage leasing scheme Capital M2c PHV upgrade support Capital M4 Free miles' for ULEV LGVs Revenue M5 HGV/coach compliance fund Capital M6 Marketing and engagement campaigns Revenue M7 Residents parking scheme Capital All Administrative costs (incl. exemptions) Revenue
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Sensitivities
Sensitivity tests were run flexing assumptions to ascertain the impact implementation costs and net cash Assumptions to test were identified by their relative uncertainty, sensitivity to changes, and ability to significantly alter modelled results. A summary table of the most impactful sensitivities runs is provided in Table 3-19.
Table 3-19 Sensitivity test summary table (£m, nominal)
Sensitivity Test description Impact area
Implementation Optimism bias lowered from 15% Capital cost, excluding decommissioning, and operational to 3%. This lowers OB levels to drop £4.0m to £18.4m, a drop of 18%. cost OB those commonly seen at FBC level, Total costs dropped 6% over the life of the however this does not account for scheme to £65.9m the higher level of contingency that would also be anticipated at FBC.
Revenue CAZ charge and Penalty Charge Reducing scheme revenues by half reduces shortfall / Notice enforcement charges were the operating revenue net operating costs Strong lowered by 50%. This is an surplus by over 50% as although the costs behavioral extreme test to assess a much reduce, they do so at a much smaller scale. response to larger behavioral response than The scheme has a negative net cash flow in charges anticipated impacted traffic flows. the final year of operations, however, at c£500, this is covered by the sinking fund.
Revenue CAZ charge and Penalty Charge The increase in operating costs combined shortfall and Notice enforcement charges were with the lower revenue results in the scheme increased lowered by 50%. operating at a loss during its final three operating costs years. However, as the sinking fund pivots off Operating costs increased by 50%. of operating costs, the increased sinking fund covers the operating loss.
However, if in this revenue scenario operating costs double, the scheme operates at a loss for the final five years of operations. In this scenario the sinking fund is inadequate to cover the scheme’s final two years of operations.
The sensitivity tests indicate that flexing the assumptions seen to have the least certainty, highest sensitivity and biggest impact on modelled outputs has moderate impacts on forecast cash flows. Only in extreme circumstances is the scheme not able to operate throughout its anticipated duration. The test lowering the level of optimism bias applied does not have significant impact on implementation costs.
However, it is possible that as the scheme design progresses that additional cost will surface and/or additional areas requiring risk contingencies will be identified.
Key Findings
Cost and revenue forecasts indicate that the revenues generated from operating the CAZ D plus Additional Measures scheme exceed the setting up and operating of the scheme. The surplus is significant in initial years and slowly decreases as the proportion non-compliant cars in car and HGV fleets is just 1% relative to the base year make up. There could therefore be an opportunity for BCC to reinvest revenues in initiatives to accelerate the take up of low/zero emission vehicles, improve air quality through other measures, or help mitigate unforeseen disbenefit to impacted groups due to the scheme’s introduction.
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4 Commercial Case Introduction
This Commercial Case details the commercial viability and deliverability of Birmingham’s Clean Air Zone (CAZ). The following section covers the procurement, tendering and contract strategy to be used to engage the Contractors and suppliers to deliver the scheme. The key viability factors identified by Birmingham City Council (BCC) are:
. Time (speed or certainty of completion date) . Cost (price level or cost certainty) . Quality (functionality and performance) Consideration for these key criteria has been made throughout the development of this commercial case and provides a basis for the recommendations and proposals delivered herein. It must be stated that the key criteria of Time, Cost, and Quality may be considered interdependently and are accepted as potentially conflicting in being able to mitigate one without compromising another. Therefore, emphasis on only one of the key criteria will almost certainly have a negative effect upon the others.
It has been agreed that a CAZ D plus a package of additional measures will be implemented, therefore BCC will need to support the project with capital work activities. The CAZ ‘D’ will include civils work which will typically comprise of camera bases/foundations, poles and sign installations and the technology work which will typically be comprising of the installation of Automatic Number Plate Recognition (ANPR) cameras and the supporting system / interfaces. Additionally, there are mitigation measures that will include the requirement to provide funding for initiatives including scrappage and credits to existing travel schemes; the funding of this will be from the mitigation measures fund awarded from the Clean Air Fund (CAF) and not subject to procurement.
As defined in Section 5.10 of the Management Case, a back-office system will be required to manage and administer the charging and penalty functionalities of the CAZ. The decision as to whether the system will be delivered by BCC or centrally by Government is still outstanding, however it is anticipated that a viable procurement route will be available via one of BCC’s currently available contracts. Birmingham City Council have carried out some exploratory supply chain engagement, using their supply chain for similar enforcement systems to gauge a benchmark. Whilst this business case is written on the assumption that the system will be delivered by BCC and indicative pricing has been provided for in the Financial Case, a robust procurement strategy cannot be defined until the decision from Government is made on the delivery and operating model.
As stated above, a package of additional measures is being proposed as an enhancement to the CAZ D which will aid BCC in achieving compliance with the emission limits set out by the EU. The additional measures being proposed consist of network alterations and the installation of car park charging infrastructure, both of which are types of schemes which BCC has experience of delivery, thus increasing viability of the additional measures being proposed. The additional measures will be implemented using frameworks which are currently available to BCC, using the NEC3 Contract options to manage the works. The package of additional measures being proposed is further defined throughout this business case however they are summarised below:
Additional Measures
. Ban northbound traffic on the Suffolk Street Queensway (A38) which exits onto Paradise Circus then accesses Sandpits Parade;
. Ban southbound traffic from paradise Circus accessing the A38;
. Close Lister Street and Great Lister Street at the junction with Dartmouth Middle Way;
. Car park charging – all currently free parking which is located within the CAZ which is controlled by BCC will be converted into spaces which have a charge applied.
The procurement approach set out in this case accounts for the fact that the CAZ D plus additional measures will be implemented on BCC’s highway network. It is proposed that some of the infrastructure assets which are being introduced will be integrated onto the existing maintenance agreements in place under the Highways Maintenance
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and Management PFI (HMMPFI) contract. Assets not suitable for inclusion onto the existing maintenance agreements may be subject to maintenance by specialist Contractors.
Asserts maintained under the HMMPFI will include signs, sign posts, kerbing and surfacing and other assets that are typically maintained under the existing provisions of the contract. Upon completion of the works, the assets will be added to the asset register and be subject to the maintenance levels of services defined in the contract.
Where assets are installed for the operation of the CAZ but are not currently part of the assets maintained under the HMMPFI these will be covered by a separate maintenance agreement as noted above. Such works would include the maintenance of the ANPR technology and associated equipment including poles and systems through to the back-office operation.
For details of the interface, please see Management Case section 5.12.
Procurement Strategy 4.2.1 Works and/or Services to be ‘procured’ The main construction works and supporting detailed design and any additional measures are to be procured through the approach detailed below. The work type and outline scope are as detailed in Table 4.1;
Table 4.1 Work Type and Outline Scope
Type Scope (outline of works)
Design (Consultancy support) Additional Measures feasibility and detailed design
Project Management Support (seconded support to the City Council)
Commercial and Construction Management Support
Project definition scoping
Marketing and engagement campaign
Residents parking scheme – Feasibility and Detailed Design
Civils (Contractors) Main CAZ- Detail Design & Construction of:
Signing
Foundations
Poles
Sign posts and/or gantries,
Highway accommodation works
Main roads (strategic) signs and Local road (distributor) signs.
Additional Measures Packages that are proposed e.g. minor highway alterations,
. Civils works to ban northbound traffic on the Suffolk Street Queensway (A38) which exits onto Paradise Circus then accesses Sandpits Parade;
. Civils works to ban southbound traffic from paradise Circus
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accessing the A38;
. Civils and Signals works to Close Lister Street and Great Lister Street at the junction with Dartmouth Middle Way
Residents parking scheme: infrastructure required for parking enforcement including marking / signing and supporting on street equipment.
Technology (Suppliers / ANPR Camera (including communications) Contractors) ECI Support to Main Caz D&B Contractor for Camera location designs
Supply of Back-office requirements for data storage, monitoring and charging and the supply of new software requirements to connect Back Office to JAQU system.
Car park charging –Additional Measures package proposed e.g. parking enforcement systems / on street equipment.
Birmingham City Council In Main CAZ - Programme and Project Management Delivery Additional house Delivery Measures - Programme and Project Management Delivery
Mitigation Measures - Resident parking scheme Programme and Project Management Delivery
Birmingham City Council – Administration of Mitigation Measures that are proposed CAZ Administration M1a Mobility support for individuals working within the CAZ (20c)
M1b Mobility support for individuals who regularly enter the CAZ (20c)
M2a Hackney carriage support package (20b)
M2b Council Hackney carriage leasing scheme (20b)
M2c Private Hire Vehicle upgrade support (20b)
M3 ‘Free miles’ for ULEV LGVs (20b)
M4 HGV & Coach compliance fund (20b)
M5 Marketing and engagement campaign (20b)
M6 Resident parking scheme
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4.2.2 Procurement Routes to Market It was initially thought that a centralised procurement activity would be undertaken for all cities requiring the implementation of a CAZ. However, the decision has now been made to run separate procurement activities per local authority. This decision was made due to the uniqueness of each cities requirements in relation to one another; whilst there are similarities in terms of the required infrastructure, the scale and complexity of the schemes varies largely.
BCC have identified a benefit to procuring the civil engineering Contractors and technology suppliers via existing Framework Agreements. The rationale behind the decision to engage under existing Frameworks is based upon the relationships formed with the appointed Contractors and the ability not to tender through the Official Journal of the European Union (OJEU), meaning it will not be subject to the potentially prolonged procurement times associated with this process. It also enables BCC to go to market with proven Contractors who, particularly with the civils works, have experience of undertaking works on BCC’s road network whilst interfacing with the PFI contractor. The PFI contractor is responsible for the maintenance of some of the infrastructure which is located on the Birmingham highway; infrastructure which may need to be modified in order to enable the CAZ construction activities; therefore, managing that interface is crucial to ensuring timely access is granted. The PFI contractor also manages the road space booking system on behalf of BCC and all Contractors on the existing Framework have an understanding of how this system works, which will be key to successfully programming the works.
Table 4.2 shows the existing framework Procurement Routes identified by BCC and their associated Contract Lengths:
Table 4.2 Existing Available Frameworks
Type Description Framework Procurement Framework Start Framework End Route Date Date **note
Design All design and Birmingham City Council October 2015 September 2019 implementation (works orders Multi-Disciplinary placed during the Transportation contract can Professional Services extend past Framework (WMTPS) completion date)
Civil; All civils works Birmingham City Council October 2014 31st March 2020 Infrastructure works Highways and Infrastructure Works Framework
Technology; All works relating to Capita ICTDS (Existing March 2013 March 2021 ANPR cameras the ANPR Camera and service provider) and supporting systems supporting (including systems Communications)
Technology; Parking Enforcement Capita ICTDS (Existing March 2013 March 2021 Parking service provider) Enforcement supporting Existing Parking systems Enforcement Team In house service
** Note - All potential existing frameworks are viable in terms of framework start and end dates.
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The frameworks referred to above are enablers for the provision of professional services and the construction of the works, however several of the mitigation measures are linked to the provision and administration of funding related to the proposed initiatives e.g. Marketing, scrappage schemes, and funding travel and are therefore not subject to procurement. These schemes will be managed by an in house team set up within Birmingham City Council to manage and administer the various mitigation measures packages
The availability of existing framework procurement routes is imperative to the efficient mobilisation of procurement activities and a key factor of deliverability for the project. Alternative traditional Procurement routes would offer greater client control over costs however to comply with the current project programme timescales these routes are not achievable.
4.2.3 Contractor Delivery Model Based on the intended use of existing procurement frameworks and contracts as the route to market, it has been identified that engaging with contractors for the civil (i.e. civil engineering, sign installation etc.) and independent specialist technology works will allow the detailed design element of the technology scope to be developed by the specialist contractor concurrently with the detail design being undertaken by the main civils contractor during the ECI and Design stages, reducing the risks to programme and incompatibility with the existing BCC provisions. This recognises the specialist nature of the technology design and the proposal to use suppliers currently appointed by the BCC for the operation and maintenance of similar existing systems.
On approval of detailed design works, the specialist technology contractor will become a Nominated Subcontractor within the Main Contract (Civil works package), where the Main Contractor will manage the construction-phase works and co-ordinate with the Nominated Subcontractor to programme the works with all parties working together collaboratively to deliver against the programme. The direct management of the Subcontractor and the risk associated with any non-performance in terms of delivery would remain with BCC to manage. The main Civils contractor will have responsibility for co-ordinating the overall programme for installation of the poles and cameras with the nominated sub-contractor but would not take on the risk of the Subcontractors performance.
This model supports the viability factors of Time, Cost and Quality by enabling efficient on-boarding of Contractors including improved contract development timescales, reduced cost risks through project-wide collaboration and creation of a project environment that stimulates innovation, improving quality of works and delivery.
4.2.4 Procurement Delivery Models To deliver the main CAZ works, BCC has identified that a procurement delivery model involving a combination of Early Contractor Involvement (ECI) and Design & Build (D&B) methodologies will provide the optimum balance of Time, Cost and Quality.
The following table shows how different Procurement Strategies can affect the balance of risk between the Client and Contractor
Procurement Route Client Contractor
Design and Build Two Stage Design and Build of Develop and Construct Traditional Procurement (lump sum fixed price) Traditional Procurement (re- measured)
Management Contracting
Construction Management
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Figure 1- Risk balance between client and contractor for different procurement strategies
As can be seen from the options above, under the Design and Build Route, the tendering Main Contractor enters into a contract at an early point in the design stage of the project, giving certainty on cost and time. With a full understanding of all implications of the construction of the project the Main Contractor can therefore carry and mitigate most of the risk burden.
As per figure 1 above the balance of risk is transferred down from the Contractor towards the client based on the responsibility and risk ownership depending on the procurement route. An example based on the above is a Design and Build Contract transfers the majority of the risk to the Contractor, whereas the Construction management procurement route transfers the bulk of the risk to the Client.
The D&B approach is one which is well recognised and known to mitigate schedule pressures by consolidating the tendering process into a single tender, as opposed to splitting the work into separate contract awards. It also enables contracts to be placed with low scope definition maturity.
In addition to the Design and Build approach the adoption of ECI is considered critical in this circumstance. The ECI stage will enable detailed designs to be developed by the specialist technology contractor(s) prior to Main Contractor appointment, thus, due to the interdependency of some Civils and Technology works, optimising lead- times for civils works designs by the Main Contractor. This approach also provides an environment for collaboration among client and contractor stakeholders, increasing opportunity for innovation throughout design and construction. Having earlier contractor input into design solutions, delivery and sequencing of works etc. will also help to reduce risk within the scheme and therefore further supports deliverability of the project.
4.2.5 Tendering Model Options The tendering route to be implemented by BCC is the utilisation of its existing Technology Contract to undertake the Camera and Back Office works and an optimised two stage tendering process for Civils works. The two-stage tendering process will involve an initial Pre-Qualification stage to identify two Contractors to take forward to stage two which will be the main tender for the ECI and Design and Build package. Elaboration on the benefits and considerations made are detailed below:
4.2.5.1 Tendering Model - Civils
. The Pre-Qualification stage will enable a focus on the contractor’s quality and capability requirements, in order to effectively filter down to a minimum of two preferred Contractors who have demonstrated the relevant experience and methodology to give assurance that the delivery complexities and programme challenges can be met.
. Stage two will be the main tender which will obtain Time, Cost and Quality assurance from the successful contractor prior to Contract Award, whilst also ensuring an efficiency is realised in the Tender Evaluation process through the reduced number of Tender Proposals and the improved pre-emptive understanding of the proposal by BCC, enabled due to the collaborative development. 4.2.5.2 Tendering Model - Technology . In support of the deliverability of the project BCC have identified that existing contracts with their technology suppliers, who delivered the bus lane enforcement solution around the city, can be used to procure the CAZ ANPR solution and associated charging systems. This will see BCC’s partner procure and manage the installation of the ANPR system and appropriate interfaces to the existing Penalty Charge Notice system used within BCC. It is considered this approach will de-risk the implementation and commissioning of the ANPR system which is a critical element of the effective delivery and enforcement of the CAZ, thus further supporting viability and deliverability of the overall scheme of works. 4.2.5.3 Tendering Model – Mitigation Measures Two elements of the proposed Mitigation Measures packages that will require procuring are the Council Hackney carriage leasing scheme and the proposed Resident parking scheme.
. The purchasing of the Taxis for leasing will be financed through the Clean Air Funding submitted for by BCC. At present there is only one supplier on the market who has the capability to meet the requirements of BCC’s proposed purchase of 50 ULEV taxis. As such, the route to will be via a Single Contract Negotiation
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(SCN); enabling a direct purchase of the vehicles. Once purchased, BCC will be responsible for managing the leasing and ‘try-before-you-buy’ scheme. In the event that a second supplier comes to market within the timescales for delivering this scheme, with the capability to meet the demand, BCC will post a notice to OJEU to open the procurement up to a competitive tender. Due process would then be followed to ensure a value for money and fit for purpose delivery. BCC currently proposes to manage the leasing and ‘try-before- you-buy’ scheme in-house. However, a further value for money assessment will be undertaken once the supply chain has been formally engaged to ensure that a fit for purpose delivery solution is employed. The Residents Parking Schemes will be funded from the CAZ charging revenue. The need for Resident Parking schemes will be identified and processed once the CAZ is in operation. BCC has delivered a number of resident parking schemes and will design and consult on the scheme with their in-house delivery team and use the existing Highways and Infrastructure Works Framework to deliver the infrastructure required.
As noted in section 1.2.2 above the remaining mitigations measures that have been identified are not subject to tendering processes and will be subject to providing funding in support of the initiatives identified through BCC. It is envisaged that BCC will employ a ‘CAZ Administration Team’ to administer the various initiatives proposed under the mitigation measures. This team will need to be in place for a minimum of 2 years following the implementation of CAZ.
Phasing of the Implementation works 4.3.1 Main CAZ Works The actual phasing of the Main CAZ construction works will be critical in achieving the key milestones for CAZ operation. The dates below highlight the current timescales around the delivery of the project:
Activity Target Date
Engagement with Contractors for Expressions of Interest on the June 2018 Design and Build (D&B) Contract
Tender Stage 1 - Pre-Qualification (to reduce tenders down to 2) November 2018
Tender Stage 1 - Pre-Qualification Evaluation November 2018;
Tender Stage 2 - D&B and ECI Contract November/December/January 2018
FBC to DEFRA for Approval December 2018
BCC FBC for Approval of Funding and to appoint Contractors January 2019
Tender Stage 2 - D&B and ECI Contract Evaluation January 2019
Appoint Design and Build Contractor(s) including ECI Mid-January 2019
Works Stage 1 –Detailed Design with ECI to support and undertake January 2019 to April 2019; Construction Planning
Camera Supplier to procure Cameras
Works Stage 1- ECI contractor(s) to develop and to agree a Final January 2019 to April 2019; Target cost
Works Stage 1 – If D&B/ECI Contractors Final Target Price within April 2019 approved budget in January FBC proceed to stage 2 and appoint for Main Works Contract
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Works Stage 2 - Construction mobilisation period April 2019
Works Stage 2 – Main Works Contract - Construction Period May 2019 to December 2019 (Camera Installation May 2019 to September 2019)
CAZ Enforceable January 2020
Post Implementation Review Mid 2020
The installation of the technology on site is as noted in Stage 2 – Main Contract works with the associated systems being developed in advance of the camera system installation.
4.3.2 Additional Measures 4.3.2.1 CPZ’s /Network Change Schemes Given the value of these schemes which will be much smaller than the Main CAZ scheme they will be delivered using a more traditional route. The current delivery programme is set out below:
Activity Target Date
Final Business Case to Defra Approval December 2018
PDD Outlining Procurement Strategy December 2018
BCC FBC Approval January 2019
Mini Bids to engage with Consultants on BCC’s Multi-Disciplinary January 2019 Transportation Professional Services Framework Contractors for Design of Additional Measures
Appoint Consultant for each Additional Measures package to undertake February to May 2019 Feasibility and Detail Design
Engage with Lot 2/3 Contractors with Tenders for the Delivery of each May to June 2019 Additional Measures Package
Tender Evaluation June 2019
Appoint Contractor(s) for Build Contracts June/ July 2019
Construction Mobilisation June/ July 2019
Main Works Contract - Construction Period – July 2019 to January 2020 In case of CPZ’s this will extend up to 2 years beyond January 2020)
Post Implementation Review End 2020
Preferred Types of Contract
The intention is to use existing frameworks, relevant to the specific areas of scope to deliver the CAZ. This approach limits the need for a full OJEU procurement, supporting the need to deliver the CAZ as quickly as practically possible, whilst allowing work to be commissioned through both competitive and direct award routes already known by BCC.
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4.4.1 CAZ Design and Development Contracts have been placed by BCC to deliver the feasibility study, including the programme management, outline design and various elements of traffic and air quality monitoring. These contracts have all been placed using existing BCC frameworks including the Highways and Infrastructure Professional Services Framework. Where further support in the form of professional services is required BCC will appoint via the frameworks identified. Using the established frameworks for the appointment of professional services is the most viable option as a contract will be entered into with consultants who have been appointed to their Framework by BCC and have experience of working with their processes and procedures.
4.4.2 CAZ Implementation (Civil Engineering) Works For Civils related works (including the Additional Measures) BCC will use the NEC3 Engineering and Construction (ECC) contract for the works delivery, as this is the basis of the Highways and Infrastructure Framework call-off contracts and is the predominant form of contract used for infrastructure works in the UK. The Framework allows the use of various options however BCC will adopt the following:
Option C – Target Cost contract with Activity Schedule
Benefits to Option C include:
. Enables the tender documentation to be issued earlier and therefore meet planned tender issue programme dates;
. Can prevent contractor from overpricing risk; . Ability to manage changes to the scope of the works and any potential future changes through change controls;
. Offers more flexibility in accommodating on going design development; . Accommodates improved post contract change;
. BCC pays actual defined cost-plus contractor’s fee and has re-assurance on the cost of the activity rather than the price;
. The use of a sensible percentage share model between the Contractor and BCC to incentivise delivery of the works under target to the best possible cost.
During the lifetime of the contract, the Main Contractor will update their price (i.e. Target Cost) based on the latest available designs. The Contractor is also incentivised to find savings in the ECI and detail design stages to identify value engineering solutions to reduce the actual cost of the scheme against the Target Price submitted at Tender.
A Cost Plan is being developed to accurately price the scheme based on the current design information. The exercise will serve as a tool which can be used as a reasonable benchmark in determining the final Target Cost provided by the Contractor and aid in the drafting of the Activity Schedule contained within the tender documents. As the Target Cost should be a genuine pre-estimate of the most likely outturn cost for the Project as defined in the Contract documentation, it will be built up in the same way and contain all the same items as a Contractor will include in a traditional tender.
The Target Cost will include the expected cost of everything for which the Contractor is responsible including risk. The target cost will comprise of the following;
. Direct costs: These are the estimated most likely costs for undertaking the physical construction works;
. Indirect costs: These are the specific project costs necessary to support the direct cost element of the project delivery. These will be defined in a separate document. Nevertheless, typical examples will include site facilities, project insurances and so on. Once BCC is satisfied with the Target Price position, contract documentation can be finalised and contractor(s) allowed to start construction.
4.4.3 CAZ Implementation (Technology) Works
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To support the procurement of the intended Technology works it is proposed to use the existing Partnering arrangement with Capita ICTDS to deliver the CAZ technology element using existing contracts with the current supplier of parking/bus lane enforcement.
Birmingham City Council is in a joint venture arrangement with Capita to be its exclusive provider of ICT, for the term of the Contract. If the Council has a requirement for a new element of ICT, that has not been previously provided to the Council by Capita ICTDS (formally Service Birmingham), the Council can seek an alternative provider, but in all instances Capita ICTDS must be provided the opportunity to cost the work, and Capita ICTDS has to procure the service from the 3rd party provider on behalf of the Council (the only exception being where they cannot provide such a service). In addition, if the new ICT service requires connection to the Council’s ICT infrastructure, Capita ICTDS are responsible for providing the work to undertake such activities and as this is not a stand-alone system but requires integration with other existing ICT applications managed by Capita ICTDS and therefore also forms part of the exclusivity arrangements in the existing contract.
The provision of the ANPR cameras was through open tender in 2013 and is due to co-terminate with the Capita ICTDS in 2021. This contract is between the supplier and Capita ICTDS; but was scrutinised by Birmingham City Council to ensure competitiveness and value for money. The contract is supply and maintain. It is felt that in this instance the ICT requirements relating to the procurement of camera and back office systems to enable the Clean Air Zone to be enforced is in line with ICT services already provided by Capita ICTDS, so as such the Council are contractually obliged to procure via Capita ICTDS
4.4.3.1 Benefits of this approach include: . Established procurement route; . Not subject to OJEU timescales for advertising opportunity to tender; . Ability to access proven suppliers / Contractors to deliver compatible systems to de-risk integration / timescales for implementation;
. Compatible with procurement for the main contractor; . Ability to manage changes to the scope of the works and any potential future changes through change controls;
. Ability to procure technology equipment early in programme – reducing risk of supply chain delivery issues.
Obvious financial risks to BCC associated with a target cost contract have been identified, should the target be incorrect, or the share percentage not be capped. Therefore, a robust yet challenging Target Cost will be set prior to contract award.
To meet delivery of the challenging programme it has been decided that the technology elements will be nominated under one supplier with an existing contract with BCC and who will be centrally managed by the main civils contractor. This has been identified as the most appropriate way to manage the risks to delivery and establishes the one contractor to manage the coordination of works across the BCC network and its interaction with the (HMMPFI).
Service Streams and Required Outputs
The required services and outputs are summarised in Table 4.3: -
Table 4.3 Service Streams and Outputs Service / Objective Provider Scope Output Key Flexible Flexible Stakeh for for older change future (s) in scope changes
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Civils Works / deliver Existing Detailed Design Detailed Design / BCC the civil engineering contractors as Design / Build Coordination with works and manage from BCC contractor, all parties (BCC / the technology works frameworks coordination of PFI contractor / as Main Contractor to the technology technology support the CAZ contractor. contractor / implementation public) and build of works.
Technology Works / Existing Provision and Detailed Design BCC / deliver the ANPR and contractor installation of and DEFRA PCN hardware and provider. ANPR and PCN implementation of software to support hardware and the solution and the CAZ software. integration with implementation Coordination existing / DEFRA with the main systems. contractor and existing BCC information and communication technology (ICT) provider(s)
Design and Project Engaged Support as Project BCC / Management Support through required to Management and JAQU / / the effective existing provide project Controls / DEFRA delivery of an outline BCC management / Technical Reports design for the framework technical / Specifications to appointment of (WMTPS) as specialists in support the design contractors. Support required. support of and delivery of the to the project delivery scheme management / justification / technical assurance delivery. and delivery / commissioning of systems / works.
Mobility Package for BCC Individual Promotion of BCC low income individuals receives £1000 modal shift where mobility credit impact on low offered in form of income individuals SWIFT travel card is identified.
Scrappage scheme for BCC With evidence of Support to BCC low income individuals scrapping a non- upgrade of compliant car vehicles promoting individual improved receives either: compliance
£2,000 cash payment toward the purchase of a compliant car (not eligible for PiG).
£2,000 mobility credit. Credit to be supplied on a SWIFT card with no expiration for
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use.
Hackney carriage BCC Drivers offered Promotion and BCC support package £5,000 as: support to the replacement / support upgrade of the payments to be Hackney carriage paid towards fleet operational expenses of ULEV vehicles (4 annual installments of £1,250)
support for an LPG retrofit of their current or newly purchased vehicle
Council hackney BCC BCC bulk Promotion and BCC carriage leasing purchase 50 support to the scheme ULEV taxis replacement / through public upgrade of the procurement Hackney carriage tender and lease fleet. Support to them to the those less able to drivers who are upgrade. most vulnerable as well as on a try-before-you- buy basis
Private Hire Vehicle BCC Private hire Promotion and BCC upgrade support vehicle owners support to the who upgrade to replacement / a compliant upgrade of the vehicle where Hackney carriage the priority will fleet. Support to be beyond the those less able to minimum BCC’s upgrade. 2020 licencing criteria i.e hybrid or ultra-low emission vehicles.
‘Free miles’ for ULEV BCC ULEV van drivers Promotion of ULEV BCC LGVs receive £1000 vehicles with cost credit to spend incentive. on BCC public charging network
HGV & Coach BCC Fleets compete Support for BCC compliance fund for £15,000 improving fleet funding package to contribute towards:
Installing a
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retrofit solution
Upfront or lease costs of a compliant vehicle
Marketing and BCC Marketing and Promotion of the BCC engagement campaign engagement CAZ to ensure campaign to people know the provide purpose of the information on CAZ and positive the CAZ and impacts. reach out to groups eligible Managing the for support negative through perspective by mitigation ensuring those measures affected understand potential support available.
Residents parking BCC Implementation Consultation, BCC scheme of residents Detailed Design parking schemes and to prevent implementation of overcrowding on Residents parking margins of CAZ; schemes once will be deployed identified. On- only if issues going arise Administration of the Residents parking scheme
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Risk Allocation and Transfer
The procurement, tendering and contracting approach has been developed to reflect the principle of risk being owned by the party best placed to mitigate or manage that risk, including the consequence should a risk event arise.
BCC has maintained a live Risk Register (see Figure 2 below) throughout the feasibility stage which will transition into delivery and be amended to incorporate delivery risks as they emerge on both the main CAZ and Additional Measures works packages. As the Risk Register is developed the cost implications of the risks being realized will be incorporated, enabling the development of a robust and justifiable contingency allocation.
After the Tender stage and once the Contractor is appointed for the Main CAZ an initial risk workshop will be undertaken. During this workshop the risks will be allocated to the party who will manage that risk through the design phase. In the Risk Register the risk owner will be named and the mitigation measures to be undertaken recorded. The Design and Build contractor will have submitted a price for managing elements of this risk such as undertaking trial holes and advanced preparation and agreement of traffic management proposals as part of the ECI element, supporting viability by enabling transfer of risk from BCC to the contractor.
Through the ECI phase a clear and robust delivery schedule will be developed which will identify interdependencies between activities and the different contract parties. All elements of risk associated with the design will pass to the contractor to manage and be either removed or mitigated through the design process. The outcomes will be reviewed in line with the BCC integrated schedule to evaluate and understand cross- schedule interdependencies.
During the design stage regular reviews of the Risk Register will be undertaken to track progress and ensure that the correct party is still identified to manage the risk. Through the life of the design stage the size of the contingency allocation should be reduced, with a final risk workshop held at the completion of the ECI and design stage prior to construction commencing.
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Figure 2 Procurement risk register
Clean Air Zone Civils Design and Build Risk Cost Prog Level Impact Impact Impact Probability/Likelihood% (£ k) (w ks) Level Contract Value£12,000,000 1 Improbable 10% < 5 < 1.00 VL RAG Status Risk Ow ner 2 Remote 25% 10 2L KEY BCC AQDG - AQ Delivery Group BCC IP - Infrastructure Projects 3 Occasional 50% 40 3M Red Risk missed its target and needs immediate att ention BCC TB - Technical Board BCC CM - Cabinet Member 4 Probable 75% 75 4H Amber Risk may not be completed w ithin timescales DB - Design and Build Contractor BCC PT - Policy Team 5 Frequent 90% > 150 > 5 VH Green Risk on target for completion w ithin timescales FC - Feasibility Consultants Highest Cost Time Time Cost Prog RAG Comp Risk ID Risk DescriptionProb Impact Ow ner Progress/MitigationFurther Actions Impact Impact Cost Prob Impact Impact Status Date Score Liklihood (£k) (w ks) Prob (£ k) (w ks) Develop Target Price through D&B A1 Target Cost Over Budget5 54 25 Red BCC IP/DB stage 90% 150 4.0 135 3.6 A2 Delay in Agreeing Fees1 11 1 Green BCC IP 10% 51.00 0 Starting in advance without A3 agreeing fees - leading to problems in design 5 11 5 Green BCCIP/DB 90% 51.04.5 0 Non-approval/late approvals by A4 DEFRA 5 15 25 Red BCC PT 90% 55.04.5 4.5 Non-approval/late approvals by A5 BCC PT/ City Council 5 15 25 Red BCC IP 90% 55.04.5 4.5 Delay to PDD - delaying A6 BCC PT/ procurement 5 15 25 Red BCC IP 90% 55.04.5 4.5 Delay to BCC FBC - delaying A7 appointment of D&B Contractor 5 15 25 Red BCC IP 90% 55.04.5 4.5 A8 Delay in Safety Audit5 13 15 Amber DB 90% 53.00 2.7 Procurement Strategy Procurement strategy submitted to A9 Approval - civils 2 23 6 Amber BCC IP BCC Procurement for approval 25% 10 3.02.5 0.75 Procurement Strategy Procurement strategy submitted to A10 Approval - Camera's 2 22 4 Green BCC IP BCC Procurement for approval 25% 10 2.02.5 0 Approval by Senior A11 Officers/CM of CAZ Stategy 4 45 20 Red BCC CM 75% 75 5.0 56.25 3.75 Change/Uncertainty of Design/Scope Design changes leading of U1 prolongation of design - by Linked to DEFRA finalising all Client 5 42 20 Red BCC IP design guidance 90% 75 2.067.5 1.8 Council changes arising from U2 change in political control 1 11 1 Green BCC 10% 51.00 0
Linked to DEFRA finalising all U3 design guidance. Early enangement Uncertainty in Specification 2 45 10 Amber BCC IP with technology supplier. 25% 75 5.0 18.75 1.25 Increase in scope around type Linked to DEFRA finalising all U4 of CAZ (by client) 5 45 25 Red BCC IP design guidance 90% 75 5.067.5 4.5 U5 Quantities uncertainty3 31 9 Amber DB 50% 40 1.0 20 0 Changes due to Public U6 Consultation 5 55 25 Red BCC 90% 150 5.0 135 4.5 Lack of Availability of Frameworks in place to appoint U7 Resources 3 14 12 Amber BCC conractors and consultants 50% 54.02.5 2 Discussion ongoing to establishing U8 BO through Imperial / BCC for Delivery of Back Office5 15 25 Red BCC IP different roles 90% 55.04.5 4.5 Discussion ongoing to establishing U9 BO through Imperial / BCC for Management of Back Office 4 15 20 Amber BCC different roles 75% 55.03.75 3.75
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At the completion of the design and ECI stage any risk that has not been designed out by the contractor may be reallocated back to BCC to manage. As the project progresses through pre-contract stages, the contingency allocation will be significantly refined down from the initial risk register produced. At the completion of the design and ECI stage any risk that has not been designed out by the contractor may be reallocated back to BCC to manage. BCC can then include the remaining contingency allocation in the final approvals for the scheme and ensure sufficient funds are available to cover the remaining risks.
The process for the Additional Measures delivery will vary slightly from that for Main CAZ in that BCC will work with the designer appointed to design the schemes to manage risk during the design stages. Following completion of the design stage and once the Contractor has been appointed for each scheme a risk workshop will be undertaken to discuss the remaining risks and the Contractor will be given the opportunity to propose further value engineering solution and mitigations for the remaining risks.
Prior to commencement of the construction stage, negotiations will take place with the contractor to discuss the possibility of transferring some of the remaining risk(s) to the contractor to own and to manage. The cost of this will then be included in the contractor’s target price and be removed from BCC’s contingency allocation. This will give BCC further cost certainty on the overall scope of works.
Warranties for the design element of the works package will be included in the Contract Documents and therefore the design risk will remain with the Design and Build Contractor. As noted above an element of risk will be managed through the NEC Contract using the NEC Option C – Target Price. This mechanism allows the financial performance of the contractor to be rewarded for any underspend or the Employers financial risk exposure to be limited if any overspend occurs.
In relation to delivery and Programme risks, BCC will apportion and potentially transfer risk(s) to those best placed to own these due to their involvement in undertaking elements of the works. This will help to ensure that the proposed ownership of risk provides value for money to the council.
. The principle outlined above would be implemented on all works contracts across the CAZ delivery including the Technology Contract for supply and Install of the ANPR Cameras and the Additional Measures contracts for civils works on Suffolk Street Queensway (A38), the scheme to ban southbound traffic from paradise Circus accessing the A38 and the Signals works to Close Lister Street and Great Lister Street at the junction with Dartmouth Middle Way..
Payment Mechanisms
Due to the key programme drivers and challenges that will be encountered in co-ordination and delivery of both the civils and technology related construction works (based on procuring these separately); there are a number of incentive models that may be adopted as shown below;
. Contractor Share Percentage – Allows the financial performance of the contractor to be rewarded for any underspend or the Employers financial risk exposure to be limited if any overspend occurs;
. Milestone Incentives - Contractor(s) can be incentivised against meeting key dates of a particular contract or programme;
. KPI Incentives - Contractor(s) are already incentivised on meeting performance level set against key performance indicators within the existing Framework Contract.
Through collaborative discussions on the most appropriate Payment Mechanisms to all project stakeholders, a win-win scenario will be created ensuring positive negotiations take place, further supporting the deliverability of the CAZ D plus additional measures.
The pricing model for the civil works the Contractors will be invited to bid based on preliminary designs and specifications. The use of a model scheme would allow earlier appointment of the contractor to support the development of a realistic implementation programme and to arrive at a fair and reasonable target cost position.
If a model scheme was used it will include the major work types allowing;
A comparison of tenders based on a common set of information to bidders. The development of a target cost the works.
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A two stage tender approach will be adopted, with the first stage focusing on quality and ensuring pre selection of suitable and capable Contractors is achieved. This will be followed by a main tender stage where an initial Target Price will be submitted which will include design, ECI and works costs with preliminaries, Overhead and Profit also priced. This will enable the contractor to develop the design of the scheme through the design and ECI stage which will enable them to produce a more accurate final Target Price. Provided this remains within approved limits set out in the business case the contractor will be retained to deliver the works.
Once at a preferred contractor stage BCC, the contractor and the design team will hold interactive planning workshops to assess risk, opportunities and dependencies to develop and manage risk mitigation strategies and update the scheme’s quantified contingency allocation.
The contractor will update their price (i.e. Target Cost) based on the latest available designs (note that a final scheme definition and design will not be possible until the detail design element of the scheme has been completed).
A Cost Plan will be undertaken separately from the Contractor which can be used as a reasonable benchmark and negotiating tool, in helping to agree on a final Target Cost provided by the Contractor. As the Target Cost should be a genuine pre-estimate of the most likely outturn cost for the Project as defined in the Contract documentation, it should be built up in the same way and contain all the same items as a Contractor would include in a traditional tender.
The Target Cost will include the expected cost of everything for which the Contractor is responsible including risk.
The target cost will compromise of the following;
Indirect costs: These are the specific project costs necessary to support the direct cost element of the project delivery. These will be defined in a separate document. Nevertheless, typical examples will include site facilities, project insurances and so on.
Direct costs: These are the estimated most likely costs for undertaking the physical construction works
Once BCC is satisfied with the Target Price position, contract documentation can be finalised and the contractor will be allowed to start the construction phase.
For the Additional Measures and Mitigation Measures infrastructure works contracts, as these will be build only contracts, the target price for the work will be accepted after the Tender Stage.
For the technology works, it may still be possible to increase the project definition to a point that enables a fixed price to be established and agreed with the Contractor. If this is achievable then a priced activity schedule could be developed and implemented.
Payment Terms The existing frameworks proposed have payment terms as detailed in Table 1.4 below:-
Type Framework/Contract Procurement Route Payment Terms
Design BCC’s Multi-Disciplinary Transportation Professional 30 Day from application Services Framework (WMTPS)
Civil; Birmingham City Council Highways and Infrastructure 30 Day from application Infrastructure Works Framework works
Technology; Existing BCC service provider Contract (ICTSD Capita) 30 Day from application ANPR cameras and supporting
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systems
Note for Mitigation Measures as there is no works procured, only an in-house administration team, no payment terms are required.
The assessment of the works that will be due for payment will ultimately be determined by the final contract options. Nevertheless, it is proposed that payments to Contractors will either be linked to milestone activity completion (as within Activity Schedules) or based or monthly applications from the Contractors in relation to actual costs spent to date.
As the proposed contract option for the civils work for Main CAZ, Additional Measures and Mitigation Measures will be target cost, then payment is made on the basis of actual costs payable upon the completion an activity. This form of Contract requires the Contractor to account using an 'open book' approach, and as such the NEC form of Contract operates under a Defined Cost approach. The Defined cost is the amount due for payment to the Contractor less disallowed cost. So the Contractor is paid his Defined Cost plus the Fee.
Disallowed Costs can include;
Costs which cannot be justified
Costs incurred as a result of failing to follow contract procedures
Costs incurred as a result of failing to follow Works Information procedures
Correcting Defects after Completion
Excessive waste/poor management of resource
Costs incurred in preparing for an adjudication
All the Contractor’s costs which are not included in the Defined Cost or Disallowed are treated as included in the Fee.
The Project Manager will assess the amount due not less than seven days before the assessment date. As per the contract the Project Manager certifies a payment within one week of each assessment date. Within 7 days of the Contractor receiving the Project Manager’s certificate, the Contractor submits a VAT invoice for the amount payable certified by the Project Manager. If the Contractor fails to submit an invoice within 7 days then the final date for payment is postponed by the same number of days as the time taken to submit the VAT invoice.
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Incentivisation
Due to the programme drivers and challenges that will be encountered in co-ordination and delivery of work between both civil related and technology related construction works (assuming current preference to procure both parts separately) it is proposed that an incentivisation model will be used.
It has been decided that using the Contractor share percentage will be the most appropriate approach based on: 4.9.1 Contractor Share Percentage
NEC 3 Option C for civils - based on the contract strategy, there is a contractual mechanism (Contractor’s Share) that allows the financial performance of the contractor to be rewarded for any underspend or the Employers financial risk exposure to be limited if any overspend occurs. The share percentages vary between contracts and projects as the Employer sets the shares.
Under the cost reimbursable option of NEC ECC Option C, the Contractor’s share will encourage effective management and control of the final Price of Work Done to Date (PWDD) relative to the target (the Total of the Prices). The Contractor receives a share of any saving or pays a share of excess when the final PWDD is compared to the target (adjusted for compensation events).
Each range is defined by levels of a ratio, PWDD/Prices expressed as a percentage. The share percentage is still to be decided subject to the on-going procurement.
Social Value Compliance with the Birmingham Business Charter for Social Responsibility (BBC4SR) is a mandatory requirement that will form part of the conditions of the Birmingham City Council Highways and Infrastructure Works Framework contract. The Contractors undertaking this project will work under the Council’s Highways and Infrastructure Framework Agreement and are certified signatories to the BBC4SR as part of requirements under the overarching Framework Contract and will provide additional actions proportionate to the value of each contract awarded. The actions will be monitored and managed during the contract period.
Additionally, in each contract issued for works on the CAZ project suppliers will be assessed on social value questions that relate specifically to the tasks and areas where the works will be undertaken. The Social Value Assessment is designed to assist with the evaluation of works packages by providing information on how the supplier will deliver their commitments included in their Birmingham Business Charter for Social Responsibility Action Plan.
All social value questions will be specific and measurable and relevant to the area where the work is being undertaken. It is expected that submissions will demonstrate where suppliers can offer added value and achieve standards in excess of the specification.
The performance of the social value actions proposed forms part of the Contract Management and Monitoring for the existing Birmingham City Council Highways and Infrastructure Works and BCC’s Multi-Disciplinary Transportation Professional Services Framework (WMTPS) Framework and these are monitored monthly as part of the Contract Management and Monitoring for the existing Framework.
Accounting Treatment 4.11.1 CAZ The initial cost to establish the Clean Air Zone (implementation measures) will be treated as capital and related assets depreciated in accordance with BCC accounting policies. Certain assets purchased by BCC will be transferred to and maintained under BCC’s PFI contract for an annual charge. The assets are on balance sheet and the revenue costs accounted for as a charge along with other PFI operational costs.
The grant will be held on balance sheet and amortized (taken to revenue) over the life of the relevant asset.
Operating costs are expensed.
4.11.2 Clean Air Funding
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Except where an asset is created which is owned by BCC, the cost of mitigation measures and related funding will be treated as revenue for accounting purposes.
Summary of Commercial Case The current intention is to deliver the CAZ using existing Framework Agreements already procured and/or accessible by BCC.
The proposed model will utilise existing Framework Agreements to appoint separate Contractors for the civils works (through the Council’s Highways and Infrastructure Works Framework) and for the technology works (ANPR and associated systems) through existing frameworks and contracts currently in place with BCC.
Using Frameworks and Contracts already available to BCC means that a reduced procurement timescale will be realised and enables BCC to procure Contractors who are known to BCC and who have past knowledge and experience of working on BCC’s road networks.
It is proposed to use the NEC Option C target cost contracting option for the civil works and an incentivised model to help drive cost and programme certainty through collaboration and interaction between the civils and technology contractor.
The mitigations measures proposed as part of the CAZ D are based on the provision in many cases of funding and grants to offset the impact of the CAZ D zone and do not on the whole involve any physical works. The administration of these mitigation measures will be undertaken by an in house team set up and managed by BCC.
The intended approach is considered the most appropriate way to manage the risks associated with time, cost and quality in delivering the CAZ ‘D’ plus additional measures, thus demonstrating the viability of the project. The inclusion of industry-recognised best practice methodologies such as Early Contractor Involvement and Framework utilisation also demonstrates the ability of BCC to deliver the project congruent to scope requirements, specifically value for money to the public purse.
As stated earlier in this case, there are some areas of the scope of work which are still subject to confirmation from Government before a robust commercial case and assessment of procurement routes can be undertaken, areas which are to be confirmed:
. The charging system – discussions are underway between BCC and JAQU as to whether the system will be implemented and managed at a local or national level; The mitigation measures – a deliverable plan is detailed in the CAF Report and summarised in section 5.10 of the Management Case.
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5 Management Case Introduction This Management Case forms the fifth and final case of this Full Business Case (FBC) as required under the Governments ‘Five Case’ business case model as set out in the Green Book Guidance. This FBC is the fourth business case to be submitted to Government for approval, following submissions of a Strategic Outline Case (SOC), Outline Business Case (OBC) and Full Business Case (FBC). The afore mentioned business cases have been subject to detailed Government review via their Delivery Independent Review Panel (DIRP) and Technical Independent Review Panel. Comments have been taken on board by the City Council and incorporated into this FBC, this is the final business case to be submitted and acts as the mechanism for applying for the funds required to deliver the programme of work.
This case sets out the management methodology, governance processes and delivery plan of the final proposals for the Birmingham Clean Air Zone programme. The methodologies and processes set out in this case serve to outline how the City Council will manage the various aspects of the programme lifecycle. This section lays out proposed timelines, governance processes, programme structure, change control, risk management, stakeholder management, reporting and monitoring, contract management, operational management and benefits realisation. The programme/project management methodology set out in this case is standardised by the City Council across similar highways and infrastructure projects and takes its principles from the industry recognised methodologies; PRINCE2 and Managing Successful Programmes (MSP).
Upon successful delivery of the project, the CAZ infrastructure will transition into an operational phase. It should be noted that not all infrastructure and subsequent operations will be delivered/managed by the City Council. See Section 5.10, the diagram shows the division of responsibilities between the City Council and Government. The scope of work which will be delivered and managed by Government will be addressed under a separate FBC which will be produced by Government under their Charging Infrastructure Project. There will be an element of integration required to achieve effective communication and operation between the two systems (City Council and Government), this is partly addressed in this case however is further explored in the Government ‘Charging Infrastructure Project’ FBC.
In addition to the highways and infrastructure improvements being delivered under the CAZ programme, a package of ‘Mitigation Measures’ have been devised by the City Council to address the potential negative impacts to various socio-economic groups affected by the introduction of a CAZ. These measures are further explained in Section 5.9.1. Whilst standardised governance and project management methodologies are to be utilised wherever possible for the delivery of the Mitigation Measures, their bespoke nature requires individual delivery plans; set out in the Clean Air Fund Report.
In the interest of adhering to a strict programme and achieving the highest value for money solutions, existing frameworks are being utilised for all procurement activities (where possible). City Council frameworks are given priority and are to be utilised for the majority of the highways and infrastructure works. However, national frameworks will be called off where the locally managed frameworks do not have sufficient provisions for the project requirements.
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Programme and Project Management, Structure and Methodology 5.2.1 Brum Breathes Programme Structure Birmingham City Council has initiated the Brum Breathes programme, which aims to` improve the city’s air quality. Five sub-programmes contribute towards achieving this overarching aim; encouraging mode shift, reducing traffic volume and increasing the number of ‘cleaner’ cars on the city’s roads. Each sub-programme sitting underneath the Brum Breathes programme is outlined below.
5.2.1.1 Early Measures A suite of early measures were identified by the City Council which could be implemented as ‘quick wins’, enabling the gap between compliance to be closed in the shortest possible time. Government approved the proposed set of measures and granted funding for their delivery in April 2018, implementation of the early measures is currently underway with each at varying stages of the project lifecycle. The five early measures are set out below, each measure is being delivered as an individual project.
. Network Signing Strategy and VMS – To improve the efficiency of the city’s signing network, incorporating Variable Message Signs (VMS) in order to streamline traffic flows into and around the city centre, reducing congestion and improving air quality;
. Bus Priority Measures – The implementation of new bus priority measures, at pre-defined locations around the city centre in order to improve public transport offering improved journey times and reliability.;
. Traffic Signalling – To implement improvements to traffic signals at strategic locations around the city; improving the efficiency of signal changeovers therefore reducing waiting time, easing congestion and improving air quality;
. Technology Air Quality Monitoring - In order to improve the city’s air quality data set, air quality monitors will be installed by this project at 3 strategic locations (same locations as above) around the city centre;
. Customer Experience Monitoring- this project is a promotional scheme for which Transport for West Midlands (TfWM) are responsible. The scheme will promote use of buses as more ‘air quality’ friendly mode of transport. 5.2.1.2 Clean Air Zone See 5.2.2.
5.2.1.3 Air Quality Policy There will be a review and further development of planning policies/guidance to ensure that development proposals consider air quality and are accompanied by an appropriate scheme of mitigation measures where negative impacts are identified. Furthermore, there will be an additional review of transport policies/guidance to ensure alignment with Air Quality Strategy and CAZ requirements.
5.2.1.4 Environmental Developing Infrastructure Throughout the CAZ programme there will be initiatives to create infrastructure for low/zero emission fuels. In addition to this, there is will be further development and implementation of proposals to improve the existing BCC fleet through a structured vehicle replacement strategy and fleet retrofit programme. Through this, it is also planned to introduce 22 hydrogen buses into the fleet operating within Birmingham.
5.2.1.5 Behaviour Change The plan is to develop and agree an approach that embeds behavioural change into all areas of activity within the CAZ programme. This is championed through engagement with partner organisations to explore ways of working together to promote awareness of air quality issues and develop solutions.
Figure 9 shows the Brum Breathes Programme structure.
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Figure 9 Brum Breathes Programme Structure
5.2.2 Clean Air Zone Programme Structure The CAZ Programme has been divided into six work streams, each of which have a series of work packages sitting under them (see Figure 101). The programme has been divided to enable a structured and manageable delivery which generally follows the project lifecycle set out in PRINCE2, as below.
Table 5.1 PRINCE2 alignment
Lifecycle phase CAZ work stream Initiation Stage Feasibility Delivery Stage Procurement and Design CAZ Implementation Additional Measures Mitigation Measures Final Delivery Stage Operations
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Figure 10 CAZ Programme Structure
The following narrative provides a brief description of each work stream:
. Feasibility – as per Section 5.1, the feasibility work stream is focused on the delivery of the suite of business cases as per the ‘Five Case’ model. Supportive work to produce the evidence required to substantiate each business case is carried out in the form of transport, air quality, economic and financial modelling. The submission and approval of this FBC concludes the feasibility phase.
. Procurement and Design – this work stream is focused on the delivery of an outline and detailed design for the CAZ including the boundary configuration, camera specification, sign and camera location and the back office charging infrastructure. The necessary goods and services to enable delivery will also be procured under this work stream in line with the Procurement Strategy.
. CAZ Implementation – this work stream will manage the physical implementation of the schemes which are designed in the ‘Procurement and Design’ phase, including site works, testing and commissioni ng.
. Additional Measures Implementation – due to the scale of Birmingham’s air quality problem the introduction of a CAZ alone will not be sufficient to meet compliance, as such the City Council have selected a package of Additional Measures to enable compliance to be achieved within the prescribed timescale. The measures being proposed are changes to the road network and the introduction of parking restrictions within the CAZ. This work stream will manage the full project lifecycle of the additional measures, i.e. the outline and detailed designs, implementation and testing/monitoring.
. Mitigation Measures Implementation – As per Section 5.1, a package of Mitigation Measures are being proposed to mitigate the impact to the most significantly affected socio-economic groups. This work stream focused on the delivery of these mitigation measures throughout the full project lifecycle. Section 5.9.1 and in the Clean Air Fund Report provide further details of the package of Mitigation Measures being proposed.
. Operations – upon the completion of a successful delivery the programme will transition into an operational phase which will involve a handover between the project delivery team and the operations and enforcement teams. A further explanation of the operational process is set out in Section 5.10. The table below provides details of the responsible person/organisation for the management and or delivery of each of the work packages under each work stream.
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Table 5.2 CAZ Programme management/delivery matrix
Work stream Work Package Management Delivery Feasibility Air quality modelling BCC and Turner & Air Quality Consultants Townsend Jacobs Traffic modelling Steer Group Consultation BCC Turner & Townsend Pell Frischmann Business Case Turner & Townsend Jacobs Design Signs BCC Outline Design – Jacobs Detail Design – Note 1 ANPR Capita ICTSD – Note 2 Back Office (IT BCC Capita ICTSD – Note 2 Infrastructure) Implementation Signs BCC Main contractor - Note 1 ANPR BCC Capita ICTSD – Note 2 Back office (IT BCC Capita ICTSD – Note 2 infrastructure) Civils/ground works BCC Main contractor - Note 1 Additional Network Changes BCC Contractor - Note 3 Measures Car Park Charging BCC Contractor - Note 3 Mitigation Mitigation Measures BCC BCC – Note 4 Measures Operations Data collection BCC BCC Image capture & BCC Capita ICTSD – Note 2 local whitelist check Payment and Government Government national whitelist check Enforcement BCC 3Sixty and Capita ICTSD – Note 2 Note 1 A competitive tender is currently underway to procure a contractor under the City Councils Highways and Infrastructure Framework through a Design and Build (D&B) contract for the ‘Civils’ work. Contract award is scheduled for January 2019. The successful contractor will be responsible for producing the detailed design for the CAZ and subsequently installing all of the ‘Civils’ work. In line with the existing partnering arrangement Capita ICTDS will be nominated as the supplier of the ANPR cameras. In the D&B contract, the contractor will be responsible for managing the interface between the civils works and the ANPR camera supplier. Note 2 In line with the existing partnering arrangement Capita ICTDS will be responsible for the delivery of the back office charging/ processing system. Note 3 The delivery of the Additional Measures will be procured using the City Councils Highways and Infrastructure Framework, tender documentation for these procurement activities is currently being prepared. Note 4 Due to the nature of the Mitigation Measures being proposed, BCC will be responsible for the delivery of the measures. Some procurement activities will be required however these are likely to be for goods rather than services.
Programme/Project Interdependencies Whilst each sub-programme under the Brum Breathes programme is being managed independently, certain interdependencies exist between the CAZ and Early Measures programmes; illustrated below in Figure 5.3. The
119 Version: 4th November 2018 Page 151 of 366 Birmingham City Council Clean Air Zone Full Business Case interdependencies shown in Figure 5.3 highlight the considerations which must be taken when developing the designs and subsequently implementing each of the work packages.
For example, the CAZ Signing and Network Signing Strategies must be developed in consideration for one another. Both schemes will be installing/modifying signs on Birmingham’s transport network and therefore the risk of ‘clashes’ between the two is reasonably high.
Figure 11 Project/Programme Interdependencies
In addition to this a number of interdependencies exist between the CAZ programme and a number of other major programmes of work being undertaken within Birmingham; High Speed 2 (HS2), the Commonwealth Games, the Midland Metro Extension, Snow Hill Development and the Paradise Circus Development. Each of these other major programmes will be undertaking construction activities within the city centre at the same time as construction is planned for CAZ. In particular, the interface between CAZ, HS2 and the Midland Metro Extension is being carefully managed with regular planning and coordination meetings taking place with all parties. Not only is there an interdependency between the construction phases of each programme but considerations must also be taken during the design phase to ensure that the design of one scheme does not impact upon that of another. The coordination between each major programme is a significant task for the City Council and one which places a heightened risk on the CAZ delivery programme – see Appendix 5A, entries R-038 to R-040.
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Governance As above, this FBC has been produced in line with the ‘Five Case’ business case model. Three other business cases have preceded this FBC; SOC, OBC and POBC. Standard process does not specify the requirement for a POBC, however the City Council submitted this revision to Government to demonstrate the progress being made on the programme and give visibility of the areas still being worked on. Figure 5.4 outlines the standard business case process and the approvals which are sought with each submission, note the POBC is not included as no approvals were sought with its submission. The grey highlighted area of Figure 5.4 shows the stage which the project is currently at.
Figure 12 Government governance process for business case approval
Each business case which has been submitted to Government undergoes a review and approval process via their DIRP and TIRP during which technical experts scrutinise the business case and provide comments to the City Council which must be addressed in the next business case. A RAG status is also given to each case individually and an overall RAG is assigned to the business case. The FBC is the mechanism for requesting funding from two separate funding streams; funds to deliver the CAZ and Additional Measures are sought from the ‘Implementation Fund’ and funds to deliver the Mitigation Measures are sought from the Clean Air Fund (CAF). Once funding has been awarded, the City Council become fully responsible for cost control, tracking and reporting.
The City Councils internal governance process must also be adhered to when seeking authority to submit a business case and request capital funding from Government. Each business case submitted to Government must first undergo review and approval by the City Council, Figure 5.5 illustrates this process.
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Figure 13 BCC Governance process
As per Figure 13 each of the documents which are shown on the left hand side of the diagram are subject to the City Councils governance process and are submitted to the process individually to gain the appropriate approvals. Each document is accompanied by a cabinet report, under normal practice the details of the documents and accompanying reports will be shared in the public domain. However in some cases the contents are commercially sensitive and are therefore kept private. The Options Appraisal and FBC which are shown in ‘blue’ in Figure 13 are the internal City Council approval documents which allow the City Council to accept the funding grant(s) given by government and proceed with the procurement of services to deliver the programme. The City Councils FBC’s are required for each individual work stream, for example one will be required for the CAZ, another for the network changes under the Additional Measures and another for the car park charging scheme.
Table 5.3 below shows the responsible person(s) for approving each stage of City Council governance as per Figure 13.
Table 5.3 Responsible party for approval of City Council governance
Approval gate Role Economy Directorate Corporate Director of Economy Management Team Corporate Management Team Chief Executive Corporate Clearance Meeting Chief Executive Chief Finance Office Cabinet Meeting Birmingham City Council Cabinet
It should be noted that at the time of submitting this FBC the City Council has not been able to procure the works and or services required to deliver the implementation phase of the project. As such, costs from the procurement activities are not yet known and therefore the costs included in this FBC are an estimate. The City Council has reached an agreement with Government that a revised cost will be supplied to Government in the form of a written report when the costs have been firmed up. In order to avoid delaying the implementation of the additional measures Government have agreed that the City Council can include an estimate in this FBC which is comparative to similar works undertaken by the City Council. Government have also indicated that there will be a minimum of eight weeks required to review the FBC and Evidence Reports. Subsequently this means that there will also be a minimum of eight weeks
122 Version: 4th November 2018 Page 154 of 366 Birmingham City Council Clean Air Zone Full Business Case before the funding of the project can be agreed. In light of this the City Council has agreed to draw down an interim amount of funding from their own resources to avoid delaying the implementation phase. When Government funding is agreed and received by the City Council the interim funding drawn down from reserves will be replenished in full.
The timescales for delivering firmed up costs for each of the work streams are as set out below:
Work Stream Work Phase Date Main Civil Engineering Works Detailed Design (Target Cost) Mid-January 2019 Main Civil Engineering Works Construction (Target Cost) April 2019 Technology (Cameras & Charging Infrastructure) Detailed Design Mid-January 2019 Technology (Cameras & Charging Infrastructure) Construction April 2019 Additional Measures – Network Changes Design & Build March 2019 Additional Measures – Parking Restrictions Design March 2019 Additional Measures – Parking Restrictions Construction March 2019 Mitigation Measure – Hackney Carriage leasing Procurement March 2019
For Clarity, we will be utilising a target-cost based procurement strategy for the main civil engineering work. Option 3 of the NEC3 suite of Contracts refers to a Target Contract with Activity Schedule. A realistic target cost and a fair ‘share mechanism’ will be agreed between the Contractor and Client, whereby both parties work together to share the risk and reward. If the Contractor delivers the scope whilst underspending against the target, the saving is shared whilst if the target is exceeded, the Contractor will pay a share of the excess agreed by both parties this contains a mechanism for sharing risk and rewards known colloquially as a “pain/gain” mechanism. The target price can be amended throughout the contract if/when the compensation events are raised and agreed between the contractor and the employer (e.g. for changes in scope or schedule). This strategy provides a cost incentive for the contractor to work efficiently to deliver the project objectives within the target cost, providing better value for money.
A further point to note is that whilst the costs included in the Monitoring and Evaluation Plan (Appendix 5D) are correct and supporting evidence can be provided for the cost estimate, these costs were not available in time for the finalisation of the financial modelling. As such, the financial model does not include the full cost for monitoring and evaluation. The monitoring and evaluation costs will be included in the financial model which will be re-submitted in January 2018 when the Target Cost is agreed for the main civil engineering works (as above).
Similarly to the above, the Clean Air Fund Report contains accurate cost information. Unfortunately some of the administration costs were confirmed too late to be run through the financial model. As such, the financial model is out of date by circa £110,000 in terms of the costs for administering the mitigation measures. The financial model will be updated to contain accurate information for the re-submission in January.
Schedule Management
5.4.1 Key Milestones and Stage gate The programme for delivery of the CAZ Programme is appended as Appendix 5B, stage gates have been identified which align to the project lifecycle and key milestones set to drive the project team to adhere to the programme. The submission of this FBC forms one of the stage gates, the subsequent approval by Government and funding award is crucial to ensuring that the timescales are met. Any delays in funding award could result in the programme being delayed respectively. The stage gates and key milestones are set out below.
Table 5.4 Stage gates
Stage Gates Stage Gate Forecast date Full Business Case submission to Government December 2018 City Council Options Appraisal submission December 2018 Funding awarded by Government February 2019 Construction starts April 2019
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User Acceptance Testing starts September 2019 Handover to operations December 2019 Key Milestones City Councils FBC approved January/February 2019 Contract award – Civils January 2019 Contract award – Technology January 2019 Construction start April 2019 User Acceptance Testing starts September 2019 CAZ live January 2020
5.4.2 Reporting Arrangements Programme progress is reported at weekly progress meetings, the agenda for these meetings covers programme, cost, risk, and opportunity, issues and change control. This weekly meeting also provides the forum for raising issues which require escalation. The weekly meeting is attended by the Project Managers, Cost Managers, Transport Policy Manager and relevant consultants. A Technical Board meets on a bi-weekly basis which is attended by the Programme Manager, Transport Policy Manager, Traffic Manager and relevant consultants. The Technical Board serves as the method of escalating issues from the weekly meetings, decisions are made at this meeting and then communicated to the project team via the Programme Manager. The Brum Breathes Programme Board meets on a monthly basis, the purpose of this board is to provide programme assurance and ‘health check’, and is attended by the senior management team and Brum Breathes Programme Manager. Programme and Commercial ‘dashboards’ are presented at this meeting by the CAZ Programme Manager and any issues which require escalation are raised to the board.
In addition to this, a briefing note is presented by the Programme Manager to the Cabinet Member at the weekly members briefing when a key milestone or stage gate has been achieved. AdHoc reporting and progress updates are also provided to members of the executive team and cabinet, reports are standardised in the form of the programme dashboards to ensure that a consistent message is communicated.
The project team also undertake regular informal peer reviews on the programme to ensure that basic project controls are being implemented and processes are being adhered to. These peer reviews are recorded and recommendations for improvement are communicated to ensure best practice across the programme.
Change Management The bespoke and complex nature of the CAZ programme carries a heightened level of uncertainty compared to ‘standard’ highways and infrastructure projects, therefore a robust change management process is in place to ensure that changes to scope, cost and programme are tightly controlled. The below sets out the process which is being followed.
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By implementing a robust change control procedure, the following benefits are realised:
. Any movements to the agreed baseline are properly understood, controlled, recorded and reported . The review and approval of changes are carried out by the correct people . The process allows a single, consistent and auditable mechanism for managing project baselines
The programme baseline will be established upon approval of the FBC by Government, the scope, programme and budget will be set in line with the position agreed with Government. Once established, the baseline will be agreed first with the CAZ Technical Board and then approved at the Brum Breathes Programme Board. The process outlined in the diagram above will be implemented to manage change against the agreed baseline.
5.5.1 Change Management Matrix A Change Management Matrix has been created to manage and delegate responsibility for any contractual changes. It should be noted that changes made to specific projects may impact on other overlapping projects with the change managed accordingly. The matrix forms basis to delegate responsibility to implement contractual changes based on cost and/or schedule deviations.
Table 5.5 Change management matrix
Role <£25k £25k - £100k £100k - £200k £200k - £1m >£1m Programme Manager Head of Infrastructure Delivery Assistant Director of Transportation and Connectivity Corporate Director of Economy Cabinet Member
Risk & Contingency Management A robust risk management process is being utilised on the CAZ programme, whereby risk workshops are held periodically with attendance by all key stakeholders. The work shop is utilised to identify risks, prioritise them in terms of significance and likelihood of occurrence, decide mitigating actions and agree action owners. The risks are then
125 Version: 4th November 2018 Page 157 of 366 Birmingham City Council Clean Air Zone Full Business Case reviewed at the weekly project progress meetings, with the highest priority risks being reviewed at the monthly Brum Breathes Programme Board. Below is an extract from the risk register (Appendix 5A) and shows the top 10 risks in terms of priority.
In order to establish an estimate for the required contingency allocation a quantitative assessment of the risks on the risk register has been undertaken. This is the process whereby the financial implications of the risk being realised are quantified as a monetary value which is then assigned to the risk in the contingency fund. It must be noted that some of the risks for the CAZ programme contain too much uncertainty to enable a meaningful quantification to be carried out, therefore an optimism bias remains against some elements of scope.
Stakeholder Management Effective stakeholder management is crucial to the success of a project such as the CAZ, where public support and cooperation is essential. The City Council has undertaken a public consultation (Jul – Aug 18) whereby residents, workers, businesses and visitors of Birmingham were invited to give their views on the proposed CAZ. The response to this consultation was greater than any other consultation ever run by the City Council, with over ten thousand responses. The stakeholder groups targeted by the consultation were identified via the creation of a stakeholder management plan, a summary of which is provided below in Table 5.6 Key Stakeholders. The full Stakeholder Management Plan is appended as Appendix 5C.
The stakeholder management plan will remain as a live document throughout the delivery and operation of the CAZ. In order to retain support from the public, a continued effort will be made by the City Council to ensure that all stakeholder groups will be kept informed throughout. This ongoing communication will be delivered via digital and traditional media forms with regular updates being provided on the City Councils webpage and Twitter page. A marketing campaign is also being proposed as one of the Mitigation Measures to ensure that all of the targeted groups are made aware of the Mitigation Measures being offered and that they receive the required take up.
Table 5.6 Key Stakeholders
Stakeholder sector Stakeholder Individuals Younger people Disabled people Pregnant women People from BME communities City centre residents City centre workers Residents along major roads People frequently driving to the city centre in diesel cars People driving significant distances in Birmingham within job
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Stakeholder sector Stakeholder Business & Economy Business Improvement Districts (especially city centre) Chamber of Commerce Federation of Small Businesses Greater Birmingham and Solihull LEP Individual businesses Education & Universities Skills Colleges Schools Environment & Environmental Groups Sustainability Health & Wellbeing Public Health England/Lap Clinical Commissioning Groups Hospitals, GP surgeries, etc. Housing & Communities Housing Associations Tenants’ and residents’ groups Media, Communication Local Press/Media & Marketing BBC WM West Midlands Growth Company Science & Technology Universities Science Parks Transport Transport for West Midlands Highways England Public Transport operators Political Birmingham Councillors Birmingham MPs/MEPs WM Mayor WMCA Other WM elected members/LAs Major projects High Speed 2 Midland Metro extension Paradise Circus development Snow Hill development Commonwealth Games
In addition to the public consultation which was carried out for the main CAZ proposals, further consultation will be required during the implementation of the Additional Measures once the outline design phase has completed. This further consultation is required under statutory process mandated for implementing parking schemes and changes to the highways network due to the potential implications they can have on members of the public and businesses. Further consultation will also be required for the Residents Parking Scheme being proposed as one of the Mitigation Measures for the same reason. The Stakeholder Engagement Plan will be used to inform the planning phase of each of the consultations.
Use of Specialist Advisors
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A variety of specialist advisors have been procured to support with the development of the feasibility phase, final option selection and FBC production. These specialist advisors were procured due to their expertise in certain subject matters such as programme management, air quality, transport modelling, economic appraisal, etc. All specialist advisors report directly to the City Council programme manager and were appointed via existing framework agreements.
Work stream Service provider Scope of work Programme Management Turner & Townsend Provision of Programme and Project Management for the Feasibility phase of the project. Including cost management, stakeholder management and engagement. Production of the Management Case of each business case and collation of the SOC, OBC, POBC and FBC. Transport Modelling Steer (subcontractor to WSP) Undertaking of the transport modelling process including all sensitivity tests and production of the Evidence Reports T1-T4 and the Analytical Assurance Statement. Air Quality Modelling Air Quality Consultants Undertaking of the air quality modelling process including all sensitivity tests and production of the Evidence Reports AQ1-AQ3 and the Analytical Assurance Statement. AirViro modelling WSP Undertaking of the AirViro modelling of the sensitivity tests and production of the gridded outputs required for the Health Impact Analysis. Business Case production and Jacobs Production of the Strategic, technical support Economic, Financial and Commercial Cases of the business case. Also responsible for undertaking the Integrated Impact Assessment and for the production of the Evidence Reports E1-E3. Additional Measures selection WSP Undertaking the long list short list process to select the proposed package of additional measures. Consultation Turner & Townsend and Pell Turner & Townsend were Frischmann appointed to Project Manage the consultation process. Pell Frischmann were appointed to provide technical and logistical support throughout the consultation. Procurement Jacobs Preparation of a Procurement Strategy for the CAZ D and authority of contractual documentation for the ‘Civil Engineering’ works Main
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Contractor. Outline Design Jacobs Production of an outline design for the CAZ D including initial site surveys, location identification and quantification of the CAZ signs and cameras. Legal services Bircham Dyson Bell Drafting of the CAZ Order which will be used to enforce the charging of the CAZ. Delivery Various A variety of contractors and consultants will be appointed to deliver the implementation phase of the CAZ. Procurement routes are set out in section XX of the Commercial Case.
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Mitigation Measures and Exemptions The POBC presented a proposed set of Mitigation Measures and Exemptions which was subject to finalisation following completion of modelling activities which were still in progress at the time of writing. This FBC presents the final set of Mitigation Measures and Exemptions which are being put forward by the City Council for approval by Government, full details can be found in the Clean Air Fund Report. The final set of Mitigation Measures and Exemptions being proposed have been selected following a long list/short list process against a set of primary and secondary critical success factors. The viability and suitability of the measures was then confirmed by running them through the air quality, transport, economic and financial models.
Whilst the Mitigation Measures and Exemptions are grouped together in this section of the FBC it should be noted that the delivery of each will follow distinctly different routes. Due to the nature of the Mitigation Measures, an individual delivery plan is being worked up for each of the measures which will involve various procurement activities, stakeholder engagement and interfaces with numerous departments in the City Council. The Mitigation Measures being proposed and their respective delivery plan are summarised in the followig pages.
5.9.1 Mitigation Measures Table 5.7 Mitigation measure summary
Ref Measure Summary M1a Mobility support or individuals Individual can access the choice of a £1000 mobility credit working within the CAZ. offered in form of SWIFT travel card or a £2,000 package (Swift credit or contribution to compliant vehicle) in return for scrapping a non-compliant vehicle M1b Mobility support for individuals who With evidence of scrapping a non-compliant car individual reside outside of the CAZ receives either: £2,000 cash payment toward the purchase of a compliant car (not eligible for PiCG). £2,000 mobility credit. Credit to be supplied on a SWIFT card with no expiration for use. M2a Hackney carriage support package Drivers offered £5,000 as: support payments to be paid towards operational expenses of ULEV vehicles (4 annual instalments of £1,250) support for an LPG retrofit of their current or newly purchased vehicle M2b Council Hackney carriage leasing BCC bulk purchase 50 ULEV taxis through public procurement scheme tender and lease them to the drivers who are most vulnerable as well as on a try-before-you-buy basis M2c Private Hire Vehicle (PHV) upgrade Private hire vehicle owners who upgrade to a compliant support vehicle where the priority will be beyond the minimum BCC’s 2020 licencing criteria i.e hybrid or ultra-low emission vehicles. M3 ‘Free miles’ for ULEV LGVs ULEV van drivers receive £1000 credit to spend on BCC public charging network M4 HGV & Coach compliance fund Fleets compete for £15,000 funding package to contribute towards: Installing a retrofit solution Upfront or lease costs of a compliant vehicle M5 Marketing and engagement Marketing and engagement campaign to provide information campaign on the CAZ and reach out to groups eligible for support through mitigation measures M6 Residents parking scheme Implementation of residents parking schemes to prevent overcrowding on margins of CAZ; will be deployed only if issues arise
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The CAF Report provides details of the delivery plan for each mitigation measure, also summarised below:
M1a - Mobility support or individuals working within the CAZ:
. Target groups will be communicated with via the City Councils marketing campaign, contacting individuals either directly or indirectly. Applicants who believe themselves to eligible for the mitigation measure would then inform their employer.
. Their employer will then register the company/business via an online application portal submitting evidence of the company’s registration. The employer will then submit details of each of their employees who is eligible for the mitigation measure, providing validation of their income.
. The City Council will then undertake a validation exercise of each applicant’s submission, making a determination on whether they are eligible for the mitigation. Those deemed eligible will then be contacted and given the choice as to whether they want to take up the offer of £1,000 SWIFT credit or if they want to scrap their non-compliant vehicle.
. For those who choose to take up the £1,000 SWIFT credit; the individual will be required to register for a SWIFT account, the City Council will then be notified by TfWM and subsequently apply the appropriate credit to that individuals account.
. For those who choose to scrap their non-compliant car; a certificate of destruction must be provided to the City Council as part of the application process.
. For those who opt for the £2,000 credit on a Swift card, they will apply in the same manner as described above. For those who chose to purchase a compliant vehicle at a discounted price, the individual will provide the council with proof of purchase plus the certificate of destruction for their non-compliant car and the council will reimburse them for the purchase.
. Where the individual does not have the upfront capital to purchase the vehicle, the council will set up agreements with second hand dealerships where individuals can take their non-compliant vehicles. The second hand dealerships will then scrap the car and provide a discount to the individual on their purchase of a compliant vehicle.
M1b – Mobility support for individuals who regularly enter the CAZ Individuals will register themselves for application in the same manner as in M1a, successful applicants will be prioritised based on their distance from the CAZ (closest being high priority). Successful applicants will then be eligible for a scrappage scheme identical to that described above for M1a (the option for £1,000 Swift credit is not available under M1b).
M2a – Hackney carriage support package/M2b – Council hackney carriage leasing scheme: delivery plan to vary depending on whether the driver is requesting funds for a retrofit technology or for offsetting the costs of a ULEV vehicle:
. Retrofit technology: registration for the scheme will be up to the responsibility of the driver, who will submit their details and book a slot for the retrofit to be carried out; £5,000 will then be deducted from the total cost. Details of the retrofit must then be provided to the City Council to enable them to licence the taxi.
. Operational finance package for ULEV vehicles: any driver who purchases a ULEV Hackney carriage post September 2018, will be eligible for reimbursement. Proof of purchase must then be provided to the City Council who will validate with the manufacturer and upon successful validation will make four consecutive annual payment s for £1,250 to the driver.
M2c – Private Hire Vehicle upgrade support : the delivery plan for this mitigation measure is as follows:
. Drivers will register their interest in the scheme with the Council’s licencing team. To register they will be required to contact the licencing department directly and verify that they are a licenced PHV driver with a non-compliant vehicle currently licenced by the Council as a PHV since at least September 2018.
. Once the information has been verified and approved the individual will be given confirmation that they have been accepted onto the funding scheme. The Council will keep a database of approved drivers as well as a record of their current non-compliant vehicle.
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. After receiving approval, the individual will then purchase a vehicle which meets the criteria of the funding award. The vehicle must be; CAZ compliant, under 3 years of age in January 2020 and comply with all other council PHV licencing conditions. Aside from this, the individual is free to choose the vehicle of their choice.
. The individual will then provide proof of vehicle upgrade to the council, this will either be in the form of a valid sales receipt or alternately a leasing contract.
. The council will validate the evidence to ensure the new vehicle meets all the funding requirements and once this has been confirmed will provide a £2,000 funding award to the individual.
M3 – ‘Free miles’ for ULEV LGV’s . Any ‘plug in’ van will be eligible for the scheme, once the vehicle is purchased the driver must submit their details and proof of purchase to the City Council. They will then be provided with a reference code to register with the EV network provider who will issue the credit amount to their account, credit which can be used anywhere on Birmingham’s EV network M4: HGV and coach compliance:
. Stage 1: A targeted marketing and communications scheme will be undertaken to ensure that all fleets are aware of the funding which is on offer and the requirement on them to register themselves.
. Stage 2: As only a limited amount of funding is available, the funding will be granted following a competition which will be run by the BCC procurement team who have experience in writing and designing funding assessments.
. Stage 3: the funding will be awarded with an expiration date of January 2021 and the retrofit technology or the purchase/lease of a compliant vehicle be allowed to be implemented at any point in this time frame.
M5 – Marketing and engagement campaign: . Funding has already been secured for this scheme and suppliers identified to undertake the marketing campaign which is planned to launch in October 2018 and will continue until December 2019. The intention is for the City Council to provide updates and information in relation to the implementation of the CAZ and/or the mitigation measures.
M6 – Residents parking scheme Residents in the immediate surrounding area of the CAZ will be able to raise concerns about increased volumes of cars parking in residential areas using established forums for raising concerns.
Concerns will be monitored by the City Council and action taken on a needs basis, i.e. when the volume of concerns being raised reaches a suitably high threshold consideration will be given as to whether a residents parking scheme is required. 5.9.2 Exemptions
The Exemptions which are being offered are detailed in the table below. Target Group Exemption Duration Commercial Vehicles LGV/HGV/Coaches registered within the CAZ 1 year registered within the CAZ will receive an exemption (max 2 vehicles per company). Commercial Vehicles with LGV/HGV/Coaches registered in the 1 year an existing finance Birmingham City area travelling to the CAZ agreement with an existing finance agreement beyond 2020 (max 2 vehicles per company). Residents of the CAZ Private non-compliant vehicles registered 2 years (private vehicles registered within the CAZ will be exempted. within the CAZ). Individuals travelling into Individuals with non-compliant vehicles 1 year
132 Version: 4th November 2018 Page 164 of 366 Birmingham City Council Clean Air Zone Full Business Case the CAZ for work. registered outside of the CAZ who travel into the CAZ for work and who meet the income criteria will be exempted. Hospital visitors Visitors to select hospitals in the CAZ, GP Duration of offices and care homes. their stay. (Exemption will run for a 1 year period) Community and schools and Vans and mini buses registered as providing All years disabled vehicles. essential community and school transport services and those classified as section 19 operators, registered for operation in Birmingham.
5.9.2.1 Process overview The package of exemptions being proposed will be offered to a number of target groups (above) who have been identified as those who will be most significantly impacted by the introduction of a CAZ. A person who believes that they are part of one of the target groups and therefore qualifies for an exemption must apply by submitting their personal details and a package of evidence which proves their eligibility. The application and evidence pack will then be assessed by the City Council against a set of fixed criteria and exemptions will be granted as required.
Details of those qualifying for an exemption will be entered into a database which will form the local ‘whitelist’. A whitelist is a database containing data which is considered to be allowable under a particular set of criteria, the opposite of a blacklist. In this case the whitelist will be populated with the details of all of the exempt people and their vehicle details. This whitelist will then be used as an input to the enforcement solution being developed for the CAZ, which will assign each vehicle on the whitelist with a virtual permit. The enforcement solution will be integrated with the ANPR cameras, so that a check of each licence plate captured on camera against the whitelist will be done in ‘real time’ at source. Where the camera check finds a permit against the vehicle no action will be taken and the vehicle will pass through the CAZ free of charge. Any vehicles which aren’t on the local whitelist and therefore are not exempt will follow the process set out in Section 5.10.
5.9.2.2 Application requirements The documents that will be required for each exemption are listed below, this is a provisional list and subject to further review.
Exemption Documents requested
E1 + E3: Commercial Proof of company registration: company number vehicles in CAZ Proof of vehicle ownership: vehicle registration document(s) Proof of address within the CAZ: building lease agreement or land register E2 + E4: Commercial Proof of company registration: company number vehicles with finance Proof of vehicle ownership: vehicle registration document(s) Proof of address within the CAZ: building lease agreement or land register Proof of finance agreement: finance/lease agreement document E5: CAZ residents Proof of address: utility bill, council tax or bank statement Proof of vehicle ownership: Vehicle registration document (V5) E6: CAZ workers Proof of company registration: company number Proof of company address within the CAZ: building lease agreement or land register Proof of vehicle ownership: vehicle registration document (v5) Proof of individuals address: utility bill, council tax or bank statement Proof of individual’s income: P60 or pay slips Confirmation that vehicle is primary method of individuals
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commute
E7: Residents outside CAZ Proof of vehicle ownership: vehicle registration document (v5) Proof of individuals address: utility bill, council tax or bank statement Proof of individual’s income: P60, pay slips, housing benefits ID, jobs seeker allowance id E8: Hospital visitors Treated separately
E9a: Community and Proof of vehicle ownership: vehicle registration document school Proof of eligibility: valid section 19 permit E9b: Disabled vehicles Registration process is to be defined.
The exemptions for hospital visitors will be treated separately as the exemption is not for a fixed period of time but is over a short flexible time period covering the duration of their visit. This will be operated by the council in conjunction with hospital staff. On their visit to the hospital, upon proving a valid purpose for their visit, individuals can request a code from hospital staff which can then be used on the online portal to provide the individual an exemption. The code will have a time period associated with it, so a long-term visitor will only have to provide the code once and will be given an exemption for the duration of their visit.
5.9.2.3 Marketing and communications The bulk of the marketing and communication related to exemptions will be delivered through the CAF mitigation measure; ‘M6: Marketing and engagement campaign’. The purpose of this campaign will be to ensure that all eligible individuals and business are aware of the exemptions and the application process and timelines. The table below shows the communication channels that will be used to contact eligible individuals and businesses for each exemption.
Communication channels Exemption Business engagement through E1 + E3: Commercial vehicles in CAZ Birmingham Connected Business E2 + E4: Commercial vehicles with Travel Network finance
Stakeholder events E1 + E3: Commercial vehicles in CAZ E2 + E4: Commercial vehicles with finance Physical outdoor advertising E1 + E3: Commercial vehicles in CAZ E2 + E4: Commercial vehicles with finance E6: CAZ workers E7: Residents outside CAZ Online advertising All Social media All Community engagement E6: CAZ workers E7: Residents outside CAZ Community events E6: CAZ workers E7: Residents outside CAZ
5.9.3 Mitigation Measures and Exemptions – delivery team The City Council are proposing to establish a CAZ management team who will be responsible for the delivery, management and administration of the mitigation measures and exemptions. The team will be required between February 2019 and December 2021, with a core team of 10 people required for the majority of the overall duration. The resource profile is set out below. The team will consist of a combination of management and
134 Version: 4th November 2018 Page 166 of 366 Birmingham City Council Clean Air Zone Full Business Case administration employees although there will be a higher proportion of administration staff, particularly during the peak time.
The team outlined above will undertake duties which include:
Data collection and collation; Data verification and validation; Data input into the enforcement software; Managing and responding to queries raised by applicants; Routine maintenance of the data; Interfacing with other City Council teams and relevant stakeholders.
The ‘team’ set out above will be responsible for the delivery of the mitigation measures however, as stated in Section 5.9 the delivery of the package of exemptions differs from the mitigation measures. Whilst the ‘team’ will be responsible for managing the application process for the exemptions, once the data has been collected and successful applicants entered into a database the list of those exempt must then be passed to the enforcement team who will be responsible for administering the enforcement solution, see Section 5.10.
Operations Upon successful completion of the implementation phases of the programme, the CAZ will transition into operations and enforcement and the CAZ will become live. The FBC which was submitted in September 2018 presented three potential options for the operation of the CAZ charging and enforcement infrastructure. Since FBC submission some further work has been undertaken to firm up the operating methodology, the final proposal is illustrated in the process map on the following page and described below.
In essence, the system will operate in the following way;
1. The City Council will be responsible for the collection of data for those people who are eligible for an exemption (see Section 5.9.2) at a local level and a whitelist will be populated accordingly. The whitelist will be read by the ANPR cameras, at source, discounting all of the locally exempt vehicles and taking no further action; 2. A list of all of the vehicles which do not appear on the local whitelist will be compiled periodically (frequency to be confirmed, likely to be once per day). This list of non-exempt vehicles will be sent to the central Government processing system as a package of data, again the periodicity of this transfer is yet to be confirmed with Government; 3. The central Government processing system will perform the required database look-ups to confirm whether payments have been received where they are due and then a second exemption check will be
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performed however this time against a national whitelist. The national whitelist is being compiled from various databases such as the DVLA link to the euro emissions data base, the national low emission taxi data base and a data base of foreign number plates. The output from this central Government processing system will be a list of vehicles who are not exempt at either a local or national level and have failed to make the required payment. This list will then be sent back to the City Council for action; 4. The City Council will be responsible for enforcing the failed payment which will be done via their supplier 3Sixty who currently provide enforcement services on similar schemes. In the first instance, a request for the missed payment will be requested within a set period of time (timeline to be confirmed). Should the offender fail to make the required payment they will be issued with a Penalty Charge Notice (PCN) with details of the fine which must be paid.
There may be some overlap between the duties of the team set up to manage the application process of the exemptions and that of the team responsible for managing the operations. This will be coordinated by the City Council and outsourced where suitably qualified and experienced personnel cannot be identified within the City Councils staff.
City Council Charging System Proposal
Maintenance A number of assets will be delivered by the CAZ Programme, as such, maintenance of these assets will be required both on a preventative and corrective basis. At this stage the delivery of maintenance is still being finalised however the below detail summarises what are currently the preferred options for each asset type:
. Signs: The City Council have an existing Private Finance Initiative (PFI) with their supplier Amey, for the maintenance of certain highways assets, this includes signs as a standard item. As such, the City Council propose to vary the PFI to increase the number of signs covered to include those being delivered by the CAZ, the maintenance regime which is currently in place would therefore apply to the CAZ signs.
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. ANPR Cameras: Unlike signs, ANPR Cameras are not covered under the Amey PFI, therefore the City Council plan to set up a service and maintenance contract with the supplier of the ANPR Cameras;
. Camera poles and power supplies: At present there are two options for mounting the ANPR cameras; (1) the cameras will be mounted on existing lighting columns or (2) new poles will be erected for the camera mounting; to be confirmed during the detailed design phase. The maintenance will be dependent upon the option chosen;
. Option 1 – An electrical contractor is under contract to provide service and maintenance. This contract would be varied to include any additional hardware which is required for the CAZ ANPR cameras;
. Option 2 – A separate SLA would be set up with an appropriately qualified electrical contractor for the service, testing and maintenance of the new poles and power supplies;
. Back office charging system: the maintenance of the software and hardware components of the charging system will be undertaken by the supplier of the equipment. Service Level Agreements will be put in place with the supplier(s) of the equipment and managed by Capita ICTDS.
Monitoring and Evaluation
A monitoring and evaluation plan has been drawn up to support the implementation of the CAZ and the evaluation of the project post completion. Birmingham has an existing network of monitoring stations to monitor traffic data and air quality. This existing network will be supplemented with new monitoring stations to ensure that a robust data set is maintained. Monitoring will be undertaken throughout the implementation phase of the project to assess the impact of the work being carried out and also to establish whether there is any early behaviour change.
The post project evaluation will establish whether Birmingham achieves compliance with the air quality targets, this will be demonstrated through data averages covering the period January 2020 to December 2020 using the monitoring outlined in the Economic Case. During the ten year appraisal period benefits are anticipated to continue increasing post implementation as modal shift occurs and modern, less polluting, vehicles and technologies become more prevalent. See Appendix 5D for the full monitoring and evaluation plan.
The direct post project evaluation is expected to be undertaken in January 2021 to reflect on the completed implementation and benefits realisation period covering January 2020 to December 2020. The scope of this evaluation will be in line with HMT Magenta Book, which sets out criteria for evaluation, encompassing examination of benefits realisation, actual cost comparison against planned, lessons learnt throughout project delivery and any opportunities to increase the CAZ benefits through further works.
Table 5.8 Benefit and Evaluation Criteria
Benefit Evaluation Criteria Reduced impact on human health Measured through improved health outcomes and reduction in health expenditure (e.g. hospital admissions, mortality impacts and chronic bronchitis impacts) Increased productivity Evaluated through work absenteeism caused by ill health Reduced damage on built environment Measured by surface cleaning costs and amenity costs Improved journey times for both private and Measures by assessing journey times against baseline for public transport due to reduction of traffic load both public and private journeys. and consequently more reliable PT services.
Increased travel by sustainable modes such as Evaluated through questionnaires and comparisons with walking, cycling and public transport baseline data Reduction in accident rates on the roads Quantifiable data available from police records against baseline. Reinvestment in local transport policies which Evaluation of new schemes and initiatives post aim to improve air quality and support the implementation. delivery of the plan.
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6 Appendices Appendix 1A CSF and High Level Appraisal of Options Critical Success Factors and High Level Appraisal of Options against Critical Success Factors
Introduction
This appendix:
. identifies the longlist of options that have been considered to reduce the specific sources of local exceedances of NO2 concentrations in Birmingham;
. lists the Critical Success Factors which have been used to appraise the longlist of alternative options; and,
. Describes the assessment that has been undertaken to date to reduce the longlist of options to a shortlist of options, for detailed appraisal in the Preferred Option Business Case.
Longlist of Options
The longlist of options is set out in Table 6-1. The longlist of additional measures (104 in total) is set out in Table 1 (p3-26) of the “Birmingham Clean Air Zone Feasibility Additional Measures Study.”
Table 6-1 Longlist of Options
Option Commentary
L1 Do Minimum Baseline option to demonstrate why taking action is necessary
L2 Class A Clean Air A charging CAZ A Zone (CAZ A) Class A vehicles (Buses, coaches, taxis and private hire vehicles) that do not meet Euro emission standards would be charged.
L3 Class B Clean Air A charging CAZ B Zone (CAZ B) Class B vehicles (Class A plus Heavy goods vehicles (HGV’s))
L4 Class C Clean Air A charging CAZ C Zone (CAZ C) Class C vehicles (Class B plus Large vans, minibuses, small vans/light commercials) that do not meet Euro emission standards would be charged.
L5 Class D Clean Air A charging CAZ D Zone (CAZ D) Class D vehicles (Class C plus cars) that do not meet Euro emission standards would be charged.
L6 Non charging A non-charging CAZ with additional measures CAZ -with additional measures
L7 Class A Clean Air A charging CAZ A with additional measures Zone (CAZ A) - with additional measures
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Option Commentary
L8 Class B Clean Air A charging CAZ B with additional measures Zone (CAZ B) - with additional measures
L9 Class C Clean Air A charging CAZ C with additional measures Zone (CAZ C) - with additional measures
L10 Class D Clean Air A charging CAZ D with additional measures Zone (CAZ D) - with Additional Measures
It is clear from Table 6-1that three broad types of options have been identified:
. 4 charging CAZ options (class A, B, C and D); . 4 packages of options, with additional measures considered in conjunction with a CAZ scheme (class A, B, C and D);
. a non-charging CAZ with a package of measures.
Additional Measures: Option Generation
In order to identify measures that could be considered in conjunction with a CAZ to achieve compliance, a desk top study was undertaken to review existing evidence on local, regional and national measures to improve air quality. In addition, BCC, Transport for West Midlands and key experts from Birmingham CAZ work streams were consulted to identify further measures to take through an initial sifting process. This generated a total of 104 potential options (as noted above, these measures are set out in Table 1 of the “Birmingham Clean Air Zone Feasibility Additional Measures Study”).
Critical Success Factors
The Critical Success Factors that have been used to evaluate the long-list of options and additional measures are set out, together with details on how each CSF is considered and scored.
Primary (Pass/fail) Critical Success Factor (CSF)
The primary CSF is:
. CSF1 Compliance: Deliver a scheme that leads to compliance with NO2 concentration limits (annual mean NO2 concentration of 40µg/m2) in the shortest possible time. Assessment against the primary CSF only has two outcomes: pass or fail. Following JAQU guidance, all options that fail to meet the primary objective will be rejected.
This CSF directly supports Spending Objective SO1 (set out in section 1.5.1).
Key questions that were asked in the case of additional measures include:
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. CSF1.1 Is the measure likely to materially contribute to achieving compliance? . CSF1.2 Is the measure already being applied on a local, regional and/or national basis?
. CSF1.2i If ‘Yes’; can it be up scaled and accelerated? . CSF1.2ii If ‘No’; is the option viable given the timeline for compliance? . CSF1.2iii If ‘No’, is the option viable post 2020?
Only measures and packages of measures that are likely to lead to compliance as quickly as possible have been accepted. Options that are not expected to deliver compliance in the same calendar year as the fastest combination of options have been rejected.
Secondary Critical Success Factors
Options that meet the Primary Critical Success Factor will be considered against the following secondary CSFs:
. CSF2 Value for money: This CSF considers the full range of costs and benefits to society of the proposed option (such as the health benefits of improved air quality and the costs to the public in complying with a measure) rather than just looking at the financial impacts to determine if the measur e is viable within an economic context. Key questions to consider include:
. CSF2.1 Do the likely overall benefits to society of this option exceed the overall costs to society? . CSF2.2 Has the option been designed to deliver effectively while maximising benefits and minimising cost?
. This CSF directly contributes to Spending Objective SO2 (see section 1.5.1). . CSF3 Evidence based: This CSF considers to what extent, the case for an option is based on real-time local evidence of air quality, emission sources, and levels of air pollution in Birmingham or in specific pollution hotspots, and (where applicable) the potential benefits and impacts are capable of being modelled. Key questions to consider include:
. CSF3.1 Is the need and the likely contribution of this option based on real-time local evidence of air quality, emission sources, and levels of air pollution in Birmingham or in specific pollution hotspots?
. CSF3.2 Can the option be represented within the CAZ traffic and air quality modelling in order to assess the benefits and impacts?
. This CSF directly contributes to Spending Objective SO3 (see section 1.5.1) . CSF4 Distributional impacts: This CSF considers the potential impacts on key groups of the proposed option, in order to determine whether there is likely to be a disproportionate impact on one or more particular groups. Key questions to consider include:
. CSF4.1 Is the option likely to be acceptable within a social context? . CSF4.2 Does the option significantly affect one or a number of particular groups of stakeholders?
. CSF4.3 Is there potential to insure some groups or provide mitigation against the detrimental impacts of this option?
. CSF4.4 Does this measure protect and enhance social equality? . This CSF directly contributes to Spending Objective SO4 (section 1.5.1).
. CSF5 Strategic and wider air quality fit: This CSF considers how the proposed option interacts with other local policies already in place, in particular the transitioning to a low emission and healthier economy by 2030Key questions to consider include:
. CSF5.1 Does the option fit and/or complement other existing and planned policies? . CSF5.2 How does the option affect overall exposure and to what extent does it reduce overall exposure?
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. CSF5.3 Does the option permit sustained improvement to human health within short timescales? . CSF5.4 Does the option support the promotion of a low emission economy? . CSF5.5 Does this option facilitate local growth and ambition? . This CSF directly contributes to Spending Objective SO5 (section 1.5.1). . CSF6 Supply side capacity and capability: This CSF considers whether or not there is sufficient commercial capacity or capability in the supply chain to successfully deliver the proposed option and whether or not this is available. This CSF reflects the considerations made in the Commercial Case. Key questions to consider include:
. CSF6.1 Are there capable suppliers or contractors available to provide the required services or facilities required by this option?
. CSF6.2 Is there a sufficiently well-developed market to support the efficient delivery of the option?
. CSF7 Affordability: This CSF considers if this option can be delivered given the potential resources available (for example staffing levels) and management structures in place as outlined in the management case. This CSF reflects the considerations made in the Financial Case. Key questions to consider include:
. CSF7.1 Is this option likely to be financially viable? . CSF7.2 Is the option likely to be affordable in both the short and long run in comparison to other options considered?
. CSF8 Achievability: This CSF considers if this option can be delivered given the potential resources available (for example staffing levels) and management structures in place as outlined in the management case. This CSF reflects the considerations made in the Commercial and Management Cases. Key questions to consider include:
. CSF8.1 Can the option be delivered on a local scale?
. CSF8.2 Can this option be targeted geographically?
. CSF8.3 Given market limitations, are adequate resources available (currently or can be obtained in sufficient time) to manage and implement such an option successfully?
. CSF8.4 Is the option based on proven / existing technology?
The Critical Success Factors largely reflect the CSFs suggested by JAQU. However, some of the secondary CSFs and the key questions have been modified to reflect the criteria adopted in the initial sifting of additional measures and the second phase of appraising additional measures. In the initial sifting process, for example, each potential additional measure was assessed against the following criteria:
. CSF1.1 Is the measure likely to materially contribute to achieving compliance?
. CSF1.2 Is the measure already being applied on a local, regional and/or national basis?
. CSF1.2i If ‘Yes’; can it be up scaled and accelerated? . CSF1.2ii If ‘No’; is the option viable given the timeline for compliance?
. CSF1.2iii If ‘No’, is the option viable post 2020? . CSF4.1 Is the option likely to be acceptable within a social context? The more detailed second phase of appraising additional measures identified and used the following criteria to appraise each option:
. CSF3.2 Representation within CAZ traffic and air quality scenarios modelling; . CSF5.3 Sustained improvement to human health within a short timeline;
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. CSF8.2 Ability for measure to be targeted geographically; . CSF5.4 Promotion of a low emission economy; . CSF5.5 Facilitate local growth and ambition; . CSF4.4 Protect and enhance social equality; . CSF7.1 Financial viability. In addition to the criteria, each measure underwent an appraisal to determine if any of the following anticipated category responses – in terms of traffic flow and vehicle use – are applicable:
. Reduce – reduce congestion, remove traffic from the network or links; . Shift – encourage modal shift;
. Improve – encourage transition to cleaner vehicles. Appendix A1 illustrates the relationship of the CSFs to the Spending Objectives (section 1.5.1) and the initial sift, and multiple criteria analysis, assessment criteria.
Scoring System
The options presented in Table 6-1 will be assessed against the CSFs according to the scale presented in Table 6-2.
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Table 6-2 Scoring criteria for Options
P Pass Primary (Pass/ Fail) CSF F Fail
Excellent
Good Secondary (Scored) CSF - Satisfactory or no score
Poor
An alternative scoring system has been developed and applied to appraise and rank the performance of additional measures, as detailed in Table 6-3. This scoring method focuses on the potential of a measure to contribute to the primary objective, whilst preserving and/or promoting the other criteria. Therefore, a positive potential score indicates that a particular measure in question is considered to have a higher potential in terms of upholding the criterion and contributing to the primary objective versus the other measures being assessed. The opposite is true for a negative score.
Table 6-3 Option appraisal scoring against MCA framework criteria
Score Potential to uphold respective criterion and contribute to primary objective
+3 Large positive potential
+2 Medium positive potential
+1 Small positive potential
0 Neutral
-1 Small negative potential
-2 Medium negative potential
-3 Large negative potential
Assessment of the Long-list of Options Using the CSFs
The assessment that has been conducted to date has involved:
. Undertaking detailed traffic and air dispersion modelling to determine if the introduction of a ‘class C’ or ‘class’ CAZ scheme in Birmingham would be sufficient to pass the primary CSF; and . A detailed and rigorous appraisal of additional measures. CAZ Options
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The initial traffic and air quality modelling that has been undertaken by BCC to date, has demonstrated that implementation of a charging ‘class C’ or ‘class D’ Clean Air Zone (CAZ), would be insufficient to pass the project’s primary CSF.
Under a class C CAZ, exceedances are still predicted to occur on the A38 and ring road. It is estimated that additional reductions of up to 11% and 31% would be required, outside and inside the CAZ, respectively, to achieve compliance. Even if all the vehicles restricted by ‘category C’ which entered the zone had a compliant engine, the levels of NO2 would still be too great. This reflects the fact that over 80% of the vehicles entering the CAZ area are private cars (or private hire vehicles) and these are not restricted by a CAZ C scheme.
Under a class D CAZ (where non-compliant cars are subject to charging), concentrations of NO2 reduce by an additional 1.5 µg/m3 inside the CAZ, with a medium charge, and by 1.8 µg/m3 for a high charge, beyond the CAZ C high scenario. There are still places, however, where the legal limits are predicted to be exceeded on the A38 and ring road. It is estimated that additional reductions of up to 9% and 19% are required, outside and inside the CAZ, respectively, to remove these exceedances.
Although a CAZ ‘A’ and CAZ ‘B’ scheme have not been explicitly modelled, it is clear that if a ‘class C’ or ‘class D’ CAZ would be insufficient to ensure compliance, then a CAZ ‘A’ or CAZ ‘B’ scheme would also be insufficient.
Options L2 - L5 in Table 6-1 have therefore been rejected.
Appraisal of Additional measures
The appraisal of additional measures has been delivered in 3 phases:
. Phase 1 involved assessing the longlist of additional measures (104 in total) against some high-level criteria to eliminate those that clearly do not contribute to the Critical Success Factors. A total of 31 options were identified within the context of contributing to the primary objective;
. Phase 2 involved developing and applying a Multi Criteria Analysis (MCA) framework to rigorously appraise each option taken forward from Phase 1 to identify those that should be taken forward for further development. This involved assessing each option against multiple criteria and scoring each measure. A measure scoring +10 (‘medium positive potential) was recommended to proceed to Phase 3. Also each measure had to achieve a positive score on two criteria (i.e. potential impact on human health and ability to be represented within quantitative traffic and air quality modelling). In addition to these determinants, extra weight was given to those measures which are more likely to have an impact across at least one more category response themes (i.e. reduce/shift/improve). A total of 18 options were recommended for further development in Phase 3. The outcomes of the MCA appraisal and associated justification for the scores assigned to each measure, are summarised in Table 3 of “Birmingham Clean Air Zone Feasibility Additional Measures Study”. In addition, this study identifies a further 14 additional measures that have the potential to contribute to further improving air quality post 2020 in support of the wider spending objectives and local air quality policy. These are presented in Table 4 of the aforementioned study;
. Phase 3 involved considering whether traffic and air quality modelling approaches could be developed for the selected measures to determine the potential for measures to be represented within the respective CAZ modelling scenarios. This resulted in a shortlist of 11 additional measures/packages of measures to be taken forward for quantitative traffic and air dispersion modelling.
Shortlist of Options
The shortlisted packages of options from Table 6-1 are presented in Table 6-4.
Table 6-4 Shortlisted Options
Shortlisted Options Commentary
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1. Class C Clean Air Zone (CAZ C) - A charging CAZ C with additional measures
2. Class C Clean Air Zone (CAZ C) - A charging CAZ C with additional measures with additional measures
3. Class C Clean Air Zone (CAZ D) A charging CAZ D
4. Class C Clean Air Zone (CAZ D) - A charging CAZ D with additional measures with Additional Measures
The shortlist of additional measures for further consideration, as part of the above CAZ options, are:
. Increase LPG refuelling for Hackney Carriages, the installation of rapid EV infrastructure for taxi and private hire vehicles, retrofitting of black taxis to LPG and zero emission buses/retrofitting of public transport fleet;
. Parking Strategy – remove free parking, parking charging and permits graded by vehicle standard or zone charges;
. Speed Enforcement – average speed enforcement along the A38 and near Dartmouth Circus to manage traffic and smooth flows;
. Speed reduction – reduce speed limits on certain routes and use variable speed limits . Public Transport Improvement Measures - Highway/infrastructure improvements to bus services to make them more viable and accessible to the public and increase bus priority schemes, restrict traffic on Moor Street Queensway to bus, taxi and cycle only and close Park Street to all traffic;
. Incentivise or subsidise sustainable travel by up to 50% to improve public transport patronage;
. Ban the route of traffic travelling northbound on Suffolk Street Queensway that exits onto Paradise Circus to then Access Sand pits parade;
. Ban the route of traffic travelling northbound on Suffolk Street Queensway that exits onto Paradise Circus and St Chads;
. Close junction on Dartmouth Middleway between Lister Street and Great Lister Street to avoid stop start traffic and reduce congestion;
. Re-signing and rerouting scheme for the A38 and banning all through traffic (and HGVs only) on the A38 around Paradise Circus diverting traffic to A4540; Enhanced bus partnership with the wider area of Birmingham.
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Appendix 1B Long List/Short List optioneering process Summary table of impacts
CAZ Option Summary
Option Air Quality Exceedance Impact Costs Summary Impact Locations
Congestion Users - Users - Health/ Vehicle Implementation +ves: –ves / Travel Welfare Charges Environmental Upgrade Time / Operating Costs
CAZ C Improvement in A4540 Lawley Negative No welfare Negative CAZ C delivers Both CAZ C & £45m across 10 Affects fewer Delivers Inside the emissions does Middleway but small impacts as impacts on lower benefits D share years vehicles compliance Ring Road not achieve impact:- cars not taxi, LGV, in terms of similar costs (resulting in later ~ 2022 (A4540) sufficient Garrison Circus £6m impacted HGV emissions of across vehicle Costs for both lower upgrade (Outside CAZ) = CAZ scenarios Reduced wider (Higher price reductions in owners NOx and PM10 types - CAZ C costs); Less band) order to meet 41.8 µg/m3 although the is slightly are similar significant health benefits = - £112m compliance in A4100 Digbeth differences are better as it economic Does not 2020 = 41.5 µg/m3 not very large does not impacts achieve when include cars:- Predicted compliance in A38 between measured in £37m 2020 concentrations Children's gross are still above the Hospital and emissions (i.e. NO2 limit on the Dartmouth tonnes rather A38 and ring Circus = 42.6 than road. µg/m3 concentrations ). ~£24m Additional Suffolk St reductions of up Queensway (nr to 11-31% are Beak St) = 45 required (outside µg/m3 and inside the CAZ, respectively).
CAZ C + Improves air A4540 Lawley Negative Welfare Negative The CAZ D Both CAZ C & £47m across 10 Affects fewer May deliver Additional quality with Middleway impact: impacts impacts on plus additional D share years + vehicles compliance Measures reductions in the from taxi, LGV, measures similar costs ongoing costs (resulting in later, but due
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Inside the number of - Garrison Circus -£22m cancelled HGV represents across vehicle of Additional lower upgrade to better Ring Road exceedance (Outside CAZ) = trips due owners £36m in total types - CAZ C Measures costs); distributional (A4540) locations to 17 42.0 µg/m3 to parking = - £162m benefits over is slightly (being Less significant impacts it may (Higher price exceedance charges the 10-year better as it calculated) economic be worth band) locations A4100 Digbeth = -£40m period - does not impacts investigating City Centre remaining = 39.9 µg/m3 additional include cars: the level of Network A38 between improvements -£35m difference Changes + Children's of £12m between this Signing & Hospital and compared the option and Rerouting Dartmouth CAZ C alone. CAZ D plus Further Circus = 42.3 additional retrofits/upg µg/m3 measures rades - Taxis, LGVs Suffolk St Parking Queensway (nr Measures Beak St) = 45.1 µg/m3
CAZ D Improves air A4540 Lawley Shows welfare Negative CAZ D delivers Would result £53m across 10 Delivers Affects more Inside the quality further by Middleway benefits in impacts impacts additional in cars years compliance vehicles Ring Road reducing - Garrison Circus terms of from on taxi, benefits in upgrading as faster ~ 2021 (hence greater (A4540) emissions from (Outside CAZ) = transport cancelled LGV, HGV, terms of well as other Costs for both upgrade (Higher price cars but predicted 41.5 µg/m3 user travel trips due and cars emissions of vehicles CAZ scenarios Greater health costs); are similar benefits band) concentrations time and to CAZ NOx and PM10 upgrade costs would still be A4100 Digbeth vehicle charges Greater although the -£55m More = 40.3 µg /m3 impact on More upgrades significant above NO2 limit operating = -£21m differences are under CAZ D on the A38 and cost population not very large economic A38 between = - £176m delivers impacts ring road in 2020. Children's savings: when greater CO2 Hospital and £23m measured in emission Does not Dartmouth gross savings and achieve Circus = 40.6 µg emissions (i.e. other compliance in /m3 tonnes rather secondary 2020 than benefits Suffolk St concentrations Queensway (nr ). ~£26 Beak St) = 42.7 µg /m3
CAZ D + Significant A4540 Lawley Shows welfare Negative The CAZ D Cost of £55m across 10 Delivers Additional Additional reductions in the Middleway benefits in impacts impacts plus additional compliance years + compliance welfare Measures number of - Garrison Circus terms of from on taxi, measures for users who ongoing costs faster ~ 2021 impacts due to Inside the exceedance (Outside CAZ) = transport cancelled LGV, HGV, represents upgrade their of Additional (but could be cancelled trips Ring Road locations from 12 41.5 µg /m3 user travel trips due and cars £38m in total vehicle is Measures 2020 due to parking (A4540) with a CAZ D time and to parking benefits over estimated to (being depending on charges are A4100 Digbeth Greater
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(Higher price alone, to 6 = 38.8 µg /m3 vehicle and CAZ impact on the 10-year be lower than calculated) impact of expected to band) exceedances in operating charges = population period - the CAZ D upgrade to result in a City Centre 2020 with A38 between cost -£54m = - £224m additional This is petrol and consumer Network additional Children's savings, improvements because some Euro6d) surplus loss of Changes + measures Hospital and though of £12m users face an CAZ D plus around £54m, Signing & Dartmouth less than compared the additional additional over the 10- Rerouting Circus = 40.3 µg CAZ D CAZ D alone. parking measures year period. Further /m3 alone charge in the represents retrofits/ Suffolk St = £11m city centre £38m in total upgrades - Queensway (nr and will thus benefits over Taxis, LGVs Beak St) = 42.7 choose to the 10-year Parking µg /m3 change mode period - Measures or avoid the additional CAZ zone improvements = -£54m of £12m compared the CAZ D alone.
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Longlist to Shortlist Tests
Table 6-5 Other Measures Considered
Type Tests Reason to Exclude Additional Testing
Network Average speed enforcement near Analysis of modelled speeds indicated that average speeds were lower None to Dartmouth Circus to manage than the optimal speeds for limiting emissions, so no benefit in reducing traffic and smooth flows. the speed limit.
Average speed enforcement along Analysis of modelled speeds indicated that average speeds were lower None the A38 to manage traffic and than the optimal speeds for limiting emissions, so no benefit in reducing smooth flows the speed limit.
CAZ Ban on HGV and LGVs on the The reconfiguration of junctions along on the A4050, as a result of HS2 None Variations Eastern section of the ring road construction means that HGVs cannot be U-turned on the ring road. This (A4050) would prevent access to the HS2 construction site and freightliner terminal which means it is not a feasible option.
Outer CAZ C Charge (Within The options tested already increases traffic on the A4040 and on Highways An updated SATURN model is being A4040) England motorway network. An additional CAZ will worsen these impacts produced adding network detail outside of to an unacceptable level. the City Centre allowing for a more robust assessment of impacts outside of the City A City Centre CAZ results in a relatively high number of vehicles to be Centre. bought/ swapped. An additional outer CAZ will affect a significantly larger number of vehicles with significant likelihood that this would put pressure An outer CAZ will be tested in this model on the 2nd hand market. assess the impacts of removing through traffic on AQ in the City Centre. This could The cost and practicality of implementing the option will be prohibitive. help support policies, such as signage to remove through traffic.
Outer CAZ D Charge (Within The options tested already increases traffic on the A4040 and on Highways As above. A4040) England motorway network. An additional CAZ will worsen these impacts to an unacceptable level.
A City Centre CAZ results in a relatively high number of vehicles to be bought/ swapped. An additional outer CAZ will affect a significantly larger number of vehicles with significant likelihood that this would put pressure on the 2nd hand market.
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Type Tests Reason to Exclude Additional Testing
The cost and practicality of implementing the option will be prohibitive.
Higher charges during the peaks. Legal AQ limits cannot be achieved when applied across the whole day so This can be considered when more detaile no little benefit likely in reducing charges in the off peak. implementation of the scheme is considere for FBC.
Incentivisation of petrol over No practical/ legal process to do this has been identified. To be considered if sensitivity testing diesel indicates that this will provide benefits an if a practical solution can be identified.
Public Incentivise or subsidise Ongoing work with TfWM and operators to develop an option that can Ongoing Transport sustainable travel by up to 50% deliver mode shift for reasonable costs. to improve public transport patronage
Car Sharing Incentivise Car Sharing Ongoing work with TfWM to develop a car sharing policy Ongoing
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Table 6-6 Additional Measures to Test
Type Test ID Summary Results FBC
Fleet (low Fleet 1 Increase LPG refuelling for Hackney Carriages Electric Vehicle upgrade estimated to remove 1.6% of total vehicle kilometres Include in emission) and the installation of rapid EV infrastructure from the City Centre network in a CAZ D scenario. Given that taxi and PHVs FBC for taxi and private hire vehicles. are predominately the AQ impacts are amplified and provide a significant reduction in NO2 emissions. Retrofitting of black taxis to LPG LPG retrofit has a less significant impact on overall AQ levels, but will provide Assumptions tested: benefits at locations with high taxi flows. 85 taxis upgraded to Electric vehicle
441 PHVs upgraded to Electric Vehicle 65 taxis retrofitted to LPG
Fleet 2 Zero emission buses (new Hydrogen buses) Reduction in emissions focused on key corridors Include in FBC
Parking Parking 1 Remove all free parking from BCC controlled Around 15% of traffic parking in the City Centre currently parks on free on Include in areas. Replaced with paid parking spaces. street parking. Our modelling indicates that this will reduce car demand with FBC Assume cost of parking in line with BCC off- free parking by around 30%. This leads to around a 2.5% reduction in overall street parking. vehicles KMs, resulting in a reasonably significant reduction in emissions, although this is limited in the key locations (failing the legal limits) as the impacts are focused on the outer areas of the City Centre.
An additional benefit is that it raises revenues of the City Centre which will be re-invested in mitigating the effects of the CAZ.
Network Network 1 Ban traffic entering (SB) or leaving (NB) Provides a reduction in overall traffic levels and reduces delays on the A38 at a Include in Changes Suffolk Street Queensway (A38) from Paradise key location, forecasted to exceed legal emission levels. FBC Circus, other than local access. Reduces traffic through Paradise Circus an area with high pedestrian flows linking one of Birmingham’s main cultural quarters, to the shopping/ business district and New Street Station. Paradise is the focus of one the city centre’s main masterplan areas, so removing traffic will support this regeneration.
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Type Test ID Summary Results FBC
Network 2 Close Lister Street and Great Lister Street at Reduction in delay on the A4540 ring road, including less traffic needing to Include in the junction with Dartmouth Middleway. This stop (and accelerate away from the junction) due to the removal of the signal FBC allows, more green time for the A4540. stage for traffic crossing the road.
This also provides a mitigation for increases in traffic caused by the CAZ charge for through trips on the A38.
Network 3 Ban on CAZ through trips for all vehicle types. Provides significant improvement to air quality in the City Centre. However, Exclude this causes significant increases on the Eastern section of the ring road which from FBC exceeds the legal NO2 limits.
In addition, the model shows large increases on local roads outside of the CAZ area which worsens AQ on these local residential roads.
There are also issues with the practicality of implementing this option on the ground.
Network 4 Ban on CAZ through trips for LGV and HGV As above Exclude vehicles. from FBC
Network 5 CAC C or D on the ring Eastern section of the Significant diversion to local roads outside the CAZ increasing emissions on Exclude ring road. these smaller residential roads. from FBC There is a need to reduce overall traffic (not just non-compliant) to meet compliance so the CAZ does not solve the issue on its own.
Public PT_1 Highway/infrastructure changes to provide bus Impact on mode shift forecast to be small, less than 1% reduction in overall Exclude Transport priority 4 corridors were tested, as agreed with trips into the City Centre, with high costs to implement. from FBC TfWM who said they could delivered by 2020 ID 19 & 21
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Appendix 1C Measures not modelled ID (As per 'Additional Earliest delivery Potential Additional Measure Modelling status Measures date Study')
Development of a freight partnership for 1 2021 Not currently modelled city centre deliveries
2 Freight consolidation centres 2022 Not currently modelled
Cargo hopper/ULEV deliveries from 3 2022 Not currently modelled freight centres
Local delivery hubs including cycle/EV 4 2022 Not currently modelled logistics
5 Provide hold back parking for HGV's 2022 Not currently modelled
6 Off peak loading and unloading permits 2021 Not currently modelled
7 Loading and Unloading code of practice 2021 Not currently modelled
Develop and implement a mass transit 22 2022 Not currently modelled network (Sprint)
Post 2022 for the Increase the number and use of park and scale of 24 ride schemes to coincide with rail and Not currently modelled implementation metro services needed
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ID (As per 'Additional Earliest delivery Potential Additional Measure Modelling status Measures date Study')
Post 2022; subject to 26 Further extensions of the Metro system availability of Not currently modelled additional funding
Reopen Camp Hill Rail Chords line for rail Post 2022 - part of 27 Not currently modelled commuters long term plan
Open stations on the Camp Hill Line at 28 Moseley, Kings Heath and Hazelwood to 2022 Not currently modelled passenger services
Post 2022 - untested due to physical New Street Station - night freight 29 delivery and Not currently modelled deliveries collaboration requirements
Post 2022 due to physical delivery and 30 Birmingham Canal Network Not currently modelled collaboration requirements
45 Enforce the existing network of red routes 2021 Not currently modelled
Post 2022 for the scale of 46 Extend the network of red routes Not currently modelled implementation needed
Post 2022 for the Walking and cycling Infrastructure scale of 57 including adopting a 'safe systems' Not currently modelled implementation approach to road safety needed
Post 2022 due to Use the NEC car park for parking outside collaboration 70 of the city with direct links for train and Not currently modelled constraints; and bus services into the city impact unclear
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ID (As per 'Additional Earliest delivery Potential Additional Measure Modelling status Measures date Study')
Post 2022 for the scale of 90 Regional low emission refuelling networks implementation Not currently modelled needed; and impact unclear
Post 2022 for the scale of impact 91 Mass transit network Not currently modelled needed; and impact unclear
Link up the Birmingham Urban Traffic Post 2022 - impact 92 Management Control (UTMC) with that of Not currently modelled unclear Highways England
West Midlands Borough's Consolidation Post 2022 - impact 96 Not currently modelled centre unclear
Post 2022 - Standardised approach to regional out of 103 collaboration Not currently modelled hours deliveries constraints
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Appendix 1D Planned Sensitivities
Planned Sensitivities
These planned sensitivities are still under discussion with JAQU and the final list of sensitivities run may be different that the list in Table 6-7.
Table 6-7 Planned Sensitivities
Model Elements Tests Purpose Method
Traffic Growth 1) Low Growth - City Centre Impact of different levels of traffic Mixture of traffic is flat + existing model growth. Uncertainty around growth of quantitative assumptions for outer areas. the city and highway mode share. assessment of likely impacts and Full 2) Low/ Medium Growth - PRISM forecasts higher City Centre model rerun. TEMPRO trip growth for City growth and lower wider Birmingham Centre (rather than PRSIM growth highway trip growth than growth updated with TEMPRO taken directly from TEMPRO, so this demographic/ land use), with will test the difference between the PRISM growth for outer areas two models. (lower than TEMPRO directly). NB - PRISM is updated with TEMPRO 3) High Growth - Apply demographic growth and trip TEMPRO trip growth to the generation/ mode share generated by outer areas on existing City PRISM based on locally calibrated Centre growth. data.
Behavioural 1) Apply published JAQU Uncertainty around response to Mixture of Responses to responses charge tested by using other projects quantitative Charging research looking at Clean Air assessment of likely 2) Apply TfL ULEZ responses Charging. impacts and Full directly model rerun. 3) Emerging research implemented into BCC CAZ.
Cost to Upgrade 1) Assume JAQU latest, new Uncertainty around cost to upgrade, Mixture of vehicle costs to current people’s choice of upgrade vehicle quantitative assumptions. and impact on secondary market in assessment of likely large increase in vehicle purchasing/ impacts and Full 2) Apply JAQU behavioural sales. model rerun. assumptions on new vehicle upgrades
3) Apply JAQU behavioural assumptions on new vehicle upgrades, and assume all old non-compliant vehicles scrapped (£0 sale value and no fee for scrappage)
4) Assume HGV users assess cost to upgrade over 3 rather than 5 years.
Base Year 1) Scale up HGV flows based Impact of errors in base year model Post model Factoring Correction on mismatch between base assessed, particularly the PM peak year and observed counts models overall impact on results. crossing the screen line. 2) Scale up PM peak flows by
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5% 3) Scale down PM peak flows 5%
Taxi 1) Develop test that does not Impact of Taxi Assumptions. Full model rerun force an upgrade to compliant (only taxis changed) vehicle based on licensing rules. 2) Factor flows at key locations based on traffic counts/ ANPR to ensure that taxi/ phv proportions are correctly captured, and that any benefits to the policy is correctly captured.
Congestion 1) Increase delays by 5% Impact of congestion on AQ. Risk that Post model Factoring over/ underestimation of delay is 2) Decrease delays by 5% impacting AQ results and where to 3) Assess Delays at key focus policy. locations and if applicable increase modelled speeds by more than above.
Fleet 1) Latest assumptions on when Uncertainty in change in fleet Mix of full model Euro classes enter the fleet makeup. rerun and post tested (this test is underway). model factoring. 2) Assume age of fleet increases over time (less compliant vehicles naturally enter the fleet) 3) Assume petrol proportion increases over time.
4) Assume more people upgrade to electric.
Parking 1) Low Parking Test - assume Test on impact of parking policy. Mixture of proportion of traffic will have quantitative access to parking permits assessment of likely reducing cost of parking for impacts and Full frequent users. As being model rerun. developed in current policy.
2) High Parking Test - Removing free parking pushes up cost to park in off-street parking.
Strategic 1) Test preferred policy in new Better understand impacts beyond Mixture of Rerouting SATURN model with better City Centre. quantitative detail in the wider model to assessment of likely better understand strategic impacts and full rerouting/ rat-running. model rerun. 2) Test rerouting option of an outer CAZ to demonstrate full impact of an outer CAZ and
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potential for removing wider area rerouting.
Trip distribution Compare with analysis being Build in checks on observed data to Comparative undertaken by wider team, ensure synthetic matrices do not Analysis using ANPR, postcode data etc. under/ overestimate key movements to ensure that knowledge of and that this biases the results. trip distribution in the area is being correctly collected.
Mode Shift/ Depending on available time/ Check removal of highway capacity Mixture of Distribution etc. budget changes in demand/ and increased cost to drive is quantitative of full policy distribution will be assessed reflected in traffic growth. assessment of likely by: impacts and Full model rerun. · Benchmarking sensitivities and deriving responses to measures to apply to demand matrices · Rerun of PRISM demand model
Copert Emissions BCC awaiting advice from JAQU Determine if changes to fleet due to Applications of Factors on how to respond to this CAZ interventions are appropriate uplifts in EFT. issue, including evidence Comparison of referenced by the T-IRP, and modelled NOx whether JAQU will respond to outputs. the T-IRP on behalf of all cities. Potential tests might include adjustment of the emissions factors for certain vehicle types/fuels/Euro standard.
Met data Use of hourly sequential met Test whether use of statistical (and Run Base, DM and data. scaled data by SMHI) met data CAZ in AirViro. impacts dispersion
Verification using Use of local NOx to NO2 Uncertainty in f- NO2 in emissions Apply road NOx from f- NO2 from CMs relationship vs EFT to test f- factors CM only, and then NO2 total not from DTs (if sufficient no. of analysers)
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Appendix 2A High Level Appraisal of Options against CSF’s High Level Appraisal of Options against Critical Success Factors
Introduction
This appendix:
. identifies the longlist of options that have been considered to reduce the specific sources of local exceedances of NO2 concentrations in Birmingham;
. lists the Critical Success Factors which have been used to appraise the longlist of alternative options; and,
. Describes the assessment that has been undertaken to date to reduce the longlist of options to a shortlist of options, for detailed appraisal in the Preferred Option Business Case.
Longlist of Options
The longlist of options is set out in Error! Reference source not found.. The longlist of additional measures 104 in total) is set out in Table 1 (p3-26) of the “Birmingham Clean Air Zone Feasibility Additional Measures Study.”
Table 6-8 Longlist of Options
Option Commentary
L1 Do Minimum Baseline option to demonstrate why taking action is necessary
L2 Class A Clean Air Zone A charging CAZ A (CAZ A) Class A vehicles (Buses, coaches, taxis and private hire vehicles) that do not meet Euro emission standards would be charged.
L3 Class B Clean Air Zone A charging CAZ B (CAZ B) Class B vehicles (Class A plus Heavy goods vehicles (HGV’s))
L4 Class C Clean Air Zone A charging CAZ C (CAZ C) Class C vehicles (Class B plus Large vans, minibuses, small vans/light commercials) that do not meet Euro emission standards would be charged.
L5 Class D Clean Air Zone A charging CAZ D (CAZ D) Class D vehicles (Class C plus cars) that do not meet Euro emission standards would be charged.
L6 Non charging CAZ -with A non-charging CAZ with additional measures additional measures
L7 Class A Clean Air Zone A charging CAZ A with additional measures (CAZ A) - with additional measures
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Option Commentary
L8 Class B Clean Air Zone A charging CAZ B with additional measures (CAZ B) - with additional measures
L9 Class C Clean Air Zone A charging CAZ C with additional measures (CAZ C) - with additional measures
L10 Class D Clean Air Zone A charging CAZ D with additional measures (CAZ D) - with Additional Measures
It is clear from Table E1 that three broad types of options have been identified:
. 4 charging CAZ options (class A, B, C and D); . 4 packages of options, with additional measures considered in conjunction with a CAZ scheme (class A, B, C and D);
. A non-charging CAZ with a package of measures. Long list option assessment
In order to gauge the primary CSF’s relation to the longlisted options traffic and air quality modelling undertaken on CAZ C and CAZ D options to determine their relative position to achieving compliance. These model runs demonstrated that implementation of a charging ‘class C’ or ‘class D’ Clean Air Zone (CAZ), would be insufficient to achieve AQ compliance in 2020. As CAZ D has great impacts on traffic due to including the car vehicle class, it will achieve compliance in the shortest possible time and was brought forward.
Under a class D CAZ (where non-compliant cars are subject to charging), concentrations of NO2 reduce by an additional 1.5 µg/m3 inside the CAZ, with a medium charge, and by 1.8 µg/m3 for a high charge, beyond the CAZ C high scenario. There are still places, however, where the legal limits are predicted to be exceeded on the A38 and ring road. It is estimated that additional reductions of up to 9% and 19% are required, outside and inside the CAZ, respectively, to remove these exceedances.
Although a CAZ ‘A’ and CAZ ‘B’ scheme have not been explicitly modelled, it is clear that if a ‘class C’ or ‘class D’ CAZ would be insufficient to ensure compliance, then a CAZ ‘A’ or CAZ ‘B’ scheme would also be insufficient.
Options L2 - L5 in Error! Reference source not found. have therefore been rejected.
Appraisal of Additional measures
The appraisal of additional measures has been delivered in 3 phases:
. Phase 1 involved assessing the longlist of additional measures (104 in total) against some high-level criteria to eliminate those that clearly do not contribute to the Critical Success Factors. A total of 31 options were identified within the context of contributing to the primary objective;
. Phase 2 involved developing and applying a Multi Criteria Analysis (MCA) framework to rigorously appraise each option taken forward from Phase 1 to identify those that should be taken forward for further development. This involved assessing each option against the CSF and scoring each measure. A total of 18 options were recommended for further development in Phase 3. The outcomes of the MCA
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appraisal and associated justification for the scores assigned to each measure, are summarised in Table 3 of “Birmingham Clean Air Zone Feasibility Additional Measures Study”. . Phase 3 involved considering whether traffic and air quality modelling approaches could be developed for the selected measures to determine the potential for measures to be represented within the respective CAZ modelling scenarios. This resulted in a shortlist of 11 additional measures/packages of measures to be taken forward for quantitative traffic and air dispersion modelling. Shortlist of Options
The shortlisted packages of options from Error! Reference source not found. are presented in Error! ference source not found..
Table 6-9 Shortlisted Options
Shortlisted Options Commentary
1. Class C Clean Air Zone (CAZ C) - with additional measures A charging CAZ C
2. Class C Clean Air Zone (CAZ C) - with additional measures A charging CAZ C with additional measures
3. Class C Clean Air Zone (CAZ D) A charging CAZ D
4. Class C Clean Air Zone (CAZ D) - with Additional Measures A charging CAZ D with additional measures
The shortlist of additional measures for further consideration, as part of the above CAZ options, are:
. Increase LPG refuelling for Hackney Carriages, the installation of rapid EV infrastructure for taxi and private hire vehicles, retrofitting of black taxis to LPG and zero emission buses/retrofitting of public transport fleet;
. Parking Strategy – remove free parking, parking charging and permits graded by vehicle standard or zone charges;
. Speed Enforcement – average speed enforcement along the A38 and near Dartmouth Circus to manage traffic and smooth flows;
. Speed reduction – reduce speed limits on certain routes and use variable speed limits . Public Transport Improvement Measures - Highway/infrastructure improvements to bus services to make them more viable and accessible to the public and increase bus priority schemes, restrict traffic on Moor Street Queensway to bus, taxi and cycle only and close Park Street to all traffic;
. Incentivise or subsidise sustainable travel by up to 50% to improve public transport patronage;
. Ban the route of traffic travelling northbound on Suffolk Street Queensway that exits onto Paradise Circus to then Access Sand pits parade;
. Ban the route of traffic travelling northbound on Suffolk Street Queensway that exits onto Paradise Circus and St Chads;
. Close junction on Dartmouth Middleway between Lister Street and Great Lister Street to avoid stop start traffic and reduce congestion;
. Re-signing and rerouting scheme for the A38 and banning all through traffic (and HGVs only) on the A38 around Paradise Circus diverting traffic to A4540;
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. Enhanced bus partnership with the wider area of Birmingham. . Option Shortlist Tests . Table 6-10: Other Measures Considered Type Tests Reason to Exclude Additional Testing
Network Average speed Analysis of modelled speeds indicated that No enforcement near to average speeds were lower than the optimal Dartmouth Circus to speeds for limiting emissions, so no benefit in manage traffic and reducing the speed limit. smooth flows.
Average speed Analysis of modelled speeds indicated that No enforcement along the average speeds were lower than the optimal A38 to manage traffic speeds for limiting emissions, so no benefit in and smooth flows reducing the speed limit.
CAZ Ban on HGV and LGVs on The reconfiguration of junctions along on the No Variations the Eastern section of A4050, as a result of HS2 construction the ring road (A4050) means that HGVs cannot be U-turned on the ring road. This would prevent access to the HS2 construction site and freightliner terminal which means it is not a feasible option.
Outer CAZ C Charge The options tested already increases traffic An updated SATURN model (Within A4040) on the A4040 and on Highways England is being produced adding motorway network. An additional CAZ will network detail outside of worsen these impacts to an unacceptable the City Centre allowing for level. a more robust assessment of impacts outside of the A City Centre CAZ results in a relatively high City Centre. number of vehicles to be bought/ swapped. An additional outer CAZ will affect a An outer CAZ will be tested significantly larger number of vehicles with in this model to assess the significant likelihood that this would put impacts of removing pressure on the 2nd hand market. through traffic on AQ in the City Centre. This could help The cost and practicality of implementing the support policies, such as option will be prohibitive. signage to remove through traffic.
Outer CAZ D Charge The options tested already increases traffic As above. (Within A4040) on the A4040 and on Highways England motorway network. An additional CAZ will worsen these impacts to an unacceptable level. A City Centre CAZ results in a relatively high number of vehicles to be bought/ swapped. An additional outer CAZ will affect a significantly larger number of vehicles with significant likelihood that this would put pressure on the 2nd hand market. The cost and practicality of implementing the option will be prohibitive.
Higher charges during Legal AQ limits cannot be achieved when This can be considered the peaks. applied across the whole day so no little when more detailed benefit likely in reducing charges in the off implementation of the peak. scheme is considered for
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Type Tests Reason to Exclude Additional Testing
FBC.
Incentivisation of petrol No practical/ legal process to do this has To be considered if over diesel been identified. sensitivity testing indicates that this will provide benefits and if a practical solution can be identified.
Public Incentivise or subsidise Ongoing work with TfWM and operators to Ongoing Transport sustainable travel by up develop an option that can deliver mode shift to 50% to improve public for reasonable costs. transport patronage
Car Incentivise Car Sharing Ongoing work with TfWM to develop a car Ongoing Sharing sharing policy
.
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. Table 6-11 Additional Measures to Test Type Test ID Summary Results POBC
Fleet (low Fleet 1 Increase LPG refuelling for Electric Vehicle upgrade estimated to remove Include in emission) Hackney Carriages and the 1.6% of total vehicle kilometres from the City FBC installation of rapid EV Centre network in a CAZ D scenario. Given infrastructure for taxi and private that taxi and PHVs are predominately the AQ hire vehicles. impacts are amplified and provide a significant reduction in NO2 emissions. Retrofitting of black taxis to LPG LPG retrofit has a less significant impact on Assumptions tested: overall AQ levels, but will provide benefits at 85 taxis upgraded to Electric locations with high taxi flows. vehicle
441 PHVs upgraded to Electric Vehicle 65 taxis retrofitted to LPG
Fleet 2 Zero emission buses (new Reduction in emissions focused on key Include in Hydrogen buses) corridors FBC
Parking Parking Remove all free parking from Around 15% of traffic parking in the City Include in 1 BCC controlled areas. Replaced Centre currently parks on free on street FBC with paid parking spaces. parking. Our modelling indicates that this will Assume cost of parking in line reduce car demand with free parking by with BCC off-street parking. around 30%. This leads to around a 2.5% reduction in overall vehicles KMs, resulting in a reasonably significant reduction in emissions, although this is limited in the key locations (failing the legal limits) as the impacts are focused on the outer areas of the City Centre.
An additional benefit is that it raises revenues of the City Centre which will be re-invested in mitigating the effects of the CAZ.
Network Network Ban traffic entering (SB) or Provides a reduction in overall traffic levels Include in Changes 1 leaving (NB) Suffolk Street and reduces delays on the A38 at a key FBC Queensway (A38) from Paradise location, forecasted to exceed legal emission Circus, other than local access. levels. Reduces traffic through Paradise Circus an area with high pedestrian flows linking one of Birmingham’s main cultural quarters, to the shopping/ business district and New Street Station. Paradise is the focus of one the city centre’s main masterplan areas, so removing traffic will support this regeneration.
Network Close Lister Street and Great Reduction in delay on the A4540 ring road, Include in 2 Lister Street at the junction with including less traffic needing to stop (and FBC Dartmouth Middleway. This accelerate away from the junction) due to the allows, more green time for the removal of the signal stage for traffic crossing A4540. the road. This also provides a mitigation for increases in traffic caused by the CAZ charge for through trips on the A38.
Network Ban on CAZ through trips for all Provides significant improvement to air Exclude from 3 vehicle types. quality in the City Centre. However, this FBC causes significant increases on the Eastern section of the ring road which exceeds the
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Type Test ID Summary Results POBC
legal NO2 limits. In addition, the model shows large increases on local roads outside of the CAZ area which worsens AQ on these local residential roads.
There are also issues with the practicality of implementing this option on the ground.
Network Ban on CAZ through trips for LGV As above Exclude from 4 and HGV vehicles. FBC
Network CAC C or D on the ring Eastern Significant diversion to local roads outside the Exclude from 5 section of the ring road. CAZ increasing emissions on these smaller FBC residential roads.
There is a need to reduce overall traffic (not just non-compliant) to meet compliance so the CAZ does not solve the issue on its own.
Public PT_1 Highway/infrastructure changes Impact on mode shift forecast to be small, Exclude from Transport to provide bus priority 4 corridors less than 1% reduction in overall trips into the FBC were tested, as agreed with City Centre, with high costs to implement. TfWM who said they could delivered by 2020 ID 19 & 21
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Appendix 5A Risk Register
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Appendix 5B Programme
See page below
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Birmingham City Council Clean Air Zone Full Business Case
Appendix 5C Stakeholder Management Plan Stakeholder Stakeholder Social Existin Traditional Stakehol One of: Public Printed sector example (not medi g email media der & Roadside signs transport flyers comprehensive) a & other (press communi (recommend), user (distributio E release) ty Radio ads, Bus messagin n strategy comms networks rear ads g tbc) – incl. Councillo rs
Individuals Younger people
Disabled people
Pregnant women
People from BME communities
City centre residents
City centre workers
Residents along major roads
People frequently driving to the city centre in diesel cars
People driving significant distances in Birmingham within job
Business & Business Economy Improvement Districts (especially city centre)
Chamber of Commerce
Federation of Small Businesses
Greater Birmingham and Solihull LEP
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Stakeholder Stakeholder Social Existin Traditional Stakehol One of: Public Printed sector example (not medi g email media der & Roadside signs transport flyers comprehensive) a & other (press communi (recommend), user (distributio E release) ty Radio ads, Bus messagin n strategy comms networks rear ads g tbc) – incl. Councillo rs
Individual businesses
Education & Universities Skills Colleges
Schools
Environmen Environmental t & Groups Sustainabilit y
Health & Public Health England/Lap
Wellbeing Clinical Commissioning Groups
Hospitals, GP surgeries, etc.
Housing & Housing Communitie Associations s Tenants’ and residents’ groups
Media, Local Communica Press/Media tion ns & Marketing BBC WM
West Midlands Growth Company
Science & Universities Technology Science Parks
Transport Transport for West Midlands
Highways
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Stakeholder Stakeholder Social Existin Traditional Stakehol One of: Public Printed sector example (not medi g email media der & Roadside signs transport flyers comprehensive) a & other (press communi (recommend), user (distributio E release) ty Radio ads, Bus messagin n strategy comms networks rear ads g tbc) – incl. Councillo rs
England
Public Transport operators
Political Birmingham Councillors
Birmingham MPs/MEPs
WM Mayor
WMCA
Other WM elected members/LAs
BCC BCC departments
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Appendix 5D Monitoring and Evaluation Plan Note – the cost information contained in this appendix is accurate, as per section 5.4 the financial model will be updated to reflect the costs in this appendix in January 2019.
Birmingham City Council are proposing to implement a Clean Air Zone (CAZ) within the city centre, bounded by the middle ring road (A4540). The Birmingham CAZ will be a charging class D CAZ (CAZ D), meaning that all vehicles (apart from two wheelers) which aren’t compliant under euro emission standards will be subject to a daily entry charge. The measure of compliance will be Euro 6 for diesel vehicles and Euro 4 for petrol vehicles. A set of additional measures are also being proposed as supplementary to the CAZ D in order to improve air quality within the zone to the required level: Parking restrictions will be implemented to convert all currently free, council controlled, free parking within the CAZ to spaces which have a charge applied; Closing the junctions between Lister Street and Great Lister Street and Dartmouth Middleway to all traffic apart from buses, i.e. making the road a through route; Banning northbound traffic on Suffolk Street Queensway that exits onto Paradise Circus to then access Sandpits Parade and banning southbound traffic from Paradise Circus entering the A38, i.e. making the road a through route.
The implementation of the above measures will be funded via the Governments ‘Implementation Fund’, a sufficient amount of funding inclusive of contingency is being requested via the submission of the Full Business Case to Government.
It is anticipated that the introduction of a CAZ D plus additional measures in Birmingham will have a negative impact on a number of socio-economic groups; this has been advised following a public consultation and extensive economic modelling and distributional impact analysis. As such, the City Council have developed a series of mitigation measures and exemptions to reduce the impact to those most significantly impacted.
Mitigation measures
Ref. Target group Description
M1a Individuals who work Individuals can chose between £1,000 mobility credits within the CAZ applied to a SWIFT card or in exchange for scrapping their non-compliant vehicle they can receive £2,000 SWIFT credit or £2,000 towards a compliant vehicle.
M1b Individuals who regularly In exchange for scrapping their non-compliant vehicle travel into the CAZ individuals can receive £2,000 SWIFT credit or £2,000 towards a compliant vehicle
M2a Hackney Carriage support Drivers offered £5,000 as support towards operating a package ULEV vehicle or towards the costs of installing a retrofit solution or a newly purchased vehicle.
M2b Hackney carriage leasing Access to a ULEV leasing scheme operated by the City scheme Council as well as a try-before-you-buy scheme
M2c Private Hire Vehicle PHV drivers who upgrade to a compliant vehicle which upgrade support fulfils BCC licencing conditions and is under 3 years old will receive financial aid of £2,000.
M3 Free miles for ULEV LGV’s ULEV van drivers receive £1,000 credit to spend on the BCC public charging network.
M4 HGV’s and Coach Fleets compete for £15,000 funding package to compliance fund contribute towards installing a retrofit solution or the upfront costs of a lease or purchase of a compliant vehicle.
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M6 All Marketing and engagement campaign targeted at those eligible for a mitigation or exemption.
M7 Residents around the CAZ Implementation of residents parking schemes to prevent overcrowding on the margins of the CAZ. Will only be deployed if issues arise.
Exemptions
E1/E3 Commercial Vehicles LGV/HGV/Coaches registered within the CAZ will registered within the CAZ receive an exemption (max 2 vehicles per company).
E2/E4 Commercial Vehicles with an LGV/HGV/Coaches registered in the Birmingham City existing finance agreement area travelling to the CAZ with an existing finance agreement beyond 2020 (max 2 vehicles per company).
E5 Residents of the CAZ All private car and van owners who are residents of the CAZ, as defined by DfT registration information.
E6 Individuals working in the Individuals travelling into the CAZ for work. Key CAZ workers prioritised, the remaining exemptions will be allocated on income.
E7 Residents who live outside A limited number of exemptions offered, allocation the CAZ based on distance to CAZ and income.
E8 Hospital visitors Visitors to select hospitals in the CAZ, GP offices and care homes.
E9a Community and schools Vehicles classified as section 19 operators, registered for operation in Birmingham.
E9b Disabled vehicles Vehicles with disabled or disabled passenger class.
A set of key outcomes have been identified by the City Council which must be achieved by the introduction of the CAZ D plus additional measures. The key outcome of the programme is: Deliver a scheme that leads to compliance with NO2 concentration limits (annual mean NO2 concentration of 40µg/m2) in the shortest possible time.
The scheme specific key outcomes are as follows: CAZ D: o The main objective is to modify the vehicle type profile in the city of Birmingham; encouraging people to buy compliant vehicles and delivering a modal shift to public transport and other sustainable modes. o The expected outcome is to reduce NO2 levels below the legal limits within the shortest possible time. Additional measures: o Reductions in traffic flows within the city centre and across the wider Birmingham area due to changes to traffic patterns may also have a beneficial impact on health by further encouraging people to walk or cycle in preference to using a car, particularly for short journeys. o Reductions in traffic flows may also help to improve social cohesiveness and reduce social isolation Mitigation measures and exemptions: o Minimal impact upon the socio economic groups identified as most impacted due to the introduction of a CAZ in the Distributional Impact Assessment.
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o Increased public support for the CAZ due to a measured successful delivery of the mitigation measures and exemptions.
Birmingham City Council have availability of existing monitoring equipment, details below:
Metric Type Quantity
RTMS (DEFRA) NO2, PM10, PM2.5 1 RTMS (BCC) NO2 5 Diffusion tubes NO2 77
In line with the Joint Air Quality Unit (JAQU) guidance, the City Council plan to share the data collected from the above sources periodically on a three monthly basis. Additional data may be provided to JAQU however this must be agreed in advance between BCC and JAQU.
In order to improve Birmingham’s monitoring and evaluation capabilities and increase the robustness of the data set, the City Council are proposing to introduce additional monitoring sites, as summarised below.
Type Location Metric Cost Air Quality Various NO2, PM10, PM2.5 and £132,630.00 weather station Traffic Various Traffic £89,040.00 Total £221,670.00
There will also be an annual maintenance and operational cost associated with the running of each of these new monitoring stations, details are provided below:
Air Quality Monitoring Cost Maintenance (annual) £27,000.00 Communications (annual) £684.00 Staffing £50,000.00 Total £77,684.00
Quantitative Evaluation
Air Quality monitored v modelled
The City Council propose to compare the monitored AQ data from existing RTMS sites, proposed RTMS sites and diffusion tube sites with the model verification points every three months factored to annual, with therefore increasing accuracy as the year progresses.
The City Council also proposes to compare around ten of the worst case target determination (TD) points with new diffusion tube sites located as close to the TD point as feasible given site specific constraints.
As per Section 2.2.5, the City Council has decided to set the daily charging levels for the CAZ at £8.00 (Cars, Taxis and LGV’s) and £50.00 (HGV’s and Coaches). The charging levels have been set following detailed analysis and benchmarking against low emission zones across other European cities. The charging levels have been modelled in the transport, air quality, financial and economic models to confirm that the desired behavioural change is achieved and that compliance is achieved in the shortest possible time. The City Councils Corporate Charging Policy reviews all City Council enforced charges on an annual basis against the current level of inflation, the charges undergo a detailed review on a three yearly basis. The charges of the Clean Air Zone will be included in the scope of the City Councils Corporate Charging Policy and thus will be reviewed in line with the performance measures of the CAZ.
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Qualitative monitoring and evaluation
In addition to the quantitative measures set out above, the City Council also propose to undertake some qualitative monitoring and evaluation to assess the change in travel behaviours and the impacts of the mitigation measures and exemptions. The proposed method for doing so is a Cohort Study. The Cohort Study would comprise of some general population sampling to assess the change in travel behaviours and support for the CAZ and some targeted sampling for the mitigation measures and exemptions. It is proposed to undertake the Cohort Study at regular intervals over a period of four years to get a measure of success and impact before, during and post mitigation measure and exemption life span.
The City Council will define a set of Key Performance Indicators (KPI’s) which will be used to measure the success of the mitigation measures. KPI’s to be included could include targets for take up of each measure.
The costs for undertaking a Cohort Study are set out below:
Year 1 Year 2 Year 3 Year 4 Total Staffing £52,500 £32,000 £32,500 £32,00 £149,000 Study £18,000 £6,500 £15,500 £6,500 £46,500 Review £1,000 £0 £0 £1,000 £2,00 Hardware/software £500 £500 £500 £500 £2,000 Telecommunications £250 £250 £250 £250 £1,000 Total £200,500
Total costs
Type of monitoring Cost
Traffic monitoring £89,040.00
Air quality monitoring £210,314.00
Travel behaviours, mitigation measures and exemptions £200,500.00
Totals £499,854.00
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OPTIONS APPRAISAL 1. General Information Directorate Economy Portfolio/Committee Transport and Environment Project Title Clean Air Zone Project Code To Be Confirmed
Project Description 1.0 Foreword
The purpose of this report is to narrate the options appraisal for the implementation of a Clean Air Zone in Birmingham, this report is supplemented by the Full Business Case (FBC) which is being submitted to Government. Both this Options Appraisal report and the Government FBC are detailed in the Cabinet Report which will be considered at the Cabinet Meeting on the 11th of December 18.
2.0 Background
Poor air quality is a major cause of health problems in many cities around the world, leading to such things as respiratory diseases, cancers, diabetes and ultimately making a significant contribution towards premature deaths. Generally speaking, poor air quality in urban areas results from local transport sources which pre-date vehicles with ‘cleaner’ engines in terms of emissions.
In 2008 the European Union established their Ambient Air Quality and Clean Air for Europe Directive, setting out air pollution limits which all EU member states must comply with. The UK Government issued the Air Quality Standard Regulation in 2010 which draws down from the EU Directive in order to enforce compliance upon local UK Governments. In 2015 DEFRA updated their air quality plans, identifying the five UK cities which have the most significant air quality problems, Birmingham was one of these cities. The UK Government, through DEFRA instructed the five cities to implement mitigation measures in order to clean up their air quality in the shortest possible time.
In response, Birmingham City Council has initiated a programme of work which will implement air quality improvements in and around the City Centre. This programme is known as ‘Brum Breathes’, the overarching aim is to influence those travelling into, through and around the City Centre to use alternative modes of transport, having a positive impact on the city’s air quality; ultimately achieving the vision of reducing traffic and increasing pedestrianised areas.
The Brum Breathes programme is divided into five programmes of work which collectively achieve the overall aims and objectives. The five programmes are; Early Measures, Clean Air Zone (CAZ), Air Quality Policy, Environment Developing Infrastructure and Behaviour Change, see Appendix B1 for a diagram of the programme structure. This Options Appraisal is focused on the delivery of the CAZ Programme. A separate Options Appraisal has been submitted to the City Council for the Early Measures Programme and other elements of the Brum Breathes programme will be brought forward for approval in accordance with the Council’s governance procedures and Gateway and Related Financial Approval Framework..
In March 2017, the City Council submitted a Strategic Outline Case (SOC) to
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Government, providing a high level summary of the CAZ options which could enable Birmingham to meet compliance with the EU Directive. In order to finalise the proposals, the City Council have undertaken extensive transport, air quality, economic and financial modelling of each proposed option (detailed in the Options Appraisal section); an Outline Business Case (OBC) was submitted to Government in July 2018 which detailed this process. In July 2018 the City Council also commenced a 6 weeks public consultation on the proposed measures (consultation approved by Cabinet on June 26th 2018); a record response was received of over 10,000 responses. In September 2018 a Preferred Option Business Case (POBC) was submitted to Government (approved by Cabinet on September 10th 2018) which detailed the preferred option but also highlighted some elements of scope which required finalisation. The next step is to submit the FBC to Government which will set out the final scheme proposals, Implementation Fund request and Clean Air Fund (CAF) request (see below).
The funding available from Government for the delivery of the CAZ and associated measures is divided into two funding streams; (1) Implementation Fund and (2) Clean Air Fund (CAF). (1) is for the delivery of the physical infrastructure such as signs, cameras, etc. (2) is for the delivery of the measures which are proposed to mitigate the impact of the CAZ on specific affected socio-economic groups (see Section 9.0). The funding being requested is outlined below. More detail can be found in the Budget Information section.
Funding stream Value £m Implementation Fund £17.845 Clean Air Fund £50.861 Total £68.706
3.0 Clean Air Zone Programme description
Overview
During the Feasibility phase of this project, extensive air quality and traffic modelling has been undertaken to help predict the impact of the introduction of a CAZ. The modelling has prompted the decision to implement a “CAZ D” bounded by the middle ring road (A4540). This will require all commercial and private vehicles which are non-compliant by euro emission standard (Euro 4 Petrol, Euro 6 Diesel), other than two wheeled vehicles, to pay a daily charge to enter the zone. The CAZ will be enforced by Automatic Number Plate Recognition (ANPR) cameras which will be situated around the boundary on the majority of the in-roads to the city centre, a number of additional camera sites are being proposed within the zone which will be at strategic locations (key junctions/roundabouts).
The modelling also shows that the introduction of the CAZ D alone will not be sufficient to achieve compliance, as such a set of additional measures have been developed which will enable the city to achieve compliance in the shortest possible time. The additional measures which will be implemented are:
Additional on-street parking controls which will remove all City Council controlled free parking within the CAZ, converting the spaces to ones where a charge will apply;
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Closing the junctions between Lister Street and Great Lister Street and Dartmouth Middleway to all traffic apart from buses, i.e. making the road a through route;
Banning northbound traffic on Suffolk Street Queensway that exits onto Paradise Circus to then access Sandpits Parade and banning southbound traffic from Paradise Circus entering the A38, i.e. making the road a through route. The main CAZ delivery will be broken down into the following high level deliverables/schemes:
CAZ Signing Strategy
The CAZ Signing Strategy will implement a new signing network which will notify drivers on the approach to the City Centre that a Clean Air Zone is in operation, providing information of the charges which are being enforced. ‘Countdown’ signs will be installed along all approaches to the Middle Ring Road (A4540), providing drivers with an advance warning which is aligned to the decreasing distance. I.e. signs could be placed at the 2 and 1 mile markers. As stated above, the new signing network will also include signs which inform drivers of how to check their vehicles compliance, the charges which must be paid for non-compliant vehicles and fines which will be enforced for those who fail to pay the charges. The implementation of this project will also involve the installation of any new infrastructure which is required and the provision of any required ground works.
ANPR Cameras
A network of Automatic Number Plate Recognition (ANPR) cameras will be installed around the boundary of the CAZ, covering all major and minor approach roads into the CAZ. The ANPR cameras around the boundary will provide the tool for enforcement of the CAZ, capturing an image of every car which enters the CAZ. The camera will integrate with a software package which is designed to perform a check of each number plate against a list of locally exempt vehicles (key workers, residents, etc.). Supplementary ANPR cameras will be installed around an outer boundary; approx. 1 mile out from the CAZ at strategic locations however, these cameras will be used for data collection rather than enforcement.
Charging Infrastructure
A charging infrastructure is required to operate the enforcement of the CAZ. The infrastructure being proposed will operate via an integrated enforcement system, a number of data bases and a hardware platform used for data processing and storage. Appendix B1 provides an illustration of the charging infrastructure system being proposed; as shown, some elements of the system are delivered and managed by Government and some by the City Council. The function of the charging infrastructure is to undertake validation of the data from the ANPR cameras to ensure that those required to make payment have done so and those who fail to pay as required are pursued accordingly.
Mitigation Measures & Exemptions
The Integrated Impact Assessment (IIA detailed in Section 8 below) provides an assessment of the impacts to various socio-economic groups if a CAZ D plus additional measures is implemented. The findings of the IIA were substantiated by the results from the public consultation undertaken through
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July and August 2018. In order to mitigate the impacts to the most negatively affected groups, a package of mitigation measures and exemptions have been developed, see Appendix B3 of the Public Cabinet Report which accompanies this report for further details. The delivery of the mitigation measures will be funded by the CAF, funds will be requested via the submission of the FBC to Government. The cost of the exemptions being proposed will effectively be met through a reduction in CAZ income over the respective duration which has been included within the financial modelling. The costs associated with the implementation of the exemptions (for example staff, back office set up and processing), will form part of the funding request from the Implementation Fund; again requested via the FBC submission.
4.0 Consultation
The City Council held a 6 week public consultation from the 4th of July to the 17th of August 2018, the proposals consulted on were for a CAZ D plus Additional Measures (see Section 4.0). The consultation received in excess of 10,000 responses which have been summarised in a report which was submitted to cabinet on the 10th September 2018.
5.0 Procurement
See Appendix B2 Procurement Strategy
6.0 Benefits
By implementing the CAZ Programme in line with this proposal, the City Council will be able to realise a number of benefits which are in keeping with the key ambitions of the City Council. The primary benefits which will be delivered by this programme are: Improved air quality in Birmingham; Achieving compliance with the EU Directive; Improved health and well-being of residents; Improved public transport; Improved efficiency of the road network; Increased data collection; Reduced congestion on the road.
For further details of the benefits listed above please refer to the “Project Benefits” section of this report.
7.0 Risks
A risk management process is in place whereby risks and corresponding mitigation actions are identified and assigned an owner to action appropriately. A record of this risk management is kept in the form of a risk register, the top five risks in terms of priority along with the unmitigated risk scores are listed below. Please see Appendix B4 for the full Risk Register.
Ref. Risk Likelihood Impact R004 Compliance may not be achieved by 2020 4 4 R006 Funding approval will be delayed 4 4 R010 Legal challenge from the public 3 3 R034 HS2 construction will impact on CAZ 3 4
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R040 Government charging infrastructure will 4 4 be delayed
8.0 Impacts
The CAZ Programme is likely to have an impact on a variety of aspects including the health and well-being and financial capacity of those working, living and visiting the city. The scheme(s) will have an impact upon air quality, congestion and ease of travel within the city and also the capacity of the city’s roads which will see an increased volume of traffic; mainly the Middle Ring Road (A4540). As such, an Integrated Impact Assessment (IIA) has been undertaken during feasibility phase which consists of an Equality Impact Assessment (EIA) and a Health Impact Assessment (HIA). As described below: Equality Impact Assessment: the purpose of this piece of work is to assess the impacts to the various impacted socio economic groups. The assessment shows that the largest impact will be to lower income families and those with disabilities. This work was further substantiated by the responses from the public consultation undertaken through July and August 2018. As part of the CAZ Programme a number of mitigation measures are being developed which will aim to reduce the impact to the people who fall into these groups, (see Appendix B3 of the Public Cabinet Report which accompanies this report for further details). Health Impact Assessment: the purpose of this piece of work assesses the implications of introducing the various schemes on the health and well-being of those people who live, work and visit the city. Highlighting the particular impacts on identified vulnerable groups such as, children and disabled people. The output of this assessment showed that the overall health impact would be positive, with areas of high income deprivation benefitting most. This is partly due to the improvement in vehicle emissions and the indirect benefits of the modal shift towards active travel.
In addition to the IIA, Traffic Modelling and Air Quality Modelling has been undertaken during the feasibility phase of the CAZ Programme which models the impacts of the various schemes being implemented under the Early Measures and CAZ Programmes. The introduction of the Network Signing Strategy and VMS project, which will re-direct traffic approaching the city around the A4540 has been included in both the traffic and air quality models. The model output shows that the overall impact to the A4540 and immediate surrounding areas is positive, with the A4540 shown to have the capacity to deal with the anticipated increased volume in traffic. In addition to this, the air quality around the A4540 is shown to improve with the introduction of these schemes due to the streamlining of traffic and reduced congestion.
9.0 Delivery
The City Councils, Infrastructure Projects Delivery Team are responsible for the delivery of the CAZ Programme. Delivery support and programme management has been procured from consultancy Turner & Townsend for the
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feasibility and initial delivery phases. Additional support can be obtained through the City Councils procurement frameworks as/if required throughout the programme life-cycle.
An initial delivery schedule has been developed for the CAZ Programme which is being managed by the delivery team. The schedule has been built based on a high level set of activities for each project and will be refined as the delivery develops and more accurate information becomes available from the supply chain. See Appendix B3 CAZ Programme – Delivery Schedule for further details. Note: The development of the schedule is an iterative process and timescales will change as programme progresses, however the deadline for implementation of January 1st 2020 will not change.
The setup of a dedicated CAZ team is being proposed who will be responsible for the delivery, administration and continued management of the mitigation measures and exemptions. The specific resource requirements are still to be confirmed and will be detailed for approval in a subsequent business case.
The City Council will also mobilise for ongoing operations in line with its responsibilities, illustrated in Appendix B1, including validation and enforcement processing and communications.
10.0 Funding
Central Government to date have provided revenue grant funding for the feasibility phase of the project totalling £2.084m. £1.071m, of this funding has been received by the City Council and a further £1.013m will be received in the near future. All of this funding has either been incurred or is committed.
The submission of the Government FBC, including the financial implications, is the mechanism by which the City Council will apply for the required funds to implement the CAZ D plus Additional Measures and the package of Mitigation Measures being proposed; drawing down from the two separate funding streams, the Implementation Fund and the Clean Air Fund (CAF) as required. The funding is being requested under a Section 31 grant.
The financial implications provided in the report to Cabinet on September 10th 2018 were an estimate, accurate at the time of writing. Since then further detailed financial modelling has been undertaken to determine the financial implications included within the FBC, based on a set of informed assumptions. The modelling was undertaken by specialist technical consultants, in conjunction with officers from the City Council, and as a part of the work undertaken the modelling has been subject to their internal quality assurance and testing processes to ensure robustness. In addition an independent review of the draft FBC financial case including the financial model has been undertaken as part of JAQU’s role in supporting development of the FBC. The City Council has taken account of matters arising during the course of the review process in finalising the FBC and financial model in producing this report. JAQU will carry out a further review of the updated costs and profile referred to under ‘CAZ Implementation’ below following completion of the procurement process.
Section 5 Budget Information provides high level summaries of the revised financial implications and the narrative below supplements these summaries. Please note that full details have been excluded due to the potential for prejudicing upcoming procurement activities and are instead shown within the Private report.
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CAZ Implementation
The CAZ Implementation costs shown in Table 1.0 indicate the current estimated cost and profile of the main CAZ programme of works. The costs of implementation will in the main be capital in nature however there may also be an element of revenue expenditure. The final estimated cost and profile including the capital and revenue combination will be firmed up following completion of the procurement activities, anticipated to be by January/February 2019. The costs will be funded via the Implementation Fund grant provided by Government, with the final combination of capital and revenue resources being in line with the final estimated cost and profile defined within the final funding request.
A quantitative risk assessment has been undertaken for the risks identified in Appendix B4 in order to establish the current required contingency allocation. In some areas of risk a quantitative assessment could not be carried out and therefore an Optimism Bias (OB) has been included to account for the uncertainty. The level of OB has been refined since the Preferred Option Business Case (POBC) submission (10th September 2018). Whilst at 15% the OB is higher than the Green Book guidance recommends for FBC stage, the level of OB has been deemed appropriate as procurement activities are ongoing. The level of OB will be reduced when the final funding request is made in January/February 2019.
Further details for each separate CAZ programme implementation work stream will be provided in subsequent FBC reports in line with the City Council’s Gateway and Related Financial Approval Framework.
Interim Implementation Development Funding Government have indicated that the timescales for review and approval of the GFBC (Appendix A) and the associated funding request will be a minimum of 8 weeks from receipt. If the Council were to wait for such approvals before progressing with development, the programme will be subject to delay, impacting on overall delivery and achievement of compliance. Recommendation 2.10 of this report seeks approval for the release of development funding from the existing Transportation & Highways Capital Budget until the receipt of Government grant funding, currently anticipated to be March 2019, at which point the resources will be repaid.
This expenditure will in the main be to develop the CAZ proposals in order to provide a more robust cost estimate as required by Government. These development costs are a pre-requisite for the final submitted programme costs and as such they will be included within the final costings.
The estimated funding and associated work streams are detailed below:
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Work December January February March Total Stream 2018 2019 2019 2019 £m £m £m £m £m Main CAZ 0.030 0.060 0.060 0.060 0.210 (Civils)
Back Office 0.000 0.020 0.020 0.020 0.060 Charging system Network 0.020 0.020 0.020 0.020 0.080 Changes Parking 0.010 0.040 0.020 0.020 0.090 Restrictions Totals 0.060 0.140 0.120 0.120 0.440
CAZ Mitigation Measures
Appendix B3 details the proposed package of mitigation measures. Table 1.0 below indicates the current estimated cost and profile of providing these measures which it is anticipated will be both capital and revenue in nature. The costs will be funded via the CAF grant provided by Government and as such the volume of mitigation measures available will be capped at the amount of funding provided. Feedback from Government on the Council CAF application will determine the need for a review into the prioritisation of these measures.
Residents Parking Scheme measures will be introduced as and when required. As such the funding for this scheme will be held in a Council ring fenced reserve until required. In the event that the funding required exceeds the amount received, it is proposed that the shortfall will be funded from the net CAZ operating income, which is in line with regulation, (please see Operating Income and Expenditure Section below).
Further details for each separate CAZ Mitigation work stream will be provided in subsequent FBC reports as required in line with the City Council’s Gateway and Related Financial Approval Framework.
CAZ Operating Income and Expenditure
CAZ Income and Expenditure - The Clean Air Zone will be introduced under Part 3 of the Transport Act 2000. CAZ revenue income will be generated through a combination of CAZ Charges raised and Penalty Charge Notices issued and, in line with requirements of the Act, will first be used to cover ‘’the expenses incurred for and in connection with the scheme which are so attributable’’. The City Council expenses have been identified as the costs of maintaining and operating the assets installed under the CAZ project and ongoing operations and processing costs in line with its responsibilities (illustrated in Appendix B1), summarised below:
Assets include signs, ANPR cameras, air quality monitoring equipment and assets installed as part of the Early Measures element of the project are also eligible expenses, (details of the Early Measures project can be found in the Joint Cabinet Member/Chief Officer report “Joint Air Quality Unit Early Measures Fund for Local NO2 Compliance – Application for and acceptance of funding” 19
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September 2018);. Costs of ongoing operations include human resources required for validation and enforcement processing, JAQU processing costs, penalty charge processing and postage, office accommodation costs and communications.
Table 2.0 below indicates the current estimated operating income and expenditure.
CAZ Net Proceeds – Table 2.0 below indicates the current estimated ‘net proceeds’ balance carried forward. Part 3 of the Transport Act 2000, schedule 12 para 8, requires that the ‘net proceeds’ of a charging scheme shall be applied by the authority “for the purpose of directly or indirectly facilitating the achievement of local transport policies of the authority”. The ‘Tackling Air Quality in Birmingham, Cabinet Report, June 26th 2017 also states that net proceeds will be invested in transport infrastructure measures to benefit the public and to improve air quality. In addition to new schemes that are identified that meet these requirements there are a number of schemes within the existing Capital Programme which could potentially be funded, in whole or in part, either through a direct contribution or to fund borrowing costs. The existing programmes identified are shown below:
The Big City Plan; Birmingham Development Plan, Growth and Sustainable Transport Area; Local Cycling Walking Initiative Programme; Journey Time Improvement; Rail and Rapid Transit.
In should be noted that all programmes, both existing and new, will be selected in order to directly or indirectly facilitate the Council’s transport policies following a prioritisation process and will be subject to approval in line with the City Council’s Gateway and Related Financial Approval Framework.
The FBC modelled position indicates that the operation of the CAZ generates significant income in the early years as the city moves from a high level of non- compliance towards compliance. A number of additional test scenarios were modelled in order to provide an insight into the potential impact that a higher than anticipated level of compliance would have on the City Council’s revenue position. Whilst increased compliance would be a positive outcome in delivering the objectives of the CAZ it was important to identify any potential revenue pressure that may result. Table 3.0 below shows the changes in total income and expenditure of 50% greater than anticipated compliance. The values represent the reductions from the FBC modelled position, showing the final reduced ‘Balance Carried Forward’. This shows that even in the event of an unlikely 50% higher level of compliance there remains a sufficient level of income to fund the operating costs and for re-investment in eligible initiatives. It should be noted that this was high level test and not all expenditure categories were subject to reduction. In reality a number of these would also be expected to reduce over time with increased compliance which would further improve the adjusted position. A more detailed analysis is shown in the Private report.
Car Parking Income – In addition to the income generated directly from the CAZ Charges and Penalty Charge Notices the City Council is also introducing a range of additional Car Parking measures as a part of the overall implementation of the CAZ, supporting delivery and in furtherance of the City
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Council strategy to dis-incentivise private car use. The associated setting of parking tariffs and charges will generate additional income and section two of Table 2.0 below indicates the current estimated level of income. Any resulting net surplus income remaining after the deduction of operating costs and other eligible expenditure will be used in accordance with the Road Traffic Regulation Act 1984 Section 55 para 4.
Miscellaneous
The City Council will be responsible for reporting to JAQU on a monthly basis and JAQU reserve the right to reclaim unspent or misspent funding. The City Council through its management of the project will put in place relevant monitoring processes and controls to ensure that project costs are managed and expenditure is in line with the grant conditions. I the event that the project is delivered within the grant resources allocated, unused grant will be retained within reserves for re-payment in line with the grant conditions.
The FBC (Appendix A) contains a financial model for the Implementation Fund and CAF application based on estimated costs and cost profile which have been benchmarked against similar projects. It is however a requirement that the final estimated cost and cost profile is built up from quotes or agreed contracts from the supply chain. As the procurement activities are still underway, the project team have been unable to include actual costs and, as noted under CAZ implementation above, a subsequent report will be submitted to Government clarifying the project costs, cost profile and the associated funding request as soon as all information is available, anticipated to be January/February 2019.
11.0 Governance
As per Section 2.0 a SOC, OBC and POBC have already been submitted to Government for review. These submissions have all been made following approval through the City Council’s governance procedures and Gateway and Related Financial Approval Framework. This Options Appraisal (OA) is being submitted to the Cabinet for approval in conjunction with the Government FBC. Following approval of this report and the Government FBC, the City Council will then proceed to develop the individual FBCs required shown in the table below. Each of these FBCs will be submitted for approval through the relevant City Council governance procedures and Gateway and Related Financial Approval Framework, dependent upon their monetary value and in line with the delegations being sought.
Ref. Title / Description Planned Submission 1.0 Civils and Cameras Design and Build January 2019 2.0 Charging Infrastructure (inc. Exemptions) February 2019 3.0 Mitigation Measures February 2019
Links to Corporate The proposals set out in this report are in line with the City Councils corporate and Service Outcomes priorities as detailed in the Council Plan 2018-2022, summarised below:
Birmingham is an entrepreneurial city in which to learn, work
and invest in;
Birmingham is an aspirational city to grow up in;
Birmingham is a fulfilling city to age well in; Birmingham is a great city to live in. Improving air quality as soon as possible, consistent with other statutory responsibilities is a key ambition of the Birmingham Health and Wellbeing Strategy and supports the delivery of policies included in the ‘Birmingham
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Connected Transport White Paper’, which in turn, supports delivery of the adopted Birmingham Development Plan and Movement for Growth The Health and Social Care Act 2012 requires Local Authorities in England to have a Health and Wellbeing Board (HWBB). A key responsibility of the HWBB is to develop a Health and Wellbeing Strategy (HWBS). Improving air quality is a key ambition of the Birmingham Health and Wellbeing Strategy. The proposals given in this report are supportive of the emerging Clean Air Strategy which is due for publication in the winter of 2018/2019.
Project Benefits The potential benefits of delivering this programme of work successfully include: . Achieving compliance with the EU Directive and avoidance of potential sanctions including financial sanctions; . Reduced impacts on human health (mortality impacts, hospital admissions and newly quantified chronic bronchitis impacts); . Reduced impact on ecosystems (new pathway reflected in Defra’s updated damage costs);
. A positive effect on climate change through reduced CO 2 emissions; . Improved travel journey times or vehicle operating costs arising from the reduction in congestion from within the CAZ (possibly offset by impacts on the same outside of the CAZ). The potential wider benefits that have not or currently cannot be quantified include:
. Improvements in well-being/quality of life; self-reported life satisfaction; . Wider health outcomes associated with a CAZ – for example, improvements in health due to increased walking/cycling; . General health benefits arising from reduced short-term exposure, for example, exacerbation of existing cases of asthma;
. Wider health benefits linked with reductions in NO 2 and other pollutants: . Reduction in cognitive decline and dementia, where this is linked to traffic related pollutants; . Improvements in lower lung function in early life associated with exposure to pollutants during pregnancy; . Reduction in risk of developing type-2 diabetes. Project Deliverables Successful implementation of this programme of work will produce several deliverables which will collectively achieve the benefits detailed above. The below lists a selection of the key deliverables: A network of signs will be installed around the Clean Air Zone which will provide drivers with warning of the upcoming CAZ and their obligations to pay a daily charge; ANPR Cameras will be installed on the majority of the in-roads into the CAZ with additional enforcement cameras installed at strategic locations within the CAZ. A supplementary set of cameras will be installed outside of the CAZ which will be for data collection purposes; IT infrastructure will be installed as required, in order to connect the ANPR Cameras in a network which communicates to a central data centre in the city. The network is anticipated to utilise wireless technology to transmit and receive images to/from each camera. The IT infrastructure will consist of new hardware and software however
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the extent of the requirements is not yet fully developed; In order to house the IT infrastructure, as outlined above, and the ‘back office’ staff required to operate the system, there may be a requirement to either re-purpose existing accommodation or construct a new, purpose built, data centre or control room. The extent of this deliverable cannot be fully understood until the IT infrastructure scoping has been developed. All free car parking within the CAZ boundary will be removed and the spaces made into paying spaces; Northbound traffic travelling on the Suffolk Street Queensway (A38) and exiting onto Paradise Circus and then onto Sandpits Parade will be banned; Southbound traffic travelling from Paradise Circus and accessing the A38 will be banned; The junction between Lister Street and Dartmouth Middleway will be closed for all traffic other than public transport; The junction between Great Lister Street and Dartmouth Middleway will be closed for all traffic other than public transport; A suite of proposed mitigation measures will be delivered, as detailed above and in Appendix B3, subject to Cabinet approval and funding being available through the Government CAF and potentially the net CAZ operating surplus. Procurement See Appendix B2 Procurement Strategy for details. Implications
Taxation Implications CAZ Implementation - The implementation of this scheme will require the City Council to place contracts with the supply chain, the City Council will be able to reclaim the VAT on any monies expended to implement the scheme.
CAZ Operation - Once operational, this scheme will generate revenue in the form of income from the charges and penalties for entering the CAZ and for using the newly introduced charging car park spaces. This income will not be taxable, i.e. there will be no route for those paying the charges and penalties to reclaim the VAT from HMRC; this is a national policy set by Government. Accountable Body There are no formal Accountable Body implications of this programme.
Key Project Milestones Planned Delivery Dates Government FBC submission December 2018 Birmingham City Council FBC/s January/February 2019 Civils Contract Award January 2019 Marketing and Communication Campaign starts January 2019 Cameras Procurement – Contract Award February 2019 CAZ Team Mobilisation March 2019 Site Work Start April 2019 Application for Mitigation & Exemptions open June 2019 User Acceptance Testing Start September 2019 Implementation Complete – CAZ live January 2020 Please note that the above timelines are as they currently stand, the delivery schedule is updated periodically as the programme progresses and as such all dates are subject to change pending the next schedule iteration. Dependencies on Government approval of CAZ Implementation FBC and Clean Air Fund FBC other projects or and approval to funding bid. activities Completion of all procurement activities as detailed within Appendix B2
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Procurement Strategy.
The CAZ Programme is a component part of the Brum Breathes Programme. Whilst each programme under Brum Breathes is being managed independently, there is a certain element of overlap between the Early Measures and CAZ Programmes. The overlapping between projects and programmes doesn’t necessarily constitute to dependencies in all cases, however there are considerations to be made where overlaps exist.
Additional Measures Network Changes/ Network Signing Strategy: the network signing strategy which is being developed under the Early Measures programme must take into consideration the changes which are being made to the network as Additional Measures. The network signing strategy must reflect the changes in the network in order to ensure that vehicles aren’t directed down a route which is prohibited. Variable Message Signs/CAZ Signing: the VMS and CAZ signing will be installed on the same set of key radial roads, as such the design of each scheme must be done in consideration of each other in order to ensure that sign location clashes and sign clutter is avoided. There is also an opportunity to combine some of the signage, i.e. the VMS could potentially be used to display the message for the CAZ signing, reducing the volume of signs.
The overall benefits realisation is entwined between all of the projects under the CAZ and Early Measures programmes. The cumulative impact of the two programmes is the only way in which Birmingham can achieve compliance with the EU Directive for Clean Air, with each scheme providing an essential contribution towards compliance.
As the Clean Air Zone will essentially encompass the entire city centre, considerations will also be given to the potential linkages with and impacts of the other schemes which are underway or to commence across the city including HS2 and, Paradise, and also woks related to the Councils Highways, Maintenance and Management Private Finance Initiative contract..
Government implementation of the charging infrastructure for which they are responsible.
Achievability The works which are being implemented under this programme aren’t necessarily complex in nature and are considered to be ‘standard’ highway infrastructure improvements.. Delivery will be procured from a mix of existing Frameworks which will ensure the required experienced. In addition the City Council’s project delivery team has significant experience of delivering similar schemes.
However the timescales for delivery are being instructed by Government; both the CAZ and Early Measures Programme must be implemented by the 1st of January 2020 in order to achieve compliance with the EU Directive for Clean Air. The City Council’s project delivery team will put in place rigorous programme governance to ensure the programme is delivered to timeline. A high risk delivery schedule has also been developed for the Early Measures Programme in order to achieve the January 2020 deadline. Project Manager Nick Richards
t: 0121 675 7325, e: [email protected] Project Accountant Andy Price t: 0121 303 7107, e: [email protected] Project Sponsor Phil Edwards
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t: 0121 303 6467, e: [email protected] Proposed Project Paul Simkins Board Members t: 0121 464 6549, e: [email protected] Nick Richards t: 0121 675 7325, e: [email protected]
Kieran Boyle t:: 07900 911947 e: [email protected] Balgit Kundi t: 07823 534 976 e: [email protected] Finance Business Simon Ansell Date of FBP Approval Partner (FBP) Other Mandatory Information Has project budget been set up on Voyager? Yes Issues and Risks updated (Please attach a copy to the PDD and on Yes Voyager)
2. Options Appraisal Records
The following sections are evidence of the different options that have been considered in arriving at the proposed solution. All options should be documented individually.
Option 1 Do Nothing Information Considered The information considered in the review of this option was: Air quality data; Traffic modelling and monitoring data; The Ambient Air Quality and Cleaner Air for Europe Directive 2008; The Environment Act 1995; Air Quality Standard Regulation 2010; Birmingham Clean Air Zone Outline Business Case; Birmingham Clean Air Zone Full Business Case (Draft). Pros and Cons of What were the advantages/positive aspects of this option? Option Non-compliant vehicles would not be subject to charging, the objections and there would be no associated dissatisfaction from stakeholders. Whilst funding for the programme is through Government grants, and rigorous programme management will be implemented, as with all projects there is a residual risk of cost overrun which may fall to the City Council. With this option this risk would be avoided. City Council Project Delivery staff resources would not be required to manage this project and therefore could be redeployed on other projects.
What are the disadvantages/negative aspects of this option? The benefits would not be realised; air quality would remain to be poor and unacceptable in terms of compliance with the EU Directive. This is may result in sanctions including financial sanctions for the City Council which could be significant. Health benefits would not be realised, the number of premature deaths in the city which occur each year due to poor air quality would not be reduced. Traffic congestion in the city centre would remain, negatively effecting travel journey times and air quality, making the city centre a less attractive destination for residents, visitors and commuters.
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The general public would remain potentially unaware of the risks posed by poor air quality and the negative contribution which they may be having towards it; a behavioural shift would not take place. People Consulted Several people/teams were consulted in the consideration of this option, below provides a non-comprehensive list:
City Council Traffic Management Team ; City Council Transport Policy Team; City Council Project Delivery Team; Air Quality and Project Delivery consultants; Turner & Townsend, Jacobs, WSP Global, Steer Group, and others. Joint Air Quality Unit (JAQU); Department for Environment Food & Rural Affairs (DEFRA); Department for Transport (DfT).
As detailed earlier in the report, public consultation was undertaken and engaged with all of the key stakeholder groups including but not limited to, the general public, SME’s, retail, large businesses, taxi and private hire operators and freight & logistics operators. Recommendation Abandon Principal Reason for The key reasons for abandoning this option are: Decision No positive contribution towards improving air quality would be made; The health risks to those living, working and visiting the City would not be mitigated; No positive contribution towards improving congestion and travel journey times would be made; The City Council would be likely to face sanctions including financial sanctions from the UK Government for non-compliance.
Option 2 Implementation of a CAZ C – The implementation of a Clean Air Zone which includes buses, coaches, HGVs, Large vans, minibuses, small vans/light commercials, taxis and private hire vehicles but does not include cars, motorcycles or mopeds. Information Considered The information considered in the review of this option was: Air quality data; Traffic modelling and monitoring data; The Ambient Air Quality and Cleaner Air for Europe Directive 2008; The Environment Act 1995; Air Quality Standard Regulation 2010; Birmingham Clean Air Zone Outline Business Case; Birmingham Clean Air Zone Full Business Case (Draft). Pros and Cons of What were the advantages/positive aspects of this option? Option Non-compliant private cars, motorcycles and mopeds would not be charged for entering the CAZ, the objections and dissatisfaction from the general public would be likely to be reduced. The amount of data processing capability required to operate the ANPR and charging IT system would be significantly reduced therefore the scope of work would be reduced increasing the achievability of the programme.
What are the disadvantages/negative aspects of this option? The full extent of the health benefits would not be realised, having minimal positive impact to air quality and therefore failing to adequately reduce the number of premature deaths. This option has been modelled during the feasibility phase and the results showed that the implementation of a CAZ C would not enable
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the city to achieve compliance. This is likely to result in sanctions including financial sanctions for the City Council which could be significant. A reduced contribution towards improving congestion and travel journey times would be made People Consulted Several people/teams were consulted in the consideration of this option, below provides a non-comprehensive list: City Council Traffic Management Team; City Council Transport Policy Team; City Council Project Delivery Team; Air Quality and Project Delivery consultants; Turner & Townsend, Jacobs, WSP, SDG, and others; JAQU; DEFRA; DfT.
As detailed earlier in the report, public consultation was undertaken and engaged with all of the key stakeholder groups including but not limited to, the general public, SME’s, retail, large businesses, taxi and private hire operators and freight & logistics operators. Recommendation Abandon Principal Reason for The key reasons for abandoning this option are: Decision A reduced contribution towards improving air quality would be made; The health risks to those living, working and visiting the City would not be fully mitigated; A reduced contribution towards improving congestion and travel journey times would be made; The City Council would be likely to face sanctions including financial sanctions from the UK Government for non-compliance.
Option 3 Implementation of a CAZ D plus Additional Measures – The implementation of a Clean Air Zone which includes buses, coaches, HGVs, Large vans, minibuses, small vans/light commercials, taxis and private hire vehicles, cars, motorcycles and mopeds. Implementation of Additional Measures which include; finance support for retrofit and upgrade of commercial vehicles, removal of free city centre parking, changes to the road network and improvements to public transport. Information Considered The information considered in the review of this option was: Air quality data; Traffic modelling and monitoring data; The Ambient Air Quality and Cleaner Air for Europe Directive 2008; The Environment Act 1995; Air Quality Standard Regulation 2010; Birmingham Clean Air Zone Outline Business Case; Birmingham Clean Air Zone Full Business Case (Draft). Pros and Cons of What were the advantages/positive aspects of this option? Option The city will be able to achieve compliance with the EU Directive for air quality and will therefore avoid the risk of sanctions including financial sanctions for the City Council which could be significant. being penalised with hefty fines. The health benefits highlighted in this document above will be realised, improving the health of those living, working and visiting the city centre, reducing the likelihood of disease. The contribution towards improving congestion and travel journey times would be made; The city centre will become a more attractive place to live, work and visit, boosting growth in Birmingham.
16 Page 226 of 366 Appendix B2, Birmingham Clean Air Zone submission of FBC and request to proceed with implementation, Public Report, 11th December 2018
The current estimated revenue income generated by the implementation of this option will fully cover the current estimated operating costs. The net revenue proceeds, after deducting operating costs, will also be available for investment to achieve local transport policies of the City Council, in line with regulation, including future upgrades in the city centre to improve air quality. What are the disadvantages/negative aspects of this option? The scope of work is considerable and will require significant effort from City Council resources to deliver; The implications on the general public and local businesses are likely to generate objections and dissatisfaction with the City Council; Proposed exemptions and mitigations detailed above and in Appendix B3, cannot fully mitigate the impact to various socio- economic groups; During construction there will be disruption to the traffic network throughout the city centre which will need to be controlled by the City Council. Whilst funding for the programme is through Government grants, and rigorous programme management will be implemented, as with all projects there is a residual risk of cost overrun which may fall to the City Council. People Consulted Several people/teams were consulted in the consideration of this option, below provides a non-comprehensive list: City Council Traffic Management Team; City Council Transport Policy Team; City Council Project Delivery Team; Air Quality and Project Delivery consultants; Turner & Townsend, Jacobs, WSP, SDG, and others; JAQU; DEFRA; DfT.
As detailed earlier in the report, public consultation was undertaken and engaged with all of the key stakeholder groups including but not limited to, the general public, SME’s, retail, large businesses, taxi and private hire operators and freight & logistics operators. Recommendation Proceed Principal Reason for The key reasons for recommending this option are: Decision The city will be able to achieve compliance with the EU Directive for air quality and will therefore avoid the risk of sanctions including financial sanctions for the City Council which could be significant.; The health benefits highlighted in this document above will be realised, improving the health of those living, working and visiting the city centre, reducing the likelihood of disease; The contribution towards improving congestion and travel journey times would be made; The city centre will become a more attractive place to live, work and visit, boosting growth in Birmingham.
17 Page 227 of 366 Appendix B2, Birmingham Clean Air Zone submission of FBC and request to proceed with implementation, Public Report, 11th December 2018
3. Initial summary of Options Appraisal – Price/Quality Matrix Options Weighting Weighted Score Criteria 1 2 3 1 2 3 Total Capital Cost 10 5 2 5% 50 25 10 Upfront Revenue Cost 10 10 10 5% 50 50 50 Full Year Revenue Consequences 0 6 10 5% 0 30 50 Quality Evaluation Criteria e.gs 1)Meeting User Requirements 0 4 9 20% 0 80 360 2) Meets City Strategic Objectives 0 4 9 25% 0 100 225 3) Provides a sustainable solution 0 8 9 15% 0 120 135 4) Air Quality Improvements 0 6 8 30% 0 180 240
Total 20 43 57 100% 100 585 1070 Note: Full Year Revenue Consequences – for this assessment revenue consequences have been deemed to relate to revenue income benefits for the City Council. It should be noted, however, that this income can only be used in line with the relevant legislation – refer to section 10 above.
4. Option Recommended It is recommended to proceed with Option 3, implementation of a CAZ D plus Additional Measures, the key reasons for this decision are: The city will be able to achieve compliance with the EU Directive for air quality and will therefore avoid the risk of sanctions including financial sanctions for the City Council which could be significant. being penalised with hefty fines. The health benefits highlighted in this document above will be realised, improving the health of those living, working and visiting the city centre, reducing the likelihood of disease. The contribution towards improving congestion and travel journey times would be made; The city centre will become a more attractive place to live, work and visit, boosting growth in Birmingham. The current estimated revenue income generated by the implementation of this option will fully cover the current estimated operating costs. The net revenue proceeds, after deducting operating costs, will also be available for investment to achieve local transport policies of the City Council, in line with regulation, including future upgrades in the city centre to improve air quality.
18 Page 228 of 366 Appendix B2, Birmingham Clean Air Zone submission of FBC and request to proceed with implementation, Public Report, 11th December 2018
5. Budget information
Table 1.0 Implementation Costs and Funding
Budget Information –Implementation Costs and Funding 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Total £m £m £m £m £m £m £m £m Project Costs: CAZ 4.270 12.915 0.395 0.244 0.020 0.000 0.000 17.845 Implementation CAZ Mitigation 3.914 18.255 20.762 4.192 2.070 1.556 0.113 50.861 Measures Total 8.184 31.170 21.157 4.436 2.090 1.556 0.113 68.706 Funded by Government Grants: Implementation 4.270 12.915 0.395 0.244 0.020 0.000 0.000 17.845 Fund Clean Air Fund 3.914 18.255 20.762 4.192 2.070 1.556 0.113 50.861 Total 8.184 31.170 21.157 4.436 2.090 1.556 0.113 68.706
Table 2.0 Operating Income and Expenditure
Budget Information – Operating Income and Expenditure
2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 Totals
£m £m £m £m £m £m £m £m £m £m £m £m £m £m
Income
CAZ 0.000 (11.451) (43.096) (32.264) (23.052) (18.697) (14.343) (10.572) (8.552) (6.533) (4.513) (2.249) 0.000 (175.322)
CAF Administration Grant (0.382) (1.353) (0.682) (0.174) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 (2.591)
Total Income (0.382) (12.804) (43.778) (32.439) (23.052) (18.697) (14.343) (10.572) (8.552) (6.533) (4.513) (2.249) 0.000 (177.913)
Expenditure
CAZ 0.000 1.656 6.340 5.197 4.230 3.771 3.292 2.869 2.661 2.441 2.209 2.367 2.542 39.577 CAF Administration 0.382 1.353 0.682 0.174 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 2.591 Total Expenditure 0.382 3.010 7.021 5.372 4.230 3.771 3.292 2.869 2.661 2.441 2.209 2.367 2.542 42.168 Net 0.000 (9.795) (36.756) (27.067) (18.822) (14.926) (11.050) (7.703) (5.891) (4.091) (2.304) 0.119 2.542 (135.745) (Income)/Expenditure To/(From) Sinking Fund 0.000 0.373 1.426 1.169 0.952 0.849 0.741 0.493 0.000 0.000 0.000 (1.501) (4.502) 0.000
Net (Inflow)/Outflow 0.000 (9.422) (35.330) (25.898) (17.870) (14.077) (10.310) (7.210) (5.891) (4.091) (2.304) (1.382) (1.960) (135.745)
Balance Brought Forward 0.000 0.000 (9.422) (44.752) (70.649) (88.519) (102.596) (112.906) (120.116) (126.007) (130.099) (132.403) (133.785)
Balance Carried Forward 0.000 (9.422) (44.752) (70.649) (88.519) (102.596) (112.906) (120.116) (126.007) (130.099) (132.403) (133.785) (135.745)
19 Page 229 of 366 Appendix B2, Birmingham Clean Air Zone submission of FBC and request to proceed with implementation, Public Report, 11th December 2018
Budget Information – Car parking income 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Totals £m £m £m £m £m £m £m £m £m £m £m £m On-street (0.481) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.924) (1.443) (19.247) Off-street (0.258) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (1.032) (0.774) (10.332) Total Income (0.739) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.957) (2.217) (29.570)
Table 3.0 Operating Income and Expenditure Sensitivity
Budget Information – Operating Income and Expenditure Sensitivity
2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 Totals
£m £m £m £m £m £m £m £m £m £m £m £m £m £m
Income Reduced from FBC Model
Total CAZ Income Reduction 0.000 5.726 21.548 16.132 11.526 9.349 7.171 5.286 4.276 3.266 2.256 1.124 0.000 87.661 Expenditure Reduced from FBC
Model
Total Expenditure Movement 0.000 (0.275) (1.033) (0.770) (0.547) (0.444) (0.341) (0.251) (0.204) (0.156) (0.108) (0.054) 0.000 (4.182)
Net (Income)/Expenditure 0.000 5.451 20.515 15.362 10.979 8.905 6.831 5.035 4.072 3.110 2.148 1.070 0.000 83.478 Movement To/(From) Sinking Fund Movement 0.000 (0.062) (0.232) (0.173) (0.123) (0.100) (0.077) (0.044) 0.000 0.000 (0.114) (0.025) 0.950 0.000 Net (Inflow)/Outflow 0.000 5.389 20.283 15.189 10.856 8.805 6.754 4.990 4.072 3.110 2.034 1.045 0.950 83.478 Movement Balance Brought Forward 0.000 0.000 5.389 25.672 40.861 51.717 60.522 67.276 72.266 76.338 79.449 81.483 82.528 Movement Balance Carried Forward 0.000 5.389 25.672 40.861 51.717 60.522 67.276 72.266 76.338 79.449 81.483 82.528 83.478 Movement
FBC Model Balance Carried 0.000 (9.422) (44.752) (70.649) (88.519) (102.596) (112.906) (120.116) (126.007) (130.099) (132.403) (133.785) (135.745) Forward
Reduced Balance Carried 0.000 (4.033) (19.080) (29.789) (36.802) (42.074) (45.630) (47.850) (49.669) (50.650) (50.920) (51.257) (52.267) Forward
20 Page 230 of 366 Appendix B2, Birmingham Clean Air Zone submission of FBC and request to proceed with implementation, Public Report, 11th December 2018
6. Project Development Requirements/Information Products required to The products required to progress the programme of work to the stage where produce Full Business a City Council Full Business Case can be submitted for approval are: Case Outline design (work ongoing) Detailed design; Early Contractor Involvement; Consultation/Stakeholder analysis (consultation completed, some further consultation to follow); JAQU Full Business Case (FBC) (work ongoing); Agreed target cost for the civils work; Agreed operating model.
Estimated time to The Government FBC will be submitted in December 2018 subject to Cabinet complete project approval. This GFBC provides a cost estimate which includes an element of development Optimism Bias. The City Council will supply Government with a firmed up cost estimate once Target Costs have been agreed with the contractor(s) in early 2019. Until the firmed up price is provided, Government will not be in a position to agree total project funding. Estimated cost to As per the financial table on page 14 of this report the total cost to complete complete project project development is as follows £2,116,027.50. This cost is not included in development the funding request made via Government FBC as it has already been accounted for in the Feasibility Funding. Funding of Funding for the development of the GFBC and this Options Appraisal have development costs been provided via the Governments Feasibility Fund. As per above, funding for the design and implementation of the project will be provided upon agreement of finalised costs.
Planned FBC Date January/February 2019 Planned Date for 1st January 2020 Technical Completion
Table of Appendixes Number Title Attached B1 Charging infrastructure diagram Yes B2 Procurement Strategy (Public) Yes B3 Delivery Schedule Yes B4 Risk Register Yes
21 Page 231 of 366
Page 232 of 366 CAZ Charging Infrastructure National Foreign Number Payment Local Authority Plates System
Data set Exemption List National Taxi Euro Standard Government Collection DB DB
Camera to JACU to BCC JACU transfer Transfer Local Whitelist National Evidence Image Capture Check Whitelist check Request
DVLA database Camera to BCC transfer
Receive Manual Check DVLA lookup Issue PCN Payment
Unenforcable Dispute PCN
Page 233 of 366
Page 234 of 366 Clean Air Zone Programme FBC Private Cabinet Report Appendix B2 – Procurement Strategy (Public)
1. Executive Summary
1.1. Background Following the Government Issued Air Quality Standard Regulation in 2010, DEFRA updated its Air Quality plans and identified Birmingham as a city with significant air quality problems. In response to this Birmingham City Council has initiated a programme of works which will implement air quality improvement in and around the city centre of Birmingham. The programme known as ‘Brum Breathes’ is encompassing of five programmes of work which collectively achieve the overall aims and objectives. The five programmes are: Early Measures, Clean Air Zone (CAZ), Air Quality Policy, Environmental Developing Infrastructure and Behaviour Change. This document outlines the procurement strategy for the CAZ programme of works.
The CAZ Programme requires a number of highways and infrastructure improvement projects to be undertaken in order to achieve successful delivery of the anticipated benefits. These projects will be managed by the City Council project delivery team; however the supply chain will be engaged through existing frameworks and other procurement routes available to the City Council. This document outlines the various procurement activities which will be undertaken on this programme of work. A number of non-infrastructure projects are also required which will deliver the package of mitigation measures.
1.2. Scope and Specification The scope of work is detailed in the Options Appraisal (PDD) Report which this Procurement Strategy is appended to. For reference, a scope summary and procurement route for each element is included below as Table 1.
Project Scheme Type Framework (Goods / Services / Procurement Works) & Value Route (indicative) Birmingham City Council Works Highways and Main CAZ Civils Infrastructure Works Framework Existing BCC Works service provider Main CAZ ANPR Cameras (Capita)
BCC’s Multi- Disciplinary Design Checking Transportation Commercial & Construction Services Main CAZ Professional Support Services
Framework (WMTPS) Existing BCC Works service provider Back Office IT Infrastructure - Systems (Capita)
Existing BCC Works service provider Back Office IT Infrastructure Data Centre – (Capita)
Page 235 of 366 Birmingham City Council Works Highways and Additional Measures Controlled Parking Zones Infrastructure Works Framework Birmingham City Council Suffolk Street Queensway Works Highways and Additional Measures (A38) NORTH Infrastructure Works Framework Birmingham City Council Suffolk Street Queensway Works Highways and Additional Measures (A38) SOUTH Infrastructure Works Framework Birmingham City Council Dartmouth Middleway - Jct. Works Highways and Additional Measures Lister & Great Lister Infrastructure Works Framework Birmingham City Council Dartmouth Middleway Jct. Works Highways and Additional Measures – Great Lister Public Transport Infrastructure Works Framework Birmingham City Council Dartmouth Middleway Moor – Works Highways and Additional Measures Street Queensway to Infrastructure Masshouse Works Framework Birmingham City Council Project Management, Cost Highways and Services Professional Services Management and Project Infrastructure
Controls Professional Services Framework M1a SWIFT Credit, Low Services/COGA BCC CAZ Mitigation Measures – – Income Admin Team M1b SWIFT Credit, Services/COGA BCC CAZ Mitigation Measures – – Scrappage Admin Team M2a Hackney Carriage LPG Services/COGA BCC CAZ Mitigation Measures – – Retrofit Admin Team M2b ULEV Hackney Goods BCC CAZ Mitigation Measures – – Carriage Lease Admin Team M2c Private Hire Vehicle Services/COGA BCC CAZ Mitigation Measures – – Support Admin Team Goods BCC CAZ Mitigation Measures M3 EV Network Credit – – Admin Team M4 HGV Funding Services/COGA BCC CAZ Mitigation Measures – – Competition Admin Team Services BCC CAZ Mitigation Measures M5 Marketing – – Admin Team
Page 236 of 366 Birmingham City Council M6 Residents Parking Works Highways and Mitigation Measures – Scheme Infrastructure Works Framework
Page 237 of 366 2. Procurement Routes
2.1 Contractor Responsibility
Given the low definition of the projects and significant programme pressures, the Design and Build approach is the most desirable procurement route for the works elements of the scheme. The contractor will be able to assist in finalising the scope, programme and delivery methodologies. The design and build contractor will take design responsibility from the scheme designs already developed by BCC’s appointed designers in support of the OBC and FBC. For schemes with reduced programme pressure and smaller works cost a more traditional approach can be taken by appointing Consultants to design the works and using the smaller Lots on the construction framework to deliver the works.
2.1 Route to Market – Goods and Professional Services To support the delivery of the above schemes there will be a requirement for professional services such as project management and programme management, and design work etc. The Council’s approved route to procure the resource to provide these services will be using the Council’s West Midlands Transportation Professional Services Framework Agreement and the Crown Commercial Services (CCS) Traffic Management Technology 2 Framework.
Where it is found that these framework agreements do not cover the scope of goods or services required or the organisations on the framework agreement do not have the capacity to deliver, alternative procurement routes will be considered including using alternative public sector framework agreements or carrying out a full procurement process. The selected route will be carried out in accordance with the Council’s Procurement Governance Arrangements.
The proposal to manage the implementation of the package of Mitigation Measures for the CAZ scheme would be to recruit a Team to work in house directly for BCC on a short term contract.
The IT elements of the scheme whether advice, design or works will be procured through the existing partnering arrangement with Capita (ICTDS). 2.2 Route to Market – Works The Council’s Highways and Infrastructure Works Framework Agreement is the Council’s approved route for these types of works and will be the procurement route utilised. The procurement route will follow approved processes in the Framework Contract.
The works programme is particularly challenging and there is a risk that there will be a reluctance from some Contractors to tender for the works. This may require adjustments to the strategy set out in section 4 and these would be dealt with in a Delegated Authority report to the Cabinet Member setting out any revisions required to remain on programme and deliver by 2020.
Where it is found that these framework agreements do not cover the scope of works required or the organisations on the framework agreement do not have the capacity to deliver, alternative procurement routes will be considered including using alternative public sector framework agreements or carrying out a full procurement process.
The selected route will be carried out in accordance with the Council’s Procurement Governance Arrangements.
Page 238 of 366 2.3 Available Framework Procurement Routes
Type Project Framework Start Date End Date Goods Main CAZ CCS Traffic Management Technology October October 2020 2 2016 Services Main CAZ WM Transportation Professional October October 2019 Services 2015 Works Main CAZ BCC Highways and Infrastructure October September Works 2014 2019* Works Back Office Capita ICTDS March 2013 March 2021 Additional BCC Highways and Infrastructure October September Works Measures Works 2014 2019 *Note – works can be undertaken beyond the completion date of the Framework if orders are already placed under the current framework.
Page 239 of 366 3. Contract Model
3.1 Contract Form The nominated Framework Procurement Routes mandate use of the New Engineering Contract version 3 (NEC3) suite of contracts. The NEC3 contract suite will therefore be utilised on all contracts awarded through a nominated Framework Agreement.
Where an alternative route of procurement is required, an NEC3 contract will be the preferred form of contract.
Table 2 below outlines the NEC3 contract type to be utilised by each project type.
Project Type NEC3 Contract Type Goods Supply Contract Professional Services Professional Services Contract Works Engineering and Construction Contract
3.2 Payment Mechanism The NEC3 contract suite provides options on payment mechanism (option A-F). The Framework contracts set up by BCC have payment mechanisms set out in them and these arrangements will be followed on each project as below.
Type Framework Procurement Route Payment Terms
Design BCC’s Multi-Disciplinary Transportation 30 Day from application Professional Services Framework (WMTPS)
Civil; Birmingham City Council Highways and 30 Day from application Infrastructure Infrastructure Works works Framework
Technology; Existing BCC service provider (Capita) 30 Day from application ANPR cameras and supporting systems
Due to programme being the key driver and challenge that will be encountered in co-ordination and delivery of work between both civil related and technology related construction works (based on procuring these separately), then consideration of some form of incentivisation model will be considered. There are a number of incentive models that may be adopted as shown below;
Contractor Share Percentage – Allows the financial performance of the contractor to be rewarded for any underspend or the Employers financial risk exposure to be limited if any overspend occurs; Milestone Incentives - Contractor(s) can be incentivised against meeting key dates of a particular contract or programme;
Page 240 of 366 4. Procurement Delivery
4.1 Overview
The tender option to be utilised wherever possible throughout the CAZ programme for works is a Tender or the ‘Mini Competition though an existing Framework’. This is a competitive bidding situation where the contract is agreed following a competitive tendering process where the award is often made to the most economically advantageous tender (MEAT principle). Tenders being evaluated by a set of quality, social value and price criteria requirements as well as providing significant other benefits as outlined within the CAZ commercial case
4.2 Tender Structure The procurement proposals for the various elements of the Main Caz scheme are set out below:
Main Civils Procurement
In view of the complexity, variety and volume of works and services to be delivered within extremely tight timescales, a traditional approach to delivery contractor procurement is not deemed suitable on the grounds of cost, time and risk reduction. The normal process would include issuing Tenders to all Lot 4 Framework Contractors based on a Price, Quality & Social Value Assessment. This results in evaluating up to 6/7 Tender submissions that can add several weeks to a scheme Programme.
The CAZ team has taken the view that a more innovative, flexible and participative approach to the procurement should be taken that has been used successfully on other schemes with challenging programme’s. Therefore, it is proposed to adopt Design and Build with Early Contractor Involvement (ECI) as the delivery process and utilise a pre-selection process to reduce the number of tenderers and subsequently cut down the evaluation and appointment process. This would allow the designing and planning of the CAZ project scheme with the contractor(s) as a partner thereby increasing the likelihood of the Council being able to meet the Programme delivery dates, have sufficient time to produce robust designs, meet the expenditure profile but also increase transparency and therefore reduce risk, and limit the reasons for any future contractual disputes.
The Highways and Infrastructure Works Framework Agreement will to be used as the procurement route to call-off works. The framework Agreement is suitable to use ECI and Lot 4 is utilised for Works above £500,000. It is felt that this route will not subject the council to challenge as all Lot 4 Contractors were given the opportunity to tender for the works. The greater risk to the project is an extended Tender and Assessment Period.
Initially, the proposed Design & Build procurement route is to follow the process set out below:
An Expression of Interest for the scheme was issued to all the Lot 4 Framework Agreement Contractors – Amey, Jacksons, Volker Fitzpatrick’s, Dawnus, McPhillips, Fitzgerald’s and Balfour Beatty. To identify which Contractors were interested in the works package.
Four contractors responded confirming an interest and confirming they had the appropriate skills, capacity, experience and reliability to deliver such a project and these were Amey, Jacksons, McPhillip’s and Fitzgerald’s.
A pre-qualification stage will further deselect to 2 contractors
Page 241 of 366 An invitation to tender will be issued to the shortlisted Contractors that will result in the evaluation of tenders with the recommendation to appoint a Contractor(s) to undertake the lead in the detailed design development and construction planning (the ECI process) which would result in the agreement of target prices for packages of work.
The final stage would be the formalised appointment of the contractor(s) to cover the period of construction and handover of the works by the successful Contractor.
If the Target Price produced by the Contractor is not acceptable a break clause will be inserted in the Contract that can be enacted at the completion of the Detail Design and ECI stage. The design will be retained by BCC and an alternative delivery partner sought.
The key stages of the procurement process with indicative dates are set out below:
Engage with Lot 4 Contractors for Expressions of Interest on the D&B Contract – June 2018
Pre-Qualification (to reduce tenders down to 2) – October 2018*
Pre-Qualification Evaluation – November 2018
Tender Period D&B and ECI Contract – November – December 2018
Tender Evaluation – December 2018/January 2019
Draft OBC to Defra Approval – September 2018
PDD Outlining Procurement Strategy – December 2018
Final Business Case to Defra Approval – November 2018
BCC FBC Approval – January 2019**
Appoint ECI Contractor(s) including Design and Build – January 2019
Stage 1 – ECI to support Detailed Design and undertake Construction Planning - January 2019 to May 2019
Stage 1- ECI contractor(s) to develop and to agree a Final Target cost - January 2019 to May 2019
Stage 1 – If ECI Contractor(s) Final Target Price with approved budget in January FBC proceeds to stage 2 and appoint for Main Works Contract.
Construction Lead in (Part of ECI Stage)– March 2019 to April 2019
Stage 2 – Main Works Contract - Construction Period – April 2019 to January 2020 The Post Implementation Review - End 2020
*Note there is a risk that at or during the PQQ stage some Contractors may withdraw from the process leaving one contractor involved in the process. At this stage approval will be sought via a Delegated Authority Report to adjust the Procurement Strategy to ensure Programme deadlines are met.
** Note the Contractors cannot be appointed until the FBC is signed in January at which stage works can commence.
Tendering Model - Technology
As part of the Capita partnership and joint venture arrangements, the City Council has appointed Capita (ICTDS) to be its exclusive provider of ICT, for the term of the contract. As the Council’s exclusive ICT provider there are contractual day rates that can be applied. The day rates are bench marked against industry standards to ensure competitiveness and value for money. The ICT
Page 242 of 366 requirement relating to CAZ are in line with the ICT services already provided by Capita, so as such the Council are contractually obliged to procure via Capita (ICTDS).
Capita (ICTDS) have experience of delivering the Bus Lane Enforcement regime that operates within Birmingham with the procurement of the ANPR cameras, the back office and interfaces it is appropriate to use Capita to procure the CAZ ANPR solution and associated charging systems. It is considered this approach will de-risk the implementation and commissioning of the ANPR system which is a critical element of the effective delivery and enforcement of the CAZ, thus further supporting viability and deliverability of the overall scheme of works
Additional Measures
CPZ’s /Network Change Schemes Given the value of these schemes which will be much smaller than the Main CAZ scheme they will be delivered using a more traditional routes. An Indicative proposal is set out below:
Final Business Case to Defra Approval – December 2018
PDD Outlining Procurement Strategy – December 2018
BCC FBC Approval – January 2019
Mini Bids to engage with Consultants on Lot 2 of BCC’s Multi-Disciplinary Transportation Professional Services Framework Contractors for Design of Additional Measures – January 2019
Appoint Consultant for each Additional Measures package to undertake Feasibility and Detail Design – February -May 2019
Engage with Lot 2/3 Contractors with Tenders for the Delivery of each Additional Measures Package – May to June 2019
Tender Evaluation – June 2019
Appoint Contractor(s) for Build Contracts– June/ July 2019
Construction Lead in – June/ July 2019
Main Works Contract - Construction Period – July 2019 to January 2020 (In case of CPZ’s this will extend beyond January 2020)
The Post Implementation Review - End 2020
Social Value
Compliance with the Birmingham Business Charter for Social Responsibility (BBC4SR) is a mandatory requirement that will form part of the conditions of all contracts on CAZ. The suppliers undertaking this project work under the Council’s Highways and Infrastructure Framework and Agreement and BCC’s Multi-Disciplinary Transportation Professional Services Framework are certified signatories to the BBC4SR and will provide additional actions proportionate to the value of each contract awarded. The actions will be monitored and managed during the contract period.
PFI Contract Alignment
Liaison will take place with the Highway Maintenance PFI Contractor through the design development stage to align, where possible, the CAZ works with planned maintenance work.
Page 243 of 366 4.3 Evaluation and Selection Award criteria, tender evaluation and contract award will be monitored and approved by Commissioning and Procurement Services in order that it complies with the Council’s Evaluating Tenders Procedure. Where required by the Council’s Procurement Governance arrangements, Social Value criteria will be between 10% and 20% to be set dependent upon the value and complexity of each scheme. Social Value will only be applicable to contracts above the value of £200K for Services, £1M for Goods and £1M for Works. The evaluation of tenders will be undertaken by officers from Infrastructure Delivery Team, supported by the Commissioning and Procurement Services. Where applicable, external consultants will support the Infrastructure Delivery Team officers with tenders evaluation where there is no conflict of interest or confidentiality.
4.4 Contract Management The contract will be managed by individual Project Managers and will be monitored and report to the Heads of Infrastructure Delivery who will maintain overall responsibility. The contractor’s performance in delivery of the services will be monitored via Key Performance Indicators (KPIs).
The NEC3 contracts also require a number of roles to help administer the contract and it is important that the correct resources are selected to fulfil these due to the NEC’s very clear requirements regarding roles and processes to administer the contract. The NEC Project Manager role is to manage the contract for the Employer with the intention of achieving the Employers objectives for the completed project. The Supervisor is to check that the works are constructed in accordance with the contract.
Page 244 of 366 ID Task Name Duration Start Finish Predecessors Resource Names Qtr 1, 2018 Qtr 2, 2018 Qtr 3, 2018 Qtr 4, 2018 Qtr 1, 2019 Qtr 2, 2019 Qtr 3, 2019 Qtr 4, 2019 Qtr 1, 2020 Qtr 2, 2020 Qtr 3, 2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 1 MAIN CAZ DELIVERY 551 days Wed 28/02/18 Wed 08/04/20 2 Feasibility Study 234 days Wed 28/02/18 Mon 21/01/19 3 Outline Design 196 days Fri 23/03/18 Fri 21/12/18 4 Production 67 days Fri 23/03/18 Mon 25/06/18 5 BCC Review 5 days Tue 26/06/18 Mon 02/07/18 4 6 Rework 10 days Tue 03/07/18 Mon 16/07/18 5 7 Outline Design Approval 114 days Tue 17/07/18 Fri 21/12/18 6 8 Outline Design Approved 0 days Fri 21/12/18 Fri 21/12/18 7FF 21/12 9 Preferred Outline Business Case (DEFRA) 143 days Wed 28/02/18 Fri 14/09/18 10 Full Business Case (DEFRA) 66 days Mon 17/09/18 Mon 17/12/18 9 11 FBC Complete 0 days Mon 17/12/18 Mon 17/12/18 10FF 17/12 12 BCC Governance (Civils & Cameras) 112 days Mon 09/07/18 Tue 11/12/18 13 Procurement Strategy 80.4 days Mon 23/07/18 Mon 12/11/18 14 Options Appraisal (PDD) 104 days Mon 09/07/18 Tue 04/12/18 15 Cabinet Report 107 days Mon 16/07/18 Tue 11/12/18 16 PDD Approval 0 days Tue 11/12/18 Tue 11/12/18 14,15,21 11/12 17 BCC Full Business Case 47 days Mon 08/10/18 Tue 11/12/18 18 BCC Full Business Case 47 days Mon 08/10/18 Tue 11/12/18 16FF 19 BCC Governance (Back Office System) 23 days Mon 01/10/18 Wed 31/10/18 20 JAQU strategy decision 1 day Mon 01/10/18 Mon 01/10/18 01/10 21 Procurement Strategy 22 days Tue 02/10/18 Wed 31/10/18 20 22 Civils Work - Tender Process 145 days Tue 03/07/18 Mon 21/01/19 23 Expression of Interest 5 days Tue 03/07/18 Mon 09/07/18 24 Resolve framework issues 30 days Mon 13/08/18 Fri 21/09/18 25 Pre-Qualification Questionaire 11 days Wed 17/10/18 Wed 31/10/18 23,24 26 PQQ Evaluation 5 days Thu 01/11/18 Wed 07/11/18 25 27 Tender Period 30 days Thu 29/11/18 Wed 09/01/19 26,13 28 Mid-tender workshop 2 days Mon 03/12/18 Tue 04/12/18 27SS 29 Tender Review Period 5 days Thu 10/01/19 Wed 16/01/19 27,28 30 Finalise Contract 3 days Thu 17/01/19 Mon 21/01/19 29 31 Civils Work - Contract Award 0 days Mon 21/01/19 Mon 21/01/19 16,11,18,30 21/01 32 Camera Procurement - Tender Process 43 days Mon 17/09/18 Wed 14/11/18 33 Final JAQU Camera Specification Received 0 days Mon 17/09/18 Mon 17/09/18 17/09
34 Expression of Interest 5 days Mon 17/09/18 Fri 21/09/18 33 35 Purchase Order Issued 1 day Wed 14/11/18 Wed 14/11/18 34,9,13 14/11 36 Back Office System Procurement 1 day Wed 14/11/18 Wed 14/11/18 37 Purchase Order Issued 1 day Wed 14/11/18 Wed 14/11/18 33,21 14/11 38 Detail Design 142 days Thu 15/11/18 Fri 31/05/19 39 Civils Work - Phase 2 65 days Mon 04/03/19 Fri 31/05/19 40 Mobilisation 10 days Mon 04/03/19 Fri 15/03/19 31,18 41 Undertake Early Contractor Involvement 40 days Mon 18/03/19 Fri 10/05/19 40 (ECI) 42 Detailed Design 40 days Mon 18/03/19 Fri 10/05/19 40 43 Development of Target Cost 40 days Mon 25/03/19 Fri 17/05/19 42FF+5 days,40 44 BCC Design Review 10 days Mon 13/05/19 Fri 24/05/19 42,41 45 BCC Review of Target Cost 10 days Mon 20/05/19 Fri 31/05/19 43 46 Back Office 70 days Thu 15/11/18 Wed 20/02/19 47 Detailed Design 60 days Thu 15/11/18 Wed 06/02/19 37 48 Development of Target Cost 60 days Thu 15/11/18 Wed 06/02/19 47SS 49 BCC Design Review 10 days Thu 07/02/19 Wed 20/02/19 47 50 BCC Review of Target Cost 10 days Thu 07/02/19 Wed 20/02/19 48 51 Cameras - Phase 1 115 days Thu 15/11/18 Wed 24/04/19 52 Mobilisation 10 days Thu 15/11/18 Wed 28/11/18 35 53 Undertake Early Contractor Involvement 65 days Thu 29/11/18 Wed 27/02/19 52 (ECI) 54 Detailed Design 90 days Thu 29/11/18 Wed 03/04/19 52
Task Summary Inactive Milestone Duration-only Start-only External Milestone Manual Progress Project: Clean Air Zone Program Date: Thu 29/11/18 Split Project Summary Inactive Summary Manual Summary Rollup Finish-only Deadline Milestone Inactive Task Manual Task Manual Summary External Tasks Progress
Page 1 Page 245 of 366 ID Task Name Duration Start Finish Predecessors Resource Names Qtr 1, 2018 Qtr 2, 2018 Qtr 3, 2018 Qtr 4, 2018 Qtr 1, 2019 Qtr 2, 2019 Qtr 3, 2019 Qtr 4, 2019 Qtr 1, 2020 Qtr 2, 2020 Qtr 3, 2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 55 Development of Target Cost 90 days Thu 29/11/18 Wed 03/04/19 52 56 BCC Design Review 15 days Thu 04/04/19 Wed 24/04/19 54,53 57 BCC Review of Target Cost 15 days Thu 04/04/19 Wed 24/04/19 55 58 Construction 295 days Thu 21/02/19 Wed 08/04/20 59 Civils Work 223 days Mon 03/06/19 Wed 08/04/20 60 Phase 2a 147 days Mon 03/06/19 Tue 24/12/19 61 Mobilisation 14 days Mon 03/06/19 Thu 20/06/19 44,45 62 Procurement 25 days Fri 21/06/19 Thu 25/07/19 61 63 RAMS 25 days Fri 21/06/19 Thu 25/07/19 61 64 Traffic Management and Controls 10 days Fri 26/07/19 Thu 08/08/19 62,63 65 Installation 88 days Fri 09/08/19 Tue 10/12/19 64 66 Works Verification 10 days Wed 11/12/19 Tue 24/12/19 65 67 Phase 2b 70 days Thu 02/01/20 Wed 08/04/20 68 Ancillary Signs / Remedials 70 days Thu 02/01/20 Wed 08/04/20 66 69 Cameras Phase 1 220 days Thu 25/04/19 Wed 26/02/20 70 Phase 1a 174 days Thu 25/04/19 Tue 24/12/19 71 Mobilisation 10 days Thu 25/04/19 Wed 08/05/19 56,57 72 Camera Delivery 10 days Thu 09/05/19 Wed 22/05/19 71 73 RAMS 15 days Thu 09/05/19 Wed 29/05/19 71 74 Installation 88 days Thu 30/05/19 Mon 30/09/19 72,73 75 Camera Testing & Remedials 81 days Tue 03/09/19 Tue 24/12/19 74SS+68 days 76 Phase 1b 40 days Thu 02/01/20 Wed 26/02/20 77 Ancillary Cameras / Remedials 40 days Thu 02/01/20 Wed 26/02/20 75,85 78 Back Office System 100 days Thu 21/02/19 Wed 10/07/19 79 Mobilisation 10 days Thu 21/02/19 Wed 06/03/19 50,49 80 Equipment Delivery 10 days Thu 07/03/19 Wed 20/03/19 79 81 RAMS 15 days Thu 07/03/19 Wed 27/03/19 79 82 Installation 60 days Thu 28/03/19 Wed 19/06/19 80,81 83 Modular testing 15 days Thu 20/06/19 Wed 10/07/19 82 84 Commissioning 86 days Tue 03/09/19 Wed 01/01/20 85 Integrated testing 81 days Tue 03/09/19 Tue 24/12/19 75SS,83 86 CAZ Operational 0 days Wed 01/01/20 Wed 01/01/20 66,85,74 01/01 87 Programme Completion 0 days Wed 08/04/20 Wed 08/04/20 77,68,86 08/04 88 ADDITIONAL MEASURES 328 days Mon 01/10/18 Wed 01/01/20 89 Network Changes 322 days Mon 01/10/18 Tue 24/12/19 90 Tender - Feasibility Design 45 days Mon 01/10/18 Fri 30/11/18 91 Evaluation 20 days Mon 03/12/18 Tue 08/01/19 90 92 Appoint Consultant - feasibility design 0 days Tue 08/01/19 Tue 08/01/19 91 08/01 93 Feasibility & Detail Design 80 days Wed 09/01/19 Tue 30/04/19 92 94 Additional Measures Final Business Case 20 days Wed 03/04/19 Tue 30/04/19 93FF 95 Contract Tender 40 days Wed 03/04/19 Tue 28/05/19 94SS 96 Appoint Contractor 0 days Tue 28/05/19 Tue 28/05/19 95FF 28/05 97 Mobilisation 25 days Wed 29/05/19 Tue 02/07/19 96 98 Construction 125 days Wed 03/07/19 Tue 24/12/19 97 99 Controlled Parking Zone 283 days Mon 03/12/18 Wed 01/01/20 100 Tender - Feasibility Design 40 days Mon 03/12/18 Fri 25/01/19 101 Evaluation 15 days Mon 28/01/19 Fri 15/02/19 100 102 Appoint consultant - feasibility design 0 days Fri 15/02/19 Fri 15/02/19 101 15/02 103 Feasibility & Detail Design 90 days Mon 18/02/19 Fri 21/06/19 102 104 Consultation 50 days Thu 20/06/19 Wed 28/08/19 103SS+88 days 105 CPZ Final Business Case 25 days Mon 01/07/19 Fri 02/08/19 106FF 106 Contract Tender 30 days Mon 24/06/19 Fri 02/08/19 103 107 Appoint Contractor 0 days Fri 02/08/19 Fri 02/08/19 106FF,105FF 02/08 108 Mobilisation 18 days Mon 05/08/19 Wed 28/08/19 107 109 Construction 90 days Thu 29/08/19 Wed 01/01/20 108,104 110 Administration 108 days Mon 05/08/19 Wed 01/01/20 107SS
Task Summary Inactive Milestone Duration-only Start-only External Milestone Manual Progress Project: Clean Air Zone Program Date: Thu 29/11/18 Split Project Summary Inactive Summary Manual Summary Rollup Finish-only Deadline Milestone Inactive Task Manual Task Manual Summary External Tasks Progress
Page 2 Page 246 of 366 RISKS - 14/11/2018
RAID LOG - Birmingham City Council
Risk Residual Risk Risk Description Consequence Effect Owner Likelihood Impact Mitigation Action Mitigation Residual likelihood Residual Comments Status ID. Date Raised Score Mitigation Date Updated influencer (1-4) (1-4) owner impact Score There is a risk that compliance may not be The council may be received sanctions including fines Reputational damages on BCC - Robust modelling which identifies interventions which make a big BCC - The traffic and air quality modelling shows that R-004 23/10/18 Programme achieved by the 2020 deadline. for failing to meet compliance in time. Birmingham for non compliance Executive 4 4 16 impact. transport policy 3 4 12 30/09/18 compliance will be achieved in all but 3 locations by Open Residents and Business in Birmingham still impacted See if there is potential to expand those initiatives to achieve team 2020, 2 will be met by 2021 and one on Suffolk St by poor air quality. compliance by 2020. Q'way in 2022. There is a risk that JAQU's funding approvals The consequence is a potential for project slippage Additional measures are not BCC - Demonstrating to JAQU the impacts of a prolonged approval process process is prolonged for final delivery of and failure to meet compliance within the respective delivered in time Transport for funding. BCC - R-005 23/10/18 Funding preferred option timescales. policy team 4 4 16 Revised timeline that reduces the legal limits (e.g. consultation). transport policy 3 4 12 19/02/18 Open Not recognising that there is significant local impacts team from not having the funding in place There is a risk that the current city traffic model The consequence would be delays to the overall Incorrect assessment of the current BCC - Model contingency plans for traffic data and their impact on Air Still need to be identified, (Saturn) does not account for road networks programme and implementation of CAZ initiatives. impact and preferred option Transport Quality and devise whether additional measures are required to meet outside of the city centre. Further funding not available to improve areas outside policy team Air Quality compliance. BCC - R-010 23/10/18 Modelling of City Centre. 3 4 12 Updates to the model are underway for the potential cordons transport policy 2 2 4 Open Raise issues around validity on the evidence team Remodelling = further delays
There is a risk that CAZ has an impact on The consequence would be that lack of engagement Delay to Implementation BCC - Ensure a robust communication and engagement strategy to enable M6 - knock on consequences BCC - Highways England network resulting in H.E could potentially mean retrospective changes, transport the most useful and most recent information to be available to inform R-011 23/10/18 Consultation 2 3 6 corporate 2 2 4 22/08/17 Open objecting to CAZ increasing the cost to the council. policy / BCC. comms Adverse comments at the consultations phase corporate There is a risk that there is insufficient Public The consequence would be that it would be more It will take longer to meet the Air BCC Already working with TfWM for certain corridors, and specifically BCC - National policy, can anything drive transport issues R-012 23/10/18 Programme Transport Capacity to support modal shift. difficult to influence people to get the modal shift Quality requirements. 2 3 6 uplifting mode share, eg extra buses transport policy 2 2 4 22/08/17 In terms of compliance the number of patronage Open (programme risk) team level changes are small. There is a risk our assumptions from the The consequence would be that inaccurate modelling Programme delays in going back to BCC - Independent verification undertaken on all results and these will be BCC air quality modelling assumptions transport and AQ modelling are incorrect. results may cause delay to the programme. revaluate the modelling transport matched with what JAQU has provided as indicative areas of poor air The consequence would be additional cost for policy quality. BCC - R-014 23/10/18 Modelling interventions as a result of poorer air quality than 2 3 6 transport policy 1 3 3 Open predicted. team The consequence would be a legal challenge from the Government resulting in cost and delay. There is a risk that political members would be The consequence would be unsupportive members Programme delays - Cost overruns BCC - Cabinet Proactive communications and engagement with influential political BCC - unsupportive of CAZ. may cause the decision making and schedule to be Member stakeholders and demonstrate impact to cost and schedule from lack transport policy 30/09/18 POBC passed through cabinet and scrutiny by a R-015 23/10/18 Political delayed significantly causing. (Economy) 2 3 6 of decision making. team & 1 2 2 political vote, the mayor is also still supportive of the Open FBC isn't signed off corportate scheme. comms There is a risk of lack of guidance and legal The consequence would be judicial review as a result delay on the delivery BCC - Engage with the supply chain to procure external support for the Review before we can accept TRO, we can still go BCC - project R-016 23/10/18 Legislation understanding in how the traffic regulation order of objections. transport 4 4 16 drafting of the charging order from specialist resource. 1 3 3 22/08/18 ahead and implement, will politicians support that Open approval can be used to implement the scheme. policy team There is a risk that JAQU doesn’t understand the The consequence would be there is the possibility of a Negative impact on the wider BCC - Provide JAQU with draft modelling results to prevent delays in Issues with conservative councillors on CAZ complexity and scale involved in BCC delay to agreeing a preferred solution impacting economy transport achieving a preferred solution. BCC - charging zone R-017 23/10/18 Funding 2 3 6 1 2 2 22/08/18 Open completing their Feasibility Study timescales to achieve compliance. Impact on deprived areas and smaller policy Keep JAQU informed of developments and progress on the overall transport policy businesses Air Quality Programme. There is a risk that the capital costs for the CAZ The consequence could be failing to deliver all Delay in compliance BCC - project Ensure budget is sufficient to deliver the respective interventions Implementation risk, procurement strategy before interventions exceed initial forecast spend. interventions to improve Air Quality and reach team / city BCC - project FBC, FBC will finalise costs R-020 23/10/18 Funding compliance resulting in a financial penalty to the finance 2 3 6 Close monitoring of financial during the delivery of the various team / city 1 2 2 01/08/17 Open council. interventions. finance Appropriate contingencies
There is a risk that there is a lack of resource in Slippage in the programme which would mean a fine Delay in compliance BCC - project Create and manage a resource tracker for the overall programme Resource tracker created, raised awareness of BCC - project R-023 23/10/18 Resources terms of capacity and capability within BCC to as a result of not being compliant. team 1 3 3 delivery to ensure no project slippage. 1 2 2 09/04/18 annual leave absences and needs for further Open deliver the project. team resources
There is a risk that there is a delay to scheme Delay to draft scheme submission and scheme Delay in compliance BCC - Constant management of the programme plan and review of critical Delaying implementation of proposal approval. approval could mean that Birmingham City Council transport activities to prevent slippage. miss the requirements of the proposed secondary policy Internal scheme approval - Mitigation, has to legislation to mandate the implantation of a CAZ in BCC - project R-024 23/10/18 Political 1 4 4 1 2 2 Open make it work (ministerial direction) Birmingham resulting in punitive measures. team Delay to approval which will result in significant Government led scheme - forced to timescales delivery pressures for implementation of the CAZ (to etc. be operational by mid 2019). There is a risk that cashless payment systems No off the shelf system currently available. Reputational damage BCC Ensure proper testing prior to user roll out. We don't know what system will be introduced for the CAZ charging zone are not user friendly. User complaints about the cashless payment system Loss of revenue BCC - project R-023 23/10/18 Technological 1 3 3 1 1 1 01/08/18 Open Interoperable system which may cause additional administration and cost to team the city council.
There is a risk that specialist with technical and Specialist resources will be in the highest demand A programme delay BCC - project One of the first cities identified to address AQ, therefore ahead of the air quality knowledge is stretched as the number Potential slow down of the project Don’t deliver compliance - to the team game BCC - project R-026 23/10/18 Resources of cities identified to address AQ nationally Reduced funding required standard/guidance 4 3 12 Can provide useful lessons learned to other cities moving forward 3 4 12 21/06/2018 Open team increased from 5 to 45. Fragmented approach than being led from a national level There is a risk that that there is limited time to The consequence would be that improper positioning Delays to delivery programme and BCC - project Continued collaboration with the design team and the infrastructure undertake detailed site work at design phase of signs and cameras leads to obscure line of sight rework of tenders. team delivery team to ensure efficiencies and knowledge is shared at all BCC - project R-033 23/10/18 Delivery 1 4 4 1 2 2 21/06/2018 Open and increased street clutter. Potential unsuitability of times. team location. There is a risk that some of the signage and The consequence could be that the authority does not Delay to programme, additional costs BCC - Communication with JAQU to raise this as an issue, national camera locations are situated on adjacent agree to the location of the sign/camera. and possible rework of design. transport assurance that authorities such as Highways England are on board BCC - project R-035 23/10/18 Delivery authorities or privately owned networks. policy / project 3 3 9 with Clean Air Zone's and have a clear understanding. team / 2 2 4 21/06/2018 Open team Communication directly with these authorities where there may be transport policy potential infrastructure on the network.
There is a risk that the construction works being CAZ project may be unable to carry out the required Time and cost escalation. BCC - project Early engagement with HS2 and BCC traffic management team. BCC - project undertaken by HS2 will clash with the works at the planned time (HS2 is likely to take team Quarterly meetings with HS2 with KB contacts, maximising time on R-038 23/10/18 Delivery 4 4 16 team / traffic 2 3 6 02/10/18 Open construction activities being planned by CAZ. priority). site - using pre dug holes to standardise the hardware. Weekly city manager centre management meeting. Same as above but for the Midland Metro As above. Time and cost escalation. BCC - project As above. BCC - project R-039 23/10/18 Delivery extension works. team 4 4 16 team / traffic 2 3 6 02/10/18 Open manager Changes planned on the BCC network by other Redesign of the CAZ may be required to work around Time and cost escalation. BCC - project As above early engagement required, where designs can be major programmes could impact the design of the works being planned by othe rmajor ciity centre team / traffic streamlined to incorporate changes being made by other BCC - project 2 R-040 23/10/18 Design the CAZ. programmes. manager 2 3 6 programmes of work then this should be done. Relies on information team / traffic 1 2 02/10/18 Open being provided by the other schemes. manager Average speed cameras being installed on the Sign clutter' on the network, reduced space to Some redesign may be result in BCC - project Designs have been provided to Jacobs for input into outline design. BCC - project R-041 23/10/18 Design A38M will also require new signage which will be implement CAZ signage and confusion to drivers. escalated cost and schedule team / traffic 2 1 2 Will be made available to D&B contractor. 1 1 1 02/10/18 Open similar in nature to the CAZ camera signs. manager team Approval of the CAZ signing is not approved by All of the required information will not be available The target cost subitted by the DfT Information has been submitted to the DfT for approval. DfT in a timely fashion. upon contract award for the next stage of design. contractor will contain an element of R-042 23/10/18 Design uncertainty which could result in 3 3 9 Seek to collaborate with other LAs to ensure a consistent approach. DfT/BCC 2 2 4 02/01/00 Open escalated cost and time.
A manager / accountable person has not been Failure to deliver the mitigation measures and The mitigation measures and BCC - SRO The BCC behavioural change and benefits have been engaged. Mitigations & assigned within BCC to manage the delivery of exemptions in time for the deadline. . exemptions may not be available Escalated within BCC as a responsible person needs to be identified. BCC - traffic R-043 23/10/18 3 4 12 2 2 4 Open Exemptions the mitigation measures and exemptions. therefore having a negative impact manager upon the identified social groups. There is a risk that the marketing campaign for The target audience of the marketting campaign will Delivery of the mitigation measures BCC Enagagement with the BCC comms team is underway. Behaviour BCC - Mitigations & R-044 23/10/18 the mitigation and exemptions will be not be engaged and therefore awareness of the and exemptions will be a failure. 3 4 12 Change team to take ownership and ensure marketting is started corporate 2 2 4 Open Exemptions unsuccessful. mitigation measures and exemptions will be minimal. ahead of time. comms There is a risk that mitiagation and exemptions The consequence is the overall delays in reaching the Delivery of the scheme will be a BCC - Modelling of the impact to traffic and air quality is being undertaken Mitigations & will have a negative impact on compliance. deadline for compliance. failure and potentially result in fines transport to ensure the measures being offered will not have a negative BCC - project R-045 23/10/18 3 3 9 1 3 3 Open Exemptions for BCC. policy impact. team manager
There is a risk of loss of public and business Loss of public support for the scheme and the Reputational damage for BCC and BCC As R007. Consultant being employed to respond to queries raised BCC - project R-046 23/10/18 Reputational support due to a failure to respond to queries required engagement will not be achieved. potential failure to deliver key parts of 3 3 9 during the consultation and ensure all reasonable queries are 1 2 2 Open team raised durng consultation. the scheme. answered.
Company Confidential Page CAZ 247 Risk log 22 10of 18 366 Page 1 of 2 RISKS - 14/11/2018
Risk Residual Risk Risk Description Consequence Effect Owner Likelihood Impact Mitigation Action Mitigation Residual likelihood Residual Comments Status ID. Date Raised Score Mitigation Date Updated influencer (1-4) (1-4) owner impact Score David Harris has resigned from BCC and will be Potential for deliverables to be misinterpreted. The delivered scheme may not match BCC - SRO Detailing of requirements and deliverables from DH, ongoing support Delivery & leaving at the end of Nov 18. A lot of knowledge the functional requirements resulting from Transport Policy, need some continuity and someone to take R-047 23/10/18 4 3 12 David H 3 2 6 Open Poilicy and project history will be lost when he leaves. in rework, time and cost increased. responsibility for supply chain management.
Consultations required for the CAZ car park The delivery of the CAZ car park charging will not be This will effect the duration of the BCC - project BCC delivery team to utilise information from previous parking Open charging additional measures will be extensive delivered in the timescales delaying compliance. project which will impact the cost, as team schemes to avoid 'error traps'. BCC - project R-048 23/10/18 Delivery 4 4 16 3 3 9 and difficult to resolve. well as reputational damage. team Consultant to be employed to undertake the outline design asap.
There is a risk that grants and incentives for taxi The specific mitigation measure could be Reputational damage for BCC and BCC - projct Consider reducing the value of the package to avoid the regulation. BCC - project team / R-049 23/10/18 Legislation drivers for electirc cars infringe on State Aid undeliverable. potential failure to deliver key parts of team 2 3 6 1 2 2 Open rules. the scheme. Engage with Sylvia Broadley to understand her involvement. transport policy team There is a risk that there are legal challenges Legal challenges could result in the necessity to This will effect the duration of the BCC - SRO Engage with BCC legal team to start drafting charging orders. R-050 23/10/18 Legislation from external parties. pause certain elements of work whilst disputes are project which will impact the cost, as 3 3 9 BCC - legal 1 2 2 Open resolved. well as reputational damage. Procure external support where possible to help accelerate the Exempting drivers based on their personal The impact to identified social groups may not be Reputational damage for BCC and BCC - SRO Engagementprocess. with JAQU is ongoing with relation to CAZ exemptions circumstance or geography may not be possible. mitigated adequately. potential failure to deliver key parts of along with BCC legal, Counsel. BCC - project R-051 23/10/18 Legislation 3 4 12 1 2 2 Open the scheme. team BCC to engage with the WMCA to get their buy in. The euro standards database will not be made The charging infrastructure for the CAZ will not be The scheme will not be delivered on Central Issue escalated to JAQU. Project initiated with the DVLA to provide BCC - project R-052 23/10/18 Delivery available in time for CAZ charging infrastructure operational and therefore the scheme will be time and therefore compliance Government 4 4 16 the euro emmissions database. BCC require timescales in order to 3 4 12 Open team design and development. unenforceable. targets will not be met. plan delivery. Due to the lack of baseline data the impact of the Significance of the CAZ will be unknown. Benefits cannot be realised. BCC - SRO AQ monitoring units are being installed across the CAZ to collect Benefits BCC - project R-053 23/10/18 scheme cannot be measured. 1 2 2 date, the delivery of these units is being accelerated (pending JAQU 1 1 1 Open realisation team approval). Lighting collumns will not be suitable for the New poles/collumns may be required which werent Time and cost escalation. BCC - project Send the sign schedule to Amey and engageent with Amey to assess BCC - project R-054 23/10/18 Delivery 3 3 9 2 2 4 Open installation of the CAZ signs. originally priced for by the contractor. team the suitability of the existing collumns. team The BCC FBC will not be submitted in line with Procurement of contractor will not be possible. This will effect the duration of the BCC - project Understand whether the design elementof the contract can be the programme (Jan 19) project which will impact the cost. team accelerated using BCC funding. BCC - project R-055 23/10/18 Procurement 4 3 12 2 2 4 Open team Phase the FBC's to increase the chances of getting them through the The charging order is not produced in time for The scheme would be non-enforceable. Compliance would not be achieved. BCC - project Engage with BCC legal team to start drafting charging orders. delivery due to challenges. team / legal BCC - project R-056 23/10/18 Delivery 3 4 12 2 2 4 Open Procure external support where possible to help accelerate the team / legal process. There is a risk that the target cost is over budget. The consequence is that there may not be enough Cost escalation. BBC - project Quanitify this risk register where possible, leave in the optimisim bias Delivery & BCC - project R-057 23/10/18 budget to complete the implementation of CAZ. team 3 4 12 where possible and use a framework contractor to ensure value for 2 2 4 Open Cost team money. Supply chain unable to cope with the demand for Not be enough cameras to implement CAZ which This will effect the duration of the BCC - project Engage with the supply chain to establish whether they are planning ANPR cameras. would require either a redesign of the project resulting project which will impact the cost. team for the surge in demand. BCC - project R-058 23/10/18 Procurement 3 4 12 2 2 4 Open in a less effiecent CAZ or delays to implementation. team Consider a collaborative approach with other LA's to manage the demand. Procurement governance is lengthy Procurement of the necessary services cannot be The programme will be delayed and BCC - project Engagement with the procurement team early, group approvals and BCC - project R-059 23/10/18 Delivery 3 3 9 2 2 4 concluded in a timely fashion. costs will escalate. team get delegated authorities in place to expedite procurement. team BCC do not have the resources available to The management of the delivery of the CAZ will be This will effect the duration of the BCC - SRO BCC are recruiting. deliver the CAZ. inefficient and some areas of the programme could project which will impact the cost. R-060 23/10/18 Delivery 3 4 12 BCC - SRO 2 2 4 Open slip. Consider the use of consultants to minimise the demand on internal resources.
Company Confidential Page CAZ 248 Risk log 22 10of 18 366 Page 2 of 2
Clean Air Fund Report
An outline of Birmingham’s proposed mitigation measures
Report for the Joint Air Quality Unit
3rd December 2018
Birmingham City Council 1 Lancaster Circus Queensway Birmingham B4 7DJ
Page 249 of 366
Birmingham Clean Air Zone Clean Air Fund Report
Contents
1 Introduction ...... 6 2 Long list/short list process ...... 6 2.1 Summary of distributional impact analysis report...... 6
2.2 BCC Clean Air Zone consultation ...... 9
2.3 Exemptions ...... 10
2.4 Mitigation measure longlist ...... 12
2.5 Mitigation shortlist ...... 15
2.6 Integrations of exemptions and mitigation measures ...... 16
2.7 Impact on compliance date ...... 16
2.8 Summary of shortlisted measures ...... 17
3 Overall approach to Value for Money and State Aid ...... 20 3.1 Approach to Value for Money assessment ...... 20
3.2 Approach to State aid ...... 23
4 M1: Mobility support for individuals who regularly enter the CAZ ...... 25 4.1 Summary of distributional impact on group ...... 25
4.2 Description of mitigation measure ...... 27
4.3 M1a: Delivery plan for supporting individuals working within the CAZ...... 32
4.4 M1b: Delivery plan for supporting individuals living outside the CAZ ...... 35
4.5 State aid considerations ...... 36
4.6 Value for Money ...... 37
4.7 Quantification of scheme ...... 39
5 M2: Financial support for Birmingham’s taxi trade ...... 41 5.1 Summary of distributional impact report ...... 42
5.2 M2a: Financial support for Hackney carriage drivers ...... 46
5.3 M2b: Hackney carriage leasing scheme ...... 51
5.4 M2c: Financial support for Private Hire Vehicle driver ...... 53
5.5 Value for Money ...... 55
6 M3: ‘Free miles’ for ULEV LGVs on BCC’s public charging network ...... 56 6.1 Summary of distributional impacts ...... 56
6.2 Description of mitigation measure ...... 57
6.3 Delivery plan ...... 57
ii
Page 250 of 366 Birmingham Clean Air Zone Clean Air Fund Report
6.4 State aid considerations ...... 57
6.5 Value for Money ...... 57
6.6 Quantification of package ...... 58
7 M4: HGV & Coach compliance fund...... 59 7.1 Summary of distributional impact on group ...... 59
7.2 Description of mitigation measure ...... 60
7.3 Delivery plan ...... 62
7.4 State aid considerations ...... 64
7.5 Value for Money ...... 64
7.6 Quantification of scheme ...... 65
8 M5: Marketing and engagement campaign ...... 67 8.1 Summary of distributional impact ...... 67
8.2 Description of mitigation measure ...... 67
8.3 Delivery plan ...... 68
8.4 State aid considerations ...... 68
8.5 Value for Money ...... 68
8.6 Quantification ...... 76
9 M6: Resident parking schemes ...... 77 9.1 Summary of distribution analysis...... 77
9.2 Description of mitigation measures ...... 77
9.3 Delivery plan ...... 79
9.4 State Aid consideration ...... 79
9.5 Value for Money ...... 79
9.6 Quantification of scheme ...... 79
10 Administrative cost and spending profile ...... 81 10.1 Administrative costs ...... 81
10.2 CAZ team administrative costs...... 84
10.3 Spending profile for mitigations ...... 89
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Authors
The report was prepared by Element Energy.
For comments or queries please contact:
Luke Gavin, Consultant, [email protected], +44 (0) 3300 883 916
Reviewers
Celine Cluzel, Director, Element Energy [email protected]
David Harris, Birmingham City Council [email protected]
Acknowledgements
The authors would like to thank the numerous stakeholders who made valuable contributions to this document: Transport for West Midlands, Birmingham Children’s Hospital, Birmingham Community Healthcare NHS Foundation Trust, the National Franchised Dealership Association, VRS, the Federation for Small Businesses, Leeds City Council and Transport for London.
We also thank the many teams from Birmingham City Council that have themselves available to help and input: the taxi licencing team, the benefits team, the Business Enterprise team and the Transportation Behaviour Change team.
Lastly, we are grateful for the assistance provided by the Joint Air Quality Unit team who provided constructive feedback on several occasions, helping us refine this report.
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Acronyms
ANPR Automatic Number Plate Recognition ATF Authorised Treatment Facility BAME Black, Asian and Minority Ethnic BCC Birmingham City Council BCH Birmingham Children’s Hospital BEV Battery Electric Vehicles DIA Distributional Impact Appraisal HGV Heavy Goods Vehicle CAF Clean Air Fund CPZ Controlled Parking Zone CS Consumer Surplus CSF Critical Success Factor CVRAS Clean Vehicle Retrofit Accreditation Scheme DEFRA Department for Environment, Food & Rural Affairs DfT Department for Transport DIA Distributional Impact Analysis DVLA Driver and Vehicle Licencing Authority EV Electric Vehicle HEV Hybrid Electric Vehicle HGV Heavy Good Vehicle HDV Heavy Duty Vehicle LGBT Lesbian, Gay, Bisexual and Transgender LGV Light Goods Vehicle LPG Liquefied Petroleum Gas LSOA Lower Layer Super Output Area MEOP Market Economic Operator Principle MSOA Middle Layer Super Output Area NINO National Insurance Number ONS Office for National Statistics PAYE Pay As You Earn PHEV Plug in Hybrid Electric Vehicle PHV Private Hire Vehicle PiCG Plug in Car Grant PiVG Plug in Van Grant PPZ Permit Parking Zone SME Small and Medium sized Enterprises TEMPro Trip End Model Presentation Program TfWM Transport for West Midlands TSRGD Traffic Signs Regulations and General Directions UCL University College London ULEV Ultra-Low Emission Vehicle VfM Value for Money VOC Vehicle operating Costs
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1 Introduction This report is designed to support the Full Business Case submitted to Government by Birmingham City Council. It aims to thoroughly explain the thought process in designing the mitigation measures and justify the funding amount asked from the Clean Air Fund (CAF). Section 2 outlines the process by which the final list of mitigation measures was reached; starting from a broad long list and comparing each to Critical Success Factors to arrive at the short list of measures which has been brought forward to the Clean Air Fund application. It also briefly explains the proposed exemptions and how these integrate with the mitigation measures.
Section 3 described the approach to assessing the Value for Money (VfM) for each measure as well as the overall State aid assessment.
The subsequent sections (4 to 9) detail each mitigation measure included in the short list including; a summary of the distributional impact on the affected group, a description of the proposed measure, a robust delivery plan, state aid considerations, value for money and lastly the methodology used to quantify the amount asked from the CAF.
Finally, Section 10 lays out the mitigation administration cost, and the total cost spending profile.
2 Long list/short list process
When designing mitigation measures to be requested from the CAF, an established longlist/shortlist process was followed. This involved the following steps:
Taking the key conclusions from the Distributional Impact Appraisal report (DIA) to identify the groups most negatively impacted and so most in need of support, whilst also considering the impact on those with protected characteristics. From the DIA conclusions creating a longlist of mitigation measures. A wide range of measures were considered which could mitigate the negative impacts identified in the DIA. This list was deliberately broad and considered all options that could be enacted to help targeted user groups. Assessing the longlist measures: each measure on the longlist was assessed against Critical Success Factors (CSF). These are divided into: o Primary CSF: this criterion is crucial to the overall project success, measures which do not meet this criterion were rejected. This is a pass/fail criterion on whether the measure delays reaching compliance in the shortest possible timeframe. o Secondary CSFs: used to determine the best option relative to the project objectives, these included: Value for money, Distributional impacts, Strategic fit with other policies, supply side capability, affordability and achievability. Revising the longlist to a shortlist of measures. All measures were compared assessed against the CSFs mentioned above and a qualitative decision was made whether to progress the measure to the short list of measures. During this process the details of the measure in question was finalised. The short list of measures was then analysed and quantified before a final decision was made on the items taken forward to the CAF ask. 2.1 Summary of distributional impact analysis report
The results from the DIA were the primary source in identifying the groups negatively impacted by the CAZ and in need of support in the form of mitigation measures. The conclusions from this report were used to design a longlist of mitigation measures. The main findings from this report are summarised below, as well as the decision process of whether to include a mitigation measure targeted at the affected group in the longlist of mitigation measures.
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Table 1 Summary of DIA findings and decision to include in mitigation measures Affected Impact Summary of distributional impact Decision to include in group longlist of mitigation measures
Low The DIA has shown that low income households Decision to include income across Birmingham would bear a disproportionate support measures in households amount of the increased vehicles costs for personal longlist of mitigation journeys. Those located in close proximity to the CAZ measures with particular or those who need to regularly enter the CAZ (e.g. for focus on those that live work) would be worst affected and least able to avoid and work within the CAZ the CAZ for everyday journeys.
Taxi drivers BCC are introducing new taxi licencing conditions in Decision to include 2020 that will result in 1,140 hackney carriages support measures in currently in operation no longer being eligible to be longlist of mitigation licenced. This represents a fleet turnover of 90% in a measures single year. Drivers are faced with limited options as a Euro 6 vehicle can only be operated for 6 years due to a proposed ULEV licencing condition in 2026 and electric taxis involve high capital costs. This creates significant affordability issues for drivers forced to change their vehicle.
Additionally, 90% of drivers identify themselves as from BAME groups and the majority of drivers live in the most income deprived areas of Birmingham.
The new licensing conditions will have a similar impact on private Hire Vehicle drivers. Out of a total stock of 4,321 vehicles, only 162 are eligible to be licenced past January 2020. This leaves 4,159 vehicles which must be upgraded. 50% of drivers are registered in LSOA’s in the 1st quintile for BAME residents and 90% reside in the most income deprived quintile in Birmingham. HGV fleets There are 1,459 small operators in Birmingham (<5 Decision to include vehicles) who are most at risk from CAZ charges as support measures in they lack the flexibility to redistribute their fleet and longlist of mitigation are less likely to have the necessary capital to either measures absorb the CAZ charges or alternatively upgrade to a compliant vehicle. Analysis of the HGV market has shown that substantial capital expenditure is required to upgrade a fleet and the CAZ will put significant pressure on local businesses.
SMEs SMEs Businesses within the CAZ will have a limited ability Decision to include within to avoid entering or exiting the zone and mapping support measures in the has shown that there is a high proportion of SMEs longlist of mitigation CAZ: which are dependent on vehicle transport within the measures CAZ creating affordability issues for the city’s small businesses. Consultation with Birmingham’s fleet operators has suggested that many will not reach
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compliance naturally before 2020 and so will face high capital costs or CAZ charges. There was also significant concern raised around the retention of staff who may change working location to avoid the charges.
Disabled Disabled: Disabled people will be impacted by the potential No: it was decided that and elderly reduction in community transport and wheelchair mitigations for disabled Individuals adapted taxis and the possible increase in cost of residents was best Elderly: community transport. As a group, they have a covered by an exemption reduced range of transport options and may be rather than by a unable to use public transport, walk or cycle due to mitigation measure mobility issues. They also, on average, have lower requiring CAF funding. household incomes making them less able to afford For more detail see CAZ charges or increases in fares. Sections 2.6, 2.8 and Table 2.12 of the Final Business Case. Accessibility will also be covered in mitigation measures targeted at the taxi community to ensure wheelchair accessible vehicles remain available to elderly and disabled residents.
Women Women have been shown to be more reliant on the No: to prevent these use of taxis and private hire vehicles and have a negative impacts, more negative perception of other travel options due mitigations will be to safety concerns. They therefore would be targeted at the taxi disproportionately impacted by the increased cost of community to ensure travel. availability remains.
People with Congregants of large places of worship within the No: It was decided that a religious CAZ would be adversely impacted if the increased mitigation measure would beliefs cost of travel dissuades them from attending their not be included in the place of worship. long list. This is due to the difficulties in implementing a scheme targeted at worshipers and a risk of perceived unfairness on other groups. Instead there is a focus on a wider group of residents on low income
An additional impact that was considered concerned residents living near the boundary of the CAZ, those who park their vehicle on-street will be adversely affected if non-residents park in these areas and complete their journey on foot to avoid the CAZ charges. This was outside the scope of the DIA but has been included on the advice of BCC’s transport team.
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For each of the shortlisted items discussed later, this report gives a detailed description of the DIA for the affected group as an explanation and justification for proposing each mitigation measure.
2.2 BCC Clean Air Zone consultation
2.2.1 Summary of consultation responses Between 4th July 2018 to 17th August 2018, BCC ran a public consultation regarding the introduction of the CAZ. 10,368 individuals and 384 organisations responded to the consultation. Below are some key results which were used to influence the design of the mitigation measures:
38% of individuals said they would need some form of support if a CAZ was introduced 81% of organisations felt there should be support for SMEs operating in the CAZ area The main groups that individuals felt should be supported were: o Visitors to the Birmingham Children’s Hospital o Disabled drivers and their carers o Residents of the CAZ o Those on low income o Small and local businesses o Commuters and those working in the CAZ o Taxi drivers 22% of individuals mentioned the possibility of having to leave their job as a result of the CAZ charges 37% of individuals felt that residents and commuters would face financial difficulties as a result of CAZ chargers 72% of organisations stated that the CAZ would be bad for business in Birmingham 26% of organisations believe that the CAZ will lead to job losses
The conclusions from the responses showed that, as well as supporting Birmingham’s fleets adapt to the CAZ, a particular focus should be given to those working in the CAZ who commute from outside the zone. This is important for number of reasons, most importantly:
These individuals have a limited ability to avoid entering the CAZ, if the public transport network is insufficient for their journey then they could have to upgrade their vehicle to avoid paying the charges which causes affordability issues. Businesses in the CAZ will suffer if employees move jobs to avoid paying the daily CAZ charges.
2.2.2 Case study: Birmingham Children’s Hospital Birmingham Children’s Hospital (BCH) employs 2,800 staff and provides 24 hour per day services to residents of Birmingham, the West Midlands and the wider area. The key site at the hospital is located on Steelhouse Lane which lies within the proposed CAZ D boundary. BCH relies on a regional workforce to provide a full range of specialist care skills and many staff commute from the wider West Midlands area. The start and end time of many shifts make public transport inappropriate, these include arriving by 07:00 on weekdays and leaving at 10:00 or 02:00 in the evenings as well as a range of weekend shifts. To assess the impact on their staff and patients, BCH conducted a survey of 463 staff as well as 458 families. The conclusions form the study showed:
Public transport services are often not adequate for staff and visitors There is a lack of safe cycle routes to the site The short time scale will prevent low income staff from upgrading their vehicle in time to avoid the CAZ charges 36% of staff would have to pay the CAZ charge with their current vehicle 69% of staff who would be charged stated that they rely on travelling to work by car because of other responsibilities
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Overall 37% of staff said they were totally dependent on their car for journeys to BCH 65% of staff that owned non-compliant vehicles stated that they would consider changing jobs in the next 3 years as a result of the CAZ charges
When comparing the responses from staff of BCH with other groups identified in the DIA as well as other consultation responses an important theme emerges. The hospital employs a wide range of staff, as well as the critical staff employed as key workers there are hundreds of others whose work is vital to the operation of the hospital (e.g. porters, receptionists and cleaners. The hospital has also committed to employing only band 2 and above (>£17,460 per year), this would likely be over the government definition of a low-income household (60% below the national median). This stresses the importance of providing support to a wider group of individuals who work within the CAZ, both for the sake of the employee and to ensure that organisations can retain/continue to attract staff. This is particularly important for key health workers as they provide a vital community service. If they were prevented from commuting to work this could jeopardise the continuing of safe levels of health services within the CAZ.
2.3 Exemptions The results from the DIA shown in 2.1 were used to identify groups who should be offered an exemption form the CAZ charges. The exemptions are part of a rational approach which balances the need to reduce the impact on individuals and businesses and deliver compliance in the shortest possible time. Exemptions are offered in order to give vulnerable groups an extended period of time to adapt to the CAZ and are designed to reduce the negative impact that results from its implementation. Table 2 shows a summary of the exemptions being proposed.
Table 2 Summary of proposed exemptions Exemption Description DIA Length of exemption
Commercial vehicles Commercially owned LGVs, SMEs with vehicles registered 1 year registered within the CAZ HGVs and coaches within the CAZ will have a registered within the CAZ limited ability to avoid the are exempted. Limited to 2 charges and will be vehicles per company disproportionately affected. (companies two cleanest non-compliant vehicles).
Commercial vehicles with Commercially owned LGVs, Finance agreements will limit an 1 year pre-existing finance HGVs and coaches with organisations ability to upgrade agreements finance agreements that vehicle. Jacobs ‘Freight and extend beyond 2020 will be Logistics’1 report showed that given a 1-year exemption. many fleet operators have lease arrangements into the early 2020’s.
Private vehicles registered Private vehicles registered Individuals with vehicles 2 years within the CAZ within the CAZ are registered within the CAZ will exempted have a limited ability to avoid the charges and will be disproportionately impacted. Areas within the CAZ have been shown to have high levels
1 Jacobs: Clean Air Zone - Freight & Logistics, 2017
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of income deprivation compared to Birmingham as a whole.
Individuals travelling into Individuals with a non- Low income individuals will be 1 year the CAZ for work compliant who work within disproportionally impacted by the CAZ will be exempt from the CAZ, especially those that paying the CAZ charges must regularly enter the zone (Cap of £30,000 annual for work. salary applied, this includes key workers). Key works provide essential services and BCC wants to ensure that their employment is retained within the CAZ
Individuals who live Individuals who live outside The DIA has shown that those 1 year outside the CAZ the CAZ with a non- who live in areas in proximity to compliant car (scheme the CAZ will be limited to finite number of disproportionately impacted, places, which will be especially those who must enter allocated on distance from regularly for purposes other the CAZ and income) than work
Visitors to key hospitals Patients/ visitors of the Individuals who visit the hospital Duration of hospital will be given an will have limited ability to avoid their stay exemption for the duration of the zone and it is vital that (scheme their stay. individuals are not discouraged will run for from attending health care a 1-year services as a result of financial period) pressure
Community, school and Vans and minibuses Community and school All years disabled vehicles registered as providing transport services are often run for essential community and by not-for-profit organisations disability school transport services who will have limited ability to adapted (section 19) as well as upgrade their vehicles. They vehicles vehicles registered as provide essential services for disabled will be exempt. A vulnerable residents. Disabled disabled vehicle will have to residents are more likely to be 1 year for be registered with the DVLA from low income households community as such, blue badge holders and have reduced options as transport will not automatically be public transport is often services exempt. This is because the inappropriate for individuals volume of blue badge with mobility issues. holders within Birmingham makes this unfeasible.
As well as the above exemptions, BCC are planning to exclude two wheeled vehicles (motorbikes, mopeds and scooters) from the CAZ charges. Motorcycles and scooters make up a very small amount of overall traffic and do not overall contribute to air quality issues significantly. The Clean Air Zone Framework requires motorcycles to be a minimum of Euro 3. Analysis of registration date for Birmingham suggests that almost three quarters of the motorcycle, scooter and moped fleet in Birmingham meets this standard.
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Feedback from the consultation showed that many residents felt they should be excluded from the charges and this is forecast to have only a minimal effect on non-compliant vehicles traveling into the CAZ. Including them in the charge would also require the capability to read rear number plates rather than the standard frontal number plate recognition.
The impact on air quality that results from these exemptions is covered fully in in Section 2.8.4 of the Final Business Case.
The Council considers that these exemptions as an important measure to give individuals and businesses an extended time frame to adapt to the CAZ. However, the Council also recognise that exemptions do not help individuals or business upgrade to a compliant vehicle other than providing them with a longer period to adjust. In some cases, individuals or businesses could be faced with the same issues after the 1-year exemption as they would have done in 2020 without an exemption. To assist those looking to upgrade their vehicle, BCC has devised a list of mitigation measures to be implemented alongside the exemptions.
However, the Council will keep the exemptions under review to ensure they are not impacting or hindering on delivering compliance.
2.4 Mitigation measure longlist
After the target groups were identified from the DIA, Element Energy conducted a detailed analysis of Birmingham’s fleet and private vehicles from which a long list of mitigation measures to aid target user groups in adapting to the CAZ was created. This included a number of measures identified as potential mitigation as part of the Additional Measures workstream. The longlist of measures was as follows:
Mobility package for private vehicle owners: residents are offered a mobility package in the form of credit for use on Birmingham’s public transport network. Options for those included in the scheme are: Residents of the CAZ (low income or all), individuals who work within the CAZ (low income or all), Low income Birmingham residents, key workers Scrappage scheme for private vehicle owners: residents are offered a choice of cash payment to contribute to compliant vehicle purchase or mobility credit (as described above) in return for scrapping a non-compliant vehicle. Options for those included in the scheme are: all Birmingham residents, low- income residents of Birmingham, low income residents of West midlands, individuals who work within the CAZ. Ultra-Low Emission Vehicle (ULEV) taxi grant: Hackney carriage drivers who purchase a ULEV vehicle receive a grant to reduce the upfront purchase price or as a contribution to lease costs. Private Hire Vehicle upgrade support: Private Hire Vehicle drivers receive a financial contribution towards the purchase or lease of CAZ compliant vehicle. ULEV taxi council leasing scheme: the council borrows a lump sum of money with which to purchase a bulk order of ULEV taxis which are then leased to drivers on favourable terms. Taxi scrappage scheme: Hackney carriage drivers receive a discount on the purchase of a new ULEV vehicle if they scrap an older non-compliant vehicle. ULEV taxi operational support package: Hackney carriage and Private Hire vehicle drivers who buy or lease a ULEV vehicle receive payments to help with operational costs such as insurance, maintenance, electricity costs, licensing fees and access fees to taxi ranks. Taxi retrofit fund: Hackney carriage drivers receive a grant with which to install an accredited retrofit technology making their vehicle compliant. SME grant scheme for HGVs/LGVs: SMEs with non-compliant vehicles are offered a grant to help with the upfront costs of a compliant vehicle. An additional option in the case of LGVs for this item is to limit the grant offering to ULEV vehicles. Retrofit scheme for HGVs/LGVs: companies are offered a grant to help with the costs of retrofitting their vehicle fleet to bring to compliance. An additional option on this item is limiting the grant to SMEs. Freight consolidation centre: BCC would finance the development of a freight consolidation centre where non-compliant vehicles could deliver goods to be picked up by alternative forms of transport
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(e.g. compliant vehicles, cycle freight etc.). This is designed to lessen the burden on non-compliant delivery fleets. Free public charging electricity credit for LGVs: companies that purchase a plug-in LGV receive free electric miles on Birmingham’s public charging network, this will be offered in partnership with Birmingham’s electric vehicle development partner (yet to be announced, procurement on-going). Additional bus service priority along 4 key corridors into Birmingham City Centre: This would increase priority lanes for public transport into the CAZ from key areas that have been identified as having the most pressing need. Improving Birmingham’s cycling and walking infrastructure: Installation of key infrastructure such as walkways, cycle lanes and cycle storage facilities along key transport routes
The above proposals all directly address issues faced by groups identified in the DIA. Through discussions with the project consortium, two additional measures were identified which BCC feel are crucial in mitigating the most severe negative impacts of the CAZ:
1. Residents parking scheme: There is concern that individuals regularly entering the CAZ will park on the margins of the zone, which are generally residential areas, and complete the rest of the journey by foot, thus avoiding the CAZ charge. This will cause parking pressure in these areas and may prevent residents being able to park their own vehicles at an acceptable distance to their house. To address these concerns, Controlled Parking Zones are proposed, where all non- residential vehicles must pay for parking with the aim of preventing a build-up of traffic in these areas. 2. Marketing and engagement campaign: Online and offline information campaign from Birmingham City Council to reach out to all key user groups with the aim of providing information on the CAZ measures, how they will impact each group, the options that each group has to reach compliance and the assistance that is available in the form of mitigation measures, government funding schemes and city council initiatives.
The decision process regarding the long list items is summarised in Table 3 below.
Table 3 Description of longlist measures including the assessment against primary and secondary CSFs leading to a decision on whether to take each measure forward to the shortlist Mitigation measure Primary CSF: Does measure Secondary CSFs Decision to bring delay reaching compliance forward to short list in shortest possible time?
Mobility package for No: encourages use of the Unless scheme is Yes – but limit package private vehicle public transport targeted cost will to low income owners become excessive individuals working within the CAZ
Scrappage scheme No: in some instances, this will Logistical and Yes – but limit package for private vehicle result in a compliant trip rather feasibility issues to low-income owners than a cancelled/re-routed trip, relating to the proof of individuals and target however the modelling scrappage, must be at those who regularly suggests this does not impact targeted to limit cost enter the CAZ the compliance date (Section 2.8.4 of the FBC)
ULEV taxi grant No: encourages transition to State aid and double No ULEV vehicle funding issues
ULEV taxi leasing No: encourages the transition Would require Not in this form. Edited scheme to ULEV vehicles significant funding or, to include a limited alternatively, a large number of taxis for the council to lease to
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loan amount drivers
Taxi scrappage No: encourages the transition Feasibility and No scheme to ULEV vehicles logistical issues, as well as state aid issues
ULEV taxi No: encourages transition to Satisfies all Yes – Combined award operational support ULEV vehicle secondary CSFs and where drivers receive package positive feedback equal funding for either received from trade retrofit solution or Taxi retrofit fund No: encourages transition to a Satisfies all ULEV operational compliant vehicle technology secondary CSFs and support package positive feedback
received from trade
Private Hire Vehicle No: encourages transition to a Satisfies all Yes upgrade support compliant vehicle technology secondary CSFs and positive feedback received from trade
SME grant for No: encourages transition to a State aid and double Not in this form. Edited HGVs/LGVs compliant vehicle technology funding issues to include a fund for HGVs only where fleets Retrofit scheme for No: encourages transition to a Issues with can apply for a funding HGVs/LGVs compliant vehicle technology technology readiness award to aid with either for HGVs, for LGVs retrofit technology or the cost of retrofit the upfront cost of a compares poorly with compliant vehicle. cost of new vehicle2 Coaches added to this scheme.
Freight consolidation No: would reduce the amount Would require No centre of CAZ entries from freight significant vehicles investment, negative feedback from Birmingham businesses and fleet operators, not feasible in the timeframe available
Free public charging No: encourages transition to Satisfies all Yes electricity credit for ULEV vehicle secondary CSFs LGVs
Further bus priority No: encourages use of the Costs are not No (could be improvements public transport considered developed at a later
2 Retrofit technologies for buses and taxis cost between £12,000 - £15,000 which is in most cases higher than the cost of a second-hand van
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reasonable in relation date outside of the to CAF3 CAF framework)
Improving No: encourages residents to Size of impact No (could be Birmingham’s cycling walk and cycle compared to the developed at a later and walking costs and timeframe date outside of the infrastructure are not considered CAF framework). The feasible in relation to Council has prepared a CAF2. separate Local Cycling & Walking Investment Plan.
Residents parking No Satisfies all Yes scheme secondary CSFs
Marketing and No: encourages transition to Satisfies all Yes engagement ULEV vehicles secondary CSFs campaign
2.5 Mitigation shortlist From this assessment, 9 mitigation measures were brought forward to the shortlist; these are quantified in detail and assessed against the CAF objectives. This assessment also forms the CAF application detailing why BCC believes they are necessary to mitigate the negative impacts of the CAZ on key groups. The 8 shortlisted items are:
1. Choice of mobility package or scrappage scheme for individuals who work within the CAZ 2. Scrappage scheme for residents of the West Midlands 3. HGV & Coach compliance fund: this is a combination of the retrofit scheme and SME grant outlined in the longlist, this will take the form of an open competition where fleets bid for funding to either retrofit their vehicles or alternatively purchase/lease a new or second-hand compliant vehicle 4. Hackney carriage support package: combination of the retrofit fund and the operational support package 5. Hackney Carriage council leasing scheme: this is in the form of a limited number of vehicles being purchased by the council to lease to drivers, this scheme will be targeted at those close to retirement and those considering purchasing a ULEV vehicle though all current drivers will be eligible. 6. Financial support for Private Hire Vehicles to upgrade to compliant vehicles 7. Free miles’ for ULEV LGVs on BCC’s upcoming public charging network 8. Marketing and engagement campaign 9. Residents parking scheme
For each of these, the following sections provide a detailed description of the measure, including:
A summary of the distributional analysis as a rationale for why the intervention is required A full description of the measure detailing how the measure meets the funds objectives and has no negative impact on air quality A detailed delivery plan of the measure A description of state aid considerations Demonstration of how the measure represents value for money A quantification of the scheme explaining the methodology used to calculate the number affected stakeholders and the funding required.
3 Birmingham Clean Air Zone Feasibility – Additional Measures Study, 2018
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2.6 Integrations of exemptions and mitigation measures The exemption and mitigation measures that have been proposed are both designed to minimise the negative impacts identified by the distributional impact analysis. As such, in some cases overlaps exist between the groups targeted by the exemptions and those eligible for exemptions. Descriptions of how exemptions are integrated into the implementation of the mitigation measure are covered in detail in the delivery plan of each measure. A summary is provided below and shown in Figure 1:
Receiving support through one of the mitigation measures proposed in no way affects an individual’s/organisation’s eligibility for an exemption and vice versa. Social mitigation measures proceed a 1-year exemption and involve a 2-step application process For mitigations affecting commercial vehicles: o The implementation of the mitigation measures will be extended to early 2021, this allows individuals/organisations to continue to use their vehicle during the exemption period and is organised so that beginning of the mitigation measure coincides with the end of the exemption. o Those that are eligible for mitigation measures but are not eligible for exemptions can receive the mitigation packages/funding to coincide with the implementation date of the CAZ (Jan 2020).
Figure 1 BCC's general approach to integrating the proposed exemptions and mitigation measures 2.7 Impact on compliance date The set of measures will not delay compliance for a number of reasons:
The measures are designed to help individuals and organisations switch to cleaner compliant vehicles earlier than they normally would, so it is not envisaged that any measure would delay compliance. For commercial fleets, especially in the case of taxis and HGVs, it is assumed that the vast majority would switch their vehicle as a result of the CAZ irrespective of any mitigation measures. Therefore, the measures should not impact the rate of compliance but instead make it financially easier for those who are forced to switch their vehicles For private individuals, the measures are designed to prevent non-compliant vehicles entering the CAZ and so are not considered to prevent compliance in any form.
The exception to the above is the scrappage scheme as this measure has the potential to cause an individual to travel into the CAZ with a compliant vehicle when they otherwise would have cancelled or re-routed their trip in order to avoid the CAZ charges. Air quality modelling has been conducted to analyse this impact. It shows that in monetary terms, if this mitigation is not included the net benefit of the CAZ on air quality will be £50,172,323. When this mitigation is included, this reduces to £49,901,646 meaning the measure has a negative impact on air the net air quality benefit of -£270,677. When compared to the total benefit, this amount is negligible and well below the resolution of the air quality model. In summary, this measure does not delay compliance and will not prevent Birmingham reaching compliance in the shortest possible timeframe.
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graphic Distributional analysis (how group is Cost (volume x Summary of mitigation measure scope impacted) cost per user)
Class D CAZ will force residents to estricted Individual can access the choice of a £1000 mobility credit offered in form of £10.84 million either upgrade vehicle or pay charges ographic SWIFT travel card or a £2,000 package (Swift credit or contribution to (5,420 x £2,000) if they wish to enter. For many area compliant vehicle) in return for scrapping a non-compliant vehicle individuals, public transport may be
the only alternative, these measures With evidence of scrapping a non-compliant car individual receives either: decrease the cost of that switch or £6.50 million est £2,000 cash payment toward the purchase of a compliant car facilitate the purchase of a compliant (3,250 x £2,000) dlands £2,000 mobility credit. Credit to be supplied on a SWIFT card with no vehicle. expiration for use. Drivers offered £5,000 as: Changes in licencing conditions will £5 million support payments to be paid towards operational expenses of ULEV force over 90% of the 1280 vehicles mingham (1000 x £5,000) vehicles (4 annual instalments of £1,250) currently operational to change and ounding support for an LPG retrofit of their current or newly purchased vehicle (upgraded/retrofit). All options on the y areas market require significant capital £2.75 million BCC bulk purchase 50 ULEV taxis through public procurement tender and ced BCC expenditure, this helps drivers to (50 x £55,000) lease them to vulnerable drivers as well as on a try-before-you-buy basis rivers) switch to a compliant vehicle. Private Hire Vehicle owners who upgrade a non-compliant vehicle to a As above, changes in licencing £7 million
2.8 Summary of shortlisted measures
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complia t ehicle hich fulfils BCC s 2020 licencing criteria and is under 3 conditions are expected to result in (3,500 x £2,000) years of age will receive financial aid of £2,000. This will aim to incentivise the 95% of the 4,321 current vehicles switch to low emission vehicles (HEVs, PHEVs and BEVs) needing to be upgraded to continue operation SMEs operating coaches/HGVs/LGVs £0.75 million Free iles for mingham ULEV van drivers receive £750 credit to spend on BCC public charging network or relying on road transport will be (750 x £1,000) disproportionately impacted. Vehicle Fleets compete for £15,000 funding package to contribute towards: capital costs are high, and many est £10.05 million Installing a retrofit solution fleets must enter CAZ as part of dlands (670 x £15,000) Upfront or lease costs of a compliant vehicle business operation. This helps fleets change to a compliant vehicle. - Ensures maximum uptake/knowledge Marketing and engagement campaign to provide information on the CAZ and £0.38 million - of measure, to minimise negative reach out to groups eligible for support through mitigation measures impact Implementation of residents parking schemes to prevent overcrowding on Prevents vehicle overcrowding on nd CAZ £5 million margins of CAZ; will be deployed only if issues arise residential streets CAZ margins Total (excluding administrative £48.27 million costs) Table 4 below summarises each measure on the short list, arrived at through the process described above. It provides a brief description of the measure, the group impacted, geographical scope, a summary of the DIA and the funding ask. This is designed as a simple summary, please note that more extensive information on each of the measures can be found in later sections, including a detailed description of how the cost of each method was calculated.
The cost in the last column does not include the administration costs; these are detailed in the final Section.
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Group Geographic Distributional analysis (how group is Cost (volume x Ref Measure Summary of mitigation measure impacted scope impacted) cost per user)
Mobility support Private car/van Class D CAZ will force residents to Not restricted Individual can access the choice of a £1000 mobility credit offered in form of £10.84 million for individuals owners who either upgrade vehicle or pay charges M1a to geographic SWIFT travel card or a £2,000 package (Swift credit or contribution to (5,420 x £2,000) working within the work or live if they wish to enter. For many area compliant vehicle) in return for scrapping a non-compliant vehicle CAZ (20c) within the CAZ individuals, public transport may be
the only alternative, these measures With evidence of scrapping a non-compliant car individual receives either: Mobility support decrease the cost of that switch or £6.50 million Private car/van West £2,000 cash payment toward the purchase of a compliant car M1b for residents facilitate the purchase of a compliant (3,250 x £2,000) owners Midlands £2,000 mobility credit. Credit to be supplied on a SWIFT card with no outside CAZ (20c) vehicle. expiration for use. Drivers offered £5,000 as: Changes in licencing conditions will Hackney carriage £5 million Hackney support payments to be paid towards operational expenses of ULEV force over 90% of the 1280 vehicles M2a support package (1000 x £5,000) carriages vehicles (4 annual instalments of £1,250) currently operational to change (20b) Birmingham support for an LPG retrofit of their current or newly purchased vehicle (upgraded/retrofit). All options on the Council Hackney and market require significant capital £2.75 million Hackney BCC bulk purchase 50 ULEV taxis through public procurement tender and M2b carriage leasing surrounding expenditure, this helps drivers to (50 x £55,000) carriages lease them to vulnerable drivers as well as on a try-before-you-buy basis scheme (20b) areas switch to a compliant vehicle. (licenced BCC As above, changes in licencing Private Hire Vehicle owners who upgrade a non-compliant vehicle to a Private Hire drivers) conditions are expected to result in Private Hire complia 2020 licencing criteria and is under 3 £7 million M2c Vehicle upgrade t ehicle hich fulfils BCC s 95% of the 4,321 current vehicles Vehicles years of age will receive financial aid of £2,000. This will aim to incentivise the (3,500 x £2,000) support (20b) needing to be upgraded to continue switch to low emission vehicles (HEVs, PHEVs and BEVs) operation SMEs operating coaches/HGVs/LGVs £0.75 million M3 Free iles for Van fleets Birmingham ULEV van drivers receive £750 credit to spend on BCC public charging network ULEV LGVs (20b) or relying on road transport will be (750 x £1,000) disproportionately impacted. Vehicle HGV & Coach Fleets compete for £15,000 funding package to contribute towards: capital costs are high, and many HGV and Coach West £10.05 million M4 compliance fund Installing a retrofit solution fleets must enter CAZ as part of fleets Midlands (670 x £15,000) (20b) Upfront or lease costs of a compliant vehicle business operation. This helps fleets change to a compliant vehicle. Marketing and Owners of non- Ensures maximum uptake/knowledge Marketing and engagement campaign to provide information on the CAZ and £0.38 million M5 engagement compliant - of measure, to minimise negative reach out to groups eligible for support through mitigation measures campaign (20b) vehicles) impact Resident parking Residents living Implementation of residents parking schemes to prevent overcrowding on Prevents vehicle overcrowding on M6 Around CAZ £5 million scheme close to the CAZ margins of CAZ; will be deployed only if issues arise residential streets CAZ margins Total (excluding administrative £48.27 million costs)
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Table 4 Summary table of shortlisted mitigation measures
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3 Overall approach to Value for Money and State Aid
3.1 Approach to Value for Money assessment Individuals and business will be impacted by the CAZ in several ways; the impacts that they face can be thought of as changing their Consumer Surplus (CS). This change in Consumer Surplus can be broadly categorized into 5 benefit areas outline below: Upgrade cost: CS loss resulting from the costs associated with upgrading to a compliant vehicle Welfare: CS will be altered for individuals/businesses who must change their travel behaviour as a result of the CAZ (e.g. switching travel modes, cancelling or rerouting trip etc.). User charge: Loss in CS as a result of charges paid for entering the CAZ zone Air quality: changes in gross emissions (PM10 and NOx) Travel time: this represents the change in travel time and cost to vehicle users
The mitigation measures aim to offset the loss of Consumer Surplus, and the Value for Money for each of the measures is judged on how well this is achieved. This is measured in two ways; The direct offset of Consumer Surplus loss: Mitigation measures offset the negative impacts of the CAZ by offering monetary compensation (or equivalent) to the groups impacted. It is assumed that this compensation offsets the Consumer Surplus loss in a 1:1 ratio. Allocated benefits from the Economic model.
Table 5 shows the methodology by which the benefits were calculated for each mitigation measure and this is used for the basis of the Value for Money assessment. For mitigations M1a and M1b, a full value for money assessment has been carried out using the 5 Consumer Surplus categories outlined above. This is possible as the measures have a direct impact within the traffic model, allowing people to drive a vehicle where they may have chosen to re-route or cancel their trip without financial support. For all other measures the financial support is assumed to offset the upgrade cost of a new vehicle in a 1:1 ratio. The exemption to this is the engagement campaign, as, although important to maximise the benefits of the other measures, it creates no direct and quantifiable benefits.
As the Value for Money section for each measure shows, the measures represent low value for money when quantified using this methodology. For M1a and M1b this results from the increase in traffic and vehicle costs. For all other measures this results from using 1:1 ratio of pounds spent to benefit; when admin costs are included in this it results in net disbenefit for each pound spent. This VfM ratio of benefits received to money spent is summarised in Table 13 in 10.1. However, the council does not believe that this reflects the true value for money that will result from the measures for several reasons:
This methodology does not account for additional, indirect benefits that will result from the mitigations. In some cases, these are significant. For each measure these are described in a separate section within the Value for Money assessment labelled as ‘Additional non-quantified benefits’. The baseline case (where mitigations are not introduced) is used as comparative tool to evaluate Value for Money. This baseline case will have significant disbenefits which are not quantified, the mitigation measures aim to offset these negative impacts, but this is not accounted for in the Value for Money calculation. A good example of this is where no support for workers was included in the mitigation measures, many may then decide to change work to locations outside the CAZ. This has severe impacts on the local economy and the livelihood of business which operate in the CAZ and in turn the individuals who are supported by these businesses. However, this negative economic impact is not considered in the baseline case, and though M1a offsets this impact it is not quantified in the VfM analysis. The Council is determined to aid individuals and business who will suffer negative impacts as a result of the CAZ and believes that this set of measures is the best method by which to do so. If the VfM analysis means these are not possible, the Council might have to resort to other measures (e.g. high-volume exemptions) which would have negative impacts on air quality. This set of measures is the best proposal and shows value for money compared to all viable alternatives that will not leave the residents and
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Table 5 Description of methodology for allocating benefits to each mitigation measure Upgrade cost Welfare User Air Quality Travel Time Ref Measure Description Charge /VOC Mobility support for M1a individuals working Mobility credit or scrappage payment to recipients directly offsets within the CAZ (20c) consumer surplus loss due to scheme implementation at a 1 to 1 Mobility support for ratio. individuals who M1b The additional traffic resulting from this mitigation is run through the regularly enter the CAZ traffic model. (20c) Hackney carriage M2a support package (20b) The mitigation payments made to taxi and PHV drivers directly offsets Council Hackney consumer surplus loss due to scheme implementation at a 1 to 1 No economic model output as all taxis are assumed to M2b carriage leasing scheme ratio. upgrade in the base case (20b) All taxis and PHVs are assumed compliant in the traffic model Private Hire Vehicle M2c therefore impacts are not in the modelled outputs. upgrade support (20b) The mitigation payments made to LGV drivers directly offsets consumer surplus loss due to scheme implementation at a 1 to 1 No economic model output as all measure targets those M3 Free iles for ULEV who are already upgrading their vehicle therefore no LGVs (20b) ratio. increase in vehicle upgrades The impact on ULEV uptake is not included in the modelled outputs. The mitigation payments made to HGV and Coach drivers directly offsets consumer surplus loss due to scheme implementation at a 1 to 1 ratio. HGV & Coach M4 No change in HGV traffic assumed compliance fund (20b) No change in HGV traffic is assumed resulting from the mitigation to HGVs benefiting from the exemptions, additionally, and mitigations fleet redistributions are anticipated to result a largely compliant fleet entering Birmingham City Centre. Marketing and M5 engagement campaign No benefit assumed No direct benefit assumed (20b) Resident parking The mitigation cost is assumed to directly offsets consumer surplus M6 No traffic impacts assumed scheme loss due to scheme implementation at a 1 to 1 ratio.
1:1 benefit on Key Benefits allocated from the traffic and economic model upgrade cost
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3.2 Approach to State aid This section outlines the general approach to State aid; more detailed descriptions of the State aid considerations for each mitigation measure are given in each specific chapter. The Council recognises the importance of complying with State aid regulations and is also aware that several of the measures listed in this document may constitute State aid.
3.2.1 Definition of State aid The measures were compared against 4 key criteria to judge whether State aid applies:
1. Is the assistance granted by the state or through state resources? This applies for all mitigation measures and exemptions. 2. Does the assistance give an advantage to one or more undertakings over others? Assistance can only be provided to a small subsection of the most impacted businesses; therefore, some businesses will naturally be supported over others. Support to entities not partaking in economic activity is not classified as State aid, as a result the mitigations and exemptions targeting individuals not carrying out economic activity (e.g. sole traders) are not classified as State aid. 3. Does the assistance distort or have the potential to distort competition? This can be broadly defined as strengthening the recipient relative to its competitors Business who benefit from mitigations or exemptions will by nature have a commercial advantage over those that are not awarded mitigations or exemptions. The exemption to this is the measures targeting hackney carriage and Private Hire Vehicle drivers. The support measures are designed to provide assistance to all those who wish to upgrade their vehicle and so does not provide a commercial advantage to one set of drivers over another set of drivers, instead offering equal support to all. 4. Does the assistance have the potential to affect trade between Member States? The CAZ, and the mitigation support package is highly localised and is not expected to impact international trade. However, it has the potential to impact the HGV compliance fund as, although the impact of the Birmingham CAZ on continental freight operators will be negligible, theoretically it could provide an advantage to a local operator over operators from other Member States.
An additional consideration is the Market Operator Economy Principle (MOEP). This applies when, instead of State assistance, a commercial interaction takes places between the commercial entity and the State. In this instance the State is operating like any other commercial market player would do and so this activity does not constitute aid. The Hackney carriage leasing scheme involves the procurement of the taxis themselves as well as for an operator to run the scheme and public procurement regulations would apply to both. As this represents a commercial agreement between the State and the market the MOEP would apply and this would not constitute State aid.
Using these criteria, it seems that only M3 and M4 fulfil all the criteria to be constituted as State aid. However, after reviewing the measures in detail against European regulations on this matter, both fall under the De minimis amount and therefore is legally permitted. A flow chart of this process is shown in Figure 2 and the relevance to each mitigation measure and exemption is outlined in Table 6.
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Figure 2 Flow chart of State aid considerations
Table 6 Relevance of State aid definitions to each mitigation and exemption State aid criteria Applies Does not apply Notes
1. Are State All mitigations None All mitigations and exemptions are offered resources and exemptions by the State involved?
2. Is the beneficiary M2, M3, M4 M1, M6, M7 Mitigations/exemptions target individuals involved in E1, E2, E9 E5, E6, E7, who are not engaged in economic activity, economic E8 individuals are not themselves involved in activity? economic activity
3. Does the M2, M3, M4 None All measures provide advantages that are beneficiary get an E1, E2, E9 not available from the open market advantage that they could normally get from the market?
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4. Does the Market M3, M4, M2b The Council will contract with the Economy M2a, M2c vehicle manufacturer and leasing Operator E1, E2, E9 operator on a commercial basis and Principle apply? therefore the Market Economy (State conducting Operator Principle applies. a commercial transaction)
5. Is the goods or M3, M4 M2a and Non-compliant long-distance freight service E1, E2, E9 M2c transport is liable to CAZ charges, so theoretically although the impact will be negligible, tradeable across this will likely constitute State aid. Member States? Only taxis (Private Hire Vehicles and Hackney carriages) registered with the Birmingham licensing authority are impacted by the new licencing conditions. European based taxi drivers could not theoretically operate in Birmingham, so this is not classified as State aid.
3.2.2 De minimis threshold The State can provide support to an individual without having to notify the Commission if the financial value of the award is under the De minimis threshold. This is measured over a 3-year rolling period. The maximum value that each user group can receive is shown below:
Van fleets: The maximum support that a single business could receive occurs when a company receives two exemptions and mitigation support for a further two vehicles. o Exemption: 2 vehicles x £8 daily CAZ fine x 260 entries a year (5 times a week) = £4,160. o Mitigation: 2 support packages with a value of £1,000 = £2,000. o The total support received in this case would be £6,160, which is well below the De minimis threshold. HGV fleets: The maximum support that a single business could receive occurs when a company receives two exemptions and mitigation support for a further two vehicles: o Exemption: 2 vehicles x £50 daily CAZ fine x 260 entries a year (5 times a week) = £26,000. o Mitigation: 2 support packages with a value of £15,000 = £30,000. o The total support received in this case would be £56,000, which is well below the De minimis threshold. Taxi drivers: Maximum support is the £5,000 financial support to aid vehicle upgrade. The lease scheme will operate at market rates and so does not constitute State aid from a driver prospective.
4 M1: Mobility support for individuals who regularly enter the CAZ 4.1 Summary of distributional impact on group The distributional impact analysis (DIA) has shown that residents on low incomes will be disproportionally impacted by the CAZ, this is particularly true for those residents who live in close proximity to the CAZ and those who must travel to the CAZ for work as they will be unable to avoid traveling into the CAZ. Quantitative analysis outlined in the DIA shows that residents of the most deprived LSOAs (quintile 1) will incur a disproportionately greater amount of the costs than more affluent areas. It also shows that that LSOAs within or adjacent to the CAZ would incur the highest proportion of costs relating to the CAZ and that these are also
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For many within this group, the cost of upgrading to a compliant vehicle will be prohibitive, as will paying the CAZ charges on a regular basis. Figure 3 shows the estimated total cost of ownership for different powertrain types and compares this to keeping a non-compliant vehicle and paying the CAZ charges either 2 or 5 times a week. This is compared over a 4-year period to capture the long-term benefits of upgrading vehicle, however it is worth noting the upgrade cost will be faced in year 1 and could create affordability issues. This analysis assumes the purchase of a second-hand vehicle (2-year-old Euro 6 diesel, 9-year-old Euro 4 petrol, 1-year- old BEV and Petrol PHEV) or the retention of a Euro 5 diesel vehicle in the case of paying the CAZ charges. The resulting costs for each option demonstrate the affordability problem on low income households. For example, an individual will incur £3,072 of CAZ charges over a 4-year period if they enter the zone twice a week for 48 weeks a year. If they drive a medium sized car, the best option economically will be to upgrade to a second-hand petrol ICE, though this results in savings of only £715 over the 4 years when compared to paying the charges. The DIA categorised this variable as a negative impact on ‘personal affordability’, meaning that residents will be restricted in the usage of a private vehicles and will likely be reliant on public transport for regular trips into the CAZ.
Figure 3 Comparison of 4-year total cost of ownership estimates for different options facing drivers in response to the CAZ. Assumes purchase of second-hand compliant vehicle or the continued use of a Euro 5 diesel vehicle. CAZ fee of £8/day. Source: Element Energy Low income residents living within the CAZ who rely on their vehicles for leisure activities, to visit friends/family, for religious purposes (see below) or for day-to day tasks such as shopping will be severely impacted by the CAZ. As discussed, without support, personal affordability issues will result in low income CAZ residents no longer being able to use a personal vehicle and current public transport is not sufficient outside of peak hours. TfWM are planning significant improvement to the West Midlands public transport infrastructure outlined in their Transport Plan4, however the majority of the measures will not come in to force before 2022 so will not mitigate the immediate impacts of the CAZ. If an individual’s access to these opportunities is limited, then this restricts the societal benefits which are derived from undertaking these activities. A report from UCL5 has concluded that a lack of mobility in this respect is inextricably linked to social disadvantage and exclusion and has a detrimental impact on quality of life.
The DIA has identified a specific negative impact on particular resident groups, most importantly:
Religious groups whose regular place of worship is located inside the CAZ. Most places of worship are of a small size suggesting a localised catchment. However, there are a few exemptions, the most
4 Transport for West Midlands Transport Plan 2017/18 5 UCL: Transport and Poverty – A review of the evidence, 2014
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prevalent being Birmingham Central Mosque which has a capacity of 20,000 and regularly attracts over 4,000 attendees to Friday prayers. Eight other places of worship have been identified as being of sufficient size to attract individuals from outside the CAZ. There may be a differential impact on religious groups if the introduction of the CAZ discourages or prevents congregants from attending their worship venue of choice. Establishing an exemption targeting worshippers would face implementation challenge (risk of abuse) and could include individuals with high income. Disabled residents who travel into the CAZ will be highly impacted, in general they are more likely to be from lower income households and may find public travel unsuitable. BCC propose that vehicles registered with the DVLA as disabled vehicles be given an exemption though this will not be expanded to blue bade holders as the volume within Birmingham makes this unfeasible.
It is proposed mitigations to support worshipers and blue badge holders entering the CAZ are included as part of the wider measure to support low income residents as these will be the most impacted. BCC sees this as preferential to specific measures targeted at religious groups and blue badge holders as such a scheme would have significant issues with enforceability and fraud potential as well as the perception, in the case of religious groups, that this was unfair on other minority groups (e.g. the LGBT community).
4.2 Description of mitigation measure From the DIA and consultation feedback, there is a clear need to target mitigation measures at residents of the CAZ, those who work within the CAZ and those who regularly enter the CAZ, especially low-income individuals. The mitigation is designed to prioritise low income individuals who live and work within the CAZ for number of reasons:
Individuals are forced to regularly travel into the CAZ and cannot alter their route to avoid the area, they are therefore most vulnerable to the CAZ charges. The distributional analysis has concluded that low-income residents will be disproportionally impacted. The financial circumstances of low-income individuals mean that they are less likely than others to be able to adapt to the CAZ, whether by upgrading their vehicle or by paying the CAZ charges. Low income households are more likely to own non-compliant vehicles. There is no definitive data on this, but it is a reasonable assumption considering households with less disposable income are more likely to own car of lower value which are in turn likely to be older vehicles and hence non-compliant. This is supported from evidence from the distributional impact analysis which showed that the LSOAs which will be most impacted by the CAZ charges are those which are in close proximity to the CAZ and have a high degree of low-income households, DfT licencing statistics show that these areas also contain a high proportion of non-compliant vehicles. To counter this, low income households are less likely to have access to a vehicle and government data shows that 44% of households in the lowest income quantile do not have access to a vehicle6. This is however not relevant to this measure as it targets those who do currently own vehicles. The delivery plan and quantification of the scheme is based on vehicle data rather than volume of individuals in the group.
BCC recognises that individuals will have varying levels of reliance on their vehicles depending on a number of factors (e.g. workplace location, school runs, proximity to public transport etc.). For some, shifting from a personal vehicle to using public transport will be an easy transition, for others the public transport network is not sufficient to meet their travel needs. To ensure that mitigation measures have a positive impact on all individuals eligible for the scheme, BCC are proposing to offer individuals a choice based on their needs and travel patterns:
Mobility credit. A one-off provision of £1,000 mobility credit, this credit will be applied through a Swift card and can be used on any public transport in the West Midlands. The user can keep their non-compliant vehicle but will be liable to CAZ charges.
6 Department for Transport: Travel by vehicle availability, income, ethnic group, household type, mobility status and NS-SEC
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Scrappage scheme. Individuals who scrap a non-compliant vehicle receive either a £2,000 mobility credit awarded through a Swift card or alternatively a £2,000 payment to contribute towards the purchase of a compliant vehicle.
Which scheme an individual is eventually supported through will depend on their willingness to scrap their non-compliant vehicle. The funding required to support all non-compliant vehicle owners who work within the CAZ would be extremely high, therefore BCC propose to prioritise individuals who are defined as key workers and those on low incomes. The two options are explained in detail in the following paragraphs.
The support available to each group is summarised below and in Table 7:
CAZ residents: 2-year exemption followed by scrappage scheme (to be funded by CAZ revenue outside of the CAF framework) Workers: can apply for a package of measures including a 1-year exemption followed by the choice of a £1,000 mobility package or a £2,000 scrappage scheme (as shown above). Limited to workers with an annual salary under £30,000. (the full justification of the salary cap value is given in 4.7.1.) Residents outside the CAZ: can apply for a 1-year exemption followed by a further scrappage scheme if necessary
Table 7 Summary of social mitigation measures offered to private vehicle owners 2020 2021 2022
The council may look to provide an additional scrappage scheme funded from the CAZ revenue. CAZ residents Exemption Exemption This will be conditional on an assessment of the needs of such a scheme conducted in 2021.
Mitigation (full CAZ workers Exemption - choice)
Residents Mitigation Exemption - outside the CAZ (scrappage only
4.2.1 Mobility credit To facilitate the transition to public transport, BCC is proposing to offer a mobility package to individuals from low income households who work and live within the CAZ. This would take the form of credit being applied to a user’s travel account which can be used on the local train, bus and tram services as well as on the upcoming shared bike scheme. The suggested amount of £1,000 is sufficient to cover the majority of the cost of a years’ worth of monthly passes for train, bus and tram services entering the city centre. The majority of individuals will not require this full service and in this case, they can purchase a less comprehensive package (e.g. bus services only) and use the rest of the credit on a pay-as-you-go basis, or alternatively towards an annual or monthly pass in subsequent years.
There has been concerned raised that this will not mitigate the impact of the CAZ as it only provides a temporary benefit to the individual in comparison to the scrappage scheme which permanently replaces a non-complaint vehicle. However, the measure is designed to increase the use of public transport and a large part of this is to educate individuals on the benefits of public transport by incentivising them to make the initial transition away from personal car use. It is expected that once the transition is made, individuals will continue to benefit from public transport on its merits alone without the need for a subsidy. It is also important to note that the scheme presents a choice to the individual. If, in their opinion the mobility credit does not mitigate against the CAZ, then they are free to opt for the scrappage scheme instead. In the case of the mobility credit, they can keep their current vehicle to use outside of the CAZ (or pay the penalty charge if they choose to enter), the £1,000 is therefore a direct benefit rather than offsetting the cost of upgrade vehicle.
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When designing this package, it is important to ensure that the public transport routes going into and out of the CAZ are sufficient to offer viable alternative to vehicle usage. The map below (Figure 4) was created by TfWM and shows the average travel time on public transport into the CAZ during the peak morning traffic period. It shows that the vast majority of locations within Birmingham can reach the city centre within 45 minutes. Element Energy compared these estimated times with forecast driving times using Google maps, the results showed that in most cases traveling by public transport was equitable if not quicker than by private vehicle. The results of this analysis give confidence that for commuting purposes, Birmingham’s public transport network is able to provide a viable alternative to private vehicle use for residents of Birmingham.
Figure 4 Illustration detailing modelled travel times on the West Midlands public travel network to the city centre during week day morning peak hours. Source: TfWM, 2018 It is however accepted that the public transport provision is less comprehensive outside of peak times and that public transport may not be sufficient for those working irregular/night-time hours. The map below (Figure 5) shows travel time into the city centre via public transport with a departure time between 00:00-02:00 on a Thursday morning. Although most of Birmingham can reach the city centre within an hour, there are significant areas where this is not possible. The travel time also compares unfavourably to estimates of travel time by private vehicle, which are reduced due to a reduction of traffic at this time. The Council does not have definitive data on the demographics of those travelling to work at off-peak hours. However, from consultation with industry, especially Birmingham Children’s Hospital, it is clear the majority are either shift workers or else work in the hospitality industry, both with a high proportion of low-income employees. There is another caveat in the case of individuals using their car to drop others within the CAZ before going on to their own workplace (or other destinations) and this was mentioned as a concern by respondents in the recent consultation. BCC accepts that a public transport mobility credit does not adequately cover instances where a car used to fulfil separate trips for numerous individuals at the same time. The mitigation measure is designed to provide assistance to those who are forced to regularly enter the CAZ with a non-compliant vehicle and could realistically shift their travel mode on to the public transport system.
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Figure 5 Illustration detailing modelled travel times on the West Midlands public travel network to the city centre on a weekday morning, 00:00 – 02:00. Source: TfWM, 2018 The proposed mobility package mitigates the negative impact of the CAZ by reducing the transport costs for local people (20.c of the CAF guidance). BCC plan for this package to be available to all individuals who work within the CAZ rather than limiting eligibility to just Birmingham residents. This is in recognition of the fact that many individuals who work within the CAZ will come from outside the Birmingham from the wider West Midlands area and will face the same negative impacts as a result of the CAZ.
There is a number of risks that BCC has considered associated with this scheme:
Could this measure cause additional trips and thus hinder compliance? Although this will lead to a higher number of personal trips on public transport it will not impact the number of vehicle trips in the short term as public transport routes and services are not due to change as a result of this measure. Furthermore, all buses operating in the CAZ will be at least Euro VI by the end of 2020 (West Midlands Bus Alliance target). In the longer term an increased demand for public transport could lead to more routes being justified, but the effect of replacing personal vehicle trips will greatly outweigh the limited impact of a small increase in public transport vehicles traveling into the CAZ Will this measure cause strain on the local public transport network? Although this measure is designed to increase the use of public transport the increase in volume is not expected to cause strain on the transport network. This is because the number of individuals forecast to be eligible is small in comparison to the number of people currently using public transport. For more detail see section 4.7. Will the measure negatively affect other initiatives such as car clubs? This mitigation measure is designed for those who consistently enter the CAZ and so this is not expected impact car club usage which is only cost effective if used for non-regular trips.
4.2.2 Scrappage scheme
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This option has been developed in tandem with the mobility credit described above and is designed to broaden the scope of the mitigation measure to include those whose travel patterns mean public transport is not a suitable option. This also recognises the fact that vehicles are often used for a second purpose during the commute to and from work (e.g. visit friends and family, leisure activities, religious commitments etc.). To account for this, BCC is proposing a scrappage scheme where, upon the scrappage of a non-compliant vehicle, individuals can receive the option of either £2,000 to contribute towards a compliant vehicle not eligible for the car or van plug-in-grant (most likely a second-hand Euro 4 petrol vehicle) or alternatively £2,000 of mobility credit as described above. The larger credit amount compared to the mobility package option is an acknowledgment that in this option the individual has given up the use of their car and so warrants a larger compensation. This proposal accounts for the fact that public transport may not be sufficient for all residents, especially outside of commuting hours as the maps supplied by TfWM (shown above) make clear. Figure 6 shows the decision process that individuals will face in deciding which package best suits their needs. This Figure 6 Decision tree diagram for individuals mitigation measure also has the benefit of reducing city deciding which support package best suits their wide emissions by taking older non-compliant vehicles off needs Birmingham’s roads. This option ensures individuals do not lose the freedom to travel and suffer the associated social deprivations.
When the additional cost of paying CAZ charges is considered, a funding award of £2,000 is considered a sufficient amount for individuals to be able have reasonable options available for replacing their vehicle with a compliant model. Element Energy’s analysis of the used car market7 has shown that there are numerous Euro 4 petrol models in reasonable condition available for purchase for around £2,000 - £3,000. An additional consideration is the CAZ charges that the individual no longer pays as a result of upgrading to a compliant vehicle (at £8/day, 3 entries a week for 48 weeks/year comes to a total of £1,152). Figure 7 displays graphically a price comparison of popular second-hand Euro 4 petrol models against paying the CAZ charges 3 times a week. It should be noted that the CAZ charges shown are annual and so would have to be paid repeatedly in subsequent years, whereas the vehicle cost and scrappage fund amount are a one-off payment only seen in year one. The results show that in a lot of cases, the funding covers the majority of the vehicle cost and hence BCC deems this an adequate amount for individuals to use towards the purchase of a compliant vehicle.
BCC recognises that the funding, in some cases, does not cover the full cost of the vehicle and affordability issues may remain for individuals. This is of particular concern as affordability issues are likely to disproportionately affect low income individuals and the cost differential may prevent the individuals who need the scheme most from participating. However, there is a risk that if a higher amount was offered, this would make the cost of the scheme prohibitively high and encourage individuals to spend the money on more expensive vehicles unnecessarily. Potential affordability issues are also partly mitigated by the choice an individual has to instead receive the scrappage payment in the form of a mobility credit, in an instance where a suitable vehicle cannot be found within an individual’s budget the mobility credit still provides alternative benefits to the individual. BCC feels that a funding award of £2,000 achieves a good balance between
7 Using this data source: http://www.usedcarexpert.co.uk/cars/fuel-petrol/
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Figure 7 Comparison of average vehicle cost of popular Euro 4 models in the small and medium car segments against the annual cost of paying CAZ charges (entry 3 times/week over 48 weeks) The scrappage element means the scheme is more targeted at those who enter the CAZ regularly with their vehicle. The logic behind this is that if an individual does not regularly drive into the CAZ for work, £2,000 would be less sufficient to warrant scrapping their existing vehicle. When CAZ charges are considered, the benefits of the scrappage scheme become much stronger. In this way the scheme targets those who are most negatively impacted (i.e. those who regularly drive into the CAZ for work).
Initially, there were concerns over the unintentional impacts that this scheme would have on Birmingham’s second-hand car market. However, after quantifying the number of second-hand purchases that this scheme is likely to lead to it was concluded that this impact will be negligible. For reference, if 50% of individuals choose the scrappage option it will result in the sale of 4,335 second hand vehicles over a year. This compares to an estimate of over 800,000 second hand vehicle sales per year in the West Midlands region8. For more information on the quantification of the scheme see section 4.7.
An important point to note is that these options can be interchangeable. For example, if DEFRA considered that providing individuals with money to purchase compliant vehicles did not fit with the fund’s objectives and the mobility credit option was preferred, then this choice can be removed, and the scheme would solely involve providing mobility credits on proof of scrappage. However, BCC sees providing the individual a choice as the optimum solution as it offers a direct substitute for those whose travel patterns are not suitable for public transport.
4.3 M1a: Delivery plan for supporting individuals working within the CAZ The implementation of this measure can broadly be categorised into two phases;
1. The identification, application and validation of target individuals resulting in a list of individuals who will be supported. 2. The implementation of the mitigation measures themselves which will deliver the mobility credit and scrappage scheme awards to the individuals.
8 8.11 million second hand car sales in 2017 (SMMT), 9.7% of total vehicle stock registered in West Midlands (Government licencing data – VEH02). Note, this estimate is for the West Midlands region, not the West Midlands metropolitan county
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4.3.1 Identification, application and validation of target individuals
To engage with target individuals, the scheme will be integrated with BCC’s communication campaign to ensure low-income individuals and employers are made aware of the schemes available to them. Initially they will be contacted, either directly or indirectly, through a targeted marketing campaign, and a request will be made for them to register their interest in the scheme.
As described above, the support offered to individuals working in the CAZ involves a year exemption followed by the awarding of mitigation measures. The application process for the exemption is very similar to that of the mitigation measures and the same resources will be used to implement both schemes. In this document we have just described the delivery plan for the mitigation measure, though it is worth noting that a 1-year exemption period will be in place for workers through 2020 (depending on their income).
Figure 8 Summary of the identification and validation process for supporting individuals who work within the CAZ The key to the success of this mitigation measure will be the establishment of a process for the identification of those most in need of support. For this purpose, BCC proposes to allocate the funding support based on income, with a salary cap of £30,000 used as an eligibility criterion. The proposed delivery plan consists of the following steps:
1. Workplaces apply for the mitigation measure on behalf of their employees: This is seen as the optimum solution as employers have the ability to easily validate an individual’s annual income as well as their workplace location. There will be a two-stage application process; First the company will register itself and have a company account on the permit software system described in Section 5.10 of the FBC. For this the company must provide their company registration number, proof of address in the form a rental agreement or land registry documents. During the consultation, BCC received a high volume of feedback concerned with loss of staff and wanting assurances that there will be provision in place to help individuals get to their workplace, this was supported by the detailed response from BCH. This, combined with the simple and quick sign up process, suggests that employers are engaged in this issue and will be willing to register so that their staff can access benefits. The company will then register their employees who are interested in applying for the scheme. This will involve collecting and uploading to the portal the following information: Name, proof of address (utility bill or bank statement), national insurance number, proof of annual income (P60 or 3-months of pay slips), evidence of non-compliant vehicle ownership (V5), Valid vehicle insurance documents, confirmation that this vehicle is primary means of travel to work (yes/no), as well as additional survey questions. Employees will be given their own account log in details, so they can track their individual application on the system. 2. Validation of applications: This will involve the manual validation of all documents provided as part of the application resulting in a database of applicants who have been confirmed to be working in the
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CAZ with a non-compliant vehicle alongside their validated annual income (To be eligible the vehicle must have been registered to the individual prior to 10th September 2018). This database will be used to track the successful applicants of the mitigation measures. 3. Confirmation of applicants: Once all the validated applicants have been collected in a central database, they will be contacted to notify them of the success of their application and to provide instructions for the requirements in the next stage of delivery.
The next step in the process is providing the individual with the support package, the first stage of this will be a one-year exemption. After the exemption, the application process will repeat with the inclusion of the choice of support; Mobility credit or scrappage scheme. The individual delivery plans for the mobility credit and scrappage scheme are described below.
4.3.2 Mobility credit This will be supplied via Swift9; a scheme owned and operated by TfWM providing travel cards which can be used on a number of different travel modes and with any operator that provides public transport within the West Midlands. Element Energy has had discussions with a representative from Swift who assured BCC that a product can be put in place whereby the relevant individuals can register for an account on to which the council can apply the £1,000 of credit. The individual can then assess the options available and decide which is most suitable for their travel needs. Any remaining credit on their account could be used on a pay-as-you- go basis or could be used to contribute towards additional travel cards in subsequent years. For context, examples of travel cards available through Swift are shown below:
Monthly pass covering bus, train and tram usage in zones 1-5 (entirety of West Midlands) is £99/month which totals to an annual cost of £1,188. Annual combined metro and bus pass: £1020 Annual pass for all buses within the network West Midlands area is £775 Annual metro pass: £800 Besides Swift, there are car club options – e.g. Co-Wheels £60 minimum annual spend plus any additional usage over this. From this evidence, it can be concluded that £1,000 will be sufficient to cover the majority of an individual’s annual public transport expenses. The Swift card will also include the upcoming Next Bike bicycle sharing scheme being introduced in Birmingham and individuals will be able to use the mobility credit to purchase an annual membership to this scheme (estimated to be an annual cost of £30).
4.3.3 Scrappage scheme An additional step in the validation process will be the proof of vehicle scrappage, this is an established process and BCC do not see logistical complications in the individual providing a certificate of destruction to the council. If the individual decides to select the mobility package option then they will receive £2,000 credit on a Swift account, again very similar to the process described previously for the mobility package mitigation measure. This credit will not have an expiry date and is a sufficient amount to provide users with almost 90% of the cost of 2 years of full travel coverage (2 x £1,188 = £2,366), as before users could choose different options to suit their individual needs. The Council is also exploring opportunities to offer credit on car sharing schemes as part of this package and BCC have recently awarded a tender to expand car sharing services within the city. BCC will work closely with the successful applicant; Co-Wheels, to include their services as part of the mobility credit.
The process is slightly more complicated if the individual opts to use the scrappage credit to purchase a compliant vehicle. In this instance, after providing proof of scrappage on their old non-compliant vehicle the individual would purchase a compliant vehicle. After receiving proof of purchase, the council would then
9 https://www.networkwestmidlands.com/swift
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1. The individual first purchases the car and then provides proof of purchase (as well as scrappage of a non-compliant vehicle), this become a simple process of checking the vehicle on the DVLA database to ensure it is a compliant vehicle before releasing the fund to the individual. 2. However, BCC understands that individuals may not have the ability to provide the upfront capital for this purchase, especially as the measure is targeting low income individuals. In these instances, BCC will reach agreements with 2nd hand vehicle dealerships where the individual can take their non- compliant vehicle to a 2nd hand vehicle dealership which will scrap the vehicle and offer a £2,000 discount on vehicle from their dealership. The Council has had conversations with the NFDA (National Franchised Dealers Association) who approve of the process and have outlined a clear process that would be followed. The council wishes to use franchised dealerships as their associations with OEMs ensures accountability and commercial transparency. They also guarantee a certain level of vehicle quality to ensure the financial support contributes towards viable alternative vehicles. They have also agreed to allow the Council to communicate with their members through the weekly/monthly newsletter. The process is as follows: The authorised dealership purchases the vehicle off the individual for a pre-agreed amount, in this case £2,000. This is given in the form of discount on a 2nd hand vehicle in their stock. The dealership then scraps the vehicle and provides the council with the certificate of destruction. The council reimburses the dealership £2,000.
The process for validating the scrapped vehicles is as follows:
After being accepted on to the scheme, individuals will take their vehicles to an authorised treatment facility (ATF). The individual must then notify the DVLA that the vehicle has been scrapped. The ATF will provide the individual with a ‘certificate of destruction’ within 7 days of the vehicle being scrapped. The individual will also retain the yellow slip (V53/3). These documents will be used as evidence to release the funds to the induvial. Alternatively, the user will bring their non-compliant vehicle to a council authorised 2nd hand dealership where they will trade their vehicle for a £2,000 discount on any compliant vehicle.
4.4 M1b: Delivery plan for supporting individuals living outside the CAZ The delivery plan for residents outside the CAZ will be run in parallel to that of the scheme for workers, with a 1-year exemption being offered in 2020 and a further scrappage scheme offered in 2021. The delivery plan is very similar with some key differences summarised below:
Individuals will register themselves rather than go through their employer, this is because the scheme targets a wider group of people, not all who will be currently employed (e.g. unemployed individuals, students etc.) The allocation of the exemptions and mitigations will be based on the distance from their address to the CAZ. Initially, BCC wanted to again use income as the key metric to judge who was most need of support. However, without assistance from employers (as in the workers scheme), validating an individual’s income is extremely difficult. This is especially hard considering that many could be unemployed and that the scheme is open to all West Midlands residents meaning using the benefits system as a validation point would mean interacting with multiple local authority benefits teams, all potentially using a different database system. Additional questions will be added, for example confirmation that the individual is not earning over £20,000 and the reason that they need to travel into the CAZ with their vehicles. Only the scrappage scheme will be available, and they will not have the option of selecting the £1,000 mobility credit.
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Figure 9 Proposed timeline for social mitigation measures 4.5 State aid considerations The mobility credit does not contradict State aid rules as the assistance is being provided to individuals not engaged in economic activity and no other State aid is being provided to contribute towards the Swift card system. The measure is also not providing money towards a certain public transport operator over another and the user will have full choice over how they utilise this credit, this includes the choice to use the credit on any public transport operator covering trains, buses, trams and bicycles. The fact that the Swift card is accepted on all public transport operators means that no market distortion will occur. The operators included on the Swift scheme include the following:
Bus operators: Arriva, Banga Travel, Claribel Coaches, Corporate Express, Diamond Bus, Discount Travel Solutions, Evergreen Coaches, First, Grosvenor Coaches, iGo, Johnsons of Henley, Landflight (Silverline), Let's Go!, Midland Classic, National Express Coventry, National Express West Midlands, Ring and Ride, RK Travel, Select Bus Services, Social Travel, Stagecoach, Sunny Travel, Thandi Transport, The Green Bus, The Green Transport Co, Travel de Courcey, Travel Express, Walsall Community Transport Train operators: Arriva Trains Wales, Chiltern Railways, Cross Country, London Northwestern Railway, Virgin Trains, West Midlands Railway Tram operators: West Midlands Metro Shared Bicycle operators: Nextbike UK
There is a possibility that some operators will benefit more than others as a result of the scheme, though the final choice of which operator is used will be the individual’s and not the council so there is no direct benefit. In the case that an individual decides to utilise the scrappage money to purchase a compliant vehicle, there is no restriction on the manufacturer or type of vehicle that is eligible, so no organisation is disproportionally benefited over another. The dealerships themselves do not receive a direct financial benefit from scrappage scheme so there is no transfer od resources from the state to an economic operator. The only restriction on the type of vehicle that can be purchased is that it must not already be eligible for the government’s Plug in Car Grant or Plug in Van Grant to avoid additionality issues.
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4.6 Value for Money
4.6.1 Quantified benefits Table 8 shows the total value for money for M1a and M1b combined. This shows very small disbenefits in total upgrade cost and air quality, though these are negligible and probably below the resolution of the economic model. The welfare Consumer Surplus is offset as fewer trips must now be re-routed or cancelled, though the increased number of vehicles on the road means that the travel time and Vehicle Operating Cost Consumer Surplus is negative as a result of the measures. In total this measure represents negative value for money to the amount of -£5.2 million. However, the Council believes this is more than offset by the non- quantified benefits outlined in 4.6.2.
Table 8 Quantified value for money for M1a and M1b combined CS with CS with Impact of CS category exemptions exemptions mitigations Explanation only and mitigations on CS
Higher upgrade rate due to Upgrade cost -£52,814,806 -£52,923,794 -£108,988 scrappage scheme, offset by financial support.
Welfare -£58,386,002 -£55,198,704 £3,187,298 Less trips are re-routed/cancelled
High compliance rate so less User charge -£18,858,240 -£17,544,906 £1,313,334 CAZ charges paid
Although higher compliance rate, Air quality £50,172,323 £49,901,646 -£270,677 increased number of vehicles means negligible disbenefit
Travel time/VOC £69,734,101 £60,431,774 -£9,292,327 Increased traffic and congestion
Total -£5,171,360
The above represents an extreme case where every individual opts to replace their vehicle through the scrappage scheme. In reality a proportion of individuals will instead opt for the mobility package option, to estimate the impact of this it is useful to consider another extreme case; where all individuals decide to scrap their vehicle but instead opt for the £2,000 mobility credit option. In this case, (as described in 3), these benefits are quantified using an assumption that the funding made available will directly offset negative consumer surplus in a 1:1 ratio. However, when admin costs are included this reduced this ratio below 1. The total funding ask for M1a and M1b £17.33 million, so using this methodology the scheme is providing £17.33 million of benefits to scheme participants. When admin costs are considered, the total scheme cost is £18.19 million. When this is considered, for every £1 of funding allocated, £0.95 worth of benefits are received by individuals in total, this represents a negative VfM value of -£847,499. It should be noted that M1a represents a better value for money with a ratio of benefit received to money spent of 0.96 compared to 0.94 for M1b.
In summary:
Considering the combined value for money for M1a and M1b, if all vehicles choose to scrap their vehicles and replace it with a compliant vehicle the total quantified value for money is -£5,171,360. If all scrap their vehicle and choose the mobility credit option, the quantified value for money is - £847,499. This does not account for those within M1a who decide not to scrap their vehicle and instead choose the £1,000 mobility credit. This cannot be quantified as the assumptions for the administrative costs
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are combined for M1a. However, it is expected that this would result in an improvement in the value for money, this is because of the reduced administrative burden resulting from not implementing the scrappage scheme would bring the total scheme cost closer to the benefits received.
The true quantified value for money lies somewhere between these two values, the Council does not possess evidence on individual’s preference between the available options and an important part of the measure is to provide flexibility for individual choice. Therefore, the Council does not wish to speculate on the relative uptake between the scrappage scheme and mobility credit. However, the Council does believe that much of the negative impacts of the scheme quantified in Table 8 will be offset by a proportion of the individuals choosing the mobility credit (both £1,000 and £2,000 options). An important factor in this is that those who are most reliant on their personal car are those most likely to choose to replace their vehicle, those that are less reliant on their personal vehicle are more likely to opt for the mobility credit. It is likely that, without support from the mitigation, those who are reliant on their vehicle will continue to drive into the CAZ, either with their current non-compliant vehicle or a new upgraded vehicle. For this subset of individuals this particular mitigation measure will not impact their behaviour, therefore the ‘Travel time/VOC’ component of the value for money will be the similar with or without the implementation of the mitigation measure. The portion of individuals who opt for the mobility package will reduce the negative impact on travel time and Vehicle Operating Costs and so the Council believes the two options are complementary to one another.
4.6.2 Additional non-quantified benefits There are a number of benefits associated with both the scrappage scheme and mobility credit:
General:
Removes barriers to entry in the workplace. The scheme assists low income individuals in commuting to work, without this help the financial burden as a result of the CAZ may prevent these individuals from making this journey. This would have the effect of limiting the on opportunities of low-income individuals, limiting their career progression and preventing social mobility. Removes disincentive for employees. Employers within the CAZ are at risk of losing staff as a result the CAZ measures if staff prefer to work in a location that does not subject them to CAZ charges. This prevents an exodus of staff from the City centre and protects current jobs. Supporting these businesses, 99% of which are SMEs10, in turn supports the local economy and prevents a loss of economic growth.
Scrappage scheme:
Protects night shift workers. Night shift workers often provide critical public services, especially in the health service, without which there would be a dangerous reduction in the service available to the public. These workers are often on low incomes and so unable to afford to commute as a result of the CAZ measures. The irregular hours also make public transport unsuitable. This measure provides a solution to these individuals and ensures a safe level of health service continues in Birmingham. Reduces local transport poverty. If an individual’s options for travel are limited, they will face social restrictions. A report from UCL11 has concluded that a lack of mobility in this respect is inextricably linked to social disadvantage and exclusion and has a detrimental impact on quality of life. This will be especially important for commitments such as regular religious ceremonies, if individuals are restricted in attending these it will prevent them from participating in their local community. Removal of older and highly polluting vehicles from the vehicle stock. This has positive health impacts on the population in general, increasing productivity and reducing financial burden on the health service. Monetary stimulus of the local economy. The scrappage scheme encourage individuals to purchase a second-hand vehicle from a local dealership, this in turn provides fiscal stimulus to the local economy with a knock-on impact on local income and jobs.
10 NOMIS labour statistics 11 UCL: Transport and Poverty – A review of the evidence, 2014
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Supports women. The DIA identified women as being disproportionately impacted by the CAZ as they are more likely to feel uncomfortable or unsafe taking public transport. This provides assistance in upgrading their vehicle so that this will not become an issue.
Mobility credit:
Encourages the switch to public transport. This has numerous benefits: o Maximises emissions reductions creating significant health benefits o Reduces congestion on Birmingham’s roads which reduces travel times, increases productivity, improves road safety, and has a further positive impact on emission reductions. This was quantified for the scrappage scheme, but the quantified benefits are not included in the quantified value for money for the mobility credit. o Increases revenue on the local transport system meaning more can be reinvested in improving the public transport network throughout the West Midlands. o Saves the individual money. Public transport is in most cases cheaper than vehicle ownership, by encouraging the switch to public transport this measure will increase long term disposable income in local areas with a resulting increase in economic growth in the local economy. Encourages the use of bicycles on the local bike sharing scheme. This provides revenue, so this service can be improved resulting in emission free journeys through the centre of the city. This also has associated health benefit associated with exercise.
4.7 Quantification of scheme The quantification methodology for the support schemes for workers and individuals outside the CAZ are detailed next.
4.7.1 M1a: Individuals working within the CAZ Birmingham has developed a detailed traffic model; PRISM12 (See Strategic and Economic case for description). This model contains forecasts of the number of trips into the CAZ for the purpose of work split by mode of travel and income band. From PRISM, the number of individuals traveling by car (drivers counted not passengers) with an annual income of less than £30,000 was estimated at 23,566. This is based on a total number of daily car trips of 57,500 which is supported by another sources, particularly one of DfT’s modelling tools; TEMPro13. The TEMPro model estimates that there are 149,466 jobs within the CAZ, with a 35% car mode share resulting in 52,313 daily car trips to work. On average, it is expected that the morning peak traffic has a higher share of personal transport so considering other uncertainties, this supports the results from PRISM. The model uses future forecasts for population, jobs as well as information on planning development and expected trip costs to estimate the number of trips completed by various demographic sub sections. The model is currently being used to support multiple projects being developed in the wider West Midlands area.
£30,000 was used as a cut off as BCC deemed that this would be the upper limit of individuals who would require support in adapting to the CAZ. For reference, the median full-time weekly earnings are £569 equating to a median annual gross income of £29,58814. Although the salary cap is above the national median, and therefore by definition supporting more than just low-income workers, BCC deems it important to set the salary cap at this level for a number of reasons. Firstly, an important aspect of this measure is to support local businesses operating in the CAZ as well as the individuals themselves, and concern from business regarding loss of their employees was a major finding from the consultation. As the salary cap is set just above the nation average, it provides for a wide range of employees mitigating this concern from businesses
Another justification for setting the cap at this level is to support key workers, a key priority of the Council’s when designing the package of mitigation measures. Data from Birmingham Children’s Hospital show that 84% of their staff who work antisocial hours earn a salary of less than £30,000, the Hospital states that these
12 http://www.prism-wm.com/ 13 TEMPro: Trip End Model Presentation Program (DfT traffic model) 14 Office for National Statistics – Employment and labour market, earnings and working hours
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The expected proportion of non-compliant vehicles in 2020 is taken form the ANPR data and shows that 23% of cars travelling into the CAZ would be non-compliant in 2020 if no CAZ was introduced. This is the number of people who will be impacted by CAZ charges. This proportion is applied to give an estimate on the number of individuals with an annual salary of less than £30,000 who travel into the CAZ for work in a non-compliant vehicle. Figure 10 graphically displays the quantification process used.
Figure 10 Quantification process to estimate number of low-income residents in the West Midlands who live and work within the CAZ This results in a rounded total of 5,420 individuals who will be supported through this scheme. As stated previously, key workers are a priority group to be targeted by this measure. On a national scale, around 15% of the national workforce are employed as a key worker. This has been partially validated within Birmingham from data provided by the Birmingham Community Healthcare NHS Foundation Trust which showed roughly 15% of its workforce were defined as key workers. If this is applied, along with the non-compliant rate used above, (23%) to the 57,500 daily trips it results in an estimate of 1,934 key workers travelling in to the CAZ with a non-compliant vehicle. This leaves 3,486 remaining places to be allocated to low income non-key workers.
At a maximum award value of £2,000 (the value if the individual chooses the scrappage scheme) this equates to a total ask of £10.84 million. Some individuals will choose the £1,000 mobility credit, so the funding ask is likely to support more than the 5,420 individuals estimated above. This is a deliberate overestimation to mitigate for:
Errors on the assumptions, most importantly the non-compliant assumption. As the scheme is targeting individuals on low annual salaries, they are more likely than the average worker to own a
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non-compliant vehicle (lower capital costs of older vehicles). This means that the 23% non- compliance rate is likely an underestimate. There is also a risk that the number of employees on less than £30,000 in an underestimate due to part time workers, so this will also be accounted for. The number of key workers could also be an underestimate as there are 2 large hospitals with operations inside the CAZ, this suggests that the proportion of key workers within the area will be higher than the national average. Additional money can be used to support those who live outside the CAZ in transitioning to compliant vehicles as the funding ask for this group is very limited in comparison to the size of the group in total.
In the case where an individual’s vehicle is worth more than £2,000, they are unlikely to see the scrappage scheme as economically beneficial and would be better placed to sell their vehicle on the second-hand market and use the funds to buy a compliant vehicle. However, this is not expected to impact the uptake of the scheme as they will still be able to claim the £1,000 mobility credit, which will hopefully encourage the use of public transport despite owning a compliant vehicle. The format of the measure means if individuals would rather sell their vehicle on the private market, then the funding will be allocated instead to another individual to take advantage of the scheme. In general, as the measure prioritises low-income individuals with non- compliant vehicle, it is expected that most vehicle values will be below the £2,000 scrappage value.
4.7.2 M1b: Individuals living outside the CAZ The quantification process for this group is difficult for a number of reasons, predominantly as a result of the large total size of group (residents outside the CAZ) and the lack of process by which to segregate this group to identify those that need support (those who frequently must enter the CAZ with a non-compliant vehicle and are unable to afford to upgrade). Initially, a general scrappage scheme for individuals from low income households within Birmingham was proposed, however where possible, BCC does not wish to limit measures to Birmingham residents and recognises that the city centre is a cultural hub for the entirety of the West Midlands. The DIA has identified the negative impact on residents who currently enter the CAZ regularly with a non-compliant vehicle, this is especially pronounced for those living in the areas immediately surrounding the CAZ. As a whole BCC is unable to support this group fully as it would not be politically viable to limit support measure geographically (e.g. to areas bordering the CAZ) and any widespread measures would be prohibitively expensive as well as having a negative impact on air quality. Therefore, to provide support for this group a number of places must be provided for that has an acceptable impact on air quality and then an attempt to be made to allocate these places to the individuals who are in most need of support. BCC recognises that this will only support a small proportion of those who will be negatively impacted but sees this as the only way to support residents living outside the CAZ without an excessive funding ask or unacceptable impacts on air quality. To arrive at the number of exemptions/mitigations to award to this group, BCC used the previous estimates on expected total emissions impact associated with social mitigations and subtracted the amount forecast for the workplace scheme. This was then translated into number of vehicles; it was found that 3,250 vehicles could be provided for whilst keeping within estimated emission levels outlined in previous versions of the proposal. The proposal therefore continues to be in line with the previous figures set out in the September 10th Cabinet Report, i.e. emissions stay within acceptable air quality impact tolerances.
3,250 scrappage scheme awards equates to a funding ask of £6.5 million. BCC anticipates a few issues with limiting support to this amount. Most importantly, this is only a fraction of the total group size and BCC wish to avoid a situation where the majority of individuals who apply for the scheme rejected due to lack of availability. To mitigate against this, the criteria will be clearly communicated during the application stage to prevent those applying who will clearly not be awarded support. There is also the possibility that the Council could look to provide more funds for support from the CAZ surplus revenue so that more people can be supported.
5 M2: Financial support for Birmingham’s taxi trade In this section the results from eh DIA will be discussed and used as justification of the introduction of M2a, M2b and M2c. Each of these measures will then be explained in detail before a collective Value for Money analysis at the end of the chapter.
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5.1 Summary of distributional impact report The distributional analysis report has identified the issues faced by the majority of the Hackney carriages registered in Birmingham. These result from a change in licencing conditions coming into force in January 2020 which mandate CAZ compliant vehicles in order to be able to operate. Out of the fleet of 1280 Hackney carriage vehicles, a minimum of 1,140 vehicles will have to be replaced due to these new licensing conditions (and an extra 69 also need action but have the option to retrofit to LPG, being TX4 under 14 years old). The options that are faced by the drivers are limited and expensive. This is further complicated by current plans for a 2026 licencing condition to be introduced mandating ULEV vehicles meaning a Euro 6 Hackney carriage bought in 2020 could be operated only for 6 years. BCC has conducted extensive consultation with the Hackney carriage driver community and two preferential options have emerged;
Purchasing a second-hand vehicle and installing a retrofit solution: This will be limited to a vehicle under 15 years of age in 2020 (Euro 4 minimum). Feedback from the driver community suggests a second-hand Euro 4 vehicle will be in the region of £12,00015 with an additional £12,500 for installation of the retrofit technology16 totalling £24,500 (Incl. VAT). Following the conversion of 65 Hackney carriages to LPG in 2016-17, the local community is familiar with this technology and its real- world performance. Purchasing/leasing a new ULEV taxi: There is currently only one ULEV Hackney carriage on the market with a retail price of £55,59917 (including VAT, accounting for the national grant). The majority of drivers have indicated they do not have access to the capital to afford this upfront payment. The manufacturer in question offers alternative forms of payment such as a personal contract purchase but as a result of the high interest rate that is used, the total amount payable can be as high as £67,744.
As well as the Hackney carriage drivers, who have been shown to be severely impacted by the CAZ measures, the distributional analysis has shown that other key groups would be negatively impacted by a reduction in Hackney carriages. These include: Disabled residents: DfT data shows adults with mobility difficulties are three times more likely to undertake a taxi trip than the average adult. The DIA showed that a significant proportion of LSOAs within the CAZ are in the top two quintiles for disability. As all Hackney carriages are wheelchair accessible but no private hire vehicles are, a reduction in Hackney carriages would have an adverse impact on disabled residents. Older residents are more likely to have a disability than any other age group and so Hackney carriages are important (as described above). The DIA has shown that women are more likely to use taxis and private hire vehicles than men, and it is anticipated that this particularly prevalent at night time hours due to security concerns. Therefore, any reduction in services as a result of the CAZ would have a negative impact on women.
The DIA report states that 88% of Hackney carriage drivers reside in areas with the highest quintile of BAME residents and data provided by BCC shows that 90% of drivers identify themselves as BAME. Therefore, any negative impact on the Hackney carriage driver community would have a disproportionate impact on BAME communities within Birmingham. Element Energy analysis of Hackney carriage registered addresses shows that the majority of Hackney carriage drivers reside in the city’s most deprived LSOAs meaning any negative impact on Hackney carriage drivers will have a disproportionate impact on deprived areas of Birmingham. Figure 11 shows the registered addresses of Birmingham’s hackney carriage drivers overlaid on a map of LSOAs differentiated by their national depravation index, more information can be found in the DIA.
15 Feedback from engagement with Birmingham taxi drivers. Pricing varies with mileage and condition of the vehicle, from £8,000 to £25,000 mostly, examples can be seen here LINK 16 http://gascab.co.uk/gascab-explained/the-repowering-solution 17 https://www.levc.com/finance/tx-pcp-offers/
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The council sees the best way to mitigate against these negative impacts is to provide support to Hackney carriage drivers to ensure that they are able continue to provide mobility services.
Figure 11 Map of Birmingham showing the registered addresses of Hackney carriage drivers by LSOAs ranked by their national deprivation index
The DIA outlines an important issue when considering the response of Hackney carriage drivers to the CAZ. There is a possibility that many will choose to retire, and this has to be considered when providing options for Hackney carriage drivers. All options that are open to drivers forced to change their vehicle require significant capital expenditure and this will be hard to justify for drivers that are close to retirement. Another factor that is a barrier to drivers wishing to change vehicle is that the technology options will be untested by the majority of drivers and will require a significant deviation from the driving experience they are accustomed to. This is especially relevant for ULEV vehicles. Research has shown that there is a natural bias against new technologies, and it is important to overcome this so that drivers feel comfortable with options open to them.
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Figure 12 Age profile of current taxi drivers forecast to 2020 Combining the need to provide for drivers approaching retirement as well provide a service whereby drivers can become comfortable with the technology before committing to a purchase, the Council is asking CAF funding to purchase or lease 50 ULEV taxis which will then be leased to licenced Birmingham hackney carriage drivers.
Private Hire Vehicle (PHV) drivers will face many of the same issues identified as impacting Hackney carriage drivers. In 2020, the proposed new licencing conditions will require PHVs to be CAZ compliant as well as enforcing an 8-year age limit. The enforcement of this age limit alone will result in 89% of the current fleet of PHVs being no longer eligible for licencing by the Council and when the emissions standards are also considered this results in only 162 vehicles out of a total stock of 4,321 being eligible for licence in 2020. This leaves 4,159 vehicles which must be upgraded. The range of vehicle choice available to PHV drivers is larger than that available to Hackney carriage drivers, and this, combined with generally cheaper vehicle prices and a larger second-hand market, means the impact of the CAZ will be less severe than that experienced by Hackney carriage drivers. However, those with non- compliant vehicles still face significant upgrade costs and there is a risk that many will no longer be able to operate as PHV drivers as a result of the licencing changes.
As with Hackney carriage drivers, Private Hire Vehicle drivers predominantly reside in areas which are in the first quintile for both BAME residents and deprivation. Figure 13 and Figure 14 show the distribution of Birmingham Private Hire Vehicle drivers in each quintile for BAME residents and deprivation. This stresses the impact that will be felt by some of the city’s most vulnerable areas and the importance of providing support to these individuals.
Through industry communication and feedback channels, the Council has also received a high volume of requests citing this issue as an area of concern. The Council therefore wishes to support the PHV trade in transitioning to a compliant fleet of vehicles through offering a specific mitigation measure which targets this group.
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Figure 13 Share of Private Hire Taxis Registered within each Quintile of BAME Community in Birmingham (DIA report)
Figure 14 Share of Private Hire Vehicles Registered within each Quintile Deprivation in Birmingham Compared to the England and Wales Average (DIA report) From the DIA, three key groups within the taxi community have emerged which will require support in adapting to the new licencing conditions. These are listed below alongside the measures which are proposed to support each group.
M2a: Hackney carriage drivers upgrading their vehicle. The council proposes to offer financial support to drivers to contribute to the operational costs of a ULEV taxi or towards the installation of a compliant retrofit technology M2b: Hackney carriage drivers nearing retirement, unable to upgrade or unconvinced on the benefits of ULEV taxis. The council proposes to introduce a leasing scheme to remove the burden of ownership from these financially vulnerable drivers. M2c: Private Hire Vehicle Drivers upgrading their vehicle. The Council proposes to offer financial assistance to contribute towards the upgrade cost of a compliant HEV or ULEV vehicle.
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5.2 M2a: Financial support for Hackney carriage drivers
5.2.1 Description of mitigation measure To help taxi drivers adapt to these new licencing conditions and to transition to compliant vehicles, BCC is requesting CAF funding to provide Birmingham city licenced taxi drivers with a £5,000 support package to contribute to either: The running costs of a new ULEV taxi, this will help the drivers in question with on-going operational payments. The items listed below, along with their expected annual costs, have been considered when assessing the correct value of the support package, these total between £9,900 - £14,900 over 4 years. From this evidence BCC believes £5,000 is an attractive offer to drivers without being excessive, covering somewhere between 33%-50% of the operational costs over 4 years. Items considered are as follows18: o Insurance: £1,300 – £1,800 pa o Vehicle maintenance: £200 - £500 pa o Taxi rank access payments (e.g. proposed annual payment to access Birmingham New Street station): Up to circa £200 pa o Licencing fees: £120 pa o Vehicle electricity costs (public and home charging): £600 - £1,000 pa o Home charge point (incl. installation fees and government grant): £200 -£400 one-off payment Retrofitting an eligible vehicle in order to reach compliance. This process has already been established by BCC with 65 vehicles being retrofitted to LPG as part of a scheme carried out in 2016- 2017, funded by the Clean Vehicle Technology Fund. In this instance, a £5,000 lump sum would be provided to the driver to carry out the retrofit. The retrofit technology and providers will not be prescribed but will have to be on the Clean Vehicle Retrofit Accreditation Scheme list. Only the LPG conversion is in an advanced stage of being accredited as of October 2018. The £5,000 funding amount covers 42% of the estimated cost of the retrofit solution, not including the cost of purchasing an eligible TX4 vehicle. Although this still requires the driver to contribute around £7,000, the grant significantly reduces the capital outlay and this proposal has received widespread positive feedback from the hackney carriage driver community. For reference, only 69 vehicles within the current fleet will be eligible for a LPG retrofit, others must first purchase a eligible vehicle.
Figure 15 shows the estimated total cost of ownership before and after the mitigation measure is applied. This assumes a driver must first purchase a Euro 4 Hackney carriage before carrying out the retrofit technology, this assumption has been made as only a limited number of the current fleet are eligible for a retrofit, the majority of drivers will need to first purchase an eligible vehicle if they wish to receive the proposed retrofit funds.
18 Sources: BCC licencing team (taxi rank and licensing fee); feedback from Hackney carriage driver community (insurance and maintenance); Element Energy estimates (electricity costs, home charging points)
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Figure 15 Total cost of ownership with and without the funding package for the two preferred options expressed by the Hackney carriage community; 1) buying a Euro 4 vehicles and installing a retrofit solution 2) Buying a ULEV vehicle. It should be noted that after 2025, LPG vehicles will no longer be licenced, and drivers will have to then purchase a ULEV vehicle to be licensed.
BCC recognises that for both options available to Hackney carriage drivers a cost differential exists between the final cost that the driver will face and the support they will receive from the Council. With the operational support package, the payments do not assist with the upfront costs and drivers will be required to fund the purchase or lease of a ULEV vehicle themselves, the upfront cost is significant with the only currently available ULEV Hackney carriage retailing at £55,599 (incl. VAT and Plug in Taxi grant). The retrofit option requires a smaller capital outlay from the drivers but could still be seen as a barrier for those on low incomes. Assuming the purchase of a retrofit eligible vehicle (estimated at £12,000) followed by the installation of the retrofit technology (£7,000 incl. £5,000 funding) the total cost to the driver is £19,000. For some drivers, the financial investment required in both cases could be seen as prohibitive and may prevent the uptake of the scheme, particularly for low income drivers who will be least able to afford the capital investment. The council acknowledges that even with support drivers may struggle with the costs associated with upgrading their vehicle, however does think that offering drivers a larger funding amount or weighting the funding award relative to the driver’s income is a feasible solution. Hackney carriage drivers are amongst the most negatively impacted groups and, as described in the DIA, face only a limited number of viable options, all requiring capital investment. In recognition of this, the £5,000 funding award proposed is significantly higher than proposed awards to other individuals (maximum £2,000 per person for individuals working inside the CAZ). The council has tried to provide drivers with as wide a range of options as possible to ease the transition to a compliant vehicle but unfortunately providing a higher funding award is not seen as good value for money.
The proposed funding amount also compares favourably with comparable policies in other cities, summarised below: Bristol: vehicle owners are offered a benefits package worth £3,636 over a 5-year period upon the purchase of a ULEV Hackney carriage. The benefits are provided as subsidies covering a number of fees required to operate a taxi in Bristol. Southampton: the Council offers cashback to drivers in return for replacing their private hire vehicle or Hackney carriage with a low emission alternative. The cashback incentive depends on the vehicle (Full electric = £3,000, Plug in Hybrid = £2,000, Full hybrid = £1,500, wheel chair accessible Euro 5/6 petrol with capacity 5 or more = £1,500)
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5.2.2 Delivery plan The delivery plan will vary depending on whether the driver is requesting funds for a retrofit technology or for offsetting the costs of a ULEV vehicle:
Eligibility and validation: Any hackney carriage driver currently licenced with Birmingham City Council will be eligible for this scheme and it will be operated on a first come – first served basis. The validation process will most likely be conducted in person, at the Council’s licencing office. The validation is expected to be a simple process of checking the driver in question against the Councils database of licensed drivers and vehicles. Retrofit technology: once an application is approved the driver will then register with the technology provider and book a timeslot for the retrofit to be carried out. This will be dependent on a vehicle inspection to confirm the vehicles eligibility for the retrofit technology conducted by an independent garage. £5,000 will be deducted from the final price of the installation which the technology provider can then claim back from BCC with valid evidence of the process. This information will also be needed for the BCC licencing team as the vehicle will not be permitted to be licenced without this retrofit technology. Operational finance package for ULEV vehicles: for this scheme, any driver who purchases a ULEV Hackney carriage after September 2018 will be eligible to receive the funding amount. BCC recognises that providing funding to those who have already purchased a ULEV vehicle by definition does not influence behaviour in line with the mitigation measure. However, it is proposed that these drivers are included in the funding package as not to unfairly penalise early adopters of ULEV taxis by denying them access to funding. The number of taxis that this condition will cover is expected to be very small, for reference there has been only a single ULEV taxi order to date (as of October 2018). Once the driver has purchased/leased the vehicle they will provide evidence of the transaction to BCC who will then validate it with the manufacturer. Starting in January 2020, BCC will then provide 4 consecutive annual payments of £1,250 to the driver. Before each payment the driver must provide evidence that they are still operating the ULEV taxi and that it is still licenced by the council. Where possible, this will be provided as benefits rather than as a cash payment, a good example of this is the licencing fee which the council can easily provide free of charge to a ULEV driver. However, the council does not propose to provide the entire funding through benefits as this would involve complex arrangements with 3rd parties (e.g. insurers, maintenance providers etc.), a cash payment will therefore be provided to make up the difference and bring the total to the £1,250 annual funding amount.
There will be no need to require proof of sale/scrappage of the old non-compliant vehicle as it can no longer be licenced within Birmingham as a result of new licencing conditions coming into force in January 2020. . If sold outside of Birmingham it could still be licenced elsewhere and driven into the CAZ, however it would not be permitted to use any of the taxi ranks and would be required to pay the CAZ charges. This is not an ideal outcome, however the same can be said for non-compliant vehicles currently registered outside of Birmingham and this measure would not worsen this impact. The resources required for identification and validation of eligible vehicles is expected to be minimal as the BCC taxi licencing team have full records of each vehicle and are regularly in contact with the Hackney carriage driver community. The full delivery plan is summarised below in Figure 16.
In both cases there may be supply constraints which prevent the delivery of compliant vehicles to drivers before the January 2020 deadline. In the case of the LPG retrofits, feedback from the only accredited garage (who’s staff was involved in the LPG trial, see case study 1), indicated that once around 8 staff have been fully trained, they will be able to conduct 10-20 retrofit installations a week. Over a 4-month delivery period, this equates to 175 – 350 vehicles. For ULEV taxis, the supply is currently limited to a single provider and, as increased demand is exempted from other cities (particularly London), the supply of sufficient vehicles to the Birmingham market is not guaranteed. The council propose to tackle this through a range of solutions:
The application process will be continuous cycle, those that apply early will be assessed at the time and if possible approved before the end of the application period. This will allow drivers who apply
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early to install the retrofit or order a ULEV taxi before the expected delivery period. This will spread out demand and allow a higher number of vehicles to be upgraded before the introduction of the CAZ in 2020. If a driver has been accepted onto the scheme but supply constraints mean that they are unable to upgrade their vehicle then the Council propose the following: o Drivers’ current vehicle will be offered a temporary licencing extension until the date of their vehicle upgrade, an appropriate time limit (e.g. 6 months) will need to be set for this option. o Drivers will be prioritised on the council leasing scheme, this will allow them to utilise the leasing vehicles while waiting for the upgrade to their own vehicle o The solution will likely involve a mix of the two options above depending on driver preference and the length of time that the driver in question must wait for their vehicle upgrade.
Figure 16 Proposed delivery plan for the Hackney carriage operational support package and council leasing scheme mitigation measures
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Case study 1: Birmingham City Council LPG Hackney carriage retrofit trail
From 2015 until 2017, the Council carried out a trial which converted the city’s most polluting Hackney carriages from diesel to LPG. The success of the trial as well as the numerous lessons learnt give a high degree of confidence in the deliverability of the LPG retrofit part of the mitigation measure. A summary of the project is provided below:
The Council utilised £500,000 of funding, provided by DfT to address air quality issues, to convert 65 highly polluting diesel taxis to LPG. A local garage was given training to acquire the skills to carry out the procedure and the UK’s first supply chain was created for the conversion of TX vehicles to LPG. The project was developed in close coordination with the Hackney carriage driver community. The general consensus was a preference for LPG over electric taxis and as result of this feedback LPG was decided upon. Emissions testing was conducted at accredited centres, results showed that on average, vehicle NOx and PM emissions were reduced by 80% and 99% respectively. The lessons learnt were primarily in establishing the supply chain, which caused repeated delay to the project. Now that this has been completed, the Council envisages a much smoother process with future retrofits. The project also showed the importance of pre-inspection of the vehicles, to ensure a sufficiently good condition – this is taken into consideration in the new scheme with an inspection check included in the process, and a limit of the vehicle’s age that is eligible. The taxi driver survey conducted in 2017 on 32 drivers showed that 97% would recommend the conversion though most drivers also said other drivers would not take up the solution without some funding support.
5.2.3 State aid considerations BCC has identified issues in aiding Hackney carriage drivers in purchasing/leasing a new ULEV taxi. These result from the fact there is currently only one provider of a ULEV taxi and already a government taxi grant in place, which leads to additionality issues as well as possible market distortion. When combined with government support, the amount that ends up being transferred to the taxi company in question could result in State aid issues. Therefore, an approach has been taken which seeks to offset the operational costs of Taxis rather than the purchase cost. A similar scheme is in the process of being implemented by Southampton City Council and BCC will seek input from a legal team to ensure that this approach does not violate State aid regulations.
For the provision of funds to contribute towards a compliant retrofit technology, BCC has experience in providing funding for this purpose during the LPG retrofit trial it conducted in 2016-17. In this case, BCC offered the full amount for the retrofit and hence BCC is confident that State aid issues will not arise from offering a cash amount which is less than half the cost of the retrofit technology. The financial assistance of £5,000 is well below the De Minimis amount and drivers will be required to sign a declaration stating they have not received State aid over this threshold in the last 3 years.
Lastly, the Hackney carriage trade is highly localised and there is no competition from taxi owners or operators from other Member States. It therefore can in no way impact trade between Member States and as a result, this measure does not constitute State aid.
5.2.4 Quantification of package BCC has detailed data on the current taxi fleet and therefore can make an accurate estimate on the number taxis that will require support. Out of the fleet of 1,280 Hackney carriages in operation in Birmingham, 7 meet Euro 6 emission standards with a further 64 fitted with an LPG retrofit technology that brings emissions down to CAZ compliance level. There are 69 additional vehicles which are currently eligible for this retrofit technology which leaves 1,140 vehicles which will have to be completely replaced. BCC does not plan to offer
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Page 299 of 366 Birmingham Clean Air Zone Clean Air Fund Report a support package for every vehicle that is forced to be replaced, this is for two reasons. Firstly, a number of drivers may choose to retire instead of investing the necessary capital to purchase a compliant vehicle. to retire in the near future (<10 years) in any case, it will not make financial sense to invest in a new vehicle if they will not operate for a sufficient length of time to recuperate their initial expense. Analysis contained in the distributional analysis report shows that 284 of the current taxi drivers will be over 60 years of age in 2020 (see Error! Reference source not found.) and could see retirement from Hackney carriage driving as the preferential option, if all chose to retire their vehicles this would leave 996 vehicles on the road. Secondly, a recent taxi demand survey19 showed that, even accounting for the expected increase in demand, the Hackney carriage fleet could reduce by 25% and still comfortably meet demand. If this is applied to the current fleet it suggests 960 vehicles are sufficient to support the mobility needs of Birmingham. As a result of these factors Birmingham is asking for a finance package to support 1000 vehicles. There have been concerns raised around affordability issues resulting in a lower uptake of the scheme than expected. However, due to the narrow range of options available to drivers it is assumed that at least 1,000 drivers will be interested signing up to the funding scheme rather than giving up their licence. This uptake assumption is supported by:
The Council’s engagement with the taxi community which suggest that majority of drivers will choose to continue to operate as a Birmingham Hackney carriage driver after the CAZ is implemented. The DIA has shown that over 90% of Hackney carriages in the current fleet will need to be replaced after January 2020 to continue to be licenced by the Council. The limited vehicle upgrade options faced by drivers, as well as affordability issues, means that drivers upgrading their vehicle will face financial strain. Feedback from the driver community suggests that only a small minority have the necessary capital to upgrade without financial assistance. This is compounded by evidence which shows that a high proportion of Hackney carriage drivers live in areas of the highest income deprivation in Birmingham. If the majority of drivers wish to continue operating in Birmingham, and evidence shows that most will struggle to upgrade without financial assistance, it is a reasonable assumption that most drivers will choose to join a scheme which provides financial assistance in upgrading. Taxi drivers are arguably the hardest hit by the CAZ, and the Council wishes to ensure that all drivers who wish to upgrade their vehicle have access to assistance. The Council therefore feels strongly that providing support for 1,000 Hackney Carriages is the correct approach.
If each driver entering the scheme receives £5,000 in funding, then the total cost of the scheme comes to £5 million.
5.3 M2b: Hackney carriage leasing scheme
5.3.1 Description of mitigation measure As well as providing financial support to aid Hackney Carriage drivers in upgrading their vehicle, the Council has identified three additional areas where the Hackney carriage trade will need support in response to the introduction of the CAZ:
1. Drivers who are nearing retirement and therefore unable spread the initial financial cost over the full life cycle of the vehicle. 2. Drivers who are considering upgrading to a ULEV vehicle but are not convinced by the benefits.
To cater for these groups the Council is asking funding from the CAF to support a Hackney carriage leasing scheme. This will serve two purposes, the majority of the leased vehicles will support drivers who are unable to afford vehicle upgrade costs, this will particularly focus on driver who are nearing retirement. A smaller sub- section of vehicles will be reserved for a Try-Before-You-Buy scheme, where drivers considering purchasing ULEV vehicle can trial a ULEV taxi for a limited period of time.
19 Birmingham City Council – Hackney Carriage Unmet Demand Survey, August 2017
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5.3.2 Delivery plan The council is proposing to run a procurement exercise to purchase the vehicles and another to source a service provider who will run the leasing scheme. This seen as necessary as the Council does not currently have the necessary skills or experience in house to operate a scheme such as this. There are a number of potential models which could be followed, the most promising are:
The council purchases the vehicles and leases them to the services provider. This will be good value for money as the up-front purchase means there will be no finance fees involved. The service provider will then lease the vehicles from the council at a fixed rate or share the resulting revenue. The service provider will be the point of contact with the drivers and lease the vehicles at market rate as not to distort competition. The council will procure a service provider who is also responsible for procuring the ULEV vehicles. In this case, the council will provide capital funding to the service provider which will directly offset the costs of purchasing or leasing the vehicles. The service provider will offer a revenue share to the council in return for the funding amount.
In both cases a proportion of the funding amount will return to the council. This could be:
used to help private hire vehicles transition to ULEVs as they are unsupported by the proposed list of mitigations and will face many of the same problems as Hackney carriage drivers when licencing conditions change in 2020; used towards charging solutions for taxi drivers (both Hackney Carriages and Private Hire Vehicles) that do not have off-street parking; used to reduce the budget ask for later years.
The proposed leasing scheme will serve two purposes:
Provide a ‘try-before-you-buy’ scheme to drivers considering making the switch to an electric vehicle. This will educate drivers on the benefits of EVs and remove any inherent bias against that technology that may exist. This will be operated on a short-term basis, where drivers will have use of the vehicle for a limited time (likely to be 2-3 weeks), during this time their vehicle will be taken off the road to keep the number of operating hackney carriages in Birmingham constant. A key part of the service provider procurement will be to assess their capability and willingness to operate this part of the scheme, the charge to drivers will be only nominal to cover operational costs but will not look to make a profit from the lease fees. Provide a lease service prioritising drivers close to retirement: this will allow drivers to lease the taxis and avoid the high upfront costs associated with purchasing a new ULEV vehicle. The aim of this scheme is to avoid the forced retirement of a significant proportion of the current fleet of Hackney carriage drivers. Although drivers over the age of the age of 60 will be prioritised, the scheme will be open to all hackney carriage drivers registered with the Council. It is proposed that these vehicles are leased are on a per day or even per hour basis, this is in response to feedback from the Hackney carriage driver community which showed that drivers have a broad range of working hours, especially older drivers who are close to retirement. By leasing the vehicle over short time periods, it maximises the utilisation of each vehicle providing benefit to the maximum number of drivers. This is designed to replace the use of non-compliant vehicles which will no longer be licenced by BCC. The procurement process of the service provider will be partly assessed on the lease rates that are offered, with a strong emphasis placed on providing value for money for drivers. However, the council recognise that the service provider needs to benefit financial from the arrangement and market rates are expected.
Out of the 50 vehicles requested, 10 will be initially allocated to the ‘try-before-you-buy’ scheme and 40 will be allocated to the short-term lease program. The Try-Before-You-Buy scheme is expected to be highly utilised during the latter half of 2019 and at the beginning of 2020 when the bulk of vehicles must be replaced. However, after this period, the demand for a Try-Before-You-Buy service will reduce, at which point the Council will then allow the service provider to transfer these 10 vehicles to the short-term leasing scheme in line with reduced demand. As the Council will use the CAF funding to either procure the vehicles or provide to the service provider to offset the vehicle costs, the vehicles will return to the council after the leasing scheme
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5.3.3 State aid considerations In order to comply with State aid regulations, the council will issue a tender to procure the 50 vehicles. An option being explored is implementing this tender in two rounds of 25 vehicles to provide the opportunity to purchase the vehicles from different manufacturers and provide a choice of vehicles to the drivers, however it may make more administrative sense and for simplicity sake to complete the procurement in a single round. By procuring the service provider it ensures that a fair market rate will be offered on the leasing scheme without causing market distortion. Both tenders will be written and delivered in full compliance with public procurement regulations.
Although there is currently only one company providing ULEV taxis, more are expected to reach market before mid-2019 and this tender will provide the opportunity for the market to offer the best possible solution to the provision of these vehicles. Considering the small market size of electric taxis, a strong emphasis will be placed on the value for money aspect of the tender.
The lease arrangement will be set at a market rate as not to distort the market by offering favourable terms below what the market is able to offer. The tender process for the suppliers of the Hackney carriages as well as for the operator of the leasing scheme is a commercial arrangement, therefore the ‘Market Economic Operator Principle’ would apply and the measure would not be classified as State aid.
5.3.4 Quantification of package The Council believes that 50 vehicles is a suitable to meet the expected demand for this service. The 10 taxis earmarked for the Try-Before-You-Buy scheme, is relatively conservative compared to the number of vehicles that have been requested by other cities when the scale of Birmingham taxi fleet is considered. For example, Sheffield have received early measures funding for the purchase of 10 ULEV taxis and Coventry are planning a Try-Before-You-Buy scheme with 6 ULEV taxis. This compares to a maximum fleet size of 859 and 857 for Coventry and Sheffield respectively. There is also strong justification for the 40 taxis included as part of the short-term leasing service as analysis of Birmingham’s licencing data shows that many drivers currently use a similar model of operation. The licencing statistics show that at least 216 registered drivers do not own their own vehicle
This shows that a large proportion of the current driver community is using a leasing, sharing or renting model to operate. Assuming that this trend continues after 2020 and considering that the vast majority of Hackney carriage vehicles must be replaced, it suggests that there will be sufficient demand to support a 40-vehicle leasing scheme.
From current market offer, it is estimated that the vehicles will cost in the region of £55,000 which equates to a total scheme cost of £2.75 million.
5.4 M2c: Financial support for Private Hire Vehicle driver
5.4.1 Description of Mitigation measure This financial support will be in the form of a £2,000 contribution towards a HEV or ULEV CAZ compliant vehicle. The funding support has been limited to this to maximise the air quality benefits resulting from this measure. Numerous studies have shown that the real-world driving emissions of Euro 6 diesel cars far exceed legal limits, in some extreme cases over 12 times the legal Euro 6 limit. The council therefore wishes to take advantage of the stock turnover that will result from the CAZ and incentivise vehicles which will deliver meaningful air quality benefits. To maximise the impact of this funding and to ensure the financial support will be used towards vehicles which have longevity in the stock, a condition on the maximum age of the vehicle will be set at 3 years (as of 2020). Considering the 8-year age limit, this will ensure that vehicle purchased through this funding scheme will be able to operate up to at least 2025.
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As stated, the Council’s preference is for this measure to be reserved for drivers upgrading to HEVs or ULEVs, however the Council is open to feedback on this issue. If it is felt that this excludes low income PHV drivers from making use of this offer due to the higher upfront costs of ULEV vehicles, then Euro 6 diesel and petrol vehicles can also be included in the eligible list of vehicles. If this is the case, the Council would look to implement a graded funding system whereby ULEVs would receive a larger funding amount than regular vehicles. For example, an individual upgrading to a ULEV could receive £2,000 support whereas a driver upgrading to a Euro 6 would receive only £1,000 support. This would retain the incentive for drivers to switch to low emission vehicles when upgrading.
5.4.2 Delivery plan The delivery plan for the measure will be as follows:
1. Drivers will register their interest in the scheme with the Council’s licencing team. To register they will be required to contact the licencing department directly and verify that they are a licenced PHV driver with a non-compliant vehicle currently licenced by the Council as a PHV since at least September 2018. 2. Once the information has been verified and approved the individual will be given confirmation that they have been accepted onto the funding scheme. The Council will keep a database of approved drivers as well as a record of their current non-compliant vehicle. 3. After receiving approval, the individual will then purchase a vehicle which meets the criteria of the funding award. The vehicle must be; CAZ compliant, under 3 years of age in January 2020 and comply with all other council PHV licencing conditions. Aside from this, the individual is free to choose the vehicle of their choice. 4. The individual will then provide proof of vehicle upgrade to the council, this will either be in the form of a valid sales receipt or alternately a leasing contract. 5. The council will validate the evidence to ensure the new vehicle meets all the funding requirements and once this has been confirmed will provide a £2,000 funding award to the individual.
5.4.3 State aid considerations The Council believes this measure will not breach state aid regulations for a number of key reasons. Firstly, the amount given to each driver is below the de minimis amount, and, as in other measure, drivers will be required to sign a document declaring that the total amount of government funding they have received is under the de minimis amount. Secondly, aside from the funding criteria, individuals will have a full choice of upgrade vehicle on which to spend the funding amount. Other than the condition stating the vehicle must be a HEV or ULEV (PHEV or BEV) the Council will not make specifications relating to powertrain or brand. This will ensure that no market distortion occurs as a result of the introduction of this measure, as by 2020 there is expected to be a significant market offering within this specification. However, it also recognised that due to the late addition of this measure into the mitigation package, the full details are yet to be finalised and that more work needs to be done to ensure compliance with state aid regulations.
If a driver decides to upgrade to a BEV, there are potentially additional issues as this support will be combined with the national Plug in Car Grant. However, the Council also sees the importance of incentivising BEVs during the transition to compliant vehicles and does not want to implement a system whereby non-plug in vehicles are incentivised over BEVs. Other cities, such as Southampton and Leeds, have been successful in implementing a scheme which provides a cash payment to Private Hire Vehicle owners who upgrade their vehicle. In Southampton’s case they offer £3,000 cashback to a PHV driver who upgrades to a fully electric vehicle (BEV). The Council will consult with other cities, a specialist state aid lawyer and DEFRA to ensure that all state concerns are covered before the FBC submission.
Lastly, the Private Hire Vehicle trade is highly localised and there is no competition from taxi owners or operators from other Member States. It therefore can in no way impact trade between Member States and as a result, this measure does not constitute State aid.
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5.4.4 Quantification of package To quantify how many funding awards should be provided the council has had to make some broad assumptions:
All current drivers will continue to operate as Private Hire Vehicle drivers after the introduction of the CAZ. Those that do not own their own vehicle (short term rentals or vehicle sharing) will continue to operate in this manner but will not take responsibility for the upgrading of a non-compliant vehicle. This will be the responsibility of the vehicle owner. Vehicle owners who are upgrading their vehicle as a result of the new licencing conditions will make use of the funding available rather than upgrading fully at their own expense. A small proportion of vehicles will upgrade through natural vehicle stock turnover before this funding scheme is introduced. The age profile of the current stock is assumed to remain constant until 2020.
Using these broad assumptions, the number of funding awards required is estimated by taking the number of Private Hire vehicle owners (3,649) and applying the expected proportion of non-compliant vehicles within the PHV stock (95%), this results in 3,466 vehicles needing to be upgraded. As there is no cost or sacrifice associated with the scheme, it is assumed that all eligible Private Hire Vehicle owners will make use of this scheme, the council is therefore asking for funding to support 3,500 individuals which at £2,000 per funding award comes to a total of £7 million.
5.5 Value for Money The value for money analysis for M2a, M2b and M2c has been grouped for efficiencies sake.
5.5.1 Quantified benefits As described in 3, these benefits are quantified using an assumption that the funding made available will directly offset vehicle upgrade costs in a 1:1 ratio. However, when admin costs are included this reduced this ratio below 1. The total funding ask for M2a, M2b and M2c is £14.75 million, so using this methodology the scheme is providing £14.75 million of benefits to the taxi community. When admin costs are considered, the total scheme cost is £15.03 million. When this is considered, for every £1 of funding allocated, £0.98 worth of benefits are received by the taxi community, this represents a negative VfM value of -£276,595.
However, the Council believe this is more than offset by the non-quantified benefits that will result from the measure.
5.5.2 Additional non-quantified benefits General benefits:
Preventing job losses in the taxi community. The DIA has identified the significant financial burden that faces taxi drivers who are forced to upgrade their vehicle. By providing financial assistance, this measure prevents job losses which in turn has a number of positive impacts: o Prevents negative impacts on BAME residents. The majority of hackney carriage and PHV drivers define themselves as BAME, and job losses will disproportionately the BAME community. o Provides support to Birmingham’s poorest areas. Analysis of registered taxi driver’s addresses show that they predominantly reside in the cities most deprived areas. This measure protects jobs in vulnerable communities and prevents further negative economic impacts. o Prevents local economic contraction. Job losses will result in lower disposable income, lower spending at local businesses and a contraction in local economic growth. o Protects dependent businesses. The taxi trade provides custom to many local businesses, these include repair garages, MOT centres, specialist insurers etc. By retaining jobs within the
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trade, it also protects the revenue enjoyed by these dependent businesses, in turn protecting local jobs and providing a boost to the local economy. Continuing the service that taxi drivers provide to Birmingham residents. As outlined in the DIA, taxi drivers provide vital services to a number of different user groups, particularly; elder residents, disabled residents and women. Prevents negative publicity. Were a large proportion of taxi drivers to go out of business as a result of the CAZ measures, it would create negative publicity around both the Council’s and Government’s lack of support for this vulnerable group. This will be especially true during the Commonwealth games which will be hosted in Birmingham in 2022.
M2a
Supporting the EV industry. The plug-in taxi industry is in its infancy; by supporting the market at this stage, this measure will increase uptake, and act as a catalyst to increase national uptake. This will result in emission reductions on a national scale. An increased number of EV taxis will also increase public awareness of electric vehicles in general, encouraging an increase in local uptake of ULEVs. Creating local jobs. Local garages will be used to carry out the retrofit installations and to fulfil the large volume of orders resulting from this measure they will need to hire additional staff. It is estimated that at least 8 full time staff will be required to meet the demand from Birmingham. Establishing Birmingham as a leader of retrofit technology. The success of this measure will hopefully lead other cities to follow Birmingham and provide incentives for the taxi community to retrofit their vehicles. Birmingham has an opportunity to create specialist jobs in this area, the number of which will grow with the increasing demand for retrofit solutions. This will have positive impacts on the local economy.
M2b
Support for local business. Part of the leasing scheme will be to tender a company to run the leasing scheme, local businesses will be prioritised in this process which promotes local jobs and provides economic stimulus into the local economy. Revenue stream for the council. The measure will return some revenue in the form of the lease fees which drivers pay to use the service and a portion of this revenue will be returned to the Council. This can be used to invest in further air quality improvements, for example in supporting the taxi trade switch to ULEV vehicles. This measure therefore provides support to the primary target (vulnerable Hackney carriage drivers), but also provides large secondary benefits as result of this revenue stream.
M2c
Monetary stimulus of the local economy. The scheme encourages individuals to purchase a vehicle from a local dealership, this in turn provides fiscal stimulus to the local economy with a knock-on impact on local income and jobs.
6 M3: ‘Free miles’ for ULEV LGVs on BCC’s public charging network 6.1 Summary of distributional impacts The distributional impact analysis identified SMEs with a heavy reliance on LGVs, either through operating vans themselves or product delivery, as being negatively impacted by the CAZ measures. It is expected that most businesses operating within the CAZ will be reliant on road transport in some form. Mitigating against these impacts is difficult, as many trips into the CAZ are an essential to the core of the businesses operations and upgrading to a new vehicle requires significant capital expenditure.
Vans are also large contributor to the poor air quality currently seen in Birmingham and upgrading to a compliant vehicle is no guarantee of a reduction in emissions. The EQUA air quality index has shown that some Euro 6 diesel vans have such high real word emissions that they are not comparable to any Euro
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Page 305 of 366 Birmingham Clean Air Zone Clean Air Fund Report standard and have NOx emissions of roughly 12 times the Euro 6 limit20. As a result of this, the Council believes it is important to encourage businesses to upgrade to the cleanest vehicles which will maximise the air quality impacts of the CAZ.
6.2 Description of mitigation measure An important issue is ensuring that when businesses are bringing in new vehicles into their fleet that they are choosing vehicles with the lowest possible emission standards, preferentially promoting ULEV vehicles where possible. To support this choice, BCC is proposing providing ‘free miles’ on the forthcoming public network due to be installed in conjunction with BCC’s EV development partner (partner to be announced, procurement on-going as of October 2018). This will provide an incentive for fleet managers to choose ULEVs over traditional compliant vehicles which have been shown, in some cases, to emit over 12 times the legal Euro 6 NOx emissions. This credit is designed to cover a years’ worth mileage using the following calculation: average van mileage of 20,623km21 at 0.2kWh/km22 equals an annual demand ~4,000kWh, assuming a price of 25p/kWh on the public charging network this gives a total cost of £1,000 per vehicle. This measure does not directly reduce negative impacts of the CAZ but instead encourages the switch to cleaner forms of transport (quantified in a later section), additionally, unlike the other measures, there are no eligibility criteria specifically targeting vehicles that enter the CAZ. As a result, BCC plan to limit the measure to drivers/fleets within the Birmingham area to limit the funding ask and ensure that the resulting clear air benefits are concentrated in Birmingham itself.
6.3 Delivery plan The delivery plan for this mitigation is expected to be simple and any plug-in van registered to an address within Birmingham will be eligible for the scheme. Once the vehicle is purchased, the owner of the vehicle can apply for the award by providing details of the vehicle purchase, proof of registration address and proof of vehicle ownership. They will then be provided with a reference code to register with the EV network provider who will issue the credit amount to their account. This credit can then be used on Birmingham’s public charging network. It is proposed that the funding be available until depleted, if funding remains after 3 years (January 2023) then the remaining amount will be returned to DEFRA.
6.4 State aid considerations As in other measures, the funding award is below any State aid thresholds and so BCC does not anticipate issues in this respect. As part of receiving the award, the company in question will have to sign a declaration stating that the total amount of state aid received over a 3-year period does not exceed the threshold. The company selected as BCC’s EV development partner may indirectly benefit from this funding as it is designed to boost electric vehicle usage as well as providing an incentive to use the public charging network. However, the EV development partner is being selected through an open tender process, and part of the requirements is to create a city-wide strategy to encourage EV uptake through collaboration with the council as well as demonstrating value for money. It is therefore expected that this measure will be covered in this strategy. The successful applicant must commit to ensuring State aid regulations are adhered to at every stage, and BCC are confident that this mitigation measure can be included as part of the development partners responsibility.
6.5 Value for Money
6.5.1 Quantified benefits As described in 3, these benefits are quantified using an assumption that the funding made available will directly offset vehicle upgrade costs in a 1:1 ratio. However, when admin costs are included this reduced this ratio below 1. The total funding ask for M3 is £0.75 million, so using this methodology the scheme is providing £0.75 million of benefits to van fleet owners in Birmingham. When admin costs are considered, the total
20 https://equaindex.com/ 21 DfT Data Table TRA0201 Road Traffic by vehicle type & DfT Data Table Veh0102 - Licensed vehicles by body type Great Britain and United Kingdom 22 Nissan e-NV200 real world range estimated to be 200 km with 40kWh battery, 40/200 = 0.2kWh/km. https://www.parkers.co.uk/vans-pickups/advice/2018/electric-van-guide/
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However, the Council believe this is more than offset by the non-quantified benefits that will result from the measure.
6.5.2 Additional non-quantified benefits
Reduction of emissions. Euro 6 vans have been shown to have real world emissions far exceeding legal limits (in some cases as high as 12 times the legal limit), encouraging the switch to ULEV vans will reduce emissions significantly and ensure the maximum possible benefit results from the forced upgrade of a company’s van fleet. Supporting local businesses. As well as the assistance the fleet owner receives in upgrading their vehicle the measure will also benefit non-fleet owners. The majority of businesses within Birmingham use freight or delivery services in some form, by assisting van owners upgrade vehicle this measure also prevents CAZ charged being applied to deliveries and then passes on to the end consumer. This measure therefore provides economic benefits for a large range of local businesses. Encouraging use of the public charging network. Birmingham is in the process of procuring an EV infrastructure provider who will be responsible for installing rapid charge points across the city. However, utilisation of these charge points is one of the key investment risks for the successful company. By encouraging the use of public charging infrastructure, the measure provides more financial certainty for the development partner meaning they can be more ambitious in the rollout of public infrastructure. This in turn will encourage general uptake of plug in vehicles leading to the associated emissions and health benefits. Encourage the use of electric vehicles. Incentivising the early uptake of electric vehicles will increase awareness and assist the market in its earliest stages. The Council expects that once business experience the benefits of EVs first hand, this will have a positive impact on EV sales within the city. The use of electric vehicles by employees will also increase awareness of the technology in general, further encouraging uptake. Reduce operational costs for businesses. Electric vehicle running costs are significantly lower than for traditional vehicles, the savings that businesses achieve can be invested elsewhere promoting growth of local businesses. For self-employed van drivers, a reduction in running costs will lead directly to higher disposable income again boosting the local economy. Reduction in noise pollution.
6.6 Quantification of package The level of uptake of this mitigation measure depends entirely on ULEV uptake within Birmingham. The UK e-van offer is limited, with only 8 OEM models on the Plug in Van Grant list (plus 2 conversions, which typically have quite a low driving range). The supply is expected to improve by 2020, with new UK models such as the LEVC range-extender van, as well as models currently available in Europe becoming available in right-hand drive version. For reference, there are over 30 e-van models for sales in Europe23.
Element Energy has created an in-depth behavioural choice model to forecast the uptake of plug-in cars and vans in the UK market (ECCo24, a tool in use by the Department for Transport). The outputs of this model have been adjusted to Birmingham’s van fleet with the assumption that the ratio of vans sales in Birmingham to the total stock of UK vans remains constant (DfT registration statistics suggest that currently 7% of the 2017 UK van sales were registered within Birmingham). The results show that, without financial support from the council, the number of BEV vans within Birmingham is expected to be around 1,250 in 2020 and will not reach 2,000 BEV vans until 2024. BCC wish is to bring this date forward to the early 2020’s. ECCo was used to forecast the impact of a £1,000 reduction in running costs in the first year of purchase. It shows that when fleet drivers receive a £1,000 discount in their electricity costs in the first year, the target of 2,000 BEV vans is
23Joint Research Centre: Electric vehicles in Europe from 2010 to 2017: is full -scale commercialisation beginning? An overview of the evolution of electric vehicles in Europe, 2018 24 ECCo: http://www.element-energy.co.uk/sectors/low-carbon-transport/project-case-studies/#project_1
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Figure 17 BEV van forecast comparing baseline uptake to a scenario where electricity costs are reduced by £1,000 in the first year of operation
7 M4: HGV & Coach compliance fund 7.1 Summary of distributional impact on group The DIA report has identified HGVs and coaches as an area of concern for several reasons. The most pressing of these is the high capital costs involved with upgrading to a compliant vehicle which could prove unfeasible for small businesses who currently own non-compliant vehicles. Figure 18 shows the results of Element Energy’s analysis of new Euro 6 vehicle prices and showcases the high capital cost facing businesses. Feedback from fleet managers within Jacobs ‘Freight and Logistics report’ showed that the majority of vehicle turnover cycles are between 5-7 years and most expect to reach compliance in the early 2020’s with nearly all reaching compliance by 2025. The high vehicle costs involved mean that this vehicle turnover is a key part of the companies’ financial plans and business model. For this reason, companies, especially SMEs, may find it difficult to adapt and bring compliant vehicles into their fleet in such a short timescale. This is especially true if their current business plan relies on purchasing older second-hand vehicles as the supply of second-hand compliant HGVs is limited. As well as limited supply, the prices of second-hand HGVs have risen sharply, feedback from the Leeds consultation reports that in some cases the price of second-hand compliant HGVs has increased three-fold since the governments CAZ plans have been introduced. SMEs are also more likely to have smaller more specialist fleets and so will be less likely to be able to re-route compared to larger fleets. The same problems also apply to non-scheduled coach fleets who also face similar high capital costs and a limited choice of vehicle options. In general, non-scheduled coaches are expected to be less affected by CAZ charges as a result of their general operations involving a higher proportion of long-distance intercity travel as opposed to HGVs which may exclusively operate in the city centre.
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Figure 18 Diagram showing average costs of new Euro VI HGVs. Source: Element Energy analysis of HGV market There will be fleets whose day to day operations will require them to regularly enter the CAZ but will not be able to afford to upgrade to a compliant vehicle in the timeframe set out. For these businesses paying the CAZ charge will be the only option, and the high costs associated with this could result in the profitability of business becoming questionable. BCC has received feedback from local businesses to this effect in the on- going consultation, with 72% of businesses (90% of which were SMEs), out of a total of 384 organisations who partook in the survey, stating that the CAZ will create difficulties for businesses. For reference there are 395 businesses who are located in LSOAs within or bordering the CAZ25. This conclusion is supported by an earlier freight and logistics report carried out by Jacobs26, which states that the natural turnover of most fleets will occur in the early 2020’s and that to upgrade prior to this will put financial burden on fleet owners. 7.2 Description of mitigation measure To protect these businesses as well as the jobs they provide the residents of Birmingham and the wider West Midlands, BCC is requesting clean air funds to provide a funding pot to subsidise the transition of HGV and coach fleets to compliant vehicles. This funding is technology neutral and can be used towards retrofitting vehicles with compliant technology or alternatively towards the purchase or lease costs of a new or second- hand compliant vehicle. This method has been adopted as there is still uncertainty around retrofit technology for HGVs, especially considering the many different engine configurations found in HGVs. With this approach companies are still provided for, even if retrofit technology for their specific vehicle does not reach maturity in time. It is also in response to feedback that Leeds City Council received from fleets citing serious issues concerning retrofit technology for HGVs. These included:
The technology is untried and untested Vehicles will be off the road for the time it takes to retrofit the vehicle The technology providers specify the servicing requirements are undertaken regular and exclusively through themselves. Fleets are concerned that these will be excessively expensive. The cost of the retrofit is very high in comparison to the cost of the vehicle. By making the funding technology neutral it allows fleets to judge for themselves the most appropriate route to compliance and provides for fleets who own vehicles where no retrofit technology exists. The funding from the CAF will be used to fund an open competition in which fleets bid for an award of £15,000. This amount is based on estimates from retrofit providers of a cost of around £13,000-£19,000 per vehicle, the funding will be capped at the cost to the company, either of the retrofit solution of compliant
25 Nomis – Official Labour Market Statistics 26 Jacobs: Clean Air Zone - Freight & Logistics, 2017
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Page 309 of 366 Birmingham Clean Air Zone Clean Air Fund Report vehicle (i.e. a retrofit solution costing £13,000 will not receive the full £15,000 funding as it is higher than the cost technology, they will instead be awarded £13,000). If the funding is used towards a new or second-hand vehicle then the proportion of the cost that could be fulfilled by the award will vary depending on the cost of the vehicle that is purchased/leased. Companies will only be eligible for a maximum of 2 funding awards, and this will not distinguish parent companies, holding companies, sister companies etc. (i.e. a company group will be eligible for maximum 2 vehicles). An open competition format allows the measure to be extended beyond just Birmingham and BCC propose that it be open to any company with a fleet that is registered within the West Midlands and the selection criteria will be used to target those most impacted by the CAZ measures. This recognises that in some instances, fleets registered outside of Birmingham will regularly enter the CAZ and therefore be equally impacted as Birmingham vehicles. The competition selection criteria will be established as part of the scheme delivery plan, this will be handled by the Business Enterprise team within the Council who have significant experience in creating funding criteria which corresponds to the needs of business as well as being suited to a fair and transparent assessment process; for more information on the Business Enterprise team see Cast study 2. The funding criteria will ensure that the businesses in most need are targeted with the funding awards, this will consider the following information from companies: The economic impact on the company of the CAZ charges. This will consider the size of the company, the size of its HDV fleet, its ability to absorb the cost of transferring to a compliant vehicle (capital reserves), company financial information (profit loss, revenue etc.) and its ability to reroute/redistribute its fleet to avoid the CAZ (vehicle type and duty cycle, vehicle routes etc.). Proof of financial stability. It’s vital that any financial support that is distributed go towards businesses which will continue to operate in Birmingham for the foreseeable future, as a result the council will require proof of financial stability. Company accounts will be requested for this purpose Proof of operations within Birmingham. This will require the company to provide evidence that the vehicle in question is in operation within Birmingham and in particular operating with the CAZ. There is a range of documents which can be supplied as evidence (e.g. service contracts, letter of support from clients, parking fees etc.), the Council will provide a list of acceptable documents and it will be the responsibility of the company to provide adequate evidence. Additional plans of the company to become compliant. This will take in to account the planned changes to a company’s fleet outside the money requested from the open competition. For example, if a company is planning to retrofit additional vehicles from its own finances this will be viewed positively. This is in place to encourage behaviour change; however, the Council fully acknowledges that some of the most vulnerable businesses will be least able to afford to deliver additional compliant vehicles. It therefore will ensure that this is a secondary assessment criterion, the priority will be first and foremost to support vulnerable businesses. The funding amount is expected to be sufficient to cover the majority of the cost of a retrofit installation, however for those where this is not possible, or where the business decides to purchase/lease a new vehicle, the amount offered is significantly less than the cost to upgrade vehicle. Similar to both M1 and M2, there has been concerns raised that this will present affordability issues for businesses, especially SMEs who will be less able to afford the high upfront capital costs. This is exacerbated by the high vehicle costs associated with HDV vehicles. Although recognising this as an issue, the Council does not propose to offer a higher funding amount as this would not represent good value for money. The competition format of the measure ensures that, through carefully designed scheme eligibility criteria, the Council will be able to target the funding at those that are most in need. For an SME, £15,000 is a significant contribution towards a vehicle upgrade. Offering a higher amount of funding would make the scheme expensive relative to other mitigation measures and ultimately result in less fleets being supported. The Council has therefore prioritised supporting the number of fleets which it has deemed are in need of support with a decent funding award amount rather than supporting fewer fleets with a larger funding amount.
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7.3 Delivery plan The implementation plan is broken down into 6 key delivery steps as shown in Figure 19 below.
Figure 19 Delivery plan for HDV compliance fund mitigation measure
Before the measure is implemented it will be key to ensure that all fleets are aware of the funding on offer and the requirements in order to apply for the funding. This will integrate with the marketing and educational campaign described later and the aim will be to make contact with all fleets operating in the Birmingham area. This will ensure all eligible parties are aware of the funding on offer, and all interested fleets register their interest to enter the competition. They will also be asked to enter the number, engine and vehicle model/configuration of their non-compliant vehicles. This will allow BCC to build up a list of non-compliant vehicles that can be communicated to retrofit/repower technologies providers, helping them identifying the configurations for which it makes the most economic sense to develop solutions. The information passed would not identify the fleets in question to respect anonymity, unless fleets express an interest in being contacted by suppliers. This will be followed by the delivery of the mitigation measure: 1. Establish the retrofit process: This will involve reaching an agreement with retrofit providers that they are willing to be a partner in the scheme to offer retrofit solutions and receive part funding from the council. This is not anticipated to be difficult process, BCC have experience with this type of arrangement, conducting a similar scheme for retrofitting taxis in 2016/2017. There is also motivation for providers to cooperate as the scheme will boost demand for their services. 2. Competition design: A key aim when designing the specification will be to make the assessment process as simple as possible, as such, non-qualitative question types will be prioritised. It is expected that this will be aided by the Business Enterprise team who have experience in writing and designing funding assessments. 3. Response to applications: Once the application document is finalised it will be distributed to fleets who expressed interest and a deadline will be set for the response submissions. There are two options by which this could be implemented; a. BCC’s tender portal used for the council’s public contract tenders b. The permit application software (described in Section 5.0 of the FBC) which allows applicants to upload documents and respond to questions 4. Assessment of applications: This is likely to be around 2 months in duration where the bids will be assessed against the criteria set out in the specification. It is suggested that BCC’s Business Enterprise department are responsible for the delivery of this project, they have significant experience of delivering projects of this magnitude and some examples of successful implementation is shown in the case study at the end of the chapter. They have significant experience in allocating funding to businesses in the Birmingham area to support them in their growth (e.g. relocating, training and capital cost assistance) and have to date distributed £40 million to over 500 local businesses. Part of this process is a detailed assessment of each applicant, including the financial viability of their funding
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ask. This experience has good synergies with work required to implement the HDV compliance fund, and many of the required process have already been established in their prior experience. 5. Validation of retrofit or vehicle purchase/lease: If the retrofit option is selected this will be an automatic process between the council and the technology provider. If the company decides to purchase/ lease a compliant vehicle then it will be a simple process of providing evidence in the form of a. a sales receipt (or certification of destruction) of the replaced vehicle. b. registration details of the newly purchased/leased vehicle. 6. Funds are released to retrofit provider or business If retrofit technology does not reach maturity in time for the implementation date of the CAZ a successful funding applicant who opted for the retrofit option has 3 options: 1. Use the funding award to instead contribute towards the capital/lease costs of a compliant new or second-hand vehicle 2. Wait for a retrofit solution to come to market, this is permissible as the funding award will be designed to have an expiration date of January 2021 (as described below). If a retrofit solution does not come to market in this time period, the company in question can revert to option 1. 3. If the retrofit solution does not reach market maturity and the company does not want to use the funding towards a compliant vehicle (option 1), then the funding will return to the funding pool and the highest-ranking unsuccessful applicants will be contacted and awarded the funding. There is potential for interested fleets to also be eligible for an exemption if the vehicles are registered within the CAZ or there is a pre-existing finance agreement in place (see section 2.3). BCC proposes that the funding be awarded with an expiration date of October 2020 and the retrofit technology or the purchase/lease of a compliant vehicle be allowed to be implemented at any point in this time frame. This allows those eligible for an exemption to be able to continue to operate their vehicle until the end of the sunset period at which point they can utilise the funding to transfer to a compliant vehicle. The time between the deadline for the funding application (October 2019) and the end of the exemption period (January 2020) will be used to ensure a timely delivery of the award and will also allow time for an operator on the reserve list to receive the award if an original awardee decides not to proceed. The full implementation plan, including the delivery steps detailed above, is set out below in Figure 20.
Figure 20 Proposed delivery plan for the HGV compliance fund mitigation measure
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Case study 2: Business Enterprise team
The Business enterprise team have a track record of delivering projects of scale which allocate funding to SMEs in the West Midlands area. Below are a few relevant examples of successful projects all of which gives confidence in their ability to deliver the measure effectively.
Green Bridge Supply Chain Programme (GBSCP), 2012 – 2015
Funding scheme offering SME supply chain companies operating in the green economy funding awards of £20,000 - £1,000,000. Received 1,600 enquiries and 611 applications resulting in 380 approved and funded projects Total funding amount was £75 million matched by £100 million of private investment.
Business Innovation Programme (BIP), 2012 – 2015
Offered funding of £10,000 - £20,000 to SME’s investing in innovative products Total funding amount of £9 million with a further £5.3 million generated from the private sector 166 companies supported resulting in 267 additional jobs and a total £52 million to be generated by 2020
Business Development Programme (BDP) 2012 – 2015
Offered £10,000 - £20,000 of funding to SME’s to assist in expanding operations, relocating or improving access to new markets Total funding amount of £8 million, which supported 390 SME’s and created 455 new jobs Generated £65 million of Gross Added Value in 2014, this is expected to reach £73 million by 2020
Consistent in all funding programs run through the Business Enterprise team:
On-line application systems including extensive application information Legal, financial and project assessment of each application in line with all relevant regulations Investment panel to review and discuss applications as well as recommend funding approval Close follow up to ensure money awarded is spent in line with funding guidelines.
7.4 State aid considerations BCC will ensure that the HGV funding competition is designed to be in full compliance with State aid rules. As the funding award is below the threshold limit for aid to freight and road transport organisations, as well as the fact that fleet managers will have full choice on the path to compliance that they choose to pursue, state aid issues are not anticipated to arise. Additionally, recipients of the award will be required to sign a document declaring that the total amount of financial benefit received from the government within the last 3 years is within state aid limits. A similar process was implemented during BCC’s LPG retrofit trail with Hackney carriage drivers. BCC will seek legal advice during the entire process to ensure State aid regulations are adhered to at every stage.
7.5 Value for Money
7.5.1 Quantified benefits As described in 3, these benefits are quantified using an assumption that the funding made available will directly offset vehicle upgrade costs in a 1:1 ratio. However, when administrative costs are included this
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However, the Council believe this is more than offset by the non-quantified benefits that will result from the measure.
7.5.2 Additional non-quantified benefits
Improving air quality. Unlike vans, the real-world emissions of HGVs have been shown to be under the legal Euro standard limits. Therefore, by assisting businesses to upgrade to CAZ compliant vehicles this will have a meaningful impact on emissions within the CAZ and contribute to Birmingham reaching compliance in the shortest possible time. Protecting local businesses. The DIA has identified the financial burden that businesses will face as a result of the CAZ. The CAZ charges will put significant strain on the operational profitability of a business and upgrading vehicle involves large capital costs, out of reach to many small businesses. Combined this puts business, especially small businesses, at financial risk. If these businesses were to fail as a result of the CAZ it would have large ramifications on the local economy resulting in a loss of local jobs and the stunting of economic growth within Birmingham. This measure protects these businesses and ensures they can continue to operate therefore preventing any possible negative economic consequences. It also protects local jobs and prevents the replacement of these services from larger national fleets which have the advantage of a newer and compliant vehicle fleet. Protecting local services. The businesses that are most at risk are small highly specialist fleets as they are totally reliant on the use of their vehicle, but their specialist nature make the capital costs of upgrading often very high. They are also limited in their options as it is less likely that a retrofit solution will be developed for low volume vehicles such as these. A lot of these specialist vehicles carry out vital services (e.g. rubbish collection, construction vehicles, cranes etc.), if these fleets were no longer able to operate due to affordability issue this would put these services at risk. Reducing costs for business and individuals. If non-compliant fleets are unable to upgrade for financial reasons and therefore forced to pay the CAZ charges to continue operating, they are likely to pass at least part of these cost on to the end consumer. For HGVs, this is likely to be other businesses, the majority of which are SMEs within Birmingham. For coaches, the increased cost will be passed on to the public, especially low-income individuals who are more likely to be traveling via coach. This measure prevents these potential price increases and provides economic stimulus to the local area.
7.6 Quantification of scheme The number of HGVs that are expected to require this financial assistance is based upon Element Energy’s analysis of the governments fleet registration service as well as ANPR data showing the current levels of non- compliant HGVs entering the CAZ as well as the frequency of entry. ANPR data shows that in single week, 2,855 unique non-compliant HGVs are expected to enter the CAZ if no additional measures are considered (i.e. no CAZ D is introduced). Of these, the behavioural modelling suggests that 29% will be able to re-route their operations and avoid the zone which leaves 2,027 vehicles which must upgrade or pay the CAZ charge. It is possible that as a result of the funding included in the mitigation measure a smaller proportion of vehicles will decide to re-route their operations and instead prefer to upgrade. It has not been possible to model this impact. However, this is estimated that these cases would be rare as There is an administrative burden with entering the competition The fund would not cover all the replacement cost (and some of the retrofit cost not covered , i.e. vehicle off road for 1-2 weeks) Meaning companies should prefer to re-route if they have the option. Furthermore, the number of awards is set before the start of the competition, limiting the overall impact to a set amount.
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Figure 21 Number of non-compliant HGVs entering the CAZ by frequency of entry (days entered per week) As shown in the distributional analysis report, upgrading to a new vehicle or to a lesser extent installing retrofit technology is only cost effective if the vehicle enters the CAZ a sufficient number of times per week. Fleet analysis by Element Energy suggests that only vehicles entering the CAZ more than once a week will see upgrading to compliant vehicle or fitting retrofit technology as an economically advantageous solution. To put this into context, a vehicle entering the CAZ once a week, using currently proposed CAZ charges of £50/day, will pay £2,600 a year in CAZ charges. This compares favourably with the upgrade costs of bringing a compliant vehicle into the fleet and also of the retrofit solution (HGV retrofit is estimated to cost ~£19,000 leaving a £4,000 surplus after the funding award is considered), this is before accounting for the inconvenience and lost revenue when the vehicle is off the road during installation. As most fleets expect to reach compliance through natural vehicle turnover in the early 2020s27, this suggests that those who only enter once a week would be likely to prefer to pay the CAZ charges and replace their vehicle in line with normal procedures.
The duty cycle of the vehicles, especially the expected frequency of entry, will also be an important marking criterion in the competition for the funding award as this directly relates to the financial impacts of the CAZ on the company. For these reasons it is assumed that only companies with vehicles entering the CAZ more than once a week will apply, or be eligible to apply, to receive the funding award amount. ANPR data shows only 33% of non-compliant vehicle entering the CAZ do so more than one day a week (see Figure 21), when this is applied to the 2,027 vehicles mentioned above this results in a total of 669 vehicles estimated to be in need of this funding. Considering the above factors, BCC believes funding provision should be made for 670 vehicles. If £15,000 is provided to each vehicle, it results in a total scheme cost of £10.05 million. ANPR data does not distinguish coaches from buses so the number of non-compliant coaches currently entering the CAZ is unknown. However, government registration data shows that only 4 fleets are registered in the CAZ. This suggests that the number of coach fleets requiring the funding will be small in comparison to HGV fleets.
The 670 vehicles that will be offered funding are only a small proportion of total HGV/coaches operating in Birmingham and the wider West Midlands. Evidence from Element Energy’s analysis of government licencing statistics shows that there are 1,973 companies operating a total of 19,918 HGVs registered in Birmingham. When expanded to the West Midlands, the data shows that 3,023 companies operate 27,058 HGVs registered in the West Midlands. The number of coach fleets is significantly smaller (Birmingham: 247 companies operating 1,208 vehicles, West Midlands: 294 operating 8768 vehicles). Figure 22 shows the position of HGV fleets in the West Midlands and within the provisional CAZ area.
27 Jacobs: Clean Air Zone - Freight & Logistics, 2017
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Figure 22 Map of the West Midlands showing the HGV fleet locations by the total number of vehicles owned by the company 8 M5: Marketing and engagement campaign 8.1 Summary of distributional impact The distributional impact has identified low income residents, Hackney carriage drivers and SMEs which rely on HGV/LGVs for their day to day operations as some of the groups who are particularly vulnerable to the CAZ introduction. The mitigation measures are designed to address the negative impacts on these groups. However, a key factor determining the success of these measures will be ensuring that the relevant groups have full access to information regarding the measures and are aware of their various options relating to reaching compliance. This will be especially important for hard to reach groups which would most likely include low income residents and some smaller SMEs, especially as these are the groups most likely to be negatively impacted by the CAZ.
8.2 Description of mitigation measure BCC is proposing a marketing and engagement campaign targeting all key groups, especially those who are covered by the 6 other mitigation measures included in the shortlist. The key priorities are to:
Outline the CAZ measures and describe in detail how each group will potentially be affected by this. This will ensure that each group is made fully aware of the impact that the CAZ measures will have on their individual operations and allow them to judge their best course of action in response. Outline the options that each group have to reach compliance. This is important to ensure that individuals/businesses are aware of all compliant technologies and can objectively assess them against their individual needs. It also gives individuals/businesses knowledge of the widest range of options and support available to them. An example of this could be a regularly updated list of the available ULEV LGVs on the market with the prices and specification for each. This would enable individuals/businesses to make a comparison of the total cost of ownership for new Euro 6 LGVs available to them. Vehicles prioritised will be taxis (both Hackney carriages and private hire vehicles), LGVs and HGVs. Describe different schemes and initiatives available to help individuals/businesses reach compliance to ensure full awareness of the total costs when incentive schemes and additional measures are
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accounted for. This also provides a platform for the council to promote the mitigation measures that have been put in place, who is eligible for each scheme and the process of applying to each. This point is especially important to target harder to reach groups who the Council may find it difficult to make contact with through traditional channels. Provide details and maps of refuelling/recharging sites, along with the necessary technical info (e.g. dispensing pressure, opening hours etc.)
The aim is to develop and implement an overarching marketing and engagement campaign incorporating an accessible and easy to understand webpage, a targeted social media campaign and visible city-wide advertising. This will be delivered under the umbrella of the council’s Brum Breathes and Business Breathes campaigns.
8.3 Delivery plan This campaign will be promoted through the Birmingham Connected Business Travel Network, which has an established stakeholder database and works in conjunction with the council’s Business Development Team to ensure that a wide range of individuals and organisations are reached. The Business Travel Network has an existing strand around fleet and freight, and this campaign will increase and complement the tools and resources already available through this. The Birmingham Connected team regularly engages with businesses and organisations across the city through email updates, stakeholder briefings and providing support with travel planning. This campaign will be integrated into these services and activities.
BCC has already secured €100,000 through the TRIS project28, to develop a brand, a website targeting businesses and a 3-month social media campaign. Following a competitive tender, a consortium made of Clever Cherry and Element Energy has been selected. Clever Cherry is a communication company, they are in charge of the branding and marketing strategy development. They are supported in writing up the relevant webpage content by Element Energy who have been responsible for the fleet analysis behind the distributional impact analysis as well as the designing and quantification of the mitigation measures described here. The campaign is planned to launch in January 2019 and continue until 31st December 2019 (although the website license allows it to be maintained until September 2020). During this time Birmingham will regularly update content with news items and developments relating to the CAZ or any of the mitigation measures.
CAF funding would be needed to:
Extend the campaign to December 2021 (website updates, social media) and to private vehicle users Increase travel planning support to businesses/SMEs most likely to be negatively impacted by the CAZ through the Birmingham Connected Business Travel Network. Enable engagement with other key groups within the CAZ, including low-income residents, community groups, places of worship and educational establishments to promote mitigations available to them. 8.4 State aid considerations Clever Cherry and Element Energy have been awarded a previous contract to carry out relevant aspects of the Business Breathes campaign. This was an open competition which followed state aid guidance. This contract could be extended for continuity (in line with BCC procurement rules), or a new tender could be held for the extension and future delivery from October 2020.
The Brum Breathes campaign is run by the Council’s team so there are no State aid issues. 8.5 Value for Money
Unlike the other mitigation measures there is no direct benefit that can be quantified from the engagement campaign. However, it results in significant indirect benefits and most importantly improves the value for money for all other measures by maximising the impact that each has on its target group. The value for money is therefore assessed through the effectiveness of the campaign relative to its goal of reaching all individuals and business who are impacted by the CAZ.
28 Transition Regions towards Industrial Symbiosis https://www.interregeurope.eu/tris/
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Table 9 below demonstrates the value for money of this measure by outlining the estimated reach relative to the cost of the measure as well as details of the groups that will be targeted and the previous experience the Council has in delivering similar measures. In summary, this illustrates that the measure represents good value for money in line with previous campaigns, and that the Council has a proven track record of effective engagement and impact from using this approach in the past.
Additional value for money is achieved as the physical advertising included in the implementation budget has been negotiated at a reduced price (£50,000 per year, normally £80,000). This will enable clear advertising messages and signage to be placed at key locations, e.g. near to Tyseley Energy Park and to further help engagement of local businesses and individuals.
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Table 9 Detail of engagement campaigns items outlining the value for money for the main cost items Item Reach Cost per reach Detail Previous experience
£57,500 to extend the This relates to <£50 per business This covers: Clever Cherry is communication company Business Breathes the Business with a solid track record of successful campaign Breathes £10,000 for PR support, to be spread out campaigns. website and across this campaign as required. ( campaign that £7,500 social media campaign A good example of the excellent service that will launch in £40,000 for website account management, this measure will deliver is the feedback January 2020. content development, social media campaign and hosting fees. This is already received from industry from a recent It will reach funded to September 2020 and will enable consultation (21/11/2018) regarding the >10,000 for this to continue over the remaining ‘Business Breathes’ campaign. This included businesses, campaign period. representatives from the Federation of Small thanks to the Businesses, Corporation of Passenger social Transport, British Vehicle Rental and Leasing campaign, outdoor Association, Road Haulage Association and campaign and the Freight Transport Association. Examples publicity from of the feedback received are listed below: industry bodies (FTA, RHA, “I wish all CAZ cities had this, can BVRLA, CPT, you add other cities?” FSB) “This is the best and most advanced (CAZ communication campaign) I’ve seen”
“Very clear layout and very comprehensive content”
“Very pleased about this initiative, we know from our members that they desperately need something like this”
“Many small businesses don’t know about the CAZ and their options, the
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outdoor campaign will be key”
“The refuelling map will be of use to fleets all over the UK so this is great”
“Birmingham is very lucky to have something like this”
This quality of service will be present throughout the entire engagement campaign ensuring the maximum benefit is achieved from the funding awarded from the CAF.
£150,000 for business 125 business Intensive support: This cost covers 0.6 of a post to: Since development of the Business Travel engagement over 3 directly engaged £400 per Network offer, the Transport Behaviour years from 2019. This business engage with businesses on clean air and Change team have developed a ‘light touch’ will be provided through 55 bronze supported to sustainable travel offer available to all businesses across the the Birmingham accreditations sign up only help them to use the online travel planning city and provided intensive support to Connected Business £800 per tool STARSfor identified stakeholders where resources have Travel Network and will 20 silver business help them to engage their staff in travel been available. focus on businesses accreditations supported planning initiatives most affected by the through to ensure that they know how to access This core offer comprises: Access to CAZ, especially SMEs. bronze relevant additional CAZ mitigations. It will ensure dedicated 1,200+ direct Regular stakeholder emails from stakeholder £1,400 per resource is available for business Initially, the focus will be on STARSfor sign up Birmingham Connected, containing network the promotion of the supported and CAZ awareness raising activity; in later relevant transport, resilience and forthcoming Business through to silver phases focus will shift to completion of travel behaviour change information. Breathes campaign and plan initiatives and STARSfor accreditation Online and social media information support access of this. Light touch and (bronze, silver, gold). from Birmingham Connected, again wider engagement: containing relevant transport, resilience £16 per Year 1: and behaviour change information. business per sign up 70 businesses (approx. 1 day of Free access to STARSfor plus online year contact time per business) library of ‘how to’ resources and travel remaining 53 days for planning, outreach planning guidance. and ‘light touch’ support to businesses less affected by CAZ. In addition, the team has cultivated strong relationships with key stakeholders who can Year 2: further disseminate and champion sign up 35 businesses (1-day contact time) information, such as BIDs, Chamber of
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achieve 35 bronze accreditations (1-day Commerce, larger employers and larger trip contact time) attractors. remaining 53 days for planning, outreach and ‘light touch’ support to businesses less Current direct reach of approximately 1,200 affected by CAZ. email addresses, but indirect reach much larger via wider networks. Year 3: sign up 20 businesses (1-day contact time) achieve 20 bronze accreditations (1-day contact time). achieve 20 silver accreditations (1.5-day contact time). remaining 53 days for planning, outreach and ‘light touch’ support to businesses less affected by CAZ.
£35,000 for stakeholder 350 businesses £100 per business An estimated 14 events (8 in year 1, 4 in year 2, During the Clean Air Zone consultation, three events, including 2 in year 3) for approximately 60 delegates each. main business/stakeholder events were held additional sessions Allowing for repeat attendance, estimate 350 with attendance by 164 delegates from about organised to raise businesses represented. 120 organisations. awareness of mitigation measures in advance of This will be aligned with any other work the CAZ being packages around CAZ (e.g. application process introduced. This for mitigation measures), to raise awareness and approach was very well increase understanding of how this programme received during the CAZ is being implemented and ensure a high level of consultation and there is attendance. an expectation that it will continue.
£7,500 for social media Approximately £0.10 per person Last 28 days: Report of BCC corporate social media during support, to complement 5k followers following. CAZ consultation: the above using specifically Birmingham Connected Facebook: established accounts interested in 262 total followers already delivered by transport issues. 6,393 reach Birmingham City 1,882 post engagements Council and Birmingham Boosted to over Connected. £150k via BCC Birmingham Cycle Revolution Facebook: corporate 2,347 total followers 73/91
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channels. 1,818 reach 256 post engagements Further boosted by combined Birmingham City Council Facebook: reach. 15,757 total followers
Birmingham Connected Twitter: 2,110 total followers 80,200 tweet impressions
Birmingham Cycle Revolution Twitter: 2,142 total followers
25,300 tweet impressions
Birmingham 20mph Twitter: 1,290 total followers 51,500 tweet impressions
Birmingham City Council Twitter: 149,829 total followers
£60,000 for community 30 community This cost covers 0.25 of a post to: The Transport Behaviour Change team has engagement over 3 groups engaged an established record of engaging with and years from 2019. This (intensive engage with community groups on clean air supporting community groups in their work will be provided through support) and sustainable travel promoting sustainable travel options. the Birmingham ensure that they know how to access Connected team in 150 Clean Air relevant additional CAZ mitigations They have strong relationships with charities conjunction with champions help them to access available resources, and third sector organisations who are well colleagues from Public recruited, such as ‘No Idling’ toolkit and air quality placed to support this agenda, such as Health and trained and monitoring kits for community use London Sustainability Exchange, Climate Communications. It will supported to help them to engage their volunteers and Action Network West Midlands, Friends of ensure dedicated deliver activities service users in. the Earth Birmingham, Clean Air Parents resource is available for Network, and British Lung Foundation. promotion of mitigation Access to measures to key 1,000+ Main focus will be on community organisations Community engagement activity has already audiences such as low- community located within or in close proximity to the CAZ, to taken place as part of the CAZ consultation income residents, groups through raise awareness of the impact of this on them and through an air quality monitoring pilot. community groups and BVSC and other and detail support available. networks In addition, the team have supported a wide range of community groups to take action 74/91
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£45,000 for community 180 info stands Information stands with detail on the introduction See above events and other provided to and implementation of the CAZ, mitigations and activities, including community exemptions, and alternative travel options will be equipment for air quality events/settings provided as part of a Clean Air Roadshow. An monitoring by some of estimated 180 sessions (90 in year 1, 60 in year these groups to aid 30 training 2, 30 in year 3) will be arranged. engagement. Previous sessions experience suggests delivered This will be aligned with any other work that an outreach packages around CAZ (e.g. application process approach where we look 30 community for mitigation measures), to raise awareness and to co-produce events groups involved increase understanding of how this programme and activities is the most in air quality is being implemented and ensure a high level of effective way of monitoring attendance. engaging with and disseminating 3 celebration Further sessions will be arranged to train up messages to events Clean Air Champions and support them to communities, and organised undertake activities, such as ‘No Idling’ harder to reach groups campaigns and air quality monitoring in particular.
£30,000 for engagement 90 schools £333 per school Two events per schools term: This work sits in the context of the Transport with educational trained to use Behaviour Change team’s ongoing establishments (schools Clean Air Cops £2.14 per pupil half day event to train teachers (10-12 engagement with schools using the & colleges) in and near resources over schools) to use the Clean Air Cops Modeshift STARS travel planning tool (200 to the CAZ over 3 years three years. resource schools signed up to date). from 2019. This will be half day celebration event rewarding provided by the School 14,040 pupils schools for progress on travel plan All LA schools receive information on travel Travel team as part of reached. initiatives and clean air via regular postings on schools the existing Modeshift noticeboard. STARS initiative Calculations below assume average 60 year 5 (including national children per school per year. In the last 8 months, 18 schools have been accreditation). trained and received Clean Air Cops books Year 1: for pupils in year 5. Train 30 new school, give out 1800 books Give 1080 books to 18 school previously
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trained.
Year 2: Train 30 new school, give out 1800 books Give 2880 books to 48 school previously trained.
Year 3: Train 30 new school, give out 1800 books Give 4680 books to 78 school previously trained.
Total books needed (equates to pupils reached) for project approx. 14,040. Cost to print approx. £4,500.
Remaining £25,500 to run events, approx.:
£1,000 per training event £1,800 per celebration event.
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8.6 Quantification In terms of number of stakeholders that Birmingham aim to reach through this campaign, the target is to make information available to every individual or business that is impacted by the CAZ. That is to say, every individual and business within the West Midlands that owns a non-compliant vehicle and travels into the CAZ forms the target audience for this campaign.
For the delivery of this measure it is estimated that £380,000 will be required. This has calculated from the additional level of engagement that will be required with key audiences, and is based on quotes already received:
£40,000 for the Business Breathes website account management, content development and hosting fees. This is already funded to September 2020 and will enable for this to continue over the remaining campaign period. £10,000 for PR support, to be spread out the Business Breathes campaign as required. £15,000 for social media support [£7,500 for the Business Breathes that is launching in January 2020 and £7,500 for the Brum Breathes campaign]. £150,000 for business engagement over 3 years from 2019. This will be provided through the Birmingham Connected Business Travel Network and will focus on businesses most affected by the CAZ, especially SMEs. It will ensure dedicated resource is available for the promotion of the forthcoming Business Breathes campaign and support access of this. £35,000 for stakeholder events, including additional sessions organised to raise awareness of mitigation measures in advance of the CAZ being introduced. This approach was very well received during the CAZ consultation and there is an expectation that it will continue. £60,000 for community engagement over 3 years from 2019. This will be provided through the Birmingham Connected team in conjunction with colleagues from Public Health and Communications. It will ensure dedicated resource is available for promotion of mitigation measures to key audiences such as low-income residents, community groups and places of worship. £45,000 for community events and other activities, including equipment for air quality monitoring by some of these groups to aid engagement. Previous experience suggests that an outreach approach where BCC look to co-produce events and activities is the most effective way of engaging with and disseminating messages to communities, and harder to reach groups in particular. £30,000 for engagement with educational establishments (schools & colleges) in and near to the CAZ over 3 years from 2019. This will be provided by the School Travel team as part of the existing Modeshift STARS initiative (including national accreditation).
This amounts to £380,000 (excluding VAT) over a 3-year period. A full breakdown of the cost items included the CAF ask are shown in Table 10.
Table 10 Full breakdown of cost items included in the marketing and engagement campaign Campaign Cost item 2019/20 2020/21 2021/22 Total
Business Breathes web hosting/management £0 £20,000 £20,000 £40,000
Business Social media support £2,500 £2,500 £2,500 £7,500 Breathes campaign PR Support £4,000 £4,000 £2,000 £10,000
Business £150,000 behaviour Business engagement £50,000 £50,000 £50,000
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change campaign Stakeholder events £20,000 £10,000 £5,000 £35,000
Community engagement £20,000 £20,000 £20,000 £60,000
Community events £10,000 £10,000 £10,000 £30,000
Brum Breaths Air quality monitoring campaign (equip.) £5,000 £5,000 £5,000 £15,000
Social media support £2,500 £2,500 £2,500 £7,500
Educational establishments £10,000 £10,000 £10,000 £30,000
Total £131,500 £141,500 £132,000 £385,000
9 M6: Resident parking schemes
9.1 Summary of distribution analysis
Residents parking was not identified in the DIA, however the Council’s transport team have requested its inclusion due to concerns around the impacts of the CAZ raised during the consultation. There is a concern regarding the potential for a high volume of cars to be parked around the outskirts of the CAZ to avoid the charge.
Unfortunately, the traffic modelling conducted as part of the emissions analysis only accounted for full trips between two defined end points, it is therefore is unable to forecast individuals driving to the margin of the CAZ and completing their journey on foot. As a result, it is not possible to quantify the expected impact on parking congestion in areas surrounding the CAZ.
Whilst the impact of parking around the city centre is likely to be low, the Council believes it is prudent to be prepared and able to respond to any issues which may arise following the implementation of the CAZ.
9.2 Description of mitigation measures The options to mitigate the negative impacts on residents who live in close proximity to the CAZ have been outlined in detail in a recent report from Jacobs29. The report assesses a combination of different parking measures in mitigating any negative impacts but does not recommend one measure over the other. The measures analysed include:
Controlled parking zone Restricted parking zone Residents parking scheme or permit parking zone Waiting or loading restrictions (on a street by street basis)
The advantages and disadvantages of each option are shown below in Table 11.
29 Birmingham Clean Air Zone: Potential parking restrictions options (Jacobs, September 2018)
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Table 11 Advantages and disadvantages of parking control measures assessed in Jacobs 'Potential parking restrictions' report Parking measure Advantages Disadvantages
Controlled Simplified traffic orders Unrealistic to expect drivers to remember the parking zone An indication to drivers that times of operation of the zone if there has been (CPZ) all road space is controlled a considerable distance (or time) between An indication to drivers of passing a zone entry sign and parking the type of parking available Yellow road markings and bay road markings (e.g. pay and display). required in CPZ Type (a) are visually intrusive; Pay and display could Difficulty in clearing roads of vehicles and other provide an income stream obstructions to enable installation of road for the council; markings in such large quantities; Signs prescribed in the Costs associated with installing pay machines TSRGD can be used. (if required); Due to the size of the zone(s), residents may still struggle to find suitable parking provision near to their home; Due to the size of the zone(s) residents may be able to use their parking permits at other locations within the zone other than close to their home.
Restricted parking Simplified traffic orders Can be confusing for motorists who are zone (RPZ) No requirement for yellow generally less familiar with RPZ than CPZ road markings and therefore Risk that motorists would inadvertently park costs are less, and it is less where restrictions apply, especially if there is a disruptive to implement considerable distance between where they wish to park and the gateway signs (e.g. 1 mile) Traffic Sign Manual states that “Restricted Parking Zones are suitable only for single streets or clearly defined small areas”
Residents parking No need for Could result in a fragmented scheme with scheme/permit entrance/gateway signs in different restrictions on different streets parking zone PPZ so cost to implement is May be some areas where the supply of (PPZ) lower (temporary signs may parking is insufficient to satisfy the demand be required when the caused by residents’ vehicles alone. In this restrictions are first case, the Authority may find itself in a position introduced) where it needs to limit the residents’ freedom to Lack of road markings keep unlimited numbers of taxed vehicles on associated with PPZ means the street there is less cost and Residents are restricted to parking within their disruption to implement such own zone and cannot use adjacent areas when zones capacity is exceeded Residents have an improved It is likely that each PPZ would require local opportunity to park near their public consultation and approval. property Waiting or loading It is assumed that elements of this would be required for the through routes where restrictions restrictions are currently not in place, however would not be generally adopted throughout the area under consideration.
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BCC considers that a distance of 1 mile (approximately a 20-minute walk) could be an area within which commuters and long stay parking motorists from outside the area could choose to park their vehicles.
The design of this measure recognises that parking control is unlikely to be necessary across the whole area and may only be needed in sections of the identified area. The areas that do require support will have different requirements based on the nature of the local parking pressure and therefore could require different parking measures to be implemented from the above list. As a result, BCC propose that a ‘reactive fund’ be held by the council and used to implement the appropriate parking measure to assist the residents when the demand arise. To assess what areas require support, the council would engage with local residents. When a certain number of issues are raised and reflect a decrease in the residents’ access to parking, the council will conduct an assessment of that particular area to judge the best measure to reduce parking pressure for residents.
9.3 Delivery plan
As stated, the measure is designed to be a ‘reactionary fund’ and does not require immediate action until the impacts on residents parking can be fully assessed. The process of implementing the measure would involves the following steps:
Communication channels would be established between the council and residents of areas bordering the CAZ. This would integrate with the communication campaign (see section 8) to provide a platform for residents to raise issues with a decrease in the supply as a result of the CAZ. There are several options for this; one being to use the existing process for logging complaints and service requests. These responses would be monitored and when a sufficient number were received from a certain area the council would assess the local issue. The feasibility and effectiveness of each parking measure will be analysed to conclude the best solution for the area in question. The council will then implement this solution through their in-house design team and it will be operated by the in-house parking enforcement team who have significant experience in such projects.
This will be designed to be a continuous cycle, starting in line with the implementation of the CAZ and is proposed to continue for a period of three years, by which time the negative impact is expected to be reduced as a consequence of a higher proportion of compliant vehicles.
9.4 State Aid consideration The scheme will use funds through public contractors, ones already used in similar projects funded by the council, so no state aid concerns are expected. The funds are also to be used to improve public services and do not provide direct financial benefits to any individuals or businesses.
9.5 Value for Money As described in 3, these benefits are quantified using an assumption that the funding made available will directly offset vehicle upgrade costs in a 1:1 ratio. However, when administrative costs are included this reduces this ratio below 1. The total funding ask for M6 is £5 million, so using this methodology the scheme is providing £5 million of benefits to residents in areas surrounding the CAZ. When admin costs are considered, the total scheme cost is £5.04 million. When this is considered, for every £1 of funding allocated, £0.99 worth of benefits are received by the resident community, this represents a negative VfM value of -£36,831.
9.6 Quantification of scheme The total length of road included in the 1-mile CAZ radius is 365km (312km not including motorways and A- roads). For the purpose of costing each item, a total zone was assumed. This is for comparison purposed only and it is not suggested that one parking measure be applied to the entire zone. The estimated costs are shown in the next table.
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Table 12 Cost estimates of different controlled parking options Cost item Controlled parking Controlled parking Restricted parking Permit zone zone (type a) zone (type b) zone
For the purposes of For the purposes of For the purposes of Not required this costing exercise this costing this costing exercise it was assumed that exercise it was it was assumed that 770 would be assumed that 770 770 would be required based on: would be required required
Entrance Signs 120m from CAZ 250m from suburban Birmingham 400m from A- roads
For the purposes of For the purposes of For the purposes of Not required this costing exercise this costing this costing exercise it was assumed that exercise it was it was assumed that Exit Signs 770 would be assumed that 770 540 would be required on new would be required required on new posts on new posts posts
Required at each For the purpose of The spacing Required at each bay. One should be this costing between consecutive bay located at no more exercise it was signs, whether or not that 15m from the assumed there they are on the same For the purposes end of the bay. If would be 4 upright side of the road, of this costing the bay exceeds signs on each road. should be no more exercise it was 30m in length, then 70% would be on than 30 m. The signs assumed there additional upright new posts. may be mounted on would be 42 signs should be lamp columns, upright signs per Upright Signs located at every separate posts or km or road. 50% 30m. possibly on walls. on new posts
For the purposes of this costing exercise it was assumed there would be 64 upright signs per km or road. 50% on new posts.
An allowance of Not Required Not Required Not Required 480m per km was made
Yellow Road Markings However, an However, an However, an allowance of 100m allowance of 100m allowance of per km was made per km was made 100m per km was made
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Yes Not Required Not required. Parking Not required. Bays may be Disabled parking An allowance of However, an provided. bays may be 700m per km was allowance of 75m Bay Marking requested. made per km was made An allowance of 75m per km was made An allowance of 75m per km was made
Cost to £20,000,000 £13,000,000 £13,000,000 £10,000,000 Implement assumes 266.22km of
road and optimism bias of 44%
NOTE: costs associated with disruption to apply road markings not assessed
These estimates suggest that to implement a controlled parking zone across the entire targeted zone would cost in the region of £10-20 million. BCC proposes to ask for funding to cover 25% of the roads included in the zone (78km), which comes to an upper estimate of £5million. BCC believe that this amount will be sufficient to mitigate any negative impacts on resident’s ability to park that may arise as a result of the CAZ. BCC recognises that there is a possibility that the amount required to implement the necessary parking schemes will be higher or lower than the £5 million asked from the CAF:
In a case where the funding required exceeds the amount received from the CAZ, BCC propose to fund additional traffic measures through revenue received from the CAZ charges. Where the funding received from the CAF exceeds the amount required to implement the necessary parking schemes, the outstanding amount will be returned to the government in 2022.
10 Administrative cost and spending profile
In this section, the following items are detailed:
The cost to put in place and run the proposed mitigation measures, referred to as the ‘administration costs’; The spending profile of both the administration costs and direct costs.
10.1 Administrative costs A centrally resourced approach was taken when calculating the administrative cost for the mitigation measures and exemptions. It is envisaged that a ‘CAZ team’ will be assembled who have responsibility for:
Establishing the application systems required for individuals/businesses to submit their application for mitigation measures and exemptions. Assessing and validating applications
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Implementing the mitigation measures Providing help desk services to respond to inbound queries Reporting (internally and to JAQU)
This team will have responsibility for all mitigation measures and exemptions with two exceptions:
Support for Hackney carriage and Private Hire Vehicle drivers (M2a, M2b & M2c): Taxi drivers are unique in that they are a well-defined group with strong communication channels with the council taxi licensing team. There is an annual licencing procedure and the council will communicate directly with the drivers themselves. Feedback from the drivers’ community, as well the BCC’s experience in communicating with taxi drivers, suggests that the best method of engagement will be a postal campaign with the drivers given the options to apply for the mitigations in person or by post. It therefore makes sense that the Birmingham licencing team have responsibility for implementing the measure as they have an established relationship with the drivers. HDV compliance fund (M5): The HDV compliance fund requires specialist skills in creating, assessing and communicating the fund criteria as well as the due diligence involved in allocating large funding awards to businesses. The Business Enterprise team within BCC have significant experience in this area and it is proposed they will have responsibility for delivering this measure.
The total funding to cover administrative costs requested from the CAF is £2,591,012, this is broken down into:
CAZ team costs: £789,561 (including £307,875 of software costs and State aid legal fees of £100,000 over 2 years) Hackney carriage support costs: £268,876 HDV support costs: £242,613
Note this includes the costs for implementing the exemptions as well as the mitigations. Out of the total administrative budget of £2,698,731 it is expected that £1,495,837 will be required to implement the mitigations and £1,202,893 will be required to implement the exemptions. It should be noted that although the total is provided above, this is divided into an administrative budget for each measure. Therefore, if DEFRA decides that one or more of the measures do not meet the funds criteria and wishes them to be removed, their contribution to the administrative budget can also be easily removed, Table 13 shows the administrative budget broken down by each individual mitigation and exemption. Figure 23 shows a summary of the resource need on a month by month basis, the underlying assumptions that were used to arrive at this timeline are explained in the following sections.
Figure 23 Summary of resource need There is significant uncertainty associated with the assumptions which underpin this estimate, as a result an optimism bias of 15% has been applied. This figure was used after conducing sensitivity analysis on the base assumptions that feed into each estimate.
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Table 13 Total administrative budget broken down by individual measures and exemptions Proportion of CAZ Funding ask incl. VfM Mitigation Total hours team cost Admin cost Funding ask admin ratio M1a CAZ workers 5,562 20% £ 432,498 £ 10,840,000 £ 11,272,498 96% M1b Residents outside CAZ 5,337 19% £ 415,002 £ 6,500,000 £ 6,915,002 94% M2 Taxi support £ 276,595 £ 14,750,000 £ 15,026,595 98%
M3 Free LGV miles 1,187 4% £ 92,300 £ 750,000 £ 842,300 89% M4 HGV fund £ 242,613 £ 10,050,000 £ 10,292,613 98%
M5 Engagement campaign £ - £ 380,000 £ 380,000 100%
M6 Parking scheme 474 2% £ 36,831 £ 5,000,000 £ 5,036,831 99% Total mitigations 12,559 45% £ 1,495,838 £ 48,270,000 £ 49,765,838 97%
E1 + E3 Commercial vehicles in CAZ 720 3% £ 55,991 £ - £ 55,991 - E2 + E4 Commercial vehicles with finance 1,440 5% £ 111,979 £ - £ 111,979 - E5 CAZ residents 840 3% £ 65,321 £ - £ 65,321 - E6 CAZ workers 2,900 10% £ 225,509 £ - £ 225,509 - E7 Residents outside CAZ 8,700 31% £ 676,521 £ - £ 676,521 - E8 Hospital visitors 857 3% £ 66,619 £ - £ 66,619 - E9a Community and school 2 0% £ 176 £ - £ 176 - E9b Disabled vehicles 10 0% £ 778 £ - £ 778 - Total exemptions 14,749 55% £ 1,202,894 £ - £ 1,202,894 -
Total £ 2,698,731 £ 48,270,000 £ 50,968,731
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10.2 CAZ team administrative costs This general mitigation and exemption team will execute all tasks associated with implementing the mitigations and exemptions (excluding the 2 exceptions mentioned above). These tasks can broadly be categorised into:
Establishing the application process: This will involve drafting the communication content sent to each target group and developing the system for individuals and businesses to apply for exemptions/mitigations. This will most likely be delivered through an external software system which will allow individuals and businesses to upload their applications for all mitigations and exemptions. Help desk resources: This task involves responding to inbound queries from individuals and businesses. This is forecast to occur in two batches, the first in 2019 Q3 & Q4 and the second in 2020 Q2 & Q3. This corresponds to the mitigations and exemptions starting in 2020 and 2021 respectively. The total resources needed have been estimated using a bottom up approach using the assumptions around the number of phone calls/emails per application for each mitigation and exemption. Application assessment: Once the applications have been received each will have to be validated and assessed leading to a decision on whether to award the individual/business a mitigation or exemption. The resources needed have been calculated from a bottom up approach with an assumption on the number of applications which can be assessed per hour by one full time employee (FTE) made for each mitigation and exemption. These assumptions are related to the number of documents that must be validated for each application and compared to a baseline of 15 Parking Charge Notices per hour per FTE30. Implementation of measure: The final task is to implement the measure, this will mainly concern the mitigations as the implementation of the exemptions is largely confined to providing a list of registrations vehicles to be included on the white list. The exception to this is for visitors to hospitals within the CAZ, as this is done on a day-by-day basis there will need to be a provision of resources to handle on going implementation. This is calculated by estimating the full-time employees needed to successfully implement each mitigation.
Table 14 Description of the assessment and implementation delivery steps associated with each mitigation and exemption Ref Description of assessment delivery steps Description of implementation delivery steps M1a Validate: Workplace address, income, Communication emails, liaising with dealerships, vehicle registration, proof of address, key liaising with Swift, validating scrappage/vehicle worker status purchase, releasing funds to dealerships/Swift M1b Communication emails, liaising with dealerships, Validate: Income, vehicle registration, liaising with Swift, validating scrappage/vehicle proof of address purchase, releasing funds to dealerships/Swift M4 Validate: vehicle purchase, company Liaising with BCC EV infrastructure provider, address releasing funds M7 Analyse parking request data and direct where Record parking requests controlled parking measures are to be implemented E1 Validate: Company address, vehicle &E3 registration address, vehicle ownership E2 Validate: Company address, vehicle & registration address, vehicle ownership, Add to white list E4 finance agreement E5 Validate: Proof of address, vehicle ownership
30 Rate observed in the Birmingham parking team
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E6 Validate: Income, vehicle registration, proof of address E7 Validate: Income, vehicle registration, proof of address E8 Verifying hospital visit and creating temporary Validate proof of hospital visit white list E9a Validate: Vehicle registration E9b Add to white list Validate DVLA disabled status
Table 14 summarises the delivery steps required for each mitigation and exemption. This was used as the basis to arrive at the assumptions outlined in Table 15. The method used to calculate the administrative costs starts with an assumption around the number of applications that will be received for each mitigation/exemption, as well as the number of successful applications that will move forward to the implementation phase. These assumptions can be broadly categorised into the following sections (colour coordinated to match Table 15); 1. Well quantified and non-competition format: The number of eligible vehicles is well understood and supported by real world data, so the number of applications can be estimated with a reasonable degree of certainty. The number of successful applications can be assumed to the same as the number of original applications as there is clear eligibility and no competition between applicants. Examples include; M4, E1, E3, E5 & E9. 2. Poorly quantified and non-competition format: In these cases, the number of eligible vehicles is not well understood due to data unavailability. In these cases, a broad conservative estimate was made. However, as there are clear eligibility criteria in place, the number of successful applicants is expected to be similar to the number of successful applicants. Examples include: M7, E2, E4, E6 & E8 3. Competition formats: Here the number of successful applicants is set in line with the expected need within each group as described in the quantification section of each measure. However, there is a large uncertainty around the number of applicants. The numbers used are conservative estimates. Examples include: M1a, M1b & E7
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Table 15 Bottom up assumptions used to calculate administrative resource required (colour code indicates level of certainty in the quantification) Exemption/mitigation No. of total No. of Establishing Help desk Help desk resources Assessment Implementation applications successf application resources – – Implementation (application of measure (estimated) ul process Application stage (only s per hour (FTEs) applicati stage successful per FTE) ons applications)
M1a: CAZ workers 10,000 5,500 5 2 2 FTEs M1b: Residents outside 10,000 3,250 1 phone call per needed to 0.2 phone calls & 5 2 CAZ application establish the 0.4 emails per M3: Free LGV miles 1,000 1,000 1 email per application 10 0.3 application application M6: Residents parking 1,000 1,000 process. 50 0.1 scheme
E1 & E3: Commercial 3,000 3,000 vehicles registered in 5 0.2 phone calls & CAZ 0.4 emails per E2 & E4: Commercial 6,000 6,000 application vehicles with existing 5 finance agreements Covered in E5: CAZ residents 7,000 7,000 No help desk required 0.2 phone calls & whitelist process 0.4 emails per 10 application Included in E6: CAZ workers 10,000 5,500 above 0.2 phone calls & 4 E7: Residents outside 30,000 3,250 0.4 emails per 4 CAZ applications E8: Hospital visitors 35,000 35,000 1 phone call per 10 applications 100 0.1 0.2 phone calls & 1 email per 10 0.4 emails per applications applications E9: Community, school 2,150 2,150 Covered in No help desk required - and disabled vehicles whitelist process
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The above assumptions give an estimate for the total resources needed per task for each mitigation. number of hours is then divided evenly over the expected time frame for each task as shown in
Figure 24.
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Figure 24 Timeline of tasks to deliver the mitigation and exemption measures An average of 131 hours per FTE per month is assumed31 to arrive at the total number of FTEs required per month. The required resources are then categorised into staff pay grades. To calculate this, an assumption was made that there will be a core team of 4 members (G5: Project manager, G3: administrative officer, G2: 2 x graduates) who will be present throughout the delivery of the project, the Council believes it is important to have a core group present throughout the project to act as the main point of delivery. This group will be in place until February 2021, at which point the bulk of the delivery tasks will have been completed. After this the core group will be reduced to 2 members (G4: Project manager, G2: Graduate). Any additional resources
31 7.3 hours/day x 5 days/week x 52/12 (weeks/month) x 48/52 (accounts for annual leave) – 4.3 sick days
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G2: £55,449 per year G3: £73,843 per year G4: £96,093 per year G5: £121,353 per year
Figure 25 shows the resulting estimate for the volume of resource required over the duration of the delivery period. In total, this results in a total administrative cost of £1,479,797. Added to this will be the cost to the council to procure and operate the application software. Current quotes attained by the council suggest this will be in the region of £20,000 to procure with a further fee of £2.50 per application made on the system. Across all mitigations and exemptions just over 115,000 applications are expected which results in a service fee of £308,000 (£288,000+ £20,000), if included it increases the total budget required to £1,787,672 however there is an option to pass the service fee costs onto the individual or business as an application fee, though this is yet to be decided upon. When the total hours needed for the mitigations are compared to that of the exemptions it shows that 45% of this administrative cost is expected to be devoted to mitigation measures resulting in an administrative budget for the mitigations alone of £801,043
Figure 25 Distribution of resources needed to deliver mitigation and exemption measures under the responsibility of the CAZ team 10.2.1 Taxi administrative costs (M2a, M2c) As the proposed leasing scheme (M2b) is likely to be outsourced to a 3rd party, the administrative costs will be largely confined to the Hackney carriage financial support package (M2a) and the financial support for Private Hire Vehicles (M2c). The full tasks required to deliver this measure are described in Section 5, it is expected that the majority of the delivery steps (e.g. validation of applications, allocating funds etc.) will have to be done manually. This is a result of the taxi driver community’s preference for face-to-face applications and the need to validate applications against the Councils licencing database. The Birmingham taxi licencing team have reviewed the delivery steps in detail and compared it the resourcing needed for current tasks, from this they have estimated that 3 additional full-time employees will be required to deliver the leasing scheme and financial support package (1 x G4, 1 x G3 & 1 x G2). The process will commence in March 2019 and the bulk of delivery work will be completed by February 2020, after which the delivery team can be reduced. Towards the end of 2019 an assessment will be carried out on the resource needed going forward, it is expected that a reduced resource will be needed after February 2020, most likely less than one FTE, so it will make financial sense to move any remaining delivery steps into the CAZ team (see Section 10.2). The total administrative costs required to cover the salaries of the three additional employees is estimated as £276,595 based on the
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10.2.2 HDV compliance fund administrative costs (M6) As described above the HDV compliance fund (M6) will be delivered by the Business Enterprise team. The delivery steps for the fund (described in Section 7.3) have been reviewed in detail by the Business Enterprise team and they have used their existing activities to estimate the additional resources they will require to deliver the measure. The estimate of resources is as follows:
1X GR5 Project Manager (£60,476 pa including on costs) – Tasked with the overall management of Fund 2X GR4 Project Officers (£47,646 x 2 pa including on costs)- Responsible for; answering enquiries, implementing the application system, assessing applications, documenting and monitoring progress and handling claims.
The 3-person delivery team will be required for 12 months (March 2019 – March 2020), after this point the team will reduce to 1 project officer who will monitor the allocation of funds, handle any inbound queries as well as delivering awards that have been delayed until the end of 2020 due to exemptions. They will be in place for an additional 12 months until February 2021. Any additional short-term demand for resources can be covered by the CAZ team. The total administrative cost required to implement the fund is £242,613.
10.3 Spending profile for mitigations Table 16 Spending profile of the proposed CAZ mitigation measures categorised by funding type and financial year (£million) Mitigation measure Funding type ‘19/20 ‘20/21 ‘21/22 ‘22/23 ‘23/24 Total Mobility support for M1a Revenue - £10.84 - - - £10.84 Workers Mobility support for M1b Revenue - £6.50 - - - £6.50 residents outside the CAZ Hackney carriage support M2a Revenue £3.13 £0.63 £0.63 £0.63 - £5.00 package M4 Free miles' for ULEV LGVs Revenue £0.15 £0.15 £0.15 £0.15 £0.15 £0.75 Marketing and M6 Revenue £0.13 £0.13 £0.12 - £0.38 engagement campaign Total revenue £3.41 £18.24 £0.89 £0.78 £0.15 £23.47
Council Hackney Carriage M2b Capital £2.75 - - - - £2.75 leasing scheme Private Hire Vehicle M2c Capital £7.00 £7.00 upgrade support HGV/coach compliance M5 Capital £5.03 £5.03 - - - £10.05 fund M7 Residents parking scheme Capital £1.00 £1.00 £1.00 £1.00 £1.00 £5.00 Total capital £15.78 £6.03 £1.00 1 1 £24.80
Administrative costs (incl. All All £1.77 £0.79 £0.14 £0.00 £0.00 £2.70 exemptions) Total £20.95 £25.06 £2.04 £1.78 £1.15 £50.97
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Title of proposed EIA Birmingham Clean Air Zone submission of FBC and request to proceed with implementation
Reference No EQUA210
EA is in support of New Function
Review Frequency Annually
Date of first review 11/12/2019
Directorate Economy
Division Transport Policy
Service Area
Responsible Officer(s) Naomi R Coleman
Quality Control Officer(s) Janet L Hinks
Accountable Officer(s) Philip Edwards
Purpose of proposal To request permission to proceed with implementation of Birmingham Clean Air Zone, aligned to the Full Business Case
What sources of data have been used to produce the screening of this policy/proposal? Survey(s); Consultation Results; Interviews; relevant reports/strategies; Statistical Database (please specify); relevant research; Other (please specify)
Please include any other sources of data Distributional Impact Appraisal (DIA), Health Impact Assessment (HIA)
PLEASE ASSESS THE POTENTIAL IMPACT ON THE FOLLOWING PROTECTED CHARACTERISTICS
Protected characteristic: Age Service Users / Stakeholders; Employees; Wider Community
Age details:
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Children, young people and the elderly can be more vulnerable to air pollution and would be more likely to adversely affected by any reduction in the availability of community transport servicing schools and community centres within the CAZ. Self evidently such groups are far more reliant on public transport than the general population. They could also be adversely affected by the increased cost of community transport particularly if this prevented them accessing schools and community centres within the CAZ, or if it prevented families of patients at Birmingham Children's Hospital from visiting them during their stay.
A high proportion of elderly people have limited mobility and therefore could be adversely affected by implementation of the CAZ if it were to result in the reduction in availability of community transport and taxis, and also the potential increase in cost of community transport and private vehicle travel.
A Defra commissioned study in 2006 showed that there is a tendency for higher relative mean annual concentrations of
NO 2 and PM10 in the most deprived areas of the country. In areas which exceed emissions standards, the correlation is stronger. The most vulnerable human receptors include young people and the elderly. A report published by the Royal College of Physicians finds that children living in high pollution areas are four times more likely to have reduced lung function when they become adults (Royal College of Physicians, 2016.).
The entire CAZ has a very low proportion of people over the age of 65 by LSOA relative to distribution across England
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and Wales and there is no variation in the proportion of people over the age of 65 within the CAZ. The areas with greater proportions of elderly people are in the Sutton Coldfield area in the northern part of Birmingham and the Northfield/Selly Oak areas to the south. This suggests that the elderly population is unlikely to be disproportionately affected by changes incurred within the CAZ.
Where transport is not provided by the school or local authority, then there could be a differential adverse impact on children attending special educational needs schools if the introduction of the CAZ discourages or prevents families from accessing these schools. However, based on School Travel Plan monitoring within the CAZ area the level of trips to school by non-car modes is generally quite high.
There are also several community centres within the CAZ that have been identified as providing services used principally by children and which may require transport to and from the premises. These include St Martin's Youth Centre and community centres associated with schools in the CAZ area such as Al-Rasool School and St George's Academy
Community transport vehicles are typically older and liable to incur the CAZ charge. As community centres are typically funded either partially or fully by charitable donations, they are unlikely to have sufficient cash reserves to upgrade to a compliant vehicle. Therefore, they may have to either increase the cost or reduce the availability of their travel services as a result of the CAZ charge. This would have a differential adverse impact on children using these services.
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BCC Procurement contracts for SEN and Community transport specify the requirement for CAZ compliant vehicles from 1 st Jan 2020.
However, where Community Organisations or Charities operating BCC Special Educational Needs (SEN) and Community Section 19 transport contracts within the Clean Air Zone, or continue to provide their own section 19 transport operations within the Clean Air Zone- they will be exempt from the CAZ charge for the foreseeable future.
Birmingham Licenced taxis that undertake BCC SEN and Community transport services or any other BCC transport contracts are excluded from exemption, as they are already required to be CAZ compliant by 31 st December 2018 in order to meet the Birmingham Licensing Authority policy criteria. Likewise, any other external Local Authority licensed taxi vehicle used to service a contract procured by BCC to deliver SEN and Community Transport (whether section 19 or other) would need to meet CAZ compliance standards of Euro 6 diesel or Euro 4 petrol as a minimum.
All facilities of importance within the air quality modelling area for the preferred CAZ option would experience a
decrease in NO 2 concentrations to some degree. The degree
of increase or decrease in NO 2 concentrations has been modelled to show impacts following implementation of the preferred CAZ option relative to locations of facilities of importance to children as described above. The greatest
decreases in average NO 2 concentrations are generally seen within the CAZ areas itself and surrounding major arterial roads as they extend out of the CAZ, which is also where
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average NO 2 concentrations are highest under the Do Minimum scenario.
By introducing exemptions, the residual effect is anticipated to be neutral as affected vehicles would be exempted.
Protected characteristic: Disability Service Users / Stakeholders; Employees; Wider Community
Disability details: The presence of a higher disability ratio may indicate a higher proportion of people sensitive to air quality due to some long term illnesses (especially respiratory). The disabled are also more likely to have concerns over personal security, i.e. more reluctant to travel via taxi or public transport and will therefore be more heavily reliant on private transport.
The CAZ includes areas where there are a high proportion of disabled residents based on the comparative illness and disability ratio component of the Index of Multiple Deprivation. The central north section as well as the southern west part of the CAZ includes the highest proportion of disabled residents in the CAZ. There is only a small section within the centre with a low proportion of disabled residents.
The 2011 Census reported that 9% of the population of Birmingham (98,181 people) reported a long term health problem or disability that was significantly limiting their day- to-day activities. A similar percentage of the population reported their day-to-day activities were slightly limited by a health problem or disability. The official labour market statistics state that the total number of people claiming
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disability living allowance in Birmingham is 43,920 (approximately 4% of the population).
The population of the young, the old and disabled exhibit a higher proportion of persons who are more sensitive to poor AQ are known to be more sensitive to poor air quality and the implementation of the Clean Air Zone will have positive impacts for those in the CAZ area and the wider city.
There are a number of exemptions and mitigations which will be available to support disabled people who live or need to travel into the Clean Air Zone and who would be adversely affected by the charges. These will be specifically targeted towards residents, low income groups and those visiting medical facilities.
Vans and mini buses registered as providing essential community and school transport services and those classified as section 19 (disabled transport) operators in Birmingham will also be exempt for the operational life of the CAZ.
The reliance on Wheelchair Accessible Hackney Carriages is also noted and proposals to support the uptake of compliant models of these vehicles is also proposed to ensure the continued availability of this service..
Vehicles within the disabled passenger vehicle tax class will be exempt from paying a charge in a Clean Air Zone. As noted vehicles registered as providing essential community and school transport classified as section 19 operators in Birmingham will also be exempt for the operational life of the CAZ.
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Protected characteristic: Gender Service Users / Stakeholders; Employees; Wider Community
Gender details: There is a very low proportion of female residents throughout the majority of the CAZ. There is a higher proportion of female residents in a small section in the southern part of the CAZ (Digbeth area) and one area, north east of the centre which includes a high proportion of female residents. This is in the vicinity of the Birmingham Children's Hospital and the high proportion of female residents is assumed to be due to the presence of key worker accommodation on the hospital site. Much of the remaining CAZ area has a low proportion of female residents by LSOA relative to distribution across England and Wales.
Notwithstanding the above, the DIA has identified that there could be a disproportionate and differential impact on women, who as a group are more frequent users of taxis and have a more negative perception or experience of alternative modes of public transport and active travel modes (walking and cycling).
Specific mitigation measures are not being proposed on the basis of gender. However a number of the mitigation measures being proposed will serve an indirect benefit to women; the mitigation for taxis, PHV etc (M1a, b & c) would help mitigate potential impacts on women by maintaining availability of taxis and PHV. Also, exemptions for key workers likely to benefit women, who are disproportionately represented in these roles (nursing, care workers etc).
Protected characteristics: Gender Reassignment Service Users / Stakeholders; Employees; Wider Community
Gender reassignment details:
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The DIA notes that "There are potential differential impacts on security [in relation to people with gender reassignment] as a consequence of some public attitudes which may affect transport preferences. However, the scale of this issue is not known and based on anecdotal evidence."
It was difficult to find sufficient evidence or studies to provide robust research on this. However it is considered that people with this protected characteristic are more likely to experience, or be concerned about, antisocial behaviour or hostility towards them which may influence whether they are comfortable using public transport or would be more likely to use taxis or own vehicles.
By assumption, therefore, any reduction in PHV and taxis may adversely affect people with this protected characteristic, so the mitigation measures to support the PHV and taxis are beneficial to gender reassignment by helping to ensure that people do not leave the taxi and PHV businesses, therefore ensuring the continued availability of this form of transport for people who do not feel safe using public transport.
Protected characteristics: Marriage and Civil Partnership Not Applicable
Marriage and civil partnership details: It is not considered that the introduction of a CAZ will negatively impact individuals who are married or in a civil partnership.
Protected characteristics: Pregnancy and Maternity Service Users / Stakeholders; Employees; Wider Community
Pregnancy and maternity details:
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There are health inequalities associated with pregnancy and air quality. The DIA notes that there is emerging evidence on the links between high levels of emissions and effects on the unborn child. Evidence shows that air pollution can affect the growth of the unborn baby and may be linked to premature birth or even still birth. It is estimated that traffic-related air pollution exposure (particularly exposure to PM) of pregnant women accounts for more than one-fifth of all cases of low birth weight at term. Low birth weight is associated with low lung function, COPD, cardiovascular disease and early death in adulthood. Air pollution can also harm placental development, which affects the development of the unborn child and has been associated with several chronic diseases, including heart disease, obesity and type 2 diabetes. Poor foetal growth is linked to abnormal development of the kidneys, and to hypertension and kidney disease in later life.
It is thought that the introduction of a Clean Air Zone will have a positive impact to pregnant women and those on maternity leave with small children.
A specific mitigation measure is not proposed for this group, however, it is noted that there are potential impacts related to accessibility to key facilities e.g. the Children's Hospital and specific mitigation measures to support visitors and patients are proposed.
Protected characteristics: Race Service Users / Stakeholders; Employees; Wider Community
Race details: Compared to England and Wales, much of Birmingham has a high proportion of its population that identifies as Black, Asian and Minority Ethnic (BAME). There is a generally high
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concentration of Birmingham's BAME population to be within the central part of Birmingham, with the highest concentrations to the east (Hockley, Winson Green and Handsworth areas) and west of the CAZ (Sparkbrook, Small Heath and Bordesley Green areas). The areas with the lowest proportion of BAME population are the Sutton Coldfield area in the northern part of Birmingham and the Northfield/Selly Oak areas to the south, but these still comprise populations in the top 40% proportion of BAME population compared to England and Wales as a whole.
There are however high proportions of LSOAs within the CAZ with high levels of income deprivation and BAME communities. Key issues are therefore likely to relate to travel within the CAZ and the proportion of residents within the CAZ that have non-compliant vehicles who would not be able to avoid the zone.
The DIA notes that the impact on the taxi trade could have consequential impacts for BAME and low income communities, since a very high proportion of taxi drivers are from communities with high proportion of non-white residents and income deprived residents. Since taxis in Birmingham are all wheelchair accessible, whereas currently none of the private hire taxis are, a reduction in this type of vehicle will have an adverse impact on disabled people who may depend on them for access.
As such, a number of mitigation measures being proposed are targeted at providing support for drivers of both Hackney Carriages and Private Hire Vehicles as detailed in the initial Equality Impact Assessment below.
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There would be an overall beneficial health impact within the study area under the preferred CAZ option and all other options, however, the magnitude of benefit would be greatest under the preferred CAZ option. When income distribution is considered relative to England and Wales, residents of those LSOAs which fall within quintile one for income deprivation would experience a disproportionately greater amount of the benefits associated with reductions in
atmospheric concentrations of all three pollutant types (NO 2, PM10 and PM2.5) than those within less deprived quintiles.
Protected characteristics: Religion or Beliefs Service Users / Stakeholders; Employees; Wider Community
Religion or beliefs details: According to the 2011 census, Christianity was the highest represented religion in Birmingham with 46% of residents saying they were Christian. Whilst 22% of the population was Muslim and 19% had no religious beliefs.
The majority of people classifying themselves in one of the White or Black ethnic groups said that they were Christian, whereas the Muslim community was predominantly made up from the Asian population. In general, the Muslim population are concentrated closer to the city centre area with the Christian group generally further out towards the council boundary.
Within the proposed CAZ area there are 30 registered places of worship, including Roman Catholic, Presbyterian, Church of England, Greek Orthodox Churches, Synagogues, Mosques and Sikh Temples. Most are of a size that suggests their catchment is highly localised. However, Birmingham
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Central Mosque is an exception with a capacity of 20,000 and regularly attracts more than 4,000 worshippers for Friday services, suggesting that it attracts a significant number of visits from outside the CAZ area on a regular basis. Other places of worship with a significantly larger than average capacity (greater than 500 spaces) within the CAZ area include the Anglican, Greek Orthodox and Catholic Cathedrals, Camp Hill Seventh Day Church, Ladywood Seventh Day Adventist Church and Birmingham City Church.
The DIA includes an analysis of the distribution of different faith populations across Birmingham. This did not indicate any pronounced issues regarding the distribution of populations and the CAZ. Therefore the analysis looked more closely at the location of large places of worship that would require people to travel across the CAZ boundary.
Mitigation measures are not being proposed specifically for faith groups as there is no direct correlation between religion and ability to comply with the requirements of the Clean Air Zone.
A mitigation measure is proposed to minimise the impact to those who travel into the CAZ regularly, successful applicants for this mitigation measure will be prioritised by income, thus indirectly supporting those of a lower income who travel into the CAZ for worship.
Further measures to work with faith and community groups on travel planning is also included within the proposed mitigations.
Protected characteristics: Sexual Orientation Not Applicable
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Sexual orientation details: It is not considered that the CAZ scheme is likely to disadvantage individuals based on their sexual orientation.
However, similar to gender reassignment, any reduction in PHV and taxis may adversely affect people with this protected characteristic, so the mitigation measures to support the PHV and taxis are beneficial by helping to ensure that people do not leave the taxi and PHV businesses, therefore ensuring the continued availability of this form of transport for people who do not feel safe using public transport.
Please indicate any actions arising from completing this screening exercise. The mitigations and exemption packages are detailed in the Initial Equality Impact assessment below.
Please indicate whether a full impact assessment is recommended YES
What data has been collected to facilitate the assessment of this policy/proposal? A Distributional Impact Appraisal and a Health Impacy Assessment were completed as detailed in the Initial Equality Impact Assessment below. These documents should be read together with this EIA.
Consultation analysis A public consultation on the Clean Air Zone proposals was launched on Wednesday 4th July 2018 and ran for 6 weeks until Friday 17th August 2018.
The consultation questionnaire asked for details about the respondents so we would be able to know how well people with each protected characteristic were represented among the respondents. The consultation report (published as part of the report to Cabinet on September 10 th 2018)provided an overview of the of the overall demographics of those who
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responded compared to the general population. This suggested favourable levels of engagement from different communities across the city.
The aim of the consultation process was to seek feedback from individuals and organisations on the proposals for a Class D Clean Air Zone (CAZ) for Birmingham. Specifically identifying:
• Feedback and thoughts on all aspects of the CAZ proposals (including the principle of the proposals); • Develop a better understanding of the impact that the proposals would have on individuals and organisations; • What support/mitigation is needed for particular groups of people/organisations; and • Suggestions for any further measures which were not included.
A press release was issued on 4 July and information was provided at the Council meeting on 10 July.
The Council, along with its partners, used a number of different channels of communication available to them to spread the word about the Clean Air Zone. This included: • Existing stakeholder and community networks; • Existing email and other electronic communications (corporate BCC, departmental and schools); • Public drop-in sessions; • Roadside signage on approach to the CAZ area • Radio and press advertising • Public transport user messages, e.g. on bus stops • Printed flyers delivered to all residential and commercial properties in and near to the proposed CAZ
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• Traditional media (press release/media briefing); • Social media activity including Facebook and Twitter; and • Stakeholder events.
Whilst engaging with businesses and organisations the Council encouraged them to raise awareness of the Clean Air Zone with their clients, suppliers and other business contacts.
A face to face drop-in session for Councillors was held alongside a Full Council meeting on the 10 July with a presentation and materials pack available for Ward Forums on request.
Other response channels included:
Be Heard - Responses were primarily collected online via Be Heard; with a survey for individual citizens and a separate survey for businesses/organisations For those people who did not wish to or were not able to respond to the questionnaire online, paper copies and consultation summary documents were available in all 37 libraries across Birmingham. In addition to this, technical documents were available at the Library of Birmingham and available upon request for those who could not access the document online. Paper copies of the questionnaire were also sent in the post to individuals upon request.
Email correspondence - All email correspondence was logged, acknowledged and responded to where relevant and appropriate.
Dedicated phone line - A dedicated phone line was available throughout the consultation during office hours,
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with a voicemail available outside of these times. All calls received were logged in the correspondence log and dealt with accordingly.
Public drop-in sessions - Twelve face to face public drop-in sessions were held in multiple locations across Birmingham. The events each attracted different amounts of people, with an average of 33 attendees per event.
Two specific drop-in events were also held for Birmingham City Council staff at Woodcock Street and Lancaster Circus.
Stakeholder Communication - Four stakeholder seminars were held within the city centre for organisations and businesses wishing to find out more information about the proposals and to feedback their concerns, comments and ideas. An invitation email was sent using the existing BCC corporate and departmental databases to approximately 26,000 businesses and organisations inviting them to register interest in the stakeholder seminars.
Taxi /Private Hire events - Five events specifically for taxis and private hire drivers were held by the licencing team for taxi drivers to come and talk to Council officers about its Clean Air Zone proposals and to find out what specific concerns were for taxi drivers. An invitation was sent by the licencing team to the taxi reps, inviting their members to any of the five events.
Key strategic stakeholder meetings - In addition to the public drop-in sessions and stakeholder seminars officers attended meetings and events during the consultation with key stakeholders including:
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• Retail Business Improvement District • Greater Birmingham Chambers of Commerce • Freight and Transport Association (FTA) • Full Council Meeting • Solihull Council • West Midlands Bus Operators Panel • West Midlands Bus Alliance Board • Central Mosque • Northfield Ward Meeting • Sandwell Council • Hammersons • Taxi Trade Liaison Meeting • Motorcycle Action Group • Showmen's Guild • RMT Union • Citizen UK
Adverse impact on any people with protected characteristics. As detailed within each characteristic analysis.
Could the policy/proposal be modified to reduce or eliminate any adverse impact on any particular group(s)? The mitigations and exemption packages are detailed in the Initial Equality Impact assessment below.
How will the effect(s) of this policy/proposal on equality be monitored? The City Council propose to undertake some qualitative monitoring and evaluation of travel behaviours to understand the impacts of the mitigation measures and exemptions and help to interpret and explain the findings from the traffic monitoring and air quality. The proposed method for doing so is by commissioning a consultant, research group or university team via a competitive tendering process to undertake a Cohort Study. The Cohort Study would be recruited through targeted sampling of
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people eligible for the mitigation measures and exemptions as well as some general population sampling to assess the impact of the CAZ on different groups, and provide a comparison to understand the additional impact that the mitigation and exemption measures have on travel behaviour.
What data is required in the future to ensure effective monitoring of this policy/proposal? To be determined by the Cohort Study as detailed above.
Are there any adverse impacts on any particular group(s) Yes
If yes, please explain your reasons for going ahead. As detailed in the Initial Equality Impact Assessment below.
Initial equality impact assessment of your proposal Birmingham City Council has a duty under S149 of the Equalities Act to pay due regard to the need to eliminate discrimination, harassment and victimisation and to ensure an equality of opportunity to those who share a protected characteristic and those who don't. Additionally the City Council has a duty to foster good relations between persons who share relevant protected characteristics and those who don't. The authority must give proper regard to all the goals in Section 149 of the Equalities Act in the context of the function that it is exercising, and at the same time, pay regard to any countervailing factors which, in the context of the function being exercised, it is proper and reasonable for the authority to consider.
As such, Birmingham City Council has commissioned a distributional impact appraisal, together with a health impact assessment, to identify how the impacts of a proposed Clean Air Zone (CAZ) would be distributed across Birmingham's diverse population and business communities. These impacts
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include positive health benefits as well as financial impacts. The outputs of this work together with responses received as part of the consultation have been used to develop a package of measures to reduce the impact on individuals and businesses most likely to be adversely impacted by the Clean Air Zone proposals. The mitigation measures and exemptions are set out in further detail in section 5.0 of this document.
Social and Equality Impacts
Income deprivation has been considered at lower super output level (LSOA)1 relative to England and Wales, and relative to Birmingham. Compared to England and Wales as a whole, there are high levels of income deprivation within the CAZ and Birmingham in general. Owners of non- compliant vehicles resident within the CAZ and in close proximity to the CAZ (such as Nechells, Aston, Perry Barr, Tyburn, Soho and Sparkbrook) are potentially the worst affected financially by the proposed scheme, as due to their geographical location they would be least able to avoid entering and exiting the CAZ for everyday car journeys. There is a higher rate of non-compliant cars associated with areas of income deprivation. It should also be noted that there is a relatively high proportion of households within the CAZ that have no access to a car. The adverse impacts therefore would be distributed among those households that are dependent on car use and which have non- compliant vehicles. It is notable that low income households across Birmingham are also among those who would benefit
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most from the effects of the CAZ in terms of reduced journey times and reduced petrol consumption due to reduced congestion around the city centre as well as from the health benefits of the proposed scheme.
Other social groups potentially adversely affected by the CAZ proposals would be those dependent on community transport and taxis, as without mitigation these forms of transport could be adversely affected to the extent that their availability decreases (see below). People vulnerable to these impacts would include the disabled, the elderly, women and children. There are some key community facilities within the CAZ whose users could be adversely affected by the combination of CAZ charges and parking charges. Examples include staff and families of children who are patients of the Birmingham Children's Hospital, and congregants of those larger or more unique places of worship within the CAZ. Mitigation or exemption will be offered to visitors of select medical facilities within the CAZ however it is not possible to provide mitigation to cover all key community facilities without adversely affecting the rate of achieving compliance. Visitors to community facilities are not provided for under the package of mitigation measures and exemptions therefore individuals will be required to plan their travel appropriately.
Business Impacts
The analysis has shown that some transport dependent businesses are more likely to have compliant fleets than others and so the impact of the CAZ would be distributed
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unequally across businesses. Taxi businesses would be faced with high upfront costs and few choices of response to the CAZ. Other types of business less able to afford the impacts of the CAZ appear to be private hire taxi companies, van companies with fleets that are owned by individuals rather than registered to the company, and SME HGV operators. A very high proportion of businesses within the CAZ are SMEs. Since all would be dependent on transport to some extent, any increase in costs from their suppliers as a result of entering the CAZ are likely to be passed on to these businesses, who in general would have less capacity to cope with increased costs than larger businesses. A number of the mitigation measures and exemptions are targeted at SMEs, Commercial Vehicle Fleets, taxis and private hire taxi companies to ensure that they are catered for and the impact is minimised.
Health Impacts
Health impacts would result from the reduction in air
pollutants (particularly NO 2 and fine particles (PM10 and PM2.5) as well as behavioural changes from switching to active modes of transport (walking and cycling) and improved environmental conditions. Analysis has shown that income deprived communities would proportionately receive higher health benefits than the population as a whole, meaning that the CAZ would help address a health inequality associated with the more deprived communities typically being exposed to more air pollution. Spatial analysis of where the main air quality changes would occur have shown
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that there would be a 26% improvement in NO2 pollution concentrations around schools and nurseries which are currently within the areas at greater risk of illegal levels of air pollution.
One of the aims of the CAZ is to nudge behavioural change, so that people use more active modes of travel where they can. Although it is not possible to quantify the likely level of change of the CAZ, across a population the increase in physical activity could contribute to significant improvements in overall public health.
Mitigation
The City Council has paid due regard to the need to achieve the goals set out in the Equalities Act (see above), and where there is risk of an adverse impact to a protective group, this has been identified and considered in the development of the mitigation measures and exemptions. A targeted package of mitigation measures and exemptions has been developed to ensure that those impacted are catered for where possible and that the City Council's duties under the Equality Act are fulfilled. The mitigation measures and exemptions are set out below.
Mitigation Measures:
◾ M1a - Mobility support for individuals working within the CAZ area; ◾ M1b - Mobility support for individuals who regularly enter the CAZ area;
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◾ M2a - Hackney carriage support package; ◾ M2b - Council Hackney Carriage leasing scheme; ◾ M2c - Private hire vehicle upgrade support; ◾ M3 - Free miles for ULEV LGVs; ◾ M4 - HGV & Coach compliance fund; ◾ M5 - Marketing and engagement campaign; and ◾ M6 - Residents parking scheme.
Exemptions:
◾ Commercial vehicles registered within the CAZ, LGVs, HGVs and coaches registered in the CAZ will receive a 1 year exemption (max 2 vehicles per company); ◾ Commercial vehicles with a pre-existing finance agreement, LGV/HGV/Coaches registered in the Birmingham area travelling to the CAZ with an existing finance agreement beyond 2020 will receive a 1 year exemption (max 2 vehicles per company); ◾ Residents of the CAZ - Individuals with non-compliant vehicles registered in the CAZ will be exempted for 2 years; ◾ Individuals travelling into the CAZ for work, Individuals with a non-compliant vehicle who work within the CAZ and satisfy the income criteria will be exempt for 1 year; ◾ Visitors to select medical facilities within the CAZ will be exempt for the duration of their stay; and ◾ Vans and mini buses registered as providing essential community and school transport services and those classified as section 19 operators in Birmingham will be exempt for the operational life of the CAZ.
The implementation of all measures is dependent upon the necessary funds being agreed and released by Government. In the event that not all measures are funded by Government the City Council will consider how revenue can be best used
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to ensure that the groups most significantly impacted are catered for.
Consulted People or Groups As detailed under Consultation Analysis
Informed People or Groups As detailed under Consultation Analysis
Summary and evidence of findings from your EIA The impacts of introducing a Clean Air Zone include positive health benefits as well as financial impacts. Financial impacts are two-fold; positive impacts include generation of a revenue stream for the city council which will be used to fund future transport initiatives that will result in further improvements to air quality. However, financial burden will be placed on those who are eligible to pay the CAZ charge. The impacts of this will be mitigated as much as reasonably possible via the implementation of a set of mitigation measures and exemptions.
It has been identified that the most significantly impacted protected characteristics are Age, Disability. Pregnancy and Maternity and Race., Some impacts are positive rather than adverse, particularly for Pregnancy and Maternity. The mitigation measures and exemptions help to address any adverse impacts. It has also been noted that there could be possible impacts for Gender and Religion or Belief particularly linked to those on lower incomes. It is anticipated that individuals with these characteristics, will benefit from the various exemptions and mitigations .
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It is important to stress that the implementation of a Clean Air Zone will have positive health impacts on a number of characteristics, particularly Age and Pregnancy and Maternity. It will also help address health inequality associated with more deprived communities typically being exposed to more air pollution.
Evidence for these impacts has been drawn from extensive consultation, a distributional impact appraisal and a health impact assessment, as detailed above. These documents should be read together with this EIA.
QUALITY CONTORL SECTION
Submit to the Quality Control Officer for reviewing? No
Quality Control Officer comments Agreed to procueed for final approval 61218
Decision by Quality Control Officer Proceed for final approval
Submit draft to Accountable Officer? Yes
Decision by Accountable Officer Approve
Date approved / rejected by the Accountable Officer 06/12/2018
Reasons for approval or rejection
Please print and save a PDF copy for your records Yes
Attachments BCAZ_DIAReport_Rev2.pdf
Content Type: Item Version: 125.0 Close Created at 26/11/2018 11:33 AM by Naomi R Coleman Last modified at 06/12/2018 11:52 AM by Workflow on behalf of Philip Edwards
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