Public Document Pack
MEETING OF THE LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Members of the Liverpool City Region Combined Authority
Dear Member,
You are requested to attend a meeting of the Liverpool City Region Combined Authority to be held on Friday, 18th March, 2016 at 1.00 pm in the Authority Chamber - No.1 Mann Island, Liverpool, L3 1BP.
If you have any queries regarding this meeting, please contact Trudy Bedford on telephone number (0151) 443 3365.
Yours faithfully
Head of Paid Service
(Established pursuant to section 103 of the Local Democracy, Economic Development and Construction Act 2009 as the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority)
LIVERPOOL CITY REGION COMBINED AUTHORITY
AGENDA
1. APOLOGIES FOR ABSENCE
2. DECLARATIONS OF INTEREST
3. MINUTES OF THE MEETING OF THE COMBINED AUTHORITY HELD ON 5 FEBRUARY 2016 (Pages 1 - 10)
ECONOMIC DEVELOPMENT
4. INTERNATIONAL FESTIVAL FOR BUSINESS 2016 AND BEYOND To receive a presentation on the International Festival for Business 2016.
5. SINGLE GROWTH STRATEGY PROGRESS UPDATE To receive a presentation which provides an update on the progress of the Single Growth Strategy.
6. CAPITAL COMMISSIONING FRAMEWORK AND OUTLINE BUSINESS CASE FOR LITTLEWOODS STUDIO LIVERPOOL To consider the report of the Lead Officer: Economic Development. (Pages 11 - 52)
7. UPDATE ON USE OF ESIF FUNDS FOR NORTHERN POWERHOUSE INVESTMENT FUND To consider the report of the Lead Officer: Economic Development. (Pages 53 - 56)
TRANSPORT
8. LIVERPOOL CITY REGION GROWTH DEAL SCHEMES To consider the report of the Lead Officer: Transport.
(Pages 57 - 74)
EMPLOYMENT AND SKILLS
9. AREA BASED REVIEW To consider the report of the Lead Officer: Employment and Skills. (Pages 75 - 86)
SCRUTINY
10. SCRUTINY PANEL REVIEW OF AFFORDABLE TRANSPORT - SHORT HOP FARES REVIEW To consider the report of the Lead Officer: Scrutiny. (Pages 87 - 138)
GOVERNANCE
11. DEVOLUTION OF POWERS AND RESOURCES TO THE CITY REGION To receive a presentation which provides an update on the devolution of powers and resources to the City Region.
12. LIVERPOOL CITY REGION DEVOLUTION AGREEMENT: DRAFT IMPLEMENTATION PLAN To consider the report of the Head of Paid Service. (Pages 139 - 178)
13. SINGLE INVESTMENT FUND To consider a report of the Head of Paid Service which will set out the principles for a design and establishment of the Liverpool City Region Investment Fund.
(Please note that this report will be circulated under separate cover.)
14. COMBINED AUTHORITY BUDGET MONITORING STATEMENT - 1 APRIL 2015 TO 31 DECEMBER 2015 To consider the report of the Treasurer. (Pages 179 - 188)
15. ACCEPTANCE OF EU GRANT To consider the report of the Treasurer. (Pages 189 - 196)
16. MINUTES OF THE MERSEYTRAVEL COMMITTEE HELD ON : -
a) 7 JANUARY 2016 (Pages 197 - 210) b) 4 FEBRUARY 2016 (Pages 211 - 220)
Agenda Item 3
LIVERPOOL CITY REGION COMBINED AUTHORITY
At a meeting of the Liverpool City Region Combined Authority held in the Authority Chamber, No. 1 Mann Island, Liverpool, L3 1BP on Friday, 5th February, 2016 the following Members were
P r e s e n t:
Mayor J Anderson OBE Chairperson of the Combined Authority (in the Chair)
Councillor P Davies, Councillor A Moorhead, Councillor R Polhill and Councillor J Fairclough (Substitute Member).
73. APOLOGIES FOR ABSENCE
Apologies for absence were received from Councillor B Grunewald, Robert Hough CBE, Councillor I Maher, Councillor I Moran (Associate Member) and Councillor T O’Neill (Associate Member).
74. DECLARATIONS OF INTEREST
The Monitoring Officer reported that the following declaration of interest had been submitted by a Member:-
Disclosable Pecuniary Interest
Councillor Agenda Item Nature of Interest
J Fairclough 11 – 2016/17 Budget - Employer is referenced Financial Perspective within the body of the report.
75. MINUTES OF THE COMBINED AUTHORITY MEETING HELD ON 18 DECEMBER 2015
RESOLVED – That the minutes of the meeting of the Liverpool City Region Combined Authority held on 18th December 2015 be approved as a correct record.
76. DEVOLUTION OF POWERS AND RESOURCES TO THE CITY REGION
The Combined Authority received a presentation from Ged Fitzgerald, Head of Paid Service, which:-
Highlighted that the portfolio leads for the Combined Authority had been agreed and were: o Economic Development and Energy – Councillor P Davies; o Transport and Connectivity – Councillor R Polhill; o Housing and Spatial Planning – Councillor B Grunewald; o Employment and Skills – Councillor I Maher; and o Health Wellbeing and Social Care – Councillor A Moorhead.
Page 1 Reported that the phase one devolution implementation plans were being prepared and would be submitted to the Combined Authority in March 2016;
Outlined that discussions were underway with Central Government to scope out the areas in the Devolution Agreement which required further detail, these areas included:- o Vocational Education; o Business rates reform and redistribution; o Multi-year settlement and the ‘Single Pot’; o Development of the Liverpool City Region Order; o Establishment of a Liverpool City Region Land Commission; and o Total Household Approach for employment programmes.
Summarised the following policy areas which were being discussed as part of the second phase of the devolution negotiations:- o Health and Social Care; o Children’s Services; o Licensing and Regulation; o Housing (powers and flexibilities); o Fiscal devolution; and o Justice.
Set out the next steps, which included negotiations continuing with Central Government on Phase 2 of the Devolution Agreement. A report would be presented to the March meeting of the Combined Authority which would set out proposed workplans, governance arrangements and executive capacity.
The Chairperson reflected on the devolution negotiations which were continuing with Central Government and maintained the importance of securing the most advantageous deal for the City Region. Of particular note was the opportunity to secure fiscal devolution for the City Region.
RESOLVED – That the update provided in the presentation be agreed.
77. THE STATE OF LIVERPOOL CITY REGION REPORT: MAKING THE MOST OF DEVOLUTION
The Combined Authority considered the report of the Head of Paid Service which presented ‘The State of Liverpool City Region Report: Making the Most of Devolution; which had been produced by the University of Liverpool and Liverpool John Moores University.
Ged Fitzgerald, Head of Paid Service, provided a presentation which:-
Explained that the document had been launched on 21 January 2016 and was an independent contribution to the devolution debate by assessing where the City Region stood, it’s future direction and how the City Region should get there.
Set out the key messages from the report which suggested that the City Region could deliver more in the future, by setting clear long term
Page 2 strategic priorities and recognised there was a need to get on with the job in hand.
Highlighted the values which should underpin the City Region which included strengthening partnerships by engaging the Local Enterprise Partnership, public bodies and the private sector in the work of the City Region.
Established that the City Region had created too many strategies, rather than focusing upon action and suggested a simple economic narrative of ‘Boats, Beatles, Brains and Barrage’.
Examined the operational issues which the City Region would have to consider, which included generating better intelligence, analysis and investment, increasing and maximising capacity to deliver the devolution agreement.
Reported that a Commission would be established to consider all aspects of the report in further detail with a formal response to the report being provided at the March meeting of the Combined Authority.
The Chairperson welcomed the report and thanked all those who contributed to the report, especially from The University of Liverpool and Liverpool John Moores University. It was recognised that the report presented a great deal of insight and identified areas of concern which required further consideration by the Combined Authority.
RESOLVED – That:-
(i) the State of Liverpool City Region Report (SOLCRR) be formally accepted by the Combined Authority;
(ii) thanks be expressed to the two Universities for the report and in particular to the authors of the report – Professor Michael Parkinson CBE, Professor Richard Evans, Professor Richard Megan and Jay Karecha; and
(iii) the Chairperson, in conjunction with the Head of Paid Service, provide a response to the recommendations set out in the Report and this be presented to the meeting of the Combined Authority in March 2016.
78. SINGLE GROWTH STRATEGY: PROGRESS UPDATE
The Combined Authority received a presentation from Gillian Bishop, Local Enterprise Partnership (LEP), which reported on the progress of the Single Growth Strategy.
The presentation highlighted the following:-
Set out the objectives and rationale of the Strategy, which had come to fruition following the LEP away day in November and a recognition that there was a vast number of strategies which would be brought together to create one vision and aspiration for the City Region.
Page 3 Explained how the Growth Strategy had been developed, which included it being aligned with the devolution themes and portfolio lead areas.
Highlighted the activity undertaken to date to develop the Growth Strategy, which included engagement with public and private partners.
Set out the structure of the Strategy, which included a focus on the four City Region priority sector strengths.
Examined the envisaged impact of the Single Growth Strategy and outlined the next steps which included providing a further update to the March meeting and presenting the final Strategy for approval to the Combined Authority in June 2016.
The Chairperson of the Combined Authority recognised the impact the Single Growth Strategy could have to maximise growth opportunities across the City Region.
RESOLVED – That:-
(i) the presentation be noted; and
(ii) the Combined Authority receive an update report in March 2016 with the Single Growth Strategy being presented for approval in June 2016.
79. TRANSPORT FOR THE NORTH AND RAIL NORTH
The Combined Authority received a presentation from Councillor L Robinson, Chairperson of Merseytravel, which:-
Summarised a number of key activities which included:- o the receipt of a special rail grant to purchase replacement rolling stock for Merseyrail; o a business case for a full franchise of the bus network; o improving the number of services and connection to Liverpool John Lennon Airport; o improving the connection to North Wales with the introduction of a direct rail line route; o exploring the potential to re-introduce the Wapping Tunnel as a train station which would improve the link with Merseyrail and Network Rail.
Reported on the progress to date on Rail North, which included the awarding of the Northern franchise to Arriva and the TransPennie franchise to First Group which would operate from April 2016.
Summarised key improvements achieved through Rail North which would see the removal of the Pacer carriages, direct train services to Scotland, four fast services per hour between Lime Street and Manchester, two services between Lime Street, Leeds and York, improved evening and Sunday services on the City line and improved services between Southport and Manchester.
Page 4 Explained that Transport for the North had been making good progress on the high speed rail links, in particular recognising how high speed rail would improve freight connectivity for the City Region.
Reported that stakeholders had recognised the importance of having the City Region linked to the high speed rail network.
Summarised the next steps for both Transport for the North and Rail North.
The Chairperson wished to place on record his thanks to Councillor L Robinson, Chairperson of Merseytravel, and Frank Rogers, Interim Chief Executive, Merseytravel for their work in driving forward the agenda for Transport for the North and Rail North. He recognised the importance of securing the connectivity between the City Region and the rest of the country which would support the growth and prospects of the City Region.
RESOLVED – That the presentation and progress made to date be noted.
80. AREA BASED REVIEW PROCESS
The Combined Authority considered the report of the Portfolio Lead: Employment and Skills which provided an update on the Area Based Review process. It was reported that a post-16 Area Based Review would commence in April 2016. To inform this Review consideration would be given to the existing needs of the City Region and identify what capacity and training requirements would be required, to ensure the sector was responsive to local employer requirements and economic priorities.
Member’s attention was drawn to paragraph 5.3 of the report which set out the proposed scope of the review which would be used to consult with the education sector and stakeholders. A full scope and criteria for the Review would be presented to the March 2016 meeting of the Combined Authority, which would include the proposed nominations to the Liverpool City Region’s Steering Group.
It was reported that the outcomes of the Review process would support the growth ambitions of the City Region and was key to delivering aspects of the Devolution Agreement. This included the devolution of the adult education budget from 2018/19, when the City Region would become the commissioner of these services.
A Member sought clarity on whether colleges would be involved in the scoping of the Review. It was acknowledged that engaging colleges early in the process would be beneficial, however it was important that the scope reflected the strategic direction of the whole of the City Region and not individual areas.
The Chairperson welcomed the review and emphasised the importance of adopting an approach to meet the needs of the City Region.
RESOLVED – That:-
(i) the draft scope and key criteria of the Area Based Review for consultation with stakeholders be agreed;
Page 5 (ii) a final version of the scope and key criteria be submitted to the March 2016 Combined Authority meeting for approval; and
(iii) the membership of the Steering Group be submitted for consideration at the March 2016 meeting of the Combined Authority.
81. SKILLS CAPITAL INVESTMENT FUND - SITES AND PREMISES
The Combined Authority considered the report of the Portfolio Lead: Employment and Skills which presented the Skills Capital Investment Panels recommended investment package for applications received under Sites and Premises (Strand 1) of the Liverpool City Region Skills Capital Fund.
Four expressions of interest from JTL and NWTC – STEM Partnership for Growth, Myerscough College – Croxteth Campus Redevelopment, City of Liverpool College – Digital Academy and Wirral Met College – Wirral Waters University Health Campus had been approved in principle. They would be asked to provide further details on their application which would be presented to the July 2016 meeting of the Combined Authority.
Members attention was drawn to appendix 2 of the report now submitted, which set out the commitments to date. It was reported that the allocation of future funding would be paused until the Area Based Review had been completed.
RESOLVED – That:-
(i) the sites and Premises Strand (Round 2) applications received as set out in Section 4, paragraph 4.2 of the report now submitted be noted;
(ii) the recommendations made by the Skills Capital Investment Panel set out in Section 5, paragraph 5.7 of the report now submitted be approved;
(iii) the Panel recommendation at Section 7, paragraph 7.4 of the report now submitted be approved and the timings and outcomes be factored into the Post-16 Area Based Review process and into the planning cycle for the launch of further rounds; and
(iv) the programme risks and proposed mitigating actions outlined in Section 8 of the report now submitted be noted.
82. MERSEY TUNNEL TOLLS 2016/17
The Combined Authority considered a report of the Treasurer regarding the schedule of Mersey Tunnel Tolls for 2016/17 which the Merseytravel Committee had considered at its meeting on 4 February 2016.
Councillor L Robinson, Chairperson of the Merseytravel Committee, reported that the Committee, at its meeting on 4 February 2016, had considered the Mersey Tunnel Tolls 2016/17 and had recommended the report for approval to the Combined Authority.
A Member welcomed the recommendations from Merseytravel and those contained in the report and endorsed the approach adopted by the Task Group which had been established to consider the Tunnel Tolls. It was welcomed that the Tunnel
Page 6 Toll had been frozen for 2016/17 and the cost of a fast tag journey had been reduced by 20p per visit. In particular, it was noted that the setting of the 2016/17 Tunnel Toll would financially benefit local people and businesses and demonstrate the value of the devolution deal. In conclusion, it was hoped that greater financial freedom could be achieved through the Devolution Agreement in setting the Tunnel Tolls and ultimately drive down the cost of the Toll for users.
RESOLVED – That:-
(i) the schedule of tolls applicable for use of the Mersey Tunnels in 2016/17, as contained within Table 1 (a) and Table 1 (b) below and including a reduction in the tolls payable to users of the Fast Tag scheme be approved
Table 1(a) Recommended Schedule of Tolls Applicable for Mersey Tunnels 2016/17
Vehicle Authorised Toll 2016/17 Cash 2016/17 Fast Tag Toll Class (November Toll RPI) 1 £1.90 £1.70 £1.20 2 £3.70 £3.40 £2.40 3 £5.60 £5.10 £3.60 4 £7.50 £6.80 £4.80
Table 1(b) Definition of Vehicle Categories to apply in 2016/17
Class Subcategories 1. (a) Motor cycle with side car and 3 wheeled vehicle. (b) Motor car and goods vehicle up to 3.5 tonnes gross weight. (c) Passenger vehicle other than a motor car with seating capacity for under 9 persons. 2. (a) Motor car and goods vehicle up to 3.5 tonnes gross weight, with trailer. (b) Goods vehicle over 3.5 tonnes gross weight, with two axles. (c) Passenger vehicle with seating capacity for 9 or more persons, with two axles. 3. (a) Goods vehicle over 3.5 tonnes gross weight, with three axles. (b) Passenger vehicle with seating capacity for 9 or more persons, with three axles. 4. Goods vehicle over 3.5 tonnes gross weight, with 4 or more axles.
(ii) the waiving of tunnel tolls for designated emergency vehicles in 2016/17 be approved; and
(iii) the waiving of tunnel tolls between 10pm on 24 December 2016 and 6am on 26 December 2016 be approved.
Page 7 (NB Councillor R Polhill requested that it be recorded that he abstained from the vote as the Borough of Halton does not form part of the legislative arrangements in respect of the Mersey Tunnels Act.)
83. 2016/17 BUDGET - FINANCIAL PERSPECTIVE
(Note: That, in accordance with Section 28(2) of the Localism Act 2011, Councillor J Fairclough declared a disclosable pecuniary interest in the following item and left the room for the duration of its consideration)
The Authority considered a report of the Treasurer regarding the Liverpool City Region Combined Authority’s budget for 2016/17. It was noted that the Combined Authority had a statutory duty to agree a Levy for 2016/17 before 14 February 2016. The Merseytravel Committee had therefore considered Merseytravel’s financial situation and recommended the budget options contained within the report.
It was reported that the City Region’s Local Growth Fund allocation had significantly increased from year 1 which would require commitment to ensure the LGF schemes were delivered in 2016/17. Furthermore, additional resources had also been identified to support the Combined Authority in managing the transition through the devolution arrangements. It was also noted that as Halton Borough Council did not form part of the transport levy there would be no direct financial implication for them.
RESOLVED – That:-
(i) the following recommendations of the Merseytravel Committee be approved:-
(a) the operational grants to Mersytravel for 2015/16 and 2016/17 in respect of its public transport capital and revenue activities;
(b) the operational grants to Merseytravel for 2015/16 and 2016/17 in respect of its responsibilities as the operator of the Mersey Tunnels on behalf of the Combined Authority; and
(c) the Mersey Tunnels Capital programme for 2015/16 and 2016/17 which would be delivered by Merseytravel on behalf of the Combined Authority.
(ii) a transport levy for the Districts of Knowsley, Liverpool, St Helens, Sefton and Wirral of £105.4m be established;
(iii) transport related activities undertaken on behalf of the Combined Authority in Halton continue to be funded through Halton Council’s main Council tax requirement for 2016/17 and would not be subject to a differential levy from the Combined Authority in that year;
(iv) the Prudential indicators, Treasury Management limits and changes to the Treasury Management Strategy as contained within Appendices One and Two of the report now submitted be approved; and
Page 8 (v) the changes in the schedule of Tunnel Tolls for 2016/17 be approved separately by the Liverpool City Region Combined Authority be incorporated into the Combined Authority Budget 2016/17.
84. MINUTES OF THE MEETING OF THE MERSEYTRAVEL COMMITTEE HELD ON 3 DECEMBER 2015
The minutes of the Merseytravel Committee held on 3 December 2015 were received and confirmed by the Combined Authority.
85. MINUTES OF THE LIVERPOOL CITY REGION COMBINED AUTHORITY AUDIT COMMITTEE HELD ON 3 NOVEMBER 2015
The minutes of the Liverpool City Region Combined Authority Audit Committee held on 3 November 2015 were received and confirmed by the Combined Authority.
Minutes 73 to 85 be received as a correct record on the 18th day of March 2016.
Chairperson of the Combined Authority
(The meeting closed at 12.09 pm)
Page 9 This page is intentionally left blank Agenda Item 6
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: ALL
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE LEAD OFFICER: ECONOMIC DEVELOPMENT
CAPITAL COMMISSIONING FRAMEWORK AND OUTLINE BUSINESS CASE FOR LITTLEWOODS STUDIOS LIVERPOOL
1. PURPOSE OF REPORT
1.1 The purpose of this report is to present an update to the Combined Authority on the Capital Commissioning Framework and to present the Littlewoods Studios proposal and outline business case from Capital and Centric for approval as a potential project for Local Growth Fund (LGF) funding. The business case for this project has been subject to an independent appraisal using the principles of the City Region’s Capital Funding Framework considered previously by the LEP Strategic Board and Combined Authority.
2. RECOMMENDATIONS
2.1 It is recommended that the Liverpool City Region Combined Authority (CA):-
(a) Endorse the ongoing work in relation to the development of the City Region’s approach to allocating Capital Funding and note the Business Plan attached as Appendix 1 which will underpin this work; (b) Agree that Capital and Centric be invited to come forward with a full business case application in respect of the Littlewoods Studios proposal for a £4.95m allocation of LGF, in accordance with the Assurance Framework process agreed by the Combined Authority and shared with Government. The project has been independently appraised for Liverpool City Council on behalf of the City Region and demonstrates very good value for money; and (c) Agree to £4.95m of LGF being made available to the Littlewoods project subject to a satisfactory full business case being independently appraised by the Combined Authority and the Treasurer and to the project applicant being informed of this so they can further develop the project.
3. BACKGROUND
3.1 The City Region was allocated an additional £31.6m of LGF resources at the end of 2014 in respect of three areas:-
Page 11
i. £15.6m capital funding – to support land and property schemes where public investment was required to bring them forward; ii. £15.6m business growth funding to support the growth and expansion of existing businesses; and iii. £400k to support the development of Low Carbon capacity in the city region and develop a pipeline of schemes.
3.2 The capital fund allocation of £15.6m was approved in full by Government who also reviewed an initial business case put forward for the development of the Littlewoods building for creative space as an example of compliant and eligible projects which would come forward for such funding.
3.3 Subsequently work was commissioned by the LEP, together with Regeneration Directors to develop a more consistent City Region approach to allocating capital funding. “A Capital Commissioning Framework” was developed using an independent consultant. A subgroup of Regeneration Directors, together with the Director of Strategy from the LEP, has overseen the development of the Framework, consulting all local authorities in its development. The aim of this work is to align the strategy, appraisal and approval processes for capital funding streams which the City Region directly manages and or influences in order to vastly increase the number of investable schemes in the City Region and lever in more private sector investment.
3.4 The work (Business Plan attached as Appendix 1) has recommended a more consistent approach to allocating all capital funding and that the City Region should consider aligning as far as possible the strategic priorities for the LGF2 funding, any remaining Growing Places Fund (GPF) funding (approx. £7.5m) and the ERDF place resources. The Framework included anticipated outputs and outcomes from the scale of resources available and recommended a process of independent appraisal against core criteria to assess:-
i. Deliverability; ii. Value for money; and iii. Strategic fit.
3.5 Utilising this funding, the City Region will strategically intervene at 3 points in the development cycle:-
a) Very early stage – For a small number of strategically important sites, preliminary development funding will be available for initial preparation and development costs such as site planning, technical feasibility and market analysis. Such schemes will need to demonstrate their potential City Region impact;
b) Early stage – For a number of key sites, upfront enabling investment to facilitate private sector investment in place-making activity such as reclamation and remediation; and
c) Developer Investment in one of 4 priority areas for commissioning:-
i. Development of SuperPort opportunities; Page 12 ii. Speeding up delivery in the Enterprise Zones; iii. Commercial property development both generic and specialist; and iv. Supporting SMEs in value added sectors to access new commercial property.
3.6 The Framework recommended allocating £2m of pre-development funding for the “very early stage” strategic projects, recognising that the City Region pipeline needed to be strengthened in order to bring forward projects which could take advantage of the potential investment funding through devolution and other sources such as recycled Chrysalis funding.
3.7 The next steps in this work are to:
i. Undertake an initial appraisal of the City Region’s pipeline of schemes to confirm strategic fit, financial viability, state aid and value for money; ii. Projects which meet this initial assessment will either be considered for pre- development or “very early stage funding” or will move to a full green book appraisal carried out by an independent procured panel of appraisers utilising the methodology from the work carried out to date.
3.8 Individual projects will be presented to the Combined Authority and LEP Strategic Board for approval when ready. In accordance with the Assurance Framework these will need to be agreed by the Combined Authority before funds are allocated. Some projects are at an advanced stage and it is recommended that the Combined Authority invite the Littlewoods project to develop a full appraisal for a £4.95m allocation of LGF. The project proposal for Littlewoods Studios is time critical and so the Combined Authority and LEP Strategic Board are being asked to provisionally commit to a £4.95m allocation subject to the full business case (which will include the cost and values assessment) being satisfactorily appraised and to the project applicant being informed of this to allow them to further develop the project. The appraisal of the outline business case is attached as Appendix 2.
3.9 The Capital Funding Framework has been developed to align with the Liverpool City Region Assurance Framework which was agreed by the Combined Authority and LEP in March 2015. This Framework was developed and agreed with Government and sets the decision making processes which the City Region must use when approving LGF projects.
3.10 Funding flowing from the devolution agreement including “gainshare” funding, future allocations of LGF and transport funding will be allocated to the City Region as part of a “single pot”. Government are expected announce this shortly and the City Region will be required to review its Assurance Framework in line with this revised guidance.
3.11 To support the Combined Authority with the immediate work required, interim resource will be utilised from existing City Region officers and some additional procured expertise to undertake the independent appraisal process.
Page 13
4. RESOURCE IMPLICATIONS
4.1 An outline commitment of £4.95m out of the total allocation of £15.6m LGF2 resources available is to be made to the Littlewoods project subject to full business case approval.
4.2 The project has demonstrated that it should be capable of an early start and this will clearly assist with the Combined Authority and LEP in ensuring the City Region meets the LGF spend profile from Government.
4.3 Any grant offer will be subject to conditions which will protect the Combined Authority’s position in respect of the use of grant and sets out clearly the conditions which will be applied and will result in clawback of grant.
5. EQUALITY AND DIVERSITY IMPLICATIONS
5.1 There are no specific equality and diversity implications associated with the implementation of the recommendations in this report.
6. COMMUNICATION ISSUES
6.1 The project will form part of the communications plan and activities of the Combined Authority and LEP. Appropriate publicity will be undertaken to ensure the positive benefits of the development is communicated effectively and the role of LGF and the Combined Authority and LEP acknowledged.
GED FITZGERALD Lead Officer: Economic Development
Contact Officers: Ged Fitzgerald, Liverpool City Council (0151 233 0048) Lisa Smith, Liverpool City Council (0151 233 0068)
Appendices: Appendix 1: Capital Commissioning Framework Commencement Business Plan Appendix 2: Outline Business Case Appraisal
Page 14
Commencement Business Plan
Liverpool City Region Capital Fund FINAL September 2015
[Type text] [Type Pagetext] 15 [Type text] Table of Contents
Glossary of Terms
1. Introduction and Context
2. Resources and Performance
3. Guiding Principles for Investment
4. Financial Profiling
5. Risk Assessment
Annexes
Economic Impact Assessment
______
This report was generated by Urban Policy Associates in partnership with ACR Development Consulting. The report was commissioned on behalf of Liverpool City Region LEP and the Liverpool City Region Combined Authority. No aspect of the report should be re-produced without permission
Urban Policy Associates 2015
2
Page 16 Glossary of Terms
LCRCF (Liverpool City Region The acronym used to define the Fund for which this Business Capital Fund) Plan is designed Capital Projects Funding Framework The City-Region strategic framework which identifies thematic priorities for commissioning activity. Also referred to as ‘the Framework’ Core Team The team of people directly appointed to Manage the LCRCF Investment Manager A nominated individual within the Core Team responsible for formal negotiations with Applicants and presenting investment case papers for approval Procured Experts Specialists such as Quantity Surveyors, Valuation Specialists and Construction Managers appointed from external panels to complete technical tasks Accountable Body The organisation in the city-region which takes direct responsibility for managing and accounting for the Funds delegated to the city-region Applicants The entity, usually a private Developer, that submits a project proposal Management and Administration Plan A linked document which contains the Plans for the management and administration of the Business Plan going forwards (also referred to as the M&A Plan) ERDF Place Resources An allocation of European Regional Development Funds (2014- 2020 programmes) for ‘Place’ type activity (ie: capital investments) Growth Deal (or City Deal) The Growth Deal is a financial package agreed between Central Government and Liverpool City Region Growth Deal 2 An additional allocation of resources, made in January 2015, for Liverpool City Region Enterprise Zones Designated zones where business rates relief applies, Wirral Waters, Liverpool Waters, Liverpool City and Daresbury are the recognised Zones in Liverpool City Region Chrysalis Fund Recyclable Loan fund established using ERDF funding, offers debt and equity finance and can offer subsidised lending rates Growing Places Fund Government capital fund distributed to LEP’s with a view to stimulating economic development activity Investment Committee A proposed small and independent committee to be tasked with recommending project approvals to the Combined Authority Capital Projects Board A Board with responsibility for overseeing the implementation of the Business Plan, might be the existing Regeneration Directors Group Development Appraisal The process of appraising all costs associated with a development scheme to establish viability Land Reclamation The process of clearing or cleaning land for the purpose of facilitating new development State Aid EU regulations that specify limits on the level of public funding that can be passed to a private entity Overage A mechanism by which profits over a certain threshold can be shared Gap Funding Public sector funding designed to plug the gap between the actual costs of a scheme and the level of return required by a Developer to make a scheme viable Abnormal Costs Specific costs associated with Development which when present cause a scheme to be unviable Outline Project Proposal (OPP) First step in the two-stage Appraisal system, ensures that a fully worked up and compliant project is in place Detailed Project Application (DPA) Second step in the two-stage Appraisal system, a completed project application with full development appraisal attached Preliminary Development Fund A component fund designed to help work-up details of major Development schemes
3
Page 17 1. Introduction and Context
1.1 Introduction
The Liverpool City-Region partners adopted a Capital Projects Funding Framework in June 2015.
The purpose of the ‘Framework’ is to link a number of established strategies (such as the Local Growth Plan) and national policy drivers (such as Enterprise Zones) to create some clear commissioning priorities. The purpose of commissioning is to direct discretionary capital funding to those projects which best deliver the economic strategy of the city-region.
The funding for this Business Plan comes principally, although not exclusively, from an expanded Growth Deal (Growth Deal 2) with Government. This funding envelope was announced by Government in January 2015, the resources were earmarked against two priorities, one of which was;
‘A competitive capital investment fund that will provide grants and/or loans to individual land, infrastructure and property projects, selected on a competitive basis’
This Business Plan is designed to both operationalise the ‘Framework’ document and implements the requirement to develop an investment fund approach. It does this by
n Allocating resources to the commissioning priorities
n Identifying the overall economic impact of implementing the Business Plan
n Identifying the management and administration (M&A) resources required to deliver the Plan
n Designing the appraisal and approval systems necessary to implement the Business Plan
n Undertaking a detailed risk assessment
n Developing a credible and robust governance proposal
As this is the first Business Plan produced by the city-region partners for this purpose it is badged as a ‘Commencement Business Plan.’
4
Page 18
The Plan covers the next three financial years (2015/16 to 2017/18). Only limited ‘spend’ activity is profiled for the 2015/16 financial year, as the emphasis for this year is placed upon early commissioning activity and setting up effective programme management systems.
Alongside this Commencement Business Plan is a linked document.
A ‘Management and Administration Plan’ which identifies the resources required to Programme Manage this Business Plan. The M&A Plan also contains proposed application and appraisal documentation as well as governance proposals.
1.2 The Objective of the Business Plan
The objective of this Business Plan is to set output and outcome targets against the commissioning priorities identified in the ‘Framework’ document and to allocate the available city-region capital funds against these priorities.
The Commissioning Framework has identified the four priority commissioning areas. These are
1. Implementing the Superport strategy through the preparation of new employment sites
2. Driving forward the implementation of activity in the City-Region Enterprise Zones
3. Driving the delivery of new commercial property
4. Supporting SME’s in value-added sectors access new commercial property in the city-region
5
Page 19 Figure 1: The Link between the Framework, the Business Plan and the Commissioning Priorities
City Region Strategy
Capital Projects Commissioning Framework
Commencement Business Plan For the City Region Capital Fund (CRCF)
Detailed Commissioning Briefs (Issue 1)
Implement Super Port Sites Strategy Drive SME Property implementation Fund of Enterprise Support Zones delivery of new commercial property
The original rationale for supporting the four priority areas is contained in the main ‘Framework’ document. The purpose of this Commencement Business Plan is managing the implementation of the ‘Framework’.
The ‘Framework’ outlined the broad commissioning areas; the Business Planning process will see those four areas worked up in much more detail (the Issue 1 Commissioning Documents are included in the Annex to this Business Plan).
1.3 Economic Impact of the Plan
A detailed assessment of the likely economic impact of the implementation of this Business Plan has been undertaken.
The impact assessment assumes that
§ A minimum of £19.7m of Local Growth Fund resources and remaining Growing Places funding will be allocated to projects.
§ £6m of ERDF resources will be allocated to supporting commercial development and to an SME Property Fund. 6
Page 20
The impact assessment period covers five years. This is because many of the interventions will require up-front public investment that may not be immediately matched by private sector resources within a three year planning horizon for this business plan.
Based on a public sector investment of £25.7m it is expected that the following outcomes can be achieved over a five-year period
§ Private Sector investment of £207.4m
§ 4,548 new jobs in the City-Region
§ 214,613 sqm of new commercial floor space
§ 120 acres of brownfield land reclaimed for development
These economic outcomes will help set delivery targets for individual projects seeking resources from the City Region Capital Fund. The full details of how the overall targets have been calculated are included in Annex 1 (Economic Impact Assessment)
1.4 Strengthening the Project Pipeline
The ‘Framework’ document recognised a number of structural weaknesses in the city-region economy.
Since the crash of 2008 and subsequent recession the pipeline of large capital projects in the city-region has largely dried up.
There are, however, two mega-level infrastructure projects under construction in the city-region. A new in-river cargo terminal which will enable the world’s largest cargo-ships to access north of England markets, and, the construction of a new Bridge crossing over the Mersey which will better link the city-region to national markets.
It can reasonably be expected that a combination of major new economic infrastructure along with a generally improving economic outlook will help create the conditions for accelerated private sector investment in the city- region.
An important priority for the Business Plan is to ensure that the flow of major sites become available to the market increases. This means that a number of key sites in the city-region will require up-front (enabling) public investment to facilitate the private sector investing in new commercial property.
Enabling activity includes the reclamation and remediation of major sites, the bringing forward of new infrastructure and investment in ‘place-making’ type activity.
Alongside these early interventions is a need to invest in the very early preparation of a small number of strategically important sites. This will require 7
Page 21 detailed planning work, technical feasibilities, cost planning and market analysis. To achieve this the Business Plan has set-aside an allocation for a ‘Preliminary Development Fund’. This will cover no more than 6-8 major development opportunities, and is earmarked for site planning and preparation type activity.
This approach marks a strategic break with previous approaches, that would often only intervene at the point at which an Applicant required funding for a scheme (the right-hand box). Figure 2 (below) demonstrates the city-region will now strategically intervene at three different points in the development cycle. This should have the effect of vastly increasing the number of ‘investable’ schemes in the city-region and will leverage more private sector investment.
Figure 2: Major Sites Project Lifecycle
Preliminary Enabling Development Developer Activity Fund Investment
Development Plan - Reclamation (if Build end-product Planning Application required) Use recyclable Market Feasibility -Construct loan/gap (if Cost Planning Infrastructure required)
1.5 The Business Plan and the wider devolution opportunity
The Government has committed to a process of devolution. This process has the potential to be transformative. It will enable the City-Region to directly manage large allocations of capital funding
The ‘Framework’ and the associated ‘Business Plan’ provide an opportunity to demonstrate to Government that the city-region is developing the right skills and capacity to manage and administer large-scale capital funds.
The associated Management and Administration report recommends hiring a small ‘core-team’ of 2-3 staff as well as setting up procured panels from which property professionals can be accessed. This ‘base’ capacity will help to demonstrate to Government that the city-region is taking positive steps to pool expertise and in the future will be in a position to manage ever larger sums of public funding.
8
Page 22 In the shorter-term the additional capacity will help the implementation of the Business Plan, and should demonstrate delivery of the Growth Plan and the city-region proposition around competitive places and competitive people.
9
Page 23 2. Resources Available to the Plan
2.1 Resources available to the Commencement Business Plan
As stated in the Introduction it could be reasonably expected that over the course of the next two years the Framework and it’s associated Business Plan might significantly evolve and develop to take-on a wider range of funds.
As it stands this Business Plan has a limited scope that reflects the initial limited scope of the Commissioning Framework.
n The Business Plan will directly influence the utilisation of ‘Local Growth Fund 2’ resources and unallocated ‘Growing Places’ resources
n The Business Plan will strategically influence the 2014-2020 ERDF programme, however, the allocation of resources and project selection is outside of the scope of this Plan.
n At some point the Framework (and therefore the Business Plan) might be expanded in scope and revised to cover the full range of capital finance available to the City-Region, including opportunities such as the re-investment of the Chrysalis Fund.
n There are other capital funds that may eventually fall under the influence of the city-region, as the policy of devolution is rolled-out.
City Region Capital Fund (Component Funds)
Figure 3: Funds in Scope and Out of Scope of the Business Plan
Direct Influence Indirect Influence
Local Growth Fund 2 ERDF ‘Place’ Programme
Unallocated Growing Places Chrysalis Fund Funds
10
Page 24 2.2 Allocating resources to the Commissioning Priorities
The process of allocating resources to the four commissioning priorities is an important task.
The allocation of resources has been undertaken on an indicative basis. The actual level of resources that ends up being committed will depend upon the quality of projects submitted by Applicants. In light of the actual submissions the city-region partners may wish to move resource allocations between the different pots. This is an important flexibility. It should result in a better use of public funds.
The immediate priority, however, is to establish a starting position by allocating resources to each of the four commissioning priorities, the preliminary development fund and allocating budget for management and administration purposes.
ERDF ‘Place’ Resources
The ERDF ‘Place’ resources are identified at £6m (this figure could vary upwards depending upon a decision regarding the future use of Financial Instruments). It is proposed to split the £6m between the two commissioning priorities (Driving Commercial Development and SME Property Fund equally).
The basis for this allocation is
n The number of property projects seeking ‘gap’ funding under the new state-aid regime may well be muted, and the intervention rates are quite low.
n The ‘Driving Commercial Development’ pot is likely to yield a higher number of jobs per £1 invested, however, the quality of jobs supported by the SME Property Fund (targeted only at knowledge rich sectors) is likely much higher.
n The ‘SME Property Fund’ is the only ‘pot’ of funds dedicated to driving property demand as opposed to unlocking supply, it is strategically important to maintain a balance between interventions that lead to constructing more property and those which increase the level of market demand for it.
n In the event that either ‘pot’ is under-bid, resources can be transferred to ‘over-bid’ pots.
National Government Funds (LGF and GP Fund)
The National Government Funds available total £24.27m.
It is recommended that in the first instance £19.7m is made available for commissioning projects.
11
Page 25 A separate amount will have to be set-aside for ‘Management and Administration’ which is detailed in the ‘M&A annex’.
The benefits of not allocating the full amount are
§ That a degree of flexibility in the deployment of funds can be retained (for example, more could be allocated to a Commissioning Pot where project demand is strong)
§ That additional commissioning priorities may emerge that require some up-front investment
The proposed allocations to the different commissioning pots are proposed at the following maximum levels
- £10m for ‘Superport’ projects
- £8m for ‘Driving Enterprise Zones’ projects
- £1.7m for ‘Preliminary Project Development’
The basis for these allocations are
The ‘Superport’ commissioning pot has the highest potential for both private sector leverage and job creation. It also supports a demonstrably growing sector with a need for large sites to be made available (this was demonstrated through the LEP commissioned Port Demand Study).
The ‘Enterprise Zones’ commissioning pot would deliver a slightly lower level of overall job creation, but this is in part because it contains a greater mix of office and associated public realm type activity. The scale of allocation may have to be revised downwards in the event that a significant office development scheme does not come forward for funding through the ‘Call’ process.
The funding allocation for the ‘Preliminary Development Fund’ is calculated at £1.7m. With a maximum of six to seven sites expected to be supported this will enable allocations in the range of £150,000 to £300,000 per-project supported.
The Preliminary Development Fund should have an overall allocation of £1.7m. The profiling of this will allow activity to commence in 2015/16 financial year, however, the majority of allocation is proposed for the following two financial years.
2015/16 £300k 2016/17 £700k 2017/18 £700k
It is proposed that the Fund should have it’s own simplified application process, with a simple scoring system designed to aid the decisions on which projects should be awarded funding. The full details of the proposed scoring 12
Page 26 and appraisal process are contained in the separate Management and Administration report.
The level of allocation between the different priorities should be reviewed on a regular basis.
2.3 Performance and Impact Assessment
The initial (baseline) economic impact assessment used two particular source documents to enable calculations.
n The ‘OffPAT 2010 Employment Densities Guide’
n Turner and Townsend 2013 ‘Global Construction Costs Assessment’
Whilst the OffPAT guidance was last updated in 2010, the broad data around employment densities remains fairly constant.
The Turner and Townsend 2013 cost assessment have UK specific data, and allows for regional variation. The data allows a range of calculations to be conducted against defined specific commercial building types.
Once the Business plan has been in operation for a decent time period (at least 18 months), it would be worth undertaking a full review of the initial baseline targets, with a view to refining them in light of outcomes from actual commissioning activity.
Impact of National Economic Performance
The scale and speed of delivery of the economic impacts projected are sensitive to external economic conditions.
As a general guide the outputs profiled as a part of the impact assessment were made on an assumption that the UK economy continues to grow albeit at a steady pace of somewhere between 2% and 3% per-annum.
Should the economy fall back into a state of recession the baseline output targets in the impact assessment would require significant downgrading.
Commensurately should the UK economy grow rapidly over the next few years, at a rate above 3%, it would enable the baseline output targets to be increased.
Impact of Values on Recycling of Project Level Grant
There are other external variables that could impact on both the level of outcomes delivered by projects, but also impact upon the potential for a higher-level of resource recycling.
13
Page 27 One such external variable is a potential increase in property values. If this were to crystallise it could mean a greater level of funding is returned from Applicants through overage agreements. An overage clause is used to ensure that profits from a development scheme are effectively shared between the Developer and the Combined Authority.
An example of overage agreements being used in this manner was the St Paul’s Square development in Pall Mall. It was delivered using a ‘grant’ and ‘overage’ mechanism. This resulted in the public sector making a profit through its funding agreement.
14
Page 28 3 Guiding Principles for Investment
3.1 Broad Approach
The city-region partners have expressed a clear preference for an approach towards investment management which is flexible whilst maintaining strategic purpose.
The broad approach towards managing the Funds should be one of seeking to actively find solutions to deliver strategically important projects. Commensurately the Fund must not make ‘funding offers’ to projects which are unable to complete an acceptable development appraisal however strategically or politically important they are deemed.
The integrity and robustness of the appraisal process are utmost in demonstrating transparency in decision-making and effectiveness in the use of public funds.
When a project has successfully passed the appraisal process, a full range of funding solutions should be considered.
The range of funding options could include (but are not limited to)
n A non-repayable grant
n A grant with profit sharing clauses
n A grant offered alongside a Chrysalis loan
n A rental guarantee
It would be for the Investment Manager (the lead individual responsible for managing the LCRCF) to ensure that whichever option selected represents the best value for money for the LCRCF.
The Investment Manager should not play a passive role. They should actively work with lead Economic Development officers from the six authorities to find funding solutions. The Investment Manager should convene a technical panel to review completed development appraisals, this panel would enable the Chrysalis Fund, ERDF and Local Authorities to consider how best to package a funding offer to the applicant.
To increase the chances of a project being successful a Local Authority could decide to intervene alongside the LCRCF, increasing the attractiveness of a particular project. They could do this in a number of ways, through making an offer of a loan, through a rental-guarantee or funding some enabling infrastructure.
The key to implementing this approach is to ensure that the right people are involved in managing the Fund. They need to have the capability to negotiate with project applicants and to be able to draw and present an investment case following these negotiations (Full details of proposals for the Core Team and 15
Page 29 professional staff requirements are in the accompanying Management and Administration Plan).
The other vital skill the Investment Manager must demonstrate is effective stakeholder management. In particular building effective relationships with the six Local Authority partners. This will need to work on a number of levels. Firstly, is the importance of a clear and open dialogue about the progression of projects through the process. Secondly, the ability to manage expectations and clearly explain and rationalise the recommendations the Investment Manager makes in relation to individual projects. The third is to effectively tap into the skills and knowledge that is present in the constituent Local Authorities. Getting the practical support and help from some experienced and skilled Local Authority staff and using that resource effectively would reduce some risks and would build collective confidence.
This implies that it will be vital to ensure that the people managing the Fund are not generic ‘Programme-Managers’ who are simply implementing a purely process-driven approach towards Fund Management.
During the consultation phase for the Business Plan it was emphasised that ‘not all projects are the same’. This important observation reinforces the need for creative deal-making skills (and a joined-up approach through the Technical Panel) to be fundamental in the way the LCRCF Fund operates.
3.2 Creating an External Identity
To implement the LCRCF effectively, it must be properly promoted.
There would be significant benefit in creating a simple brand under which the LCRCF is promoted. A brand can help explain to the outside world and the developer and investment community what is potentially available to them. Something along the lines of ‘Liverpool Funding Solutions’ would have the benefit of being useful in terms of promoting and marketing activity, but would not necessarily generate an additional administrative burden.
This is because it would not be an independent entity or company, simply a ‘brand’ under which activity is promoted and communicated. The benefit of taking such an approach would be;
n It would help create a single ‘gateway’ for those parties interesting in accessing capital funding in Liverpool City Region
n It would create a strong on-line presence, enabling calls for proposals, details of the application processes, timetables and contact details to be put in one place
n Developed correctly it could have on-line checklists that quickly establish the likely eligibility of a project, as well as details on what will be required to complete a successful appraisal. This, if done properly, should cut-down the need for a large staffing infrastructure
16
Page 30 n It could also provide a useful means to connect those parties interested in development activity to be connected to the right people in Local Authorities through the provision of key contact information
n It would provide to potential investors across the UK and beyond a simple synopsis of how they might be assisted in planning an investment
n It would provide a ‘resource’ for information on wider funding opportunities such as ERDF, the Chrysalis Fund, as well as links to information on issues such as State Aid.
The ‘brand’ and the ‘core-team’ would both be operated through the Accountable Body, as a ‘stand-alone’ unit within Merseytravel.
By creating a simple brand it means that potential applicants don’t have to navigate through links on the main Merseytravel web-site, or the Combined Authority or LEP websites, each site could provide a clear link to the main ‘Funding Solutions’ web site.
Over time the ‘Funding Solutions’ site could be expanded to cover a wider range of public funding, especially once the range of programmes devolved to the city-region expands.
3.3 Basic Requirements for Projects
Whilst the need for an Investment Manager to actively negotiate development agreements on behalf of the city-region partners is important, and will require a degree of flexibility, other parts of the process require and benefit from a consistent approach.
All projects seeking funding from the City Region Capital Fund must meet a number of basic level criteria.
The first is that a clear ‘need’ for public funding must be established and evidenced. This is best achieved through the submission of a full development appraisal.
Where a ‘need’ has been established it can only be due to market failure. Examples of this include;
n Low Land Values
n Abnormal Costs
n Availability and pricing of credit
All public funding must be state aid compliant and not distort private sector roles:
n GBER – Article 45 – brownfield land
17
Page 31 n Regional Aid
n De-Minimis
n Notification
n Direct development – (non distortive)
n Market Economy Investor Principle
It will always be the responsibility of an applicant to ensure that what they are proposing is state-aid compliant. The full details of the administrative resources required to manage the approval and appraisal process are included in the Management and Administration Plan.
It is strongly recommended that the information included in this section is included on the proposed web site. This will help applicants determine whether a scheme might be eligible for support, and help them understand the level of information required in order to complete a development appraisal.
Specific Requirements
The specific requirements an applicant must comply with are detailed in the individual ‘call’ documents. These are provided as an annex to the Business Plan.
In all circumstances applicants must be clear that they are working at risk, and all costs associated with submitting a bid are also being undertaken at risk.
It will be recommended that it most cases that the applicant should pay for the completion of an independent development appraisal. It would then be for the Investment Manager to challenge and check the details in that appraisal as a part of a funding negotiation. The Investment Manager can use a procured panel of experts to challenge particular aspects of the appraisal as a part of this process.
It is recommended that a set of quality operating standards are adopted. These should help ensure that applicants benefit from a clear process with a commitment by the public sector partners to make timely decisions.
Whilst a commitment to a professional approach by the City-Region is essential, equally Applicants must understand that they cannot ‘reserve’ allocations of funding for projects not worked-up. Applicants must accept that the ‘clock only starts ticking’ once a full development appraisal has been submitted with all requests for information met. If information is not forthcoming within a defined time-period the Investment Manager may decide to remove any provisional approvals the project has.
In a similar vein applicants that enter into a contract will be given a clear commencement date, should they miss this commencement date it could be 18
Page 32 considered an act of contractual default, and the project funding could be re- allocated.
3.4 Recycling Finance
As a base policy position the city-region remains committed to the principle of re-cycling resources to deliver economic development activity.
It is recognised that in certain prescribed circumstances, such as in the case of the Preliminary Development Fund’ that there is no practical or sensible way of recycling the funds.
In the case of the use of grant funding as a mechanism to deliver certain schemes, it is recommended that it is always the intention of the city-region to share in the risk of private sector led schemes. If a scheme generates profits, then the city-region should have a fair share of those profits in return for its investment.
The starting position, therefore, is that any grant issued as a part of a funding agreement will be subject to both claw-back and overage (profit sharing) clauses. The city-region should remain committed to recovering investment made through the City Region Capital Fund, and recycling these funds for future deployment.
Each Funding Agreement issued by the Accountable Body will lay out the conditions under which a ‘claw-back’ of funds will be sought. These will include the ability to re-appraise projects at a later point and take a share of value uplift.
Two of the commissioning areas are earmarked for the use of ERDF resources. It will be for the European team at DCLG to determine whether to put a ‘claw-back’ mechanism into any funding agreements that they issue.
3.5 Alignment with Chrysalis
It is expected that the Chrysalis Fund will continue to operate, as a Fund with access to debt and equity finance, and those applicants who require either of those products would continue to directly approach the Fund.
There are three other scenarios
- An applicant seeks funding from Chrysalis, but even with a ‘subsidised’ loan (using the Chrysalis State Aid notice) there remains a funding gap. In these circumstances, and should the project meet the specification of a ‘call for proposals’ a full development appraisal could be requested. This could potentially identify how a grant could be used alongside Chrysalis Funding.
- An applicant seeks funding from the LCRCF via a ‘call for proposals’ but has not sought a Chrysalis loan. The LCRCF Investment Manager may challenge
19
Page 33 the Applicant as to why they have not sought loan finance, and may require that the project formally applies for a Chrysalis loan.
- An Applicant presents a Development Appraisal which suggest a loan could be used instead of grant, but Chrysalis either has insufficient funds remaining or the activity is ineligible. In these circumstances the LCRCF Investment Manager could offer a commercial loan (there is no State Aid notice to enable subsidised loans) alongside a grant.
To ensure proper alignment is realised, the Chrysalis Fund Manager should be asked to join a ‘Technical Panel’ (explained in more detail in Section 3.1)
In circumstances where the Chrysalis Fund has utilised it’s state aid notification and lent at a subsidy level, any grant-aid awarded alongside may have to be commensurately adjusted to ensure state-aid compliance.
3.6 Preliminary Project Development Fund
Whilst there is recognition that because of the timescales associated with the Government capital funding it will be necessary to prioritise those projects that can demonstrate ‘deliverability’ in the shorter term.
However, this business planning process also recognises the importance of enabling a small number of much larger and potentially strategically significant projects to emerge.
Many of these projects will be at a very early stage in the planning and development process and will not be able to spend large capital allocations. That said it is of great importance that these projects continue to be worked up and that they make progress towards implementation.
To support this objective it is proposed that an allocation be put aside to support a small number of strategically important projects. These projects must be agreed as a portfolio of projects by the Combined Authority and once agreed should have access to funding to support their development. It is proposed that the support could include
n Market testing and commercial feasibility
n Costing of infrastructure and other enabling works
n Costs associated with assembling planning or other statutory requirements for development
To maximise the value of this approach it is strongly recommended that external market reports, and other feasibility/market assessment type documents generated for a particular site, should be commissioned in such a way that the information gathered can be effectively pooled. So, for example, in the case of a site being earmarked for distribution uses, the demand assessment should review city-region demand, and this information should be collected and managed by the ‘Core-Team’
20
Page 34 This Business Plan makes an allocation for a ‘Preliminary Development Fund’. The Fund should be managed, as a part of the overall management arrangements for the ‘Commissioning Framework’ and Applicants should be subject to a shortened application process.
The funding can be sourced from remaining Growing Places funding. This type of activity aligns closely with the original purpose of the Fund, namely to move forward stalled development sites which require up-front funding to make them investable.
21
Page 35 4. Financial Profiling
The financial profiling is based on a number of assumptions.
There is a baseline position. This is the minimum level of resources this Business Plan will have attached to it. The baseline is a combination of the Local Growth Fund resources and the remaining un-allocated and recycled Growing Places resources.
The ERDF ‘Place’ resources are included in this Business Plan for the purpose of both strategically influencing the deployment of the ERDF funds and having over- sight of their delivery performance. The decision making related to individual projects is taken nationally by CLG (with only a degree of local input).
The baseline financial position could be further expanded in the future, depending upon the availability of capital funds and the willingness of city-region partners to use this business planning mechanism.
4.1 Income
The following resources have been identified as available to allocate and are in scope of this Business Plan.
n Local Growth Fund 2 allocation to the city-region for ‘gap-funding’ type activities’
n Re-cycled ‘Growing Places’ resources. The loan funds which have been lent to projects recycled with residual interest payments (subject to the agreement of the LEP and the Combined Authority)
n Unallocated ‘Growing Places Money’
n ERDF ‘Place’ resources of £6m (strategic influence only)
The following resources could become in scope of a future iteration of this Business Plan
n Recycled Chrysalis Funds (c£20.8m of original £34m allocation has been approved)
n Other city-region capital funds (such as the devolved FE College Capital Budget)
n Other discretionary capital funds (such as Housing) which may form a part of future devolution negotiations
22
Page 36 Income Sources
Fund (£m) 2015/16 2016/17 2017/18 Total Baseline LGF (2) £0 £15.6m £15.6m Reallocated Growing Places £300k £8.67m £8.670m Unallocated Growing Places £0.743m
Monitoring Only ERDF ‘Place’ Programme £6m
4.2 Expenditure
There are a number of different expenditure categories.
They can be defined as n Funds made available for a ‘Preliminary Project Development Fund’ n Funding made available to support the ‘Commissioning Priorities’ n Funds available to support the Management and Administration of the City- Region Capital Fund (the full details of the M&A Budget are contained in a separate Plan)
The allocation of resources into specific financial year profiles can cause particular challenges, especially with capital programmes. Delays with projects commencing are commonplace as wide number of potential issues can occur. It will be the responsibility of the lead ‘Investment Manager’ to attempt to manage financial profiles across a range of contracts, and to seek to negotiate with Government changes to the financial profiles.
The expenditure related to ERDF projects should be subject to monitoring through the regular reporting of progress in implementing this Business Plan to the Combined Authority.
23
Page 37 5. Risk Assessment
This Risk Assessment takes account of a number of risks associated with the implementation of the Business Plan
RISK IMPACT MITIGATION 1. Failure to Deliver Business Plan Insufficient projects to - Targets Missed - It should be assumed that at least 6 projects will be deliver spend and output - Reputation required in the process to end up funding three projects. targets - Economic losses Should allow more projects to proceed than resource envelope allows for. - Some up-front resource should be dedicated to working with Developers to establish as wider pool of projects as possible The new State Aid - ERDF underspend - Early dialogue with Developers to informally assess regulations (which reduces - Potential for resources to the likely response to a Call intervention levels) is be reallocated to other - Potential alignment with Chrysalis Fund to utilise its inadequate to attract thematic areas or even State Aid notification Developers to apply for the other transitional regions Funds City Region partners are unable to agree on project funding decisions
2. Failure to Deliver spending on time Key projects are slow to - Resources Lost - Realistic profiling which builds in delay assumptions commence and spend slips - Disputes with Applicants - Identifying projects which could bring forward spend beyond years in which - Using innovative methods of profiling, such as escrow resources are available accounts - Effective Programme Management would highlight risks at an early enough stage to mitigate Projects which are awarded - Resources Lost - Set clear timelines for a start on site (act of default if funding are slow to - Failure to deliver outputs not on site by a certain date) commence (often because and spend targets - Active Programme Management to enable effective of external factor such as - Resources tied up with and accurate re-profiling Bank funding, contractor projects not proceeding - Strong and clear appraisal processes that avoid problems or signing up awarding funds to undeliverable projects tenants) The allocation for Local - Slippage of projects could - The Growing Places Funding can be used to flatten Growth Fund is all in lead to loss of resource the profile somewhat 2016/17, causing a spike in the spending profile, this could prove difficult to manage 3. Failure to Administer the Funds Effectively Projects which are - Funds don’t get deployed - Retaining expertise to advise on all information shortlisted for detailed - Reputational Impact required for a full development appraisal appraisal don’t reach final - Projects stuck in the - Have external appraisal specialists available and appraisal stage development pipeline retained to undertake detailed appraisal once all information has been provided Projects which have been - Failure to deploy - Ensure the Accountable Body has in-house legal appraised are stuck at a resources capacity to issue contracts legal stage for too long - Reputational - Ensure the lead appraiser is available to support the causing spend slippage drafting of contracts - Design a template of a standard contract to be made available to applicant ahead of final appraisal to speed legal stage up - Ensure that the Accountable Body has adequate administrative resource to manage the legal and contracting process 24
Page 38 - Ensure the Accountable Body has access to external State Aid legal advice and an appropriate budget Projects which submit claims - Reputational - Skills in place in the ‘core-team’ to effectively manage are not receiving payments - Delays spending the payments process in time - Potential contractual - Clear working relationship with Accountable Body to breaches ensure an effective process is in place. A failure to capture overage - Loss of future income - High quality legal agreements and claw-back from project - Developers see the Fund - Commitment to actively manage contracts to seek as a soft touch information from Developers on sales/disposals; etc. - Skill-sets required to calculate and negotiate claw- back and overage payments The Investment Manager is - Poor quality funding - The process of appointing a Investment Manager must insufficiently skilled to agreements hone in on the technical skills of the Manager negotiate optimum funding - The Fund is under- - The appointment process must avoid selecting those agreements leveraged with generic project management experience - Opportunities for overage - The Investment Manager must demonstrate and claw-back are missed outstanding stakeholder relationship skills, and be able to proactively manage relations with six Authorities
The Investment Manager is - Limits buy-in to the - The Investment Manager must demonstrate a strong technically proficient but Business Plan from key track-record in effective stakeholder management lacks an ability to stakeholders - Must demonstrate a willingness to work in partnership communicate with - Reduces the potential to with Developers and Local Authorities, and not seek to stakeholders tap-in to Local Authority use the platform to build alternative power-bases officers skills and knowledge - Reduces the impact of what is being planned with Developers/Applicants 4. Economic Impact is lower than expected The total level of economic - Reputational - Commitment to independent and external evaluation return is much lower than - Opportunity cost of using projected from investments resources ineffectively A failure to effectively - Loss of external credibility - Ensure proper resource and skills are applied to the monitor outputs and - Failure to quantify impact task of performance monitoring outcomes of funds - Ensure robust counting and quantifying systems are in place Too much grant has been - Reputational - Clear commitment to resource the project appraisal issued to schemes which did - Ineffective use of public process with the right skill-sets not require it funds - In-house negotiating skills to ensure the Fund only - Opportunity cost of not pays what is necessary to secure a development supporting schemes which agreement require grant
25
Page 39 Annex 1:
Economic Impact Assessment
Full Fund Scenario Projected Outcomes
1. Implement Super 3 large projects (total of n 80 acres of land 80 acres of development reclaimed Port Strategy land) n 133,280sqm of floor- - 10,000sqm building per 6 space (Assume £10m allocation) acres of gross development n 1,666 new jobs created land (non-office) - For £8m allocation - 1,666m2 (per acre) x 80 n £125m of private sector economic impact lessened by acres =133,280sqm total investment 25% development B8 (Large Scale and High - For £6m allocation Bay warehousing) economic impact increased - 1 jobs (FTE) per 80m2 of by 25% development 133,280/80 = 1,666 FTE Jobs
Construction Cost: (Large Warehouse/Distribution) £940psm
133,280sqm x £940psm = £125.2m
------
5 smaller projects (total of n 40 acres of development 40 acres of development land reclaimed land) n 53,333msq of new floor- - 8,000sqm of building per 6 space acres of gross development n 762 new jobs created land (non-office) - 1,333m2 (per acre) x 40 n £44.79m of private sector acres = 53,333sqm total investment development
B8 (General Distribution) - 1 job (FTE) per 70m2 of development 53,333/70 = 761.9
Construction Cost: (Warehouse Units/Factory Basic) £840psm
53,333 x £840psm =
26
Page 40
2. Drive Forward Assume 3 projects Enterprise Zones - Development of 20,000sqm n 20,000sqm of new office
of new office space space developed (Assume £8m allocation) n 1,667 new jobs created
B1(a) General Office n 2 acres of new public - For £10m allocation - 1 (FTE) Job per 12sqm of realm increase outcomes by 20% development n £28.4 private sector
20,000/12 = 1,667 new FTE investment - For £6m allocation reduce jobs outcomes by 20%
Construction Cost: (Offices
Business Park 10,000sqm)
£1,450psm
10,000 x £1,450psm =
£14.5m
(less 20% pub intervention =
£11.6m)
Construction Cost (Offices
CBD Offices A-Grade
10,000sqm)
£2,100 psm 10,000 x 2,100 = £21m (less 20% pub intervention = £16.8m)
- 2 acres of new public realm
- Environmental improvements
3. Driving Commercial Assume 2-3 projects Development - Development of 6,000sqm n 6,000sqm of new light
Light Industry at City-Region industrial space (ERDF) Business Parks n 2,000sqm of new Office
Space Assume £3m ERDF B1(c) Light Industry n 328 new jobs investment (Business Park) n £6.35m private sector 1 (FTE) job per 47sqm of investment development 6,000/47 = 128 jobs
Construction Cost (Warehouse/Factory Units £840psm) 6,000sqm x £840psm = £5.040m (less 20% pub intervention = £4.032m
27
Page 41
- Development of 2,000sqm of General Office (Business Park)
B1(a) General Office (Business Park) 1 (FTE) job per 10sqm of development 2,000/10 = 200 new jobs
Construction Cost (Offices Business Parks £1,450psm) 2,000sqm x £1,450 psm = £2.9m (less 20% pub intervention = £2.32m)
4. SME Property Fund Assume 25 funding awards to growing SME’s
Assume £3m ERDF Average 50sqm new SME n 1,250sqm of improved investment floor-space per award workspace n 125 new jobs Total floor-space fitted out for n £2.5m of private leverage occupation 50sqm x 25 projects = 1,250sqm total space improved
Prepared workspace in a B1(a) type environment – serviced workspace 1 FTE job per 10sqm
1,250/10 = 125 new jobs Average £100k bank finance per applicant (£100k x 25 applicants = £2.5m)
Summary of Outputs and Outcomes
28
Page 42 Public Private Jobs Commercial Land Investment Leverage Floor-space Reclaimed 1. Super Port £10m £169.79 2,428 186,613sqm 120 acres
2. Enterprise Zones £8m £28.4m 1,667 20,000sqm 0
3. Commercial £3m £6.35m 328 8,000sqm 0 Development 4. SME Property Fund £3m £2.5m 125 (1,250sqm 0 refurbed) 5. Preliminary £1.7m £0 0 0 0 Development Fund
TOTALS £25.7m £207,040,000 4,548 214,613sqm 120 acres
ENDS
29
Page 43 This page is intentionally left blank APPENDIX TWO
OUTLINE BUSINESS CASE APPRAISAL
The Assurance Framework agreed by the Combined Authority in February 2015 requires projects to be endorsed by the Combined Authority and independently appraised on behalf of the Combined Authority before funding can be allocated. To support this process, Liverpool City Council have commissioned an independent appraisal which can be used to inform that undertaken for the Combined Authority. Background to the Project and detail from that appraisal is detailed below.
BACKGROUND
Although Liverpool has a growing reputation as an outdoor filming location, the lack of appropriate indoor filming space means that the City is potentially missing out on some important opportunities.
Capital and Centric Ltd (C&C) have put forward a proposal to develop the Littlewoods Studios project on the site of the former Littlewoods Building on Edge Lane.
The Littlewoods Studios development is expected to provide 11,000 sqm of refurbished and new space including a film studio, studio work and office space, a Creative and Digital Hub and Liverpool Theatre School. The development is expected to form the first phase of a new hub for the creative and digital industries in Liverpool Innovation Park and there is an aspiration that the development will become the focal point for the media and creative industries in the City Region.
BUSINESS CASE
A Business Case for the project was finalised in November 2015. This concluded that the following:- Public sector funding of £4.95 million is required to address a scheme viability gap. Grant support for the project will lever in significant private sector investment. The scheme will contribute substantially to the development of the creative and digital sector in the Liverpool City Region. Phase 1 will accommodate over 400 full-time equivalent (FTE) jobs and create almost 350 net additional (FTE) jobs in the City Region economy. The scheme represents very good value for money with an overall benefit cost ratio of 23:1 and a cost per job that is substantially below benchmarks.
The appraisal was conducted to verify and assess the robustness of the business case and provide recommendations on the strength of the case for public sector investment.
The independent appraisal report is structured around the different elements of the rationale for public sector development and is structured around the five business cases:- i. The Strategic Case for investment drawing conclusions about the strength of the strategic rationale for grant support for the project;
Page 45 ii. The Economic Case which focuses on the value for money that the project offers to the public sector; iii. The Financial Case particularly on how the viability gap has been calculated; iv. The Commercial Case, which includes consideration of any dependencies; and v. The Management Case focuses particularly on the deliverability of the proposals put forward by Capital and Centric.
Although project development and appraisal systems for the Capital Commissioning Framework and in particular LGF2 are not yet formally in place, the proposals have an emphasis of deliverability, value for money and strategic fit. The business case has been reviewed with reference to this.
Strategic Case
The appraisal concludes that there is an excellent strategic case for investment in the Littlewoods Studios project. The business case presents a comprehensive and well evidenced strategic case for public sector intervention to fill the viability gap that Capital and Centric has identified. The case is based around the project’s close fit with existing policy, the strength and importance of the creative and digital sector in the Liverpool City Region, its growth potential and the constraints that a lack of premises place on its growth. The location of the site within a Mayoral Development Zone (MDZ) and the contribution that its development will make to wider City Region objectives further strengthens the strategic case for investment.
The project has a close fit with the aspirations of the City Region’s Capital Framework. The Business Plan for the capital fund highlight a desire to use the £26m fund to create around 4,500 FTEs and 215,000sqm floorspace. The Combined Authority and LEP Strategic Board should note that a £4.95 million grant would represent almost a fifth of the fund’s capital but the project does not contribute commensurately to the fund targets. The Business Case indicates that the project would contribute just 8% to the fund’s total jobs targets and 5% to its commercial floorspace targets. This reflects the high level at which the targets for the fund have been set, rather than poor value for money offered by the project.
Economic Case
There is a very strong economic case for public sector intervention to support the Littlewoods Studios. The preferred option generates strong Value for Money with an overall BCR ratio of 23:1. It is expected to support the creation of 345 net additional FTE jobs at a cost of £14k per job.
The options assessment underpinning the economic case has been carried out to a rigorous standard. The underpinning assumptions are evidence based where possible and built on sound professional judgement where benchmarks do not exist. The options present a reasonable and realistic set of development scenarios to inform the assessment.
The economic case uses a robust methodology to calculate employment and GVA impacts. The impact calculations are subject to various assumptions and while the impact calculations are sensitive to adjustments in these assumptions, the value for
Page 46 money supported by the preferred option remains strong even when more conservative assumptions are applied.
Financial Case
There is a robust financial case for investment in the Littlewoods Studios project. The Business Case clearly demonstrates that there is a viability gap and uses transparent and robust methods to do so, although the costs have not been appraised and verified by cost consultants at this point. The size of the viability gap is estimated to be c£5 million. It is however essential to note that the size of the viability gap is sensitive to assumptions about the cost of construction and the rental values that the project will generate.
Uncertainties around these points are inevitable and it is worth noting that the developer will bear the risk of any changes that increase the size of the viability gap. Taken at face value, the development costs seems reasonable.
Given the importance of these costs to the overall viability gap, it is suggested that the Combined Authority and LEP commissions an independent review (by a Cost Consultant) of the construction cost estimates and (by a valuer) of the rental and capital value of the completed scheme put forward by Capital and Centric prior to formerly confirming the actual level of grant to be offered, but that ahead of this review that the developer be advised that the Combined Authority will support a viability gap of £4.95m should this be confirmed by the aforementioned appraisal.
In light of this, reasonable steps should be taken to protect the Combined Authority (as accountable body) from Capital and Centric benefitting from any major reduction in the size of the viability gap. If assumptions about construction costs are too high and/or revenues too low, the viability gap could be smaller. It is therefore recommended that an assessment is made of the true value of the viability gap in due course, and structures any grant agreement to allow some or the entire grant to be recovered if there is substantial variation in the viability gap post project completion. This would ensure that project funders can be partly or fully reimbursed should the developer’s profit substantially exceed the 15% requirement that underpins the viability gap presented.
Commercial Case
The commercial case is very strong. There is a very clear agreement about the commercial structure for the delivery of this project. The nature and extent of the role for the public sector is very clear. Public sector involvement in the project is limited to grant funding and the sale of the development site so the exit strategy is clear. There is no requirement for ongoing public sector funding or support during the operation of the development.
Capital and Centric will bear all of the commercial risks and commercial responsibilities (including State aid and procurement compliance) in delivering the project. From a commercial perspective, the project does not offer any major risks to the public sector. It is recommended that that any grant funding agreement clearly specifies:-
Page 47 the nature and extent of public sector involvement in the project; and the commercial risk sharing arrangements.
Management Case
Although there are inevitable uncertainties about the deliverability of some aspects of the project, the management case is strong overall. There is always a risk that project delivery could be affected by external factors and this cannot be eliminated. The project is well developed and, based on the information available, is in a strong position to progress quickly if grant funding is made available. Nonetheless, the Combined Authority and LEP should:-
seek clarification and reassurance that Capital and Centric have finance in place; include a clear and detailed set of delivery milestones in any grant agreement; and carefully manage progress against these milestones and be ready to take appropriate action if the project slips.
The demand assessment for the project highlights confidence amongst stakeholders and the industry that there is adequate demand for the project. It will never be possible to provide 100% certainty that assumptions about project demand are correct. The degree of confidence amongst stakeholders and the analysis in the Business Case suggests that demand for the project exists. Capital and Centric will shoulder the commercial risks associated with market demand but it is important to note that if demand is lower than expected the economic benefits and, as a result, the value for money offered by the project will be lower than set out in the Business Case.
PROJECT ASSESSMENT
As highlighted above the Capital Commissioning Framework sets out assessment criteria against the key headings of deliverability, value for money and strategic fit.
An assessment against each of these headings using the conclusions drawn by the independent appraisal of the project has been summarised below for the Combined Authority and LEP Strategic Board.
Deliverability i. Compliance with State aid – Capital and Centric, a small enterprise, is applying for £4.95 million in (State) funding from the Liverpool City Region towards the Littlewoods Studios Liverpool scheme. The scheme is located within an area identified as falling within the terms of Article 107(3)(c ) of the Treaty on the Functioning of the European Union (TFEU) under the UK Assisted Areas Map 2014 - 2020. The proposed rate of intervention is justifiable within the Regional investment aid provisions of the General Block Exemption Regulation 651/2014 (‘GBER’) Article 14 (see Section 5.2 of the Business Case).
Page 48 ii. Development finance is secured – Capital and Centric will provide further details in respect of the private sector funding sources (including direct investor funding and bank finance) upon which they will draw in delivering this project.
iii. Site ownership – The Littlewoods Building and adjacent former MTL site are currently owned by the HCA. The HCA has agreed by means of Heads of Terms to dispose of the site and existing premises to Liverpool City Council by way of a long lease. The former Littlewoods Building and adjacent site will then be transferred to Capital and Centric immediately following completion of the transfer to the Council by the HCA.
iv. Planning – Capital and Centric has secured planning consent for all but the proposed new build sound stage, although this does have outline consent.
v. Realistic development programme – Capital and Centric has set out what appears to be a realistic development programme within the Business Case.
vi. Track record – Capital and Centric has a track record of successfully delivering complex development and regeneration schemes on time and within budget. Recent schemes have included the redevelopment of the Bunker Building located to the rear of the Littlewoods Building. Capital and Centric has also delivered a number of other projects within the City Region including the Lightbox in Birkenhead (benefiting from Regional Growth Fund support) and Tempest in Liverpool City Centre (with ERDF gap funding support).
Value for Money
i. Private / public leverage – public sector investment will directly lever significant private sector investment. It will also contribute to catalysing further investment over the longer term associated with the regeneration of the wider Littlewoods site and potential spill over benefits for adjacent sites (including Liverpool Innovation Park).
ii. No of jobs / Brownfield Land – As set out in the Business Case Review, the BCR for the project is strong and the cost per job compares well to recognised benchmarks. The relatively small contribution to overall proposed Capital Commissioning Framework targets reflects a high (and perhaps unrealistic) level of ambition about the impacts that the Framework may be able to deliver.
Strategic Fit
i. Linkages with the priorities in the framework–the project is providing specialist commercial space, one of the framework priorities agreed previously as part of the Capital Framework.
ii. Support of Local Authority – Liverpool City Council is fully supportive of the project. Capital and Centric has worked closely with the Council (and the Homes and Communities Agency) in developing the proposals and to progress the agreement for the acquisition of the buildings and site.
Page 49 APPRAISAL RECOMMENDATIONS
The independent appraisal of the project is recommending that there is a valid case for the public sector to grant fund this project. This is based on the following:-
a. The project offers a range of economic development and regeneration benefits and provides an excellent fit with the strategic aspirations of the City Region;
b. There are a number of clearly demonstrated market failures which contribute to the viability gap. The case for grant funding to fill this gap can be based on the project’s potential to both create positive, and overcome negative, externalities;
c. The estimated benefits of the project offer strong value for money for the public sector investment. The project is expected to deliver 345 net additional jobs and an annual net additional GVA impact of £26 million;
d. The Business Case clearly demonstrates that there is a viability gap of c£5 million. The size of the viability gap is sensitive to assumptions about the cost of construction and the rental values. Although the Business Case includes a transparent reflection of the uncertainties, the actual cost and revenue assumptions which underpin it have not been independently verified;
e. The commercial arrangements are clearly and appropriately structured and the expected role for the public sector is very clear. All commercial risks will be borne by Capital and Centric; and
f. Although there are always uncertainties about the timescales over which a project will be delivered, the Littlewoods Studios project appears to be in a position to proceed quickly if grant funding is made available.
Although the Outline Business Case provides a strong case to the Combined Authority and LEP to proceed with a grant funding agreement, we recommend that the funding agreement contains the following conditions:-
a. There is a central assumption that the development would not go ahead if the return on the developer’s capital was estimated to be significantly lower than 15%. This means that alternative methods of financing the gap (i.e. debt, equity) are not feasible. This is an important assumption but it cannot be easily verified. Before finalising a grant funding agreement, the Combined Authority and LEP needs to ensure it is satisfied that Capital and Centric would not proceed with the development without the gap funding.
b. As Capital and Centric is proposing to use debt to finance their investment into the project the Combined Authority and LEP should seek confirmation that this is in place and can be readily drawn down, before finalising a grant funding agreement. The Combined Authority and LEP should also review any conditions that might be attached to Capital and Centric’s finance.
c. Development costs and end values are an important element of the estimation of the viability gap. The costs and values seem reasonable and are based on Capital and Centric’s experience of similar sites but the Combined Authority and LEP should commission an independent review of both the costs and values by Page 50 specialist Cost Consultants and valuers before a grant funding agreement is finalised. d. The Combined Authority and LEP should seek assurance from Capital and Centric that no further public sector funding will be required to operate the space and deliver the benefits set out in the Business Case.
It is recommended that any grant funding agreement should include the following measures: a. Scope for an ex-post assessment of the viability gap and mechanisms to allow some or the entire grant to be recovered if there is substantial variation in the viability gap and the developer realises substantially more than 15% return on capital. b. Conditions which ensure that the Combined Authority as Accountable Body will be notified of any proposed disposal of the site within a given period. The Combined Authority should ensure that there is scope to consider any proposals that Capital and Centric make to dispose of the site and include provisions that will enable the Combined Authority to recover all or part of the grant if this is deemed appropriate. c. The extent and nature of public sector involvement in the project and the register of risks should be clearly set out in any agreement and reflect those included in the Business Case. d. Any agreement should include a clear set of delivery milestones and provisions for appropriate action if the project slips.
Page 51 This page is intentionally left blank Agenda Item 7
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authorities Affected All
Exempt/Confidential No
REPORT OF THE LEAD OFFICER: ECONOMIC DEVELOPMENT
UPDATE ON USE OF ESIF FUNDS FOR NORTHERN POWERHOUSE INVESTMENT FUND
1. PURPOSE OF THE REPORT
1.1 The purpose of this report is to update the Combined Authority on the proposed use of £12.5m of Liverpool City Region ERDF Funds in a £400m Northern Powerhouse Investment Fund giving local SMEs access to a range of debt and equity funds to stimulate growth.
2. RECOMMENDATIONS
2.1 It is recommended that the Liverpool City Region Combined Authority:-
a) Endorse the principle of Liverpool City Region ERDF Funds contributing to the Northern Powerhouse Investment Fund provided that these meet the needs of the local business community as referenced in this report and subject to ratification of detailed proposals from British Business Bank by the City Region’s European Structural and Investment Funds Committee; and b) Mandate the LEP to continue to engage with British Business Bank to ensure that detailed proposals meet local business community needs.
3. BACKGROUND
3.1 As part of the extensive consultation on the use of EU 2014-2020 ERDF funds to stimulate Business Growth that took place in 2013, consideration was given to an allocation to a JEREMIE Fund (Joint European Resources for Micro and Medium Enterprises) for the City Region to provide debt and equity funds to SMEs to follow on from the existing programme managed by North West Fund.
3.2 The LEP, on behalf of local partners, then commissioned EKOS to undertake a study into the needs and options for the City Region around Funding for Business Growth consulting widely with local business, Local Authorities and corporate finance providers. The report concluded that the City Region would be best placed pursuing a balanced portfolio of interventions, including investing a sum into a revolving Page 53 JEREMIE fund, investment readiness support, development of a business angel network and assistance to business to access the range of alternative sources of funding emerging on the market.
3.3 From this the ESIF Business Growth Group concluded that circa £12.5m of the EU funds available should be considered for putting into a JEREMIE Fund for the City Region, subject to it meeting the City Region partners requirements for a coherent and joined up approach for funding that recognises the existing landscape.
3.4 The LEP, on the City Region’s behalf and with the ESIF Committee’s endorsement, undertook a series of meetings with North West Fund, DCLG and other North West LEPs on the prospective implementation of these funds in the North West to be match funded with European Investment Bank (EIB Funds) through a NW JEREMIE Fund. In the JEREMIE model, EIB funds are repaid first from returns of capital and interest to the fund. ESIF Funds will be recycled for further rounds of investment.
3.5 However, in September 2015, British Business Bank advised that it was considering pulling together a JEREMIE fund across the Northern Powerhouse geography subject to agreement with each LEP/Combined Authority Area. This was then substantiated in the Autumn Comprehensive Spending Review to involve 10 Northern LEP areas, including all 5 of the North West LEP areas previously covered by the North West Fund.
3.6 The British Business Bank proposal, supported by HM Treasury, involves matching all 10 LEP areas’ ESIF JEREMIE contributions with EIB Funds and adding a further £50m from Treasury (matched with a further £50m EIB) to create a £400m Northern Powerhouse Investment Fund. Treasury has also agreed to provide £6m in grant towards the set up and management costs, which would otherwise have been borne from available funds.
3.7 Whilst ERDF funds will not be ring-fenced by LEP area, Fund Managers will be incentivised to allocate funds on an equitable basis in proportion to the amount contributed from each LEP area. This will be subject to the quality of the deal flow in each area.
3.8 These arrangements deliver a number of positive features, not least the increase in available funds for business in that for the £12.5m Liverpool City Region ESIF fund committed, funds of up to £30m might reasonably be expected to be delivered to business in the City Region during the initial investment period of 6 years with further funds becoming available from returns once EIB funding had been repaid, creating a long term revolving fund.
3.9 It is proposed that the £400m fund will be allocated to a number of fund managers to deliver providing:-
micro finance (loans from £0.025m-£0.100m) debt (loans from £0.100m-£0.750m) early stage technology/innovation (equity from £0.050m to £1m) equity (growth capital from £0.500m to £2m+)
Page 54 3.10 Liverpool City Region has a number of successful existing funds/fund managers in MSIF and Spark Impact. Liverpool City Region LEP has made it clear to British Business Bank that arrangements for promotion of Northern Powerhouse Investment Funds must be aligned and coherent with this local provision and meet the particular needs of business in the City Region and also that Liverpool City Region representatives be involved in fund manager specification, selection and performance monitoring. This is important in order to maximise the effectiveness of all of the Liverpool City Region business finance available both grant and loan funding in a coherent and aligned manner and which will result in the greatest impact on business growth.
4. NEXT STEPS
4.1 A detailed proposal from British Business Bank and DCLG will be considered by the next ESIF Committee on 14 April 2016.
4.2 British Business Bank will start the tendering process in April for a panel of fund managers and they anticipate funds to be available by October 2016.
4.3 In order to maximise the quality of pipeline of businesses for these and other funds in the City Region, a separate Call for Access to Finance, Investment Readiness and Post Investment Management Proposals is proposed and will be considered at the next ESIF Committee on 14 April 2016.
5. RESOURCE IMPLICATION
5.1 There are no direct resource implications on the Combined Authority. Liverpool City Region LEP will continue to engage and represent the Combined Authority in this matter, subject to Combined Authority agreement.
6. RISKS AND MITIGATION
6.1 There is a risk to the City Region that the pipeline of projects will not be sufficient to utilise the level of Liverpool City Region funding that should reasonably be expected. This is being mitigated by the establishment of an EU call as referred to in section 4.3 to enhance the pipeline.
6.2 There is a risk that such funding does not align in a coherent manner with other business finance products. This risk is being mitigated by the involvement of Liverpool City Region representatives in the establishment, design and management of the proposed fund.
7. EQUALITY AND DIVERSITY IMPLICATIONS
7.1 There are no direct equity and diversity implications.
Page 55 8. COMMUNICATION ISSUES
8.1 There are no Combined Authority communication issues.
9. CONCLUSION
9.1 This report has provided the Combined Authority with an update on the development of a Northern Powerhouse loan fund.
GED FITZGERALD Lead Officer: Economic Development
Contact Officer: Mark Basnett, Liverpool City Region LEP (0151 237 3906)
Page 56 Agenda Item 8
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: All
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE LEAD OFFICER: TRANSPORT
LIVERPOOL CITY REGION GROWTH DEAL SCHEMES
1. PURPOSE OF REPORT
The purpose of this report is to update the Combined Authority on the progress of developing the shortlisted Liverpool City Region Transport Schemes and to request approval of the Full Business Case for one scheme to commence delivery in the financial year 2016/17.
2. RECOMMENDATIONS
It is recommended that the Liverpool City Region Combined Authority:-
(a) Note the progress to date on the development of the Liverpool City Region Transport schemes; and (b) Approve the Full Business Case for A565 North Liverpool Key Corridors.
3. BACKGROUND
3.1 Merseytravel, on behalf of the Liverpool City Region, is managing a programme of developing major schemes to take advantage of investment through the Local Growth Fund (LGF). These 14 schemes form a prioritised list of the City Region’s most pressing investment priorities for transport using an agreed shortlisted process set out in the city region Transport Assurance Framework.
3.2 Authorities across the City Region have continued the development of 14 Full Business Cases which address the most urgent transport and highway issues in the Liverpool City Region. These are:-
Page 57
Scheme Sponsor Scheme Name LGF Value (£m) Status Knowsley MBC Access and £5.6m Approved by the Connectivity Combined Authority Improvements to January 2015 Knowsley Industrial Park Knowsley MBC A5300 Knowsley £4.0m Approved by the Expressway Combined Authority January 2015 Merseytravel Newton-le-Willows £14.4m Approved by the Interchange Combined Authority January 2015 Merseytravel Halton Curve £10.4m To be considered by the Combined Authority April 2016 Merseytravel Maghull North £6.2m Full Business Case under development Liverpool City A565 North £13.3m To be considered by Council Liverpool Key the Combined Corridors Authority March 2016 Liverpool City City Centre Strand £5.4m Following Council Corridor discussions with DfT this scheme has been combined with the DfT retained City Centre Connectivity scheme as the two are linked. See below Liverpool City City Centre £33.0m Scheme is a Council Connectivity retained scheme and will be appraised by DfT. Approval will be sought from the Combined Authority following/in line with DfT timescales during 2016 Halton Silver Jubilee Bridge £5.0m Approved by the Maintenance Combined Authority December 2015 St Helens MBC A570 Linkway £3.6m Full Business Case under development St Helens MBC Windle Island £3.8m Approved by the Combined Authority December 2015 Sefton MBC M58 Junction £5.5m Full Business Case Improvements under development Wirral MBC Wirral Dock Bridges £6.7m Funding secured from DfT Highways Maintenance Challenge Fund and was formally withdrawn from this
Page 58 Scheme Sponsor Scheme Name LGF Value (£m) Status process in October 2015 Merseytravel Sustainable £41.4m Approved by the Transport Combined Authority Enhancement April 2015 Package (STEP)
3.3 The Combined Authority approved Full Business Cases for three of these schemes at the Combined Authority Meeting held on the 23 January 2015 – ie Knowsley Industrial Park, A5300 Knowsley Expressway and Newton-le-Willows Interchange. A further scheme was approved at the Combined Authority meeting held on the 17 April 2015 ie Sustainable Transport Enhancement Package (STEP) and these schemes are progressing with delivery. An offer letter and funding agreement to each of the promoting authorities is now in place. Also, in March 2015, Wirral were successful in securing funding from the Department for Transport Highways Maintenance Challenge Fund and have been awarded £6.4m for the Wirral Dock Bridges scheme. Therefore, this scheme was formally withdrawn from the Growth Deal programme in October 2015. At the Combined Authority meeting held on the 15 December 2015, the Combined Authority approved two further schemes – Windle Island and Silver Jubilee Bridge Maintenance. An offer letter and funding agreement has been sent to the promoters and signed by all parties for these two schemes.
3.4 A further Full Business Case has been submitted and is therefore seeking full approval from the Combined Authority. This is the Major Scheme Business Case for A565 North Liverpool Key Corridors.
4. 2016/17 GROWTH DEAL SCHEMES FOR APPROVAL
4.1 There are currently six large transport schemes that have been identified to commence delivery during 2016/17. These are:-
(a) Halton Curve, Merseytravel (b) Maghull North, Merseytravel (c) Silver Jubilee Bridge Maintenance, Halton Council (d) A565 North Liverpool Key Corridors, Liverpool City Council (e) Windle Island, St Helens (f) A570 Corridor, St Helens
4.2 Of the six schemes, two schemes have been approved by the Combined Authority, two are currently preparing final business cases and two schemes have submitted final business cases for consideration by the Combined Authority – A565 North Liverpool Key Corridors and Halton Curve.
4.3 The Full Business Cases for A565 North Liverpool Key Corridors and Halton Curve have been submitted and have been assessed by the Transport Advisory Group’s (TAG) independent advisory consultant, Waterman’s. However, this report is wholly concerned with the A565 North Liverpool Key Corridors business case. The business case for Halton Curve is to be presented to the Combined Authority in April 2016.
Page 59 4.4 The Full Business Case accords with the Department for Transport (DfT) appraisal guidelines. The Benefit Cost Ratio (BCR) for the scheme is set out below:-
Scheme Assessment BCR North Liverpool Key High value for money 4.36 Corridors
4.5 In addition, as part of the detailed scheme approval process, the Combined Authority requires scheme promoters to submit evaluation and monitoring statements and the requirement to monitor and evaluate schemes will be a funding condition. The monitoring and evaluation strategy submitted as part of the business case must follow current DfT guidance. As part of its evaluation exercise, TAG will ensure, aided by Waterman’s that monitoring and evaluation proposals are fit for purpose and accord with DfT guidance and this will form part of the recommendations to the Combined Authority.
4.6 The detailed feedback from the assessment from Waterman’s of the A565 North Liverpool Key Corridors business case is set out in Appendix A but in summary, the business case is well presented, and conforms to WebTAG criteria and has a high value for money scheme.
4.7 Based on the assessment of the Full Business Cases by Waterman’s, the Transport Advisory Group is recommending that the Combined Authority approve the Full Business Case for A565 North Liverpool Key Corridors.
5. RESOURCE IMPLICATIONS
Financial
5.1 The table overleaf sets out the base cost funding profile for A565 North Liverpool Key Corridors, identifying the level of funding being sought and the levels of match funding contributions from the promoting authorities.
5.2 It is also confirmed that the funding contributions are in place and a signed Value for Money Statement from the District’s respective Section 151 Officer has been included in the Full Business Case for the scheme. This is a core criterion in any funding decisions being considered by the Combined Authority. The Value for Money statement has been validated by Waterman’s and TAG is satisfied that the scheme offer value for money to the City Region, based on the Benefit Cost Ration (BCR).
A565 North Liverpool Key Corridors
2015/16 2016/17 2017/18 2018/19 Total LGF funding £0 £5,944,529 £6,847,333 £508,137 £13,300,000 required Local £508,137 £0 £1,653,451 £6,183,625 £8,345,211 contribution Annual Totals £508,137 £5,944,529 £8,500,783 £6,691,761 £21,645,211
5.3 Human Resources
Page 60 None.
5.4 Physical Assets
None.
5.5 Information Technology
None.
6. RISK AND MITIGATION
There is a risk that without the approval of the Major Scheme Business Cases for the A565 North Liverpool Key Corridors, the promoting authority will not be in a position to commence delivery of the scheme with any confidence during 2016/17 and the consequent reputational risk to the City Region’s ability to deliver large transport schemes.
7. EQUALITY AND DIVERSITY IMPLICATIONS
7.1 As part of developing a Full Business Case, scheme promoters must give due consideration to the equality and diversity implications of their scheme and what mitigation measures, if any, will be required to ensure that the implementation of the scheme does not have any negative implications on those who have protected characteristics.
7.2 No concerns were raised in the assessment of this Full Business Case.
Page 61 8. COMMUNICATION ISSUES
8.1 A detailed technical report into the Independent Assessment of the business cases undertaken by Waterman’s on behalf of the Combined Authority has been discussed in the Transport Advisory Group; therefore, all directly involved Liverpool City Region partners have been involved in agreeing the recommendations put forward.
8.2 Once a decision is reached by the Combined Authority all business cases are published on the Merseytravel website in accordance with the Transport Assurance Framework.
8.3 A communications plan and protocol for the Local Growth Fund (LGF) Transport Schemes has been developed by the LEP with support from Merseytravel, the districts and BIS to ensure that the City Region maximises profile for the schemes
9. CONCLUSION
Based on the advice of the Independent Assessor (Waterman’s), TAG recommends to the Combined Authority the approval of the Major Scheme Business Case for A565 North Liverpool Key Corridors to enable the scheme promoter to draw down Local Growth Fund (LGF) to commence delivery of schemes to support the ambitions of the Liverpool City Region.
FRANK ROGERS Lead Officer: Transport
Contact Officers: John Smith, Merseytravel (0151 330 1307) Barbara Wade, Merseytravel (0151 330 1852) Liz Carridge, Merseytravel (0151 330 1151)
Appendices: Appendix A – Liverpool City Region Major Schemes Full Business Case Assessment
Background Documents: None
Page 62 Appendix A
Liverpool City Region Major Schemes Full Business Case Assessment
A565 North Liverpool Key Corridors
Introduction
The purpose of this report is to present to the Transport Advisory Group (TAG) the findings of the Major Scheme Business Case assessments carried out for the Outline Business Cases and Full Business Cases by Waterman’s for the North Liverpool Key Corridors (NLKC) major scheme.
This report further set out recommendations, based on the formal assessment for TAG to consider before making any final recommendations to the Combined Authority (CA).
Background
Headline Description
The North Liverpool Corridor (NLKC) improvement scheme is a package of measures aimed at facilitating proposed development and unlocking aspirational development in the north Liverpool area. At the same time the scheme seeks to address the causes of vehicle based congestion along the A565 corridor and improve east-west linkages for non-motorised users reducing the existing severance caused by the A565 to allow better access to the proposed regeneration and development areas.
The A565 is the key route through the north of Liverpool, the Port of Liverpool and into Sefton and its upgrade has been a long standing aspiration for the Liverpool City Region. North Liverpool holds the most potential to create considerable employment. The corridor is a fundamental link to a stream of proposed development and investment plans.
The 'Atlantic Avenue' initiative which began in 1994 intended to upgrade the corridor from a single carriageway to a dual carriageway. The essential and integrated improvements would unlock the potential of the strategically important corridor. Acting as a catalyst and enabler for economic growth, the scheme would also improve pedestrian facilities, reduce congestion, improve local access and east-west movements, and strengthen connections between Liverpool and Sefton. The scheme is also required to facilitate the Liverpool Waters, North Liverpool Regeneration and SuperPort developments. The first four stages of the 'Atlantic Avenue' initiative have been built and this North Liverpool Key Corridor Improvement Scheme seeks to complete the dual carriageway route.
1 Page 63 The Scheme
The NLKC scheme comprises five main elements, these are as follows:
A565 Great Howard Street highway improvements (Phase 5 of Atlantic Avenue) – converting the current sections of single carriageway to dual carriageway with associated junction improvements and changes to right turns to facilitate improved traffic flow; A565 Derby Road highway improvements (Phase 6 of Atlantic Avenue) – applying the same improvements mentioned above, to create a complete dual carriageway along the A565 between Sefton and Liverpool; King Edward Street junction improvement - Upgrade of the King Edward Street / Leeds Street junction to better accommodate both motorised and non- motorised users; Upgrade and improvement of Regent Road to include north-south segregated cycleway and the southern section of Regent Road to be converted from a through route to a local access road; and Upgrade of connections between A565 and Regent Road to include cycle facilities on Paisley Street, Oil Street, Saltney Street, Walter Street and Blackstone Street.
Table 1: North Liverpool Key Corridors Cost Profile
2015/16 2016/17 2017/18 2018/19 Total Major scheme £0 £5,944,529 £6,847,333 £508,137 £13,300,000 funding required Local £508,137 £0 £1,653,451 £6,183,625 £8,345,211 contribution Annual Totals £508,137 £5,944,529 £8,500,783 £6,691,761 £21,645,211
Business Case Assessment – Summary Headlines
Set out below is a summary of the key headlines from the assessment of the Outline Business Case (OBC) and Full Business Case (FBC) for the NLKC scheme. A more detailed breakdown of identified issues for the OBC’s is set out in Appendix 1 and the detailed assessment of the FBC’s is set out in Appendix 2.
In assessing business cases, Waterman’s are required to consider the following:
Business Cases accord with DfT requirements and are therefore webTAG compliant; Business Cases are proportionate to the size of the scheme; and Business Cases are sufficiently robust and offer the best value for money to help meet the ambitions of the CA.
2 Page 64 Outline Business Case
Following submission of the Options Appraisal Report, the OBC focusses on a detailed assessment of the options presented to find the best solution. Full economic and financial appraisals take place during the OBC (building up the economic and financial cases), a preferred option is selected and where relevant, preparations are made for the potential contract through the development of the commercial case. The arrangements required to ensure successful delivery of the scheme are set out in the management case. In summary, the OBC is used to:
Align the progress of the project towards achieving city region objectives; Confirm the strategic fit and the case for change; Set out a detailed assessment of the options to find the preferred solution; Refine the investment/intervention proposal; and Provide details of the schemes overall balance of benefits and costs against objectives.
The assessment of the OBC by Waterman’s did highlight some issues primarily with the Commercial and Management cases. However, these issues were resolved following discussion between Waterman’s and the scheme promoters which will be fully reflected at the Full Business Case stage. Appendix 1 highlights those areas that required further information to be addressed during the development of the Full Business Case.
Full Business Case
Using the feedback from the assessment of the OBC, scheme promoters are required to complete a FBC for each of their schemes. The FBC’s will be assessed by Waterman’s and TAG will consider each FBC assessment and make recommendations to the Combined Authority as to whether business cases should be approved and a scheme therefore proceeds to implementation. The FBC should:
Provide details of the schemes overall balance of benefits and costs against objectives and set out plans for monitoring and evaluating these benefits when required; Confirm the strategic fit and the case for change; Provide the business and financial rationale for the scheme; Detail the proposed contract management resourcing, processes and benefits realisation plans; Show how the return would justify the overall investment of time and money; and Continue to be used to align the progress of the scheme towards achieving Combined Authority objectives.
The detailed feedback from the assessment by Waterman’s of the FBC is set out in Appendix 2. The BCR for the scheme shows that the NLKC scheme offers very high value for money with a BCR of 4.36.
3 Page 65 There are no major deficiencies with the FBC. This has been shared with the scheme promoter.
Topic Commentary What is Justification included in Full Business Case Strategic Case No issues identified
Economic Case No issues identified
Financial Case No issues identified
Commercial No issues identified Case Management No issues identified Case
Conclusions
Following the assessment of the FBC’s, it is the view of the appointed independent assessor, that the business cases for NLKC is generally well laid out, easy to review and in line with the requirements of WebTAG. Waterman’s consider therefore that the scheme can be recommended by TAG to the CA for approval.
4 Page 66 Appendix 1 - Outline Business Case Assessment
Any issues identified in the assessment of the Outline Business Case for NLKC to be addressed in the Full Business Case are summarised below.
The Strategic Case
Element Commentary Business Strategy Strategic aims and responsibilities have been identified in the OBC. Problem Lack of analysis in relation to current behaviour and attitudes of Identification the population and environmental issues. Lack of information on future problems and justification of how the scheme will help overcome the problems provided. Impact of not The consequences of failure to progress the A565 scheme have changing been identified but not discussed in detail. No reference has been made to environmental and longer term impacts. Objectives The primary objective is clearly identified and with measurable definitions of success. The first secondary objective is defined however it is not clear how the objective was derived and how success will be defined. The objective lacks detail. The 2nd secondary objective is defined however it is not clear how the objective was derived and how success will be defined. The objective lacks detail. The 3rd secondary objective is defined and links to relevant LTP objectives however it is not clear how the objective was derived and how success will be defined and measured. The objective lacks detail. Measures for Linkages between identified problems, outputs, outcomes, wider Success impacts and measures of success are evident but lacks detail. Scope Scope of scheme and relevant parameters clearly identified including what is outside of the scope. Constraints Scheme constraints have been discussed however more detail could be provided. Interdependencies Interdependencies are referenced in Table 2.1 however no further details are provided. Reference is only made to synergy with other schemes in 2.16 Stakeholders Consultation to date is limited and no evidence of support for the scheme is provided. No reference to Management Case provided. Lack of detail on sifting and EAST. Options/Scenarios options for do nothing, do minimum and two do something options are provided.
5 Page 67 The Economic Case
Element Commentary Introduction Introduction has been updated outlining the work carried out in developing the Economic Case for the scheme. Options Appraised Economic Appraisal Report contains details of the options considered. Assumptions Traffic modelling appraisal period, modelled years & traffic growth assumptions are reliable and consistent with the Mersey Travel guidelines. No annualisation factors. Sensitivity and Risk Section 4.5 of the OBC document provides details of the profile Quantified Risk Assessment (QRA). Appraisal Summary Relevant economic impacts have been assessed as indicated in Table Appendix C (Economic Impact Assessment Report) and the completed Transport Economic Efficiency (TEE) table included in Appendix E to the OBC and demonstrate an acceptable VfM. The OBC includes detailed assessments for noise, air quality, landscape, townscape, historic resources or biodiversity. It is stated that the scheme will have the greatest beneficial impact on physical activity levels, journey quality, security levels, access to services and severance, accidents. However impacts on commuting and reliability impact on commuting and other users have not been detailed. BCR has been calculated for preferred scheme and low cost alternative. Additional information on any modifications to improve BCR would be beneficial. Value for Money BCR has been calculated for preferred scheme and low cost Statement alternative. Additional information on any modifications to improve BCR would be beneficial.
The Financial Case
Element Commentary Introduction OBC sets out methodology and assumptions underlying the Financial Case Costs Base costs are set for highway works, land, prepartation and supervision. Maintenance costs may not be applicable Likelihood of the 4 identified key risks occurring are very high & potential % cost risk figure of 7% has been applied Optimism bias correctly calculated for stage of Scheme. Budgets/ Funding Split of funding between Local Growth Fund and Highways Cover Investment Fund. Lack of breakdown of costs by year No alternative funding sources proposed. Letter from Section 151 Officer for Liverpool City Council included in Appendix K.
6 Page 68 The Commercial Case
Element Commentary Introduction Introduction to Commercial Case included in Table 5.1 pg 78 Output based No specification of outputs and outcomes is provided specification Procurement The scheme construction will be procured using one of a Strategy number of proven options available to the scheme promoters. Options are discussed with decision to be made in the future Sourcing Options Sourcing options for the provision of services are outlined but decision on preferred option still to be taken. Payment Payment mechanisms are outlined however details on possible Mechanisms performance incentives are missing Pricing framework No description of incentives, deductions or performance targets and charging mechanisms Risk allocation and Lack of detail on risk allocation and potential for transfer transfer Contract length Few details on contract length & key contractual clauses are outlined. The OBC states 'Contract length will marry the construction period and will be revised accordingly' Contract Almost no information on contract management is provided. ' management Develop the procurement timeline through to contract closure' is identified as one of the next steps
The Management Case
Element Commentary Introduction The Management Case introduction is included. Evidence of similar Projects listed however links to the current project could be projects more clearly demonstrated. Programme/Project No mention of any dependencies (or not) for external projects dependencies LCR Strategic Transport Governance together with Roles & Responsibilities are fully covered. Governance, LCR governance & roles & responsibilities are covered. LHA organisational and Governance is included, roles & responsibilities are not covered structural roles in detail . Programme/project Scheme delivery programme included in Appendix M - no critical plan path included Assurance and Assurance Plan and Review process outlined but not detailed, approvals plan particularly in relation to goals. OBC indicates consultation for the scheme and details of those Communications to be consulted are provided however future consultation and stakeholder strategy and schedule need to be further defined. No details of management consultation for general public Programme/project Elements of reporting arrangements described reporting Risk management Risk Management Strategy lacks some detail of risk allocation
7 Page 69 Element Commentary strategy and risk reporting procedure. Benefits realisation Benefits realisation plan is fully outlined plan Monitoring and evaluation methodology has been described. Monitoring and evaluation process will include traffic surveys Monitoring and and route user surveys, however no details on costs have been Evaluation provided. Summary of the overall approach for project management is Options adequate but lacks detail
8 Page 70 Appendix 2 - Full Business Case Assessment
Strategic Case
Element Commentary Business strategy Strategic aims and responsibilities have been identified in the FBC. Problem Existing problems are identified and details provided however identification some lack of analysis in relation to current behaviour and attitudes of the population issues. Details regarding future problems are included however a greater level of detail could be provided. Impact of not Details for the impact of not changing and the longerer term changing strategy are provided. Scheme objectives The primary objective is clearly identified and with measurable definitions of success.
The secondary objective is defined however it is not clear how the objective was derived and how success will be defined. The objective lacks detail no additional information has been provided in the FBC.
The secondary objective is defined however it is not clear how the objective was derived and how success will be defined. The objective lacks detail no additional information has been provided in the FBC. Measures for Linkages between identified problems, outputs, outcomes, success wider impacts and measures of success are evident but lacks detail. Scope Scope of scheme and relevant parameters clearly identified including what is outside of the scope. Constraints Constraints are discussed however more details could be provided especially on managerial constraints. Interdependencies Details of interdependencies have been provided. Stakeholders Evidence of consultation to date and evidence of support for the scheme is provided. Methods for future consultation are outlined. Reference to management case not included. Options/scenarios Derivation and assessment of 'schemes partially discussed and evidenced. Detailed OAR provided.
Economic Case
Element Commentary Introduction Introduction has been updated from the OBC outlining the work carried out in developing the Economic Case for the scheme. Options A list of options is included and has not changed from the OBC appraised
9 Page 71 Assumptions Traffic modelling appraisal period, modelled years & traffic growth assumptions are reliable and consistent with the Mersey Travel guidelines. No annualisation factors. Sensitivity and Section 9.4 of the FBC document provides details of the Quantified risk profile Risk Assessment (QRA).
Relevant economic impacts have been assessed as indicated in Appendix C (Economic Impact Assessment Report) and the completed Transport Economic Efficiency (TEE) table included in Appendix E to the OBC and demonstrate an acceptable VfM & the appraisal summary table Appendix H. Appraisal The OBC includes detailed assessments for noise, air quality, summary table greenhouse gases, landscape, townscape, historic resources, biodiversity and the water environment.
It is stated that the scheme will have the greatest beneficial impact on physical activity levels, journey quality, security levels, access to services and severance/accidents. However impacts on commuting and reliability impact on commuting and other users have not been detailed.
Optimism bias of 15% applied and small decrease in indirect tax benefits. Value for BCR has been calculated for preferred scheme and low cost Money alternative. statement
Financial Case
Element Commentary Introduction FBC sets out methodology and assumptions underlying the Financial Case. Scheme costs Costs were previously £18.8m now costs listed as £18.3m however maintenance costs are still missing.
Likelihood of the 4 identified key risks occurring are very high & potential % cost risk figure of 7% has been applied.
Optimism bias correctly calculated for stage of Scheme. Budgets/ Split of funding between Local Growth Fund and Highways funding cover Investment Fund. Breakdown of costs by year has been provided. No alternative funding sources proposed.
Letter from Section 151 Officer for Liverpool City Council included in Appendix K. Does not include details for funding overspends, but text of FBC includes confirmation of Memorandum of Understanding.
10 Page 72 Commercial Case
Element Commentary Introduction Introduction to Commercial Case included Output based The document refers to 'Outputs and Outcomes of the scheme are specification presented in Section 10.8.2. These outputs and outcomes will be reviewed as part of the planned Business Case Review to be held prior to the full business case submission.' as per the OBC. No additional information has been provided. Procurement Options for the scheme procurement are discussed and decision strategy methodology is outlined for choosing the preferred option. Sourcing Sourcing options for the provision of services are outlined & the options decision on preferred option is provided. Payment Payment mechanisms are outlined and stated that performance mechanisms incentives are not applicable due to relationship. Pricing Procurement and payment mechanisms have been identified. framework and Performance targets not applicable. However no deductions have charging been identified or confirmed. mechanisms Risk allocation Appendix M provides comprehensive details for risk allocation and and transfer transfer. Contract length Details of contract length and contractual clauses are limited. Contract Details are provided regarding the timescales and management of management the project. However lack of detail of additional support during the roll-out/closure is provided.
Management Case
Element Commentary Introduction An introduction to the Management Case is provided. Evidence of Projects listed however links to the current project could be more similar projects clearly demonstrated. Programme/ The North Liverpool Key Corridor (NLKC) scheme has a direct project link and dependency on the Challenge Bridge Fund scheme dependencies which will modify a key Highway Structure over which the A565 passes and which will need to be undertaken to allow the NLKC scheme to be delivered. Governance, LCR Strategic Transport Governance together with Roles & organisational Responsibilities are fully covered. and structural LHA Governance together with roles and responsibilties are roles covered. Programme/ A detailed scheme delivery programme is included in Appendix L. project plan Assurance and Assurance Plan and Review process outlined . approvals plan Communications Details of methods of consultation are outlined however almost no and stakeholder details of attitudes from consultation to date have been provided. management
11 Page 73 Element Commentary FBC indicates consultation for the scheme and details of those to be consulted inlcuding the strategy and schedule. Programme/ References to reporting are partially made, however details are project reporting lacking. Key issues for Partial coverage of delivery issues implementation Partial coverage of implementation issues Contract Contract arrangements have been confirmed. management Risk Risk management strategy lacks detail of who has authority to management allocate resources. strategy Benefits Benefits realisation plan is fully outlined realisation plan Monitoring and Monitoring and evaluation methodology has been described in evaluation detail, additional information has been added since the OBC.
Monitoring and evaluation process will include journey time and traffic surveys, collision data analysis, non motorised user surveys, air quality and noise surveys however no details on costs have been provided but the FBC states 'all costs associated with future monitoring will be covered by Liverpool City Council and Sefton Borough Council' Options Summary of the overall approach for project management is adequate but lacks detail
12 Page 74 Agenda Item 9
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: All
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE LEAD OFFICER: EMPLOYMENT AND SKILLS
AREA BASED REVIEW
1. PURPOSE
1.1 The purpose of this report is to inform the Combined Authority of the progress made in the preparations for the Area Based Review commencing in April 2016. This includes the feedback on the initial consultations with stakeholders on the scope and key criteria for the Review.
2. RECOMMENDATIONS
2.1 Liverpool City Region Combined Authority are recommended to:-
a) Note the imminent notification of the start of the Liverpool City Region Area Based Review in April 2016 as per paragraph 3.7; b) Agree the recommendation at paragraph 5.6.1 for the nomination of the Steering Group Chair; c) Agree to set up an Advisory Group as per paragraph 5.6.2 and delegate authority to the Lead Officer: Employment and Skills to commission and appoint an independent skills expert to the Advisory Group; d) Note the headline outcomes of the consultation with stakeholders on the scope and key criteria for the review as set out at section 6; and e) Agree the final scope and key criteria as recommended in paragraph 6.6.
3. BACKGROUND
3.1 The creation of a strong economy, that allows the Liverpool City Region to compete in today’s challenging global market, can only be achieved by continuing targeted investment in employment, learning and skills, together with the promotion of a vibrant employment market and a strong culture of entrepreneurship. There is a clear link between skills levels and qualifications and the potential for increasing business growth and productivity. These are also a key factor in any decisions investors would make in relocating to or remaining within the Liverpool City Region.
Page 75
3.2 The Devolution Agreement gives the Liverpool City Region more local decision making powers and responsibility over skills provision and employment support, including full devolution of the Adult Education Budget (previously known as the Adult Skills Budget) from 2018/19. In the role of commissioner for these funds the Combined Authority will have direct control over what the funding delivers.
3.3 A key piece of work in support of the devolution of the Adult Education Budget is responsibility for chairing an Area Based Review of post-16 Provision to start in April 2016. The Area Based Review process forms part of the national reforms to the post-16 education sector, with the aim of raising productivity and economic growth. The Review will help the Liverpool City Region to establish the best institutional structures to offer high quality provision based on current and future needs of learners and employers within the local area.
3.4 The purpose of the Area Based Review process is to deliver:-
Institutions which are financially viable, sustainable, resilient and efficient, and deliver maximum value for public investment; A skills offer that meets Liverpool City Region’s educational and economic needs; Local providers with strong reputations and greater specialisation; Sufficient access to high quality and relevant education and training for all; and Provision which is well equipped to respond to the reform and expansion of the apprenticeship programme.
3.5 The role of the Chair is to be independent from the providers involved in the Review. In those areas with an agreed devolution deal and where the Combined Authority is taking a leading role, it is expected by Government that the Chair will be a representative of the Combined Authority.
3.6 The Area Based Review is a national process so there is an established approach to conducting the Review itself and the role and responsibilities of those participating. Since the last report to the Combined Authority in February 2016 more details on the process have been published by Government (link here) and are set out in brief in Section 4 of this report.
3.7 Formal notification from the Joint Area Review Delivery Unit confirming that the Liverpool City Region Area Based Review will commence in April 2016 has now been received.
4. AREA BASED REVIEW PROCESS
4.1 Prior to the April 2016 start date for the Area Based Review there will be a pre- meeting with the City Region’s nominated manager to agree as a priority roles and responsibilities, data sources to inform the evidence base and the approach to stakeholder consultation. The Review team will also be notified of the Combined Authority’s appointed Chair, the scope and local criteria to be considered as part of the Review, subject to Combined Authority agreement of the recommendations set out at sections 5 and 6 of this report.
Page 76
4.2 Each Review will be led by a local area Steering Group composed of a range of stakeholders within the area. Members will include the following:-
Chairs of governors of each institution supported by Principals or Chief Executives; FE and Sixth Form College Commissioners; Local Authorities; Local Enterprise Partnership; Skills Funding Agency and Education Funding Agency; Regional Schools Commissioner; and Representatives from the Department for Business Innovation and Skills and the Department for Education (either through or alongside the Funding Agencies).
4.3 The Review process will be guided by the following principles:-
Commitment to collaboration, taking account of the views of learners and employers; Consider potential new structures and teaching models including new technology; Focus on quality improvement across the area and maintaining provision for disabled students; and Willingness to change for the greater good, irrespective of vested interests and personal preferences.
4.4 The Review itself will follow a set structure of 5 local Steering Group meetings, each to consider a different aspect of the review as follows:-
Background to the review, demand for skills; The curriculum / specialisation; The college estate and shared services; Options appraisal; and Recommendations and the way forward. 4.5 The Steering Group will call on wider expertise in curriculum and financial matters, as well as experts in areas such as special educational needs and learning disabilities. The above stages will be supported by College visits, data analysis and stakeholder consultations which are designed to take account of:-
Future educational and economic needs using local labour market information and the data available about learners and institutions; Review options for the whole area; and Sound financial planning to ensure best area-wide use of resources and discharging of any debt to secure long term financial sustainability.
4.6 The Review process is designed to flesh out options which may for example include appraisal of the following:-
Rationalisation of provision; Mergers/federations/alternative structures; Sixth form college converts to academy; Shared back office functions; Better use of estates;
Page 77
Agreements as to affordable levels of service; Greater degrees of specialisation; Apprenticeship units or companies; and New Institutes of Technology.
4.7 At the conclusion of the Review recommendations are expected to be made by the Steering Group but it will be for the governing bodies of each individual institution to decide whether to accept the Review’s recommendations, reflecting their status as independent bodies.
4.8 However, a Governing Body will need to be able to justify why any recommendations put forward by the Steering Group are not to be taken forward. If this justification is not accepted this may impact negatively on the funding allocations the institution receive from the Funding Agencies and ultimately once the Adult Education Budget is devolved in 2018/19 the Combined Authority.
5. LIVERPOOL CITY REGION RECOMMENDED APPROACH
5.1 The Liverpool City Region approaches the Area Based Review from a position of strength. It has a robust employment and skills strategy, agreed skills for growth priorities and a suite of sector skills for growth agreements that have been developed in partnership with employers and learning providers. The strategic governance arrangements through the Combined Authority and Local Enterprise Partnership are well established and include representation and active collaboration from the FE sector.
Role of the Chair
5.2 As the Area Based Review process is conducted on a nationally set framework with a very clear policy drive towards the financial stability of colleges it will be important that the Steering Group takes a visionary approach, thinking strategically about options for the benefit of the Liverpool City Region area as a whole matched to local economic and educational needs and priorities for the benefit of learners and employers.
5.3 The role of the Chair in this instance is critical to promote a long term strategic view and commitment to collaboration. Knowledge of the City Region’s economic and skills priorities is essential alongside a willingness to consider and judge objectively a range of structural options to assess which can deliver most effectively across a wider scope of post-16 provision beyond what is offered by the General FE and Sixth Form Colleges in scope.
Role of Participants
5.4 The Steering Group membership as set out at paragraph 4.1 will result in a large group, many of whom will have clear vested interests and personal preferences in the outcome. It will be essential that this group is challenged to consider options with an open mind. The key participants likely to have a more objective view of the process are:-
Page 78
The Further Education and Sixth Form Commissioners who are responsible for ensuring consistency, quality and neutrality across all Review areas, ensuring boundary issues are addressed appropriately and ensuring recommendations are clear and deliverable.
The Regional Schools Commissioner will support the engagement with post- 16 academies, free schools and University Technology College’s (UTC’s) at the beginning and end of the process.
Local Authorities will contribute to the wider economic and educational analysis of the future needs of the area by setting out a vision for the education and skills system and the role of Colleges and other post 16 providers within this wider strategy. From a City Region perspective it will be particularly important that local Directors of Children’s Services are engaged in the process to ensure that alongside the Regional Schools Commissioner they can take account of the evidence and analysis to inform future decision making about post-16 provision in academies, free schools and UTC’s.
Other Participants - the LEP and Funding Agencies/BIS/DfE roles are primarily linked to developing a strong evidence base for the review and facilitating access to resources including data and impact evaluation.
5.5 Clearly a considerable amount of work will be required outside of the Steering Group meetings to call on evidence and progress the Review. This will require dedicated resources with experience of the skills system from within the Liverpool City Region as well as officials from the Joint Area Review Delivery Unit.
5.6 The Combined Authority is therefore recommended to take the following actions in preparation for the Area Based Review:-
5.6.1 Nomination of Steering Group Chair
Taking into account the leading role designated to the Combined Authority, it is recommended that the Area Review is best served by appointing the Combined Authority’s Portfolio Holder for Employment and Skills to the position of Steering Group Chair. This will promote a strong commitment to collaboration and provide a foundation for more effective joint working post Review, including the development of local outcomes agreements and greater devolution of responsibility for adult skills. It will also provide democratic accountability to the conduct of the Review, ensure a strong connection to the wider strategic work of the Combined Authority and maintain a City Region wide view throughout the Review process.
5.6.2 Advisory Group
To establish a small Advisory Group to assist the Chair in his role, and for this Group to be made up of the Lead Officer: Employment and Skills, other senior officers with relevant expertise, including a LEP representative and a member of the Joint Area Review Delivery Unit. The Advisory Group would be supported by the commissioning of additional external independent resources as required. It is recommended that the selection and appointment of this specialist resource is delegated to the Lead Officer: Employment and Skills.
Page 79
6. SCOPE AND KEY LOCAL CRITERIA
6.1 At the meeting in February 2016 the Combined Authority reviewed a draft scope and key local criteria for conducting the Review and requested a consultation exercise be carried out with stakeholders to inform the final content.
6.2 The consultation process has included an event for the sector on 29 February 2016, with over 50 learning providers represented, including FE College Principals and members of their governing boards, Local Authority community learning providers and independent training providers.
6.3 Meetings with the City Region’s Employment and Skills Portfolio Holders, the Employment and Skills Board and City Region Directors of Children’s Services have also taken place to consider the scope and raise awareness of the Review process.
6.4 Feedback from this initial consultation exercise has been very supportive of a wider scope of post 16-provision to be included in the gathering of evidence and analysis phase for the Review. This will then be used to enable (if appropriate) an extended set of options for appraisal for wider post-16 changes to be considered within the Review recommendations. Any options proposed will be for the Directors of Children’s Services and RSC to consider as evidence within future plans for academies, free schools and UTC’s.
6.5 Some of the key messages from the consultation on the key criteria are as follows:-
Reforms to apprenticeships including employer routed funding and the levy will need to be considered to ensure that there will be a wide enough vocational offer to increase volumes and maximize the levy; Important within the Review process itself to ensure meaningful consultation with learners via student unions; Characteristics of the learners need to be considered e.g. many unemployed people or those with health conditions need access to very local offers; Review needs to take account of ensuring an offer for employability skills within key employment sectors and not just technical skills in growth/priority sectors; Progression routes within qualifications on offer should be considered as well as loans provision; Positive support for the inclusion of HEI provision and developing progression pathways and Degree apprenticeships; and Employers should be engaged throughout the Review.
6.6 The draft scope and key local criteria have been revised to reflect the feedback received and are now presented as a final version at Appendix One and Appendix Two for sign off by the Combined Authority.
6.7 In addition, in considering the options from the Area Based Review, the Liverpool City Region may also want to factor in as we move forward the potential cumulative impact from a range of decisions on changes to public services in an area e.g. Local Authority, Health, Courts and Jobcentre Plus.
Page 80
7. RESOURCE IMPLICATIONS
7.1 Financial There are financial implications associated with the recommendations in this report linked to the commissioning of some additional expertise and this will need to be considered within the overall approach to financing additional resources to ensure the Devolution Agreement is effectively implemented.
7.2 Human Resources Engaging with the Area Based Review to the extent that we are anticipating will require considerable resources and will require specialist expertise. The setting up of an Advisory Group and the commissioning of some additional independent expertise will be required.
7.3 Physical Assets The recommendations within this report have no bearing upon any land/ buildings/other physical assets owned by the Combined Authority or its constituent Councils.
7.4 Information Technology The recommendations in this report will not have any direct impact upon the use of IT, or need for IT support.
8. RISKS AND MITIGATION
8.1 There is potential risk of FE Colleges trying to pre-empt the outcome of the Liverpool City Region Area Based Review by commissioning their own reviews of structural options prior to April 2016 which could remove options the Area Review would want to consider. This presents the following risks:-
Individual reviews focusing on a tightly defined geographical or sectoral area, with feedback gathered from stakeholders on a different footprint which could be counterproductive to the wider Area Based Review consultation; College Boards being presented with recommendations and outcomes that are in the best interest of their institutions rather than for the benefit of learners and employers across the City Region as a whole; and It may be harder to gain agreement on implementing the outcomes of the City Region Review (a key part of the process) if College Boards have already published their plans to learners and stakeholders which have not taken account of the wider scope of post-16 provision as per the Liverpool City Region intention.
8.2 This will be mitigated by ensuring there is clear engagement of FE Colleges and providers in the development process and ongoing via the Steering Group. Consulting and taking soundings from Colleges at the outset and then throughout the Review process will help to focus efforts on a City Region wide approach.
Page 81
9. EQUALITY AND DIVERSITY IMPLICATIONS
9.1 There are no direct issues as a result of the recommendations set out within this report.
10. COMMUNICATION ISSUES
10.1 The scope and key criteria has been shared with key stakeholders (including Councils, Colleges and business networks) for input and a series of events have been held to raise awareness of the Review process. There will be a structured approach to consultation and communications within the Review process itself and the opportunity to provide input will be communicated through the usual channels.
11. CONCLUSION
11.1 This report has informed the Combined Authority of the Area Based Review process, highlighted the roles and responsibilities of participants and made recommendations for the nomination of a Steering Group Chair. The report also includes the final version of scope and key criteria for the review for sign off alongside recommendations to set up an Advisory Group.
MIKE HARDEN Lead Officer: Employment and Skills
Contact Officer: Sue Jarvis, Knowsley Council (0151 443 3559)
Appendices: Appendix One – Liverpool City Region Area Based Review: Scope Appendix Two – Liverpool City Region Area Based Review: Key Local Criteria
Page 82
APPENDIX ONE
LIVERPOOL CITY REGION AREA BASED REVIEW: SCOPE
The Area Based Review process will cover by way of the consideration of options for structural change the following FE and Sixth Form Colleges, although announcements made as part of the Autumn Statement has given the opportunity for the Sixth Form Colleges, through the post-16 review process, to establish themselves as 16-19 Academies if this is an appropriate option within the review.
General FE Colleges Sixth Form Colleges Liverpool City College Carmel College Hugh Baird College King George V College Southport College Birkenhead Sixth Form College Knowsley College St Helens College Wirral Metropolitan College Riverside College
Other providers of post-16 provision in terms of the availability and quality of wider 16+ provision including independent training providers, School Sixth Forms and HEIs will be considered during the analysis phase by the Liverpool City Region.
This will include analysis of:-
Apprenticeship provision delivered outside of FE Colleges; Out of area provision – focused on specialised provision used by Liverpool City Region employers/learners; Outcomes of Other Area Reviews – e.g. Cheshire and Warrington (Wave 2) and Lancashire (Wave 3) where they impact on travel to learn patterns; Progression routes from 14 and options for vocational education; HEI provision; and School Sixth Forms – vocational provision delivered via this route.
Page 83
APPENDIX TWO
LIVERPOOL CITY REGION AREA BASED REVIEW: KEY LOCAL CRITERIA
1) An offer that meets the area’s educational and economic needs
Liverpool City Region criteria:- Proposals using Labour Market Intelligence and future skills requirements that better delivers the higher level and technical skills required by the City Region’s growth sectors Proposals with a strong role for employers and learners both in shaping the curriculum to meet future needs or supporting delivery – embedding work experience, vocational education, enterprise skills and knowledge transfer Provision which integrates timely, quality Careers Education, Information, Advice and Guidance linking to the emergent Liverpool City Region Careers Hub Proposals which are focused on outcomes, not only qualifications, reducing the number of NEETs and increasing English/Maths attainment by age 19 as well as employment opportunities Proposals that support an integrated approach to skills/employment/provision Proposals that support innovation, the development of new qualifications and the reforms already in train of qualifications and apprenticeship standards.
2) Sufficient access to high quality and relevant education training for all
Liverpool City Region criteria:- Providing choices and access to Level 2/3 and below provision (including English and Maths) within each area of the City Region (a presence in each district), recognising travel to learn patterns Proposals with clear pathways for progression to further/higher education or into employment and to develop higher level skills to drive up productivity Strong collaboration between institutions and employers to ensure there are seamless progression routes for people across geographies, linking in particular with schools around vocational education options Strong academic post 16 offer, distinct from general FE, with more young people taking and succeeding in STEM subjects at Level 3 Ensuring that there is sufficient provision for adults and learners with Special Educational Needs and Disabilities
3) Providers with strong reputations and greater specialisation
Liverpool City Region Criteria:- Provision of specialist higher level provision, working closely with employers, at specific sites Remove unnecessary duplication in provision (both at local level and across the City Region specifically for level 3+) Proposals built on the existing strengths of institutions as demonstrated through volumes delivered, success rates, Ofsted grading and learner/employer ratings Greater specialisation focused on level 3+ provision including the opportunity for one or more Institutes of Technology in the City Region
Page 84
Focus on growing provision in key City Region sectors where skills shortages are emerging and impacting on growth including opportunities for Degree Apprenticeships. Demonstrating and delivering clearer progression routes to further education or skilled employment
4) Provision which reflects changes in government funding priorities and future demand
Liverpool City Region Criteria:- Proposals that deliver significantly more 16-18 apprenticeships, with a focus on level 3 and above apprenticeships in City Region’s key economic sectors Growing the number of level 3 and above apprenticeships for those already in employment Proposals that support the reforms of apprenticeships standards and the introduction of new trailblazer provision Increasing employment rates by supporting progression into work Reducing reliance on public funding by growing provision funded through adults loans, apprenticeship levy and direct employer investment Proposals which are flexible to meet changing future demand, including new models of delivery and virtual learning (not just investment in fixed infrastructure costs and traditional institutions)
5) Institutions which are financially viable, sustainable, resilient and efficient, and deliver maximum value for public investment
Liverpool City Region Criteria:- Greater efficiency against the key cost drivers, at least meeting national benchmarks set out by the FE Commissioner Make more efficient use of the land, buildings and technology in line with ‘one public estate’ – allowing delivery in a varied range of the whole public estate Proposals with strong leadership arrangements, with reduced overhead/back office costs and flexibility to support different models in different places Creating the right infrastructure for the future, for learners and the economy, rather than protecting any one existing institution Proposals which promote greater collaboration across HE/FE, schools and other approved training organisations including the voluntary sector
Page 85 This page is intentionally left blank Agenda Item 10
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: All
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE LEAD OFFICER: SCRUTINY
SCRUTINY PANEL REVIEW OF AFFORDABLE TRANSPORT – SHORT HOP FARES REVIEW
1. PURPOSE OF REPORT
1.1 The purpose of the report is to bring to the attention of the Combined Authority a piece of work that has been undertaken by the Scrutiny Panel on short hop bus fares and to suggest that the Authority refers the matter to the Merseytravel Committee, asking that it responds on its behalf.
2. RECOMMENDATIONS
2.1 Liverpool City Region Combined Authority is recommended to:-
a) Welcome the work done by the Scrutiny Panel; and b) Ask the Merseytravel Committee to consider the issues and recommendations raised in the report and to prepare a formal response to the Scrutiny Panel.
3. BACKGROUND
3.1 As part of its work programme, the Scrutiny Panel has recently finished its second piece of work which has looked at the issue of „short hop‟ bus fares within the City Region. As part of its review work the Panel heard evidence from bus operators and, from Transport Focus, the Government approved passenger champion.
3.2 The Panel were particularly concerned about the relatively high cost of short hop bus fares within the Liverpool City Region. The Panel‟s findings, which are attached, contain a number of recommendations to the Combined Authority under the following headings:-
Cost of Fares; Information about fares; Improved bus flow across the Liverpool City Region; and Future opportunities, including legislative background and Buses Bill. Page 87
3.3 The Scrutiny Panel has asked that the Combined Authority consider those recommendations and report back to the Panel.
3.4 Given that the majority of the recommendations contained in the report relate to matters within the responsibilities of the Merseytravel Committee, it is suggested that the Authority refers the report to that Committee, to respond to the Panel‟s recommendations on behalf of the Authority.
4. RESOURCE IMPLICATIONS
4.1 Financial
There are no direct financial implications for the Authority contained within this report.
4.2 Human Resources
There are no human resource issues associated with this report.
4.3 Physical Assets
There are no physical asset issues associated with this report.
4.4 Information Technology
There are no information technology issues associated with report.
5. RISKS AND MITIGATION
5.1 There are no risks to the Authority contained within this report.
6. EQUALITY AND DIVERSITY IMPLICATIONS
6.1 There are no equality and diversity issues associated with this report.
7. COMMUNICATION ISSUES
7.1 There are no communication issues associated with this report.
Page 88 8. CONCLUSION
8.1 It is suggested that the Authority asks the Merseytravel Committee to consider the recommendations made in the Scrutiny Panel‟s report and respond back to the Panel.
DAVID PARR Lead Officer: Scrutiny
Contact Officers: David Parr, Halton Council (0151 511 6000) Ian Leivesley, Halton Council (0151 511 6002)
Appendices:- Appendix One – Scrutiny Panel Report Appendix Two – Underpinning Evidence Base
Page 89 APPENDIX ONE SCRUTINY PANEL REPORT
LIVERPOOL CITY REGION COMBINED AUTHORITY SCRUTINY PANEL
AFFORDABLE TRANSPORT – SHORT HOP BUS FARES REVIEW
1 Chair’s Introduction
This is the second piece of detailed scrutiny undertaken by the Liverpool City Region Combined Authority Scrutiny Panel and I would like to thank Panel members for the time they put into this work and those individuals who presented evidence to us. The issue of affordable and reliable transport is vital to our communities, as reflected by the comments made to elected members by their constituents. We were particularly keen to understand why the cost of „short hop‟ bus fares within the LCR appeared higher than other comparable areas and what, if anything, can be done about it.
Whilst it initially appeared that, within the deregulated bus market we may be unable to influence significant change in terms of bus fare regimes, our investigations revealed that there were nonetheless suggestions that could be made that may help bus users and which may encourage greater bus patronage across the city region. These suggestions are reflected in the recommendations at Section 7 of this Report.
I commend this report to you,
Cllr Kevan Wainwright Chair – LCR Scrutiny Panel
2 Background to the Review
When the Panel was first formed it identified a number of topical areas around which it wished to carry out in-depth reviews. The Panel has already looked at „European Funding‟ and has now examined „Affordable Transport‟. The topics were originally selected as they covered the broad range of responsibilities of the Combined Authority. It also allowed the Panel to test a methodology of working, given that each of the constituent authorities „do‟ scrutiny in a different way.
3 Developing the Scoping Document
Having identified „Affordable Transport‟ as a review topic the Panel held an initial scoping meeting to:
Further refine the review area. Identify a timescale for its completion. Identify those who the Panel would want to receive evidence from.
The Panel identified the issue of „short hop‟ bus fares for further investigation. This was selected as evidence provided by Merseytravel had identified that the cost of
Page 90 APPENDIX ONE SCRUTINY PANEL REPORT “short hop” fares in the Liverpool City Region were some of the most expensive in the country. Members wanted to understand why this was the case and what could be done about it.
Following those discussions a Scoping Document was produced to guide the next stages of the review, which is attached at Appendix A of this report.
4 What we did and who we spoke to
As noted in the Scoping Document the review consisted of three evidence sessions as follows:
a) The first evidence session focused on reviewing trends in the bus market, rates of fare increase, the current position on „short hop‟ journeys within the LCR area and provided comparisons to similar urban areas across the Country. A range of questions that emerged from this evidence session was discussed and agreed with Members before other witnesses were interviewed.
b) In the second session two smaller operators, Avon Buses and Halton Transport were interviewed by the Panel and shared their views. This was supplemented by a representative from Transport Focus, the Government appointed passenger champion, who conduct annual passenger surveys across the region.
c) At the Final Session the two major operators, Arriva and Stagecoach, were interviewed and this session was closed by representatives from Merseytravel who briefed Members on the way forward, including how the proposed Bus Alliance may operate.
5 What did we hear and from whom?
a) Evidence Session One
Paul Johnson, Research and Intelligence Adviser, and Ian Raymond, Evidence and Intelligence Officer, from Merseytravel‟s Policy Research/Intelligence team presented in detail the market in the City Region noting that nearly 80% of public transport journeys are made by bus but numbers have fallen by nearly a quarter since the mid 1990‟s. In examining bus fares specifically, it was noted that these have increased at a faster rate than inflation or rail since at least 2000. In addition, fares are charged at a flat rate for trips up to 6 miles, but there are some local variations. Evidence available confirmed that many other urban areas have „short hop‟ bus fares with cost increasing over distance. The evidence presented in charts showed that „value for money‟ increased significantly with distance travelled. The draft interview questions that were discussed by Members in this session provided an outline to probe operators into their decision making over fares including how the short distance policy evolved in the city region, barriers to future adoption of short distance fares, reasons for the rapid fares increases and future fare innovations.
b) Evidence Session Two
Page 91 APPENDIX ONE SCRUTINY PANEL REPORT The second session consisted of witnesses from two smaller operators - George Lewis, Managing Director Avon Busses and Colin Stafford Managing Director, Halton Transport. Both noted particularly the cost element of running bus services and the need to make a return in order to invest further in the bus fleet. Furthermore, it was stated that they have recorded few complaints on the fares they charge. When asked about flat fares they believed it was a historic decision instigated to prevent „overriding‟ but could not provide any specific evidence of this. Both operators indicated that they ran some commercial routes that larger operators would not provide, due to commercial viability. They also noted they were conscious of the impact of the fares charged, with one operator stating that they had reduced their weekly fare as part of their fare revision earlier in the year (although other fares were increased).
David Beer, Passenger Executive Manager from the watchdog „Transport Focus‟ also attended the second session. He stated that although Transport Focus was appointed by Government it had no statutory powers to force operators to reduce prices or introduce new fare structures. He did however indicate that the surveys that his organisation undertakes and the pressure that local passengers can make a difference citing a fare decrease in the Bristol area as an example. He noted that it‟s generally punctuality/reliability that are the main concerns of passengers, and stated that information is a key requirement in ensuring passengers were aware of all fare options available to them. c) Evidence Session Three
The third session consisted of witnesses from the major operators - Gary Nolan, Regional Director North and Elisabeth Tasker, Managing Director Merseyside and South Lancashire from Stagecoach followed by Arriva‟s Howard Farrell, Managing Director Merseyside and Derek Bowes, Commercial Manager NW and Wales. The session closed with final witnesses from Merseytravel - Liz Chandler, Director of Corporate Development, Matt Goggins, Head of Bus and Carol Mitchell Data ＆ Analysis Team Leader. As noted in the earlier session the larger operators could not provide tangible evidence of the „overriding‟ issue that had been quoted to justify the flat fare policy but both operators stated that they were conducting trials of shorter distance fares, although at present the outcomes of these are inconclusive. However both agreed the current flat fare system could be perceived as unfair for shorter distances and needed to be looked at. In addition, Stagecoach as part of their evidence noted they had a half fare for job seekers, which was particularly beneficial when people needed help the most.
It was stated that if short „hop‟ fares were introduced, fares on longer journeys may have to be increased as a result. Both operators noted that they may look at a „carnet‟ type ticket that would be cheaper for people who worked in jobs which requires them to travel, for example, on just 2-3 days per week. They also agreed that investment in the bus fleet would be a factor in helping increase patronage in the future citing more comfortable seats, wi-fi, charging points etc. They mentioned that improved reliability/punctuality would help them to reduce costs which could help stabilise ticket prices or possibly reduce them. However, this would require highway authorities to work with them on bus priority measures. Finally, regional inconsistencies in fares where noted to be down to
Page 92 APPENDIX ONE SCRUTINY PANEL REPORT historical reasons, but it was acknowledged that these are slowly being addressed.
Merseytravel provided a presentation on issues concerning affordability, setting fares, competition issues, the role of Merseytravel and the development of a City Region Bus Strategy. Questions were asked about a possible franchising system, and it was explained that this would depend on the future Bus Bill. The proposed „Bus Alliance‟ with the City Region bus operators works within current legislation and Merseytravel will be working closely with operators to deliver partnership aims specifically to increase bus patronage.
Smaller operators are recognised as an important component of the bus industry, and regular meetings between Merseytravel and all operators are now undertaken to facilitate good communication and understanding. It was also recognised that speeding up the flow of buses could reduce costs and would be welcome. „Carnet‟ Tickets were recognised as helping making fares affordable but it was reiterated that apart from supported fares the organisation could not insist that the operators change their fare structure or levels.
6 What conclusions did we reach?
From the evidence sessions the following conclusions were reached
a) Cost of fares 1. In comparison with other urban areas, short distance fares are expensive with affordability improving with distance. 2. In the City Region, bus fares have increased at a faster rate than rail fares since 2000 however, the average bus fare is still cheaper than the average rail fare. 3. Taxis can be competitive over short distances particularly when two or more people share the cab. 4. Operators claimed that overriding in the mid 2000‟s was an issue in implementing the „flat fare‟ system. However, they could not provide „hard evidence‟ that the Liverpool City region was any different to anywhere else. The current trials will indicate if there are any current issues in this respect. 5. The Panel welcomed that some operators recognised that flat fares are poor value and could be reducing patronage. Short distance trials were to be encouraged but it was noted that there is no wish to improve complexity or penalise unfairly those who are currently travelling around 6 miles at a relatively cheap rate (although longer distance fares may increase). 6. No real explanation was given as to why „short hop‟ fares were available in other urban areas apart from the development of local networks.
b) Information about fares
1. Information on fare options was deemed to be key. It was evident that from a customer perspective that more information on fares is required and that this should be incorporated into the Bus Strategy that Merseytravel is developing. Further, individuals should be able to find out the best available fare for their journey. However, it is noted that this
Page 93 APPENDIX ONE SCRUTINY PANEL REPORT could be complicated in a multi-operator environment despite being undertaken by operators such as Warrington Borough Transport and Trent Barton. 2. There was a lack of awareness of the Stagecoach Job Seekers ticket which should be better publicised.
c) Improved Bus Flow across the LCR
1. Improved traffic management arrangements that reduce and make journey times for buses more reliable including new technology, traffic management, bus lanes etc can reduce costs to operators. This could result in reduced or more stable fares due to them being able to reduce costs by utilising less buses on the route. A number of the operators commented on the impact the removal of bus lanes had on the free movement of buses, which added to journey times and therefore added to their costs, which is then reflected in fares. The evidence from Transport Focus also shows that reliability and punctuality are more important to users than price.
d) Future opportunities,
1. Bus Patronage has declined for a number of years however more recently it has exhibited slight growth which operators noted had been higher on certain routes. 2. Fares are exclusively a matter for bus companies who operate in a commercial environment, with the exception of supported service bus fares. The regulatory conditions mean that the neither the Combined Authority (through Merseytravel) nor Transport Focus have the powers to insist that operators change their fares. They can however influence particularly using evidence from passenger surveys and comments to get the best possible outcome for users and encourage non-users. 3. A Carnet of tickets was raised as an approach for reducing fares for part time workers, and the use of smartcards was also mentioned in this context. 4. The Panel welcomed trials on short distance fares that some operators are undertaking and suggest that a key location away from Liverpool City Centre is considered eg Kirkby, St Helens, Southport, Runcorn etc as a future trial as part of the Bus Strategy/Bus Alliance. 5. Smaller operators voiced concerns particularly regarding their revenue streams that the impact of moving to a „short hop‟ system could have – the elasticity on a route and levels of competition being crucial. They further indicated that there had been very few complaints when moving to a flat fare a few years ago. 6. The Bus Alliance was mentioned by all operator witnesses. Small operators stated that they required to be involved fully in discussions and engaged. The Panel see the Alliance as having a key role in ensuring that information is available to passengers and influencing more affordable fares to be a key aspiration.
7 What recommendations are we making?
Page 94 APPENDIX ONE SCRUTINY PANEL REPORT a) Cost of fares
Review supported fares to analyse the costs/benefits of introducing short distance fares on supported services. Continue to develop a range of tickets that includes an „all operator‟ carnet ticket and other innovations. To raise, through the Alliance, a trial at a key centre which incorporates short distance fares as part of the agreement. b) Information about fares
Ensure that the emerging bus strategy includes information on fares as a key element
Develop the Merseytravel website/apps to incorporate fare information on point to point fares in conjunction with work undertaken by the Bus Alliance.
The Bus Alliance customer experience workstream develops a strategy with all operators on main routes to publicise fares between key centres by operator. This to include the consideration of publishing fares at shelters and in timetables.
Task the Bus Alliance customer experience workstream to develop point-to- point fares as part of the journey planner as a long term development.
c) Improved Bus Flow across the LCR
Work with Local authority partners to encourage improved traffic management arrangements to improve punctuality/reliability. The Better Bus Area evaluation should help inform this. d) Future opportunities, including legislative background and Buses Bill
Continue to work with Transport Focus to influence their work in relation to ticketing and user/non user perceptions re „value for money‟ and distance. Smaller operators should be encouraged to join the Bus Alliance. Progress on short distance trials to be shared amongst Alliance members, provided it does not breach commercial confidentiality or competition legalities with a view to expand the trials, if successful, across the network. The progress of the Bus Bill is kept under review and relevant consultations responded to. If enacted the relevant powers be used regarding affordable fares.
Page 95 APPENDIX ONE SCRUTINY PANEL REPORT Liverpool City Region Combined Authority Scrutiny Panel
Scrutiny Review of Affordable Transport
Aims and Objectives The review will look at three questions, as follows:
1) Why are short journey distance cash fares so expensive? Aim and Objectives 2) Why do operators have different fare levels in place across different areas/routes of the
Page 96 Page City Region? 3) What can be done about it?
Members of the Liverpool City Region Scrutiny Panel had identified “Affordable Transport” as a topic for detailed scrutiny as part of their work plan. At their Development Day held on 17 August 2015 they identified the issue of short hop fares as an area of more detailed review. Context/Background This was in the light of information provided on that day that indicated that short hop cash fares were more expensive in the LCR than anywhere else.
Methodology The target completion date for this piece of work is for the final report, together with any Timescale recommendations to the LCR Combined Authority, to be signed off by the Panel at its meeting on 28 October 2015.
Evidence session 1 will focus on the information held on this issue by representatives of Merseytravel and will look at the current position on short hop journeys within the LCR areas, Evidence session 1 together with comparisons across the Country. This will enable members to formulate questions to bus operators and to determine any other sources of evidence they may wish to identify.
APPENDIX ONE SCRUTINY PANEL REPORT
Evidence session 2 will concentrate on receiving evidence from the principal bus operators within the LCR and will provide members with the operators‟ rationale for their pricing Evidence session 2 structures. Evidence will also be provided by “Transport Focus” – an independent transport user watchdog.
Session 3 will continue to receive evidence from the transport operators, but will also start to focus on drawing conclusions from the evidence received and forming recommendations to Evidence 3 session and the CA. Officers will draft a final report which members will be consulted upon before formal Wrap up meeting submission to the Panel on 28 October 2015.
Potential outcomes Members will gain a greater understanding as to the rationale behind the different price Page 97 Page structures across the Country and the region.
Expected outcomes Members will develop recommendations to the CA in order to influence providers in delivering a more equitable and understandable price structure.
The ultimate measure of success will be that:
The rationale behind the fares charged will be more widely understood. Measuring success The inequality in short hop cash fares is reduced. Those fares will be considered to offer value for money to the user. Bus passenger journeys will increase across the City Region
Officer/Member involvement All members of the Scrutiny Panel will have the opportunity to be involved in review Members
APPENDIX TWO UNDERPINNING EVIDENCE BASE
Scrutiny Panel - Short Distance Fares Evidence base
Page 98 APPENDIX TWO UNDERPINNING EVIDENCE BASE
Contents
1 Key points 1
2 The Big picture – Public Transport in the City Region 3
3 Household income and modal choice 6
4 Changes in transport costs 7
5 Comparison of fares by Distance 9
6 Prepaid Tickets 13
7 Comparison of Bus vs. Taxi fares 16
8 Other Comments 18
Appendix A: Bus passengers’ priorities for improvements 19
Appendix B: Transport Select Committee 2010 (key points) 23
Appendix C: Summary of findings on Elasticity of Demand 26
Appendix D: Prepaid Ticket product prices 27
Appendix E: Data tables 28
Appendix F: “Short hop” Fare details 35
Appendix G: Sampled fare tables from the Merseyside districts 37
Appendix H: Main Operators 39
Page 99 APPENDIX TWO UNDERPINNING EVIDENCE BASE Briefing – Short Distance Fares
1 Key points
1.1. 77% of public transport journeys in Merseyside are made by bus.
1.2. Since 1997/98 the number of bus passenger journeys on Merseyside has fallen by 23%.
1.3. People on lower household incomes make greater use of the bus than those living in more affluent areas.
1.4. A number of core cities see a „short hop‟ ticket available from some operators; this is a ticket priced at a lower level than the typical flat fare product, which is only valid for a set number of stops or within a given area.
1.5. Short journeys, for single cash fares in the Liverpool City Region (LCR) are relatively expensive in comparison to other city regions.
1.6. Cash fares can be different across the LCR districts. Fares are typically charged at a flat rate up to 6 miles within Liverpool but vary from 3 miles in the other districts
1.7. Taxi fares (both hackney and private hire) are often cheaper where two or more people are travelling together but bus fares represent better value over longer distances, and this is reflected with the increases seen in the average journey length.
1.8. The average pay of part-time workers in Merseyside has risen by 1.4% per annum over the last 5 years, and that of full-time workers by 1.8% per annum; by contrast the Retail Price index has risen by 4.2% per annum over the same time.
1.9. The cost of the bus has risen significantly faster than other modes of transport (155% from 2000, compared to 68% for Merseyrail and 22% for motoring costs) – albeit noting that the average bus fare has shown a decrease in the last year.
1.10. Transport Focus has identified that 2 of the top 5 priorities for improvements to bus services amongst paying customers are better value ticketing and ticketing that can be utilized on all bus companies.
1.11. There is often significant difficulty in customers trying to track down information about bus fares; Transport Focus has identified that one of the two priorities for bus stops is to have information on fares. Few bus companies publish fare tables or have them on the internet.
Fares data – 2015 Update Page 1 Merseytravel Policy Research Page 100 APPENDIX TWO UNDERPINNING EVIDENCE BASE 1.12. Bus operators‟ prepaid tickets offer significant savings, compared both to single cash fares and Merseytravel products, but there can be drawbacks preventing their use, especially amongst part time workers and low income groups.
1.13. Over the last 10 years there has been a significant rise in the number of journeys undertaken using operator prepaid tickets (up 216%) and a significant drop in the number of journeys undertaken using cash fares (down 66%). Over this period, the number of journeys undertaken using Merseytravel products (Saveaway, Trio, Solo) also showed a net drop (down 24%) – but note this has risen over the last three years (journeys undertaken by Merseytravel products being up by 10% in the period 201112 to 2014/15).
1.14. A report by Aecom in 2010 has identified that a 10% increase in bus fares would result in a 3.4% drop in demand for bus; there would be a resultant rise in rail and car use.
Fares data – 2015 Update Page 2 Merseytravel Policy Research Page 101 APPENDIX TWO UNDERPINNING EVIDENCE BASE 2 The Big picture – Public Transport in the City Region
2.1 77% of public transport journeys in Merseyside are made by bus.
The big picture 1:
Our Merseyside roads carry 7.7 billion vehicle kilometres, or around 5,558 road kilometres per Merseyside resident per year.
Merseyside residents made 137 million bus trips per annum. That‟s the equivalent of 98 bus trips per resident.
42 million rail trips are made per annum on our local network. That‟s 30 local train trips per resident.
Walking plays a critical role in linking all these trips and 21% of all journeys involve walking as the main mode used.
Source: Travel in Merseyside, Countywide Household Survey (CWS 2013), LCR Transport Model, DfT Statistics.
Fares data – 2015 Update Page 3 Merseytravel Policy Research Page 102 APPENDIX TWO UNDERPINNING EVIDENCE BASE The big picture 2: Change in bus passenger journeys on local bus services
200 180 160 140 120 100 80 60 40 20
Change indexed to 1997/8 = = 100 to 1997/8indexedChange 0
London English metropolitan areas English non-metropolitan areas Merseyside
Source: DFT statistics / Merseytravel Annual Statistical Monitor
2.2 Since 1997/98 the number of bus passenger journeys on Merseyside has fallen by 23%; the average for all metropolitan areas is a drop of 22%. It is worth noting that Merseyside saw a small rise over the last year (one tenth of a per cent), while all metropolitan area experienced a drop of 1%. In Non- metropolitan areas the number of bus journeys has been relatively stable.
2.3 Over this period, bus passenger journeys in London have increased by 87%.
The big picture 3: Change in Merseyside Journeys by Mode
160 140 120 100 80 60 40 20
Change indexed to 1997/98 = 100 = to 1997/98indexedChange 0
Bus Rail Car (km)
Source: DFT statistics / Merseytravel Annual Statistical Monitor
Fares data – 2015 Update Page 4 Merseytravel Policy Research Page 103 APPENDIX TWO UNDERPINNING EVIDENCE BASE 2.4 Apart from a dip in 2012/13 (owing to station refurbishment), rail journeys in Merseyside have shown strong growth and are up 52% overall on 1997/98, whilst car km has shown slower growth (up 6% overall).
Fares data – 2015 Update Page 5 Merseytravel Policy Research Page 104 APPENDIX TWO UNDERPINNING EVIDENCE BASE 3 Household income and modal choice
3.1 In 2014 the average (median) wage in Merseyside was £20,982 (£25,572 for full time workers and £9,060 for part-time workers).
3.2 The average pay of residents in the area working full-time has risen by just an average 1.8% per annum over the last five years, and that of those working part-time by an average 1.4% per annum. Over the same time, the Retail Price Index (May indicators) showed a growth of an average 4.2% per annum, an indicator of the strain being placed on household budgets.
Gross Annual Pay (median) Merseyside £30,000
£25,000
£20,000
£15,000
£10,000
£5,000
£0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Full Time Workers Part Time Workers
(Source: Annual Survey of Hours and Earnings, ONS)
3.3 Following the recession, there was a trend of increasing levels of part-time employment and reducing levels of full-time employment. Although these trends now show some reversal, full time employment in particular has yet to attain pre-recessionary levels. This has significant implications for levels of disposable income, not least in choices of expenditure on transport.
Change in Employment Patterns
120 115 110 105 100 95 90 85
80 Change indexed to to March2007indexedChange
Full time employment Part time employment Self-employment
(Source: Annual Population Survey, ONS)
Fares data – 2015 Update Page 6 Merseytravel Policy Research Page 105 APPENDIX TWO UNDERPINNING EVIDENCE BASE 4 Changes in transport costs
4.1 The cost of the bus has risen significantly faster than other modes of transport – up 155% since 2000 compared to 68% for Merseyrail and 30% for motoring costs. (Although over the last year bus fares were reduced by 2.3% compared to a 2.2% increase for rail).
Trends in public transport fares, motoring costs
300
250
200
150
Change indexed to 2000 = 100 = to 2000 indexed Change 100
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bus Merseyrail AA Motoring Costs *
Source: Merseytravel Annual Statistical Monitor
Note for charts:
Average bus fares are calculated from a „basket‟ of cash fares. Fares tables are obtained for 33 key routes of the major operators. The routes are selected on the basis of running for a distance of at least 12 miles and ensuring each of Merseyside‟s five districts are represented by several routes (including some cross-river routes) with both commercial and supported fares being used.
The average fare is a weighted mean average, drawn from the % of journeys made by each operator, the average standard single fare of each operator, weighted by the average distance travelled (to allow for the fact that whilst many fares are „flat rate‟ this is by no means universally the case).
Fares data – 2015 Update Page 7 Merseytravel Policy Research Page 106 APPENDIX TWO UNDERPINNING EVIDENCE BASE
Trends in public transport fares, motoring costs
£3.00 £0.70
£2.50 £0.60
£0.50 £2.00 £0.40 £1.50 £0.30
£1.00 * (£) mile per Cost MotoringAA £0.20
£0.50 £0.10 Bus & Merseyrail Average (£) Mile per fare Average Merseyrail & Bus
£0.00 £0.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bus Merseyrail AA Motoring Costs * Notes * AA Motoring costs figures refer to total running cost per mile for a petrol fuelled car costing between £13,000 and £18,000 new running on unleaded fuel, travelling 10,000 miles in a year,. The latest data available on the AA website is correct for July 2014, when unleaded petrol was 129.0 pence per litre. The April 2015 price of unleaded petrol has been estimated to be 113.3 pence per litre. The AA no longer classifies vehicles by engine size for cost purposes. This price range has been selected as most closely matching
Source: Values underlying the index within the Merseytravel Annual Statistical Monitor
4.2 The graph below shows Merseyside‟s fares in comparison with London, all Metropolitan areas, Non-metropolitan areas and the Retail Price Index (RPI). Merseyside (and indeed all Metropolitan areas) bus fares have increased at a greater rate than RPI or the London average: The reference to wage increases mentioned in 3.2 also needs to be remembered here.
Bus fares index
300
250
200
150
100
50 Changeindexed 2000 to 100 =
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Retail Prices index English non-metropolitan areas London English metropolitan areas Merseyside
Source: DfT returns, Merseytravel Statistical Monitor 2014/15.
Fares data – 2015 Update Page 8 Merseytravel Policy Research Page 107 APPENDIX TWO UNDERPINNING EVIDENCE BASE 5 Comparison of fares by Distance
Single cash fares for key operators – Urban areas
Cost of a single bus fare for a 1-mile trip into city centre £3.50 £3.00 £2.50 £2.00 Max £1.50 Min £1.00 £0.50 £0.00
Cost of a single bus fare for a 3-mile trip into city centre £3.50 £3.00 £2.50 £2.00 Max Min £1.50 £1.00 £0.50 £0.00
Cost of a single bus fare for a 6-mile trip into city centre £3.50 £3.00 £2.50 £2.00 Max £1.50 Min £1.00 £0.50 £0.00
Source: PTEG, 2013,(^ Strathclyde 2012 data), Halton & Warrington Unitary Authorities; fares looked at for journeys only within their boundaries 2015 fares.
5.1 A key factor emerging is that bus cash fares on Merseyside are relatively expensive for shorter journeys compared to other areas. Also many other major cities including Birmingham, Cardiff, Glasgow, Leeds, Nottingham, and Sheffield have short hop single tickets available which are often cheaper than standard single tickets. These short hop tickets are often for 1-5 stops or within a designated zone or city centre area. (See section 5.4 - the Liverpool City Region doesn‟t have short hop tickets available so fares tend to be more
Fares data – 2015 Update Page 9 Merseytravel Policy Research Page 108 APPENDIX TWO UNDERPINNING EVIDENCE BASE expensive however see below re some routes in Wirral. This is outlined further in the appendix.)
5.2 As distance increases, the „flat fare‟ approach means that fares on Merseyside begin to appear better value than those in some other areas – though South Yorkshire, the West Midlands and Strathclyde remain cheaper.
5.3 The charts below detail the variance that exists for bus fares within each Merseyside district:
Single cash fares for key operators – Liverpool City Region Districts
Cost of a single bus fare for 1-mile, 3 miles & 6 mile trips £3.50
£3.00
£2.50
£2.00
£1.50
£1.00
£0.50
£0.00
Wirral Wirral Wirral
Sefton Halton Sefton Halton Sefton Halton
Liverpool Liverpool Liverpool
Knowsley Knowsley Knowsley
St Helens St Helens St St Helens St 1 Mile Source: Operator3 Miles fare tables 2014 6 Miles
The majority of routes in Liverpool are flat fares up to the first six miles. In St.Helens, fares begin to increase from 3 miles when traveling out of the town centre. Journeys from Liverpool to St Helens only show fare increase around 7miles Routes in Knowsley generally have flat fares over the first six the miles (From Liverpool). As you travel though Knowsley towards Liverpool fares can reach £2.30 at 3 miles and go up to £2.50 at 6miles. Fares in Halton are at the flat rate up to 3 miles travelled. Fares then show steady increases at 3miles and again at 6miles Fares in Sefton are the same for one mile in all areas (£2.20). The distance covered by the flat fare tends to decrease the further north journeys start, e.g; you can travel up to 6 miles for the minimum fare from Bootle, but only up to 2 miles when making journeys that start in Southport. Journeys that start further north show prices increases at shorter distances (£2.50 to 2.80 over a range of 3miles to 6 miles). In Wirral fares show staged increases from 1 mile on several routes. NOTE: Some routes in Wirral appears to offer something equivalent to
Fares data – 2015 Update Page 10 Merseytravel Policy Research Page 109 APPENDIX TWO UNDERPINNING EVIDENCE BASE a „short hop‟ ticket, which results in some lower fares (this being by the same operator). Steep increases occur at 3 miles and 6miles when compared to the other districts.
Fares data – 2015 Update Page 11 Merseytravel Policy Research Page 110 APPENDIX TWO UNDERPINNING EVIDENCE BASE 5.4 “Short-Hop” fares –other areas
As mentioned in 5.1, a number of operators provide for “short hop” fares within core cities; these are fares priced below the typical flat fare for the area, and cover a duration of a number of stops, one fare stage, or a defined area.
Some examples are shown below, more details of which are contained within the Appendix.
City Operator Distance Fare Sheffield First South Yorkshire Within City Centre £0.50 Cardiff Cardiff Bus Designated zones £1.00 Nottingham Nottingham City Transport 1 fare stage £1.10 Glasgow First Glasgow 5 stops £1.20 Leeds First Leeds 4 stops £1.30 Birmingham National Express West Midlands Within the Middle Ring Road £1.90
Operator websites 2015
Fares data – 2015 Update Page 12 Merseytravel Policy Research Page 111 APPENDIX TWO UNDERPINNING EVIDENCE BASE 6 Prepaid Tickets
6.1 Single cash fares in Merseyside are high in relation to operators‟ prepaid tickets. These prepaid products can offer significant savings over purchases of separate single tickets. 6.2 People on lower incomes may be less likely to afford weekly / monthly prepaid tickets and so are disproportionately affected by high cash fares for single trips. 6.3 This situation is exacerbated when we come to look at those in part time employment (such as those working 2 or 3 days a week). Without being able to benefit from weekly/monthly ticket savings, their costs can be approximately 33% higher pro rata than those on a weekly ticket and 50% higher pro rata than those on a monthly ticket. (Exact levels depend on the operator / cash fare being compared). 6.4 A further complicating factor can be where someone travels outside of the busiest times (such as evenings and weekends, perhaps because of shift patterns or education) and where the operator providing the journey is not the same across all time periods. For example; the 464/164 Birkenhead to New Ferry, run by Arriva during the day and Avon (supported) during the evenings. This removes the ability of these passengers to benefit from the savings offered by the operator prepaid tickets. o (NB – this is less of an issue on the QBN routes with their improved evening/weekend frequencies and tickets being interchangeable, but there are parts of the bus network where this problem remains).
6.5 As the tables below show, there can be significant savings when comparing between Merseytravel and operator prepaid products. (Summary example for travel in the Liverpool area shown below – fuller details within the appendix).
Saveaway * Trio Solo Arriva Stagecoach Halton Warrington Daily £3.90 n/a n/a £4.20 £3.90 £3.80 £5.95 Weekly n/a £21.90 £18.00 £16.00 £13.50 £15.00 £25.50 Monthly n/a £77.50 £58.30 £56.00 £48.00 £61.00 £90.00 * Saveaway tickets are only valid for off peak travel (Not before 09:30 except at weekends & bank holidays).
. There are savings of at least two pounds per week for passengers who opt for an operator weekly ticket rather than a Solo. In Halton, the monthly ticket shows smaller savings against Solo tickets. Prepaid prices in Warrington are more expensive in comparison.
Fares data – 2015 Update Page 13 Merseytravel Policy Research Page 112 APPENDIX TWO UNDERPINNING EVIDENCE BASE
6.6 Prepaid tickets for key operators in other areas compared with Merseyside key operators are shown below: Daily: Weekly: Monthly: Tyne & Wear: £3.90 to £7.00 £12.80 to £32.00 £49.20 to £105.84 West Midlands £4.20 £16.50 £58.50 West Yorkshire £4.70 £20.00 £68.00 South Yorkshire £3.90 £20.00 £74.70 Greater Manchester £4.10 £13.50 £50.00 Greater Glasgow £5.75 £21.00 £59.00 Bristol £6.00 £22.00 £80.00
Merseyside £3.90 to £4.20 £13.50 to £16.00 £48.00 to£56.00 Operator websites 2015
Daily operator prepaid tickets on Merseyside show good value in compassion to other areas. Solo weekly and operator weekly tickets are more affordable in comparison to most other areas. Operator monthly tickets on Merseyside show comparable prices with Greater Manchester.
Change in bus journeys by payment method
500.0 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0
Cash fares Merseytravel Prepaid tickets Operator Prepaid tickets
Source: Merseytravel Annual Statistical Monitor Note: Merseytravel Prepaid tickets covers Saveaway, Trio and Solo products – see overleaf.
6.7 The chart above highlights the rise in popularity of operator prepaid tickets (up 216% over the last 10 years), against a steep drop in the use of cash fares (down 66% over this period).
Over the last three years there has been a growth in journeys using Merseytravel prepaid products (following previous dip, strongly associated with the recession). Merseytravel prepaid products now include a new ticket for young people; “MyTicket” which proved to be popular in its first year of sales (2014/15 – see next page). It is now available in Halton.
Fares data – 2015 Update Page 14 Merseytravel Policy Research Page 113 APPENDIX TWO UNDERPINNING EVIDENCE BASE Change in bus journeys by Merseytravel products
300
250
200
150
100
50
0 Change indexed to 1997/98 = 100 = to 1997/98indexedChange
Saveaway Trio Solo My Ticket *
Source: Merseytravel Annual Statistical Monitor
6.8 The above displays what has occurred in terms of bus journeys made using Merseytravel products. Specifically, if we look at the last 10 years:
Journeys made by Solos have dropped by 37%. With a decrease of 1% in the last 2 years, showing little recent change.
Journeys made by Saveaways have dropped by 34%. With a decrease of 24% in the last 2 years, although see the point below regarding MyTicket.
Journeys made by Trios have dropped by 24%. With a decrease of 3% in the last 2 years, showing little recent change.
* A new bus only ticket, MyTicket for young people was launched in May 2014. It has proved to be popular, its use accounted for 3 million bus journeys by the end of March 2015
Fares data – 2015 Update Page 15 Merseytravel Policy Research Page 114 APPENDIX TWO UNDERPINNING EVIDENCE BASE 7 Comparison of Bus vs. Taxi fares
7.1 Given the current policy of many operator‟s charging „flat fare‟ levels, regardless of distance travelled, this can mitigate against some shorter journeys being taken by bus. In particular, the impact of flat fares on some journeys can make the bus relatively good value for longer journeys, but where two or more people travel together on shorter journeys the per capita taxi fare is better value. This is shown in the chart below.
Price per head comparison: Route 10 £20.00 £18.00 £16.00 £14.00 £12.00 £10.00 £8.00 £6.00 £4.00 £2.00
£0.00
(1.6 miles) Low Hill Low miles) (1.6
(2.2 miles) Sheil Rd Sheil miles) (2.2
(10.6 miles) Toll Bar Toll miles) (10.6
(3.3 miles) Green Ln Green miles) (3.3
(9.7 miles) Portico Ln Portico miles) (9.7 (0.5 miles) Queen Sq Queen miles) (0.5
(2.7 miles) Holland St Holland miles) (2.7
(0.7 miles) TJ Hughes TJ miles) (0.7
(3.9 miles) Queens Dr Queens miles) (3.9
(1.4 miles) Royal Hosp Royal miles) (1.4
(8.3 miles) Prescot Bus Prescot miles) (8.3
(10.2 miles) Carmel Coll Carmel miles) (10.2
(3.5 miles) Old Swan Ctr Swan Old miles) (3.5
(10.8 miles) Bird ith Hand ith Bird miles) (10.8
(6.0 miles) Page Moss Ctr Moss Page miles) (6.0
(12.1 miles) St Helens Bus Helens St miles) (12.1
(6.5 miles) Seth Powell Wy Powell Seth miles) (6.5
(0.0 miles) James St/Lord St St/Lord James miles) (0.0
(11.3 miles) Bank St/Tullis St St/Tullis Bank miles) (11.3
(0.2 miles) Victoria St/Dale St St/Dale Victoria miles) (0.2
(9.1 miles) Eccleston Ln Ends Ln Eccleston miles) (9.1
(8.5 miles) Hope St /Church St /Church St Hope miles) (8.5
(4.6 miles) Eaton Rd/Thomas Ln Rd/Thomas Eaton miles) (4.6
(5.0 miles) Finch Ln/Dovecot Ave Ln/Dovecot Finch miles) (5.0
(7.0 miles) Hillside Rd/Longview Ln Rd/Longview Hillside miles) (7.0
(5.6 miles) Lordens Rd/Ashover Ave Rd/Ashover Lordens miles) (5.6 (7.3 miles) Lyme Cross Rd/Blenheim Dr Rd/Blenheim Cross Lyme miles) (7.3 Bus Taxi pp (1 pax) Taxi pp (2 pax) Taxi pp (3 pax) Taxi pp (4 pax)
Liverpool City Council Hackney tariff tables / Arriva fare tables, Policy Research team, 2015
Fares data – 2015 Update Page 16 Merseytravel Policy Research Page 115 APPENDIX TWO UNDERPINNING EVIDENCE BASE 7.2 We also note that taxi fares within Merseyside are currently ranked amongst the cheapest in the country.
Taxi tariffs: 2 mile District Two mile fare Ranked Halton £5.20 271 Out of 363 local authorities Warrington £5.20 280 Out of 363 local authorities Wirral £5.20 281 Out of 363 local authorities Liverpool £5.00 301 Out of 363 local authorities Sefton £4.60 342 Out of 363 local authorities Knowsley £4.40 354 Out of 363 local authorities St.Helens £4.50 351 Out of 363 local authorities National average £5.65 Source: Private Hire & Taxi Monthly, Feb 2015
This suggests that taxi tariffs are relatively low, with Sefton, Knowsley and St.Helens particularly noted for being in the lowest tier of charges. Overall on Merseyside, taxi tariffs are between 78% and 92% that of the national average (£5.65 per 2 miles).
Comparison with other core cities: Core cities: 2-mile Taxi Tariff £7.00 £6.20 £6.20 £6.20 £5.80 £6.00 £5.70 £5.60 £5.60 £5.20 £5.00 £5.00
£4.00
£3.00
£2.00
£1.00
£0.00
Source: Private Hire & Taxi Monthly, Feb 2015
Compared with other key cities across the UK, Liverpool itself still emerges as being relatively low – a tariff of £5.00 per 2 miles compared to £6.20 per 2 miles in Birmingham, Bristol and Leeds.
Fares data – 2015 Update Page 17 Merseytravel Policy Research Page 116 APPENDIX TWO UNDERPINNING EVIDENCE BASE 8 Other Comments
8.1 General point - the average annual income for disadvantaged areas is £14,500. Research from the Joseph Rowntree Foundation (JRF) in 2010 indicated that a typical family with two children needed to earn £29,200 per annum to reach a minimum socially acceptable standard of living in the UK. JRF also highlighted that costs for a minimum budget have risen by 38% over the decade to 2010 and income levels have not kept pace with this. Bus fares, which have increased by 59% over the decade to 2010 are attributed as having a major influence over this increase.
8.2 Looking at bus passengers‟ priorities for improvement, two of the items in the „top 5‟ list for improvement relate directly to fares: “Bus fares, tickets and passes offer better value for money” (ranked 2nd) and “Tickets and passes are available that entitle you to travel on all bus services in your local area, not just those operated by a specific bus company” (ranked 4th). (Source: Bus passenger priorities for improvement, Transport Focus – see appendix.)
8.3 A common theme, apart from the actual cost of bus fares, is the lack of information on fares. Research by Transport Focus found that in metropolitan areas, the two key expectations of passengers at the bus stop that weren‟t met were „real time information‟ and „information on fares‟. (Source: Bus passenger priorities for improvement, Transport Focus – see appendix.)
8.4 A 2010 report by PTEG indicated that low income families, who are more likely to be bus users, are disproportionately impacted on by increases in bus fares. (Source: The effect of bus fare increases on low income families, PTEG).
8.5 A cash fare of £2.10 on a bus is almost double the cost of a litre of unleaded petrol (£1.15 as at August 2015 – Source: AA Fuel Price Reports).
8.6 A 10p increase on a £2 bus fare represents is a 5% increase. This is roughly double the current rate of inflation.
8.7 A report by AECOM indicated that a 10% increase in bus fares would result in a 3.4% drop in demand for bus whereas the same percentage increase in train would prompt a 2.28% drop in rail demand – in part down to the perceived more attractive rail offer. In both cases the increase in fares indicated a rise in use of the car. (Source: Review of Prepaid Ticketing Scheme 2010, Aecom for Merseytravel).
Fares data – 2015 Update Page 18 Merseytravel Policy Research Page 117 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendices
Appendix A: Bus passengers’ priorities for improvements
Source: Bus passenger priorities for improvement, Transport Focus, March 2010
.
Note that at the bus stop, in urban and metropolitan areas, only two aspects stand out as not being met: real-time information and information on fares.
Both of these elements are even more likely to not be met if we focussed on non- concessionary pass holders.
Fares data – 2015 Update Page 19 Merseytravel Policy Research Page 118 APPENDIX TWO UNDERPINNING EVIDENCE BASE
Note that for the bus journey itself, in urban and metropolitan areas only two aspects stand out as not being met: punctuality and value for money.
Fares data – 2015 Update Page 20 Merseytravel Policy Research Page 119 APPENDIX TWO UNDERPINNING EVIDENCE BASE Again, both of these elements are even more likely to not be met if we focussed on non- concessionary pass holders.
Fares data – 2015 Update Page 21 Merseytravel Policy Research Page 120 APPENDIX TWO UNDERPINNING EVIDENCE BASE
Looking at bus passengers‟ priorities for improvement – and here focussing on those not using concessionary passes – we see that in the top 5 items, two are connected to fares, explicitly:
“Bus fares, tickets and passes offer better value for money” (ranked 2nd). “Tickets and passes are available that entitle you to travel on all bus services in your local area, not just those operated by a specific bus company” (ranked 4th).
The demand for “Tickets and passes are available that entitle you to travel on all types of public transport in your local area, not just buses” was ranked 7th.
The demand for “Information on fares is available at bus stops” was ranked 21st.
Fares data – 2015 Update Page 22 Merseytravel Policy Research Page 121 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendix B: Transport Select Committee 2010 (key points)
Competition in the local bus market: http://www.parliament.uk/business/committees/committees-a-z/commons- select/transport-committee/inquiries/parliament-2010/bus-comp/
A Evidence from Transport Focus
Passengers across England rate the availability of multi-operator tickets as a high priority; this is an even higher priority in metropolitan/urban areas.
There should be co-operation / consistency between neighbouring authorities (for example, in the case of someone whose nearest town centre actually lies in a different local authority. [An example in Merseyside is people might be people in Garswood travelling to Ashton in Makerfield, or in Eastham travelling to Chester].
Multi operator tickets are especially more important on routes where services in the evenings can be provided by a different operator, necessitating the purchase of two single tickets. [An example in Merseyside is the 464 (Arriva) / 164 (Avon) route to New Ferry.]
Passengers want: A product that enables them to catch the first bus that comes along. To be aware of above product. Understanding of the product‟s terms and conditions. As easy to buy as the competing single-operator ticket. A cost that is fair, reflecting value to passenger (in terms of greater flexibility/convenience).
Transport Focus expresses particular concern that operators shouldn‟t just be able to undermine multi-operator tickets with single-operator tickets – and notes that the Competition Commission suggested restrictions on pricing / issuing of multi-journey ticket where a similar product already existed. However Transport Focus was equally concerned that there shouldn‟t be a disincentive for operators to reduce fares. Ultimately, much would depend on the motive behind an operator's actions – i.e., setting the cost a multi-operator ticket too high or lowering their fares to compete with a multi-operator ticket.
B. Competition Commission
The competition commission report into the bus market (http://www.competition- commission.org.uk/our-work/directory-of-all-inquiries/local-bus-services-market- investigation) found relatively high levels of profitability (based on Return on Capital Employed – an average of 13.5% across 2005/6 to 2009/10). Report is not clear as to whether this excess profit is reinvested to the benefit of passengers (i.e., fleet renewal, ticketing, infrastructure) or distributed to shareholders.
Notes that the Return on Capital Employed for operators in London (where routes are awarded on a competitive basis) tended to be lower than that achieved outside London.
Fares data – 2015 Update Page 23 Merseytravel Policy Research Page 122 APPENDIX TWO UNDERPINNING EVIDENCE BASE C. Evidence from Stagecoach
Since 2005/6 has invested £500m on 4,000 new buses.
Claims to be Britain‟s best value operator, with low cost weekly tickets – 17.5% cheaper than competitors.
Cites Transport Focus work, identifying reliability and punctuality as being the two issues of most importance to passengers.
Believes multi-operator tickets provide significant benefits but wary of prescriptive pricing formulae.
Believes that DfT should promote Quality Partnerships, local authorities and operators should concentrate on delivering them.
D. Evidence from Arriva
Arriva has a strategy of delivering its commercial objectives through growth via: Consistency at the bus stop A passenger focused culture Marketing investment Pricing Networking refreshing
Arriva conducts its own independent surveys of passengers; these show passenger‟s preferences are for punctuality, frequency, cleanliness and value for money.
E. Evidence from Bus Users UK
Notes how fares are an issue to those on low incomes (and not entitled to concessionary travel); this can impact on people‟s engagement in economic / education / health / social activities.
F. General points
Virtually all evidence has supported the Competition Commission recommendations to encourage more multi-operator ticketing.
Notes that some local authorities / PTEs have implemented multi-operator tickets; but that dominant bus companies rendered them unattractive by charging a premium / undercutting them with cheaper single-operator tickets.
Fares data – 2015 Update Page 24 Merseytravel Policy Research Page 123 APPENDIX TWO UNDERPINNING EVIDENCE BASE Conclusions
“Wider provision of multi-operator ticketing is long overdue. The government must ensure that where the private sector does not deliver such a scheme voluntarily, the local transport authority has the powers to implement a viable scheme.”
Recommends that the government / local transport authorities focus on raising standards and achieving a “stable reliable and integrated service”.
Fares data – 2015 Update Page 25 Merseytravel Policy Research Page 124 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendix C: Summary of findings on Elasticity of Demand
Taken from Review of Prepaid Ticketing Scheme 2010; AECOM, for Merseytravel
Key Finding:
Aecom noted in their 2010 report on prepaid ticketing, that bus demand will increase by 0.03% for every 1% rail fare increase whereas rail demand will increase twice as much for the same fare increase on bus. The principal they are arguing is that rail travel is seen to be more attractive than bus and hence bus passengers will be easier to entice onto rail services.
Within the Aecom report they reference David Hensher‟s „Bus Transport: Economics, Policy and Planning‟; the following table highlights the direct elasticities in bold. For example a 10% increase in bus fares would result in a 3.4% drop in demand for bus whereas the same percentage increase in train would prompt a 2.28% drop in rail demand.
It is noted in the table below that both for increasing rail and bus costs there can be an increase in car use.
Fares data – 2015 Update Page 26 Merseytravel Policy Research Page 125 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendix D: Prepaid Ticket product prices
Stagecoach Area Daily Weekly 4 weeks 13 weeks Annual Merseyside & Cheshire £3.90 £13.50 £48.00 na na As above, plus Lancashire & Cumbria £27.30 £98.00 na na
Arriva Area Daily Weekly 4 weeks 13 weeks Annual Liverpool, Knowsley, Sefton £4.20 n/a n/a n/a n/a Merseyside n/a £16.00 £56.00 n/a £560.00 Merseyside, Greater Manchester, £5.20 n/a n/a n/a n/a Cheshire & Wrexham As above, plus North Wales £5.50 £17.50 £61.50 n/a £615.00
Merseytravel Saveaway Area Daily Weekly 4 weeks 13 weeks Annual 1 area (Wirral or St.Helens or Liverpool + £3.90 n/a n/a n/a n/a Knowsley + Crosby or Sefton) Merseyside, Chester, Ellesmere Port & £5.10 n/a n/a n/a n/a Ormskirk
Merseytravel Trio Area Daily Weekly Monthly 13 weeks Annual 1 area (or 2 Zones) (Wirral or St.Helens or Liverpool + n/a £21.90 77.50 n/a £775.00 Knowsley + Crosby or Sefton) 1 area + 1 zone (or 3 Zones ) (i.e., Wirral to Liverpool City Centre or n/a £28.00 £96.40 n/a £964.00 Southport to Bootle) All Merseyside n/a £36.30 £125.70 n/a £1,257.00
Merseytravel Solo Area Daily Weekly Monthly 13 weeks Annual 1 area (Wirral or St.Helens or Liverpool + n/a £18.00 £58.30 n/a £631.00 Knowsley + Crosby or Sefton) All Merseyside n/a £25.90 £83.40 n/a £903.00
Halton Transport Area Daily Weekly Monthly 13 weeks Annual 1 area £3.80 £15.00 £61.00 n/a n/a (Halton)
Halton Transport have no prepaid tickets beyond a month duration.
Merseytravel Tickets; Source,Mersytravel.gov.uk , September 2015 Operator Tickets ,Source Oppeator websites 2015
Fares data – 2015 Update Page 27 Merseytravel Policy Research Page 126 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendix E: Data tables
Table 1: Bus passenger journeys Bus passenger journeys on local bus services (m)
English English non- metropolitan metropolitan London1 areas1 Merseyside2 areas1 1997/98 1,281 1,292 177 1,286 1998/99 1,266 1,256 168 1,286 1999/00 1,294 1,213 170 1,297 2000/01 1,347 1,203 169 1,292 2001/02 1,422 1,196 171 1,263 2002/03 1,527 1,182 170 1,255 2003/04 1,692 1,162 166 1,233 2004/05 1,802 1,069 164 1,177 2005/06 1,881 1,070 163 1,184 2006/07 1,993 1,072 154 1,253 2007/08 2,160 1,098 148 1,297 2008/09 2,228 1,105 149 1,328 2009/10 2,238 1,085 143 1,313 2010/11 2,269 1,056 142 1,317 2011/12 2,324 1,027 137 1,313 2012/13 2,315 1,001 136 1,281 2013/14 2,384 1,015 137 1,303 2014/15 2,394 1,004 137 1,303 1 Source: Bus passenger journeys on local bus services, Transport Statistics Great Britain, DfT. 2 Source: Merseytravel Annual Statistical Monitor
Table 2: Volume of local journeys
Vehicle km Bus (m)1 Rail (m)1 (m)2 Car km (m)3 1997/98 176.6 27.5 7,095 5,881 1998/99 168.5 29.4 7,185 5,932 1999/00 169.8 31.5 7,254 5,991 2000/01 169.2 32.1 7,343 6,055 2001/02 170.6 33.1 7,375 6,085 2002/03 169.5 32.1 7,593 6,265 2003/04 165.9 33.0 7,587 6,198 2004/05 164.3 34.1 7,651 6,229 2005/06 162.9 35.3 7,763 6,295 2006/07 153.8 37.0 7,780 6,295 2007/08 147.7 38.4 7,826 6,305 2008/09 148.7 39.1 7,824 6,318 2009/10 142.9 39.6 7,727 6,288 2010/11 141.6 39.8 7,564 6,123 2011/12 137.1 41.2 7,639 6,183 2012/13 136.2 39.0 7,574 6,135 2013/14 136.5 41.1 7,569 6,110 2014/15 136.7 41.9 7,732 6,210 1 Source: Merseytravel Annual Statistical Monitor 2 Source: Motor vehicle traffic by Local Authority in Great Britain, DfT. (Note: Calendar, not financial year) 3 Source: Car traffic by Local Authority in Great Britain, DfT. (Note: Calendar, not financial year)
Fares data – 2015 Update Page 28 Merseytravel Policy Research Page 127 APPENDIX TWO UNDERPINNING EVIDENCE BASE Table 3: Household income and car ownership
Average car ownership levels Rest of Deprived Household Income Merseyside areas Up to £5,000 0.27 0.14 Up to £7,500 0.28 0.21 Up to £10,000 0.68 0.32 Up to £12,500 0.85 0.34 Up to £15,000 0.88 0.70 Up to £20,000 0.97 0.88 Up to £25,000 1.27 1.11 Up to £30,000 1.47 1.46 Up to £35,000 1.59 1.30 Up to £40,000 1.63 1.33 Up to £45,000 2.00 1.00 Up to £50,000 1.79 2.00 Up to £55,000 2.00 2.00 Up to £60,000 2.33 - Over £60,000 2.38 1.50 Source: Countywide Household Survey (CWS) 2010
Table 4: Household income and modal choice (national data)
Table NTS0705 Travel by household income quintile and main mode / mode: England, 2013
Real household income quintile Lowest real Highest real All income income level Second level Third level Fourth level income level levels Trips per person per year by main mode: Walk 253 190 193 189 187 203 Bicycle 12 17 14 15 14 14 Car / van driver 203 328 410 478 496 380 Car / van passenger 180 228 227 221 192 210 Other private transport1 7 13 10 10 10 10 Local and non-local buses 116 68 59 37 33 63 Rail2 20 20 22 27 61 30 Other public transport3 17 13 10 10 14 13
All modes 808 877 945 987 1,008 923 Distance (miles) per person per year by mode: Walk 216 169 181 170 199 187 Bicycle 28 43 48 60 70 49 Car / van driver 1,296 2,220 3,028 4,355 5,526 3,235 Car / van passenger 1,447 1,692 1,938 2,065 2,229 1,865 Other private transport1 78 147 223 160 164 154 Local and non-local buses 524 381 342 211 179 331 Rail2 391 384 506 617 1,427 650 Other public transport3 73 75 69 76 286 113 All modes 4,053 5,110 6,334 7,714 10,079 6,584 Unweighted sample size: individuals 3,398 3,361 3,243 3,287 2,903 16,192 trips ('000s) 50 54 56 60 54 274 stages ('000s) 56 58 61 65 62 302 Source: 2013 National Travel Survey, DfT.
Fares data – 2015 Update Page 29 Merseytravel Policy Research Page 128 APPENDIX TWO UNDERPINNING EVIDENCE BASE Table 5: Gross Annual Wages (Median) Merseyside
Residents in full-time Residents in part-time employment employment Change on Change on £ Wage previous year £ Wage previous year 2007 22,317 3.4% 7,851 1.6% 2008 23,198 3.9% 8,121 3.4% 2009 23,435 1.0% 8,456 4.1% 2010 24,375 4.0% 8,327 -1.5% 2011 24,421 0.2% 8,437 1.3% 2012 24,647 0.9% 8,481 0.5% 2013 25,508 3.5% 8,726 2.9% 2014 25,572 0.3% 9,060 3.8% Source: Annual Survey of Hours and Earnings, ONS
Table 6: Merseyside Working Age Population: Employment Patterns
Working full Working Self time part time employed Mar 2007 438,400 140,000 57,900 Jun 2007 435,000 142,700 59,800 Sep 2007 430,900 145,900 54,200 Dec 2007 429,500 152,000 53,500 Mar 2008 426,100 150,700 56,000 Jun 2008 422,800 151,100 55,200 Sep 2008 426,900 143,100 59,800 Dec 2008 425,000 141,100 57,300 Mar 2009 426,000 140,900 56,900 Jun 2009 430,400 141,200 59,100 Sep 2009 424,300 145,900 57,300 Dec 2009 426,200 141,100 58,400 Mar 2010 424,500 141,800 56,400 Jun 2010 425,300 144,800 57,000 Sep 2010 428,200 144,700 56,600 Dec 2010 424,100 149,700 56,700 Mar 2011 425,900 148,800 58,600 Jun 2011 423,700 151,000 59,200 Sep 2011 416,300 156,200 58,600 Dec 2011 412,400 159,200 57,800 Mar 2012 410,600 161,900 61,600 Jun 2012 415,300 157,900 61,200 Sep 2012 414,800 157,000 59,500 Dec 2012 422,600 156,200 60,000 Mar 2013 424,300 156,900 58,100 Jun 2013 422,500 159,300 58,800 Sep 2013 424,900 160,100 64,400 Dec 2013 427,100 156,600 66,800 Mar 2014 427,500 155,800 66,900 Jun 2014 425,200 144,300 63,500 Sep 2014 431,700 140,600 66,000 Dec 2014 428,500 138,300 63,800 Mar 2014 435,200 138,800 63,600 Source: Annual Population Survey, ONS
Fares data – 2015 Update Page 30 Merseytravel Policy Research Page 129 APPENDIX TWO UNDERPINNING EVIDENCE BASE Table 7: Northwest England Part-time employees: factors behind being in part-time employment People (000s)
Could not Did not find full- want full- time job time job Dec 2011 143.3 555.9 Mar 2012 153.8 553.0 Jun 2012 162.8 556.4 Sep 2012 160.3 561.0 Dec 2012 166.8 556.8 Mar 2013 162.2 559.1 Jun 2013 154.1 568.9 Sep 2013 154.1 571.1 Dec 2013 152.0 566.2 Mar 2014 152.1 569.6 Jun 2014 154.5 554.9 Sep 2014 155.6 547.8 Dec 2014 158.2 545.9 Mar 2015 159.3 547.4 Source: Regional Labour Market Statistics, ONS
Although the above data is not available at a Merseyside level, this illustrates further the pressures on household budgets; much of the increase in part time employment coming from those who would have wanted a full-time job. For this group, the ticket products they may have used when in full-time employment may no longer be a „match‟ for their current situation.
Fares data – 2015 Update Page 31 Merseytravel Policy Research Page 130 APPENDIX TWO UNDERPINNING EVIDENCE BASE Table 8: Trends in public transport fares, motoring costs and the retail price index Indexed values
Retail Price AA Motoring Index1 Bus2 Merseyrail3 Costs4 2000 100.0 100.0 100.0 100.0 2001 101.8 103.3 106.1 102.1 2002 103.3 117.8 109.1 100.2 2003 106.5 124.6 112.1 110.1 2004 108.5 132.4 115.2 103.3 2005 112.6 144.6 118.2 111.3 2006 115.5 151.1 121.8 110.0 2007 120.8 160.8 126.1 109.6 2008 125.8 196.3 131.3 146.6 2009 124.3 216.0 138.8 114.0 2010 131.0 212.9 143.6 132.7 2011 137.8 212.2 143.6 134.9 2012 142.6 230.0 150.9 142.1 2013 146.7 252.2 159.4 140.7 2014 150.3 261.6 164.8 121.7 2015 151.7 255.5 168.5 129.6 1 Source: Consumer Price Inflation, ONS 2 Source: Fares basket, major routes / Operators, Merseytravel (ammend figure for 2014) 3 Source: Integrated transport 4 Source: The AA running costs tables
Fares data – 2015 Update Page 32 Merseytravel Policy Research Page 131 APPENDIX TWO UNDERPINNING EVIDENCE BASE Table 9: Trends in public transport fares, motoring costs and the retail price index Actual values
Bus Retail Price average Merseyrail AA Motoring Index (Jan fare average fare Costs (pence 1987 = 100)1 (pence)2 (pence)3 per mile)4 2000 170.1 90.0 165.0 39.6 2001 173.1 93.0 175.0 40.4 2002 175.7 106.0 180.0 39.6 2003 181.2 112.1 185.0 43.6 2004 184.6 119.1 190.0 40.9 2005 191.6 130.1 195.0 44.1 2006 196.5 136.0 201.0 43.5 2007 205.4 144.7 208.0 43.3 2008 214.0 176.6 216.6 58.0 2009 211.5 194.4 229.0 45.1 2010 222.8 191.6 237.0 52.5 2011 234.4 191.0 237.0 53.4 2012 242.5 207.0 249.0 56.2 2013 249.5 227.0 263.0 55.7 2014 255.7 235.5 272.0 48.1 2015 258.0 229.9 278.0 51.3 1 Source: Consumer Price Inflation, ONS 2 Source: Fares basket, major routes / Operators, Merseytravel (ammend figure for 2014) 3 Source: Integrated transport 4 Source: The AA running costs tables
Fares data – 2015 Update Page 33 Merseytravel Policy Research Page 132 APPENDIX TWO UNDERPINNING EVIDENCE BASE Table 10: Local bus fares Indexed to 2005 English All items Retail metropolitan Prices Index London areas Merseyside 1995 77.4 71.1 61.8
1996 79.5 74.3 65.2 59.2 1997 81.6 77.0 69.0 61.5 1998 84.4 80.0 72.6 66.1 1999 86.1 83.3 75.8 69.2 2000 88.4 83.2 79.1 69.2 2001 90.4 83.9 83.3 71.5 2002 91.6 81.5 87.3 81.5 2003 94.4 81.8 90.3 86.2 2004 96.9 86.9 94.7 91.6 2005 100.0 100.0 100.0 100.0 2006 102.4 105.7 111.9 104.5 2007 107.3 116.6 113.6 111.2 2008 111.3 111.2 121.6 135.8 2009 110.9 120.0 136.5 149.4 2010 115.9 135.2 137.6 147.3 2011 122.0 144.5 146.4 146.8 2012 126.4 152.3 156.2 159.1 2013 130.6 159.4 161.3 174.5 2014 133.8 164.3 165.3 181.0 2015 135.0 168.8 171.4 176.7 Source: Local bus fares index, DfT Source: Merseytravel Annual Statistical Monitor (Ammended figure Merseyside 2014) All values indexed to 2005 to match DfT source statistics
Table 11: Bus Journeys by payment method Passenger journeys Operator Prepaid Merseytravel My Cash fares Tickets prepaid tickets Saveaways Trios Solos Ticket 1994/95 98,186,841 10,367,522 26,283,521 8,883,543 7,682,661 9,717,317 1995/96 96,155,927 11,702,590 26,012,323 10,142,530 6,612,550 9,257,243 1996/97 86,639,429 9,419,903 21,489,814 7,948,564 6,583,718 6,957,532 1997/98 87,568,191 8,863,374 18,886,790 5,498,232 6,977,382 6,411,176 1998/99 81,615,367 9,245,756 18,166,035 4,577,838 7,111,365 6,476,832 1999/00 79,916,031 10,357,814 20,365,798 4,525,169 8,611,426 7,229,203 2000/01 78,774,634 7,695,981 25,004,666 8,225,289 7,280,680 9,498,697 2001/02 78,157,216 5,737,556 32,409,216 13,288,853 6,008,941 13,111,422 2002/03 76,710,751 7,705,906 32,411,999 11,128,337 6,039,508 15,244,154 2003/04 69,853,616 11,735,096 31,451,425 10,127,372 6,103,156 15,220,897 2004/05 66,853,745 13,318,943 31,575,962 9,483,927 6,350,662 15,741,373 2005/06 63,657,279 16,767,622 31,213,177 9,278,861 6,479,859 15,454,457 2006/07 52,704,445 24,373,481 27,720,041 9,049,472 6,151,728 12,518,841 2007/08 47,258,143 28,106,455 24,543,916 7,182,135 5,618,771 11,743,010 2008/09 43,120,198 32,166,202 22,806,165 5,801,142 5,385,554 11,619,469 2009/10 39,315,626 32,255,088 22,197,861 6,385,734 5,034,099 10,778,028 2010/11 37,490,837 34,406,175 22,730,729 6,278,727 5,297,409 11,154,593 2011/12 33,526,730 34,193,651 21,955,946 6,776,068 5,066,023 10,113,855 2012/13 30,132,827 36,121,088 23,328,633 8,229,265 4,975,041 10,124,327 2013/14 25,337,299 40,277,354 23,826,400 8,165,884 5,107,668 10,552,848 2014/15 22,993,116 42,143,592 24,065,959 6,270,858 4,822,288 9,980,360 2,992,453 Source: Operator Print, Data & Analysis, Finance, Merseytravel
Fares data – 2015 Update Page 34 Merseytravel Policy Research Page 133 APPENDIX TWO UNDERPINNING EVIDENCE BASE Note: Excludes concessionary travel Appendix F: “Short Hop” Fare details
Operator Standard Single Ticket: Short Hop Single Ticket: Network Warrington Adult prices range from £1.60 n/a to £4.20 for longer journeys. Nottingham City Transport £2 (adult) A single journey within a fare stage £1.10 (Adult) National Express West Single journey on-bus cash Stage 1-2 (Short Hop) Midlands fares are based upon 'fare stages'. Each bus route is split City Hop. into a number of fare stages, with each fare stage usually Single journey wholly within the containing about 3 bus stops. Middle Ring Road in Birmingham Standard Single (Stage 3+ ) £2.20 (Adult) £1.90 (Adult)
First Leeds Standard Single £1.30 (Adult) £2.30 (Adult) Typically 4 stops within or For Longer journeys between across the Leeds Metropolitan Leeds City Centre and the Boundary (please note on a few Metropolitan boundary. routes it may be 3 or even 6 stops). £2.80 (Adult)
Journeys from the city centre to the Leeds Metropolitan boundary or across the city or across the Leeds Metropolitan boundary and into Bradford. Note some longer journeys from Leeds to Halifax and Skipton may be higher. Cardiff Bus They have 2 fare zones, Cardiff Fares are available at £1 adult (including Penarth) and Barry. or 70p young persons for any single journey in the short hop Standard Single: £1.80 (Adult) boundary in the designated Cardiff Fare Zone “short hop zones”
Standard Single: £1.70 (Adult) city centre, Barry Fare Zone Canton, Roath, Standard Single: £2.50 (Adult) Llanrumney Both Fare Zones & St. Mellons.
Short hop fares are only valid for a single journey within each of the short hop areas and are not transferable from one designated short hop area to another. First Glasgow SimpliCITY Single Fares Short Hop
Longer Hop (travel across city) A £1.20 short hop fare typically £2 (Adult) applies to journeys of approximately 5 stops or less. Single fares for trips outside the city are based on distance.
Fares data – 2015 Update Page 35 Merseytravel Policy Research Page 134 APPENDIX TWO UNDERPINNING EVIDENCE BASE Operator Standard Single Ticket: Short Hop Single Ticket: First South Yorkshire Single fares in Sheffield range A special 50p fare is available between £1 and £2.30 for short journeys around Sheffield City Centre. Go North East Newcastle n/a
£1.50 (1 zone) £2.10 (2 zones) Lothian Buses SINGLEticket n/a
Edinburgh Adult: £1.50
Brighton & Hove Buses There's a standard single Short Hops: journey fare of £2.40 Short hop fares are available throughout the Brighton and throughout the city for £1.80. Hove conurbation, stretching from Shoreham in the west to Centre Fare: Falmer and Saltdean in the There is a central zone flat fare east. of £2.
Transport for London Oyster & Contactless n/a Pay As You Go
£1.50 Source: Operator Websites 2015
Fares data – 2015 Update Page 36 Merseytravel Policy Research Page 135 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendix G: Sampled fare tables from the Merseyside districts
Sampled Bus Routes in Different Areas Sefton St Helens To and From Southport To St Helens Fom Liverpool Sample Sample Sample Sample Sample Sample Route 1 Route 2 Route 3 Route 4 Route 1 Route 2 Miles To From To From To From To From Miles To From To From 1 220 220 220 220 220 220 220 220 1 220 220 200 200 2 220 250 220 220 220 220 220 220 2 220 220 200 200 3 250 250 250 250 220 220 220 220 3 220 250 200 230 4 250 250 250 250 280 250 220 220 4 220 250 200 230 5 250 250 250 250 280 250 220 220 5 220 280 200 230 6 250 250 250 250 280 280 220 220 6 220 280 200 230 7 - 250 250 280 280 280 300 220 7 220 280 200 280 8 - 250 280 280 280 280 300 220 8 220 280 230 300 9 - 250 280 280 280 280 300 - 9 280 300 230 300 10 - 280 280 280 280 280 300 - 10 280 300 230 300 11 - 280 280 280 300 280 300 - 11 300 300 280 300 12 - 280 280 280 300 280 300 - 12 300 300 300 300 Wirral Knowsley Wirral (excluding cross river services) To / From Hyuton & To / From Kirkby Sample Sample Sample Sample Sample Sample Route 1 Route 2 Route 3 Route 4 Route 1 Route 2 Miles To From To From To From To From Miles To From To From 1 200 140 220 250 200 200 200 200 1 220 200 200 200 2 250 180 220 250 200 200 200 230 2 230 200 200 200 3 250 200 220 270 200 220 230 230 3 230 200 200 200 4 280 250 220 270 200 220 250 250 4 230 200 200 200 5 280 280 250 280 220 230 250 250 5 250 200 200 200 6 280 280 250 280 220 280 250 250 6 250 200 200 200 7 330 330 280 280 270 280 250 250 7 250 200 200 200 8 280 280 280 280 270 310 8 250 200 200 200 9 280 280 280 280 270 310 9 250 200 200 200 10 280 280 280 280 270 310 10 250 200 200 200 11 280 280 280 280 310 310 11 250 200 200 200 12 280 280 280 280 310 310 12 250 200 200 200 Halton Within Halton Only Sample Sample Route 1 Route 2 Miles To From To From 1 220 220 200 200 2 220 220 200 200 3 220 250 200 230 4 220 250 200 230 5 220 280 200 230 6 220 280 200 230 7 220 280 200 280 8 220 280 230 300 9 280 300 230 300 10 280 300 230 300 11 300 300 280 300 12 300 300 300 300
Fares are in pence Source : Operator fare tables 2014
Fares data – 2015 Update Page 37 Merseytravel Policy Research Page 136 APPENDIX TWO UNDERPINNING EVIDENCE BASE
Fares data – 2015 Update Page 38 Merseytravel Policy Research Page 137 APPENDIX TWO UNDERPINNING EVIDENCE BASE Appendix H: Main Operators
Main Bus Operators in PTE Areas Market Share % Merseyside Arriva 54.5 Stagecoach 19.6 Huyton Travel 6.0 Greater Manchester First 38.2 Stagecoach 37.0 Arriva 5.0 South Yorkshire First 49.8 Stagecoach 35.8 Wellglade 5.5 West Midlands National Express 75.5 Rotala 8.4 Arriva 4.4 West Yorkshire First 57.6 Arriva 23.7 Transdev 5.4 Tyne and Wear Go Ahead Group 50.6 Stagecoach 39.3 Arriva 7.7
Main Bus Operators in Unitary Authorities Market Share % Halton Arriva 55.6 Halton Transport 35.3 Ashcroft Travel 2.4 Warrington Network Warrington 79.8 Arriva 10.2 Fairbrothers Coaches 4.6 Source; DfT Bus Statistics
https://www.gov.uk/government/organisations/department-for-transport/series/bus-statistics Last Update September 2014
Fares data – 2015 Update Page 39 Merseytravel Policy Research Page 138 Agenda Item 12
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: ALL
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE HEAD OF PAID SERVICE
LIVERPOOL CITY REGION DEVOLUTION AGREEMENT: DRAFT IMPLEMENTATION PLAN
1. PURPOSE OF REPORT
1.1 The purpose of this report is to update the Liverpool City Region Combined Authority on the implementation of the devolution agreement signed with Government in November 2015 and present a draft implementation plan.
2. RECOMMENDATIONS
2.1 It is recommended that the Liverpool City Region Combined Authority:-
a) Note the draft implementation plan at the Appendix to this report, which Government is reviewing at the same time; b) Note that the progress against the devolution agreement commitments set out in the draft implementation plan will be kept under review by lead officers, working with Lead Officers and reporting to Portfolio Holders; and c) Note that decisions on implementation of individual parts of the agreement, such as the Single Investment Fund and devolution of the adult education budget, will be brought to the Combined Authority as appropriate.
3. BACKGROUND
3.1 The devolution agreement signed between Liverpool City Region and Government in November 2015 committed the Combined Authority to work with the Government to develop a full implementation plan covering each policy in the deal.
3.2 The draft plan attached as Appendix One to this report brings together the commitments within the agreement and sets out the work required to implement the deal. It highlights key actions, milestones, timescales, requirements of Government and risks, including how these are being mitigated.
3.3 Implementation of the commitments in the deal is already underway, as shown in the plan, with progress already being made on priority areas.
Page 139
3.4 The implementation plan will be kept under review by Lead Officers and reporting to Portfolio Holders on progress being made.
3.5 This will be done collaboratively with those identified within Government in order to jointly monitor implementation of the commitments made in the agreement.
3.6 Engagement with and comments from Government on the plan have been very positive to date. The Plan is being considered by Government at their internal Board established to oversee the implementation of devolution deals. Any feedback or amendments to Appendix One will be presented to the Combined Authority at the meeting on 18 March 2016.
4. RESOURCE IMPLICATIONS
4.1 There are no direct resource implications to this report. Any actions to be taken in implementing the devolution agreement will be presented to the Combined Authority as appropriate for consideration and all financial implications set out at that point.
5. EQUALITY AND DIVERSITY IMPLICATIONS
5.1 There are no specific equality and diversity implications associated with the implementation of the recommendations in this report. Individual elements of the deal will be required to consider such implications as part of their implementation plans.
6. COMMUNICATION ISSUES
6.1 There are no specific communication issues associated with the implementation of the recommendations in this report. Individual elements of the deal will be communicated and presented to stakeholders and the public as appropriate and as part of their implementation plans.
7. CONCLUSION
7.1 This report presents the Combined Authority with a draft implementation plan for the devolution agreement signed in November 2015.
GED FITZGERALD Head of Paid Service
Contact Officers: Ged Fitzgerald, Liverpool City Council (0151 233 0048) Lisa Smith, Liverpool City Council (0151 233 0068)
Appendices: Appendix One – Draft Implementation Plan for Devolution Agreement
Page 140
Liverpool City Region Devolution Implementation Plan v1 – 04/03/2016 The Liverpool City Region Devolution Agreement was published on 17 November 2015. This summary sets out the agreement between the government and Liverpool City Region and both the offer of powers and budgets from government, and the reforms and measures that Liverpool City Region will need to deliver. Central to this is a reformed governance system.
Summary of the Liverpool City Region agreement:
A new, directly elected Liverpool City Region Mayor (LCR Mayor) will act as Chair to the Liverpool City Region Combined Authority (LCR CA) and will exercise the following powers and functions devolved from central government: ● Responsibility for a devolved and consolidated transport budget, with a multi-year settlement to be agreed at the Spending Review. ● Responsibility for franchised bus services, which will support the Combined Authority’s delivery of smart and integrated ticketing across the Combined Authority. ● Powers over strategic planning, including the responsibility to create a single statutory city region framework, a Mayoral Development Corporation and to develop with government a Land Commission and a Joint Assets Board for economic assets.
Page 141 Page The LCR CA, working with the LCR Mayor, will receive the following powers: Summary ● Control of a £30 million a year funding allocation over 30 years, to be invested in the Liverpool City Region Single Investment Fund, to unlock the economic potential of the River Mersey and Superport as well as maximise the opportunities from HS2. ● Responsibility for chairing an area-based review of 16+ skills provision, the outcomes of which will be taken forward in line with the principles of the devolved arrangements, and devolved 19+ adult skills funding from 2018/19. ● Joint responsibility with the government to co-design employment support for the harder-to-help claimants. ● More effective joint working with UKTI to boost trade and investment, and responsibility to work with the government to develop and implement a devolved approach to the delivery of national business support programmes from 2017. ● Building on the success of International Festival for Business (IFB) 2014 and the proposals for IFB 2016, Liverpool City Region and the government, and in particular UKTI and the GREAT Britain campaign, will continue engagement to establish IFB Liverpool as a vital feature of the international business calendar in 2018 and 2020.
In addition: ● To support the development of the Liverpool City Region, the government will offer Liverpool City Region expert advice and support to ensure they are able to put forward a City Region led proposal to undertake a Science and Innovation audit. ● The Liverpool City Region will engage with the government to explore options around a sustainable and viable business model for National Museums Liverpool. ● The government will work with the Liverpool City Region Combined Authority to agree specific funding flexibilities after the Spending Review.
1 04/03/2016 15:53
Deal Elements: LCR Lead Governance/Mayoral Election Angela Sanderson Skills (19+) Sue Jarvis Skills (16-18) Sue Jarvis Employment Sue Jarvis Planning Mark Dickens Housing Tim Jago Policy Leads Transport Huw Jenkins Innovation John Whaling Business Growth and Support Mark Basnett Energy and Environment Catherine Garnell Culture Claire McColgan Single Investment Fund Catherine Garnell
Page 142 Page European Funding Lisa Smith
2 04/03/2016 15:53 Deal Governance/Mayoral Election Element: To move to the model for a Directly Elected Mayor for the Combined Authority, operative from May 2017, with associated legislative and Summary: organisational changes to implement both the model and the terms of the Devolution Agreement Identify and specify the requirements of secondary legislation Identify and specify required changes to the Combined Authority Constitution Draft appropriate scheme for consultation and submission to Secretary of State Outcomes: Agree electoral arrangements for the election of Mayor in May 2017 Review devolved powers and identify legal and risk implications in relation to rights and liabilities Implement arrangements which provide the capacity to support the CA with a directly-elected mayor Initial draft order establishing mayoral model, including term of office – May 2016 Consult on scheme – July/August 2016 Milestones: Specific draft order re. powers and responsibilities – August 2016 Changes to Constitution for new model approved by CA by March 2017 Increase in capacity to support new framework ongoing throughout 2016-17
Page 143 Page Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Secondary Legislation Draft Mayoral Order agreed with DCLG David Parr/ Leigh May 2016 Angela Bura Sanderson SoS sends mayoral order for final consent from CA/ Constituent Councils David Parr/ Leigh June 2016 Angela Bura Sanderson Mayoral orders laid before debate before Parliament David Parr/ Leigh July 2016 Angela Bura Sanderson Agree powers to be transferred to the elected Mayor and combined authority, subject to review, scheme Angela Leigh May 2016 and consultation Sanderson Bura SoS sends transfers order for final consent from CA/Constituent Councils David Parr/ Leigh October Angela Bura 2016 Sanderson Transfer orders laid for debate in Parliament David Parr/ Leigh November 3 04/03/2016 15:53 Angela Bura 2016 Sanderson Constitution Review existing Constitution with a view to making sufficient amendments to operate for the 2016/17 Angela - April 2016 municipal year Sanderson Approve interim amendments to the Constitution for 2016/17 Combined - June 2016 Authority Identify amendments needed to Constitution for operation from May 2017 Angela - May 2016 Sanderson Consultation on proposed Constitution David Parr/ - July 2016 Angela Sanderson Approval to Constitution for operation from May 2017 Combined - April 2017 Authority Scheme Page 144 Page Draft appropriate scheme Angela - April 2016 Sanderson Seek approval of Combined Authority to publish and consult on scheme Angela - June 2016 Sanderson Publish scheme and consult on it Combined - July/August Authority 2016 Submit summary of consultation responses to Secretary of State Combined - August Authority 2016 Electoral Arrangements Term of office agreed with DCLG David Parr Leigh February Bura 2016 Election funding agreed with DCLG David Parr Leigh March Bura 2016 Consider how the election will be conducted locally David Parr - March 2016 Capacity Make arrangements for the new governance process to be fully supported, with particular consideration of: Ged - To be in Staffing and management Fitzgerald place by Finance systems May 2017
4 04/03/2016 15:53 IT systems Location
Risks and Issues Mitigation LCR lead Govt lead RAG Rating Delays in Parliamentary process Ensure timelines are agreed Angela Leigh Bura Green and met Sanderson Secondary legislation must properly provide the powers required to Full consideration must be Angela Leigh Bura Green enable the CA to assume the functions agreed in the Devolution given to the requirements Sanderson Agreement necessary and separately reviewed Legal challenge delaying implementation Where consultation is carried Angela Leigh Bura Green out, this must be in accordance Sanderson with good practice and case
Page 145 Page law Delay in implementing arrangements to support the new process, Constituent Councils need to Ged - Green leading to greater costs agree how this will be funded Fitzgerald
5 04/03/2016 15:53 Deal Skills Element: The Government will enable local commissioning of outcomes to be achieved from the 19+ adult education budget starting in academic year 2016/17; and will fully devolve budgets to the Liverpool City Region (LCR) Combined Authority from academic year 2018/19 (subject to readiness conditions). In 2016/17, the City Region will develop a series of delivery agreements with providers about what should be delivered in return for allocations in the 2016/17 academic year. For the 2017/18 academic year, and following the area review, government will work with the LCR Combined Authority to vary the block grant allocations made to providers, within an agreed framework. From 2018/19, there will be full devolution of funding. The LCR Combined Authority will be responsible for allocations to providers and the outcomes to be achieved, consistent with statutory entitlements. Summary: The government commits to an Area Based Review of post-16 education and training, currently expected to start in April 2016 (Wave 3). To ensure continued local collaboration following the Area Based Review, the Liverpool City Region Combined Authority will work in partnership with local colleges and providers to publish a local skills strategy. The government will work with LCR Combined Authority to ensure that local priorities are fed into the provision of careers advice. Liverpool City Region and the government will collaborate to maximise the opportunities presented by the introduction of the apprenticeship reforms
Page 146 Page Liverpool City Region will work with the government to explore ways of continuing to improve standards of education and skills and vocational training across the City Region. More resilient skills system which is more responsive to the needs of the local labour market Greater local influence over adult skills provision Outcomes: Clearer landscape for careers advice through improved co-ordination Increased uptake of apprenticeships Area Review to start in April 2016 Outcome agreements in place with main recipients of adult education funding by April 2016 as first wave of devolution of adult education budget Milestones: Careers Hub established by Summer 2016 Apprenticeship Growth Plan agreed by Spring 2016 Parliament has legislated to enable transfer to local authorities of the current statutory duties on the Secretary of State Area Review process is complete
Central Government and LCR Combined Authority agree arrangements to ensure devolved funding decisions take account of the sustainability and Readiness financial viability of the post 16 provider base Conditions Central Government and LCR Combined Authority agree clear principles and arrangements for sharing financial risks and managing failure of post
16 providers Learner protection and minimum standards arrangements are agreed
6 04/03/2016 15:53 Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Devolution of Adult Education Budget LCR to review baseline delivery information and existing provider plans for 2016/17 Sue Jarvis Helen March In Kaczmarek 2016 progress
LCR to publish Local Outcome Agreement setting out priorities for balance and mix of provision Sue Jarvis April 2016 In progress Initial outcome Delivery Agreements to be in place with FE colleges and main recipients of adult education May 2016 In budget funding for 2016/17 progress Grant Funding Statements shared with LCR SFA/BIS March 2016 Final Allocations 2016/17 SFA/BIS June 2016
Area Review Completes Sue Jarvis By October 2016 Performance discussions with providers to review baselines for 2015/16 and progress with enrolments in Sue Harvis Oct 2016, Page 147 Page 2016/17 with final review of outturn March 2017 & September 2017 Planning for 2017/18 Commissioning Sue Jarvis April – June 2016 Commissioner and Provider Dialogue for 2017/18 commences Sue Jarvis October- December 2016 2017/18 Delivery Agreements Formalised and Funding confirmed Sue Jarvis Jan-April 2017 BIS/ SFA Localities Budget Consultation with LCR Sue Jarvis SFA/ BIS May 2016 BIS/SFA Localities Budgets Agreed with LCR October - December 2016 From 2017/18 Government to vary the block grant allocations in line with LCR priorities. (Activity related to Sue Jarvis Helen Jan 2017 commissioning for 2017/18 likely to be Autumn 2016 phase of work – eventual allocations by Jan 2017). Kaczmarek
September 7 04/03/2016 15:53 Framework for the variation of funding agreements 2017/18 to be jointly developed and agreed between 2016 LCR and SFA/ BIS
Govt to complete legislative process to transfer statutory duties to LCR Helen June 2017 In Govt to agree with LCR statutory duties that transfer Kaczmarek progress Other readiness conditions: Jan 2017 Govt and LCR to agree learner protection and minimum standards arrangements Govt and LCR to agree funder and provider management arrangements Govt and LCR to agree arrangements to ensure sustainable 16+ provider base Govt and LCR to agree principles and arrangements for sharing financial risk and managing failure of 16+ providers Progress: under way and expected to be reported to Employment and Skills Board and Combined Authority in April 2016
Area based review
148 Page Consult with local stakeholders and partners on the scope of the review Sue Jarvis Bobbie February In progress McLelland 2016 Combined Authority and BIS to agree scope of review Sue Jarvis Bobbie March In progress McLelland 2016 Preparation of background data and information profiles Sue Jarvis Bobbie February - In progress McLelland April 2016 Appointment of Chair by Combined Authority Sue Jarvis Bobbie March In progress McLelland 2016 Stakeholder briefings Sue Jarvis Bobbie April – June McLelland 2016 Review to commence with first meeting of Steering Group Sue Jarvis Bobbie April 2016 McLelland Steering Group meetings Sue Jarvis Bobbie April 2016 McLelland onwards Implementation of findings Sue Jarvis Bobbie Ongoing McLelland Develop local skills strategy in consultation with Councils, employers, colleges and providers Sue Jarvis Bobbie Tbc McLelland Progress: report considered on draft scope by Combined Authority on 5 February 2016
8 04/03/2016 15:53
Joint work on careers Consult with stakeholders and partners and develop plan for Careers Hub Sue Jarvis tbc February – In progress April 2016 Submit plan for approval to City Region Employment and Skills Board Sue Jarvis June 2016 Implement Careers Hub Sue Jarvis Summer 2016 Progress: consultation with stakeholders under way
Joint work on apprenticeships Consult with stakeholders and partners and develop Apprenticeship Growth Plan / Apprenticeship Hub Sue Jarvis Cat February – In progress Strategy Settle/ April 2016 Olly Newton Submit plan for approval to Employment and Skills Board Sue Jarvis March In progress
Page 149 Page 2016 Apprentice reforms: submit City Region response to Government consultation on Apprenticeship targets for Sue Jarvis March In progress the public sector 2016 Apprentice reforms: employer research to benchmark awareness of reforms and potential implications Sue Jarvis Tbc Target and co-ordinate Apprentice and Growth Hub activity to help employers expand the quantity and Sue Jarvis Post Area quality of Apprentices Review Progress: consultation with stakeholders on Apprenticeship Growth Plan under way
Risks and Issues Mitigation LCR lead Govt lead RAG Rating Risk of late start to Area Based Review due to Preparation of background information and analysis Sue Jarvis Bobbie Amber delays in other Reviews nationally within the City Region as early as possible McLelland Lobbying of Government to ensure that timescales can be achieved There is a risk of FE Colleges trying to pre- Clear engagement with Colleges and learning Sue Jarvis Amber empt the LCR Review by commissioning their providers in the development process own reviews prior to 2016, with feedback On-going engagement via the Steering Group being gathered from stakeholders on a
9 04/03/2016 15:53 different geographic footprint There is a risk that the Area Review process Clear outline of City Region’s requirements through Sue Jarvis Bobbie Green does not deliver what the City Region needs it the scope and identification of local criteria McLelland to Support for the Chair to ensure that the Review achieves its outcomes On-going engagement with the sector Regular reporting to the Combined Authority There is a risk that the Careers Hub does not Clear statement of what is required locally Sue Jarvis tbc Green gain engagement with national organisations Engagement with national organisations involved in careers (E.g. Careers and Enterprise Company, National Careers Service)
Page 150 Page
10 04/03/2016 15:53 Deal Employment Element: Liverpool City Region Combined Authority will work with DWP to co-design the future employment support, from April 2017, for harder-to-help claimants, many of whom are currently referred to the Work Programme and Work Choice. Summary: Liverpool City Region will work with DWP to develop a business case for an innovative pilot to support those who are hardest to help, taking a household approach. Work with Government to develop and implement new approach to help residents with sickness benefits back into work More targeted and locally responsive employment provision Outcomes: Pilot of innovative approaches to supporting residents into work Submission of Business Case to Government by April 2016 Milestones: DWP procurement to commence in April 2016 with replacement activity by October 2017
Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Co-design and co-commissioning of back to work support Consult with Councils, CCGs, Public Health, Colleges and other stakeholders on the key issues to be Sue Jarvis n/a February In progress Page 151 Page addressed in design and process 2016 Agree roles and responsibilities with DWP at Workshop Sue Jarvis Kathy 23 In progress Prior February 2016 Combined Authority to agree City Region position for inclusion in co-design of back to work support Sue Jarvis Kathy April 2016 Prior Combined Authority to agree tender specification with DWP Sue Jarvis Kathy June 2016 Prior DWP to issue PQQ (and thereby begin ‘conditioning the market’) Sue Jarvis Kathy April 2016 Prior City Region to input into draft evaluation strategy Sue Jarvis Kathy July 2016 Prior DWP to issue Invitation to Tender Sue Jarvis Kathy Autumn Prior 2016 City Region to co-assess tender responses with DWP Sue Jarvis Kathy Autumn Prior 2016 DWP to award contracts Sue Jarvis Kathy Spring 2017 Prior
11 04/03/2016 15:53 Progress: Initial planning meeting took place with DWP 21 January 2016; consultations under way with Councils, CCGs, Public Health and Colleges; initial workshop held on 23 February 2016
Pilot household approach to supporting residents into work Initial draft of Business Case completed in conjunction with Councils, DWP, Jobcentre Plus, CCGs, Public Sue Jarvis Kathy March In progress Health and other stakeholders Prior 2016 Review Draft Business Case with DWP Sue Jarvis Kathy March In progress Prior 2016 Submit Business Case to Combined Authority for approval Sue Jarvis Kathy April 2016 In progress Prior Submit Business Case to Government Sue Jarvis Kathy April 2016 In progress Prior DWP to formally respond and proceed accordingly Sue Jarvis Kathy tbc Not yet Prior started Progress: local consultation under way Page 152 Page
Develop and submit proposal to Health and Work Innovation Fund for additional place based pilot to support residents with health conditions into work Draft proposal in conjunction with Councils, CCGs, DWP, Jobcentre Plus, Public Health, Colleges and other Sue Jarvis Kate March – In progress stakeholders on the key issues to be addressed Masri April 2016 Submit proposal for approval by the Combined Authority Sue Jarvis Kate June 2016 Not started Masri Submit proposal to Government for consideration Sue Jarvis Kate June 2016 Not started Masri Progress: Initial planning meeting took place with DWP 21 January 2016, and consultation under way with local stakeholders
Risks and Issues Mitigation LCR lead Govt lead RAG Rating There is a risk that Government will not Clear statement of City Region’s requirements Sue Jarvis Kathy Prior Green accede to the City Region’s requirements Understanding of the clear negotiating positions on both sides There is a risk that Government will not have Agreement of and adherence to timescales Sue Jarvis Kathy Prior Green the capacity to engage with the City Region Regular reporting to Combined Authority over the co-design process There is a risk that challenging design and Clearly agreed plan of engagement by City Region Sue Jarvis Kathy Prior Green 12 04/03/2016 15:53 commissioning timescales are not adhered to and Government Ensure required capacity is in place
Deal Housing and Planning Element: Development of a Statutory Spatial Framework supporting delivery of strategic housing and employment sites throughout the City Region – with individual Local Authorities completing their own Local Plans by early 2017 Power to call in planning applications with consent of Constituent LA Completion of (non-statutory) identification of key housing and employment sites by 2017 and development of a brownfield Summary: register to support this work Mayoral Development Zone designations with CPO powers A Land Commission and Joint Assets Board (with increased control over assets formerly held by the RDA) including representation from Senior Government Departments The City Region will produce a Housing Strategy by summer 2016 that will: Have an ambition to deliver 25,000 new homes over the next five years (this has been discussed and now agreed as an ambition by
Page 153 Page the Housing and Spatial Planning Board) Ensure that the condition of stock is improved – with the additional benefits of improving the socio-economic conditions within the City Region (e.g. in health, fuel poverty etc.) Identify the best tenure mix of housing for the City Region recognising the complexities of where we start from, financing and funding changes, and what national policy is currently attempting to achieve Have an honest assessment of where people want to live and consider how the implications of this can be managed including Outcomes: possible ‘zoning’ of areas based on their relationships with one another The outcomes described in the Business Case for developing a City Region Single Spatial Framework are: A working estimate of delivering 50,000 home over 10 years (the statutory process would determine an actual number) Up to 30,000 jobs enabled (using the estimates of job density for the economic sites identified in the 2013 Local Investment Plan agreed for the City Region) Better communities through a more coordinated approach More investment through providing greater confidence to investors about what activity will be supported and where spatially within the City Region area Agreement to high level objectives for a Housing Strategy (February 2016 – DONE with Housing & Spatial Planning Board) Milestones: Commission consultancy support to produce strategy by summer 2016 (TO BE DONE IMMEDIATELY) Production of Land Commission TofR (completed in September 2015)
13 04/03/2016 15:53 Establishment of Land Commission (summer 2016?) For Statutory Spatial Plan Completion of shared SHELMA (completed by summer 2016 and underway) Revised Duty to Co-operate (requirement for Spatial Plan) (April 2016) Completion of Local Plans by each LA by early 2017 Single Plan – non-statutory spatial priorities overview (by summer 2016) Statutory evidence base (2016 - 18) Statutory Framework (2018 – 20)
Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Development of a Single Statutory City Region Framework Presentation to Housing and Spatial Planning Board on commitment and timeline Mike Palin - January DONE 2016 Production 154 Page of a Revised Duty to Cooperate Mark - April 2016 Dickens Completion by each LA of their Local Plan Each LA - By early 2017 Production of a non-statutory spatial priorities overview Mark - Summer Dickens 2016 Commissioning of a single LCR Strategic Land Assessment (first stage evidence required to inform statutory plan) Mark - February DONE Dickens 2016 Completion of single LCR Strategic Land Assessment Mark - Summer Dickens 2016 Identification of key employment and housing sites (flows from above evidence work) Mike Palin - Summer 2016 Development of Brownfield register Mark tbc Summer Dickens 2016
Power to be consulted on call in of planning applications Understanding from Government of their legislative process to the ask Mark tbc Dickens Inclusion in Statutory Order Angela tbc Sanderson 14 04/03/2016 15:53
Development of a Land Commission Draft TofRs Mike Palin Tbc Oct 2015 DONE Business Plan Mike Palin tbc Oct 2015 DONE Scoping discussions with relevant Govt. Depts. Via Govt. Property Unit (initial meeting scheduled) Mike Palin Tbc March 2016 Register of assets development tbc Tbc Summer 2016 Government Senior Responsible Officer identified Mike Palin tbc
Development of Housing Investment Fund Development of LCR Housing Strategy Tim Jago Tbc Summer 2016 Understanding from Government of current housing funds position Mike Palin tbc Summer 2016
City 155 Page Region development of Fund options: Mike Palin tbc tbc Legal Form (working Governance group to be Objectives established) Delivery capability/capacity Financing
15 04/03/2016 15:53
Deal Transport Element: Responsibility for a devolved and consolidated local transport budget, including all relevant devolved highways funding, with a multi-year settlement to be agreed at the Spending Review The ability to franchise bus services in the city region, subject to necessary legislation and local consultation A Key Route Network of local roads which will be managed and maintained by the Combined Authority on behalf of the LCR Mayor, from May 2017 a long term Special Rail Grant Settlement for the Merseyrail network to allow Merseytravel to separately progress the locally-funded procurement Summary: of new trains for the Merseyrail network bring forward alternative proposals for, in the first instance, the management of rail stations on the Merseyrail Electrics network and, subsequently, all stations in the Liverpool City Region The Department for Transport will continue to work with the Liverpool City Region in the review of the tolls on the Mersey Tunnels being undertaken by the Combined Authority Government recognises and supports the city region’s crucial role in delivering Transport for the North, including improvements to the capacity of
Page 156 Page the Liverpool Lime Street area to serve as a major transport hub, and options for strategic road investment and smart ticketing. Greater levels of funding available for the delivery of key transportation interventions leading to better connectivity, better accessibility and a more equitable and sustainable transport network that supports the needs of the LCR Growth in bus patronage linked to improvements in the quality of the bus offer across the city region A well-managed and maintained Key Route Network for the Liverpool City Region that supports the needs of all road users Outcomes: A modernised, accessible local rail network that can accommodate growth and satisfy future needs Affordable, well managed Mersey Tunnels that support growth, environmental and social inclusion objectives and which support the delivery of transport interventions across the LCR through surplus toll income protected within the consolidated transport pot Radically improved transport links across the North of England to help rebalance the country’s economy, with a better connected city region and one that also alleviates transport pressures from congested ports and transport networks in other parts of the country. A new needs-led approach to the deployment of consolidated transport funds from April 2017 Management of a Key Route Network of local roads from May 2017 Milestones: Finalisation of procurement of a new fleet of trains on the Merseyrail trains, with new stock entering service from 2019/2020 Clear commitments in respect of enhanced E-W connectivity within Transport for the North’s March 2016 report and ensuring developmental work
16 04/03/2016 15:53 Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Responsibility for a devolved local transport budget, including all relevant devolved highways funding, with a multi-year settlement to be agreed at the Spending Review Confirmation of scope and scale of the devolved transport budget by DfT John Cathy March Outstanding Fogarty Miller 2016 Develop clear pipeline of transport schemes and interventions to help guide the allocation of funds from Frank Richard April 2016 Work in the devolved consolidated funding pot and from other sources Rogers Perry progress on methodology and on sifting schemes Progress: DfT is expected to confirm the scope of the consolidated budget in March 2016. The Transport for the North recommendations will help to inform spend on complementary local transport priorities following the publication of the Northern Transport Strategy in March 2016. New strategies developed in respect of LCR Rail and Mersey Ferries. Strategies for tunnels and bus being finalised, to guide future transport investment Page 157 Page priorities. The LCR intends to commission a freight study for the city region, to build upon the Northern Freight Strategy developed by Transport for the North and to help guide future funding priorities. The identification of the Key Route Network, linked to LCR-wide Transport Asset Management Plan will support targeted investment in the city region’s highway network. The ability to franchise bus services in the city region, subject to necessary legislation and local consultation Tracking and influencing the passage of the Buses Bill Liz Stephen Bill In Chandler Fidler / expected progress Deborah during Lewis 2016, with powers in place before Mayoral election Completing the LCR Bus Strategy to guide approach and action in respect of future bus service provision for Matt Stephen Strategy to In the LCR Goggins Fidler/Stev be finalised progress e by April Blackmore 2016 17 04/03/2016 15:53 Securing joint delivery of enhanced local bus services and adoption of transformational fare paying Liz Richard Bus In patronage growth targets (10% increase) through the LCR Bus Alliance Chandler Perry / Alliance progress Steve finalised by Blackmore April 2016 – 3 year rolling agreement Developing the franchising assessment –an assessment of bus franchising options for the LCR in line with Matt Richard Key Started emerging Buses Bill guidance and HM Treasury Green Book principles, also including assessment of Alliance Goggins Perry / deliverable and enhanced partnership provisions as comparison. Steve s to include Blackmore outline assessment by end of 2016 and full assessment Page 158 Page completed by early 2018. Progress: The focus of activity to date concern the development of a strong partnership approach with commercial bus operators through the Bus Alliance in order to deliver immediate improvements for customers and to grow patronage. Officers are monitoring and influencing the progress of the buses Bill through direct contact with DfT officials and through the Urban Transport Group. A Key Route Network of local roads which will be managed and maintained by the Combined Authority on behalf of the LCR Mayor, from May 2017
Establishment of a Key Route Network (KRN) task group to provide technical and professional support in the Mick Richard December Established identification and management of a KRN Noone Perry 2015 Presentation of draft proposals to elected members on scope of a KRN and to secure agreement of core Mick Richard April / May In progress principles Noone Perry 2016 Development of operating model, Highways Protocols and Governance arrangements, Memorandum of Mick Richard January Work Understanding with Highways England plus LCR-wide Asset Management Plan Noone Perry / 2017 underway Steve by task Berry group Progress: The KRN task group, chaired by Mick Noone (Halton BC) has been meeting regularly since December 2015 to define a Key Route Network based on traffic flows and relevant evidence from sources including the Liverpool City Region Transport Model.
18 04/03/2016 15:53 Best practice and guidance has been obtained from work undertaken previously by Greater Manchester. A draft KRN is now close to being defined, intended for discussion with senior officers and members of the Merseytravel Committee, members of the Combined Authority and external stakeholders (e.g. Highways England) A long term Special Rail Grant Settlement for the Merseyrail network to allow Merseytravel to separately progress the locally-funded procurement of new trains for the Merseyrail network
SDG and Grant Thornton engaged to support the negotiation of detailed elements of Special Rail Grant. Frank Dan February In This will develop a revised approach to the calculation of SRG aligned to the rolling stock business case. Rogers / Moore 2016 progress David Powell LCR to progress with the determination of the CP5 Special Rail Grant settlement under the current Frank Dan With effect Ongoing calculation method in discussion with government officials. Rogers / Moore from 1 April David 2016 Powell (agreement of formula may post-
Page 159 Page date this but retrospective ly applied if so) The rolling stock procurement process will comprise the following key stages:- Frank Dan Rogers / Moore David Powell
(a) OJEU notice agreed by Merseytravel Committee and published (a) Oct 2015
(b) Prequalified candidates identified and Invitation to Negotiate released. (b) Q1 2016
(c) Initial bids evaluated and candidates selected down (c) Q3 2016
(d) Final bids evaluated and negotiations completed (d) Q4 2016
(e) Contract award (e) end 2016
19 04/03/2016 15:53 Progress: Detailed commissioning work has been underway since 2012 to specify the Merseyrail network’s rolling stock requirements and the best way to fulfil these. The detailed business case has concluded that a new fleet of rolling stock will be necessary to secure the sustainability of the network and to support regional economic growth. The formal OJEU procurement process was commenced in October 2015. Five bidders have been shortlisted to the next stage of the process and invited to make detailed submissions. The shortlisted bidders are: o Bombardier o CAF o Mitsui: a J-Trec and Alstom consortium o Siemens o Stadler
Bring forward alternative proposals for, in the first instance, the management of rail stations on the Merseyrail Electrics network and, subsequently, all stations in the Liverpool City Region
160 Page Consultants jointly engaged by Merseytravel and Merseyrail to support business case for devolution of of Frank Peter February Merseyrail stations potentially on a long term lease basis Rogers Batten 2016
Principles in respect of scope of control and operating model options will be presented to LCR Combined Frank Peter April 2016 Authority in April 2016, setting out a proposition for the next stage of development , resources and costs Rogers Batten for approval
Subject to the Combined Authority’s policy position and confirmation of the next steps and associated Frank Peter Next steps timelines, a business case would be developed and submitted to the Department for Transport. Rogers Batten and timescales driven by Combined Authority’s policy position in April 2016 Progress:
Engagement with Network Rail to establish OMR plans, budgets and arrangements, with a view to the development of a financial model and business case The Department for Transport will continue to work with the Liverpool City Region in the review of the tolls on the Mersey Tunnels being undertaken by the Combined Authority 20 04/03/2016 15:53 Member-level review group established to examine tolling regime and make recommendations, following Frank Richard December Established commitments by Combined Authority in 2015 Rogers Perry 2015 Initial recommendations to inform toll setting process for 2016-17, for agreement by Merseytravel Frank Richard February Done Committee and Combined Authority Rogers Perry 2016 Legal advice being sourced to establish scope of existing tolling legislation in respect of funds being ring- Frank Richard March Underway fenced for local transport purposes and to inform any corresponding action. Rogers Perry 2016 Development of detailed strategy to inform on-going tolling and payment arrangements, to inform toll Frank Richard By Underway setting process for 2017-18 Rogers Perry February 2017 Progress: The task group has met, and a series of initial proposals in respect of the 2016-17 financial year were agreed by the Combined Authority on 6 February 2016. This includes a freeze on existing toll levels, further discounts for FastTag users and free travel for ‘blue light’ emergency vehicles and during the Christmas period.
Task group will continue to develop and consider further proposals to inform the 2017-18 toll setting process during 2016.
Government recognises and supports the city region’s crucial role in delivering Transport for the North, including improvements to the capacity of the Liverpool Lime Street area to serve as a major transport hub, and options for strategic road investment and smart ticketing 161 Page Development of input and evidence to inform March 2016 Transport for the North on priorities and Frank Richard February/ Underway investment , including completion of TfN Freight Strategy Rogers Perry / March Andrew Cooke Merseytravel to commission further economic evidence to inform better east-west connectivity as part of Frank Richard March New High Speed Rail - Linking Liverpool alliance and engagement with DfT and HS2 Ltd Rogers Perry / 2016 technical Helen study Smart commissio ned to assess econ. benefits of enhanced E-W rail links for LCR Progress: The LCR is actively engaged in the Transport for the North governance structures and associated workstreams, and is leading on the Freight Study for the North and on the Northern highway aspects, including participation in the RIS2 process. 21 04/03/2016 15:53 In parallel, the LCR continues to work with HS2 Ltd and DfT on building the case for a better offer for the city region from the high speed rail proposal. Feasibility work is underway in respect of reinstatement of Wapping Tunnel to support strategic local connectivity workstream.
Risks and Issues Mitigation LCR lead Govt lead RAG Rating Inability to agree scope of, and management Maintain regular meetings of KRN task group to Mick Richard Green protocols governing the Key Route Network for the secure full ownership of the process and Noone Perry / Steve Liverpool City Region develop a strong and compelling evidence base Berry to inform the proposals. Delays to/difficulties with the Merseyrail Rolling Existence of dedicated rolling stock Project David Dan Moore Green Stock replacement programme Director and project team to manage the Powell programme and engage with rail industry, DfT and Merseytravel Committee & Combined Authority members.
162 Page Inability to agree or take forward of enhancements Maintain close working relationship with DfT Liz Stephen Green to LCR bus offer as a result of delays to the passage and with Urban Transport Group as Bill passes Chandler / Fidler of the Buses Bill through Parliament Matt /Deborah LCR Bus Alliance established to secure Goggins Lewis engagement between principal bus operators and Merseytravel to deliver an enhanced bus offer. This is linked to a new Bus Strategy and associated Memoranda of Understanding. Risk that Transport for the North process fails to Maintain close engagement with TfN project Frank Richard Green attach sufficient weight to the transport needs of team and ensure senior officer and senior Rogers Perry / the LCR and that growth opportunities are not fully politician representation on TfN governance Andrew supported or realised structures Cooke Risk that the proposed single devolved transport Development of robust evidence base and Frank Cathy Miller Green budget does not meet the expectations of LCR and project selection process to prioritise schemes Rogers ability to fund transport enhancements is that offer the greatest benefit to the LCR (e.g. diminished or constrained through transport ‘pipeline development’ process) Utilisation of local funds to maximise size and effectiveness of the single devolved budget, such as surplus Mersey Tunnel toll income.
22 04/03/2016 15:53
Deal Innovation Element: The government supports the vision for innovation set out in the Liverpool City Region (LCR) Innovation Plan The government will offer Liverpool City Region a dedicated Smart Specialisation Advisory Hub workshop in Liverpool The government will offer expert advice and support to ensure that they are actively engaged in the forthcoming Science and Innovation audit Summary: process. The LCR will work with others in the North West, to be at the heart of a collaboration of sufficient scale and ambition to develop internationally significant excellence and capacity, able to compete globally. The LCR will aim to establish a robust case that ensures its innovation assets are recognised in UK context and beyond. An enhanced robust research and evidence base re. the LCR’s smart specialisation innovation assets and capabilities Outcomes: A prioritised pipeline of investment-ready projects to maximise potential funding opportunities Submit LCR-related Science & Innovation Audit (SIA) expressions of interest Hold Smart Specialisation Advisory Hub workshop Milestones: Deliver SIA(s) work streams – subject to approval Revise LCR Innovation Plan based on findings
Page 163 Page Deliver individual Innovation Plan projects
Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Development & delivery of potential SIAs involving the LCR Establish a high level steering group and, led by the LEP and its Innovation Board, and wider John Whaling Ann Johnstone 29 January DONE consortium, draft and submit a dedicated “LCR+” Expression of Interest to BIS Involvement in other relevant thematic SIA consortia and input into associated round 1 SIA John Whaling Ann Johnstone 29 January DONE submissions Hold dedicated Smart Specialisation Hub workshop in Liverpool, once SIA Round 1 outcomes known John Whaling Ann Johnstone April Pending (NB. existing innovation Asset Inventory, Innovation Plan and Innovation Board meant that the LCR was at a more advanced stage than most other places, whereby the SSH workshop would be most useful post SIA submission rather than used in order to inform its contents) Deliver LCR+ Science and Innovation Audit (review following announcement of successful first wave John Whaling Ann Johnstone From March Pending EOIs) Deliver other SIAs that the LCR is explicitly involved in, i.e. Offshore Energy and Health Science John Whaling/ Ann Johnstone From March Pending (review following announcement of successful first wave EOIs) Mark Knowles/ Andy Rose 23 04/03/2016 15:53
Work closely with other Northern LEPs to provide collective input to BIS to inform the Round 2 SIA John Whaling Ann Johnstone From March Pending process Enhancement & implementation of LCR Innovation Plan – to translate LCR’s singular innovation assets & capabilities into international investment opportunities Enhance private sector representation on LCR Innovation Board John Whaling - From March Pending Refine & prioritise existing indicative project pipeline (using SIA research/evidence base if selected in Round 1) in order to maximise investment, e.g. from additional ESIF (existing Innovation Portfolio John Whaling - From March Pending allocation already almost fully committed), Single Investment Fund, future Local Growth Fund, private sector Revise LCR Innovation Plan (using SIA research/evidence base if selected in Round 1) John Whaling - From March Pending Develop/deliver individual collaborative projects John Whaling - From March Pending
Progress: The LCR hosted a very positive visit by BIS DG for Innovation Gareth Davies on 22 January
164 Page The LCR+ SIA Expression of Interest was submitted in advance of the 29 January deadline The LCR is also an active partner in (a) the Offshore Energy SIA consortium led by Newcastle University, also including N8 Universities and LEPs from the North East, Teeside and Humber; (b) the “Health North” SIA submitted by Northern Health Science Alliance (NHSA) The LCR LEP is an integral/founding member of the informal Northern LEPs Innovation Group catalysed by the SIA development process.
Risks and Issues Mitigation LCR lead Govt lead RAG Rating LCR+ SIA not selected for an audit in the first round Wide engagement & consortium-building both John Whaling Ann Johnstone Amber within LCR & across broader economic geography in order to submit as strong an application as possible Close liaison & engagement with BIS during application process John Whaling Ann Johnstone Lack of funding for delivery of individual projects Develop a strong prioritised pipeline of projects to John Whaling Ann Johnstone Amber maximise opportunities from possible funding sources Collate strong evidence base for individual projects John Whaling Ann Johnstone
24 04/03/2016 15:53 Deal Business Growth and Support Element: The government will work with LCR to support the development of their growth hub so that it joins-up and co-ordinates public, private, national and local support to ensure businesses get the help they need to boost their productivity and grow. This will include agreeing how we will work in partnership to help the growth hub to: become sustainable; connect small businesses with national services that support exports, innovation, access to finance and skills; collaborate on innovative business support evaluation projects which develop robust evidence about what works; and share best practice widely to deliver better outcomes for the country as a whole Ring-fence trade services resource within Liverpool City Region; explore options for integrating it with the Liverpool City Region Growth Hub to form a single trade service for businesses; agree an export plan for the City Region with UKTI Summary: Establish IFB Liverpool as a vital feature of the international business calendar in 2018 and 2020. UKTI will agree joint objectives for a strengthened locally-delivered service to attract inward investment and will participate in a quarterly board to track progress. The government will consider the case for creating a Northern Powerhouse hub for foreign investment in discussion with key partners in the region. This approach will be focused on maximising high-level jobs and long-term economic impact. HMRC commits to extending its existing policy of custom warehousing and other reliefs to any goods that are imported and then manufactured and/or assembled in Liverpool City Region before export as and when businesses LCR apply for this facility. Page 165 Page A sustainable growth hub that effectively joins up and co-ordinates, public, private, national and local support to ensure businesses get the help they need to boost their productivity and grow. LCR Exporters Network established for peer to peer export support ahead of LCR Export Plan being agreed with UKTI Outcomes: Outstanding IFB 2016 programme in place with many international delegations confirmed Significant progress made in moving towards a NP Foreign Investment Task Force with UKTI but model still to be agreed. LCR partners agreed collaborative ESIF Bid for Investment/Sector place marketing Transfer of assets from Business Growth Service end March 2016 Export Plan to be agreed with UKTI April 2016 Successful IFB 2016 to be delivered July 2016 Milestones: LCR Collaborative Investment Place Marketing ERDF Programme commences May 2016 Interim NP FI Task Force arrangements put in place April 2016 LCR Business apply for custom warehousing status Ongoing
25 04/03/2016 15:53 Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) Business Growth HMG to work with LCR to help develop their growth hub, including sharing appropriate assets from BGS, Mark Mark Mar 2016 Ongoing and facilitating the join up of local and national business support. Basnett Sayers (BIS) MAS has been in dialogue with LCR regarding options for continuation of some elements of the MAS service Mark David Apr 2016 Ongoing utilising local ESIF funding managed from outside LCR. LCR’s strong preference however is for support for Basnett Read manufacturers to be managed and delivered within the City Region and integrated into the Growth Hub (DCLG) service. LCR LEP is in dialogue with DCLG and LA/Chamber partners about utilising ESIF allocation alongside Growth Hub extension funding to provide a manufacturing brokerage and subsidised consultancy service as an extension to the New Markets 2. LCR has put in place a range of business support for growth businesses utilising ERDF funds matched with Mark David Mar 2016 Done Growth Hub, LA and Chamber funds including the New Markets 2 programme providing bespoke subsidised Basnett Read consultancy support for high growth businesses. (DCLG)
Progress: 166 Page LCR partners secured ERDF funding to enable delivery of support to business as part of extended Growth Hub service Autumn statement confirmed closure of BGS. Savings were banked and ministers specifically decided against recycling savings for devolution to local areas. BIS has confirmed the list of BGS assets to be shared with hubs. At SR HMG made a separate decision to provide a further two years’ funding to support growth hub sustainability (£12m per year from 2016-17)
Ring-fence trade services resource, integrate with the LCR Growth Hub and agree an export plan to form a single trade service for businesses in LCR
LCR has established a City Region wide Liverpool Exporter’s Network to enable peer to peer export support Mark Clive January Done and advice facilitated through the Growth Hub and led by experienced exporters with LA, Chambers and Basnett Drinkwater 2016 UKTI support. This will be resourced and developed through the Growth Hub with the creation of specialist (UKTI) LCR Export Brokerage explored with UKTI. LCR and UKTI have agreed to meet in March to discuss framework for an Export Plan to deliver a single Mark Clive 30 March Ongoing trade service in LCR Basnett Drinkwater 2016 (UKTI) Agreed Export Plan in place and implementation begins Mark Clive Sep 2016 Ongoing Basnett Drinkwater (UKTI) Progress: LCR Exporters Network established in partnership with experienced exporters to provide peer to peer export support through Growth Hub
26 04/03/2016 15:53
Establish IFB Liverpool as a vital feature of the international business calendar in 2018 and 2020. Excellent progress made in establishing a high quality and extensive programme for IFB 2016 with a large Max Simon February Ongoing and growing number of confirmed international delegations confirmed to participate. Increasing support Steinberg Fisher 2016 from Government through UKTI and GREAT Campaign. (UKTI) Exit report published to capture and summarise project lifetime achievements and lessons learned from IFB Max N/A December 2016 to inform future festivals Steinberg 2017 Project evaluation report published for IFB 2016 to inform future festivals. Max N/A December Steinberg 2017 Progress: Excellent IFB 2016 programme in place with extensive overseas delegations confirmed
UKTI will agree joint objectives for a strengthened locally-delivered service to attract inward investment and consider creating a Northern Powerhouse Hub for Inward Investment with LCR and other partners in the region
LCR partners working collectively on an ERDF Bid for a collaborative approach to Place Marketing LCR for Mark David Apr 2016 Ongoing
Page 167 Page Inward Investment based on key growth sectors and investment opportunities. Detailed bid in development Basnett Read due for submission in March and ESIF decision in April 2016 (DCLG) Progress: Detailed discussions and proposals for NPFITF under way. LCR ERDF detailed bid for Investment about to be submitted.
HMRC commits to extending its existing policy of custom warehousing and other reliefs
Initial meeting between LCR Partners and HMRC to scope out delivery and awareness raising amongst Alan Evans Tim April 2016 Ongoing businesses + Mark Gordon Basnett (HMRC) Progress: Custom Warehouse opportunity communicated to business
Risks and Issues Mitigation LCR lead Govt lead RAG Rating Business Growth Service providers fail to provide data and resources LCR Partners establishing Mark Mark Sayers Green from BGS contracts alternative provision through Basnett (BIS) the Local Growth Hub LCR and UKTI unable to agree mutually acceptable Export Plan for LCR partners established Mark Clive Green 27 04/03/2016 15:53 LCR for 2016/17 Exporter Network to drive Basnett Drinkwater forward peer to peer support (UKTI) ahead of Export Plan and UKTI dialogue planned soon IFB fails to attract major national and international business Extensive programme of Max Simon Fisher Green audience events already in place with Steinberg (UKTI) thousands of delegates registered Failure to agree mutually acceptable NP FI Task Force and extended Dialogue ongoing on basis of Mark Marian Green key account management arrangements with UKTI long established relationship. Basnett Sudbury LCR Partners will implement (UKTI Investment Place Marketing Programme with ESIF Funding No uptake from businesses for Custom warehousing LCR partners to undertake Mark Tim Gordon Green extensive promotion to target Basnett (HMRC)
Page 168 Page business audience
28 04/03/2016 15:53 Deal ENERGY AND ENVIRONMENT Element: Government provide guidance to support LCRs development of a cost-effective tidal power scheme proposal for the River Mersey or Liverpool Bay that could generate low carbon energy for businesses and consumers. DECC and Ofgem commit to explore further LCRs proposals on how innovation and collaboration can enable a more coordinated Summary: approach to network investment in order to meet growing network demands. Ofgem commit to considering proposals put forward by the LCR and the DNO as part of the ‘Quicker and More Efficient Connections’ project. DECC commits to work with LCR on the design of future home energy efficiency programmes, including ways to make delivery mechanisms more efficient and effective. Cleanest river standard by 2030 and a discharge free Mersey by 2040. Tidal range harnessed to produce power for the City Region's businesses and citizens. Outcomes: A more co-ordinated approach to network investment to meet growing demands. LCR home energy efficiency programmes.
Action 169 Page s/Outputs LCR lead Govt lead Timeline Status (e.g. done) Cleanest River Standards LCR Combined Authority to work with government to scope the potential to work towards the cleanest river tbc tbc From March standard. 2016 Progress: The River Mersey Task Force, established in 2012 to examine the feasibility of the River Mersey becoming the cleanest and most ecologically diverse river in an urban setting by 2045, met in January 2016 to consider the Devolution Agreement. It will meet again on 1 March 2016 to explore how the Agreement could be taken forward, including scope of work, and will report to the Combined Authority.
29 04/03/2016 15:53 Tidal Power Scheme DECC to act as a critical friend in relation to the development of tidal and energy related business and Catherine On-going economic cases to be submitted by the LCR. Informal discussions, policy and analytical support will be Garnell provided , subject to the resource capacity and timing of both DECC and LCR. DECC to regularly report progress to the LCR on its independent review of tidal lagoon energy in the UK Catherine Reporting announced in February 2016. Garnell Autumn LCR will look to input into the tidal lagoons review. LCR will await a possible call for evidence from the 2016 independent review panel. LCR to establish a LCR Tidal Energy Steering Group that will consist of local and government stakeholders, Catherine Establish and have a remit to agree actions and milestones, monitor and report progress and to prepare and agree Garnell group April public position papers. The Group will report to the Combined Authority and the new City Region Mayor 2016 post May 2017. A programme of work to be undertaken that will consider all options for tidal power generation, reassess Catherine Nov 2016 the technology options and update the due diligence work already undertaken. Garnell LCR will look to develop their business and economic case regarding their tidal and energy related Catherine March 2017 Page 170 Page commitments, working with DECC, over the following 12 months. Garnell Following the strong economic and environmental case being made, work with government to include, though Catherine March 2018 not necessarily limited to: Garnell Apply for planning consents. Consider Contract for Difference. Explore options for a special purpose vehicle that would enable the benefits to be provided directly to the residents, businesses and public buildings through a ‘direct’ connection to the output of the tidal power project. Negotiate a lease agreement with the Crown Estate for seabed and foreshore areas in their ownership. Provide a marine license through DEFRA and the Marine Management Organisation to allow the tidal project to be built. Powers for the planning application to be administered and determined locally under the Mayoral model and exempt from call in by the Secretary of State, providing EU criteria are met. LCR will have conversations with DECC to consider additional methods of energy generation using the River Catherine Mersey as a resource e.g. a Water Source Heat Pump system, et al. Garnell DECC will continue to work with LCR on specific projects, such as community energy and regulation, Catherine together with exploring potential pilot project opportunities. Garnell Progress: Initial meetings have taken place with government to scope out next steps.
30 04/03/2016 15:53
Energy Network Development Establish a Joint Working Group consisting of Liverpool City Region, DECC and OFGEM. Mark Operational Create an LCR network operators forum including Scottish Power Energy Networks, National Grid Gas Knowles by April 16 Networks, United Utilities and Liberty Global. Mark Operational Review feedback from Liverpool City Region’s submission to the ‘Quicker and More Efficient Connections’ Knowles by April 16 project. Christine Feedback by Darbyshire Feb 16 The Joint Working Group to identify, develop and prioritise action areas by geography and technology for Mark 2016 areas each year through the period 2016-2019. Knowles agreed Jun16 Complete the LCR Utilities Masterplanning roll out across all utilities. Mark Roll out Knowles completed by Sep 16 Progress:
Home Energy Efficiency Programmes 171 Page Create an LCR working group for home energy efficiency centred on the existing Viridis partnership (14 Christine Operational largest LCR social landlords, six LCR local authorities and the LEP). Darbyshire by May 2016 Establish a formal consultation structure with energy supply companies through Energy UK. Operational by July 2016 The LCR and Energy UK joint working group to be given terms of reference and nominated resources. Christine Operational Darbyshire by Sep 2016 Options to use funding sources such as ECO3, ERDF and NIA to create whole place energy efficiency Christine Initial solutions to be considered. Darbyshire assessment completed by Oct 2016 Options Opportunities for enhanced working and improved levels of investment through enhancements of the Mark completed regulatory systems to be identified and fed through to the Regulatory Pilot Area review. Knowles by Nov 2016 Progress:
Risks and Issues Mitigation LCR lead Govt lead RAG Rating Risks will be assessed in detail throughout the project development process. tbc tbc tbc tbc
31 04/03/2016 15:53
Deal Culture Element: Place culture and creativity at the heart of Liverpool City Region’s strategy to accelerate economic growth, building on existing assets and Summary: strategically aligning funding to accelerate economic growth, improve skills and further develop its distinctive visitor offer. Liverpool City Region will develop a place-based strategy to culture and creativity that brings together national and local partners in a Cultural Partnership, aligning strategic priorities to deliver shared outcomes over the mayoral term. Exploration of the options around a sustainable and viable business model for National Museums Liverpool. Outcomes: The development of Liverpool’s ambition for a National Migration Museum to reflect its heritage and future as part of wider city region cultural infrastructure plans The development and sharing of learning by Liverpool of its legacy as the European Capital of Culture in 2008 and the development of a city region wide cultural programme to celebrate the 10th anniversary in 2018 Spring 2016 – Decision by the Secretary of State on the options around a sustainable and viable business model for National Museums Liverpool Milestones: September 2016 – Interim Local Cultural Partnership in place Page 172 Page May 2017 – Local Cultural Partnership in place, accountable to the new city region mayor and Combined Authority
Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) National Museums Liverpool The Liverpool City Region will engage with the government to explore options around a sustainable and viable business model for National Museums Liverpool by the end of this financial year. Programme Board (DCMS, LCR & NML) to undertake options appraisal and make recommendations to Claire Clare December In Progress Secretary of State McColgan Pillman to March 2016 Ministerial Decision Claire Clare Spring 2016 Pending McColgan Pillman final option assessment Implementation of Decision TBC Progress: Programme Board set up & meetings scheduled monthly from December to end of March 2016. Options Appraisal is currently underway.
32 04/03/2016 15:53 Local Cultural Partnership Government will work with Liverpool City Region to support a place-based strategy and the city region's plans for a Local Cultural Partnership (LCP).
Set up interim Local Cultural Partnership for LCR, including the appointment of the Chair Claire Wendy September McColgan Shales 2016 Local Cultural Partnership for LCR formally set up, with full board in operation and accountable to the new Claire Wendy May 2017 city region mayor and CA McColgan Shales Develop place based Cultural Strategy, agreed between LCR and national funding agencies Claire n/a May 2017 McColgan Local stakeholder engagement Claire n/a On-going to In McColgan May 2017 progress Engagement with DCMS and relevant agencies and funding bodies Claire Wendy On-going to On-going McColgan Shales May 2017 Appointment of Local Authority Coordination role (Knowsley lead) Paula n/a Appointed Done Williams Feb 16 Progress: Meetings between LCR and DCMS in December, January and February - agreed direction of travel. Page 173 Page Ongoing engagement and discussions held to date between LCR and DCMS, Arts Council, & BFI Paula Williams KMBC appointed to lead Local authority coordination and a group has been set up to develop proposals for future joint working and activities. Engagement with other sectors (e.g. tourism, and marketing) is underway locally Arts Council is working with LCR on a shared 30 year vision and to develop a 4 year strategy for delivery (over mayoral term) National Migration Museum The government notes that Liverpool city region will work to realise Liverpool’s ambition to develop a National Migration Museum to reflect its international heritage and contemporary future. Migration Museum Concept is under development Claire n/a tbc McColgan Progress: Discussions with national and local partners underway to create full capital analysis for discussion through combined authority 2008 Legacy Recognising Liverpool’s status as the UK’s European Capital of Culture 2008 and the work undertaken to harness that legacy, the government welcomes Liverpool’s move to develop this legacy further and share its learning. City Region wide Programme of events for 2018 Claire n/a June 2016 underway McColgan 08 Legacy - Research and evaluation programme and conference Claire n/a January Research McColgan 2018 programme is underway 33 04/03/2016 15:53 Progress: 2018 Programme is under development Research and evaluation project is underway, with elements still to be developed – project will report at launch event in 2018
Risks and Issues Mitigation LCR lead Govt lead RAG Rating NML – Risks are being assessed in detail through the options Formalised working arrangements through Programme Board Claire Clare Amber appraisal process – these include: McColgan Pillman Preferred option not workable or fails to meet LCR’s ambitions NML Trustees do not accept new governance proposals Proposed funding model not viable LCP – Key partners (local/national) not persuaded to join the Coordinated approach to stakeholder and partner Claire Wendy Green/ Cultural Partnership engagement. McColgan Shales Amber Esnure key cultural partners in place for interim LCP, with Page 174 Page agreement on scope and priorities of the Partnership National Migration Museum – challenge to develop a viable Work with key funding partners in development of plans Clare n/a and sustainable proposal. McColgan 08 Legacy – Finance for programme needs to be confirmed 70 Planning and partnership working Claire n/a Green weeks out due to transport and logistical issues McColgan
34 04/03/2016 15:53
Deal Single Investment Fund Element: Creation of a Single Investment Fund (SIF) drawing together national and city region funding streams, prioritising investment based on economic Summary: impact. Government will capitalise this pot with £30m of ‘Gain Share’ funding and will work to identify additional funding streams which will form part of the LCR single pot. The Gain Share element will be subject to 5 yearly gateway assessments. Establishment of a SIF and delivery of a programme of investment projects which will deliver increased economic growth for the City Region. Outcomes: The bringing together of public funding streams and the ability to make local decisions on priorities will ensure that resources are invested in ways that will have the maximum impact on the economy. Government to announce the scope and scale of LCR single pot – March 2016 Local Assurance framework approved by DCLG – June 2016 Milestones: Gain Share conditions met by LCR and fund commences – July 2016 First projects approved – September 2016
Actions/Outputs LCR lead Govt lead Timeline Status (e.g. Page 175 Page done) Liverpool City Region strategy and implementation Local assurance framework revised and submitted to DCLG Lisa Smith N/A April 2016 LCR to develop 3 year SIF prospectus setting out strategy, objectives and targets and criteria to be used for Lisa Smith N/A June 2016 appraisal LCR to establish governance structures to advise CA on SIF investments Lisa Smith N/A June 2016 Operational arrangements for the SIF established Lisa Smith N/A June 2016 First projects approved Lisa Smith N/A September 2016 Gain Share fund Government to set out scope of Single Pot and any conditions of funding Lisa Smith Paul March Miller/ 2016 Robin Froggatt- Smith DCLG to sign off local assurance framework Lisa Smith Paul June 2016 Miller 35 04/03/2016 15:53 Government, LCR and other Gain Share areas to agree proposals for single gateway assessment and Lisa Smith Paul March-June appointment of independent panel Miller 2016 Gain Share conditions met and fund commences Lisa Smith Paul July 2016 Miller Gateways to take place on 5 yearly intervals Lisa Smith Paul 5 yearly Miller from 2021 to 2041
Risks and Issues Mitigation LCR lead Govt lead RAG Rating LCR prospectus not in place or not fit for purpose LCR fully understands the Lisa Smith Paul Miller Green requirements and will engage with government on the prospectus and protocols being established. Page 176 Page Single Gateway assessment could lead to complex arrangements with Cambridgeshire CC is lead and Lisa Smith Paul Miller Green a significant number of cities and potential delays LCR will provide support and engagement as required.
36 04/03/2016 15:53 Deal EU Funding Element: Intermediate Body Status for ERDF and ESF funding with increased powers and responsibilities for project selection by April 2016 or as soon as Summary: possible thereafter. Designation of Liverpool City Region with Intermediate Body (IB) Status by April 2016 Outcomes: Greater local influence and decision making over project selection Agreement of Memorandum of Understanding (MoU) – April 2016 Review of CA structures to ensure conflicts of interest arrangements have been put in place – March/April 2016 Milestones: A review of the management systems and people resources for each IB – March/April 2016 Finalising the IB Business process - March 2016 Designating IB – April 2016
Actions/Outputs LCR lead Govt lead Timeline Status (e.g. done) DCLG to issue Draft MoU Lisa Smith David February Done
Page 177 Page Morrall 2016 DCLG to issue schedule with information requirements for LCR due diligence (conflict of interest, Lisa Smith David March Under governance structures, capacity etc) Morrall 2016 developme nt LCR to sign MOU Lisa Smith David April 2016 Morrall LCR to provide information to support Due Diligence Lisa Smith David March/ Morrall April 2016 Designation of IB status Lisa Smith David April 2016 Morrall Risks and Issues Mitigation LCR lead Govt lead RAG Rating Delays in MOU and provision of information Ensure timelines are agreed and met Lisa Smith David Amber Morrall LCR does not have the appropriate LCR to ensure they meet all requirements and Lisa Smith David Green governance/capacity/structures to accept IB provide appropriate evidence of local structures Morrall status and decision making
37 04/03/2016 15:53 This page is intentionally left blank Agenda Item 14
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: All
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE TREASURER
COMBINED AUTHORITY BUDGET MONITORING STATEMENT 1 April 2015 to 31 December 2015.
1. PURPOSE OF THE REPORT
1.1 The purpose of this report is to provide members of the Combined Authority with a budget update for the third quarter of 2015/16. This report also includes a summary Financial and Performance Monitoring report with respect to Merseytravel and the Mersey Tunnels at Appendix 1.
2. RECOMMENDATIONS
2.1 Liverpool City Region Combined Authority is recommended to:-
a) note the contents of the Combined Authority Budget Monitoring Statement and the associated Merseytravel and Performance Monitoring report.
3. BACKGROUND AND KEY ISSUES
3.1 The Combined Authority approved its Revised Budget for 2015/16 at its budget meeting on 5 February. These revised estimates, and forecast outturns are shown in Table 1.
3.2 The Combined Authority has delegated detailed financial and performance monitoring to Merseytravel, and it was agreed that the Combined Authority would receive regular reports on those activities conducted on its behalf by Merseytravel, and also those in relation to the financial performance of the Mersey Tunnels.
3.3 The financial performance for the third quarter of 2015/16 is shown below. Expenditure is largely in the form of grants to Merseytravel and partner organisations. The only variance against the recently approved revised estimates is higher than expected tolls income, with a corresponding increase in transfers to reserves.
Page 179 Table 1 : Forecast Revenue Outturn 2015/16
Liverpool City Region Combined Initial Revised Forecast @ Variance to Authority 2015/16 Budget Budget Quarter 3 revised £m £m £m £m EXPENDITURE Merseytravel Operating Grant 97.4 96.8 96.8 0.0 MerseyTunnels Operating Grant 27.3 27.4 27.4 0.0 Other costs 0.3 0.2 0.2 0.0 DFT Highways Funding to Districts - - - - ITB Grant to Districts/Merseytravel 10.1 10.1 10.1 0.0 Special Rail Grant to Merseytravel 95.4 86.1 86.1 0.0 Capital Financing/Debt Repayment 17.9 17.7 17.7 0.0 Local Growth Deal/Hub grants 30.5 32.0 32.0 0.0
TOTAL EXPENDITURE 278.9 270.3 270.3 0.0
INCOME Transport Levy -113.7 -113.7 -113.7 0.0 Tunnel Tolls -43.1 -44.2 -44.3 -0.1 Other Income -1.9 -2.1 -2.1 0.0 Special Rail Grant from DFT -95.4 -86.1 -86.1 0.0 ITB Grant from DFT -10.1 -10.1 -10.1 0.0 DFT Highways Funding - - - Local Growth Deal/Hub Funding -30.5 -32.0 -32.0 0.0
TOTAL INCOME -294.7 -288.2 -288.3 -0.1 TRANSFER TO RESERVES -15.8 -17.9 -18.0 -0.1
3.4 In year savings and additional income allowed the Combined Authority to increase its transfer to reserves by an additional £2.1m. The above table also shows better than forecast income from Tunnel tolls, which if continued would allow further transfers to reserves.
3.5 Table 2 in Appendix One summarises Merseytravel financial performance across service areas. It is encouraging to note the £0.6m favourable variance at the end of the third quarter.
3.6 The Combined Authority is the recipient of substantial Government funds through the Local Growth Fund settlement. These are shown in Appendix One in Table 3 for 2015/16, with performance for the third quarter. An additional £1.5m has been received from Government in respect of Low Carbon projects and is now included in the table.
Page 180
4. RESOURCE IMPLICATIONS
Financial
4.1 The summarised revenue spending financial monitoring shown at Appendix One contains 9 months employee expenditure, together with 36 weeks creditor and debtor activity. Overall, a favourable variance of £0.6m is shown for the third quarter revenue financial performance.
4.2 Capital spend during the second Quarter is broadly on target with expectations. There are no major revisions to the capital programme approved by the Authority at its February budget meeting.
Human Resources
4.3 There are no Human Resources implications arising from the recommendations in this report.
Physical Assets
4.4 A number of the capital schemes referred to in this report will improve the physical assets of the Combined Authority.
Information Technology
4.5 There are no Information Technology implications arising from the recommendations in this report.
5. RISKS AND MITIGATION
5.1 There are no risks arising directly as a consequence of this report.
6. EQUALITY AND DIVERSITY IMPLICATIONS
6.1 None directly as a consequence of this report.
7. COMMUNICATION ISSUES
7.1 None directly as a consequence of this report.
Page 181 8. CONCLUSION
8.1 The Liverpool City Region Combined Authority and Merseytravel as its executive body are performing within their respective budgets at the end of the third quarter of 2015/16.
JOHN FOGARTY Treasurer
Contact Officers:- Dave Edge, Merseytravel (0151 330 1015) Liz Carridge, Merseytravel (0151 330 1151)
Appendices:- Appendix One – Financial Monitoring Report - Quarter 3 2015/16
Page 182 APPENDIX ONE LIVERPOOL CITY REGION COMBINED AUTHORITY FINANCIAL MONITORING REPORT – QUARTER 3 2015/16
1.1 INTRODUCTION
1.1.1 This report presents an overview of the Liverpool City Region’s financial and performance indicators at the end of Quarter 3 2015/16.
1.2 BACKGROUND
1.2.1 The Combined Authority approved the Revised Budgets for 2015/16 budget at its 5 February 2016 meeting.
1.2.2 In 2015/16, the Combined Authority’s operational activities have broadened significantly as the Combined Authority is now acting as accountable body for an increasing number of non-transport funding streams. In addition, the City Region’s Growth Fund is starting to flow from government to the Combined Authority and requires detailed and specific financial monitoring.
2. 2015/16 QUARTER 3 FINANCIAL AND PERFORMANCE UPDATE
2.1 Combined Authority Financial Performance Summary: Quarter 3
2.1.1 Summarised financial information in respect of Merseytravel’s financial performance is included in the Financial and Performance Summary report at Table 2.
2.1.2 Performance against budget in the third quarter was broadly in line with approved budgets, with no material overspends.
2.1.3 The risk of any material overspending on Merseytravel Services or the Mersey Tunnels in 2015/16 is currently assessed as low.
2.1.4 A summary of revenue expenditure against budget for the period April – December 2015 is presented overleaf:-
Page 183 APPENDIX ONE
Table 1: Combined Authority Financial Monitoring 3rd Quarter 2015/16
Liverpool City Region Combined Initial Revised Forecast @ Variance to Authority 2015/16 Budget Budget Quarter 3 revised £m £m £m £m EXPENDITURE Merseytravel Operating Grant 97.4 96.8 96.8 0.0 MerseyTunnels Operating Grant 27.3 27.4 27.4 0.0 Other costs 0.3 0.2 0.2 0.0 DFT Highways Funding to Districts - - - - ITB Grant to Districts/Merseytravel 10.1 10.1 10.1 0.0 Special Rail Grant to Merseytravel 95.4 86.1 86.1 0.0 Capital Financing/Debt Repayment 17.9 17.7 17.7 0.0 Local Growth Deal/Hub grants 30.5 32.0 32.0 0.0
TOTAL EXPENDITURE 278.9 270.3 270.3 0.0
INCOME Transport Levy -113.7 -113.7 -113.7 0.0 Tunnel Tolls -43.1 -44.2 -44.3 -0.1 Other Income -1.9 -2.1 -2.1 0.0 Special Rail Grant from DFT -95.4 -86.1 -86.1 0.0 ITB Grant from DFT -10.1 -10.1 -10.1 0.0 DFT Highways Funding - - - Local Growth Deal/Hub Funding -30.5 -32.0 -32.0 0.0
TOTAL INCOME -294.7 -288.2 -288.3 -0.1 TRANSFER TO RESERVES -15.8 -17.9 -18.0 -0.1
2.1.5 Mersey Tunnels patronage continues to be in excess of budgeted levels, and this is delivering additional toll income. The current income projections suggest an additional £0.1m by year end. This will be transferred to reserves.
2.1.6 As Table 1 shows, the grant to Merseytravel has been reduced in 2015/16. This is a consequence of Merseytravel continuing to seek efficiencies in its operational activities. It is too early to forecast a further reduction in the grant payable to Merseytravel, but it is encouraging to note the savings accruing (in Table 2) in these services. Should these continue, then the opportunity to reduce the grant will be reduced at outturn. Any reduction will enable the Combined Authority to transfer these savings to reserves.
2.2 Merseytravel Financial Performance Quarter 3, 2015/16
2.2.1 This section of the report summarises the key financial and performance monitoring information in respect of Merseytravel and the Mersey Tunnels. Merseytravel remain the executive function of the Combined Authority and account for the largest proportion of its revenue expenditure in 2015/16.
2.2.2 The Liverpool City Region Combined Authority delegates detailed monitoring and scrutiny of financial and performance issues relating to Merseytravel to the Merseytravel Committee under its scheme of delegation. This report is a summary of the comprehensive financial and performance information considered by the Merseytravel Committee. The following table summarises the financial position for the third quarter:
Page 184 APPENDIX ONE
Table 2: Financial Monitoring Statement for Merseytravel Quarter 3 2015/16
Revised Internal Gross @Q3 @Q3 Variance Budget Recharges Budget Budget profile Actual @Q2 2015/16 2015/16 2015/16 2015/16 2015/16 2015/16 £ooo £ooo £ooo £ooo £ooo £ooo Service Area Bus services 20,068 2,121 17,947 9,608 9,592 -16 Rail services -3,082 -935 -2,147 394 396 2 Travel concessions 48,291 -7,581 55,872 36,168 36,168 0 Hubs 5,842 -1,899 7,741 3,144 3,130 -14 Mersey Ferries -126 -1,918 1,792 -1001 -1,113 -112 Mersey Tunnels -23,747 -6,938 -16,809 -19,645 -19,712 -67 Corporate Management 1,807 -893 2,700 1130 1127 -3 ICT 3,675 3,675 0 2,751 2,708 -43 Policy & LTP Development 2,250 -1,009 3,259 1438 1386 -52 Funds Management 39,053 2,383 36,670 15,223 15,143 -80 Asset Management 10,013 10,013 0 7,648 7,567 -81 Rolling Stock 3,004 0 3,004 1009 1028 19 People, Customer & Devel’nt 4,330 659 3,671 2,891 2,803 -88 Resources Directorate 2,322 2,322 0 1,565 1,504 -61 Contribution from Reserves 0 0 0 0 0 0
113,700 0 113,700 62,323 61,727 -596
2.2.3 Included within the variations against budget in Quarter 3 is greater revenue for the Mersey Ferries Beatles Story subsidiary than was anticipated in the budget, some £0.1m.
2.2.4 Merseytravel’s capital programme remained on course at the end of Quarter 3 and no significant revisions were made in that quarter.
2.3 Merseytravel Performance against Corporate Priorities Quarter 3
2.3.1 Merseytravel’s six key corporate priorities for 2015/16 are: i. providing professional advice, guidance and support to the continued development of the Liverpool City Region Combined Authority; ii. improving connectivity through leading and developing strategic transport initiatives linked to the Liverpool City Region Growth Plan and wider regional and national strategy; iii. develop and deliver a comprehensive Bus Strategy for the City Region as part of a multi modal transport approach; iv. continue to manage and develop a range of transport assets and services, including infrastructure, information, the Merseyrail concession, Tunnels and Ferries; v. continue to develop an innovative, inclusive and contemporary concessionary travel scheme; and vi. design and deliver a customer focussed programme that significantly improves their experience.
2.3.2 Significant progress continues to be made in the delivery of each of the key priorities in Quarter 3.
Page 185 APPENDIX ONE 2.3.3 Merseytravel has continued to plan a key role representing the Combined Authority at a national and regional level. The Northern Freight and Logistics Survey was procured by Merseytravel on behalf of the Transport for the North partners: a consortium of consultants has been commissioned to deliver the project and work is now underway. The target date for completion of the report is January 2016.
2.3.4 The challenge for the rest of 2015/16 is to maintain this progress. In particular, the focus of our activity in Quarter 4 will be: i. to complete the business case evaluation of the rolling stock renewal options for the Merseyrail Fleet and make recommendations to members accordingly; ii. to continue working with partners across the Northern City Regions on the development of Rail North; iii. continue to support the interests of the Liverpool City Region in promoting the benefits of HS2 and in working with TfN in the promotion of better East-West connectivity; iv. as discussed in 2.3.3, Merseytravel continues to work with partners for the completion of the Northern Freight and Logistics Strategy; v. to continue with a programme of efficiency improvements to support service functions; and vi. a significant priority will be the management of the Authority’s Growth Deal funding streams, and securing compliance with the Assurance Framework that governs its management. This entails managing both the transport and non-transport elements. The former includes the co-ordination of the transport programme as a whole, including projects that are being delivered directly by Merseytravel, whilst the latter includes elements such as Skills Capital, Low Carbon and Business Growth Hub funding. As noted elsewhere in this report this is especially critical and LGF funds cannot be transferred into successive years.
2.3.5 Merseytravel has a Corporate Risk Register which identifies all its key corporate risks. Based on the performance of the organisation in Quarter 3 and our knowledge of our operating environment, no revisions to this risk register have been made in Quarter 3.
2.3.6 At the end of Quarter 3, the organisation was not aware of any material risks that would impact on our ability to deliver our key corporate priorities.
2.4 Liverpool City Region Combined Authority Local Growth Fund
2.4.1 2015/16 is the first year in which the Liverpool City Region Combined Authority has attracted external funding in its own right, outside of the Transport Levy and tunnel tolls. The initial allocation for this programme was £30.5m. This has recently been increased by an additional £1.5m for Low Carbon schemes.
2.4.2 While Merseytravel stands behind the Liverpool City Region Combined Authority in acting as Accountable Body for these resources, they are separate from Merseytravel’s base budget and as such are subject to separate reporting arrangements. Merseytravel manages the programme on behalf of the Combined Authority and makes payments to partner bodies delivering Growth Fund schemes.
Page 186 APPENDIX ONE 2.4.3 As this is the first year of the Local Growth programme, arrangements have been put in place to ensure any slippage on these schemes can be switched to fund other eligible LTP projects to ensure the full allocation of grant will be utilised in 2015/16. The released LTP funding will then be earmarked to fund any slippage on LGF schemes in 2016/17.
2.4.4 The following table illustrates the spending by each of the first three Quarters (i.e. grant claims received from partners) and the forecast level of spend for the final Quarter of 2015/16:
Table 3: Local Growth Fund Spending end of Quarter 3 2015/16
City Region Funding 2015/16 - Qtr 3
Quarter 3 - Final 2015/16 Quarter Quarter Quarter Quarter Total Variance to LGF 1 £m 1 2 3 4 budget £m £m £m £m £m £m Transport Schemes Access and Connectivity Improvements to Knowsley Industrial Park 5.60 0.27 0.12 0.40 3.31 4.10 -1.50 A5300 Knowsley Expressway 3.50 0.05 0.11 0.36 2.54 3.06 -0.44 Newton-le-Willows Interchange 4.40 0.14 0.15 0.29 1.39 1.97 -2.43
STEP 6.90 0.04 0.83 1.49 4.36 6.72 -0.18
Skills capital and low carbon Strand 1 - Specific building projects fund 8.60 0.00 0.22 1.12 4.01 5.35 -3.25 Strand 2 - Conditions Improvement Fund 2.00 0.00 0.03 0.01 1.14 1.18 -0.82 Strand 3 - Capital Equipment Fund 1.00 0.00 0.00 0.01 0.26 0.27 -0.73 Strand 4 - Low Carbon Fund - see below 1.50 0.00 0.00 0.00 1.50 1.50 0.00
IFB 2016 0.00 0.00 0.00 0.00 3.00 3.00 3.00
Actual funding provided 33.50 0.50 1.46 3.68 21.51 27.15 -6.35 CA Allocation 32.00
Outside of LGF monies City Centre Connectivity Growth Hub 0.55 0.04 0.12 0.19 0.20 0.55 0.00 Skills for Growth 1.55 0.00 0.00 0.00 0.09 0.09 -1.46
2.4.5 Where scheme slippage has been identified, the opportunity to advance the delivery of other approved projects from 2016/17 is being pursued.
3. CONCLUSION
3.1 The Liverpool City Region Combined Authority is performing within its recently approved budgets for 2015/16 and there are no material risks of overspending identified at Quarter 3. Similarly, the City Region, through Merseytravel, has made significant progress in achieving its priority outcomes in Quarter 3.
3.2 The most significant area of risk remains the Local Growth Fund schemes, where there is considerable pressure on delivery. The City Region needs to ensure that sufficient capacity exists to manage this complex programme. Members should also be aware of the risk to delivery that arises through the involvement and dependencies on third parties.
Page 187 This page is intentionally left blank Agenda Item 15
LIVERPOOL CITY REGION COMBINED AUTHORITY
To: The Chair and Members of the Combined Authority
Meeting: 18 March 2016
Authority/Authorities Affected: ALL
EXEMPT/CONFIDENTIAL ITEM: No
REPORT OF THE TREASURER
ACCEPTANCE OF EU GRANT
1. PURPOSE OF REPORT
The purpose of this report is to propose that the Liverpool City Region Combined Authority should accept and act as Accountable Body for £39.214m European grants and agree that the Combined Authority should make onward grant awards as outlined below.
2. RECOMMENDATIONS
2.1 It is recommended that the Liverpool City Region Combined Authority:-
a) Formally accept the EU grants outlined in Table 1 below and agree to act as accountable body for these grants; b) Agree the onward grant award of these monies to relevant partner agencies; c) Delegate authority to the Combined Authority Treasurer to sign relevant offer letters and agree any necessary amendments to these schemes during the period of their delivery; and d) Request to receive regular update and performance reports associated with these grant funding programmes as appropriate.
3. BACKGROUND
3.1 As part of the operational arrangements for the new EU funding programme within the Liverpool City Region, Government have required that partners locally develop and submit strategic and collaborative consortium bids for funding.
3.2 As previously reported, a number of these consortium bids have been submitted by the Combined Authority in order to support the delivery of a range of key services and initiatives across the City Region.
Page 189 3.3 These various bids are summarised in Table 1 (with further detail in Appendix One) and have now all been agreed by the relevant Government departments. The Combined Authority is now beginning to receive grant offer letters in relation to these bids which will need to be signed and accepted on behalf of the Combined Authority. This report requests that the Combined Authority agree to accept this grant and act as Accountable Body for this funding.
Table 1: Summary of grants
Scheme Name Amount of Grant Programme End Awarded Date Liverpool City Region ESF Ways to Work £29,539,656 31/03/2019 Programme Liverpool City Region ERDF Integrated £2,935,124 31/03/2019 Business Support Project Liverpool City Region ERDF New Markets £5,641,582 31/01/2019 2: Building Business Capacity Liverpool City Region ERDF Technical £791,438 31/03/2019 Assistance project Liverpool City Region ESF Technical £306,379 31/03/2019 Assistance Project
3.4 Each of these bids will require the Combined Authority to make onward grant awards to relevant partner agencies as outlined in Table 2 below. This report requests that the Combined Authority agree to the relevant grant awards as outlined in Table 2.
Table 2: Payments to partner agencies
Scheme Name: Liverpool City Region ESF Ways to Work Programme
Partner Agency Amount of Grant Awarded Halton Borough Council £2,088,521 Sefton Metropolitan £4,345,041 Borough Council Wirral Metropolitan Borough £4,328,716 Council Knowsley Metropolitan £6,200,463 Borough Council St Helens Metropolitan £3,431,203 Borough Council Liverpool City Council £9,055,712 Merseytravel £90,000
Scheme Name: Liverpool City Region ERDF Integrated Business Support Project
Partner Agency Amount of Grant Awarded Knowsley Metropolitan Borough Council £528,944 Sefton Metropolitan Borough Council £544,207 Halton Borough Council £231,073 Liverpool Sefton Chamber £118,108 Page 190 Wirral Chamber £321,776 Liverpool Vision £349,129 Liverpool City Region Local Enterprise Partnership £661,886 St Helens Chamber £180,000
Scheme Name: Liverpool City Region ERDF New Markets 2: Building Business Capacity
Partner Agency Amount of Grant Awarded Agent Marketing £245,211 Alt Valley Community Trust £405,022 Women's Technology Training Limited & School for Social Entrepreneurs North West £30,030 Downtown in Business, The Venture Accelerator Programme (VAP) £245,562 High Performance Consultancy, The Venture Accelerator Programme (VAP) £233,976 Liverpool City Region Local Enterprise Partnership £1,090,255 Liverpool & Sefton Chambers of Commerce £450,483 Liverpool John Moores University £602,286 Mersey Maritime Limited £400,000 North West Coast Academic Health Science Network (NWC AHSN) £150,000 Regenerus (SSDT) £90,000 Daresbury SIC LLP £289,459 Liverpool Sound City Ltd £215,271 St Helens Chamber £340,495 The Women's Organisation Venture Accelerator Programme (VAP) £495,998 The University of Liverpool £357,533
Scheme Name: Liverpool City Region ERDF Technical Assistance project Partner Agency Amount of Grant Awarded Liverpool City Region Local £634,562 Enterprise Partnership
Scheme Name: Liverpool City Region ESF Technical Assistance project
Partner Agency Amount of Grant Awarded Liverpool City Region Local £290,138 Enterprise Partnership
Page 191 All schemes will contribute towards the costs of overall programme management incurred by the Combined Authority. This contribution will come from a mixture of grant and the applicants’ own funds - management of the programme is therefore cost neutral from a Combined Authority perspective.
3.5 As with all EU grant, these monies carry a significant risk of grant clawback. In order to manage this risk a due diligence exercise has been carried out on all partner agencies. This has resulted in a number of partner agencies withdrawing from the process. The remaining partners are included in Table 2.
3.6 All partners will receive back-to-back grant award offers from the Combined Authority thus passing on the risk of organisational clawback to the relevant delivery partner.
3.7 A team of experienced EU grant officers has been established within the Combined Authority in order to manage these funding programmes and minimise the risk of clawback on behalf of the Combined Authority. This report proposes that this team will provide the Combined Authority with regular 6 monthly performance reports for all of the schemes included in Table 1.
3.8 Finally, this report seeks permission to delegate to the Combined Authority Treasurer authority to agree and sign the relevant grant offer letters including both those received from Government as outlined at Table 1 and those subsequently awarded to partner agencies outlined in Table 2 with such authority also to include permission to agree and sign any relevant amendments to those offer letters.
4. RESOURCE IMPLICATIONS
4.1 This report seeks permission to accept and onward award £39.214m of EU grant to key schemes across the City Region. The Merseytravel budgets will be amended to reflect this decision.
4.2 The key issues associated with this decision is the risk of clawback. As outlined in 3.5 to 3.7 of this report relevant measures have been put into place to minimise the risk of clawback to the Combined Authority.
5. EQUALITY AND DIVERSITY IMPLICATIONS
5.1 There are no specific equality and diversity implications associated with the implementation of the recommendations in this report.
6. RISK ASSESSMENT
6.1 There is always a risk of clawback when dealing with European funding. This has been mitigated by putting into place back to back agreements with delivery partners and by securing experienced European grant management officers to oversee this work. Page 192
6.2 There is a risk of under delivery against these projects with consequent opportunity loss to the City Region. This will be mitigated by clear management responsibilities, with regular reporting to the Combined Authority on progress.
6.3 There is a risk of duplication of activities given the scale of funding being deployed in the City Region at the moment. This is being mitigated by close liaison between the Combined Authority and other recipients of funding to ensure that the activities align, complement and add value.
7. COMMUNICATION ISSUES
7.1 The various programmes and schemes outlined in Tables 1 and 2 of this report will provide a range of key support services to the businesses and citizens of the sub- region and should provide Combined Authority members with a range of good news opportunities within their local area.
8. CONCLUSION
8.1 This report presents the Combined Authority with the opportunity to accept £39.214m of EU funding to support activities across the Liverpool City Region.
JOHN FOGARTY Treasurer
Contact Officers: Darren Hardy, Liverpool City Council (0151 233 0257)
Appendices: Appendix One – details of grants offered by Government
Page 193 APPENDIX ONE
DETAILS OF GRANTS
Scheme Name Description Amount of Grant Programme Awarded End Date Liverpool City The Ways to Work programme is designed to provide a range of services to unemployed £29,539,656 31/03/2019 Region ESF Ways and inactive residents across the Liverpool City Region to enhance their employability to Work skills and to assist them in gaining employment. Participants will be able to access a Programme range of services including high quality Information, Advice and Guidance (IAG), transitional employment opportunities (ILMs), and skills development. Services will be tailored to meet the needs of the individual and will add value to mainstream provision, respond to employer needs and yield improved outcomes. The programme will also incorporate and add value to the existing LCR Youth Employment Gateway (YEG).
Page 194 Page
Liverpool City The Project will provide eligible SMEs across the Liverpool City Region, who would not £2,935,124 31/03/2019 Region ERDF typically engage with providers of business support, with the capacity and support they Integrated need to grow and prosper. Business Support Project The Project will be a bridge between start-up and more bespoke, intensive or specialist support typically provided by the private sector.
Support to SMEs will include:
* An intensive Business Diagnostic * An Action Plan * A dedicated Adviser * Informed brokerage into specialist/commercial business support e.g. IFB2016,local/ national provision * More intensive support, where appropriate, focusing upon the management of people, processes and resources Liverpool City The project will enable productivity and employment growth in local SMEs by building their £5,641,582 31/01/2019 Region ERDF New capacity for growth through the delivery of targeted support based on their specific needs Markets 2: Building and opportunities. It complements the LCR Integrated Business Support consortium by Business Capacity providing more specialised value added services in key sectors, to groups under- represented in business and to businesses with high growth potential. The project will Scheme Name Description Amount of Grant Programme Awarded End Date stimulate increased coherence and commercialisation of business support, delivering significant value to participating SMEs whilst levering out financial contribution where possible to the services delivered, which in turn reduces the burden on public sector funds. Liverpool City The Project will deliver integrated support to all partners and stakeholders wishing to £791,438 31/03/2019 Region ERDF develop projects for the ESIF programme aligned to the LCR strategy. The project will Technical deliver dedicated LCR wide TA activity across ERDF and ESF. It will focus on Assistance project development of the project pipeline in key areas of the programme and with additional support through partnership engagement, continued support for projects progressing through the application process, promotion and publicity. It will work closely with the GDT for ERDF, DWP for ESF team and DEFRA for EAFRD (rural development). The project will form part of the governance and management of the LCR Combined Authority. There will be a joint CA and LEP steering group. This application covers the ERDF element. Liverpool City ESF project for the technical assistance budget to promote the ESIF Programme and £306,379 31/03/2019 Region ESF develop the ESF project pipeline. Technical Page 195 Page Assistance Project
This page is intentionally left blank Agenda Item 16a
Merseytravel Committee
Merseytravel Committee
7 January 2016
Present: Councillor L Robinson, Chair Councillor G Friel, Deputy Chair
Councillors R Abbey, D Barrington, A Carr, J Dodd, S Foulkes, H Howard, K McGlashan, P McKinley, M Norris, M Rasmussen, K Roberts, L Rowlands, T Shields, J Stockton, P Thomas, J Williams and J Wolfson
Apologies for absence were submitted by Councillors J Lilly
51. Chair's Announcement
The Chair wished the Committee a Happy New Year and expressed his enthusiasm for another year of working together to improve the transport network.
Wishes for a quick recovery were sent to Councillor Joan Lilly who was absent from the meeting due to ill health.
52. Declarations of Interest
There were no declarations of interest.
53. Minutes of the Last Meeting
Resolved that the minutes of the last meeting held on 3 December 2015 be approved as a correct record, subject to the addition of Councillor J Lilly to the attendance list.
Page 197 Merseytravel Committee
54. Merseyrail Presentation
The Committee received a presentation from Merseyrail’s Managing Director, Jan Chaudhry-van der Velde, regarding Merseyrail’s strategy moving forward into the second half of the 25 year concession.
With regard to the services provided over the Christmas period, Mr Chaudhry- van der Velde reported that the number of passengers using the late night services provided during the two weekends leading up to Christmas had increased from the previous year. It was evident that passengers found those services useful and, although they were not necessarily cost effective, the company saw it as their contribution to ensuring that people could make use of Liverpool’s growing night-time economy.
Trains operated on Boxing Day for the first time in 2015; 20 stations were open and a limited half hourly service was provided on the routes operated by the Sandhills signalling centre. 18,000 journeys were counted over the day which, in context, was between a third and a half of the typical number of passengers using the network on a Sunday during winter. There were concerns beforehand that some passengers may miss the last service and extra trains were on standby should that happen, however, it became apparent that passengers were aware of the timetable and the extra trains were not needed. The Boxing Day service was well recognised and received positive media coverage as one of only two networks in the country operating on that day.
Councillor Abbey referred to the pressure that the rail network was under following price increases and, whilst he acknowledged that Merseyrail had one of the lowest fare structures in the country, affordability of passengers was a key factor, in particular that of young people. Merseyrail did offer incentives for young people but they were not widely publicised and he enquired as to how the company would communicate those offers to encourage future travellers onto the transport network at a young age. Mr Chaudhry- van der Velde advised that the 16 to 18 years child ticket was available on the Merseyrail network. Initially there was a risk that offering the ticket could affect overall fare revenue, as passengers were paying half the fare they should be, but as agreed with Merseytravel the risk would be counteracted with higher passenger numbers and volumes were increasing.
Page 198
Merseytravel Committee
Merseyrail had put a significant amount of effort into publicising this and the further range of tickets offered. It was another positive example of a devolved concession agreement producing results that would have been difficult to enact had it been a Department for Transport franchise.
Councillor Shields, with reference to the security and crime reduction strategy mentioned in the presentation, enquired as to how Merseyrail were tackling fare evasion. There were grave concerns that, at those stations with automated ticket gates, the manual gates were often left open and used by passengers without valid tickets. This had not only financial but security impacts on the network. Mr Chaudhry- van der Velde candidly explained that, despite what he had been told when joining Merseyrail in July 2015, the company did have issues with revenue protection and fare evasion, and there was more that could be done to tackle it. The underground stations around the City Centre were considered to be well protected; whereas parts of the network outside of the city were vulnerable to fare evasion, particularly of an evening. A revenue protection strategy had been identified in order to focus on the issue. Merseyrail currently had 30 Revenue Protection Officers who were all fully trained and competent in their role; however, their deployment could be reviewed to ensure that they were placed at the key locations. Consideration also needed to be given to increasing the number of officers, introducing more ticket gates and undertaking more joint working with the British Transport Police. Over the next 12 months the company would be placing more emphasis on tackling revenue protection issues.
Councillor Norris enquired as to what the timescales were for introducing smart ticketing on to the Merseyrail network. With the introduction of concessionary travel, Solo and Saveaway tickets already on to the Walrus platform, Mr Chaudhry-van der Velde believed that it was a great head start in introducing further tickets such as the Rail Pass. He explained that he had tasked his Ticketing Team at Merseyrail with transferring the Rail Pass products onto Walrus within a year and since then significant work had been done. Close contact had been kept with Merseytravel’s Smart Ticketing team to ensure that work was progressing in line with Merseytravel’s strategy. A detailed timeline for the Rail Pass was currently in development, with introduction anticipated sooner rather than later, however there were some
Page 199 Merseytravel Committee
fundamental issues that needed to be resolved first such as whether the Walrus cards would remain anonymous and the procedure for issuing refunds.
In response to a question from Councillor Stockton regarding the ability for Merseyrail ticket machines to dispense pre-booked tickets for national journeys, Mr Chaudhry-van der Velde advised that there were active discussions going on within Merseyrail about converting the machines to accept the national Ticket on Departure Scheme, but it was difficult to justify as all stations were staffed during operational hours. The company’s view was that it was preferable for passengers to book their tickets at a station where the ticket clerks could provide expert advice and receive their ticket there and then. It was acknowledged, however, that due to the increasing number of passengers booking tickets at home on the internet, the need for the machines to issue national tickets was inevitable but to date there was no timescale for it. One such machine would be introduced at Liverpool South Parkway but would be the only one on the Merseyrail network.
Councillor Carr felt that Merseyrail underplayed the community work they did. Initiatives such as station adoption, of which he had three in his own ward, created a sense of ownership of the station, and the junior football leagues to which Merseyrail staff volunteered their own time should be recognised and promoted. Small gestures that had a big impact such as providing flip flops to passengers after the Grand National in 2015 were what people appreciated and also helped to improve the company’s reputation across the Liverpool City Region. He asked if there was a programme in place to continue but also to improve the work in the community. Mr Chaudhry-van der Velde stated that the community work was one of the aspects that most impressed him when joining the company and the impact of the goodwill and community involvement was enormous. Merseyrail were full appreciative of the work and had no intention of doing any less; there was an ambition to try to do more moving forward.
With regard to the Safer Stations accreditation that the Merseyrail network had, Councillor McGlashan suggested that efforts be concentrated on linking the accreditation with the community involvement ascommunity ownership of stations enhanced safety for passengers using the network. Mr Chaudhry-van der Velde agreed that the two
Page 200
Merseytravel Committee
elements were connected. All stations on the network had CCTV and help points and all lighting was controlled from a central point. Customer satisfaction survey results indicated that satisfaction with security at stations was high and Merseyrail wanted to maintain and even improve those results.
Councillor Friel commended the presentation and the work that had been done and he looked forward to the future work mentioned in the presentation. He also enquired when the refurbishment work to Moorfields Station would be complete and also, with regard to delays, he enquired as to how Merseyrail’’s strategy would improve the information provided to passengers. He further referred to the decrease in oil prices, which could put the company in competition with car usage, and asked if passenger numbers on the network were compared with other networks around the country.
Mr Chaudhry-van der Velde advised that Moorfields Station was the last of the underground stations in the City Centre to be modernised. The Hunts Cross platform was currently closed with work expected to be complete in early April, in time for the Grand National. Both platforms would remain open for the Grand National and the final platform would close for refurbishment afterwards. In order to keep disruption to passengers to a minimum and prevent further closures there were nine escalators being renewed at the same time. Due to the success of the designs at James Street Station, Merseyrail had been more ambitious in the designs for Moorfields and passengers would see more colour introduced.
With regard to service information he acknowledged that it could be improved and it was a critical strategy for the company moving forward. When it came to providing passengers with information during delays consistency was critical. He provided an example of a recent journey that was delayed due to signalling failures; the guard on the train he was travelling on gave excellent information to passengers that she was receiving via her mobile phone, however, Merseyrail received a number of complaints as a result of that incident about the lack of information provided; therefore it was clear that the issue of guards not relaying information or not being able to receive the information if stuck underground needed to be resolved. Another complaint was received about station staff not providing information and upon investigation it
Page 201 Merseytravel Committee
was found that the complainant had spoken with contractors, who were wearing high visibility vests, and not Merseyrail staff, which was another issue that needed to be looked at. A multi-faceted service information strategy would be developed, which the company were in good stead to produce as their control centre was combined with Network Rail’s control centre and was the most integrated in the country. Merseyrail needed to exploit this advantage to ensure that information was provided to passengers during normal running, but in particular during delays, by using all possible channels including social media. Train operating companies had been known to use their passenger information databases to text passengers with delay information, which was well received, and could be considered in the future.
In response to the comments about oil prices, Mr Chaudhry-van der Velde advised that train operating companies were at the mercy of the economy of the local area, which is why Merseyrail put a lot of effort into contributing to the health of its local economy. Oil prices were a concern, as people used their cars instead of public transport when there were reductions in oil. Another influence on the mode of transport used was the highway network, which in the local area was well developed. Fares on the network were really good value, especially when compared to parking in the City Centre, but there were other things that Merseyrail could do to drive growth and counteract the risks that came from cheaper oil prices such as engaging with large employers. Through Merseytravel’s employer network Merseyrail could contact large employers and ask for a list of staff that lived near stations and offer them first year discounts on season tickets to encourage people onto the network.
Councillor Abbey commended the parking that was provided at stations, which was well used particularly at Birkenhead North and Bidston. More passengers were choosing to park and ride; therefore potential capacity issues at the car parks needed to be recognised, with possible expansion of some sites being included in Merseyrail’s strategy. The passenger growth generated by the car parks and subsequent impact on the carbon footprint was not highlighted and needed to be. Whilst Mr Chaudhry-van der Velde agreed with Councillor Abbey’s comments he advised that if additional car parking spaces would result in new journeys it was the right thing
Page 202
Merseytravel Committee
to do but the displacement of passengers also needed to be taken into consideration, as extra spaces could encourage passengers to drive to another station rather than walk to their local station and use the train for the entire journey.
Councillor Robinson commended the presentation. It was encouraging to see the company’s vision for the next 12 years and know that the standards reached in the first half of the concession would continue to improve. He also commended Merseyrail on the progress of the introduction of smart ticketing and the service provided on Boxing Day. The plans for Boxing Day were developed with fairly short notice and stood the planning of the 2016 service in good stead. Close working between Merseyrail and Merseytravel, as identified in the presentation, was key and Merseytravel were keen to continue the close relationship moving forward and for the remainder of the concession.
Mr Chaudhry-van der Velde was thanked for the presentation and the Committee noted the contents.
55. Mersey Ferries Long Term Strategy
The Committee considered a report of Merseytravel concerning the recently commissioned Mersey Ferries Long Term Strategy review.
Councillor Robinson advised the Committee that there had been a lot of welcome interest since the publication of the report, and reminded members that there would be no decisions made at the meeting regarding anything contained within the Strategy.
Councillor Foulkes stressed that, despite the public focus on the more negative aspects of the Strategy, the document was undoubtedly positive news for the iconic ferry service and the Liverpool City Region. In a time when the Government were cutting public services it was encouraging to see a 20 year Strategy being developed. The new vessels would be key to the Strategy to ensure that the service generated income and was sustainable moving forward. The interest generated from the public was welcomed; their ideas could help inform the development of the Strategy. He asked that, when decisions needed to be made, could Members consider the same logic and strategy used for building up the
Page 203 Merseytravel Committee
reserves for the Rolling Stock project. The figures contained within the Long Term Strategy were high but could be handled in the same way as the rolling stock to build up both the reserve and capital. The development of the Strategy should not stop interim discussions to make the current operation more efficient and successful. Steps had already been taken towards that, such as the introduction of annualised hours, but other aspects such as the boat being kept on the river overnight with a full crew should be looked at.
Councillor McGlashan welcomed the report and urged the public to do the same. The members recently had the opportunity to visit the Mersey Ferries dry dock, where the work, and associated cost, that goes into maintaining the vessels was appreciated. Nowhere else in the country was looking to renew their fleet as Merseytravel was and the development of a 20 year Strategy was something that should be viewed as positive.
Councillor Williams asked whether the tourism factors around Woodside Ferry Terminal had been fully explored. Wirral Council had invested a substantial amount of money in the area and the history of Birkenhead was significant. Officers advised that no decision on the closure of terminals had been taken; however the ambition of the Strategy was to reduce costs. The patronage levels were lower from Woodside, with 10% of the total passengers, and the transport links in Birkenhead were thought to be a contributing factor. If the decision was taken to close Woodside terminal it could be reviewed should demand increase.
The Interim Chief Executive welcomed the comments that had been made by Members. The Strategy was a positive development and it was unfortunate that the report had received negative media attention. He drew the Committee’s attention to the Executive Summary appended to the report, particularly the aim of the Strategy which was to provide a long term programme for investment in the Mersey Ferries to maximise the benefits of the operation, as well as ensuring that they continued to fulfil the important role they played in the visitor economy of the Liverpool City Region, and this had to be achieved in the most cost effective way possible. The report presented to the Committee was not requesting approval for individual decisions but about utilising a strategic approach for the future development of the Mersey Ferries.
Page 204
Merseytravel Committee
Councillor Abbey welcomed the report, which provided a number of options, and at this stage it was clear that no decision was to be made. The tourism offer had to be an encompassing Liverpool City Region offer and the Mersey Ferries were an integral part of tourism in the area. Despite the location of the terminals the ferries belonged to the whole of Merseyside and it was imperative that their long term future was maintained, not only for 20 years but much further beyond. The benefit of the service needed to be maximised to benefit the wider region whilst also being mindful of cost, particularly in the current time of severe public service cuts. With regard to the closure of a terminal, he again reiterated that it was only an option and not a recommendation at this stage and stressed that when the time came to make decisions they would be made by Politicians based on recommendations from Officers.
Councillor Robinson endorsed the comments made by Members. The organisation cherished the Mersey Ferries and it was a great privilege for the Members to be ‘guardians’ of the service and to safeguard it for future generations. A strategic, cost effective approach was needed in order to maximise the operation and the Strategy provided the opportunity for practical, achievable, visionary growth. There were a number of positives contained within the Strategy such as the introduction of new vessels, more focus on the charter market and improved marketing for both commuters and tourists. Working with those stakeholders groups who were passionate about the ferries would be key to achieving the aim of the Strategy. The report being considered was a starting point and re-assurance was provided that officers would be submitting more detailed options to the Committee prior to any decisions being made.
Councillor Robinson also gave notice that he would be moving a motion to request Officers to look at options that should include a future three terminal service. It was hoped that it would demonstrate to the Liverpool City Region that the organisation was serious about considering all options for the future of three terminals in order to achieve the best outcome for the Strategy and operation of the Mersey Ferries.
Councillor Rowlands welcomed the 20 year Strategy and the economical tracks contained within. The Strategy had
Page 205 Merseytravel Committee
to be based around future need and how growth could be achieved. He agreed with the comments made throughout the discussion and confirmed his Group’s full support for the forthcoming motion.
Councillor Friel commented that the Officer’s passion to see the Mersey Ferries service continue was evident in the report. The recent communications regarding the Strategy had not conveyed how the report placed before Members was merely a framework of how to move forward and not about making decisions. The ferries service had evolved over the years but rail and tunnel links across the River Mersey and also bus de-regulation had affected patronage levels. Officers had taken this and other factors into account upon production of the Strategy. The preserving of the history and heritage of the service was important but had to be at an appropriate cost. With regard to the communication issue he suggested that it could be avoided in future by issuing information on the full details of the matter to be considered. The media had a significant role to play and should be involved as much as possible, as should other interested stakeholder groups.
Councillor Robinson agreed; there was a lot of stakeholder engagement undertaken regarding the Strategy and the dialogue with those groups and the media needed to be continued and strengthened.
Motion by Councillor L Robinson seconded by Councillor S Foulkes
That:- a) the 20 year Mersey Ferries Long Term Strategy, subject to periodic review at not later than three year intervals, be approved; b) Officers be requested to explore the interventions as identified within the strategy and bring back to the Committee, within a six month period, proposals on which early decisions needed to be made and accompanied by associated detail; and c) Officers be requested to look at options around all three Terminals; Pier Head, Woodside and Seacombe, that should include a future three terminal service.
Page 206
Merseytravel Committee
The Motion was then put, carried and it was Resolved Accordingly.
56. Priorities for the Future of Welsh Rail Infrastructure
The Committee considered a report of the Lead Officer for Transport regarding Merseytravel’s draft response to the National Assembly for Wales’ inquiry on Priorities for the Future of Welsh Rail Infrastructure.
Councillor Robinson commended the detail contained within the response, particularly the inclusion of the partnership working that the organisation was involved in.
Resolved that the draft response to the National Assembly for Wales’ inquiry on Priorities for the Future of Welsh Rail Infrastructure be endorsed, subject to the addition of a paragraph regarding the importance of Welsh rail infrastructure in providing access to Liverpool Airport.
57. Smart Ticketing Update January 2016
The Committee considered an update presentation from the Head of IT on the progress of the Smart Ticketing Programme (presentation attached).
Councillor Friel commended the team and Councillor Norris for the achievements of the programme to date. He also enquired as to whether consideration had been given to the handling of personal data when the cards were developed to hold such information in the future. Officers advised that there was a legal and moral obligation to handle personal data in the correct way and the legalities would be looked at prior to this data being captured. There was also an intention to learn lessons of data handling from other sectors.
Councillor Carr referred to the recent technological issues that caused the Oyster system to ‘go down’. Transport for London were now facing fines and he enquired as to whether similar issues were anticipated with the Walrus system. Officers advised that it was always possible when using technology but there would be plans in place to manage such issues. Through the Bus Alliance the Walrus scheme would be leveraged by a separate
Page 207 Merseytravel Committee
commercial entity that would protect the organisations involved and would feature in all commercial agreements. From an internal perspective, the resolution of technical issues would be considered by each separate project on a step by step basis.
Councillor Abbey stressed the importance of recognising that the Walrus scheme had no similarity with the Oyster scheme. Oyster had had 20 years of development and was done so solely for the London area. Based on this timeframe Walrus had made great strides in a short time and it should be an ambition to have a product better than Oyster. Walrus was at the forefront of ITSO development and the team were commended on the progress made. Officers agreed that Oyster scheme was very different; however, there were lessons that could be learnt from the project and continuous work was on-going with partners including Transport for London.
Councillor Robinson echoed Councillor’s Abbey’s comments. The number of cards issued since the introduction of the scheme (800,000) was remarkable and put it in the premier position of ticketing schemes in the North of England. It was pleasing to see that all operators had agreed to use the Walrus platform; this would make it simpler for passengers and hopefully encourage more people onto the network. The team were again commended for their work and further constructive progress was anticipated to in order to make the ticketing offer more affordable and attractive for passengers.
Resolved that:-
a) the contents of the presentation be noted; and
b) further updates on the Smart Ticketing Programme be received.
The Chair indicated that the following item of business would be taken as a matter of urgency as delay in one cycle would not be in the interests of the efficient operation of the service
58. Performance and Review Sub-Committee
Page 208
Merseytravel Committee
Resolved that the minutes of the meeting of the Performance and Review Sub-Committee held on 4 January 2016 be approved insofar as they require the approval of the Committee.
Motion by Councillor J Stockton, seconded by Councillor H Howard that Councillor Patrick McKinley be appointed Chair of the Performance and Review Sub-Committee Programme Management Task and Finish Group.
The Motion was then put, carried and it was Resolved Accordingly.
The Chair indicated that the following item of business would be taken as a matter of urgency as delay in one cycle would result in the failure to meet the submission deadline of 8 January 2016.
59. National Infrastructure Commission Submission
The Committee considered a report of the Lead Officer for Transport regarding the proposed Liverpool City Region response to the National Infrastructure Commission’s Call for Evidence on future investments in the North’s transport infrastructure.
Councillor Robinson welcomed the opportunity to provide a response to this important Call for Evidence. Improving east to west links across the North of England and to London were key for both passenger and freight services, and those aspects were well detailed within the response.
Resolved that:-
a) the proposed response be noted; and
b) authority be delegated to the Interim Chief Executive, in consultation with the Chair, to submit the final response.
CHAIR
Page 209 This page is intentionally left blank Agenda Item 16b
Merseytravel Committee
Merseytravel Committee
4 February 2016
Present: Councillor L Robinson, Chair Councillor G Friel, Deputy Chair
Councillors R Abbey, D Barrington, A Carr, J Dodd, S Foulkes, J Lilly, K McGlashan, P McKinley, M Norris, M Rasmussen, T Shields, J Stockton, P Thomas, J Williams and J Wolfson
Apologies for absence were submitted by Councillors H Howard, K Roberts and L Rowlands
60. Declarations of Interest
There were no declarations of interest.
61. Minutes of the Last Meeting
Resolved that the minutes of the last meeting held on 7 January 2016 be approved as a correct record.
62. General Purposes Sub-Committee
Resolved that the minutes of the meeting of the General Purposes Sub-Committee held on 14 January 2016 be approved insofar as they require the approval of the Committee.
63. Performance and Review Sub-Committee
Resolved that the minutes of the meeting of the Performance and Review Sub-Committee held on 1 February 2016 be approved insofar as they require the approval of the Committee.
Page 211 Merseytravel Committee
64. Mersey Tunnels Tolls 2016/17
The Committee considered a report of the Lead Officer for Transport regarding Mersey Tunnel Tolls for 2016/17.
Councillor Foulkes welcomed all proposals contained within the report. The responsibility of maintaining and continuing to improve the Mersey Tunnels, which were two routes that helped to drive and support economic growth in the Liverpool City Region, was a significant task that Merseytravel continued to do in an exemplary way. Historically the tolls were seen as a local tax but due to the initial review by the Combined Authority and through Merseytravel’s effective use of finances and efficient operation of the tunnels there was manoeuvrability in the toll-setting process, which had been used to good effect. The planned freeze on tolls was the third in as many years and the Fast Tag discount was a massive advantage for those who were part of the scheme; regular users of the tunnel, who did not have a Fast Tag, were strongly encouraged to get one. Both proposals would be welcomed across the Liverpool City Region and further afield, but particularly in Wirral. Free travel for emergency service liveried vehicles was also a much welcomed proposal. The implementation of the proposals, if agreed, would be done without any direct financial contribution from central Government, which was in stark contrast to the promises made by the Chancellor of the Exchequer prior to the 2015 General Election.
Councillor Foulkes declared that he had not always agreed with the decisions made by the former Merseyside Integrated Transport Authority regarding tolls but the current proposals had his utmost support and full credit was to be given to Merseytravel and personally to the Chair of the Merseytravel Committee.
Councillor McGlashan also welcomed the report. The Mersey Tunnels were safe and attractive to use and all those in the Liverpool City Region and beyond who used the tunnels should be pleased with the proposals. Should the recommendations be agreed by the Combined Authority, it would be interesting to see if the press attention would be comparable to the volume given when the tolls were increased.
In response to a question from Councillor Carr regarding the cost of depositing the cash from the tolls into the
Page 212
Merseytravel Committee
bank, Mr Evans advised that there were varying transactional charges for both notes and coins, with coins being more expensive. There were significant benefits of moving away from cash in order to lessen customer’s time at the toll booths; Fast Tag technology, although it had the same operational costs, was preferred as it was quicker and more convenient for customers. He would ascertain details of the costs associated with depositing cash and provide the Committee with the information.
Councillor Robinson echoed Councillor Foulkes’ earlier comments. Merseytravel had worked collaboratively with the Combined Authority in order to find ways to improve the deal for local people and this had been achieved solely at a local level with no support or assistance from central Government. The recommendation for the reduction in Fast Tag tolls was pleasing to see as it was something that the organisation had aspired to do for a long time in order to provide a better offer for local residents and businesses. The next step was to encourage more customers to take up the Fast Tag through re-branding and re-marketing of the product.
Councillor Robinson continued that Merseytravel’s key focus was affordability and the proposals in the report were a demonstration of how the organisation was moving in the right direction. According to recent National Passenger Surveys Merseyrail was recognised as the number one train operator in the country, one of the reasons being that the fares were more affordable than other parts of the country. The one anomaly of the transport network across the Liverpool City Region was bus fares, which were too expensive and nonsensical.
Merseytravel had worked to maintain the affordability of tunnel tolls and rail fares and it was now the responsibility of the bus operators to recognise this and follow suit by reducing their fares.
Resolved that:- a) the contents of the report be noted; b) the level of “authorised tolls” for the Mersey Tunnels as determined by the Tunnels Act 2004, with details on calculation methods explained in section 3 of the report be noted;
Page 213 Merseytravel Committee
c) the Liverpool City Region Combined Authority be recommended to increase the Fast Tag discount and implement a schedule of tolls contained in the table below with effect from Sunday 3 April 2016, in effect retaining current cash toll levels and reducing the toll for Fast Tag users:-
Vehicle Authorised 2016/17 2016/17 Class Toll Cash Toll Fast Tag (November Toll RPI) 1 £1.90 £1.70 £1.20 2 £3.70 £3.40 £2.40 3 £5.60 £5.10 £3.60 4 £7.50 £6.80 £4.80
65. 2016/17 Budget - Financial Perspective
The Committee considered a report of the Treasurer regarding the Merseytravel Budget for 2016/17.
The Treasurer, John Fogarty, presented the report and highlighted key points for Members’ attention. As well as including the budget for 2016/17 and the Capital Programme, the Merseytravel Corporate Plan for the next year was also included. The addition of the Corporate Plan was important as it demonstrated how it had been integrated with the budget and how Merseytravel’s resources were prioritised.
Each year the process was becoming more comprehensive as meeting the savings targets became increasingly difficult. Budget holders and Heads of Service had worked with colleagues in the Finance and Policy divisions throughout the year and the significant effort of those involved had been recognised and, on behalf of the Directors of Merseytravel, the officers were thanked. The Members were also thanked for their input and it was hoped that both the budget and Corporate Plan reflected their priorities and intentions for the forthcoming year.
Across the organisation there had been a responsible approach to the budget setting process and costs had continued to be reduced through improving efficiency, making better commissioning decisions, better procurement and contract monitoring, and better use of assets. As a result, the 2016/17 budget would once again
Page 214
Merseytravel Committee
allow the Combined Authority to significantly reduce the transport levy.
Members were reminded of the relationship between Merseytravel and the Combined Authority. Merseytravel as an organisation was the transport delivery arm of the Combined Authority outside of Halton. It was a separate statutory body with Directors who were responsible to the Combined Authority, from where the funding was derived. The Merseytravel Committee acted on behalf of the Combined Authority in holding Merseytravel to account, part of which was to make recommendations to the Combined Authority on the level of resources Merseytravel required to fulfil its responsibilities and manage risks.
The amount of required funding that Merseytravel were recommending to the Combined Authority was £94.4 million for its non-tunnels activities. This represented a £3 million reduction on the previous year’s original budget. In order to reduce the operating grant by such an amount the organisation had to find over £7 million in savings, allowing for inflation and unavoidable growth.
Many of those savings were already reflected in this year’s budget; in particular concessionary travel, the Northern Rail direct award, and changes to revenue protection and survey staff arising from Smart Ticketing. The remaining savings were newly identified for next year and included almost £2 million on the Supported Bus and Merseylink services, savings in asset management costs associated with the hubs and other premises, and increased income from fares and departure charges already approved, National Express and Mann Island. The outcome of those efforts meant that Merseytravel was able to recommend a further £8.3 million reduction to the transport levy for 2016/17, taking the total levy to just over £105 million. This was a 17.5% reduction in two years.
The reduction would make a significant impact on the budget setting process for each of the district councils. When setting a responsible budget, Merseytravel were always mindful of the financial situation of the districts and worked closely with the Council Leaders, Chief Executives, Treasurers and Transport Leads to set a budget that recognised the pressures from non-transport services.
Page 215 Merseytravel Committee
As well as the levy, Merseytravel also received a Special Rail Grant for Merseyrail Electrics. Whilst confirmation of this was still awaited, indications from the Department for Transport suggested that it may be subject to reductions, the organisation would continue to work with Merseyrail to ensure that the taxpayers of Merseyside would not be disadvantaged. Comfort was taken in a devolution deal that limited any reductions in Special Rail Grants to a manageable level in return for local investments in rolling stock. Progressing the Rolling Stock replacement was one of the organisation’s main priorities for the next year.
Merseytravel’s third source of revenue was the grant received from the Combined Authority for operating the Mersey Tunnels and managing the assets on its behalf. This revenue came from tolls, although as had been reported, the tolls were no longer the organisation’s direct income. The grant would broadly remain the same as 2015/16 at £27 million and would allow the organisation to progress major schemes such as the rewiring and modernisation of the tolling systems on behalf of the Combined Authority, as well as maintaining a safe environment for users and staff alike.
The Capital Programme of £31.3 million was relying less on direct levy contributions and more on alternative sources of financing, including Local Growth Fund and Merseytravel’s accumulated capital reserves next year which was both prudent and appropriate. Non-tunnels schemes included Kirkby Bus Station and Local Growth Fund funded rail schemes at Newton-Le-Willows, Maghull and Halton Curve, which were all part of the Long Term Rail Strategy.
In conjunction with budget setting Merseytravel had reviewed the Corporate Plan and produced five key priorities that would be used in 2016/17 to guide the prioritisation of resources. The priorities were connectivity of the Liverpool City Region, management of the organisation’s assets and services, delivery of a Liverpool City Region comprehensive bus strategy, promotion of affordable and sustainable travel, and support for the Combined Authority.
The budget would allow Merseytravel to deliver a set of key activities within each of the priorities; however it did not mean that all resources would be diverted into those areas. The risk register remained as important as the Corporate Plan in determining the budget, and as ever,
Page 216
Merseytravel Committee
managing services in a safe and efficient manner was priority.
Councillor Foulkes commended the report; it was a good summary of the organisation’s current position. A dramatically reduced levy continued to be delivered year on year, which alleviated pressure on district council budgets and helped to protect front line services. The organisation was outward looking and delivered innovations such as MyTicket, whilst still saving money and credit was given to all officers and the members of the Merseytravel Committee.
Councillor Foulkes continued that the draft Capital Programme appended to the report showed no let-up in investment for 2016/17, particularly for the Mersey Tunnels and Ferries and the major contribution from the Asset Management division to the organisation’s efficiency needed to be recognised.
In response to a question from Councillor Carr regarding the appointment of a Head of Paid Service to the Combined Authority, Mr Fogarty advised that there was one in place. The position was previously held by David Brown during his time as Chief Executive of Merseytravel and now held by Liverpool City Council Chief Executive, Ged Fitzgerald. This role, along with the other Statutory Officers of the Combined Authority, did not attract remuneration. Merseytravel’s ability to continue to be the accountable body for the Combined Authority was well made through the organisation’s own resources. It was recognised in the budget being recommended to the Combined Authority’s budget meeting that as the authority grew and devolution progressed it would need its own architecture. How this would look would be a matter for the Combined Authority.
Councillor Robinson commended officers on producing a budget report that was transparent, understandable and accountable to the residents of the Liverpool City Region. The appending of the Corporate Plan was also commended; it demonstrated that the organisation was developing in a professional manner and also that the Corporate Plan and budget reflected each other. The continuing reduction of the levy was significant; it was important to provide an efficient service but also to give money back to the district councils to assist with the financial challenges they faced from central Government. Councillor Foulkes’ earlier comments regarding
Page 217 Merseytravel Committee
innovations were echoed. Although there was a reduction in spending for the current financial year Merseytravel had still managed to deliver initiatives such as MyTicket, which was the best offer for young people in the country outside of London. Any necessary reductions had been handled in a sensitive way and with minimal impact to the public travelling on the transport network; the Lead Members were commended for their involvement.
Resolved that:-
a) a reduced 2015/16 grant be requested from the Liverpool City Region Combined Authority for revenue activities including the operations of the Mersey Tunnels as detailed in sections 5 and 6 of the report;
b) 2016/17 operating grants be requested for both public transport and Mersey Tunnels operating activities as detailed in sections 4 and 6 of the report;
c) Capital grants be requested for both 2015/16 and 2016/17 as detailed in section 6 of the report; and
d) the 2016/17 Merseytravel Corporate Plan be endorsed.
66. Response to Consultation on National Planning Policy Changes
The Committee considered a report of the Lead Officer for Transport regarding Merseytravel’s response to the Government’s Consultation on National Planning Policy Changes.
With regard to paragraph 1.2 of the report, Councillor Stockton raised concern that the intensification of residential developments would lead to an increase in environmental issues and have an impact on the ability to deliver transport infrastructure. Officers advised that within Merseytravel’s response the need to take transport issues into account had been reinforced, particularly on land that had transport potential. The importance of considering transport side by side with housing had also been highlighted.
Page 218
Merseytravel Committee
Councillor Robinson thanked officers for producing a good, straight forward response.
Resolved that Merseytravel’s draft response to the Government’s Consultation on National Planning Policy Changes, attached as Appendix 1 to the report, be endorsed and finalised in consultation with the Chair of the Merseytravel Committee and Lead Officer for Transport prior to submission.
CHAIR
Page 219 This page is intentionally left blank
Page 220