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, 17th November, 2017 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

Interim 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 LCR COMBINED AUTHORITY MEETING HELD ON 20 OCTOBER 2017 (Pages 1 - 10)

4. LIVERPOOL CITY REGION METRO MAYOR ANNOUNCEMENTS AND UPDATES To receive updates from the Liverpool City Region Metro Mayor.

TRANSPORT

5. UPDATED LONG TERM RAIL STRATEGY (*KEY DECISION) To consider the report of the Lead Officer: Transport. (Pages 11 - 76)

6. PROPOSALS FOR ALLOCATING THE 2018/19 TRANSPORT INVESTMENT FUND BUDGET (*KEY DECISION) To consider the report of the Lead Officer: Transport. (Pages 77 - 84)

ENERGY AND RENEWABLES

7. MERSEY TIDAL PROJECT UPDATE To consider the report of the Lead Officer: Energy and Renewables (Pages 85 - 94)

SKILLS AND APPRENTICESHIPS

8. SKILLS INVESTMENT STATEMENT 2018/19 (*KEY DECISION) To consider the report of the Lead Officer: Skills and Apprenticeships. (Pages 95 - 138)

CRIMINAL JUSTICE

9. PORTFOLIO UPDATE - CRIMINAL JUSTICE To receive an update on the work of this portfolio from Jane Kennedy, Portfolio Holder for Criminal Justice.

HOUSING AND PUBLIC SERVICE REFORM

10. CONSULTATION RESPONSE ON PLANNING FOR THE RIGHT HOMES IN THE RIGHT PLACES: CONSULTATION PROPOSALS To consider the report of the Lead Officer: Housing. (Pages 139 - 150)

GOVERNANCE

11. COMBINED AUTHORITY BUDGET MONITORING STATEMENT AND TREASURY MANAGEMENT POSITION UPDATE 1 JULY 2017 TO 30 SEPTEMBER 2017 (QUARTER 2) To consider the report from the Treasurer. (Pages 151 - 162)

12. LIVERPOOL CITY REGION COMBINED AUTHORITY APPOINTMENT To consider the report of the Interim Head of Paid Service. (Pages 163 - 164)

13. PUBLIC QUESTION TIME Members of the public will be given the opportunity to ask questions which have been submitted in accordance with Meetings Standing Orders No. 11. A period of 30 minutes will be allocated for this item. Copies of valid questions will be circulated at the meeting,

Public questions should be submitted to Knowsley Council Democratic Services by 5.00pm on Monday 13 November 2017.

By email to: [email protected]

In writing to: Knowsley Metropolitan Borough Council, Democratic Services, PO Box 26, Municipal Building, Archway Road, Huyton, Knowsley LE6 9YU.

14. PETITIONS AND STATEMENTS Members of the public will be given the opportunity to submit a single petition or statement in accordance with Meetings Standing Orders No.11. Petitions and Statements should be submitted to Knowsley Council Democratic Services by 5.00pm on Monday 13 November 2017.

By email to: [email protected]

In writing to: Knowsley Metropolitan Borough Council, Democratic Services, PO Box 26, Municipal Buildings, Archway Road, Huyton, Knowsley, L36 9YU.

15. MINUTES OF THE TRANSPORT COMMITTEE HELD ON 5 OCTOBER 2107 (Pages 165 - 178)

Agenda Item 3

LIVERPOOL CITY REGION COMBINED AUTHORITY

PUBLICATION: 20 OCTOBER 2017

DEADLINE FOR CALL-IN: 27 OCTOBER 2017

FOLLOWING THE CALL-IN PERIOD, DECISIONS INCLUDED IN THESE MINUTES MAY THEN BE IMPLEMENTED WHERE THEY HAVE NOT BEEN SUBJECT TO A CALL-IN.

* DENOTES KEY DECISION

At a meeting of the Liverpool City Region Combined Authority held in the Authority Chamber, No. 1 Mann Island, Liverpool, L3 1BP on Friday, 20th October, 2017 the following Members were

P r e s e n t:

Metro Mayor S Rotheram Chairperson of the Combined Authority (in the Chair)

Councillor P Davies, Councillor A Moorhead, Councillor R Polhill, Councillor I Maher, Mr A Hamid MBE and Councillor R Bowden (Substitute Associate Member for Councillor T O'Neill).

Mayoral Advisors in attendance

Janet Beer (Higher Education) Kate Farrell (Homelessness) Sara Wilde-McKeown (Visitor Economy)

84. MINUTES SILENCE

Metro Mayor S Rotheram reflected upon the sad passing of Sir Bert Massie. He reported that Sir Bert was one of the country’s leading campaigners for disability rights and was a son of Liverpool. He remarked that Sir Bert had a profound impact on anyone who had met him and highlighted that he had had the pleasure of working with him recently on the development of the Fairness and Social Justice Advisory Board for the City Region.

The Combined Authority observed a minute’s silence as a mark of respect.

85. APOLOGIES

Apologies for absence were received on behalf of Mayor J Anderson OBE, Deputy Mayor A O’Byrne, Councillor T O’Neill (Associate Member), Councillor I Moran (Associate Member), Councillor L Robinson (Co-opted Member – Transport), Jane Kennedy (Co-opted Member – Criminal Justice), Luciana Berger MP (Mayoral Advisor – Mental Health), Gideon Ben-Tovim OBE (Mayoral Advisor – Natural Environment), Reverend Canon Dr E Loudon (Mayoral Advisor – Voluntary and Community Sector) and Barbara Spicer (Mayoral Advisor – Social Housing Growth).

Page 1

86. DECLARATIONS OF INTEREST

It was reported that no declarations of interest had been received.

87. MINUTES OF THE LCR COMBINED AUTHORITY MEETING HELD ON 15 SEPTEMBER 2017

RESOLVED – That subject to the following amendment, the minutes of the meeting of the Liverpool City Region Combined Authority held on 15 September 2017 be approved as a correct record

Minute 73 Merseyrail Update – Page 7, 5th paragraph be amended to read:-

 ‘He reported that this was the right solution for Merseyrail given the nature of the network which was very different to the Northern and Southern networks but similar to the Manchester Metro and Glasgow network.’

88. LIVERPOOL CITY REGION METRO MAYOR ANNOUNCEMENTS AND UPDATES

Metro Mayor S Rotheram reported he had recently attended a Northern Leaders meeting with the Mayor of Greater Manchester and Council leaders from across the North to call on the Government to honour its full commitments to transport investment for the North of England and also confirmed support for the work being undertaken by Transport for the North. He reported that the discussions had focused on the need to establish a body to provide a co-ordinated voice on a national and international stage and to celebrate and promote the North of England was also discussed. The aim of this body would be to work constructively with Government with the aim of securing a fair share of investment for the North to deliver the Northern Powerhouse.

The Metro Mayor highlighted that he recently held a cross party meeting with the Leaders from the Cheshire Councils to consider how the two regions could work together on areas of mutual benefit and help deliver the Northern Powerhouse. He reflected that this was a very positive meeting and would enable information sharing between the City Region and the Cheshire Councils.

He also reported that he had attended a summit with the Brexit Secretary, David Davis MP and other Metro-Mayors to discuss how they could have an input into the Brexit negotiations. Consequently, David Davis MP had pledged to set up a working group between his Department and the Combined Authorities. The Metro Mayor also reported that David Davis MP would be attending a meeting with himself and other City Region Leaders to understand their priorities during the Brexit negotiations.

The Metro Mayor provided a summary of his speech at the Liverpool City Region’s Digital Summit, which had brought together over 120 experts and businesses to promote the regions digital offer and discuss how a world class digital offer could be developed. As part of this the Metro Mayor gave an account of the transatlantic vTime discussion he had taken part in with a representative from NASA. The Summit had been organised by the LCR Local Enterprise Partnership and the Metro Mayor wished to place on record his thanks to the Chair of the LEP, Mr Asif Hamid MBE, Mark Basnett and John Whaling for hosting a fantastic event.

Page 2 The Metro Mayor also informed the Combined Authority that he had attended the MIPIM UK event in London to promote the City Region as one of the leading places for investment in the UK and to showcase major future investment and infrastructure plans. He reported that he had been involved in numerous meetings with potential investors and also participated in a joint event with Manchester to promote the North West.

In the coming weeks the Metro Mayor reported that he would be meeting with Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy to discuss unlocking further investment to develop the City Region’s economy.

In conclusion, the Metro Mayor made reference to the Mersey Gateway Bridge formally opening on 14 October 2017 and the receipt of £5.6m from the National Productivity Investment Fund (NPIF). This funding would improve road infrastructure, reduce congestion and improve journey times on the A59 Walton Road/County Road, Liverpool and the A554 Tower Road, Wirral.

89. LOCAL GROWTH FUND: APPROVAL OF FULL MAJOR BUSINESS CASE FOR LIVERPOOL CITY CENTRE CONNECTIVITY

The Liverpool City Region Combined Authority considered the report of the Lead Officer: Transport which sought approval for the Full Business Case for the Liverpool City Centre Connectivity major scheme to commence delivery in the financial year 2018/19. It was reported that the Liverpool City Centre Connectivity scheme was also endorsed by the Liverpool City Region Local Enterprise Partnership at their meeting on 5 October 2017 in line with the Local Growth Fund Assurance Framework.

Frank Rogers, Interim Head of Paid Service, reported that this scheme would support a round of projects to improve the quality and resilience of the City Region’s roads. Members were informed that the Full Business Case for the scheme had been assessed by the Transport Advisory Group’s independent advisory consultant, Waterman Infrastructure and Environment Limited (Waterman’s). This scheme was the last to be developed in response to the Local Growth Fund Round One and comprised of funding of £38.4m available to the City Region.

RESOLVED – That:-

(i) the contents of the report be noted;

(ii) the Transport Advisory Group recommendations to the Combined Authority to approve the Full Business Case for the Liverpool City Centre Connectivity scheme be endorsed; and

(ii) the scheme be approved in principal and dialogue be continued.

90. LIVERPOOL CITY REGION SINGLE INVESTMENT FUND (*KEY DECISION)

The Liverpool City Region Combined Authority considered the report of the Interim Head of Paid Service which sought approval on two Full Business Cases submitted for Single Investment Funding, which were the:-

 Pall Mall project, requesting a maximum sum of £3,500,000 (Appendix One); and

Page 3  City Centre Connectivity Phase 2, requesting a maximum sum of £18,612,905 (Appendix Two).

It was reported that following the initial call for projects, 46 projects had received approval of their Strategic Outline Case submissions and were now at various stages of the appraisal process. A summary of the appraisal process for the two schemes were detailed at Appendices one and two of the report now submitted.

RESOLVED – That:-

(i) approval of the Full Business Case in relation to the Pall Mall project and the award of Single Investment Fund grant support in the maximum sum of £3,500,00 be agreed;

(ii) approval of the Full Business Case in relation to the City Centre Connectivity Phase 2 project and the award of Single Investment Fund grant support in the maximum sum of £18,612,905 be agreed; and

(iii) authority be given to the Interim Head of Paid Service to negotiate detailed terms and conditions of the respective grant agreements in consultation with the Combined Authority Interim Monitoring Officer and Combined Authority Treasurer. Any material variations to the projects as detailed in the report be referred back to the Combined Authority for consideration.

91. PORTFOLIO UPDATE - SKILLS AND APPRENTICESHIPS

Councillor I Maher, Portfolio Holder for Skills and Apprenticeships, provided a presentation to the Liverpool City Region Combined Authority which set out work achieved to date within his portfolio. The presentation highlighted the following:-

 Set out the portfolio responsibilities, which included implementing aspects of the devolution agreement relating to the Adult Education Budget and providing strategic commissioning and delivery of the Skills Capital Fund, European Social Fund, the Youth Employment Gateway, Skills for Growth Service and the Households into Work Programme;

 Summarised the work of the Employment and Skills Board which provided wider sectoral and stakeholder input in to the portfolio;

 Explained the work of the Skills Commission, which had recently undergone a review to reflect the challenges facing future opportunities. Furthermore, an in depth Employer Skills Survey had recently been completed and the findings were being reviewed and the outcomes of which would be used to inform the work of the Skills Commission.

 Reported that this Combined Authority along with Further Education Establishments was the first to participate in an Area Based Review, which had been challenging and recommended a number of structural and curriculum actions to post 16 education provision in the City Region.

Page 4  Summarised how the full devolution of the Adult Education Budget had experienced significant delays as a consequence of negotiations with Central Government.

 Referred to the Youth Employment Gateway which was a mentoring programme which had helped over 2,000 young people into work. The young people were supported by a personal advisor who provided on- going support and received a budget of £500 for each young person to spend on what would support them into work.

 Reported on the work of the Skills for Growth Service, which provided impartial advice for employers on training needs and brokerage support for skills. The feedback from employers had been positive and they valued the flexible provision and brokerage support received.

 Explained the purpose of the Skills Shows, of which 20 would be delivered by June 2018 with the aim of providing young people with the opportunity to meet employers and find out more about work opportunities to inform their career plans.

 Highlighted the key areas of work for the portfolio over the coming 12 months and in particular focusing on:-

o identifying short term priorities for local colleges and providers to respond to as part of the Skills Investment Statement 2018/19; o identifying longer term objectives for the Skills Strategy; o responding to the government call for proposals for the Institute of Technology; and o implementing the outcomes of the Area Based Review.

Councillor P Davies welcomed the establishment of the Skills Commission and requested that a route map for accessing skills provision across the City Region be developed. He went on to reference the Apprenticeship Levy and how it was restrictive in not allowing employers to recruit additional staff, when they had invested in upskilling their current workforce.

Metro Mayor S Rotheram reflected upon how pivotal the Skills Strategy was for the City Region. He noted the concerns regarding Combined Authorities not being granted the opportunity to reinvest the residual underspend of the Apprenticeship Levy which had to be transferred back to Central Government. He undertook to write to the Department of Education expressing the concerns of the Liverpool City Region Combined Authority in relation to the Apprenticeship Levy.

RESOLVED – That:-

(i) the presentation and comments raised be noted; and

(ii) on behalf of the LCR Combined Authority Metro Mayor S Rotheram write to the Department of Education expressing the concerns of the Liverpool City Region Combined Authority regarding the residual underspend of the Apprenticeship Levy and it not being passported back to the City Region.

Page 5 92. LOCAL GROWTH FUND 3 AWARD - APPROVAL TO COMMISSION PROJECTS TO SUPPORT THE PERFORMANCE OF THE KEY ROUTE NETWORK (*KEY DECISION)

The Liverpool City Region Combined Authority considered the report of the Interim Head of Paid Service which sought approval to commission a number of projects to enhance the City Region’s most important roads. Approval for £25m was being sought from Local Growth Fund 3 award which was available between 2017/18 and 2020/21.

The report also sought derogation from the Liverpool City Region Combined Authority’s adopted Assurance Framework which governed the use of these funds. This proposal would shorten the application process from three stages to two and ensure a significant amount of the funding was committed before the end of the 2017/18 financial year.

It was reported that the LCR Combined Authority had submitted a bid for additional funding from the third round of Local Growth Fund in July 2016. As a consequence of this bid the Combined Authority had been awarded £71.950m to support growth through investment in transport, skills, business and innovation. Furthermore, the amount received was the second highest allocation in the country. Accordingly, Members’ attention was drawn to paragraph 3.3 of the report now submitted which set out how the award would be apportioned to support transport, business, innovation and skills across the City Region.

RESOLVED – That:-

(i) a second round of Single Investment Fund projects be commissioned to improve the effectiveness and performance of the Key Route Network, taking the form of a single Programme Business Case, committing up to £25m allocated for these purposes from the Local Growth Fund 3 award be agreed;

(ii) the draft commissioning text in Appendix One of the report now submitted, which sets the priorities for the commissioning of the Key Route Network Business Case to support improved access to main employment and growth sites, together with corresponding measures that improve the safety, capacity, effectiveness of key junctions and highway links, and which also addresses the significant maintenance backlog be agreed;

(iii) further work be undertaken to assess how centralised management and delivery arrangements could potentially be utilised in this and subsequent business cases for the Key Route Network with a view to ensuring more effective delivery and in line with the principles underpinning the creation of the Network be agreed;

(iv) procedural provisions within the Single Investment Fund Assurance Framework be relaxed on an exceptional basis to support the recommendation above and to enable funds to be committed ahead of the end of the current financial year, as set out in paragraphs 4.4 – 4.6 of the report now submitted be agreed; and

(v) note that further work is being undertaken to develop a City Region pipeline of projects, aligned with Local Growth Fund 3 bid themes and

Page 6 including strategic priorities such as business growth, innovation and digital connectivity.

93. DISCHARGING THE COMBINED AUTHORITY'S NEW POWERS OVER EUROPEAN STRUCTURAL AND INVESTMENT FUNDS

Councillor P Davies presented a report to the Liverpool City Region Combined Authority which set out the arrangements for discharging the Combined Authority’s duties as an Intermediate Body in respect of the European Structural and Investment Funds programme. He reported that through the Devolution Deal the Combined Authority had been granted greater influence to shape future ERDF and ESF funding ‘calls’ so that they could be more closely aligned to the objectives of the City Region, which was a welcomed approach. Furthermore, the process would be supported by an Assurance Framework, which was similar to that of the Single Investment Fund, and would set out how duties would be discharged.

RESOLVED – That:-

(i) the proposed Assurance Framework for European Structural and Investment Funds (ESIF) as set out in Appendix Two to the report now submitted, to support the Authority’s new responsibilities as an Intermediate Body for these funds be agreed;

(ii) responsibility for the discharge of Intermediate Body functions in respect of European Regional Development Fund (ERDF) strands are delegated to the Lead Officer: European Issues in consultation with the Portfolio Lead for Economic Development and Culture and the Lead Officer: Economic Development be agreed;

(iii) responsibilities for the discharge of Intermediate Body functions in respect of European Social Funding (ESF) strands be delegated to the Lead Officer: European Issues in consultation with the Portfolio Lead for Skills and Apprenticeships and the Lead Officer: Skills and Apprenticeships be agreed; and

(iv) Councillor Eddie Jones be nominated to represent the Combined Authority’s Employment and Skills Board on the European Structural and Investment Fund Committee.

94. PROPOSED CHANGE TO THE CONSTITUTION (*KEY DECISION)

The Liverpool City Region Combined Authority considered a report from the Interim Monitoring Officer which proposed changes to the Liverpool City Region Combined Authority Constitution.

It was reported that the proposed changes to the Constitution related to the alignment of the deadlines for Public Question Time, Petitions and Statements to 5.00pm on the Monday before the Combined Authority meeting.

RESOLVED – That the changes to the Liverpool City Region Combined Authority Constitution as set out at Appendix One to the report now submitted be agreed.

Page 7 95. PUBLIC QUESTION TIME

Members of the public were given the opportunity to submit questions in accordance with the Meetings Standing Order No. 11.

The Metro Mayor reported that two questions had been received from the Women’s Leadership Group. In this respect, Fiona Gibbs-Armstrong, directed the following two questions to the Liverpool City Region Combined Authority:-

Question One

How does the recent round of SIF funding of approx. £76 million, reported at the last meeting on 15th September (below) benefit women and Black and Minority Ethnic (BAME) people employed in those projects?

Project Applicant Financial Ask Shakespeare Rail Knowsley MBC £9.346m (Capital) Interchange Shakespeare Knowsley MBC £6.5m (Capital) North Playhouse Access to Knowsley MBC £19.865m (Capital) Halsnead Garden Village Parkside Link St Helens MBC £27.850m (Capital) Road Maritime Wirral MBC £5.040m (Capital) & Knowledge Hub £0.290m (Revenue) Sci-Tech Halton MBC £2.921m (Skills Capital) Daresbury Skills Factory Liverpool aviation Liverpool John £1.425m (Skills Capital) academy Lennon Airport Wirral Waters Manufacturing £3.200m (Skills Capital) Skills Factory Training Centre.

Question Two

At the last meeting on the 15th September it was highlighted in the Liverpool City Region Employer Skills Survey that low skilled jobs and employers who create these low skilled and low paid jobs is a concern for the LCR CA and one that we also share. How will you ensure the plan you develop to challenge this is open, transparent and with no conflict of interests?

The Metro Mayor reported that a full written response would be provided within 10 working days.

96. PETITIONS AND STATEMENTS

The Metro Mayor reported that no petitions and statements had been received.

Page 8 97. MINUTES OF THE TRANSPORT COMMITTEE HELD ON 7 SEPTEMBER 2017

RESOLVED – That the minutes of the Transport Committee held on 7 September 2017 were received and confirmed by the Liverpool City Region Combined Authority.

Minutes 84 to 97 be received as a correct record on the 17 day of November 2017.

Chairperson of the Combined Authority

(The meeting closed at 1.38 pm)

Page 9 This page is intentionally left blank Agenda Item 5

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 November 2017

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

Key Decision

REPORT OF LEAD OFFICER: TRANSPORT

UPDATED LONG TERM RAIL STRATEGY

1. PURPOSE OF REPORT

1.1 This report presents an update to the Liverpool City Region Long Term Rail Strategy, which was formally adopted by the Combined Authority in September 2014. It was intended from the outset that the Strategy would be subject to regular review to ensure it reflects changing economic circumstances and funding opportunities. This updated Strategy therefore reflects significant developments both nationally and locally, which will impact on its delivery.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority endorse the Updated Long term Rail Strategy (as set out in Appendix One).

3. BACKGROUND

3.1 The Long Term Rail Strategy was developed with the aim of ensuring that the rail network meets Liverpool City Region’s needs over the next 30 years and beyond. Its aim is to present a clear vision for the development of the network, and articulate the important role rail can play in the economic development of Liverpool City Region, and its hinterland, to maximise its contribution to the wider UK economy, acting as a catalyst for growth.

3.2 First published in 2014, the Long Term Rail Strategy was developed to offer flexibility through regular review, acknowledging that economic circumstances evolve and the business case for interventions would correspondingly fluctuate. As such, it is being updated in light of a number of developments, not least the Devolution Deal which saw new powers and responsibilities being devolved to the City Region, along with a directly elected Metro Mayor, and a devolved and consolidated local transport budget.

Page 11 3.3 In developing the initial Strategy, a comprehensive review of previous studies, informed by stakeholder engagement and consultation, helped shape a long list of potential schemes including long term infrastructure improvements; new routes; new stations; improvements to the operation of services; and wider policy initiatives. Twelve packages of schemes were then drawn from the initial pool of more than 150 individual projects, addressing a number of network constraints, capacity issues and latent rail demand. Appendix Two sets out a summary of the twelve packages. Significant progress has been made over last three years with projects either delivered, or in the process of being delivered, by Liverpool City Region and other external parties including:

Project Original Work Package Timescale for completion Procurement of new rolling (2) Merseyrail Growth 2021 stock for Merseyrail Enabling

Halton Curve upgrade (6) Halton Curve May 2018

Maghull North new station (12) Selected New Stations May 2018

Newton-le-Willows upgrade (4) City Line Enhancements April 2018

Electrification of the Liverpool Network Rail project linked to Completed to Manchester and Liverpool (4) City Line Enhancements to Preston lines

Introduction of Class 319 Northern Rail project linked to Completed electric units on the City Line (4) City Line Enhancements increasing train capacity project

Four tracking of line between Network Rail project linked to Completed Roby and Huyton (4) City Line Enhancements

Re-development of Liverpool (3) Liverpool City Centre October 2018 Lime Street Station Capacity

3.4 While constraints still exist, the issue of on train passenger capacity will largely be addressed through the planned introduction the new units on the Northern and Wirral Lines and the introduction of Class 319 units on the City Line. There will, however, be a need for this increased number of passengers to be accommodated within the existing rail network and, importantly, at stations.

3.5 There is, therefore, a need to review the overall programme of projects contained within the Long Term Rail Strategy, take stock of what has already been achieved, and to consider how the identified interventions might be prioritised within a more uncertain environment. It is also an opportunity to incorporate a number of projects which were not included in the initial Strategy, including HS2 and Northern Powerhouse Rail, and to ensure that the growing importance of cross-border transport demand is incorporated.

Page 12 3.6 Key to this is consideration of the fact that Liverpool Central station is close to capacity, something which has been further reinforced through the Network Rail Strategic Rail Study 2016 that has been developed with the Merseytravel and Merseyrail. As a consequence, a new project has commenced with Merseytravel undertaking a development review to better understand the impact of the expected growth in rail demand, and the release of suppressed demand which will result from the introduction of the new rolling stock and the potential impact of other interventions on the network. The study will consider a number of options and identify the preferred solution to be taken forward.

3.7 It is anticipated that whichever solution is considered to be the most cost effective, developmental work will be undertaken over the next 5 years. The initial work is looking at the demand requirements and the space both available and required to deal with the projected growth increases. Further development work will then follow which will flesh out the design of the preferred solution and the development of the Business Case to be submitted to Central Government. The delivery of the project will follow this and could be completed within the next ten years, subject to funding being made available.

3.8 Accordingly, The Long Term Rail Strategy moves away from the initial package approach, and introduces three specific groupings:

1) Projects which have been delivered or are committed to delivery. 2) Projects which are linked to Liverpool Central or require an upgrade at Liverpool Central to be delivered. 3) Projects which can be delivered which have limited or no impact on Liverpool Central.

4. RESOURCE IMPLICATIONS

4.1. Financial

4.1.1 The funding constraints associated with the delivery of the Strategy are considered in full within the Strategy itself (section 5.16 – 5.25). There is full recognition of the freedoms afforded by the Devolution Deal, but also an acknowledgement that introduction of the Single Investment Fund process provides competition between Transport and other investment priorities for funds within a set level of local capital funding available. Along with the wider national moratorium on spending on enhancements on the rail infrastructure, it remains unclear how investments in rail infrastructure will be able to secure funding in future years, with central Government also retaining control of the major funding streams to support the development of schemes.

4.1.2 Liverpool Central has been identified as the key constraint which needs to be addressed. Early development of the project will be needed to be funded through the Single Investment Fund. Delivery of the full project is likely to be in the hundreds of millions of pounds and will require a Full Business Case and request for funding to be submitted to central Government that may require an element of match or third party contribution to be successful.

Page 13 4.2. Human Resources

None

4.3. Physical Assets

None

4.4. Information Technology

None

5. RISKS AND MITIGATION

5.1. The key risk identified in 2014 was the need to raise the profile of rail infrastructure as a supporter of economic growth, recognising that without substantial investment, the rail network threatened to stifle, rather than facilitate, the economic growth potential of the City Region. Since the publication of the Liverpool City Region Growth Strategy in 2016, this review has afforded an opportunity to align the direction of the Strategy in a way to best support economic growth, through improved connectivity for investment and business needs, and access to work, education and training.

5.2 A further risk is that we fail to maximise funding opportunities which will be vital to the effective delivery of the Strategy. Central Government remains the primary source of such funding streams which are needed to support the development of rail infrastructure. This is especially so in terms of our ambitions to be directly linked into HS2 and Northern Powerhouse Rail. This Strategy provides the platform upon which robust business cases can be built, and without it we are likely continue to have sub-standard connectivity for a City Region of our size; as such, therefore, we fail to realise our full economic potential and the contribution which can be made to the northern and national economy.

6. EQUALITY AND DIVERSITY IMPLICATIONS

6.1 Members are reminded of the requirements of the Public Sector Equality Duty, specifically the need to eliminate discrimination; advance equality of opportunity; and foster good relations between people who share a protected characteristic and those who do not. In terms of the Long Term Rail Strategy, an Equality Impact Assessment has been completed and has highlighted that should be no negative impacts associated with this work.

6.2 Removing barriers which are preventing access to the network is addressed within the strategy through a number of projects, such as the Merseyrail Rolling Stock replacements, and through the improvements at Newton Le Willows and Maghull North which is due for completion in 2018, both incorporating lift access into the design. This approach to accessibility will be rolled out wherever practicable and subject to available funding, as part of any new station design.

Page 14 6.3 There is also a recognised need to ensure focus is given to customer needs in the widest sense, such as enhanced information provision and an attractive fares and ticketing offer. Whilst the Long Term Rail Strategy is focused primarily on infrastructure enhancements, these important workstreams, which will be of benefit across all protected characteristics, will be progressed at a local level through delivery of the Transport Plan for Growth and at sub-national level by Transport for the North.

7. COMMUNICATION ISSUES

7.1 Key stakeholders were consulted during the process of updating the Strategy

8. CONCLUSION

8.1 The Liverpool City Region Long Term Rail Strategy presents an ambitious vision of a network that meets future passenger needs, and opens up economic opportunity. Where good service levels exist, the network is already a success story, but more must be done to spread these benefits to a wider travel-to-work geography and to provide the capacity and frequencies required to enable projected economic growth, as well as increased capacity for rail freight to maximise the economic benefits of the City Region’s assets and potential, including the internationally significant Liverpool 2 container facility at the Liverpool Waterfront. Whilst the scale of investment required is significant, it nevertheless presents a blueprint for “converting strength to lasting long term economic growth”.

8.2 In order to achieve this economic growth and to deliver the rail priorities set out within the Long Term Rail Strategy for endorsement, there needs to be recognition of the immediate and ongoing development funding needs and commitment by the City Region to support that development.

FRANK ROGERS Lead Officer: Transport

Contact Officers: Suzanne Cain, Merseytravel (0151 330 1318) David Jones, Merseytravel (0151 330 1627) Joanna Sawyer, Merseytravel (0151 330 1129)

Appendices: Appendix One – Updated Long Term Rail Strategy Appendix Two – Summary of original 12 packages

Background Documents: None

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Liverpool City Region Combined Authority Long Term Rail Strategy – update Converting Strength to Lasting Economic Growth

November 2017

Last Updated 7 November 2017 Page 17 Contents

Foreword ...... 1 Background ...... 3 Converting Strength to Lasting Economic Growth ...... 5 Responding to New Challenges ...... 7 Decentralisation and Devolution ...... 7 An Engine for Growth ...... 8 Network Rail ...... 10 Franchising ...... 12 Updating the Evidence Base ...... 14 Liverpool City Region Growth ...... 14 Growth in Travel ...... 16 Connectivity...... 20 Challenges and Opportunities ...... 24 Local Strategic Context ...... 24 Freight ...... 25 Merseyrail Rolling Stock ...... 26 Network Constraints ...... 27 Funding Constraints ...... 29 Strategy Delivery ...... 32 Group 1: Projects which have been delivered or are committed...... 33 Group 2: Projects which are linked to, or require an upgrade at, Liverpool Central ...... 35 Group 3: Projects which have limited impact on Liverpool Central ...... 38 Project Timeline ...... 38 Conclusion ...... 40 Appendix 1 – Network Constraints Identified in 2014 ...... 41 Appendix 2 – Original Work Packages ...... 48 Appendix 3 – New Stations ...... 51 Appendix 4 – Timeline ...... 52 References ...... 53

Page 18 Foreword

If the UK economy is to be re-balanced and the prosperity of our City Region increased, then transport, and specifically rail, has a vital role to play. Super-regions are securing the advantages of agglomeration to become the economic powerhouses of the modern world. Whether it is Dongguan in China, Randstad in the Netherlands, or closer to home in London, they all exhibit higher than average productivity because they are the places where business investment, skills and innovation come together in ever greater concentrations, facilitated by effective transport networks.

This updated Long Term Rail Strategy takes forward the 2014 version to provide a route map for the rail infrastructure that can support the clustering effect we need to see. Increased connectivity, capacity and frequencies, together with reduced journey times and simplified ticketing across Liverpool City Region and the North of England generally, will enable people and freight to move more efficiently, catalysing economic growth.

This Strategy sets out a systematic and evidence based approach to developing our rail network, building on the pioneering devolution of the Merseyrail Concession in 2003. The contract now in place for the replacement of the Merseyrail fleet is a key priority of this Strategy that is now in the delivery phase. The new City Region devolution arrangements have helped to create both greater funding flexibility and certainty; however we nonetheless need to conduct hardnosed assessments of the economic benefits of the schemes put forward, such as expanding stations or building new ones, or extending our rail network.

Furthermore, central Government continues to hold the purse strings for the majority of funding streams needed to support development of the rail infrastructure required. This is especially so in terms of our ambitions to be directly linked into HS2 and ‘Crossrail for the North’ to give us west- east connectivity. That’s why the Government needs to give its total commitment to infrastructure investment and improving connectivity across the North of England. Without it we will continue to have well beneath par connectivity for a city region of our size and fail to realise our full economic potential.

Ambitions for major rail infrastructure improvements in our area are not simply about giving people access to the 21st century transport system they deserve. The economic reality is that the UK will continue to have a heavily imbalanced economy without it – and that would be a detriment to a post-Brexit UK economy.

This Strategy also addresses our more localised connectivity challenges and opportunities, the most significant of which in terms of passenger transport is capacity in Liverpool city centre. Central Station sits at the heart of our rail network and is already the busiest underground station outside the capital with 15.6million journeys starting or ending there each year. It is reaching capacity and yet we can anticipate demand continuing to rise as our population and economy grow. In order to keep the City Region moving we therefore need to increase capacity at the heart of the system in central Liverpool.

Page | 1 Page 19 In terms of freight, our biggest challenge, particularly in the context of our future outside the EU, is improving connectivity to our £400million post-Panamax port at Liverpool 2. Promoting modal shift to rail is likely to provide the most sustainable option for moving up to 13,500 TEU (Twenty- foot Equivalent Unit) each vessel can carry. This Strategy therefore identifies the need to upgrade the Bootle Branch Line to connect in to enhanced West-East and North-South lines.

I am pleased to endorse the contents of this strategy, which provides a key plank for delivering my vision for a better connected and more prosperous city region.

Steve Rotheram Metro Mayor for Liverpool City Region

Page | 2 Page 20 Background

1.1 The railway plays an important role in facilitating sustainable economic growth. Railways connect people with communities, and link our major towns and cities. Rail travel also has environmental benefits, reducing congestion and pollution caused by road traffic. But the infrastructure is largely Victorian, and a recent Transport Select Committee reporti reported that our railways face a huge capacity challenge; the number of passenger journeys has more than doubled over the last two decades, while the size of the physical network has barely increased at all.

1.2 There is growing confidence in the Liverpool City Region economy, and recognition of its key role in realising the aspirations of the “Northern Powerhouse” as a means to rebalance the whole UK economy. Liverpool City Region, for example, has the second highest incidence of high-growth firms in the country, second only to London. But to fully maximise this potential, the City Region needs to be prepared for a significant increase in passengers and freight over the next 30 years; these increased transport needs will come from within the City Region, from its surrounding hinterland, and further afield. For these reasons, the Long Term Rail Strategy was developed in 2014, as a way of unlocking this potential through an enhanced rail offer in the City Region, to build on the strength of its existing assets, and to help facilitate the prioritised investment and growth envisioned. Four documents were produced as part of the process, including the Final Strategy Summary Report1.

1.3 It was intended from the outset that the Strategy would be subject to regular review to ensure it reflects changing economic circumstances and funding opportunities. This update should therefore be considered as the fifth document in the series, and whilst it is intended to complement the first four, it is in essence a standalone document.

1.4 This update reflects significant developments both nationally and locally, which will clearly have an impact on its delivery. In August 2014, for example, just after the Long Term Rail Strategy was published, the then Chancellor set out a vision to better connect the North and for it to become a Northern Powerhouse, acting together to drive economic outcomes greater than the sum of its parts.

1.5 The proposals include Northern Powerhouse Rail; a long-term ambition to link the economic centres of the North more closely together so that the North can compete both internationally and with the rest of the UK much more effectively. The Government’s proposals for High Speed 2 have also progressed since 2014; a High Speed link remains a priority for Liverpool City Region, and for it to be fully connected to not only Northern Powerhouse Rail, but also connecting directly to the HS2 Network.

1.6 An Independent Economic Review of the Northern Powerhouse was undertaken in 2015, which concluded that a step change in economic performance – significantly above "business as usual projections" – was possible with substantial improvements in transport connectivity, skills, innovation, and inward investment across the North. These revised economic projections have informed this updated Long Term Rail Strategy, providing a critical underpinning of the requirements of the rail network as population, GVA, and employment growth increase demands for travel.

i The future of rail: Improving the rail passenger experience (October 2016) Page | 3 Page 21 1.7 The Liverpool City Region vision, as articulated in the Growth Strategy “Building our Future”2, is “to build on our core strengths and capacity for innovation to create a truly global and competitive City Region at the heart of the Northern Powerhouse”. Quite simply, our rail network must be up to the challenge.

Page | 4 Page 22 Converting Strength to Lasting Economic Growth

2.1 The Long Term Rail Strategy has been developed with the aim of ensuring that the rail network meets Liverpool City Region’s needs over the next 30 years and beyond. Its aim is to present a clear vision for the development of the network, and articulate the important role rail can play in the economic development of Liverpool City Region, and its hinterland, to maximise its contribution to the wider UK economy, and act as a catalyst for growth.

2.2 The Liverpool City Region Combined Authority was established in 2014. In 2015, a Devolution Deal3 was agreed with Government which saw new powers and responsibilities being devolved to the City Region. In 2017, Liverpool City Region directly elected its first Metro Mayor, who will exercise powers over a devolved and consolidated local transport budget. Since the Long Term Rail Strategy was developed to offer flexibility through regular review, acknowledging that economic circumstances evolve and the business case for interventions would correspondingly fluctuate, it is being updated in light of these developments.

2.3 These developments are discussed in greater detail in section 3.1 – 3.7, alongside consideration of the impact of Transport for the North (section 3.8 – 3.15); an organisation created in the second half of 2014 to transform the transport system across the North of England, and to add strategic value by ensuring that funding and strategy decisions about transport in the North are informed by local knowledge and requirements. However, the vision for this Long Term Rail Strategy remains unchanged; that rail should play a key role in helping deliver the economic vision of Liverpool City Region.

2.4 In developing the Long Term Rail Strategy (Figure 1 – The Long Term Rail Strategy Process), a comprehensive review of previous studies, informed by stakeholder engagement and consultation, helped shape a long list of potential schemes. The full list of schemes included long term infrastructure improvements, new routes, new stations, improvements to the operation of services and wider policy initiatives. The process was informed by the economic projections which had underpinned the City Region’s Growth Dealii, which have been revisited as part of this periodic update (section 4).

2.5 One of the outcomes of the developmental aspects of the Long Term Rail Strategy was the identification of existing and future constraints on the rail network. Based on available evidence and forecast future demand, they highlighted a number of significant issues in relation to capacity; connectivity; infrastructure, facilities and rolling stock; and funding which would need to be addressed to ensure they did not hinder the economic growth of the City Region. These constraints are revisited in terms of their ongoing relevance and significance (section 5.15).

2.6 Each of the identified schemes was initially considered against a number of criteria. Following the development of the potential project shortlist, the interdependencies of the projects were reviewed and twelve integrated packages of work established, the component parts of which were intended to work together in a complementary fashion to deliver maximum impact, and scalable to adapt to variables over time. Section 6 considers the ongoing validity of these original packages,

ii The June 2013 Spending Review saw the Government ask Local Enterprise Partnerships (LEPs) to develop multi-year local Strategic Economic Plans, which would then be used for negotiations on ‘Growth Deals’ with the Government. These deals would see LEPs awarded funding from the Local Growth Fund, created in the 2013 Spending Review. Page | 5 Page 23 and updates and refocuses the proposed interventions, regrouping them within three new categories, in line with the updated evidence base and new challenges.

Figure 1 – The Long Term Rail Strategy Process

Document Review Long-list of 2013 and Stakeholder 2014 Interventions Engagement

Twelve Review of Scheme Potential Shortlist Appraisal and Constraints Workpackages Interdependencies of Interventions Scoring and Demand Modelling

2017 REVIEW

2.7 Clearly, with a time horizon of 30+ years, the funding sources for many of these schemes remain undetermined. Some schemes (the reinstatement of the Halton Curve; a new station at Maghull North; and the development of Newton-le-Willows station as a strategic interchange) have already secured funding through the Growth Deal and are now being delivered. Furthermore, a key element of the Liverpool City Region Devolution Deal was the commitment to the establishment of a Single Investment Fund, aligning national and City Region funding, in order to give the Mayoral Combined Authority greater flexibility over local investment.

2.8 The Long Term Rail Strategy presents an ambitious vision of a network that meets future passenger needs, and opens up economic opportunity. Where good service levels exist, the network is already a success story, but more must be done to spread these benefits to a wider travel-to-work geography and to provide the capacity and frequencies required to enable projected economic growth. Whilst the scale of investment required is significant, it nevertheless presents a blueprint for “converting strength to lasting long term economic growth”.

Page | 6 Page 24 Responding to New Challenges

Decentralisation and Devolution

3.1 The Liverpool City Region Devolution Deal outlines a range of new funds, freedoms and responsibilities that have passed to the control of the Liverpool City Region Combined Authority, principally by means of the directly elected Metro Mayor. It focuses predominantly on economic development, transport, housing and planning and employment and skills, and is intended to support additional jobs whilst improving the skills and employment prospects of the City Region’s residents.

3.2 The recently published Transport Investment Strategy recognises Government’s reliance on such devolved decision-making to allow communities to flourish and power our city economies. As such, the powers and freedoms that stem from the Devolution Deal ultimately mean Liverpool City Region has greater potential to support the planning, phasing and delivery of the local rail offer, ensure that it is joined-up with plans for new housing and economic development, and help to improve integration between rail and other transport modes, through the interventions set out within this Strategy.

3.3 The Deal commits to the establishment of a long term Special Rail Grant settlement for the Merseyrail network, which has enabled Merseytravel and the Combined Authority to progress a locally-funded procurement of new trains (section 5.12 – 5.14). The Deal also allows Liverpool City Region to consider bringing forward alternative proposals for the management of rail stations on the Merseyrail Electrics network initially and, potentially, other stations on other lines in due course. This will allow the City Region to determine its own investment priorities based on customer need, thereby supporting the Long Term Rail Strategy in providing an enhanced rail offer for the City Region and delivering economic growth.

3.4 In addition, there is a commitment within the Deal to develop a Single Statutory City Region Framework supporting the delivery of strategic employment and housing sites across the City Region. The Metro Mayor has pledged, through his manifesto, to use the Combined Authority’s strategic Planning and housing powers to encourage better use of brownfield land, whilst recognising that for this to be effective, we will need to radically improve the transport network and improve rail connectivity within the City Region.

3.5 A significant fiscal element of the Devolution is the creation of a “Single Investment Fund” which comprises allocations of the Local Growth Fund (LGF); consolidated, multi-year transport settlements; and additional allocations of grant-based investment funds. The Single Investment Fund (SIF) is not ring-fenced, allowing the City Region freedom to allocate funds to locally identified priorities. A key guiding principle underpinning the SIF relates to “Gain Share”; where possible, the SIF fund will be invested in projects that generate a return, so that resources can be recycled to achieve further growth. The implications of this change, along with a number of other funding issues are covered in detail in section 5.16 – 5.25.

3.6 The SIF is a highly significant consideration in the development of the Long Term Rail Strategy. It provides the City Region with capital funding to support the delivery of core priorities, without the need necessarily to bid to Government on a project-by-project basis. However, it introduces a degree of competition and complementarity across thematic areas, with conflicting Local Authority Page | 7 Page 25 priorities, and between different modes of transport. Scheme promoters must, therefore, clearly demonstrate that schemes have a clear strategic fit, deliver the best outcomes for the City Region, and generally offer high value for money.

3.7 In addition, as articulated in the Transport Investment Strategy, the Government remain committed to supplementing devolved funding with specific investment on a competitive basis, both for larger projects across the country which are too big to fund locally, and for projects which deliver national priorities, such as the local transport schemes within the National Productivity Investment Fund. As such the Long Term Rail Strategy will clearly support the strategic case for scheme development (see section 5.20) as part of any competitive bidding process.

An Engine for Growth

3.8 When the then Chancellor unveiled initial plans for the Northern Powerhouse, it was aimed at helping to improve the economic performance of the North, which has a 25% gap to the economic performance of the rest of the country. Central to these plans were better transport connections across the North, recognising its potential as a polycentric region to make a step change in performance, helping to rebalance the economy; this recognised that the current relatively slow and infrequent journey times across the North represented one of the barriers to transformational change, when compared with successful regions across Europe, such as the Randstad and Rhine- Ruhr areas.

3.9 Transport for the North (TfN) was established to transform the transport system across the North of England, providing the infrastructure needed to drive economic growth. A significant partnership, with elected and business leaders from all areas of Northern England uniting to work with central Government and national transport bodies, TfN is expected to become a statutory Sub- national Transport Body before the end of 2017. It will not replace or replicate the work of existing local transport bodies such as Merseytravel, but has a pan-Northern remit including elements such as Northern Powerhouse Rail, an ambitious plan for a rail network that will provide faster, more frequent and reliable links between the North's six biggest cities.

3.10 The Northern Powerhouse Independent Economic Review (NPIER)4, commissioned by TfN, identified that there were four industry sectors in the North, known as “prime capabilities”, that could help to achieve this transformational growth: advanced manufacturing; energy; health innovation; and digital. These are underpinned by three “enabling capabilities”: financial & professional services; logistics; and education. Uniquely across the North of England, the Liverpool to Manchester corridor boasts strong representation of all seven capabilities.

3.11 Importantly, the report also identified a number of prerequisites for this growth to take place, including:

 Enhanced pan-Northern city centre to city centre rail links to enable agglomeration, integrated with local city region public transport. Rail is currently constrained by poor connections, low frequencies, slow journey times and complex fares.  Enhanced public transport within city regions, including joined up networks, cross-city operations and smart simplified ticketing.

Page | 8 Page 26  Improved global connectivity for both people and goods, ensuring improved access and capacity to the North’s ports and airports.

3.12 The Northern Powerhouse Rail concept helps with these strategic aims; more frequent fast services between the 6 core cities of the North, and Manchester Airport, will both enable agglomeration, and through the use of new links offers the potential to release capacity on current infrastructure for more freight and local passenger services. Work is currently underway to identify the exact solutions which TfN will be taking forward for business case development, whilst the initial “conditional outputs” formulated for the Northern Powerhouse are shown in Figure 2:

Figure 2 – Vision for Northern Powerhouse Rail – frequencies and journey times

Source: TfN – The Northern Transport Strategy: Spring 2016 Report

3.13 In addition, progress on High Speed 2 (HS2) continues, with the bill for construction of Phase 1 having received royal assent on 23rd February 2017. This first Phase will connect London with the West Midlands, and is due to open in 2026. The Government has decided to speed up delivery of the West Midlands to Crewe section, Phase 2a, which is now expected to open in 2027, bringing benefits to Liverpool City Region six years earlier than planned. Phase 2b (West Midlands to Leeds and Crewe to Manchester) is projected to open in 2033.

3.14 These initial plans see Liverpool served by “conventional compatible” trains, running on HS2 infrastructure as far as Crewe but then using the current congested route along the West Coast Main Line and Runcorn to reach Liverpool. Although Liverpool will see an increase in service frequency, it will not see as great a reduction in journey times as other cities. A comparison with Manchester, Wigan and Preston is shown in Figure 3:

Page | 9 Page 27 Figure 3 – Projected HS2 Journey times (to London Euston)

Forecast journey times 02:30

02:00

Current times 01:30 Phase 1

Hours 01:00 Phase 2a Phase 2b 00:30

00:00 Liverpool Manchester Wigan Preston

Source: Source: HS2 Ltd

3.15 In November 2016, the Secretary of State for Transport confirmed that HS2 Phase 2b construction plan could make provision to join up north-south HS2 rail infrastructure with west-east Northern Powerhouse Rail to Liverpool. Subsequently, the Chancellor of the Exchequer announced £300m of funding in September 2017 towards NPR ‘touchpoints’ with HS2. Two touchpoints are required on HS2 to enable both West-East and North-South connectivity for Liverpool City Region and both would comprise small sections of additional line to provide junctions for NPR with minimal impact to HS2 operations. If a successful case can be made for the touchpoints and the wider Northern Powerhouse Rail network, they are expected to be included in the Hybrid Bill for Phase 2b. Accordingly, Liverpool City Region continues to lobby for a direct High Speed link to Liverpool, which will both enable the competitive journey times important for the City Region’s economic growth and release capacity on the current infrastructure for more freight and improvements to other passenger services.

Network Rail

3.16 In October 2013 the ORRiii set out Network Rail’s funding, and the outputs expected of it, for Control Period 5 (CP5)iv. This included a planned £11.5bn for infrastructure upgrades, or “enhancements”, which were intended to deliver the Government’s strategic objectives for the railway. Network Rail was reclassified as a public company in September 2014.

3.17 On 25 June 2015, the Secretary of State for Transport announced that aspects of the enhancements were, “costing more and taking longer” than forecast. Sir Peter Hendy, as the new Chairman of Network Rail, was commissioned to re-plan how this investment could be delivered. The Secretary of State also asked Dame Colette Bowe, a non-executive member of the DfT Board, to consider the lessons to be learned from the planning process, and the practical steps that might be taken to ensure more effective future planning and delivery.

iii Then the Office for Rail Regulation, now the Office of Rail and Road iv Control Period 5 (2014 – 2019); Network Rail Control Periods are the 5-year timespans into which Network Rail, the owner and operator of most of the rail infrastructure in Great Britain, works for financial and other planning purposes. Page | 10 Page 28 3.18 In July 2015 Nicola Shaw, Chief Executive of High Speed 1, was commissioned to advise the Government on the longer term future shape and financing of Network Rail. In November 2015, a scoping document was published, setting out a view of the railway as a vital national asset; driving economic growth, increasing social and economic cohesiveness.

3.19 The Bowe and Hendy Reviews both reported in the November of 2015. Sir Peter Hendy’s report5 examined every element of the enhancements programme, reviewing costs and timescales, in order to provide a plan that was efficient, deliverable and affordable. The plan proposed that all infrastructure schemes should be delivered, although a number of schemes would need re-profiling to take place in CP6 (2019 to 2024).

3.20 Dame Colette Bowe6 concluded that there was no single overarching cause for the cost escalation and delays, with a number of issues contributing. These included planning processes which had been thought to have worked successfully during CP4, but were inadequate in the face of the scale and complexity of the CP5 programme, and included proposed electrification works on a scale not attempted before in the UK. She added that the blurred lines of responsibility between DfT, Network Rail and the ORR, and inadequate internal programme and portfolio management, and the complexity of the portfolio of scheme, with poor scope definition, had led to cost increases.

3.21 Her recommendations called for DfT to be significantly more active in prioritising strategic objectives, allocating funding for schemes in the early stages of development, and introducing greater flexibility to adjust the programme in response to emerging pressures. She concluded that complex route enhancement schemes should be subject to integrated governance frameworks, and reflect the whole-system requirements of such upgrades (including greater involvement of operators), and that project, programme and portfolio management practices should be introduced throughout the process; noting in particular the key issues of assurance, integration, and risk management. In planning how schemes are delivered, and in focusing future investment, more consideration should be given to passenger and operator priorities, in terms of both passenger and freight needs.

3.22 This was followed in March 2016 by the Shaw review’s recommendations7, which concluded that there should be a greater focus on the “needs of the customer” – train operators and passengers – with the railways lacking the “local flexibility and autonomy”, required. The report also noted that one option was to introduce private sector capital through private financing.

3.23 However, there are a number of barriers to the involvement of third party investment; some relate to process, and some concern the role and perceived behaviours of Network Rail towards third parties. To address these issues, Professor Peter Hansford was commissioned by Network Rail to chair an independent review of contestability in the UK rail market, with the aim of encouraging third party investment and infrastructure delivery on the national railway.

3.24 The Hansford Review8 focuses on ways of unlocking new investment and reducing costs for rail projects. It recognises that that a more contestable market for rail projects would lead to greater innovation, improve cost performance, deliver projects more competitively and predictably and therefore offer better value for money. In addition, it would provide more opportunities for third parties to fund and deliver projects. It is anticipated that this approach will streamline the process for third party investment and thus make some of the longer term projects more achievable.

Page | 11 Page 29 3.25 The issues described above, while not impacting on the broad thrust of the Long Term Rail Strategy, do have an impact on the timing of the potential interventions on the rail network. With this in mind, a broader approach to the timescales for delivery being taken, and a clear split between the development and the delivery of specific projects is required. While 5-year time periods have been used to illustrate the likely programme, the Government’s move away from tying enhancements to specific Control Periods is understood, and projects will be taken forward once a robust business case has been developed.

Franchising

3.26 Most of the franchise services operating into Liverpool City Region, with the exception of Merseyrail Electrics, have either seen, or are going though, a period of change. This section looks at those changes, and considers their potential impact on the City Region.

3.27 Management of the Merseyrail Concession was devolved from DfT to Merseytravel in 2003, during which time it has been managed through a bespoke agreement. The Concession covers the operation rail services across the Northern and Wirral Lines which comprise the DC electrified network and has 75 miles of track and carries 34m passengers annually. Liverpool Central is the busiest station on the network and is the most heavily used underground station outside of London, with 15.6m passengers a year starting or finishing their journey at Liverpool Central.

3.28 As the lead transport body for Liverpool City Region, Merseytravel is a member of the consortium of Local Transport Authorities (LTAs) which comprise Rail North Limited, a company established in March 2015 to oversee the management of the TransPennine Express and Northern Rail Franchises on behalf of the Secretary of State for Transport. Rail North has brought together the LTAs across the North of England into one cohesive and proactive body, to represent the Northern authorities’ national, regional and local economic, transport and strategic objectives for the rail industry, and co-manages the franchises with DfT, on a path towards full devolution from DfT.

3.29 Since one of the drivers for the creation of TfN as a Sub-National Transport Body was to create an organisation which could speak with one voice on all transport matters affecting the North of England, it has been proposed that TfN take over ownership of Rail North and subsume all of its functions directly into TfN. However the franchises are managed going forward, Liverpool City Region will continue to work with Rail North to develop the rail network and improve links across the North of England.

3.30 In addition, Merseytravel continues to press for improvements to services operating on the West Coast Main Line. The current franchise is expected to be extended through a Direct Award to Virgin Trains. An Invitation to Tender for the new franchise, West Coast Partnership, is expected to commence in the second half of 2018 with the new franchise commencing in April 2019. In particular, Liverpool City Region will be pressing for an increase in services between Liverpool and London to two trains an hour; a reinstatement of hourly stops at Milton Keynes; and one service an hour to call at Liverpool South Parkway.

3.31 The current East Midlands Train franchise, under which services from East Anglia and the East Midlands operate into Lime Street, is due to end on 4 March 2018, with an option to extend it for a further year. The Secretary of State has decided to use the full extension period, taking the Page | 12 Page 30 franchise to 3 March 2019, and intends to make a further interim agreement with East Midlands Trains, which will end in August 2019. The final three bidders for the new franchise have been identified and the Invitation to Tender will be issued shortly. Merseytravel will press for improved links to the Midlands as part of the new franchise.

3.32 It must be noted, however, that Liverpool City Region’s wider functional economic geography extends into Cheshire West and Chester, North East Wales, West Lancashire and Warrington, with important flows of goods, services and commuters in both directions across the national boundary; these are already substantial flows, and are forecast to grow even higher. For this reason, Liverpool City Region has actively engaged with partnerships such as the Mersey Dee Alliance over many years. Priorities include working together on common strategic interests to ensure a sustainable future for the area, and facilitate a coherent approach to social, economic and environmental issues.

3.33 Transport and enhanced connectivity by rail has consistently been recognised as a key ingredient of sustaining growth, improving skills, supporting social inclusion and tackling transport emissions across local authority boundaries. High quality and well used rail connections already exist, including the Merseyrail service from Liverpool to Chester, which provides a quarter-hourly stopping service for much of the day. However, away from the Merseyrail network, the rail offer is considerably poorer.

3.34 The need to improve cross boundary rail links to support the major employment and economic opportunities on both sides of the border has resulted in the establishment of the North Wales & Mersey Dee Rail Task Force, which has set out its plans and aspirations under the banner of “Growth Track 360”9.

3.35 The process that is now underway by Transport for Walesv to secure an operator and development partner to operate the Wales and Borders Rail franchise. The re-specification of the franchise provides opportunities to enhance the reach, frequency and capacity of services operating to Liverpool City Region from across the border via the Halton Curve and the Borderlands Line (Bidston to Wrexham). The Invitation to Tender was issued in September 2017, and a new contract will be awarded in October 2018. Liverpool City Region will work closely with Transport for Wales and shortlisted bidders to seek to shape the franchise accordingly.

v Transport for Wales was established by Welsh Government in 2015 as a wholly owned, not-for-profit company to provide support and expertise to the Welsh Government in connection to transport projects Page | 13 Page 31 Updating the Evidence Base

Liverpool City Region Growth

4.1 The Liverpool City Region Local Enterprise Partnership (LEP) commissions a series of forecasts of how the economy of the City Region will change over the forthcoming years. These provide a key narrative for growth in the transport network, as increases in population, employment and GVA increase travel demand. The most recent set of forecasts were produced for the LEP by Oxford Economics in 2016, providing an up-to-date evidence base. There are two scenarios; one (‘Baseline’) considers growth prospects based on current levels of background growth; the second (‘Scenario’) provides the likely growth prospects based on delivery of a number of large employment and housing investments across the City Region; these are what might be termed known investments, as opposed to investments which are at a more speculative stage. Figures 4a – 4c show both “baseline” and “scenario” for population, employment and GVA:

Figure 4a – Population

1,620 1,600 1,580 1,560 1,540 1,520

1,500 Population(000s) 1,480 Scenario 1,460 Baseline

1,440

2038 2040 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2000

Figure 4b – Employment

800 780 760 740 720 700 680 660 640 620 Totalemployment (000s) 600 Scenario 580 Baseline

560

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2000

Page | 14 Page 32

Figure 4c – GVA

55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000

15,000 GVA GVA (£m. 2014 prices) 10,000 Scenario 5,000 Baseline

0

2038 2040 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2000 Source: Liverpool City Region Forecasts (Source: Liverpool LEP, Oxford Economics, 2016)

4.2 The current population of Liverpool City Region is 1.52m and the wider City Region 2.47m; by 2040 these will have grown to 1.61m and 2.63m respectively and there will be 113,000 more people in employment. This growth is not uniform; the highest levels of growth occur in Liverpool itself, which poses strong implications for the City Region’s transport infrastructure, and shows the importance of considering transport links not just within Liverpool City Region but also its wider area.

Figure 5 – Growth comparisons

Growth 2015 -2040 Liverpool City Region Liverpool District Population 5.6% 8.5% Employment 16.8% 25.4% Source: Liverpool City Region Forecasts (Source: Liverpool LEP, Oxford Economics, 2016)

4.3 Furthermore, with employment overall forecast to increase at levels above population growth, there is a strong likelihood of increased inward commuting from those areas which form the City Region’s hinterland. Some of this growth will be met by increasing the levels of economically active population, but there remains a need to connect to other population centres, a growth which would not be sustainable if accessed by road. There is further external evidence to support this, with many of these findings mirrored by the data that underpins the NPIER:

“The increase in town and city centre employment in the knowledge-based ‘Prime’ and ‘Enabling’ capabilities cannot be accommodated through private (car) travel alone. It will require enhanced public transport connectivity within city regions: coherent, user-friendly joined-up networks, involving frequent rail services (including cross-city operations), light rail and bus, all supported by smart, multi-modal ticketing with simplified fares.” Northern Powerhouse Independent Economic Review, Scenarios for Future Growth

Page | 15 Page 33 4.4 We should not, however, consider changes in rail demand solely on the basis of changes in population and employment; part of the change in Liverpool City Region’s economy owes much to the visitor economy which over the past 10 years has been a lynchpin of growth. In 2016 the City Region recorded almost 5m staying visitors and over 56m day visitorsvi; the LEP forecasts growth by 18% and 15% respectively over the next ten years, placing specific demands and expectations on the transport network including: the need for better long-distance connectivity; accessing the major international gateways; and enabling visitors to access specific locations of current or growing importance within the City Region.

4.5 This evidence base updates the original analysis that informed the Long Term Rail Strategy in 2014. These latest LEP forecasts, shown in Figure 6, suggest that both population and employment will grow faster than earlier envisaged. In the charts below, the dotted line indicates the previous forecasts and the solid line indicates the current forecasts. Section 4.6 – 4.9 utilises the same Network Rail scenario of travel demand growth as in the 2014 Final Strategy Summary Report, but this does mean that the key messages are now of even more relevance.

Figure 6 – Original and updated scenarios for population and employment

1,600 780 1,580 760 740 1,560 720 1,540 700 1,520 680 660 1,500 640

1,480 620 Population(000s) 600

1,460 Totalemployment (000s) Scenario 580 Scenario 1,440 560 2014 scenario 2014 scenario

1,420 540

2018 2006 2008 2028 2002 2004 2006 2008 2010 2012 2014 2016 2020 2022 2024 2026 2028 2030 2000 2002 2004 2010 2012 2014 2016 2018 2020 2022 2024 2026 2030 2000 Source: Liverpool City Region Forecasts (Source: Liverpool LEP, Oxford Economics, 2014 and 2016)

Growth in Travel

4.6 Using forecasts to see what passenger growth might occur can highlight particular constraints. This is amply illustrated by the work conducted by Network Rail, who produced a number of rail passenger growth scenarios in 2013vii, projecting how the rail passenger market might change based on a range of different socio-economic factors. The scenario which provides the closest alignment with the LEP forecasts is “Prospering in Global Stability”, which looked towards a 104% travel demand growth for Liverpool over a 30-year period. In Figure 7, this has first been overlaid this on top of the latest city centre station counts, before next considering what this means for individual routes.

vi Source: STEAM tourism economic impact modelling data vii Network Rail – Long Term Planning Process: Regional Urban Market Study (October 2013) Page | 16 Page 34 Figure 7 – Comparing current (2015) and projected (2045) patronage at City Centre Stations

6,000 Moorfields station 2,000 Lime Street station (low level) 1,750 5,000 1,500 4,000 1,250

3,000 1,000

750 2,000 500 1,000 250

0 0

00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00

05:00 13:00 21:00 00:00 01:00 02:00 03:00 04:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 22:00 23:00

2015 count 30-year increase 2015 count 30-year increase

7,000 Central station 3,000 James Street station

6,000 2,500 5,000 2,000 4,000 1,500 3,000 1,000 2,000

1,000 500

0 0

00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00

05:00 13:00 21:00 00:00 01:00 02:00 03:00 04:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 22:00 23:00

2015 count 30-year increase 2015 count 30-year increase

Source: Merseyrail 2015 Station Counts overlaid by Network Rail’s Prospering in Global Stability scenario.

4.7 The analysis suggests that by 2045, a further 7,000-8,000 passengers could be boarding trains at the city centre stations during the 5pm-6pm evening peak. At a very rough level, without any measures to affect station use, this might mean 3,400 more passengers at Central, 2,600 more passengers at Moorfields, 1,200 more passengers at James Street and over 700 more passengers at Lime Street. With this in mind, consideration must be given as to what this could mean for station capacity. It is also worth considering the impact of HS2 and Northern Powerhouse Rail (NPR) on this, and it is likely that the growth in passenger numbers at Lime Street Low Level will accordingly be higher than that shown.

4.8 On a line-by-line basis, seated capacity on many lines into central Liverpool will be over-capacity in the next 30 years. The new Merseyrail rolling stock (section 5.12 – 5.14) will offer substantially more total on-board capacity for passengers (seated and standing), and analysis indicates that even with the 30-year growth rates this will be able to accommodate all passengers. Figure 8 shows the total capacity levels expected in 2045; this is based on counts conducted in 2015, the planned total capacity of the new Merseyrail rolling stock and the current refurbished electric City Line stock, elevated by Network Rail’s “Prospering in Global Stability” scenario for Liverpool.

Page | 17 Page 35 Figure 8a – 2045 Peak demand vs Total Capacity – Inbound (08:00-08:59)

Source: train passenger counts, Network Rail “prospering in Global Stability”

Page | 18 Page 36 Figure 8b – 2045 Peak demand vs Total Capacity – Outbound (17:00-17:59)

Source: train passenger counts, Network Rail “prospering in Global Stability”

4.9 In reality, the 104% growth scenario into Liverpool, forecast by Network Rail, is unlikely to be uniform; referring to the LEP forecasts and projected housing developments, at this stage there is the potential for a higher level of growth for:

 Journeys into the City Centre from suburban Liverpool stations;  Journeys into the City Centre from the St. Helens corridor; and  Journeys into Liverpool City Region (not just the city centre) from its hinterland of North East Wales, Cheshire West, Warrington and West Lancashire.

Page | 19 Page 37 Connectivity

4.10 In addition to the potential constraints enforced by passenger growth, there are also connectivity constraints which, through limiting the ability to travel efficiently, may be making the City Region less attractive to inward investors, deterring the expansion of existing businesses, or limiting people’s ability to access employment and training opportunities.

4.11 At a local level, Figure 9 shows how well connected Liverpool City Region and its wider functional area is within itself. Darker reds indicate better connected areas, blue areas those that are less so. By and large the city centre has a good level of connectivity, being connected at more than 50% of what would be possible in a theoretical ideal situation. Note that for some areas, especially those of a more rural nature, a lower level of connectivity might be expected. There are some points worth making:

 Certain corridors have a noticeably weaker connectivity than analysis suggests they deserve: this includes the Deeside area, Vale Royal, and the lines running north-east from Kirkdale towards Ormskirk and Kirkby.  Southport, Kirkby and St. Helens do not emerge as key centres in the display below, something this type of analysis might be expected to show.  The lack of any rail link currently to Skelmersdale makes for a particular area of weak connectivity.  No integration between Northern, City and Wirral lines is a specific factor (amongst others) that weakens overall connectivity levels.

Figure 9 – Internal connectivity of Liverpool City Region and its hinterland by rail

Source: Jan-May 2017 timetables at MSOA level. Page | 20 Page 38 4.12 The above points should be considered against those areas highlighted previously as having the potential for a higher level of rail demand growth. Those areas which are particularly important to the growth of the City Region’s economy, and which show signs of weak connectivity, might be considered of particular priority.

4.13 Looking at the wider picture, a key question is how well connected Liverpool is to other locations around Britain. Figure 10 demonstrates Liverpool’s connectivity based on whether or not a direct service links the locations, with a comparator displaying population relative to Liverpool (shown in red).

Figure 10 – Connectivity of key GB towns and cities

Source: Jan-May 2017 timetables

4.14 Currently Liverpool is very poorly connected for a city of its size, being ranked 21st out of 30 locations with a connectivity rating of 27.6%. Committed franchise improvements by TransPennine Express to restore links to Scotland plus an expected call at Milton Keynes by the West Coast Partnership franchise would elevate this to 37%, but this is still not that competitive. Of the 20 cities with better connectivity, only 7 have a larger population than Liverpool. Reading, for example has almost double the level of connectivity, but a third of the population, and Plymouth, with half the population, has over 50% better connectivity.

4.15 Figure 11 shows what might be achieved by also restoring services from Liverpool to Bristol, Reading, Southampton and Cardiff. This would provide uplift in national connectivity, with substantial uplift in Liverpool, placing it on more of an equal footing with other core cities, and so making the area more attractive to inward investors, tourists, etc. Indeed, when it comes to the visitor economy, the provision of direct rail services literally places a destination “on the map” and is important for continued growth.

Figure 11 – Connectivity of key GB towns and cities with restoration of specific services to Liverpool Page | 21 Page 39

Source: January-May 2017 GBTT

4.16 HS2 and NPR, if implemented as currently planned, would also impact on connectivity in terms of journey time for the six core cities of the North, as well as the important HS2 nodes of London and Birmingham. This can be understood by looking at the impact on average journey times between these cities; reduced journey times encourage greater agglomeration, and make destinations more attractive to investors. Within this analysis the reduction in the weighted average journey time for each city to all others is shown in Figure 12.

Figure 12 – Change in average journey times between core Northern Cities, Birmingham and London

180

160

140

120

100

80

60

40

20 Average weighted journey (mins)time journey weightedAverage 0

Current With HS2 With HS2 to Liverpool With HS2 to Liverpool & NPR

Source: calculated from GBTT, HS2 publications, TfN publications.

Page | 22 Page 40 4.17 There is a beneficial impact from HS2 for Liverpool City Region, although this is not to the same level of journey time reduction as seen by other cities. The impact of HS2 would, however, be substantially improved with the provision of a direct link to Liverpool, and the beneficial Impact of a full, direct north-south HS2 and east-west NPR connection is shown in Figure 13:

Figure13 Beneficial Impact of a High Speed Connectivity

Source: Economics Study: HS2, Northern Powerhouse Rail and the Liverpool City Region (Steer Davies Gleave, 2016)

4.18 There is a further enhancement in average journey times for the Northern cities following the introduction of NPR. For Liverpool, and based on TfN’s Conditional Outputs (Figure 2), gaining both a direct HS2 link and NPR could mean an improvement of its average journey time of 41%.

Page | 23 Page 41 Challenges and Opportunities

Local Strategic Context

5.1 The Liverpool City Region Growth Strategy, “Building our Future”, articulates how transport supports economic growth, and recognises the importance of a high quality rail network in improving connectivity for investment and business needs, and access to work, education and training. It focuses on three strategic growth pillars:

Figure 14 – Liverpool City Region Growth Strategy: Growth Pillars

- supporting economic growth in the City Region, through increasing employment, levels of productivity and investment through the better movement of goods and people

- supporting access to opportunity by connecting those who wish to access employment, training, education and further learning opportunities; and supporting accessibility to fresh food, leisure and healthcare

- supporting place quality by drawing our energy from a range of low carbon energy sources, with vehicles powered by alternatives to fossil fuels, and with increased active travel opportunities

5.2 These growth pillars will facilitate the focused allocation of investment, with partners across Liverpool City Region aligning their existing resources to support them. Clearly for rail investment to have maximum impact, it is essential the work packages are aligned with these pillars.

5.3 Sitting below the Growth Strategy are the Merseyside and Halton Local Transport Plans (LTPs), which provide the statutory framework under which policies and plans are taken forward to guide the future provision of transport. The Transport Plan for Growth brings the LTPs together, and details how transport is an enabler of growth; it connects people and places and is crucial to the economic success of the City Region, providing a strategic direction for transport which supports growth, regeneration and carbon reduction, and is the overarching framework under which the Long Term Rail Strategy is being delivered.

5.4 Another important aspect of the Long Term Rail Strategy is consideration of the whole journey approach; recognising that if a multi-modal integrated journey is broken down into its constituent parts, encouraging active travel choices for the shorter elements (e.g. the journey to or from the station) will make a valuable contribution to delivering a low carbon economy which supports economic growth. In addition, this will help to ensure focus is given to customer needs in the widest sense, such as enhanced information provision and an

Page | 24 Page 42 attractive fares and ticketing offer. Whilst the Long Term Rail Strategy is focused primarily on infrastructure enhancements, these important workstreams will be progressed at a local level through delivery of the Transport Plan for Growth, and at sub-national level by Transport for the North.

5.5 This holistic approach is also a fundamental aspect of the Liverpool City Region Local Journeys Strategy (due for publication in 2017), which sets out a vision for safe, well- connected places and access to interchanges and centres, which encourage sustainable travel choices for local journeys. Structured around the three growth pillars, the Local Journeys Strategy will help us ensure that our planned improvements are continually focused on those areas that are most critical to delivering economic growth.

Freight

5.6 Since the Long Term Rail Strategy was first developed, work carried out by TfN has highlighted the importance of the freight sector to the Northern economy10, and the role of rail in particular in capturing a greater market share for the north-bound goods entering the country via the south-coast ports.

5.7 The Liverpool City Region Freight and Logistics Strategy (also due for publication in 2017) builds upon the recognition given to the Maritime and Logistics sector in the Growth Strategy, and develops further the priorities set out by TfN. The majority of goods entering the UK do so from the south-coast ports, and whilst some travel to the North via rail, there is scope for much greater modal shift from road. Securing this shift requires additional capacity on the West Coast Main Line (WCML), and, although the North West is already served by rail linked distribution sites in Ditton, and Trafford Park, an expansion in the number of Strategic Rail Freight Interchanges in the North is planned. Improving rail connections and logistics sites has particular benefit for Liverpool City Region, as its peripherality for national distribution means that it is only by utilising lower cost forms of transport – including rail and water – that the region can secure additional market share.

5.8 In addition, the opening of the Liverpool2 deep-sea container terminalviii, allied with the widening of the Panama Canal, has the potential to significantly alter the economic geography for freight in the UK, opening up the opportunity for an increasing amount of goods from North and South America, China and the Far East entering the country via Liverpool. The economics of freight transport means that many of these goods, destined for consumption in the North, will be transported via road. Some, particularly where the destination is in Scotland, on the east side of the Pennines or in the North Midlands, could travel efficiently and sustainably by rail, but this would require an improvement to the rail terminal within the Port, an increase in capacity on the Bootle Branch Line, and paths both north-south and east-west on the national rail network.

5.9 The Liverpool City Region Freight and Logistics Strategy highlights the impact the developments at the Port are likely to have on the rail network, with the greatest increase in

viii A £400 million in-river container terminal, which will allow post-Panamax vessels of up to 13,500 TEU to call at the Port of Liverpool Page | 25 Page 43 demand for paths expected on the Bootle Branch Line, the Chat Moss route and its connections north- and south-bound onto the WCML and east-bound beyond Earlestown to Manchester. In general terms, in addition to the existing hourly freight path from the Port of Liverpool, another hourly intermodal rail freight path would be required to Earlestown and then south down the WCML towards the Northampton area; this is likely to be required quite rapidly to allow the port to develop services that are associated with the Liverpool 2 terminal. A further hourly path from the port across the Pennines would also be required.

5.10 One path per hour from Garston/Ditton to the WCML is likely to be sufficient, whereas an additional hourly path would be needed for traffic to/from the rail linked distribution parks developed to the east of the WMCL. Finally, some new daily paths would be needed to accommodate some additional traffic from the Ellesmere Port and Knowsley areas as traffic develops.

5.11 The Liverpool City Region Freight and Logistics Strategy has identified the following key objectives:

• Network capacity optimisation in line with Network Rail’s aspirations, including the use of 750 metre trains on intermodal routes, and the move from five to six day per week operation, as well as continued changes to maintenance regimes. • Securing additional paths for freight trains on the WCML. The analysis of rail freight demand has indicated that there is a need to secure 3 paths per hour in each direction north of Wigan, 6 between Wigan and Crewe, and 6 south of Crewe. The development of HS2 may provide some additional capacity in the longer term on the WCML, if it leads to a net reduction of passenger services on the existing tracks. A further effective local measure may be provided by NPR providing a new high speed passenger link between Liverpool and Leeds, linking to HS2, which could further contribute to relieving the WCML north of Weaver Junction. • Securing additional paths for freight trains crossing the Pennines. The analysis has also indicated a need for two paths in each direction along the Chat Moss route. Similar to the situation on the WCML, the delivery of NPR may provide some additional freight capacity in the longer term on trans-Pennine routes, if it leads to a net reduction of passenger services on the existing tracks. • Undertake further work with Network Rail to examine options for removing the key freight bottlenecks on the LCR rail network located at Bootle Branch Line, Earlestown West Junction, Winick Junction and Weaver Junction to enable greater opportunities for pathing and hence growth in freight.

Merseyrail Rolling Stock

5.12 The procurement of the rolling stock has been concluded, with Stadler identified as Merseytravel’s long-term partner, providing a new fleet of 52 four car units, extensive modernisation of the network’s depot facilities, including construction of a new maintenance building at Kirkdale and undertaking all rolling stock maintenance as a

Page | 26 Page 44 subcontractor to Merseyrail Electrics, following the transfer under TUPE regulations of their current engineering and cleaning workforce. The introduction of the new trains will:

 provide 60% increased passenger carrying capacity;  enable journey times to be reduced by up to 10% through substantially improved acceleration and braking;  fully address the findings of the Rail Accident Investigation Branch reportix into the fatality at James Street in 2011;  provide industry leading accessibility for a Victorian railway by means of reduced floor height and intelligent sliding steps at each passenger doorway;  offer much improved passenger information;  reduce energy consumption by over 20%;  provide a fourfold increase in reliability; and  offer a considerable improvement in passengers’ experience including allowing on board staff to focus on passenger facing duties.

5.13 Merseytravel will be the owners of the new fleet, which will allow them to be customised to meet the specific needs of our passengers and characteristics of the network. In addition to the works with Stadler, investment of around £90m is being undertaken with Network Rail to ensure that the railway’s infrastructure is configured to maximise the benefit of the new rolling stock. The key components of this works are:

 trebling the capacity of the power supply system to address current weaknesses and enable the reduced journey times;  regularising the relationship between the track and the platform to enable the improved accessibility; and  works to accommodate the slightly longer new rolling stock.

5.14 The programme has been designed as an integral part of the Long Term Rail Strategy. The following features have been incorporated to achieve this:

 ability to convert the rolling stock to dual voltage;  ability to retrofit the European Rail Traffic Management System (ERTMS);  options to procure up to an additional 60 units of rolling stock;  depot capacity and ability to incorporate a short test track with 25kV electrification; and  the potential for the deployment of alternative technologies.

Network Constraints

5.15 In 2014, the Long Term Rail Strategy identified a number of constraints on the development of the rail network. Appendix 1 details these original constraints and highlights how they have since been addressed. The current identified constraints, as supported by the updated evidence base, are detailed below.

ix RAIB: Fatal accident at James Street station, Liverpool 22 October 2011 (Report 22/2012 – October 2012) Page | 27 Page 45

Capacity Constraints – restricting the ability to run extended services to meet demand

1 Merseyrail suffers from passenger capacity problems at certain times and locations, that will substantially constrain passenger growth at Liverpool Central Station due to limited platform space, and the need to turn-around services. (Figure 7; section 4.7)

2 There is a limit to the number of trains per hour that can be used on busy sections of the Merseyrail Network. For example, the required maximum of 18-20 trains per hour on the Northern Line between Sandhills and Liverpool Central, and the ability to provide additional cross-river services (for instance from Wrexham) cannot currently be readily accommodated.

3 Despite recent remodeling, and the further works planned for 2018, the throat on the approach into Liverpool Lime Street will continue to act as a constraint on the number of services per hour that can access the station. This is due to the limited number, and the current location, of cross-over facilities on the Lime Street approach.

4 The West Coast Mainline, between Weaver Junction and Crewe, is heavily utilised at present with a lack of available rail paths, limiting the number of services per hour that can run between Crewe and Liverpool Lime Street.

5 Single-end termini create significant capacity issues on the Merseyrail network, as they create longer turnaround times and create conflicts between inbound and outbound services on single-track sections. Chester, Ormskirk, Kirkby and Hunts Cross are identified as particular constraints. (Figures 8a/8b; section 4.8)

6 The combination of extra freight trains, plus a parallel growth in passenger services, driven by the Northern Hub passenger service expansion (the completion date for which is not currently known, due to elements of project being deferred such as platform 15/16 at Manchester Piccadilly)

, and HS2Connectivity Phase 1 (opening Constraints in 2026), – lack will of provegeographical difficult coverageto accommodate of network on both --- the Chat Moss and West Coast Mainline routes. 7 The network does not always link places where people live with employment sites, and does not always offer sufficient service frequencies to allow seamless commuting where it does. (Figure 9; section 4.11) For example, no rail services between Skelmersdale and Liverpool. 8 There are no direct services between Liverpool and South West England or South Wales.

9 There is a poor frequency of services to London (when compared with other cities of a similar size and population).

Page | 28 Page 46 10 There are poor links between Liverpool and other key cities around the UK compared to other cities (Figure 10; section 4.13).

Infrastructure, Facilities and Rolling Stock Constraints 11 There are operational conflicts at Hunts Cross West Junction between Merseyrail services and Cheshire Lines Committee (CLC) services, at Wavertree junction due to the merging of routes, and at Sandhills due to the confluence of Northern lines. There are also line-speed constraints on the Chester line in the Bache area, which can perpetuate delay and limit the number of services per hour that can currently run through these areas.

12 The mix of semi-fast and stopping services on the CLC and Chat Moss lines constrains timetabling options, and restricts some stations to a single service per hour.

13 There is a lack of Park and Ride capacity at a number of stations on both the Merseyrail and City Line networks. This could be suppressing demand, whist impacting on local congestion and air quality.

14 A number of routes require substantial service improvements. For example, infrastructure constraints exist on some of the key diesel lines that serve peripheral parts of the City Region. Southport to Wigan, Preston to Ormskirk, and Wigan to Kirkby all have sections of single track, or otherwise constrained running, that limits the number of services that can effectively run on each route.

15 There is a significant capability gap for W10 gauge container freight between the Port of Liverpool and the wider rail network.

16 The current prevalence of split-ticketing as a result of the availability of cheaper advance purchase singles can lead to a significant skewing of demand data obtained via the Lennon database. This in turn can cause issues in planning effective services and meeting demand, e.g. Preston, underrepresenting the flows between Liverpool and Scotland and impact on Business Case development.

Funding Constraints

5.16 In 2014, it was considered that “with huge rail infrastructure schemes such as the proposed HS2 railway (with mooted Northern Connectivity components and early discussion of HS3), ongoing and wide-spread electrification, large-scale expansion of the Metrolink network in Manchester, and many other current schemes there is a strong precedent for Liverpool City region to seek significant investment in its rail infrastructure. The scale of the proposals in

Page | 29 Page 47 this strategy is not out of proportion with the needs of a growing city region and comparable investment being made elsewhere”x.

5.17 Central Government remains a major source of funding for rail improvements on the network, with funding made available to cover both the maintenance and renewal of the current network, through the publication of the High Level Output Statement (HLOS)xi. The issues identified through the reviews of Network Rail’s performance in the delivery of enhancements (section 3.16 – 3.25), and the subsequent postponement of significant national enhancement programmes of work, is likely to influence the Government’s view of national rail priorities, and hence the level of funding made available for enhancements in future Control Periods. This will have an impact on how and where funding is allocated, and whether the Government prioritises enhancement of the rail network within Liverpool City Region over other nationally significant plans. It is expected that the HLOS will focus more upon Network Rail’s objectives in respect of operating and maintaining the railway, including renewals with enhancements dealt with separately by Government, as projects are brought forward for consideration.

5.18 Furthermore, as highlighted in section 3.1 – 3.7, whilst devolution offers many freedoms, the Single Investment Fund (SIF) process puts limits on the level of local capital funding available, and is still in its infancy. As such, it remains uncertain how rail infrastructure will be able to secure funding in future years when considered in competition with other regional priorities, as well as the extent to which transport investment can enhance economic and regeneration proposals.

5.19 Another consideration is the complex, costly and protracted gestation of rail projects as a consequence of the rail industry structure, Network Rail’s processes and role as System Operator (SO) and the regulatory planning process, all of which are somewhat at odds with the short term delivery timescales and the challenge for development funding. Whilst recognising the validity of the Network Rail’s processes for managing safety risk and cost escalation, it can take a number of years to reach project implementation, and the associated development costs in the early stages are in themselves not insubstantial. Network Rail have indicated that their aim is to be more responsive to stakeholder requirements going forward, with greater devolution within routes, collaboration across routes and the move to continuous modular strategic planning within the SO function, for example. Merseytravel will therefore continue to work closely with Network Rail to streamline the delivery process.

5.20 This is in addition to the need to develop comprehensive business cases before investment can be approved, either locally by the Combined Authority or when applying for government funds. Business cases are developed in line with HM Treasury’s advice on evidence-based

x Long term Rail Strategy – Final Strategy Summary Report (August 2014) xi The HLOS sets out what the Secretary of State for Transport wants to be achieved by railway activities during a given control period and the Statement of Funds Available outlines the Government’s view of how much funding it can provide to support these activities. The HLOS is a statutory requirement introduced by the Railways Act 2005. Page | 30 Page 48 decision making and must use its best practice five case model approach. This approach shows whether schemes:

 are supported by a robust case for change that fits with wider public policy objectives – the strategic case;  demonstrate value for money – the economic case;  are commercially viable – the commercial case;  are financially affordable – the financial case; and  are achievable – the management case.

5.21 It is important to acknowledge that Network Rail are exploring new ways of financing schemes which support the growth in passengers and freight on the railway, the intention being to encourage innovation and speed up the delivery of improvements.

5.22 The role of TfN, and its establishment as a statutory body, is also likely to have a bearing on the prioritisation and funding of sub-national improvements on the rail network. At present the extent to which TfN will hold delegated or devolved powers is yet to become clear.

5.23 In the Transport Investment Strategy, the Government acknowledge that “transport infrastructure comes at considerable cost, and must take place alongside other priorities. We cannot afford to tackle every problem, or seek to realise every potential, through investment. Our ambitions must be balanced against the need to maintain fiscal credibility. In this context, it is right to consider how we will keep future transport investments within budget; how we can find alternative and innovative sources of funding; and how we make sure we choose the best schemes which will have the greatest impact for transport users across the country.”

5.24 The Government also acknowledge the need to take account of the balance of spending between different regions, and assess investments for their contribution to creating a more balanced economy. As such, they are committing to develop a “rebalancing” assessment toolkit, for use as part of the strategic assessment of future investment programmes, that will require programmes to be judged on how they contribute towards creating a more balanced economy, as part of the overall assessment of their strategic case.

5.25 In short, it is timely that we consider not only the revised economic projections and the updated network constraints, but are pragmatic in terms of what can realistically be achieved, even acknowledging the long-term nature of this Strategy.

Page | 31 Page 49 Strategy Delivery

6.1 The process of developing the Long Term Rail Strategy (see Figure 1) originally identified twelve packages of schemes drawn from an initial pool of more than 150 individual projects The schemes that formed each package and which are, in the main, retained here, were shortlisted via an appraisal process (see section 2.4 – 2.6) that assessed each in terms of its fit with strategic aims and objectives; ability to engender mode shift; environmental benefits; and estimated level of deliverability including affordability.

6.2 The packages themselves addressed a number of network constraints, capacity issues and latent rail demand, and included service enhancements, the introduction of new rolling stock and extension of the Merseyrail network. The original packages are listed in Figure 14, with full details on each shown in Appendix 2.

Figure 14 – The original 12 work packages

1. Improving National Passenger and Freight Connections 2. Merseyrail Growth Enabling 3. Liverpool City Centre Passenger Capacity 4. City Line Enhancements 5. Cheshire Lines Committee Line 6. Halton Curve 7. Improved Connections from Chester and Ellesmere Port 8. Ormskirk – Preston Enhancements 9. Kirkby – Wigan Line Improvements 10. Borderlands (Wrexham – Bidston) Line Enhancements 11. Conversion of Freight Lines to Mixed Passenger and Freight Usage 12. Selected New Stations

6.3 While specific constraints still exist, along with the latent demand for rail services, which specific projects aim to address, the issue of passenger capacity has largely been addressed, at least on the Merseyrail Northern and Wirral lines, by the planned introduction the new fleet of vehicles which has a significantly greater capacity. Whilst new trains will be able to transport increasing numbers of people, as demand grows there will be a need for those numbers of passengers to be accommodated within the existing rail network and, importantly, at stations.

6.4 This does bring into focus the issue of Liverpool Central which, through the work more recently undertaken as part of Network Rail’s Liverpool City Region Strategic Rail Studyxii, has reinforced earlier work that the station is increasingly close to capacity. At present, in excess of 60% of journeys start or finish in Liverpool, with Liverpool Central being the most used station, in addition to its function as a primary interchange. The LCR Strategic Rail Study stated that there would be a need for an expansion of the station in CP7 at the latest, and identified the high number of passengers using 2 platforms as an issue. xiiNetwork Rail: Liverpool City Region Strategic Rail Study – Long Term Planning Process (October 2016) Page | 32 Page 50 6.5 Given the potential impact of the station, and its ability to operate normally and to accommodate passenger demand, it is appropriate to consider all of the other network constraints within the context of their impact upon Liverpool Central. Development work, which is already underway, will review the capacity required to deliver an effective service in the future, and will take into account the expected demand for rail services as identified in the Liverpool City Region Strategic Rail Study, but with assessment of the impact of the potential interventions identified within the Long Term Rail Strategy upon that capability.

6.6 There have also been a significant number of developments since the Strategy was first developed. Merseytravel have initiated three Local Growth Fund Schemes (with funding secured as part of the 2014 Growth Deal) covering the improvements at Newton-le-Willows, a new station at Maghull North and the re-opening of the Halton Curve to regular passenger services. The High Speed Rail programme has been developed further and the North West electrification programmexiii, insofar as it affects Liverpool City Region, is nearing completion.

6.7 The Bowe, Hendy and Shaw reports (section 3.16 – 3.25) have also had a significant impact on the delivery of rail projects. With the increasing cost of projects, and the increasing demand for improvements across the network such as the Northern Hub, TransPennine Route Upgrade and capacity challenges in general at London and South East stations, it is clear that proposed projects will not only need to have a very strong business case if they are to be taken forward, but also be affordable in the context of other national priorities.

6.8 With all this in mind there is a need to review the overall programme of projects contained within the Long Term Rail Strategy, take stock of what has already been achieved, and to consider how the identified interventions might be prioritised within a more realistic timeframe. It is also an opportunity to incorporate a number of projects which were not included in the initial Strategy, including HS2 and NPR, and to ensure that the growing importance of cross-border transport demand is incorporated. The Long term Rail Strategy now moves away from the package approach, for the reasons outlined above, and introduces three specific groupings:

1. Projects which have been delivered or are committed to delivery. 2. Projects which are linked to Liverpool Central or require an upgrade at Liverpool Central to be delivered. 3. Projects which can be delivered which have limited or no impact on Liverpool Central.

Group 1: Projects which have been delivered or are committed.

Merseyrail Rolling Stock

6.9 The current Merseyrail rolling stock will be replaced with new units which will be able to both carry more passengers and reduce journey times on the network. The vehicles, which xiii Over £1bn of rail service improvements to speed up journeys, create rail links and improve stations as part of the Great North Rail Project Page | 33 Page 51 will be expected to commence delivery from 2020, will have passive provision for dual voltage operation; the potential for battery operation will be investigated in the future. In addition, the train/platform interface will be improved, delivering a safer and more accessible railway. As part of the project Network Rail are upgrading the power supply to meet the needs of the project. The project will also have a bespoke Depot Strategy which will ensure the long term durability of the new trains.

Halton Curve Reinstatement

6.10 Halton Curve is a scheme which will deliver large benefits for Liverpool City Region, its wider travel to work area and North Wales. Funded predominantly through the Local Growth Fund the £15m project the service will, initially, provide a two way operation between Chester through to Liverpool stopping at Liverpool South Parkway for bus connections to Liverpool John Lennon Airport. Discussions are ongoing with Transport for Wales to extend this service beyond Chester. As originally envisaged this work was combined with the re-signalling of the Weaver-Wavertree Junction line section. Work has commenced and the new service is expected to be in place by December 2018.

6.11 Merseytravel will continue to work with the Cheshire West and Chester, Rail North, DfT, Welsh Government and the rail industry to identify and support capacity improvements which will allow for services to operator further afield, such as along the North Wales Coast and through to Cardiff.

Newton-le-Willows Refurbishment

6.12 Newton-le-Willows station is in the process of being completely revamped. It will be fully accessible with lifts to both platforms, and a new underpass linking the north and south side. The car park will be expanded to over 400 spaces and the station will include a new ticket office and bus interchange.

Maghull North new station

6.13 A new station, situated between Maghull and Town Green on the Ormskirk Line, will be delivered by May 2018. The new station will serve a large community which currently doesn’t have direct rail access, will be fully accessible and will have a 140 space car park.

New rail service between Chester and Leeds via Newton-le-Willows

6.14 As part of their franchise commitment Northern will be operating a new service between Chester and Leeds, via Runcorn East and Newton-le-Willows, from May 2018. This will be a Northern Connect service with the intention of providing a more limited stop interurban service.

Development of long distance service connections

6.15 Merseytravel has worked with Rail North and TransPennine Express to provide a new direct link to Glasgow in December 2018 which will be followed by a new direct link to Edinburgh in December 2019.

Page | 34 Page 52 Group 2: Projects which are linked to, or require an upgrade at, Liverpool Central

Introduction

6.16 Liverpool Central station is close to capacity on the Northern Line platform and concourse area. As such, Liverpool Central is identified as a key priority for the City Region in taking forward any further improvements on the rail network. Merseytravel is currently undertaking a development review at Liverpool Central to fully understand the impact of the expected growth in rail demand, as identified in the Network Rail Liverpool City Region Strategic Rail Study 2017. The study will also consider the release of suppressed demand which will result from the introduction of the new rolling stock and the potential impact of other interventions on the network. Indeed one of the conclusions of the Study was that the delivery of new rolling stock is the correct strategic solution for accommodating growth of the Merserail network.

6.17 This section considers the projects which could have a direct impact on the City Centre and particularly Liverpool Central. This incorporates not only direct interventions on the City Centre stations but also includes potential extensions to the network. The majority of rail users on Merseyrail start or finish their journeys in Liverpool City Centre.

Liverpool Central

6.18 Merseytravel is undertaking a development review which will address the capacity constraints at Liverpool Central. The study will consider the space required to deliver an effective solution at Central and is expected to assess a number of options and identify the preferred solution to be taken forward. The potential solutions include:

 New station required in an alternative location;  Expansion of the current station; this could be a widening of the current platform or the introduction of a new platform;  Expansion of the concourse area;  Interventions at Moorfields and James Street.

Lime Street

6.19 Lime Street is currently undergoing a remodelling which will expand the number of platforms from 9 to 10. This solution, while addressing the immediate issues through to 2026, does not address the longer term issues. Merseytravel will undertake the necessary development work with Network Rail to identify the future requirement for a City Centre station. This could include extending the platforms in the current location or relocating the station.

Wapping Tunnel Development

6.20 An initial feasibility study has been carried out to review the potential of bringing the Wapping Tunnel back into use for passenger services. This would build on the recent Network Rail electrification project, and allow the operation of high speed Merseyrail Page | 35 Page 53 Electric services to operate on the City Line network. The study identified that there is potential to extend City Line services through to Liverpool Central as an alternative to Lime Street via the Wapping Tunnel. This would significantly improve connectivity between the Northern and City Line services while relieving the pressure on Lime Street. It would, however, increase the demand at Liverpool Central. As part of the development work the possibility of providing a new station, which would provide a direct link to the revitalised Knowledge Quarter, was identified.

Skelmersdale Extension

6.21 Merseytravel is currently working with Lancashire County Council and Network Rail to develop the Merseyrail network from Kirkby through to Skelmersdale. This work is expected to be completed in 2019. Further development work will be required before this project is implemented. While 3rd rail electrification is being considered currently, alternatives will be considered later in the development process. A new station at Headbolt Lane to serve the Northwood area of Kirkby is an integral part of this proposal. The potential to extend the network further through to Wigan will need to be developed separately.

Extending Merseyrail services through to Liverpool John Lennon Airport

6.22 The creation of a direct fixed link from the Merseyrail network through to Liverpool John Lennon Airport (LJLA) would enhance the connectivity of the region to the airport. While work was undertaken on this in the mid-1990s this work is now out of date and a new study, which could identify the feasibility of the project and the optimum route to deliver this, is required. LJLA has undertaken long term business planning based on projections of future passenger demand and potential for cargo and other services to be developed. LJLA’s forecasts of passenger growth indicate potential to accommodate 7.8m passengers per annum by 2030 and 11m by 2050. It is anticipated that this level of growth will be required in order to pro-actively support a robust business case.

Cheshire Lines Committee (CLC) Route Enhancements

6.23 The electrification of all or part of the CLC route, and the potential extension of Merseyrail Electric services from the Northern Line onto this route, would enhance the connectivity of the wider region. An initial feasibility study is required to identify the potential to deliver this intervention. Linked to this is the desire to provide improvements on the longer distance services to Sheffield and beyond. This will be raised as part of the East Midlands Trains franchise consultation.

Electrification of the Chester-Shrewsbury and Chester-Warrington Lines

6.24 While predominantly outside of the City Region, this project would significantly increase connectivity of the wider travel to work area for Liverpool City Region. While supporting this, it must be recognised that current electrification proposals have been deferred, and that the Government is looking for alternative methods of delivering the benefits electrification of the network would bring, such as the use of bi-mode vehicles.

Page | 36 Page 54 Electrification of Ellesmere Port to Helsby Line

6.25 There is a reasonable business case for extending the Merseyrail service through to Helsby. However this is likely to be best served by the use of Merseyrail battery powered enabled services. This will be tested on the new units in 2020.

Ormskirk-Preston enhancements

6.26 This incorporates both electrification from Ormskirk through to Preston and the potential reintroduction one or both of the Burscough Curves. In view of the deferral of electrification proposals, and the relative low ranking of the electrification proposal in the Northern Sparks reportxiv, it is unlikely that the electrification proposal is expected to be taken forward in the near future. In addition to this, the business case for extending electrification to Burscough, and the introduction of the southern Burscough Curve, is poor. The potential use of battery powered Merseyrail units may improve the business case for both proposals. This will be reviewed after the Merseyrail units have been tested for battery operation in 2020.

Borderlands Development

6.27 While the aspiration is to fully electrify the line, and incorporate it into the Merseyrail network, this is very much a long term aspiration. In the interim period the aim is to develop the line through the introduction of an improved diesel service. Merseytravel will work closely with relevant cross-border organisations such as Growth Track 360 to bring this about. There are a number of new station proposals for the line, the principal being a new station close to the Deeside Industrial Park, which would improve the ability of the workforce to access the site via public transport.

Bootle Branch Electrification

6.28 A long term proposal which will need to be considered alongside the developing freight strategy for the region and the expansion of the Port of Liverpool. The proposal envisages the introduction of passenger services which will operate from the Bootle Branch into Lime Street. An initial study is required to understand fully the freight requirements for the line and what the realistic potential for operating passenger services over the line is.

North Mersey Branch

6.29 A long term proposal; this envisages a new service operating from Ormskirk via Bootle into Liverpool. It was reviewed as part of the Merseyrail Route Utilisation Strategy in 2009 which identified a poor business case.

New Stations

6.30 Liverpool City Region has developed a New Stations assessment tool which reviews the potential for 25 new station locations across the network mostly identified in 2014 and predominantly within the City Region; some locations do fall just outside its boundaries but xiv Northern Sparks - Report of the North of England Electrification Task Force (March 2015) Page | 37 Page 55 are considered important in serving the City Region rail network. An initial assessment clarified whether the proposals aligned with the Long Term Rail Strategy, whether they could be considered short term projects, and which could be delivered on the current network, or long term projects which required further rail development work such as new lines or connections.

6.31 The stations were then assessed using a normalised and weighted scoring metric, to rate the extent to which they met eight main criteria of possible influential variables upon feasibility; demand impacts; operational impacts; wider economic impacts; strategic impacts, social impacts; environmental impacts; physical constraints and external support. The purpose of the assessment tool is to provide a consistent and objective comparative appraisal of the feasibility of a station within a portfolio and is intended to provide information early to decision makers. The tool is very much a transport led appraisal, with individual station locations capable of being assessed on their own merits, to consider emerging economic and regeneration opportunities, changes in demand and funding availability. Appendix 3 includes a summary of the results.

Group 3: Projects which have limited impact on Liverpool Central

Development of Liverpool – London services

6.32 Increasing the frequency of Liverpool to London services to two trains an hour and will continue to be pressed for as part of the West Coast Partnership franchising process. The development of Liverpool South Parkway to allow longer trains to call will also be pursued through the same process.

Freight Proposals

6.33 The City Region is in the process of developing a comprehensive multi-modal freight strategy which will have the development of rail freight at its heart. The Liverpool City Region Freight and Logistics Strategy considers these in more detail.

Development of Long Distance Service Connections

6.34 Building on the improved links to Scotland, Merseytravel will continue to collate the necessary evidence to support the further development of other long distance links. This must be balanced against the need to deliver a robust and resilient timetable, maximise the best use of the rail network and provide a reliable rail service for the public.

Project Timeline

6.35 An indicative timeline was produced in 2014, which included a series of other anticipated rail improvements such as the further development of HS2 as well as the twelve specific packages. Given the difficulties encountered in delivering rail projects in recent years, a revised, more pragmatic time line has been developed (see Appendix 4), which identifies when projects could realistically be delivered, takes account of Government’s decision to Page | 38 Page 56 separate out enhancements from maintenance and renewals within the HLOS for future Control Periods, and is structured around three new time periods:

 Short Term: 2017-2022  Medium Term: 2022-2027  Long Term: 2027+

Page | 39 Page 57 Conclusion

7.1 The Liverpool City Region Long Term Rail Strategy presents a bold vision to equip the City Region with a modern railway, providing a necessary step-change in terms of quality, accessibility and speed. In acknowledging the huge asset to Liverpool City Region that the rail network already provides, the Strategy provides a pathway which ensures that projected levels of future demand are accommodated, how latent demand can be opened up to the railway, by accessing untapped markets, and reducing the overall impact of car travel on the region’s roads whilst supporting economic growth

7.2 The aspirations of our Long Term Rail Strategy can only be realised with a commitment from Government to delivering long term economic benefits to the North through transforming connectivity; rail infrastructure will play an important part in this commitment. Such investment will be vital to redressing the longstanding imbalances in transport funding between the South East and the North, with transport expenditure in the North West, over the last ten years, being a fraction of that spent in Londonxv, a disparity which can only hamper the economic growth of the UK. Indeed the former Chancellors “Northern Powerhouse” speech was an acknowledgment of the role the North must play in the nation’s prosperity, “to end the imbalance in the UK economy so our success is not wholly dependent on the global city of London, so we have across the north of England individual cities that are better connected, have a better quality of life, and are able to create”.

7.3 Opportunities for capital funding for enhancement schemes is often made available with relatively short periods of notification for bids to be considered, and are out of alignment with the prolonged and complex gestation period for rail projects, particularly from central Government, and increasingly so as a consequence of the changing treatment of rail enhancement schemes within the Regulatory framework. These opportunities generally will only consider schemes that have already been developed significantly, and for which a sustainable business case can be demonstrated. It is therefore imperative that development funding is made available at a local and regional level, to allow prioritised schemes and those with a greater potential to support a business case at an early stage, so as to maximise the funding opportunities when they arise.

7.4 The Strategy will remain under regular review, to ensure it stays relevant to the physical, policy and economic context of not only the City Region itself, but the wider North of England, and the UK as a whole.

xv Source: IPPR North Page | 40 Page 58 Appendix 1 – Network Constraints Identified in 2014

Summary of constraints originally included within the Long Term Rail Strategy and work undertaken to date to address them.

Capacity Constraints – restricting the ability to run extended services to meet demand

Constraint How addressed 1 Merseyrail suffers from passenger capacity The need for additional capacity on trains is problems at certain times and locations addressed by the new rolling stock. that will substantially constrain future passenger growth, especially at Liverpool The capacity at Liverpool Central is a key Central Station and on trains into central part of the Long Term Rail Strategy and Liverpool, due to limited platform space, options are being considered in conjunction and the need to turn-around services. with Network Rail.

2 Services into Liverpool Lime Street, In the short term the issue has been particularly two and three-car addressed through the electrification configurations are often overcapacity undertaken by Network Rail and the during peak periods. introduction of Class 319 4-car sets on to the line. By the end of 2018 the approach and platform configurations at Liverpool Lime Street will allow 8 car 319 sets to be accommodated.

3 Constraints on the network limit the While the ability to operate an increased number of trains per hour that can be used number of trains has not been addressed on busy sections of the line, for instance the capacity of the units will be the required future maximum of 18-20 significantly increased with the trains per hour on the Northern Line introduction of new rolling stock. Current between Sandhills and Liverpool Central, 3 car sets have a capacity of 303, the and the ability to provide additional cross- equivalent new sets by 2020 will have a river services (for instance from Wrexham) capacity of 437. cannot currently be readily accommodated. The ability to incorporate the Borderlands Line serving Bidston-Wrexham in to the Merseyrail network remains a LTRS aspiration.

Page | 41 Page 59 4 Related to constraint 2, the throat on the By the end of 2018 the approach and approach into Liverpool Lime Street acts platform configurations at Liverpool Lime as a constraint on the number of services Street will allow 8 car 319 sets to be per hour that can access the station. This accommodated. is due to the limited number and the current location of cross-over facilities on In the longer term the service pattern the Lime Street approach. could be altered via the delivery of High Speed services and the potential to reroute services via the Wapping Tunnel.

5 Platform lengths pose a significant This issue has largely been superseded capacity issue at several locations, by the introduction of the 4 car Class 319 particularly on the City Lines, with six-car trains on the City Line which has raised trains unable to call at a number of significantly the capacity of services on locations. the Liverpool to Manchester Victoria and Wigan/Preston services. The CLC (Liverpool-Warrington-Manchester Line) is still served by diesel trains, the issue of short platform lengths is resolved through selective door opening. This is not an issue on the Northern or Wirral Lines which can accommodate 6 car trains.

6 The West Coast Mainline between This is an issue which still needs to be Weaver Junction and Crewe is heavily resolved. It is identified as a priority utilised at present with a lack of available within the LCR Freight and Logistics rail paths. This limits the number of Strategy and will be taken forward in services per hour that can run between conjunction with Transport for the Crewe and Liverpool Lime Street. North.

7 Single-end termini create significant The single line termini do create a capacity issues on the Merseyrail network, constraint on the ability to operate an with Chester, Ormskirk, Kirkby and Hunts increased level of service and impact on Cross identified as particular constraints. the potential extensions of the network. Single-end terminals create longer For instance the single line into Kirkby has turnaround times and create conflicts a significant impact on how an extension between inbound and outbound services of electrification through Headbolt Lane on single-track sections. and on to Skelmersdale is achieved.

These issues will be addressed as individual projects are taken forward.

Page | 42 Page 60 8 The combination of extra freight trains This constraint remains and has been plus a parallel growth in passenger highlighted as a constraint within the services, driven by the Northern Hub developing Liverpool City Region Freight passenger service expansion (service and Logistics Strategy. This will be taken upgrade complete by 2018) and HS2 Phase forward in conjunction with Transport for 1 (opening in 2026), could prove difficult the North. to accommodate on both the Chat Moss and West Coast Mainline routes.

Connectivity Constraints - lack of geographical coverage of network

Constraint How addressed

9 The rail network does not always link The packages which aim to extend the places where people live to employment network are aimed at increasing the sites effectively and does not always offer attractiveness and availability of the rail sufficient service frequencies to allow network to improve accessibility to seamless commuting where it does; employment. For instance, the extension of the rail network through Headbolt Lane to Kirkby would open up the railway to a population which currently does not have access to the rail network.

10 There is evidence that transport networks This is being partially addressed

either side of the England/Wales border through the re-introduction of rail are developed partially in isolation from services on the Halton Curve branch, each other, leading to gaps in service initially serving Chester but with provision and difficulties in seamless cross options to connect to Wrexham and border journeys. For example, there are Bangor once sufficient rail capacity to no through-trains between Liverpool and these centres is addressed. North Wales Coast Line /Wrexham despite a desire to create a link between Further work is required on the Borderlands Liverpool John Lennon Airport and the Line to complement the Halton Curve work. A area (i.e. through Liverpool South Development Group has been set up to Parkway); consider the options for improvements on this service and a number of organisations are pressing for improvements through the new Wales and Borders franchise.

Page | 43 Page 61 11 There are no direct services Services will be operating between between Liverpool and Scotland, Liverpool and Scotland (Glasgow) from Liverpool and South West England, December 2018 operated by TPE; and or Liverpool and South Wales; from December 2019 to Edinburgh.

The potential to provide direct services to South Wales is enhanced through the delivery of the Halton Curve which with other line improvements being delivered (Chester-Wrexham) allows the potential operation of services between Liverpool and South Wales.

Liverpool City Region will lobby for other improvements to long distance services will be picked up through the franchising process.

12 There is a poor frequency of In the short term Liverpool City Region services (when compared to other are lobbying for the new WCP franchise cities of a similar size and to increase the service frequency for population) between London and services to Liverpool from the current 1 Liverpool; tph. The HS2 service specification for Liverpool is for 2 trains per hour from 2026. It is likely that additional service enhancements will be required beyond this time to accommodate forecast demand, requiring additional services between Liverpool and London.

Page | 44 Page 62 Infrastructure, Facilities and Rolling Stock Constraints

Constraint How addressed

13 The existing Merseyrail Electrics fleet Merseytravel is in the process of procuring will become life expired before 2020, on behalf of the Combined Authority 52 and could be replaced with new higher new units which will replace the current capacity rolling stock. Further additional Class 507/508 fleet. Delivery of the new rolling stock is likely to be required prior units is expected to take commence in to 2040 to cope with additional demand; 2019. The programme includes substantial improvement to the traction power supply for the Merseyrail network, as well as work to standardise the platform train interface and remodeling of the fleet depots at Kirkdale and Birkenhead North. The supply contract for the new trains will allow for additional units to be provided as required.

14 The lack of a coherent long-term rolling Rail North is, in conjunction with the train stock strategy for the North of England operators, leading on the rolling stock has created a significant rolling stock strategy for Northern and TransPennine constraint on services, with many local Express. Both Northern and TPE expect to services utilising older units with capacity have new trains deployed by 2019. and quality limitations. In addition, plans Liverpool City Region will continue to press to increase services between North West for new and refurbished stock to be England and Wales are limited in number provided on routes serving the City Region. due to a shortage of available rolling The provision of refurbished Class 319 units stock; on Northern services and the refurbishment of the Class 185 units for TransPennine services have seen significant improvement for passengers.

15 There are operational conflicts at Hunts These issues are still prevalent and have Cross West Junction between Merseyrail yet to be addressed. services and Cheshire Lines services, at Wavertree junction due to the merging of Merseytravel has raised these issues with routes, and at Sandhills due to the Network Rail. confluence of Northern lines; There are also line-speed constraints on the Chester line. This can perpetuate delay and limits the number of services per hour that can currently run through these areas;

Page | 45 Page 63 16 There is no connectivity provision for This constraint still exists. Merseytravel is services from the Cheshire Lines working with TfGM to consider potential Committee (CLC) rail line between improvements to services on this line and Liverpool, Warrington and Manchester, calls at Liverpool South Parkway. to use platforms 3 or 4 at Liverpool South Parkway, limiting flexibility in platform assignment;

17 The mix of (semi-fast and stopping) A study is currently being undertaken with services on the CLC constrains TfGM and Warrington Borough Council timetabling options and restricts some which is looking into potential options to stations to a single service per hour. improve the delivery of services on the CLC This is due to a lack of passing loops and route. constraints at the Manchester end of the railway;

18 There is a lack of Park and Ride capacity at Merseytravel is working with the wider city a number of stations on both the region district authorities to identify land Merseyrail and City Line networks. As an which could be used to provide additional example, the car park at Liverpool South capacity for park and ride facilities. St Helens Parkway is full by 08:00 and this is Junction and Bromborough are currently suppressing demand. being taken forward through the STEP process. Other sites, including Spital and St Helens Central, are sites for further potential car park expansions. 19 A lack of electrification on key routes has This remains an issue which will be partially led to inefficient operation of passenger addressed the delivery of specific projects services (relating to routes between across the network. Section 6 sets out the Liverpool, Manchester, and Wigan via St details of each project. The introduction of Helens, and between Chester and Crewe, new bi-mode trains on the network may also Warrington, North Wales and Wrexham). reduce the need for electrification of lines. This will be partially addressed by the electrification of the Chat Moss and St Helens routes later this year, however it remains an issue on lines with no identified electrification programme including the CLC;

Page | 46 Page 64 20 Infrastructure constraints exist on some These constraints continue to exist and the of the key diesel lines that serve parts of potential to improve this situation on each the City Region not associated with the line will be reviewed in the future. City Centre. Southport to Wigan, Preston to Ormskirk, and Wigan to Kirkby all have sections of single track or otherwise constrained running that limits the number of services that can effectively run on each route;

21 There is a significant capability gap The Chat Moss has been W10 cleared since for W10 gauge container freight 2015 between the Port of Liverpool and the West Coast Mainline, limiting rail freight growth in light of SuperPort proposals.

Funding Constraints

Constraint How addressed 22 Government funding is constrained at See Funding Constraints (section 5.16 – present due to the current austerity 5.25) measures. This places a requirement on sound economic cases for investment in order to stimulate potential funding source opportunities. In some cases this has hindered the progression of schemes whose main benefits are social or strategic rather than economic;

23 The current prevalence of split-ticketing This is still an issue which Merseytravel as a result of the availability of cheaper continues to raise within the Rail industry advance purchase singles can lead to a when possible. The development of SMART significant skewing of demand data ticketing may address this issue. obtained via the Lennon database. This in turn can cause issues in planning effective services and meeting demand.

Page | 47 Page 65 Appendix 2 – Original Work Packages

This lists the original 12 work packages, including their constituent components

Improving National and Passenger Freight Connections (CP5-CP7)

 Increase inter-peak frequency of Liverpool – London and extending the Crewe – London interurban services to operate to London  Extend platforms 3 and 4 at Liverpool South Parkway to allow longer trains to call  Resolve conflict between passenger and freight services included grade separated junctions between the Bootle Branch, West Coast Mainline and Chat Moss route  New direct routes between Liverpool and Glasgow Central/Edinburgh Waverley, Stoke/Derby/Leicester and Bristol/Cardiff

Merseyrail Growth Enabling (CP5-CP8)

 Replacing Merseyrail Replacing Merseyrail Rolling Stock with higher capacity, high quality heavy rail units with provision for dual voltage units  Future proofing the power requirements of the Merseyrail network by undertaking a full power upgrade  Reducing operational constraints at Liverpool Central by introducing a turnback facility at Liverpool South Parkway  Increasing rail capacity across the network  Increasing Merseyrail depot capacity with a new facility at Birkenhead Central  Introducing operational efficiencies

Liverpool City Centre Capacity (CP6-CP8)

 Optimising passenger use at James Street and Moorfields stations  Full implementation of the Liverpool Central Station passenger capacity enhancements scheme  Improving rail capacity at Lime Street Station (to accommodate additional services including HS2 proposals) as part of a wider multimodal interchange scheme for the station and a large- scale redevelopment of the area  Assessing requirement for a new station in Liverpool City Centre

City Line Enhancements (CP5-CP7)

 Re-use of Wapping Tunnel and new underground connections into burrowing junctions south of Central on the Northern Line to allow trains to run between Central and Edge Hill and beyond  Increasing capacity at Wavertree Junction for services between Mossley Hill and Edge Hill  Extending Merseyrail services between South Parkway and Airport / Speke / Runcorn  Connecting the Wirral, Northern and City Lines via the Stock Interchange and Wapping Tunnels Page | 48 Page 66  Creating new stations serving the Universities and Smithdown Road corridor  Capitalising on the opportunities of substantially enhanced services between Liverpool, Manchester, and Wigan as a results of Northern Hub and electrification investment

Cheshire Lines Committee Route Enhancements (CP5-CP8)

 Electrification and capacity enhancements on the CLC line to facilitate increased frequency  Extension of Merseyrail services via the CLC to Warrington Central and beyond  New connection between CLC and West Coast Mainline (Liverpool Branch) to provide capacity relief at Hunts Cross junction  New stations at Tarbock Interchange (or Halewood South) and Warrington West

Halton Curve (CP5-CP7)

 Provision of Halton Curve in upcoming resignalling of Weaver-Wavertree Junction line section:  Reinstatement of two-way frequent running on Halton Curve  New routes between Liverpool and Chester, Wrexham, North Wales and Cardiff/South Wales  Provision of a new halt on the Halton Curve itself at Beechwood in Runcorn to serve a key area of growing employment

Improved Connections to Chester and Ellesmere Port (CP6-CP8)

 Electrification of Chester-Crewe and extension of Merseyrail services from Chester to Crewe  New stations at Ledsham and potentially on Chester-Crewe Line  Electrfication of the North Wales Mainline providing the potential to run electric Pendelinos between London, Chester and North Wales  Electrification of the Chester-Warrington line, and Ellesmere Port-Helsby line allowing regular electric services to run on these lines  New route between Chester and Leeds via Newton-le-Willows  Increased service frequencies

Ormskirk-Preston enhancements (CP6-CP7)

 Electrification of the Ormskirk-Preston line, with required remodelling, resignalling and line speed improvements, and extension of Merseyrail operations to Preston  Reinstatement of the Burscough Curves between Ormskirk/Preston and Southport directions  Creation of a two level interchange station at Burscough Bridge allowing connections between Ormskirk/Liverpool service and Southport/Wigan services Page | 49 Page 67 Kirkby – Wigan Line (CP6)

 Electrification of the line between Kirkby and Wigan Wallgate including new electric spurs between Rainford and Skelmesdale, and between Upholland and Skelmersdale  New stations at Headbolt Lane (Kirkby) and Skelmersdale  Increased service frequencies between Kirkby and Manchester Victoria/Rochdale line with potential through services to Liverpool

Borderlands (Wrexham – Bidston) Line Enhancements (CP5-CP7)

 Service enhancements on the Wrexham – Bidston Line  Line electrification and direct connectivity and integration with the Merseyrail Wirral Line  New stations at Beechwood (Wirral), Woodchurch and Deeside Industrial Park

Mixed Passenger & Freight Use on Current Freight Only Lines (CP7-CP8)

 Upgrade of North Mersey Branch and Bootle Brancline to passenger services  New routes between Liverpool and Ormskirk via North Mersey Branch, and between Edge Hill and Bootle via Bootle Branch  New stations at Anfield, Tuebrook and Edge Lane

Selected New Stations (CP5-CP7)

 New stations at Carr Mill, Ditton, Maghull North, St James, Vauxhall, Town Meadow, and other locations (mentioned in the packages above)

Page | 50 Page 68 Appendix 3 – New Stations

Liverpool City Region has developed a New Stations assessment tool which reviews the potential for new station locations across the network, mostly identified in 2014 and predominantly within the City Region; some locations do fall just outside its boundaries but are considered important in serving the City Region rail network. An initial assessment clarified whether the proposals aligned with the Long Term Rail Strategy, whether they could be considered short term projects, and which could be delivered on the current network, or long term projects which required further rail development work such as new lines or connections.

Performance at this stage is to provide a comparison between possible stations. Further work is required to identify whether a business case exists for each of the possible stations listed.

Short Term Schemes Long Term Schemes

Performed well St. James Liverpool City Centre Smithdown Road Liverpool John Lennon Airport University Vauxhall

Performed moderately well Carr Mill Skelmersdale/Headbolt Lane Chinatown Beechwood (Runcorn) Deeside Industrial Park Estuary Commerce Park Ditton Speke Ledsham Tarbock Interchange

Performed less well Beechwood (Wirral) Anfield Halewood South Burscough Interchange Town Meadow Edge Lane Woodchurch Tuebrook

Page | 51 Page 69 Appendix 4 – Timeline

2017-22 2022-27 2027+ Merseyrail Rolling Stock delivered

Maghull North delivered

Halton Curve delivered

Newton-le-Willows refurbishment delivered

Chester-Newton service delivered

Completed/Committed Optimisation of Weaver Junction

HS2 Phase 1 HS2 Phase 2

NPR Enhancement

Develop Improved Long Distance Links

Borderlands Service Enhancement

Other service development eg Chester- Service Development Service Crewe

Borderlands Infrastructure Development Borderlands Infrastructure Upgrade

Liverpool Central Development Liverpool Central Delivery

Lime Street Development Lime Street Delivery

Wapping Tunnel Development Wapping Tunnel Delivery

Skelmersdale Link Development Skelmersdale Link Delivery

Ormskirk-Preston Development Ormskirk-Preston Delivery

CLC Development CLC Delivery Infrastructure Development Infrastructure Airport Link Development Airport Link Delivery

Bootle Branch Development Bootle Branch Delivery

Earlestown Grade Separation

Secure adequate additional freight paths on the West Coast Main Line Grade separation at Earlestown West

Grade separation at Winwick Junction

Upgrade loading gauge between

Freight Development Freight Warrington and Wirral to W10

Bootle Branch/Chat Moss Grade Separation

Page | 52 Page 70 References

1 Long Term Rail Strategy – Final Strategy Summary Report (August 2014) http://tinyurl.com/zxl7o9x

2 Building Our Future – Liverpool City Region Growth Strategy (June 2016) https://www.liverpoollep.org/wp-content/uploads/2016/06/SGS-Final-main-lowres.compressed.pdf

3 Liverpool City Region Devolution Deal https://www.gov.uk/Government/publications/liverpool-devolution-deal

4 The Northern Powerhouse Independent Economic Review – Final Executive Summary Report (June 2016) http://www.transportforthenorth.com/wp-content/uploads/Northern-Powerhouse-Independent-Economic- Review-Executive-Summary.pdf

5 Report from Sir Peter Hendy to the Secretary of State for Transport on the replanning of Network Rail's Investment Programme (November 2015) http://www.networkrail.co.uk/wp-content/uploads/2015/11/hendy-report.pdf

6 Report of the Bowe Review into the planning of Network Rail’s Enhancements Programme 2014-2019 (November 2015) https://www.gov.uk/Government/uploads/system/uploads/attachment_data/file/479560/bowe-review.pdf

7 The Shaw Report - The future shape and financing of Network Rail (March 2016) https://www.gov.uk/Government/uploads/system/uploads/attachment_data/file/510180/shaw-report-the- future-shape-and-financing-of-network-rail-print.pdf

8 Report of the Hansford Review to consider third party investment in and infrastructure delivery on the national rail network (June 2017) https://16cbgt3sbwr8204sf92da3xxc5m-wpengine.netdna-ssl.com/wp-content/uploads/2017/07/The- Hansford-Review.pdf

9 Growthtrack 360 Campaign http://www.growthtrack360.com/ 10 TfN – Northern Freight and Logistics Report (September 2016) http://www.transportforthenorth.com/wp-content/uploads/TfN-Freight-and-Logistics-Report.pdf

Page | 53 Page 71 This page is intentionally left blank APPENDIX TWO Summary of Long Term Rail Strategy Packages

Summary of contents detailed in packages contained within the Long Term Rail Strategy

(1) Improving National Passenger and Freight Connections (CP5 – CP7) Components  Increasing inter-peak frequency of Liverpool - London services and extending the Crewe - London interurban services to operate to Liverpool;  Extending platforms 3 and 4 at Liverpool South Parkway to allow longer trains to call;  Resolving conflict between passenger and freight services including grade separated junctions between the Bootle Branch, West Coast Mainline and Chat Moss route; and  New direct routes between Liverpool and Glasgow Central / Edinburgh Waverley, Stoke / Derby / Leicester, and Bristol / Cardiff.

(2) Merseyrail Growth Enabling (CP5-CP8) Components  Replacing Merseyrail Rolling Stock with higher capacity, high quality heavy rail units with provision for dual voltage units;  Future proofing the power requirements of the Merseyrail network by undertaking a full power upgrade;  Reducing operational constraints at Liverpool Central by introducing a turnback facility at Liverpool South Parkway;  Increasing rail capacity across the network;  Increasing Merseyrail depot capacity with a new facility at Birkenhead Central; and  Introducing operational efficiencies.

(3) Liverpool City Centre Capacity (CP6 – CP8) Components  Optimising passenger use at James Street and Moorfields stations;  Full implementation of the Liverpool Central Station passenger capacity enhancements scheme;  Improving rail capacity at Lime Street Station (to accommodate additional services including HS2 proposals) as part of a wider multimodal interchange scheme for the station and a large-scale redevelopment of the area; and  Assessing requirement for a new station in Liverpool City Centre.

(4) City Line Enhancements (CP5 – CP7) Components  Re-use of Wapping Tunnel and new underground connections into burrowing junctions south of Central on the Northern Line to allow trains to run between Central and Edge Hill and beyond;  Increasing capacity at Wavertree Junction for services between Mossley Hill and Edge Hill;  Extending Merseyrail services between South Parkway and Airport / Speke / Runcorn;

Page 73  Connecting the Wirral, Northern and City Lines via the Stock Interchange and Wapping Tunnels;  Creating new stations serving the Universities and Smithdown Road corridor; and  Capitalising on the opportunities of substantially enhanced services between Liverpool, Manchester, and Wigan as a results of Northern Hub and electrification investment.

(5) Cheshire Lines Committee (Liverpool – Warrington – Manchester) Route Enhancements (CP5 – CP8) Components  Electrification and Capacity Enhancements on the Cheshire Lines Committee line to facilitate increased frequency, regular clock-face stopping services as well as higher quality semi-fast trains;  Extension of Merseyrail services via the Cheshire Lines Committee to Warrington Central and beyond;  New connection between Cheshire Lines Committee and West Coast Mainline (Liverpool Branch) to provide capacity relief at Hunts Cross junction; and  New stations at Tarbock Interchange (or Halewood South) and Warrington West.

(6) Halton Curve (CP5 – CP7) Components  Provision for Halton Curve in upcoming resignalling of Wavertree – Weaver Junction line section;  Reinstatement of two-way frequent running on Halton Curve;  New routes between Liverpool and Chester, Wrexham, North Wales and Cardiff / South Wales; and  Provision of a new halt on the Halton Curve itself at Beechwood in Runcorn to serve a key area of growing employment.

(7) Improved Connections to Chester and Ellesmere Port (CP6 – CP8) Components  Electrification of Chester - Crewe line and extension of Merseyrail services from to Crewe;  New stations at Ledsham and potentially on Chester – Crewe Line;  Electrification of the North Wales Mainline providing the potential to run electric Pendolinos between London, Chester and North Wales;  Electrification of the Chester – Warrington line, and Ellesmere Port - Helsby line allowing regular electric services to run on these lines;  New route between Chester and Leeds via Newton-le-Willows; and  Increased service frequencies.

Page 74 (8) Ormskirk – Preston Enhancements (CP6 – CP7) Components  Electrification of the Ormskirk – Preston line, with required remodelling, resignalling and line speed improvements, and extension of Merseyrail operations to Preston;  Reinstatement of Burscough curves between Ormskirk / Preston and Southport directions; and  Creation of a two-level interchange station at Burscough Bridge allowing connections between Ormskirk / Liverpool services and Southport / Wigan services.

(9) Kirkby - Wigan Line (CP6) Components  Electrification of the line between Kirkby and Wigan Wallgate including new electric spurs between Rainford and Skelmersdale, and between Upholland and Skelmersdale;  New stations at Headbolt Lane (Kirkby) and Skelmersdale; and  Increased service frequencies between Kirkby and Manchester Victoria / Rochdale line with potential through-services to Liverpool.

(10) Borderlands (Wrexham – Bidston) Line Enhancements (CP5 – CP7) Components  Service level enhancements on the Wrexham – Bidston Line;  Line electrification and direct connectivity and integration with the Merseyrail Wirral Line; and  New stations at Beechwood (Wirral), Woodchurch and Deeside Industrial Park

(11) Mixed Passenger & Freight Use on Current Freight-Only Lines (CP7 – CP8) Components  Upgrade of North Mersey Branchline and Bootle Branchline to passenger services;  New routes between Liverpool and Ormskirk via North Mersey Branch, and between Edge Hill and Bootle via Bootle Branch; and  New stations at Anfield, Tuebrook and Edge Lane.

(12) Selected New Stations (CP5 – CP7) Components  New stations at Carr Mill, Ditton, Maghull North, St James, Vauxhall, Town Meadow, and other locations (mentioned in the other packages above).

Page 75 This page is intentionally left blank Agenda Item 6

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 November 2017

Authority/ Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

Key Decision

REPORT OF THE LEAD OFFICER: TRANSPORT

PROPOSALS FOR ALLOCATING THE 2018/19 TRANSPORT INVESTMENT FUND BUDGET

1. PURPOSE OF REPORT

1.1 The aim of this report is to recommend that the Combined Authority agrees to the proposal as set out in this report, in respect of the transport funds that form part of the Single Investment Fund for 2018/19. These proposals, if agreed, will inform the Combined Authority’s 2018/19 Budget.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:-

a) Approves the proposed allocation of funds for transport activities, that form part of (but will sit outside) the formal Single Investment Fund process, as shown in Tables 3 and 4 below, and which will inform the Combined Authority’s budget proposals for 2018/19; b) Notes that a funding agreement will be developed between the Combined Authority and the constituent local authorities to ensure that these funds are used for their intended purpose, in line with the Department for Transport’s funding conditions associated with the Liverpool City Region Single Pot; c) Delegates authority to the Lead Officer: Transport, in consultation with the Portfolio Lead, Transport, to ensure that the programmes developed as part of the proposals within this report deliver against the Liverpool City Region/Combined Authority Priorities; and d) Requests Transport Advisory Group to monitor the progress of schemes throughout 2018/19.

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3. BACKGROUND

3.1 The Combined Authority will be aware that all transport funds now form part of the Single Investment Fund, which is governed by an Assurance Framework. As will be seen from the Assurance Framework extract below, provision was made for £26.5 million of transport funds to be detached from the main Single Investment Fund allocation and for them to be allocated formulaically for the 2016/17 financial year:-

“This assurance framework is for the Liverpool City Region SIF which includes….£26 million p.a. Single Transport Pot (part of the devolved single pot allocation). For 2016/17, the Liverpool City Region Combined Authority has allocated this funding to transport activities on a formulaic basis and partners will receive this funding without the need for further prioritisation. The process for allocating the consolidated transport funding from 2017/18 will be subject to review by the Liverpool City Region Mayor in line with their responsibilities outlined in the Devolution Deal….;”

3.2 At the meeting of the Combined Authority on 3 February 2017, a more refined approach for allocating funds in 2017/18 was agreed. This did maintain an element of formulaic reallocation (Capital Maintenance and Integrated Transport Block) reflecting the evolving nature of the evidence base, which was not sufficiently mature to move to a fully prioritised approach. It will be appreciated, therefore, that there is no formal agreement beyond 2017/18 for these transport funds to be managed in a way other than through the Single Investment Fund and via the provisions set out in the Assurance Framework (i.e. through the WebTAG process).

Table 1: Liverpool City Region Single Pot

3.3 In view of the ongoing move from the way that transport is delivered at a local level to a more co-ordinated and streamlined approach across the Liverpool City Region as a whole, a derogation from the assurance framework is needed for a further 12 months (2018/19 financial year), to allow the transport funding to remain as a separate block outside of the Single Investment Fund and be managed formulaically.

4. PROPOSALS

4.1 In recognition of the Devolution Deals and that a more refined and evidence-led approach was required to aid the prioritisation and commissioning of schemes and interventions which moved away from historic formulaic allocations, the Transport Advisory Group duly tasked the Key Route Network Group with identifying initial proposals for the ‘transport fund’ for the forthcoming 2018/19 financial year.

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4.2 However, it has to be recognised that there are few alternatives to the Integrated Transport Block for the funding of localised, lower cost, but nonetheless, vital ‘minor works’ which, for example, secure local safety schemes that make significant contributions to the recently adopted Liverpool City Region Road Safety Strategy. Most alternative opportunities for ‘minor works’ funding is reliant on competitive bidding and therefore not guaranteed. In addition, if the Liverpool City Region was reliant upon competitive bidding for minor works capital programmes, this would likely result in a stop/start programme of works which, in itself, would be inefficient.

4.3 Similarly, Capital Maintenance is the only guaranteed funding for highway maintenance activities across the Liverpool City Region road network, i.e. competitive bidding opportunities do arise and the Liverpool City Region has been successful in some cases, but success is not guaranteed.

4.4 It is also necessary to fund the creation of a strong evidence base/technical modelling/ data collection to support the development of future transport investment pipelines and competitive bid submissions.

4.5 Transport Advisory Group, as recommended by the Key Route Network Group, has discussed the options available for this ‘transport’ fund which reflect the issues as outlined above, take notice of the long term aspirations of the Liverpool City Region and recognise the need to deliver against the aspirations of the Liverpool City Region Metro Mayor. Therefore, having had these discussions and in recognition of these varying expectations, Transport Advisory Group propose to develop the 2018/19 Transport Fund along the following principles.

Top-slice Capital Maintenance for Exclusive Investment in the Key Route Network

4.6 In December 2014, the Department for Transport announced the indicative 2018/19 Capital Maintenance allocations for the Liverpool City Region as shown in Table 2 below, noting that these will be altered as a result of a data refresh by Department for Transport.

Table 2: Department for Transport Indicative 2018/19 Capital Maintenance Allocations Council 2018/19 Indicative Band 3 (highest band = needs/formula allocation 100% of maximum incentive) (£m) (£m) Halton 1.793 0.373 Knowsley 1.490 0.310 Liverpool 3.391 0.706 Sefton 2.329 0.485 St. Helens 1.947 0.405 Wirral 2.660 0.554

4.7 Subject to any changes resulting from Department for Transport’s data refresh and final allocations, this would result in a total Liverpool City Region Capital Maintenance allocation of £16.433m.

4.8 As a Combined Authority, there has been an expectation from central government that the Liverpool City Region will move toward identifying a Key Route Network of locally strategically significant roads (which has now been done) and that as such, there is

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also an expectation that appropriate maintenance and investment will be directed locally to this Key Route Network. Much work has already been undertaken by the Key Route Network Group in establishing the network and developing the necessary framework to support it. It is therefore now proposed that a portion of the Capital Maintenance Allocation be allocated specifically to the Liverpool City Region Key Route Network.

4.9 Based upon the level of previous bids to the Department for Transport from the Liverpool City Region for Capital Maintenance schemes on the Key Route Network an allocation of 18% from the proposed Capital Maintenance Allocation is proposed amounting to approximately £3m.

4.10 The Key Route Network represents circa 11% of the total Liverpool City Region network and maintenance interventions will generally be more costly than on non-Key Route Network roads. Furthermore, in its calculations, the Department for Transport proportion 25% of funding to ‘A’ roads which broadly make up the Key Route Network and emerging data from the Key Route Network Carriageway Asset Management Plan condition assessment indicates that maintenance should be considered on circa 24% of the Key Route Network.

4.11 Accordingly, the proposed allocation of 18% is considered to be a reasonable first year Key Route Network allocation under the new approach to funding distribution, which can be reconsidered in future years based on the Carriageway Asset Management Plan.

4.12 It is of note that the Carriageway Asset Management Plan is expected to report in full toward the end of the calendar year and it is proposed that this will inform the evidence base upon which to prioritise the proposed £3m Key Route Network portion of the Capital Maintenance fund. This will therefore be the subject of a separate future report and associated delivery programme.

4.13 The Key Route Network allocation could also form match for any potential future Highways Challenge Fund, Single Investment Fund or Local Growth Fund bids, thereby effectively increasing the available budget and with potential scope for central delivery subject to the appropriate Combined Authority approvals and resources being in place.

Distribution of Remaining Capital Maintenance

4.14 Once the Key Route Network provision has been allocated, it is proposed that the remaining Capital Maintenance should be distributed by the Combined Authority across the Liverpool City Region districts to reflect the Department for Transport’s own distribution calculation when issuing Capital Maintenance to the Liverpool City Region.

4.15 The Combined Authority is reminded that the Department for Transport’s Capital Maintenance is the only guaranteed source of capital funding to districts for local road maintenance schemes.

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4.16 Table 3 below details the proposed percentage distribution of the remaining Capital Maintenance to the six local highway authorities, based on an established Department for Transport formula, and the actual allocations this would result in per Council.

Table 3: Suggested Distribution of Remaining 2018/19 Capital Maintenance Fund Knowsley Liverpool Sefton St Helens Wirral Halton Total % * 10.95% 24.92% 17.11% 14.30% 19.54% 13.18% 100%** £m 1.471 3.348 2.298 1.921 2.625 1.770 13.433 *Both the Base Element and the Incentive Element **For the purposes of this table the % are shown to 2 decimal points

Integrated Transport Block

4.17 From the £26.500 million per annum total ‘Transport Investment’ pot, there is a balance of circa £10m once the Capital Maintenance element is deducted and this forms the Integrated Transport Block. This fund needs to be allocated in a way that supports the Mayoral Combined Authority’s priorities and the Liverpool City Region’s key strategic themes.

4.18 The Combined Authority is asked to agree retaining a formulaic allocation of Integrated Transport Block to all partners for 2018/19, but with an emphasis to deliver interventions which support the Mayoral and Liverpool City Region priorities and strategies e.g. Liverpool City Region Road Safety Strategy, Liverpool City Region Rail Strategy, Local Journeys Strategy, together with those Liverpool City Region Strategies that are yet to be fully approved/ developed e.g. an Air Quality Strategy.

4.19 To support this recommendation, it is proposed that each Liverpool City Region partner be required to submit a proposed programme of works/schemes to Transport Advisory Group for consideration. It is recommended that authority to agree the schemes in line with the priorities set out here is delegated to the Lead Officer: Transport in consultation with the Portfolio Lead, Transport. This would include putting in place an agreement is required between the Combined Authority and Councils to satisfy Department for Transport Grant Funding conditions.

4.20 It is also proposed that each partner be required to report back to Transport Advisory Group regarding scheme progress and budget expenditure, at an appropriate future date and that this requirement be incorporated into a funding agreement between the Combined Authority and each Liverpool City Region partner i.e. each Council and Merseytravel.

4.21 The Combined Authority is asked to delegate this provision to Transport Advisory Group to manage on its behalf. This measure is proposed to streamline the timescales involved in each partner submitting their programmes and gaining approval, which in turn should result in each partner ensuring their specific programme will be delivered in a timely manner i.e. within the 2018/19 financial year.

4.22 Adopting this approach to submit a programme prior to gaining funds will provide assurance and prevent any diversion of such monies in non-transport schemes, together with an element of prioritisation based on the Mayoral Combined Authority priorities. It is considered vital that this funding is retained (and potentially bolstered)

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at a local level given that it is the only guaranteed fund available for road safety engineering schemes, for example, at present.

4.23 It is proposed that the distribution of Integrated Transport Block follow similar principles agreed for 2017/18 allocations, including £1m for maintaining the Liverpool City Region’s ability to provide evidence to support its transport priorities. This is shown in Table 4 below.

Table 4: Proposed allocation of 2018/19 Integrated Transport Block Description Budget (£m) Build and maintain the Liverpool City Region’s wider evidence 1.0 base (including transport modelling, monitoring, data collection, meta-evaluation and tackling Low Carbon and Congestion) Bus Alliance support 0.5 (excl. Liverpool City Region Devolution Deal commitments) Rail enhancements 0.5 (excl. Liverpool City Region Devolution Deal commitments) Local transport priorities 5.5 (funding allocated on a population basis to local authorities* ) Halton (0.46) Knowsley (0.53) Liverpool (1.74) St Helens (0.64) Sefton (0.99) Wirral (1.15) Combined Authority Priorities and /or Liverpool City Region 2.5 Strategic Priorities TOTAL 10.0 * Population shares based on 2016 mid-year statistics: Halton - 8.28%, Knowsley - 9.64%, Liverpool - 31.6%, St Helens - 11.64%, Sefton - 17.89%, Wirral 20.95%

4.24 However, unlike in 2017/18, the Liverpool City Region partners will not be in a position to identify a ‘development budget’ from the Integrated Transport Block due to the Department for Transport restrictions on the use of capital grants.

4.25 It is proposed, therefore, that as an alternative an allocation of £2.5m be set aside to support the Combined Authority priorities at a ‘strategic level’, e.g. Cycling and Walking via the Local Journeys Strategy Implementation Plan, Road Safety engineering works to support the Road Safety Strategy objectives, and air quality initiatives which could be forthcoming from the Air Quality Feasibility Study which is soon to be commissioned. It is noted that all these priorities currently have no identified strategic budget.

4.26 The Combined Authority is asked to once again delegate authority to agree the projects to the Lead Officer: Transport in consultation with the Portfolio Lead, Transport: the overall management of this will be overseen by the Transport Advisory Group in the interests of efficiency.

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5. GOVERNANCE

5.1 As discussed above, the Combined Authority’s Treasurer would ensure a funding agreement is developed between the Authority and each of the fund’s recipients, to safeguard that the monies are used for transport purposes. This is in line with grant conditions set by the Department for Transport.

6. RESOURCE IMPLICATIONS

6.1 Financial Implications

The financial implications are covered in the main section of this report.

6.2 Human Resources

None as a direct result of this report.

6.3 Physical Assets

This report will provide resources to Merseytravel and Liverpool City Region Councils to undertake asset management and maintenance functions along with road/public transport infrastructure improvements for public, private and commercial traffic on both the key route network and local roads to improve traffic flows, ease congestion and promote economic growth.

6.4 Information Technology

There are no Information Technology implications arising from the implementation of the recommendations in this report.

7. RISKS AND MITIGATION

7.1 There are risks to the condition and future development of the transport infrastructure within the City Region, including public transport, the Key Route Network and local roads, if insufficient resources are available for maintenance and investment. The distribution of this funding is intended to mitigate these risks for 2018/19.

8. EQUALITY AND DIVERSITY IMPLICATIONS

8.1 Members are reminded that under Public Sector Equality Duty, the Combined Authority has a duty to eliminate discrimination, advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. Whilst the level of detail contained within this budget does not lend itself to a full appraisal of the operational implications with respect to equality and diversity, it is possible that there could be resultant implications for people who share a protected

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characteristic, for example older disabled people. Therefore whilst there are no issues with the budget itself, any actions undertaken as part of the management of any schemes, the equalities consequences will be fully appraised and considered as part of the process, and any negative implications for any of the protected characteristics will be mitigated, where possible, subject to available resources.

9. COMMUNICATION ISSUES

9.1 None as a direct result of this report.

10. CONCLUSION

10.1 The Combined Authority is invited to consider and approve the above approach, to allow suitable proposals to be presented to the Liverpool City Region Combined Authority in the context of the 2018/19 budget setting process.

FRANK ROGERS Lead Officer: Transport

Contact Officers Mick Noone, Chair of Transport Advisory Group 0151 330 1081 Sean Traynor, Knowsley Council 0151-443 2699 Barbara Wade, Merseytravel 0151 330 1852

Page 84 Agenda Item 7

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 November 2017

Authority/Authorities Affected: ALL

EXEMPT/CONFIDENTIAL ITEM: NO

REPORT OF THE LEAD OFFICER: ENERGY AND RENEWABLES

MERSEY TIDAL PROJECT UPDATE

1. PURPOSE OF REPORT

1.1 The purpose of this report is to update the Combined Authority on the progress of the Mersey Tidal project and seek in principle approval to explore budget options to progress key project requirements.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:

a) To note the appointment of Mr Brent Cheshire as Chair of the Mersey Tidal Commission for an initial 12 month period from November 2017; b) To note the appointment of DLA Piper to provide legal services for the formation of the Mersey Tidal Special Purpose Vehicle; and c) See, in principle approval to explore budget options and procurement of technical and financial advisors to support the Mersey Tidal project through Financial Year 2018/19.

3. BACKGROUND

3.1 The Liverpool City Region considers tidal power to be a critical part of its strategic infrastructure going forward offering local, competitive and resilient energy and creating significant economic benefit.

3.2 Tidal energy would enhance an existing portfolio of energy infrastructure investments covering both generation and distribution. New forms of generation including offshore wind, biomass and energy from waste have significantly lifted the level of indigenous generation. New and enhanced electricity, gas and water systems have been created. New investors including DONG Energy, Lego Group, RWE, Iberdrola, Viridor Laing and Stobart Energy have invested over £4bn in the last five years. These company’s investments have proved successful with Liverpool City Region earning a reputation for positively and actively supporting

Page 85 investors and delivery partners to get complicated projects, often featuring new or innovative technology, delivered on time and to budget.

3.3 There have been a number of major studies conducted into the potential energy yield, location options and environmental impacts harnessing the power in the River Mersey’s tidal range would derive and entail. The studies have shown that, whilst not without significant technical and environmental challenges, there is a credible set of options available. The studies have also highlighted the urgent need to scope and refine the commercial case for such an investment.

3.4 The City Region is looking to accelerate the development of the project. This acceleration is both to create an attractive investment proposition and focus as a political priority for the UK Government.

3.5 Whilst the large-scale deployment of a tidal energy generation system would be new to the UK, the principle components of such a scheme (concrete structures, hydro turbines and sluices and in-river construction) are mature and well understood.

3.6 Liverpool City Region has seen several significant infrastructure schemes in recent years in the River Mersey and Liverpool Bay. The Mersey Gateway Bridge, the Liverpool 2 in-river container port and Burbo Bank Extension windfarm have all been delivered successfully for institutional and commercial investors. Allied to this recent construction experience is the world class knowledge base on tidal systems and hydrodynamics contained within the National Oceanography Centre (NOC) and the Institute for Sustainable Coasts and Oceans (ISCO) both at the University of Liverpool.

3.7 There are several opportunities potentially available from a tidal energy scheme in the River Mersey. There is the principle output of significant volumes (in excess of 700MW) of predictable, dispatchable renewable energy. In addition, depending on the choice of tidal technology to be deployed, there could also be positive opportunities from additional transport connectivity, regeneration options for areas impacted by the tidal scheme and flood management benefits across the Mersey basin both up and down stream.

3.8 An investment in a new form of renewable energy must also be shaped to maximise the opportunities for local supply chain and talent development. The City Region needs to maximise the wider socio-economic benefits associated with infrastructure investment.

4. MERSEY TIDAL COMMISSION

4.1 The Mersey Tidal Commission will be established to progress this work and the principal areas for its focus are:-

1. The Mersey Tidal project will need a robust economic, financial and technical business case creating for the project to be investable; 2. A Contract for Difference will be required to be approved by the Secretary of State for Business, Energy and Industrial Strategy and HM Treasury;

Page 86 3. A scheme of this magnitude and complexity will take around 6 years to get to Contract Award/Financial Close if appropriate resources are applied; 4. A Special Purpose Vehicle is under development to act as the project development vehicle; 5. A non-executive Mersey Tidal Commission Chair should be appointed to provide guidance, expertise and advocacy to the project; 6. Early engagement with Department for Business, Energy and Industrial Strategy, Crown Estate, Duchy of Lancaster and Treasury will be essential; 7. National Policy for tidal energy projects needs to be developed and linked to the development of an economic, financial & technical business case to be presented to Central Government; 8. Appropriate executive resources will need to be dedicated to the project. It is envisaged that resources will come from within the Combined Authority and from appointed consultants and advisors; and 9. Suitable Development Expenditure budgets will need to be scoped and secured for the duration of the project.

Indicative Project Timeline

4.2 A tidal project in the River Mersey or Liverpool Bay would represent one of the largest civil engineering projects in the UK. Initial indication suggests a project development span of around twelve years from commencement to completion. This timescale is reflected in the recent experience of the Mersey Gateway project.

4.3 Such a project will, inevitably, have significant impact on the river and the communities that surround it. This is recognised by both the project and UK Government and its regulators. There are significant regulatory and consenting processes that will need to be undertaken ahead of any Final Investment Decision.

4.4 These processes are generally well understood by the project. There is recent precedent and best practice that can be brought to the tidal project to mitigate development risk and reduce project costs. Data and practice from the recent development of Mersey Gateway, Liverpool 2 and Burbo Bank windfarms will be applied to the Mersey tidal project.

4.5 The following indicative milestones have been identified for the project:

 We would target Contract Award and commencement of construction by the end of the Mayor's second term;  We anticipate a Development Consent Order application to Department for Communities and Local Government could be made within the Mayor's first term with the decision occurring in the Mayor's second term;  2017/2018 – will focus on: - Developing project objectives – What is the primary objective of the Project? (e.g. generation of green and affordable energy; regeneration and rejuvenation either side of the River Mersey; creating a new transport link across the River Mersey and stimulating employment and investment in the Liverpool City Region). - What role does the Combined Authority wish to play in the project? - Establishing an Special Purpose Vehicle; - Securing initial exclusive rights from the Duchy of Lancaster;

Page 87 - Preparing economic, financial and technical business case for the Combined Authority and subsequently Central Government; and - Policy development and engagement with Central Government.

5. MERSEY TIDAL COMMISSION

5.1 The Mersey Tidal Commission will be established under the auspices of the Liverpool City Region Metro Mayor as an executive body to provide impartial, expert advice and make independent recommendations to the Metro Mayor on the options to exploit tidal infrastructure in the River Mersey and Liverpool Bay.

5.2 The Mersey Tidal Commission will operate independently, at arm’s length from the Metro Mayor. Its objectives are to:

1. Build an evidence base to support sustainable development of tidal projects 2. Develop viable commercial, technical and environmental cases for tidal projects 3. Work with Government and agencies to secure support for tidal energy projects in the Mersey 4. Develop investor confidence in tidal energy projects in the Mersey 5. Manage the development of the Mersey Tidal Special Purpose Vehicle

5.3 The Mersey Tidal Commission will advise the Metro Mayor on all aspects of tidal projects, defined as the following:

1. Energy generation, distribution and storage 2. Transport and connectivity 3. Water quality and flow 4. Flood risk management 5. Regeneration opportunities 6. Habitat and wildlife protection.

5.4 In carrying out its role, the Mersey Tidal Commission will produce the following:

1. Annual monitoring report taking stock of progress; 2. Reviews of the Commercial, Technical and Environmental cases for tidal energy in the River Mersey and Liverpool Bay; 3. A tidal energy investment prospectus; 4. A multimedia platform dedicated to tidal energy; and 5. A recommendations report for the Metro Mayor.

5.5 The Mersey Tidal Commission will be required to carry out its work in accordance with the remit and terms of reference set by the Metro Mayor, but in all other respects will have complete discretion to independently determine its work programme, methodologies and recommendations, as well as the contents of its reports and public statements.

5.6 Recommendations made by the Mersey Tidal Commission represent the views of the Mersey Tidal Commission and are not a statement of Metro Mayor policy. The recommendations should be robust, well-evidenced and prioritised according to the Mersey Tidal Commission’s remit, with due consideration given to a range of proposals.

Page 88 5.7 The Commission will have a Chair and between 4 and 12 other non-executive members, who will be appointed for terms of up to 4 years by the Metro Mayor. These members will be appointed for their specialist knowledge, experience and abilities.

5.8 The Metro Mayor will consult the Chair when appointing members and will have regard to the need to ensure the Commission has the right mix of skills, expertise and local knowledge to discharge its functions effectively. The Metro Mayor may also appoint a Deputy Chair from amongst the members and will consult the Chair before doing so.

5.9 The responsibilities of the Commission are to:

1. Through the Chair, provide impartial and expert advice to the Metro Mayor on tidal energy and associated infrastructure through assessment and specific studies 2. Ensure that recommendations are in line with the remit (including the fiscal remit) set by the Metro Mayor and the Combined Authority and that the Mersey Tidal Commission includes a transparent assessment of impact on costs to businesses, consumers, public bodies and other end users of infrastructure that would arise from implementing a proposal 3. Ensure that the evidence and analysis behind the recommendations is robust 4. Monitor the City Region’s progress in delivering endorsed recommendations through an annual monitoring report 5. In conjunction with the Metro Mayor, formulate a strategy and a work programme to deliver the MTCB’s objectives in line with the terms of this framework document

5.10 In addition to his or her responsibilities as a Commission member, the specific responsibilities of the Chair are:

1. Strategic leadership for the Commission, setting priorities and ensuring the independence of the Commission’s recommendations 2. Overseeing delivery of the Mersey Tidal Commission’s work, including specific studies and monitoring reports 3. Directing the other commissioners’ input, harnessing their skills, experience and expertise 4. Engaging with stakeholders, including government, industry, academia, interest groups and the public 5. Representing the Mersey Tidal Commission in public, including in the media and at public events 6. Ensuring that the work of the Commission and its members is reviewed and that they are working effectively 7. Consulting with the Metro Mayor on the balance of skills on the Commission and advising the Metro Mayor on the Commission’s needs when vacancies arise 8. Develop a code of practice and the ‘Code of conduct for board members of public bodies’, including the rules relating to the use of public funds and conflicts of interest.

Page 89 Chair of the Mersey Tidal Commission

5.11 Mr Brent Cheshire has been selected by the Metro Mayor to act as Chair of the Mersey Tidal Commission. This is a non-executive position and will be for an initial twelve-month period commencing in mid-November 2017.

5.12 Mr Cheshire has recently retired from the position of Executive Chairman of DONG Energy UK, the world’s largest developer of offshore windfarms. DONG Energy own and operate the Burbo Bank windfarms in Liverpool Bay. These represent an investment of over £2bn alongside significant local supply chain development and community investments. Investors in Burbo Bank Extension (opened in May 2017) include PKA (the Danish public-sector pension fund) and Lego Group. He has extensive knowledge and a thirty year track record in developing complex energy systems and bringing them to the investment market. He has held senior positions with IGas, Amerada Hess, Shell and KP Renewables. He is recognised internationally as a thought leader on renewable energy infrastructure investment and has strong links at the highest level within Government and regulators.

6. RESOURCE IMPLICATIONS

6.1 Financial

The Chair of the Mersey Tidal Commission working with Combined Authority officers will, subject to approval, explore budget options ahead of a submission to the Combined Authority in January 2018.

Key areas of planned expenditure for 2018/19 centre on the production of an outline business case for the project by March 2019. The business case will need to address statutory, regulatory and commercial issues derived from developing a significant piece of infrastructure in the Mersey. Legal, financial and technical advice will be required alongside an executive to manage the project.

6.2 Human Resources

An infrastructure project of this scale will require a dedicated executive resource to lead and manage the programme. At present, executive resource is being drawn from the LEP and Combined Authority partners. In order to move the project forward, an appropriate resource plan outlining resource requirements and where they could be drawn from will be drafted by the end of January 2018

6.3 Physical Assets

There are no specific Physical Assets implications associated with the implementation of the recommendations in this report.

6.4 Information Technology

There are no specific Information Technology implications associated with the implementation of the recommendations in this report.

Page 90 7. RISKS AND MITIGATION

7.1 The development of a commercially viable tidal energy system for the Mersey forms a key part of the Metro Mayor’s manifesto. Such a large-scale infrastructure project will take over ten years to deliver. It is critical that each stage of the project is completed sequentially and to a standard that ensures compliance with regulators and potential investors.

7.2 The recommendations in this report ensure that progress can be made in key areas to aid the production of the outline business case in March 2019. These elements will add financial value to the Mersey Tidal project and reduce regulatory and stakeholder risk.

8. EQUALITY AND DIVERSITY IMPLICATIONS

8.1 There are no specific Equality and Diversity implications associated with the implementation of the recommendations in this report.

9. COMMUNICATION ISSUES

9.1 The development of a Mersey tidal project is a key element of the Metro Mayor’s manifesto. It also features in the City Region’s Devolution Agreement. It is a long- term infrastructure project of national significance which has received heightened level of interest from national media and politicians over the last six months.

9.2 Due to the length of time such projects take to proceed through various regulatory, commercial and investment hurdles a strong communication plan will be required. This will keep key stakeholders informed and engaged with the project. It will allow strategic lobbying and information exchange with national Government and agencies. It will also engage with the investment community to stimulate appropriate interest and support.

9.3 The tidal project will follow a similar trajectory through the planning and regulatory approvals process to the Mersey Gateway. The Tidal Commission will utilise best practice developed during the Mersey Gateway project and use feedback from the Gateway Project Board.

9.4 The ability to translate a complicated, long duration infrastructure project like the Mersey Tidal project for key stakeholders and critically, the residents of the City Region has been identified as a key priority.

Page 91

10. CONCLUSION

10.1 The actions outlined in this report are a summary of progress made over the last six months. A high profile, well respected, leading figure from the renewables industry has been secured. A Special Purpose Vehicle that will secure value for the City Region from the project has been commissioned and engagement with national Government and agencies is underway and has been well received. The principle actions required to move the project forward during 2018 have been identified and will be fully costed ahead of a budget process to the Combined Authority.

10.2 The actions identified for 2018 are both necessary and deliverable within a commercially sustainable framework. They will add value to the project at each stage. The outline business case will act as the next major milestone on the project. The Combined Authority and key stakeholders will be kept informed through and up to this milestone.

CATHERINE GARNELL Lead Officer: Energy and Renewables

Contact Officer: Mark Knowles, Liverpool City Region LEP (0151 237 3949)

Appendices: Appendix One – Indicative timeline for Mersey Tidal Project

Page 92 APPENDIX ONE Page 93 Page This page is intentionally left blank Agenda Item 8

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 November 2017

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

Key Decision

REPORT OF THE LEAD OFFICER: SKILLS AND APPRENTICESHIPS

SKILLS INVESTMENT STATEMENT 2018/19

1. PURPOSE OF REPORT

1.1 The purpose of this report is to seek approval for the Liverpool City Region Skills Investment Statement 2018/19 of local needs.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:-

(a) Agree to pursue the enhanced influencing option to shape Adult Education Budget provision for residents in 2018/19; (b) Endorse the Liverpool City Region Skills Investment Statement 2018/19 of local needs as set out in Appendix One; (c) Request that recipients of Adult Education Budget grant funding reflect the strategic skills priorities in their 2018/19 provision and complete an Outcome Agreement to show how their funding allocation is to be deployed; (d) Request that the wider provider base operating in the Liverpool City Region reflect the Skills Investment Statement 2018/19 priorities in their delivery plans; and (e) Request that the Employment and Skills Board monitor the progress of the delivery of those actions throughout 2019/20.

3. BACKGROUND

3.1 As part of the devolution agreement with Government, the responsibility for the Adult Education Budget is being devolved to the Liverpool City Region: this funding supports the engagement of adults, to provide them with skills and learning needed for work or further learning. It funds a range of statutory entitlements for learners if they study for a first qualification at Level 2 and/or Level 3, including the development of English, Maths and Digital skills. The devolution of the funding will allow the Combined Authority to play a greater role in shaping local skills provision to meet local needs within the context of overall national policy. Page 95

3.2 The devolution was due to take place from 2018/19 but the timetable has been put back to 2019/20 owing to delays within Government and the legislative process. The Combined Authority has continued to express concerns to Government over the continual delays in this process. Government has now written to the Combined Authority with a choice of two transitional options for 2018/19:-

 Option 1 - Delegation under section 16 of the Localism Act 2011, whereby the Combined Authority would act as an agent of Government in commissioning Adult Education provision, with accountability for this funding remaining with the Secretary of State for Education; or  Option 2 - Influencing of provision, whereby the Combined Authority will be able to set out priorities to be reflected in local delivery.

3.3 Whilst the features of Option 1 would delegate relevant Adult Education functions and funding to the Liverpool City Region Combined Authority, the benefits of this approach are outweighed by the dis-benefits and risks, including the following:-

 Department for Education have yet to identify the full scope of the Delegation option and the way in which it will be implemented;  The specific details of how the operational readiness tests are to be assessed are not yet fully known;  It is unclear whether any funding would be available to support implementation costs nor when this would become available;  It is unclear on the extent to which the Combined Authority would be able to effect any change on provision or whether it would simply be an agent of national Government and its’ settled skills policy;  Operation of the delegation function would require a bespoke assurance framework to be developed in consultation with local partners, with the timescale to do this very tight;  The rules of engagement around the deployment of the funding have not been confirmed; and  The legal and contracting preparations have not been concluded and would require significant resourcing to deliver on time.

3.4 On the basis of there being insufficient information to make an informed decision to proceed, it is proposed that the delegation option (Option 1) is not pursued given the risks set out above.

3.5 There is, however, an ability to pursue an enhanced influencing option with providers in the deployment of the 2018/19 Adult Education Budget allocation (Option 2). This would enable the Combined Authority to gain traction over the provision being delivered by Colleges and Independent Training Providers in this transitional year. In order for this to happen, there needs to be a very clear statement of skills priorities for providers to be able to respond to. This statement of priorities is the Skills Investment Statement for 2018/19.

Page 96 4. SKILLS INVESTMENT STATEMENT 2018/19

Process

4.1 The Combined Authority was briefed on the interim findings of the Employer Skills Survey at its meeting on 15 September 2017. The final report of this survey is released in November 2017.

4.2 The findings of the Employer Skills Survey will be included within the long term Skills Strategy. Further consultations on this Strategy are ongoing and the final version will be available for consideration by the Combined Authority at a future meeting.

4.3 The planning cycles for Colleges and Independent Training Providers mean that they agree on their curriculum in November/December each year ahead of publishing course prospectuses in the New Year. This would mean that they would not be able to reflect the findings of the Skills Strategy into curriculum planning for 2018/19.

4.4 The Combined Authority has therefore developed a Skills Investment Statement 2018/19 which sets out initial priorities and conclusions from the Employer Skills Survey and Skills Strategy: this can be reflected in provision for 2018/19 and enables the enhanced influencing role set out above to be implemented. It also reflects the actions set out in the Combined Authority’s Single Growth Strategy. The Statement covers the provision funded through the Adult Education Budget, that funded by other national means (e.g. Education and Skills Funding Agency 16- 18 provision) and locally sourced funding.

4.5 The document builds upon rather than duplicates the actions of the Liverpool City Region Post-16 Area Based Review and is informed by new insight into skills demands, needs and training provision from the Liverpool City Region Employer Survey 2017. It is published ahead of a longer term Skills Strategy for Liverpool City Region and prior to the Combined Authority taking on responsibility for the devolution of the Adult Education Budget in 2019/20. In that case, it is the ‘first fruits’ of this work and provides an immediate focus for the provider base to plan 2018/19 activities in line with Combined Authority’s locally-determined priorities, first set out in the Area Based Review of Further Education.

4.6 The enhanced influencing role that the Combined Authority is seeking for 2018/19 will mean that recipients of Adult Education Budget funding will be held to account locally for delivery of the priorities set out in the Skills Investment Statement 2018/19. Colleges and Independent Taining Providers will also be asked to consider how these priorities are reflected in non Adult Education Budget funded provision.

Key issues

4.7 The draft Skills Investment Statement 2018/19 is attached as Appendix One. This has been subject to consultation with Colleges, Independent Training Providers and Councils. The identified key issues for focus are set out below and overleaf.

Page 97 4.8 Employment and Unemployment rates are improving but a gap remains to national levels. The employment and unemployment rates in the City Region have improved in recent years, but remain less favourable than national levels, particularly for females in work, unemployed males and employed and unemployed black and minority ethnic people.

4.9 There remains a high proportion of economically inactive residents. The City Region has had high levels of economically inactive residents for many years, and has the highest rate of residents on sickness benefits nationally.

4.10 Attainment at age 16 is below national levels and inhibits the development of technical skills. There is significant work under way in different areas to improve this. The attainment of GCSEs (Level 2) of residents at age 16 is below national levels. Although this gap is narrowed by age 19, it results in an attainment lag and lost opportunities to pursue academic routes post school and develop the Level 3 technical skills that are valued by employers, until later in life or not at all.

4.11 The implementation of apprenticeship funding and curriculum reforms has had an initial impact on provision. Overall apprenticeship starts locally are comparable with 2015/16, whilst nationally starts have fallen. 16-18 year olds apprenticeship starts locally are now lower than national rates whilst starts for those aged 25 and over have increased to a greater extent than nationally from the previous year. There is a risk on the viability of the provider base locally if the trend of falling starts continues.

4.12 The proportion of residents without qualifications remains high, particularly for over 50s. The proportion of residents in the City Region without a qualification has been high and although having fallen in recent years, this trend has recently reversed: this is most acute for residents aged over 50. Targeted efforts are required to narrow this gap.

4.13 The proportion of residents with mental health issues is rising. Residents with mental health issues has risen over a number of years. Services report residents presenting with an increased combination of more complex conditions.

4.14 Work readiness is generally good, but employer feedback suggests the need for improvement in the Health and Social Care, Visitor Economy and Manufacturing sectors. The Employer Skills Survey found that overall work readiness of new staff was higher in the City Region than nationally. However, employers from Health & Social Care and Visitor Economy sectors reported that new recruits were not as work ready as other employers.

4.15 Specific skills gaps in Digital, Manufacturing and Construction Sectors and in Leadership and Management need to be narrowed. The Employer Skills Survey also found that there were specific skills gaps in Digital, Manufacturing and Construction sectors. In addition, there are specific gaps in leadership and management skills, particularly for micro and large organisations.

Page 98 Key actions

4.16 The Statement then identifies a number of key actions to be implemented in 2018/19: these are for employment and skills providers, Councils, the Combined Authority and Government to implement. For ease of reference, these are categorised by the group of people or employers who will benefit from their implementation:-

16-24 year olds

 Combined Authority to commission additional wrap-around support (based upon previous experience and delivery) for 16-18 year olds at risk of being not in education, employment and training from European funds;  Colleges and Independent Training Providers should continue to support learners to achieve their Level 2 qualifications as soon as possible to enable progression to Level 3 academic and technical skills.

A Lifelong Skilled Workforce

 Support for those that require maths, English and digital skills needs to continue to be available and targeted for over 50s, including through Community Learning;  The Skills Commission will identify how collectively employers and individuals can take action and responsibility to improve the skills levels of older workers in the light of individuals being required to work for longer; this includes better approaches from employers to retaining existing staff and skills, retraining for employees and supporting individuals to refresh their skills and rethink their career choices later in life.

Adult Employability Skills

 Working collaboratively with all local partners, Colleges and Independent Training Providers need to consider how they can do more/adopt new ways to help economically inactive residents into work;  Combined Authority will commission additional employment support for groups which have a gap to overall employment rates from European funds;  Provision of employability skills to unemployed residents needs to be more tailored to the requirements of employers in Health & Social Care, Visitor Economy and Manufacturing sectors.

Sector specific actions

 Employers from Digital, Construction and Manufacturing need to articulate more effectively their specific technical skills needs to colleges and independent training providers: this can be organised through the LEP Sector Boards and College and Independent Training Provider Curriculum Networks in addition to the Skills for Growth Reports;  Colleges, Independent Training Providers and Universities need to scale up the provision of leadership and management training, possibly through apprenticeships, targeted in particular at micro employers: this may require new forms of delivery (e.g. online) to meet their needs.

Page 99 Apprenticeships

 Employers and providers must engage fully in the development of an Apprenticeship Growth Plan to identify how to grow the number, quality, level and breadth of apprenticeships;  Providers of apprenticeship training need to promote the benefits of recruiting 16-18 year olds to employers, to ensure employer succession planning and skills retention;  Colleges and Independent Training Providers should ensure that there is as much focus on apprenticeship completions as there is on apprenticeship starts to improve employee quality and retention, in the context of a long term contraction in the number of younger people entering the labour market in the Liverpool City Region.

Capacity building measures

 Providers should ensure that their staff are kept up to date on mental health issues and referral points to relevant healthcare provision as appropriate;  Combined Authority to broker relationships between mental health services, Colleges and Independent Training Providers to promote specialist services and referral points;  Colleges and Independent Training Providers to agree arrangements to secure greater alignment between Traineeships, Apprenticeship and Adult Education Budget provision linked to progression pathways;  Schools should ensure that more pupils are able to gain Level 2 qualifications at age 16, and the Regional Schools Commissioner to identify adequate support and progression routes to enable this;  Skills Commission should identify and promote Liverpool City Region’s competitive skills advantage;  Colleges and Independent Training Providers should maximise spend on local residents of their Adult Education Budget funding allocations to maintain locality grant levels ahead of devolution;  Combined Authority to lobby Government to improve access to data to reduce duplication of efforts between providers working to different Government Departments.

4.17 The Combined Authority are recommended to approve the Skills Investment Statement 2018/19 as attached as Appendix One. Colleges, Councils and Independent Training Providers will be asked to articulate how they are responding to the priorities set out, to cover provision funded by the Adult Education Budget and links to wider provision. This will be a summary of specific measures taken and a number of key performance measures to be tracked. The progress of this will be monitored by the Employment and Skills Board, with learning taken into the process for 2019/20.

5. RESOURCE IMPLICATIONS

5.1 Financial

There are no direct financial implications for the Combined Authority arising from the implementation of the recommendations in this report. Page 100

5.2 Human Resources

There are no direct Human Resources implications arising from the implication of the recommendations in this report.

5.3 Physical Assets

There are no specific Physical Assets implications associated with the implementation of the recommendations in this report.

5.4 Information Technology

There are no specific Information Technology implications associated with the implementation of the recommendations in this report.

6. RISKS AND MITIGATION

6.1 There is a risk that recipients of Adult Education Budget funding deliver national priorities but not local priorities. This has been mitigated by developing a Skills Investment Statement for 2018/19.

6.2 There is a risk that information on local priorities is not available in time to be reflected in curriculum planning. This has been mitigated by producing a timely Skills Investment Statement for 2018/19.

6.3 There is a risk that colleges and providers commit to deliver priorities but do not do so. This will be mitigated by those actions being monitored by the Employment and Skills Board and through the enhanced influencing role that the Combined Authority is looking to negotiate.

7. EQUALITY AND DIVERSITY IMPLICATIONS

7.1 Consultation has taken place with a wide range of stakeholders in the preparation of the Skills Investment Statement 2018/19, which has included specific feedback on groups with protected characteristics.

7.2 A full equality and diversity assessment will be conducted by all recipients of Adult Education Budget funding as they determine their provision.

8. COMMUNICATION ISSUES

8.1 The Skills Investment Statement 2018/19 has been subject to consultation with Colleges, Independent Training Providers and Councils. Feedback has also been received from Government funding agencies.

Page 101 8.2 The final version will be published on the Combined Authority and Employment and Skills Board websites, and circulated to recipients of Adult Education Budget grant funding and other key stakeholders. An event will be held to communicate the content of the Skills Investment Statement 2018/19 to stakeholders.

9. CONCLUSION

9.1 This report has sought approval for the Skills Investment Statement 2018/19 and set out why the Combined Authority wishes to pursue an enhanced influencing role for Adult Education Budget funding for 2018/19.

MIKE HARDEN Lead Officer: Skills and Apprenticeships

Contact Officers:- Sue Jarvis, Liverpool City Region Combined Authority (0151 330 1225) Rob Tabb, Liverpool City Region Combined Authority (0151 330 1250)

Appendices:- Appendix One – Skills Investment Statement 2018/19

Page 102

Skills Investment Statement 2018/19

Version 1.0

Page 103 Liverpool City Region Skills Investment Statement 2018/19

FOREWORD

Making sure that people have the skills to get a job and progress in work and employers have people with the right skills they need for growth is a key task for the Liverpool City Region Combined Authority. Improving skills levels will help to improve the productivity and economic output of our employers, as well as ensuring that they can benefit from this growth.

The devolution of the Adult Education Budget from 2019/20 provides an opportunity for greater local direction over skills provision. We will be better able to align skills delivery with the needs of our people and businesses. The Skills Investment Statement 2018/19 is an important step in that process as the Combined Authority sets out its immediate priorities for delivery.

Working together, we have made great strides in recent years, but there is more to be done to drive collaborative working across providers. Those areas for additional focus in 2018/19 are set out in detail in this document.

Steve Rotheram Cllr Ian Maher Liverpool City Region Metro Mayor Liverpool City Region Portfolio Lead, Skills and Apprenticeships

Page 2 Page 104 Liverpool City Region Skills Investment Statement 2018/19

1. SUMMARY

Purpose

This Skills Investment Statement 2018/19 considers the key labour market evidence and wider strategic context for the Liverpool City Region impacting on the development and delivery of skills needed for sustainable and inclusive economic growth.

The document builds upon rather than duplicates the actions of the Liverpool City Region Post-16 Area Based Review and is informed by new insight into skills demands, needs and training provision from the Liverpool City Region Employer Survey 2017. It is published ahead of a longer term Skills Strategy for Liverpool City Region and prior to the Combined Authority taking on responsibility for the devolution of the Adult Education Budget in 2019/20. In that case, it is the ‘first fruits’ of this work and provides an immediate focus for the provider base to plan 2018/19 activities in line with the Combined Authority’s locally-determined priorities, first set out in the Post-16 Area Based Review.

The purpose of the Skills Investment Statement is to:

 Bring clarity to the scale and nature of Liverpool City Region skills issues and to identify where local interventions are likely to have greatest impact;  Create direction and bring focus to the response required from providers and employers to address identified skills priorities;  Provide a framework for local public and private skills investments; and  Stimulate and support partnership working to bring greater strategic alignment on skills priorities across stakeholders.

This is intended to cover all skills funding in the Liverpool City Region, with a particular focus on the deployment of the Adult Education Budget.

These transitional arrangements will enable the Combined Authority and providers to jointly prioritise local skills investment to develop residents with the skills to meet the needs of business. This statement is scheduled to allow the provider base sufficient time to reflect these priorities in their business planning approach for 2018/19. It will be supplemented by the development of individual provider Delivery Agreements for 2018/19 to capture delivery outcomes and measure impact.

Liverpool City Region Economy

Over the past two decades Liverpool City Region has undergone an economic renaissance, with a diversifying economy of internationally-oriented markets and businesses. A growing number of globally significant companies, including Unilever, Jaguar Land Rover, Dong Energy, IBM and Inovyn, are investing heavily in our economy. The economy generates £29.5bn of output. Productivity per resident and per hour worked have both improved in recent years, but there remains a gap to regional and national rates.

Since 2010 approximately 46,000 private sector jobs have been created. Currently the City Region has a stock of 49,125 business units, of which over 99% are SMEs. We have significant strengths and huge potential in innovative and globally-competitive sectors: Page 3 Page 105 Liverpool City Region Skills Investment Statement 2018/19

Advanced Manufacturing, Digital and Creative, Financial and Professional Services, Health and Life Sciences, Low Carbon Energy, Maritime and Logistics, and the Visitor Economy.

More than 1.5million people live within Liverpool City Region, of which 972,400 are of working age (16-64 years). Currently there are 598,000 jobs and over 71,000 self- employed people.

Liverpool City Region has seen significant growth in the number of people in employment over the last five years, and a commensurate fall in unemployment: wage rates remain low in comparison to other parts of the country. Employers are however reporting greater difficulties in recruiting skilled staff, demonstrating there is a tightening in the labour market.

The City Region is relatively well contained as a labour market with low levels of in commuting, as well as having low projections of population change. Future growth in the workforce will therefore need to come from supporting those who are economically inactive into work and the training of the existing labour force as retirement age increases. This is harder and costly to achieve given the multiple complex barriers that many residents face.

The skills levels of residents in the City Region have generally been increasing in recent years, there remains significant skills gaps at all levels, with progress earlier in life key to the progression into advanced technical and higher level skills.

The numbers without formal qualifications has recently begun to rise again. Young people (16-18) who are not in education employment or training (NEET) is also rising. As detailed in the Liverpool City Region Area Based Review confidence in mathematics, written and spoken English, digital and employability skills are transformational skills that can make a huge difference to the lives and employment prospects of Liverpool City Region residents.

Apprenticeship starts remained high across the 2016/17 academic year despite concerns over the proportion of 16-18 year olds starts compared to previous years and the initial impact of national apprenticeship reforms.

Policy context

The Combined Authority agreed the City Region’s Single Growth Strategy in June 2016, which sets out a focus on how the growth potential of the City Region will be delivered. It has three pillars (people, place and productivity) and sets out an ambitious plan to growth the economy, improve productivity and create more jobs. This will form the foundation of the City Region’s local Industrial Strategy, with the emergent Skills Strategy being an essential component.

This Statement builds upon the report and recommendations of the Post-16 Area Based Review which reported in January 2017. This wide ranging and inclusive report set out a number of clear recommendations around structural changes and curriculum reforms required to deliver the future skills needs of learners and employers in the City Region. These are currently being implemented.

Page 4 Page 106 Liverpool City Region Skills Investment Statement 2018/19

There has been a reduction in the overall levels of Government grant funding available to Colleges and Independent Training Providers in recent times, based upon participation levels and policy shifts in Government. Maximising the use of this funding is a priority and will require Colleges and Independent Training Providers to work collaboratively with the Combined Authority to focus increasingly scarce resources on provision for City Region residents (taking into account the statutory entitlements that must be delivered). Feedback from local delivery is identifying that employers also require increasingly bespoke and tailored solutions to their skills needs. The challenge for all organisations involved is to ensure local public funding allocations for skills are aligned to meeting local demand rather than being delivered or sub-contracted outside of the Liverpool City Region. There is also a wider imperative to align the Adult Education Budget and the rest of the system to ensure efficient use of funding and avoid duplication.

The Combined Authority has supported Colleges, Independent Training Providers, Councils and other stakeholders to invest in new facilities through Skills Capital, with £30m committed since 2015. This has led to a significant improvement in the quality of provision available for learners which is more closely linked to the specific skills needs of employers.

Apprenticeship reforms have started to have an impact on the provision available to and taken up by employers and their employees. Since May 2017 the way apprenticeships are delivered and paid for in England have changed, underpinned by a new apprenticeship levy and a curricula move from frameworks to standards. There is anecdotal evidence to suggest the reforms are impacting on employer demand for apprentices, leading to a degree of uncertainty for Colleges and Independent Training Providers from a business planning perspective.

The Skills Investment Statement 2018/19 comes at a crucial time, as the preparatory work scales up ahead of full devolution of the Adult Education Budget in 2019/20. 2018/19 will be a transitional year with an enhanced influencing role providing the Combined Authority further opportunity for traction over local provision. Localism is not solely about financial allocations but also about how provision is structured to best meet the economic and educational needs of the City Region. This responsibility will be elevated further in 2019/20 when the Adult Education Budget is devolved to the Combined Authority for commissioning.

Significant reforms to vocational and technical education, with the introduction of T levels from 2020, accrediting skills at Level 3 across 15 vocational routes, will impact on the curriculum, approach and offer from Colleges, Independent Training Providers and Universities. This will include a transitional year from age 16, which will be of key importance for City Region learners. Locally, work is starting on this, and opportunities for further collaboration on curriculum and facilities must be seized through local sector fora. Enrolment on T levels will also require leaners to have attained Level 2 qualifications before embarking upon this study.

Our longer term Skills Strategy for the City Region will enable these opportunities and challenges to be addressed more fully. It will enable the City Region to gear up in anticipation of future demands and be clear about what the bespoke and distinctive Liverpool City Region offer is. In the meantime, this Statement for 2018/19 provides the evidence for focused immediate action in line with this longer term approach.

Page 5 Page 107 Liverpool City Region Skills Investment Statement 2018/19

Key issues

Employment and Unemployment rates are improving but a gap remains to national levels

The employment and unemployment rates in the Liverpool City Region have improved in recent years, but remain less favourable than national levels, particularly for females in work; unemployed males; employed and unemployed black and minority ethnic people; and people with a disability.

There remains a high proportion of economically inactive residents

The Liverpool City Region has had high levels of economically inactive residents for many years, and has the highest rate of residents on sickness benefits of any area nationally: the majority of residents have primary mental health or musculoskeletal diagnoses.

Attainment at age 16 is significantly and persistently below national levels and inhibits the development of academic and technical skills

The attainment of GCSEs (Level 2) of residents at age 16 is below national levels. Although this gap is narrowed by age 19 it means an attainment lag and lost opportunities to pursue academic routes post school and develop the Level 3 technical skills that are valued by employers, until later in life or not at all.

Apprenticeship numbers remain steady overall in 2016/17, but there has been a fall in starts since the commencement of national reforms in May 2017

The implementation of apprenticeship funding and curriculum reforms has had an initial impact on provision. Apprenticeship starts locally are comparable with 2015/16, whilst nationally starts have fallen. 16-18 year olds apprenticeship starts locally are now lower than national rates whilst starts for those aged 25 and over have increased to a greater extent than nationally from the previous year. There is a risk on the viability of the provider base locally if the trend of falling starts continues.

The proportion of residents without qualifications remains high, particularly for over 50s

The proportion of residents in the Liverpool City Region without a qualification has been high and although having fallen in recent years, this trend has recently reversed: this is most acute for residents aged over 50. Targeted efforts are required to increase engagement in learning and support progression to higher levels to narrow this gap.

The proportion of residents with mental health issues is rising

The number of residents with mental health issues has risen over a number of years. Services report residents presenting increasingly with a combination of more complex conditions.

Work readiness is generally good, but employers suggest a need for improvement for recruits in the Health & Social Care, Visitor Economy and Manufacturing sectors

The Employer Skills Survey in 2017 found that overall work readiness of new staff was higher in the Liverpool City Region than nationally (83% vs 78%). However, employers

Page 6 Page 108 Liverpool City Region Skills Investment Statement 2018/19 from Health & Social Care and Visitor Economy sectors reported that new recruits were not as work ready as other employers. This means that more targeted efforts are needed to ensure that recruits are work ready.

Specific skills gaps in Digital, Manufacturing and Construction Sectors and in Leadership and Management need to be narrowed

The Employer Skills Survey also found that there were specific skills gaps in Digital, Manufacturing and Construction sectors across a range of levels. In addition, there are specific gaps in leadership and management skills, particularly for micro and large organisations.

Actions for immediate implementation

This Skills Investment Statement 2018/19 sets out the issues that the City Region faces and proposes the following actions to be implemented to address them:

16-24 year olds  Combined Authority to commission additional wrap-around support (based upon previous experience and delivery) for 16-18 year olds at risk of being not in education, employment and training from European funds;  Colleges and Independent Training Providers should continue to support learners to achieve their Level 2 qualifications as soon as possible to enable progression to Level 3 academic and technical skills.

A Lifelong Skilled Workforce  Support for those that require maths, English and digital skills needs to continue to be available and targeted for over 50s, including through Community Learning;  The Skills Commission will identify how collectively employers and individuals can take action and responsibility to improve the skills levels of older workers in the light of individuals being required to work for longer; this includes better approaches from employers to retaining existing staff and skills, retraining for employees and supporting individuals to refresh their skills and rethink their career choices later in life.

Adult Employability Skills  Working collaboratively with all local partners, Colleges and Independent Training Providers need to consider how they can do more/adopt new ways to help economically inactive residents into work;  Combined Authority will commission additional employment support for groups which have a gap to overall employment rates from European funds;  Provision of employability skills to unemployed residents needs to be more tailored to the requirements of employers in Health & Social Care, Visitor Economy and Manufacturing sectors.

Sector specific actions  Employers from Digital, Construction and Manufacturing need to articulate more effectively their specific technical skills needs to colleges and independent training providers: this can be organised through the LEP Sector Boards and College and Independent Training Provider Curriculum Networks in addition to the Skills for Growth Reports; Page 7 Page 109 Liverpool City Region Skills Investment Statement 2018/19

 Colleges, Independent Training Providers and Universities need to scale up the provision of leadership and management training, possibly through apprenticeships, targeted in particular at micro employers: this may require new forms of delivery (e.g. online) to meet their needs.

Apprenticeships  Employers and providers must engage fully in the development of an Apprenticeship Growth Plan to identify how to grow the number, quality, level and breadth of apprenticeships;  Providers of apprenticeship training need to promote the benefits of recruiting 16-18 year olds to employers, to ensure employer succession planning and skills retention;  Colleges and Independent Training Providers should ensure that there is as much focus on apprenticeship completions as there is on apprenticeship starts to improve employee quality and retention, in the context of a long term contraction in the number of younger people entering the labour market in the Liverpool City Region.

Capacity building measures  Providers should ensure that their staff are kept up to date on mental health issues and referral points to relevant healthcare provision as appropriate;  Combined Authority to broker relationships between mental health services, Colleges and Independent Training Providers to promote specialist services and referral points;  Colleges and Independent Training Providers to agree arrangements to secure greater alignment between Traineeships, Apprenticeship and Adult Education Budget provision linked to progression pathways;  Schools should ensure that more pupils are able to gain Level 2 qualifications at age 16, and the Regional Schools Commissioner to identify adequate support and progression routes to enable this;  Skills Commission should identify and promote Liverpool City Region’s competitive skills advantage;  Colleges and Independent Training Providers should maximise spend on local residents of their Adult Education Budget funding allocations to maintain locality grant levels ahead of devolution;  Combined Authority to lobby Government to improve access to data to reduce duplication of efforts between providers working to different Government Departments.

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Tracking progress

The Combined Authority proposes to create a ‘single conversation’ with Colleges and Independent Training Providers in the Liverpool City Region working collaboratively across all aspects of employment and skills. This will enable us to align post-16 skills provision with the needs of employers and residents in a more strategic and effective way. This will improve the curriculum offer and ensure that all local resources are effectively aligned.

The Combined Authority will co-design new performance management outcome measures with Colleges and Independent Training Providers, supporting a change in culture to an outcome based approach driven by strong leadership. Outcome agreements will enable skills provision to better respond to local economic need, through dialogue, agreement and accountability between providers, employers and other local partners including the Combined Authority. Success will be measured by a wider set of outcomes not just educational attainment.

These agreements will reflect the skills priorities as set out in this Statement and will assess provider success for the following outcomes:

 Sustained employment;  Sustained learning and progression; and  Provider curriculum responsiveness to priority sector needs.

Colleges and Independent Training Providers will be invited to complete an Outcome Agreement for 2018/19 to demonstrate how they are meeting the actions identified in this Statement. This approach has been piloted in 2017/18 and the lessons will inform the process for 2018/19. Progress against these Agreements and delivery of the Outcomes will be monitored by the Employment and Skills Board and lessons taken into the planning ahead of devolution in 2019/20.

A collation of Outcome Agreements from individual Colleges, Local Authorities and Independent Training Providers will contribute to an overall Adult Education Budget specific plan for the Liverpool City Region and set out the mix and balance of provision commissioned locally.

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2. PURPOSE AND CONTEXT

This Skills Investment Statement 2018/19 considers the key labour market evidence and wider strategic context for the Liverpool City Region impacting on the development and delivery of skills needed for sustainable and inclusive economic growth.

The Combined Authority agreed the City Region’s Single Growth Strategy in June 2016, which sets out a focus on how the growth potential of the City Region will be delivered. It has three pillars (people, place and productivity) and an ambitious plan to grow the economy, improve productivity and create more jobs. This will form the foundation of the City Region’s local Industrial Strategy, with the emergent Skills Strategy being an essential component.

The Post-16 Area Review of Further Education carried out in the Liverpool City Region reported in January 2017 and set out a number of structural changes and reform recommendations which are being progressed. The Review was one of the first nationally to have such a strong focus on curriculum reform and change as well as delivering the financial and operationally sustainable institutions required for the future. This document builds upon this approach and is informed by new insight into skills demands, needs and training provision from the Liverpool City Region Employer Survey 2017.

It is published ahead of a longer term Skills Strategy for Liverpool City Region and prior to the Combined Authority taking on responsibility for the devolution of the Adult Education Budget in 2019/20. In terms of skills devolution, it is the ‘first fruits’ of this work and provides an immediate focus for Colleges and independent training providers to plan 2018/19 activities in line with the Combined Authority’s locally-determined priorities, first set out in the Post-16 Area Based Review.

The purpose of the Skills Investment Statement is to:

 Bring clarity to the scale and nature of Liverpool City Region skills issues and to identify where local interventions are likely to have greatest impact;  Create direction and bring focus to the response required from providers and employers to address identified skills priorities;  Provide a framework for local public and private skills investments; and  Stimulate and support partnership working to bring greater strategic alignment on skills priorities across stakeholders.

This is intended to cover all skills funding in the Liverpool City Region, with a particular focus on the deployment of the Adult Education Budget.

These transitional arrangements will enable the Combined Authority and providers to jointly prioritise local skills investment to give residents the skills to meet the needs of employers, facilitate their progression to better jobs over time and build resilience to sectoral or other downturns in labour demand. This statement is scheduled to allow the provider base sufficient time to reflect these priorities in their business planning approach for 2018/19. It will be supplemented by the development of individual Outcome Agreements for 2018/19 to capture delivery outcomes and measure impact.

There has been a reduction in the overall levels of Government grant funding available to Colleges and Independent Training Providers in recent times, based upon participation Page 10 Page 112 Liverpool City Region Skills Investment Statement 2018/19 levels and policy shifts in Government. Maximising the use of this (and other) funding is a priority and will require Colleges and Independent Training Providers to work collaboratively with the Combined Authority to focus increasingly scarce resources on provision for City Region residents (taking into account the statutory entitlements that must be delivered). Feedback from local delivery is identifying that employers also require increasingly bespoke and tailored solutions to their skills needs. The challenge for all organisations involved is to ensure local public funding allocations for skills are aligned to meeting local demand rather than being delivered or sub-contracted outside of the Liverpool City Region. There is also a wider imperative to align the Adult Education Budget and the rest of the system to ensure efficient use of funding and avoid duplication.

Devolution of the Adult Education Budget (AEB) to the Combined Authority was agreed in the City Region’s Devolution Agreement of November 2015. Local devolution of the AEB will help ensure providers’ skills offer meets the City Region’s needs through local commissioning. The national focus for the AEB is to engage adults and provide them with skills and learning needed for work or further learning: devolution provides the opportunity for local priorities to be reflected within the national context. It also enables more tailored programmes of learning, which do not need to include a qualification, to help those furthest from learning or the workplace. Following delays in the devolution process full devolution is now expected for the academic year 2019/20 with the laying of Parliamentary Orders expected in 2018.

It is a time of significant change in national employment and skills policy which Colleges and independent training providers are having to respond to in order to maintain delivery during transition. In July 2016, the Department for Business Innovation and Skills and the Department for Education published the Government’s Post-16 Skills Plan, accepting and agreeing to implement all of the Sainsbury Review’s proposals, subject to existing skills budgets for 16-18 year olds. The Post 16 Skills Plan recommends:

 Every 16 to 18-year old in college based technical education being “entitled” to a “quality work placement”;  Just one awarding organisation for 15 vocational or academic routes; and  Colleges and other providers could be permitted to deliver traineeships for up to a year in duration (a doubling of the current six months) as part of a ‘transition year’ for 16 to 18-year-olds progressing onto one of the 15 routes.

The full roll out of technical education policy and vocational T Levels at Level 3 is expected by 2020. This will include a transitional year from age 16, which will be of key importance for City Region learners. This will require substantial actions locally to fully implement, and will be picked up in greater detail in the forthcoming Skills Strategy.

Apprenticeship reforms have started to have an impact on the provision available to and taken up by employers and their employees. Since May 2017 the way apprenticeships are delivered and paid for in England have changed, underpinned by a new apprenticeship levy. Reforms include:

 An employer levy for training of apprentices for employers with a pay roll of over £3M;  Funding for training is now routed through an employer digital account;  How much an employer can expect to pay for an apprenticeship, with maximum caps determined by the Institute of Apprenticeships;

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 Employers of over 50 staff making a 10% financial contribution to apprenticeship training;  How apprentices are assessed as competent with independent end point assessments;  How the content of apprenticeships is agreed with employers and developed by them;  The levels at which apprentices can study, including Higher and degree levels;  The public sector apprenticeship institutional target of 2.3% of the workforce; and  A national ambition for 3 million apprentices starts (by 2020).

Anecdotal feedback from local providers highlights the risk of the initial fall in starts continuing, and the detrimental impact this would have on the provision available for employers and learners. The specific actions for employers, Colleges, Independent Training Providers and Universities will be identified in the Apprenticeship Growth Plan, which is currently in development.

The Government will be launching a call for proposals to establish Institutes of Technology before the end of 2017 as a way of addressing skills gaps at Level 4 through to Level 6 (first degree level). Successful applicants will involve collaborations of employers, Higher Education Institutes (HEIs / Universities) and Further Education (FE) Colleges or independent training providers. Institutes of Technology will focus on Science, Technology, Engineering and Maths related skills areas linked to local needs with a national capital funding of up to £170m. The Combined Authority will be providing local leadership to the approach adopted within the Liverpool City Region.

The Work and Health Programme has been commissioned by the Department for Work and Pensions and delivery will commence from November 2017. This is the Government’s flagship back to work programme for long term unemployed people and those who have a sickness condition or a disability: the focus is on those individuals who have the potential to work within 12 months. The volume of programme starts will be much smaller than the previous Work Choice and Work Programme activities, and as a result, more residents will be remaining with mainstream Jobcentre Plus services.

The rollout of Universal Credit is continuing across the Liverpool City Region. This is designed to combine a number of benefits into one single payment, and to adjust the work incentives to encourage people to keep more of their earnings. There is an explicit expectation within the Universal Credit design that recipients will continue to seek opportunities to increase their earnings and income: this is designed to avoid the cliff edge reductions that previous benefits contained.

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3. KEY LABOUR MARKET ISSUES

Employment and Unemployment rates are improving but there remains a gap to national levels

The employment rate within the City Region has lagged national rates for some time, and the gap has narrowed in recent years.

Chart 1 – Comparison of employment rates (aged 16-64) in Liverpool City Region and elsewhere

There is still a significant gap to national rates, which is higher in the City Region than in most other economic areas. There are more males in work than females in the City Region, but the gap between the employment rate for females and that overall is smaller in the City Region than nationally. There are fewer black and minority ethnic people in work than overall, and the gap is wider in the City Region than nationally. There is a smaller proportion of people with a disability in work in the City Region than nationally.

Table 1 – Employment Rate (June 2017) Liverpool City Region England Gap Overall 69.1% 74.6% 5.5% Males 73.1% 79.7% 6.6% Females 65.2% 69.6% 4.4% Black and minority ethnic people 57.9% 64.3% 6.4% People with a disability 35.2% 46.0% 10.8% People without a disability 77.8% 80.0% 2.2% Source: NOMIS

The unemployment rate within the City Region has recently reduced, with a steeper reduction here than elsewhere. The level is now below what it was before the recession took effect in 2008.

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Chart 2 – Unemployment count (all ages) in Liverpool City Region compared to elsewhere

There are more males and fewer females registered as unemployed in the City Region than national rates, but there is a higher rate of black and minority ethnic residents than nationally.

Table 2 – Unemployment Rate for 16-64 year olds (June 2017) Liverpool City Region England Gap Overall 4.7% 4.6% 0.1% Males 5.5% 4.7% 0.8% Females 3.8% 4.4% 0.6% Black and minority ethnic people 8.4% 7.9% 0.5% Source: NOMIS

The levels of young people who are Not in Education, Employment and Training are increasing. There is extensive provision in place to support young people, through mainstream and European funds: the feedback from practitioners is that there are gaps in mentoring and wraparound provision to ensure that young people make the best use of the provision that is available.

There remains a high proportion of economically inactive residents The rate of worklessness (working-age adults who are either officially unemployed, or economically inactive but actively seeking work) is slightly higher in Liverpool City Region when compared to the national picture - 12.2% versus 11.5%. This averaged around 85,000 people over 2016/17. The Liverpool City Region worklessness rate has more than doubled as a consequence of the last recession, rising from 5.2% in 2005. Realising pre- recession worklessness rates could release more than 40,000 people into employment. The numbers of people who are economically inactive including those who are in receipt of sickness benefit is particularly acute; the City Region has 100,000 claimants, which is the highest rate of any economic area nationally, with mental health and musculoskeletal conditions covering the vast majority of those claiming.

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Chart 3 – Economic inactivity rates (aged 16-64) in Liverpool City Region compared to elsewhere

Attainment at age 16 is significantly and persistently national levels and inhibits the development of academic and technical skills

Level 2 qualifications include National Vocational Qualifications (NVQ) at Level 2, Intermediate Apprenticeships and five GCSE grades A* to C. Schools performance at year 11 is below the national average on average with some areas significantly below. In contrast, Wirral has a strong record of GCSE performance, with results above the national average.

Chart 4 – Attainment of 5 GCSEs at A*-C (including English and Maths) by Constituent Council

The lower rate of attainment of Level 2 at age 16 in the City Region compared to elsewhere has a longer term impact: Chart 5 shows the Level 2 attainment by age 19, which shows that whilst the City Region narrows the gap to elsewhere it does not close it completely.

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Chart 5 – Level 2 attainment at age 16 in Liverpool City Region compared to elsewhere

The City Region does benefit from increases in Level 2 attainment between 16 and 19, with the FE sector clearly adding value, but this is not sufficient to counteract the average earlier in life lower attainment of City Region residents.

Attainment of Level 3 (NVQ Level 3 or two or more A levels equivalent) by age 19 is much lower in Liverpool City Region than national rates. The impact of lower Level 2 attainment through school and the need to repeat English and Maths qualifications impacts on when Liverpool City Region residents progress to Level 3 Technical Qualifications either through academic routes such as A Levels or vocational qualifications delivered in FE Colleges, independent training providers and in work.

Chart 6 – Level 3 attainment at age 16 in Liverpool City Region compared to elsewhere

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The opportunities for students to develop the technical skills that employers need are is lost whilst students ‘catch up’ on English and maths and Level 2 qualifications, meaning that young people would need to stay in full time education for longer to make up for this and then progress to Level 3.

Apprenticeship numbers remain steady overall in 2016/17, but there has been a fall in starts since the commencement of national reforms in May 2017

The implementation of funding and curriculum reforms in apprenticeships has had a short term impact on provision. Overall apprenticeship delivery across the Liverpool City Region in 2016/17 is comparable with 2015/16 but this masks a significant fall in starts since the reforms were introduced in May 2017. Starts locally have increased by 1.14% compared to the North West and England which saw reductions of 2.03% and 3.67% respectively. This masks a fall in starts for 16-18 year olds and an increase for over 25s.

Table 3 – Apprenticeship starts 2016/17 Age band Liverpool City Region North West England

16-18 -12.6%  -6.9%  -8.4% 

19-24 -2.0%  -6.3%  -9.2%  25+ +8.4%  +2.8%  +2.0%  Source: Statistical First Release, October 2017

There has been as shift in delivery away from Level 2 programmes to advanced and higher level apprenticeships in line with government and local ambitions with the proportion of overall starts that are Level 2 reduced to 51.3% in 2016/17 from 55.2% in 2015/16. The trend for increasing apprenticeships at L4+ continues with a 33.06% increase in starts in the City Region compared to 29.68% in the North West and 32.71% nationally.

There remains a local priority on ensuring that there is a focus on apprenticeship completions as much as on starts. There is extensive support available for apprenticeships, and this needs to continue and improve.

There could be a detrimental effect on the viability of the provider base locally if the trend of falling starts is sustained.

The proportion of residents without qualifications remains high, particularly for over 50s There is a higher proportion of Liverpool City Region residents who do not have a formal qualification when compared to the national average. The latest data suggests that this gap to national averages is widening. The Liverpool City Region Area Based Review identifies a need to widen access to entry routes to learners with low level skills and re- engage learners to progress into further learning or work whilst supporting employer’s needs to ensure labour demand meets supply. This includes confidence in mathematics, written and spoken English, digital and employability skills.

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Chart 7 – Population (aged 16-64) with no qualifications in Liverpool City Region and elsewhere

Skills gaps are most pronounced for residents aged 50-64:

Table 4 – Liverpool City Region residents without formal qualifications (Dec 2016) Age 16-24 25-29 30-39 40-49 50-64 Overall Proportion 11.3% 7.0% 7.2% 10.2% 18.9% 12.2% Source: ONS Annual Population Survey, NOMIS

This was exemplified in the Employer Skills Survey, which found that 29% of over 50s did not have the right technology skills for their business, compared to 16% overall. This lack of digital skills can exacerbate the digital exclusion of older residents.

Targeted efforts are required to increase engagement in learning and progression to higher levels to narrow the qualification gap. In addition, support may need to be intensified for residents who need help with English as a Second Language, in order for them to find work.

The proportion of residents with mental health issues is rising

There is consistent anecdotal feedback from services providers that the nature of the issues faced has changed in recent years, and that residents accessing support tend to have more and more complex barriers that prevent them from working: this includes those with a mental health condition. The data on this is difficult to obtain in a measurable way but the following indicators give a sense of this:

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Table 5 – Summary of mental health indicators Liverpool City Indicator Year England Region Estimated prevalence of depression amongst 2015/16 9.73% 8.26% population (GP Practice returns) Antidepressant prescribing: average daily 2016/17 2.0 1.4 Long term mental health problems amongst 2016/17 7.28% 5.70% population (GP Patient Survey) Depression and anxiety prevalence amongst 2016/17 18.38% 13.74% population (GP Patient Survey) Source: PHE Fingertips – Mental Health Disorders (October 2017)

This would appear to suggest that Liverpool City Region has a higher incidence of residents with a range of mental health conditions than nationally. The combination of long term mental health problems and depression and anxiety prevalence is around 1 in 4 of the population, confirming the qualitative feedback received from front line services.

Work readiness is generally good but employers suggest a need for improvement for recruits to Health & Care, Visitor Economy and Manufacturing sectors

The perceptions of work readiness of new recruits across all employers are generally high at 83%, which is slightly above the nationally recorded level of 78%. There were a number of differences in the perceived work readiness of new recruits based upon their experience as below:

Table 6 – Work readiness by recruitment type (selected) Recruitment type Prepared Not prepared for work for work Long term unemployed people 62% 38% Those new to employment 64% 36% School leavers 58% 42% Experienced/skilled workers 97% 3% Source: 2017 Liverpool City Region Employer Skills Survey

A sectoral analysis found that these work readiness gaps were most pronounced in the Health and Care, Visitor Economy and Manufacturing sectors. This suggests that there are gaps in employability provision for these sectors, and this can be more tailored and effective.

Specific skills gaps in Digital, Manufacturing and Construction Sectors and in Leadership and Management need to be narrowed

The Employer Skills Survey found that 20% of respondents identified that they had some form of internal skills gap: this is above the national rate of 14%. Large businesses are more likely to be experiencing these gaps that SMEs or micro sized businesses. This is most pronounced as follows:

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Table 7 – Internal skills gaps Category of business Proportion Business and administration 31% Education 27% Wholesale and retail trade 26% Construction 26% Source: 2017 Liverpool City Region Employer Skills Survey

The skills gaps were predominantly the specialist skills needed to perform the job roles. The City Region is well served in provision for Business and Administration, Education and Wholesale and retail trade, but would benefit from addition support for Construction.

In addition, employers from the Digital, Manufacturing and Construction sectors had the largest skills gaps in relation to new recruits. This suggests that they are unable to find the specific skills that they require in a tightening labour market, which is constraining their future growth. The skills requested included specific programming skills, graphic design, engineering fabrication, engineering assembly, joinery, heating engineers and bricklayers.

Leadership and management remains an issue with 25% of employers identifying this as a specific skills gap in their current workforce and 10% identifying it as a skills gap for new recruits: this is most pronounced on both elements for larger employers. In addition, 20% of employers reported that Chief Executive and Senior Management roles would be most affected by future demand for new skills. This is most acute for micro sized employers where 26% identified a need for these skills in future years.

4. ACTIONS FOR IMMEDIATE IMPLEMENTATION

16-24 year olds  Combined Authority to commission additional wrap-around support (based upon previous experience and delivery) for 16-18 year olds at risk of being not in education, employment and training from European funds;  Colleges and Independent Training Providers should continue to support learners to achieve their Level 2 qualifications as soon as possible to enable progression to Level 3 academic and technical skills.

A Lifelong Skilled Workforce  Support for those that require maths, English and digital skills needs to continue to be available and targeted for over 50s, including through Community Learning;  The Skills Commission will identify how collectively employers and individuals can take action and responsibility to improve the skills levels of older workers in the light of individuals being required to work for longer; this includes better approaches from employers to retaining existing staff and skills, retraining for employees and supporting individuals to refresh their skills and rethink their career choices later in life.

Adult Employability Skills  Working collaboratively with all local partners, Colleges and Independent Training Providers need to consider how they can do more/adopt new ways to help economically inactive residents into work;

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 Combined Authority will commission additional employment support for groups which have a gap to overall employment rates from European funds;  Provision of employability skills to unemployed residents needs to be more tailored to the requirements of employers in Health & Social Care, Visitor Economy and Manufacturing sectors.

Sector specific actions  Employers from Digital, Construction and Manufacturing need to articulate more effectively their specific technical skills needs to colleges and independent training providers: this can be organised through the LEP Sector Boards and College and Independent Training Provider Curriculum Networks in addition to the Skills for Growth Reports;  Colleges, Independent Training Providers and Universities need to scale up the provision of leadership and management training, possibly through apprenticeships, targeted in particular at micro employers: this may require new forms of delivery (e.g. online) to meet their needs.

Apprenticeships  Employers and providers must engage fully in the development of an Apprenticeship Growth Plan to identify how to grow the number, quality, level and breadth of apprenticeships;  Providers of apprenticeship training need to promote the benefits of recruiting 16-18 year olds to employers, to ensure employer succession planning and skills retention;  Colleges and Independent Training Providers should ensure that there is as much focus on apprenticeship completions as there is on apprenticeship starts to improve employee quality and retention, in the context of a long term contraction in the number of younger people entering the labour market in the Liverpool City Region.

Capacity building measures  Providers should ensure that their staff are kept up to date on mental health issues and referral points to relevant healthcare provision as appropriate;  Combined Authority to broker relationships between mental health services, Colleges and Independent Training Providers to promote specialist services and referral points;  Colleges and Independent Training Providers to agree arrangements to secure greater alignment between Traineeships, Apprenticeship and Adult Education Budget provision linked to progression pathways;  Schools should ensure that more pupils are able to gain Level 2 qualifications at age 16, and the Regional Schools Commissioner to identify adequate support and progression routes to enable this;  Skills Commission should identify and promote Liverpool City Region’s competitive skills advantage;  Colleges and Independent Training Providers should maximise spend on local residents of their Adult Education Budget funding allocations to maintain locality grant levels ahead of devolution;  Combined Authority to lobby Government to improve access to data to reduce duplication of efforts between providers working to different Government Departments.

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5. TRACKING PROGRESS

The Combined Authority proposes to create a ‘single conversation’ with Colleges and Independent Training Providers in the Liverpool City Region working collaboratively across all aspects of employment and skills. This will enable the alignment of local resources for post-16 skills provision with the needs of employers and residents in a more strategic and effective way.

The Combined Authority will co-design new performance management outcome measures with Colleges and Independent Training Providers, supporting a change in culture to an outcome based approach driven by strong leadership. Outcome agreements will enable skills provision to better respond to local economic need, through dialogue, agreement and accountability between providers, employers and other local partners including the Combined Authority. Success will be measured by a wider set of outcomes not just educational attainment. They will reflect the skills priorities as set out in this Statement and will assess provider success for the following outcomes:

 Sustained employment;  Sustained learning and progression; and  Provider curriculum responsiveness to priority sector needs.

Colleges and Independent Training Providers will be invited to complete an Outcome Agreement for 2018/19 to demonstrate how they are meeting the actions identified in this Statement. This approach has been piloted in 2017/18 and the lessons will inform the process for 2018/19. Progress against these Agreements and delivery of the Outcomes will be monitored by the Employment and Skills Board and lessons taken into the planning ahead of devolution in 2019/20.

A collation of Outcome agreements from individual Colleges, Local Authorities and Independent Training Providers will contribute to an overall Adult Education Budget specific plan for the City Region and set out the mix and balance of provision commissioned locally.

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6. TECHNICAL ANNEX

DEMOGRAPHICS

Liverpool City Region has not enjoyed the level of population growth of other cities, which highlights a concern that future labour supply may constrain future growth ambitions. Liverpool City Region’s working age population grew by 12,600 (or by 1.3 per cent) between 2006 and 2016, to reach 972,400 in 2016. This rate of growth was significantly below the England average growth rate of 5.3 per cent.

Chart 8 – Population changes (all age) in Liverpool City Region compared to elsewhere

The future projections of population see reductions in the City Region’s population when there is projected growth elsewhere.

Chart 9 – Projected population changes (all age) in Liverpool City Region compared to elsewhere

This will lead to a reduction in the number of people available for work, which could make it harder for employers to recruit the skills and capacity they require.

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There is a particular issue with the number of 16-19 year olds, which will see a decline in future years. This reduction is likely to have a long-term impact on the working age population, the labour market and the FE sector. This decline in 16-18 numbers is more significant in Liverpool City Region compared to the North West (and England). 16-19 numbers in Liverpool City Region do not return to 2014 levels until 2028, 4 years later than the North West and five later than England. The percentage reduction from 2014 to 2020 in the City Region is also steeper, compared to elsewhere.

Chart 10 – Projected population changes (ages 15-19) in Liverpool City Region compared to elsewhere

This population change will give Colleges and providers to this age group an issue where funding is predominately focused on 16-18 cohorts, as learner numbers fall, future funding allocations will reduce based on previous delivery (calculated on a lagged learner numbers basis). Colleges need to be realistic in their plans for growth in 16 to 18 student numbers for the foreseeable future.

If providers do not maximise delivery to the remaining 16-18 cohort through increased engagement activities, there will continue to be a loss of local capacity to support young people who are NEET (not in education, employment or training) at a time when Councils are reporting increases in the number of young people in these circumstances.

LABOUR SUPPLY

More than 1.5million people live within Liverpool City Region, of which 972,400 are of working age (16-64 yrs). The City Region is home to businesses including Unilever, Jaguar Land Rover, Ineos Chlor, Santander, Sony and NGF Europe, who together generate £29.5bn of output. Currently there are 598,000 jobs and over 71,000 self- employed people. Since 2010 approximately 46,000 private sector jobs have been created. Currently the City Region has a stock of 49,125 business units.

Job growth Liverpool City Region has experienced significant recent jobs growth, at a rate similar to the North West region lower than the national average. 10.4% LCRPage job 24 Page 126 growth 2000 - 15 Liverpool City Region Skills Investment Statement 2018/19

Between 2000 and 2015, jobs in Liverpool City Region grew by 64,000 - or by 10.4 per cent, compared to 15.2 per cent for England as a whole. Over the past five years, total workforce jobs have increased by 43,000 or 6.8 per cent, close to the national rate of growth of 7.7 per cent.

Within Liverpool City Region, there is a marked variation in rates of employee jobs growth. Knowsley experienced growth of 15.5 per cent over the five years between 2010 and 2015 while both Sefton and Wirral suffered falls in employment.

Jobs and sectors The types of jobs undertaken in Liverpool City Region have become more highly skilled over the past 10 years. Highly skilled jobs (Level 4 occupations: managers & senior officials, and professional occupations) as a share of total employment has increased from 22.5 per cent in 2007 to 28.5 per cent in 2017. This is a greater increase than that recorded nationally, although LCR is just below the England average (31.4 per cent).

That said, there is evidence that Liverpool City Region has experienced a net loss of jobs in industries where earnings are above the national average, and a larger net gain of jobs in industries with earnings below average.

Overall, Liverpool City Region is more reliant on public services 18.5% of Liverpool for employment – with 22.5 per cent (134,700) of all employee City Region jobs, compared to 17.2 per cent nationally. Liverpool City employment in Region’s largest employer is the health and social work sector. Health and Care Employment in Liverpool City Region is highest in Human health (12.8% nationally) and social work, accounting for 18.2 per cent (108,900) of all employees in 2015. This is far more significant than the national average, where jobs in this sector account for 12.8 per cent of the total.

LCR economic forecasts suggest a range of industries will have strong jobs growth. Significant future forecast job growth of +22,200 jobs over the next decade (2015-2025), particularly in the sectors of:

Table 8 - Breakdown of Liverpool City Region Job Growth by Industrial Classification OVERALL FORECAST Administrative and support Professional, Scientific and JOB GROWTH +22,200 service industries (+7,100) technical activities (+6,400) Information and Communication Construction (+4,800) Wholesale and retail (+3,600) (+1,900) Source: Cambridge Econometrics projections for Liverpool City Region LEP

There are significant levels of retirement forecast across many occupational categories, which will require replacing. This ‘replacement demand’ is frequently much large than net employment growth and can contribute up to 90 per cent of total demand for labour. This is relevant, even in occupations which are contracting. Employers in the Skills Survey reported around half of their workforce was over 50, bringing this need into sharp relief.

Page 25 Page 127 Liverpool City Region Skills Investment Statement 2018/19

Table 9 - Growth in Employee Jobs between 2010 and 2015 Total Employees Growth - 2010 to 2015 Area 2010 2015 Number Per cent Halton 52,200 55,200 3,000 5.8 Knowsley 55,500 64,100 8,600 15.5 Liverpool 222,500 230,200 7,600 3.4 Sefton 91,500 89,600 -1,900 -2.1 St. Helens 59,800 59,000 -800 -1.4 Wirral 94,600 100,400 5,800 6.1 Liverpool City Region 576,200 598,400 22,300 3.9 England 23,085,300 24,866,600 1,781,300 7.7 North West 2,980,200 3,140,400 160,200 5.4 Source: Business Register Employment Survey, Office for National Statistics.

Job density relates to the level of jobs per resident aged 16 64. For example, a job density of 1.0 would mean that there is one job for every resident aged 16-64. Local Authority job density varies throughout the city region.

Table 10 – Jobs density by City Region Council Great Liverpool St Helens Sefton Knowsley Wirral Halton Britain Jobs density 0.8 0.62 0.61 0.71 0.57 0.75 0.82 Source: ONS Local Authority Profile

Employment rate The employment rate within the City Region has lagged national rates for some time, and the gap has narrowed in recent years.

Chart 11 – Employment rates (aged 16-64) in Liverpool City Region and elsewhere

Out of work The unemployment rate within the City Region has recently reduced, with a steeper reduction here than elsewhere. The level is now below what it was before the recession took effect in 2008.

Page 26 Page 128 Liverpool City Region Skills Investment Statement 2018/19

Chart 12 – Unemployment count (all ages) in Liverpool City Region and elsewhere

The rate of worklessness (working-age adults who are either officially unemployed, or economically inactive but actively seeking work) is slightly higher in Liverpool City Region when compared to the national picture - 12.2% versus 11.5%. This averaged around 85,000 people over 2016/17. The Liverpool City Region worklessness rate has more than doubled as a consequence of the last recession, rising from 5.2% in 2005. Realising pre- recession worklessness rates could release more than 40,000 people into employment. The numbers of people who are economically inactive including those who are in receipt of sickness benefit is particularly acute; the City Region has 100,000 claimants, which is the highest rate of any economic area nationally.

Chart 13 – Economic inactivity rate (aged 16-64) in Liverpool City Region and elsewhere

Mental health There is consistent anecdotal feedback from services providers that the nature of the issues faced has changed in recent years, and that residents accessing support tend to have more and more complex barriers that prevent them from working: this includes those with a mental health condition. The data on this is difficult to obtain in a measurable way but the following indicators give a sense of this: Page 27 Page 129 Liverpool City Region Skills Investment Statement 2018/19

Table 11 – Statement of key mental health indicators for Liverpool City Region and England Liverpool City Indicator Year England Region Estimated prevalence of depression amongst population (GP Practice 2015/16 9.73% 8.26% returns) Antidepressant prescribing: average 2016/17 2.0 1.4 daily quantities Long term mental health problems 2016/17 7.28% 5.70% amongst population (GP Patient Survey) Depression and anxiety prevalence 2016/17 18.38% 13.74% amongst population (GP Patient Survey) Source: PHE Fingertips – Mental Health Disorders (October 2017)

This would appear to suggest that Liverpool City Region has a higher incidence of residents with a range of mental health conditions than nationally. The combination of long term mental health problems and depression and anxiety prevalence is around 1 in 4 of the population, confirming the qualitative feedback received from front line services.

SKILLS NEEDS REPORTED BY EMPLOYERS

Employers have reported that the vast majority of applicants are ready for work (83%, higher than the national average), but there are specific sectors which have lower levels of satisfaction. In particular, employers within Health and Care and the Visitor Economy report this to be an issue. The general employability support offered by employment and independent training providers can therefore be seen as effective and having an impact, but this could be improved by better targeting on a specific sectoral basis.

The City Region also has a number of specific technical skills gaps, with 48% of employers in the recent survey reporting this to be an issue. This is most acute in IT (where 85% of employers report this as an issue), manufacturing (68%) and construction (63%). In addition, employers reported a need for leadership and management skills to be improved: this is supported by the feedback from the Skills for Growth Service.

Workplace training is commonplace across the City Region, with 84% of respondents offering training. However, 47% of businesses report no budget for training and 32% access public funding for training provision. Those employers who do use external provision have high levels of satisfaction with them, particularly with private training providers and Universities.

However, training is still seen as costly and time-consuming by some businesses, suggesting that there are still barriers that continue to hamper workforce development. Providers of training need to continue to offer alternative methods of accessing training that are more flexible and cost effective for employers, in particular, the increased use of online and blended learning.

Page 28 Page 130 Liverpool City Region Skills Investment Statement 2018/19

SUPPLY OF SKILLS INVESTMENT AND SPECIALISATION

General further education colleges and independent training providers continue to offer a broad range of technical provision for young people and adults including foundation learning, maths and English, apprenticeships for 16-18 and adults and some higher education provision. The highest volumes of technical courses offered are in the following areas:

Table 12 – Statement of curriculum areas with highest volumes of learners in Liverpool City Region Languages, literature and Health and social care Craft and creative arts and culture of the British Isles design Mathematics and statistics Service enterprises Business management Science Building and construction Administration Source: Liverpool City Region Area Review of Further Education (2017)

There are emerging FE sector specialisms in Liverpool City Region that have been supported by local skills capital investment:

 St Helens College and Knowsley Community College’s Northern Logistics Academy;  Hugh Baird’s Port Academy and investments to support the health sector;  Riverside College Weld Tech Futures and an Ideas Factory supporting STEM and digitally supported advanced manufacturing including the automotive sector;  Wirral Met College have expanded their capacity to support the Construction Centre;  Liverpool Community College has invested in a Digital Academy;  Southport College investment to support Engineering and Motor Vehicle;  Myerscough College has invested in equine and animal care at their Knowsley campus;  Maritime and Engineering College NW has invested in welding simulation facilities;

This investment will support the delivery of Technical Education in the City Region in preparation for changes proposed in the Government’s Post 16 Skills Plan.

Higher Skill Levels in Liverpool City Region (Level 4 and above)

The latest available HEFCE local data details that regionally 32% of north-west young people progress to HE, whilst across the UK the figure is 32.6%. In Liverpool City Region progression to HE is variable with Knowsley, Halton and Liverpool less than the national average (all below 28%) of young residents in HE. In St Helens the figure is 31%, whilst Sefton and Wirral exceeds the national average with 35% of young resident’s progressing.

Page 29 Page 131 Liverpool City Region Skills Investment Statement 2018/19

Chart 14 – Progression of young people to Higher Education by City Region Council

Source: POLAR 3: Higher education progression

Liverpool City Region has seen an improvement in the overall skills levels of the population in recent years, and for the majority of measures, there has been a narrowing of the gap to national levels. This is most pronounced for residents with a Level 4+ qualification where the overall level has increased significantly whilst closing on national rates.

The opportunities to gain Level 4+ and degrees through Higher and Degree Level Apprenticeships will be key in ensuring the City Region maintains this momentum.

Chart 15 – Proportion of population (aged 16-64) with Level 4 and over qualifications in Liverpool City Region and elsewhere

Advanced and Technical Skill Levels in Liverpool City Region (Level 3 and above) Attainment of Level 3 (NVQ Level 3 or two or more A levels equivalent) by age 19 is much lower in Liverpool City Region than national rates.

Page 30 Page 132 Liverpool City Region Skills Investment Statement 2018/19

The impact of lower Level 2 attainment through school and the need to repeat English and Maths qualifications impacts on when Liverpool City Region residents progress to Level 3 Technical Qualifications either through academic routes such as A Levels or vocational qualifications delivered in FE Colleges, independent training providers and in work.

Chart 16 – Proportion of population (aged 16-64) with Level 3 qualifications in Liverpool City Region and elsewhere

The opportunities for students to develop the technical skills that employers need are is lost whilst students ‘catch up’ on English and maths and Level 2 qualifications, meaning that young people would need to stay in full time education for longer to make up for this and then progress to Level 3.

At the age of 24 (or 19 for a second Level 3 opportunity) residents are required to take out an FE loan to cover the cost of training unless undertaken through an Apprenticeship. FE loans are drastically underspent nationally.

The growth of Apprenticeships and Technical Education options for Liverpool City Region residents is key to our ambitions of delivering the advanced and technical qualifications required for growth of the local economy. Level 3 skills gaps. The City Region requires specialisms from its FE Sector that mirror the skills needed by sectors within the local economy in order to maintain and support further growth.

The Post 16 Skills Plan details plans for Technical Education that will require the local FE sector to be responsive to delivering. The Government’s plans for Institutes of Technology are a key opportunity to ensure those with Level 3 technical skills can progress. The Liverpool City Region Area Based Review recommends Colleges and providers including HEIs collaborate to develop a prospectus of advanced and higher level technical skills to support employer and learner choice and to inform gaps in provision.

Page 31 Page 133 Liverpool City Region Skills Investment Statement 2018/19

Intermediate Skills - Level 2 attainment in Liverpool City Region

Level 2 qualifications include National Vocational Qualifications (NVQ) at Level 2, Intermediate Apprenticeships and five GCSE grades A* to C. Schools performance at year 11 is below the national average on average with some areas significantly below. In contrast, Wirral has a strong record of GCSE performance, with results above the national average.

Chart 17 – Attainment of 5 GCSEs at A*-C (including English and Maths) by Constituent Council

The lower rate of attainment of Level 2 at age 16 in the City Region compared to elsewhere has a longer term impact: Chart 18 shows the Level 2 attainment by age 19, which shows that whilst the City Region narrows the gap to elsewhere it does not close it completely.

Chart 18 – Level 2 attainment at age 16 in Liverpool City Region compared to elsewhere

The City Region does benefit from increases in Level 2 attainment between 16 and 19, with the FE sector clearly adding value, but this is not sufficient to counteract the average earlier in life lower attainment of City Region residents.

Page 32 Page 134 Liverpool City Region Skills Investment Statement 2018/19

Lower Level Qualification and progression opportunities

There is a higher proportion of Liverpool City Region residents who do not have a formal qualification when compared to the national average. The latest data suggests that this gap to national averages is widening. The Liverpool City Region Area Based Review identifies a need to widen access to entry routes to learners with low level skills and re- engage learners to progress into further learning or work whilst supporting employers’ needs to ensure labour demand meets supply. This includes confidence in mathematics, written and spoken English, digital and employability skills.

Chart 19 – Population (aged 16-64) with no qualifications in Liverpool City Region and elsewhere

Skills gaps are most pronounced for residents aged 50-64:-

Table 13 – Liverpool City Region residents without formal qualifications (Dec 2016) Age 16-24 25-29 30-39 40-49 50-64 Overall Proportion 11.3% 7.0% 7.2% 10.2% 18.9% 12.2% Source: ONS Annual Population Survey, NOMIS

Providers working to improve lower level skills should consider how they should target their efforts on residents aged 50-64 (including through Apprenticeships in the workforce) to improve their qualifications levels and productivity.

The Liverpool City Region Area Based Review sets out a need for change which is focused on outcomes, not only qualifications, reducing the number of NEETs and increasing English and maths attainment by age 19 as well as employment opportunities. The Strategic Planning and Oversight Group has established a Task and Finish Group of General FE Colleges, Jobcentre Plus and community learning providers (including local authorities) to collaboratively plan to deliver more cohesive and accessible entry routes for learners with low level skills. A NEET Task Group has now also been established.

Community Learning play a vital role in the local skills infrastructure helping disadvantaged and hard-to-reach learners re-engage in learning, build confidence, and enhance their

Page 33 Page 135 Liverpool City Region Skills Investment Statement 2018/19 well-being. This learning in many cases leads towards progression into further learning or employment rather than achievement of a qualification. This area of learning will remain a local priority and need following the devolution of Adult Education Budget.

Training in work – Apprenticeships

Overall apprenticeship delivery across the Liverpool City Region in 2017/18 continues to hold steady. Despite the uncertainty created by apprenticeship reforms, starts have increased by 1.14% compared to the North West and England which saw reductions of 2.03% and 3.67% respectively. However, providers locally are reporting a continued fall in the number of starts, which has yet to make it way through to formal statistics. This could present a risk to the ongoing viability of providers if this trend were to continue.

26% of employers who responded to the employer skills survey employ apprentices (above national rate of 18%), with Construction (41% of businesses) and IT (33%) particular high marks. There is more work to do in Wholesale Trade and Logistics and Health and Care where 16% and 19% of employers respectively employ apprentices. The number of apprenticeship starts has continued to increase prior to apprenticeship reforms.

Chart 20 - Apprenticeship Starts in the Liverpool City Region 25,000

20,000

15,000

10,000

5,000

- 2005/062006/072007/082008/092009/102010/112011/122012/132013/142014/152015/16 Intermediate Advanced Higher

There have been a number of changes in the apprenticeship subjects being studied, with Health, Public Services and Care now making up 28% of all starts (2016/17 SFR provisional data), with a notable rise in recent years in Higher Level apprenticeships. The proportion of advanced and higher level apprenticeships has increased from 37% in 2013/14 to 45% in 2016/17 supporting the closure of the skills gaps to national averages at Levels 3 and 4.

Table 14 – Liverpool City Region Apprenticeship Starts in selected subject areas 2013/14 2014/15 2015/16 2016/17 Business, Administration and Law 5,870 5,990 5,760 6,210 Construction, Planning and the Built 630 640 790 640 Environment Engineering and Manufacturing Technologies 1,790 1,980 2,370 2,440 Health, Public Services and Care 4,000 4,870 5,080 5,240 Information and Communication Technology 330 390 430 370 Leisure, Travel and Tourism 580 570 550 470 Retail and Commercial Enterprise 2,880 2,930 2,780 2600 Source: Department for Education Statistical First Release

Page 34 Page 136 Liverpool City Region Skills Investment Statement 2018/19

Key points to note are:

 Construction has fewer apprenticeship starts in 2016/17 than in 2015/16 across the City Region and whilst this follows the regional and national trend it is of concern;  Locally Engineering has higher apprenticeship starts in 2016/17 than in the previous year, which is in contrast to regional and national changes.  The largest volume increase has been in Business Administration and Law, which includes the delivery of Higher Level leadership and management apprenticeships.

Key points to note regarding Liverpool City Region apprenticeship starts for 2016/17 (provisional data) are:

 There has been as shift in delivery away from Level 2 programmes to advanced and higher level apprenticeships in line with government and local ambitions;  Level 2 starts fell by -6.02% compared to -9.47% in the North West and -11.1% nationally;  The proportion of overall starts that are Level 2 reduced to 51.3% in 2016/17 from 55.2% in 2015/16;  Level 3 starts grew by 5.98% compared to 3.98% in the North West and 2.49% nationally; and  The trend for increasing apprenticeships at L4+ continues with a 33.06% increase in starts in the City Region compared to 29.68% in the North West and 32.71% nationally.

Liverpool City Region apprenticeship starts by age (provisional data) in 2016/17 details that:

 16-18 aged apprentice starts dropped by a greater proportion than in the region and nationally, falling by -10.95% compared to -2.93% in the North West and -7.85% nationally;  16-18 aged apprentice Level 2 starts experienced a decline above that of regional and national falls, decreasing by -15.28% compared to -9.27% in the North West and -10.81% nationally;  19-24 aged apprentice starts dropped by -2.36% which is less than in the North West reduction of -5.93% and the national reduction of -8.46%;  For those apprentices aged 25 and over, starts grew in the City Region by 8.70% compared to a 2.93% increase in the North West and 2.07% nationally.

Apprenticeship reforms including the apprenticeship levy, for those with over £3m in payroll, and changes to how providers are paid introduce key challenges for the City Region’s provider base. Reductions in 16-18 aged apprenticeship starts appear to be over and above those that could be expected from demographic changes.

The Liverpool City Region Post-16 Area Review (published in January 2017) found that current apprenticeships starts in colleges made up 17% of all starts of providers with a base in the City Region. It recommended an increase in the volume, quality, range and volumes of higher and degree level apprenticeships starts. This will be addressed in the impending Apprenticeship Growth Plan, which is due for completion by December 2017.

Page 35 Page 137 This page is intentionally left blank Agenda Item 10

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 November 2017

Authority/Authorities Affected: None

EXEMPT/CONFIDENTIAL ITEM: No

REPORT OF THE LEAD OFFICER: HOUSING

CONSULTATION RESPONSE ON PLANNING FOR THE RIGHT HOMES IN THE RIGHT PLACES: CONSULTATION PROPOSALS

1. PURPOSE OF REPORT

1.1 This report is to provide a response on behalf of the Liverpool City Region Combined Authority to the Government’s consultation on the “Planning for the Right Homes in the Right Places” document.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:

(a) Submit the attached response as its formal response to the Government’s consultation on “Planning for the Right Homes in the Right Places” document.

3. BACKGROUND

3.1 The Government released its Housing White Paper earlier this year to set out how it proposed to tackle the housing crisis. As part of the Housing White Paper there were numerous proposals to address housing supply and quality.

3.2 This consultation (Planning for the Right Homes in the Right Places) follows on from some of the content of the Housing White Paper and covers areas including, calculating Objectively Assessed Housing Need, Planning Application Fees, Statements of Co-operation and the potential role of Combined Authorities

3.3 A response to the consultation has been drafted and is attached as Appendix One. This generally supports the principle of a simplified approach to calculating housing need, however it raises concern at the actual methodology used and highlights the imbalance between the north and south when considering the resultant housing figures and therefore not supporting the principles of balancing the national economy and the Northern Powerhouse.

Page 139 3.4 The response also promotes the importance of the Combined Authority acting as a co-ordinating resource for the Liverpool City Region in terms of the Statement of Common Ground. There is also support for the proposed increase in planning application fees to increase Local Authority income and go some way to creating a self-funding development management service in each Local Authority (however the proposed fee increases do not go far enough to do this).

3.5 The Combined Authority are recommended to approve this response to be submitted to Government.

4. RESOURCE IMPLICATIONS

4.1 Financial

There are no financial implications for the Combined Authority in making this response.

4.2 Human Resources

There are no human resource implications for the Combined Authority in making this response.

4.3 Physical Assets

There are no physical assets implications for the Combined Authority in making this response.

4.4 Information Technology

There are no information technology implications for the Combined Authority in making this response.

5. RISKS AND MITIGATION

5.1 There are no direct risks resulting from this report, however if the Combined Authority chooses not to respond it will not have the potential to influence the Government’s decision on the matters consulted on.

6. EQUALITY AND DIVERSITY IMPLICATIONS

6.1 There are no equality or diversity implications resulting from the implementation of the recommendations in this report.

7. COMMUNICATION ISSUES

7.1 It is considered that there are no communication implications and therefore no need for a specific communications strategy as a result of this report.

Page 140

8. CONCLUSION

8.1 This report has submitted a response to the Planning for the Right Homes in the Right Places consultation for approval.

MIKE PALIN Lead Officer: Housing

Contact Officer: Mark Dickens, Liverpool City Region Combined Authority (0151 330 1382)

Appendices: Appendix One – Consultation Response: Planning for the Right Homes in the Right Places

Page 141 APPENDIX ONE

Consultation response proforma Family Name (Surname) Dickens First Name Mark Title Mr Address Mann Island, PO Box 1976 City / Town Liverpool Post Code L69 3HN Telephone Number 0151 330 1382 Email Address [email protected]

Organisational Response

Name of Organisation Liverpool City Region Combined Authority

Organisation Type Other (Combined Authority)

Proposed approach to calculating the local housing need

Question 1(a) Do you agree with the proposed standard approach to assessing local housing need? If not, what alternative approach or other factors should be considered?

The Liverpool City Region agrees that a more simplified transparent approach is required to ensure that the public can understand how these figures are calculated. The various complex approaches utilised at present do not provide an easy to understand approach that is easy to comprehend for none technical people.

The proposed approach is very simplistic, this simplicity makes it easier for the public to understand and as such has merits, especially as if used consistently across the country easy comparisons can be made of adjoining and similar authorities. However the assumption that increasing housing supply will automatically reduce house prices is unsubstantiated and is considered a flawed assumption as such the housing supply assumptions need to be refined.

The Liverpool City Region is also concerned that the figures that are being consulted on are perpetuating the north / south divide with significantly larger housing figures in the south in comparison with the north. This does not support the concept oif the Northern Powerhouse and rebalancing the national economy. LCR requests that the methodology is reviewed to ensure that the local need calculations are nationally balanced.

Following the principle of the standardised objectively housing needs assessment there should also be a standardised approach to how growth can be calculated to simplify the whole process.

Page 142 Question 1(b) How can information on local housing need be made more transparent?

At present national planning statistics are displayed on the CLG website and this website is one that many people refer to as it is authority neutral and provides “checked” data. The local housing need figures for each local authority should be provided on the CLG web site – this also has the advantage of being perceived as being independent to the public.

In order to provide transparency the Liverpool City Region Combined Authority will display the local housing need figures for the City Region (combined figure) as well as the figures for the 6 constituent authorities plus any associate authorities where appropriate.

Question 2 Do you agree with the proposal that an assessment of local housing need should be able to be relied upon for a period of two years from the date the plan is submitted?

Yes

There needs to be some security for local authorities that when they submit their plans that they are not going to have to review them / be challenged at the Enquiry in Public because the figures have changed due to the release of updated information. The Liverpool City Region would ideally prefer it to be for 3 years in order that there is greater certainty and to ensure that the plan has made its way through the Enquiry and adoption process.

Question 3 Do you agree that we should amend national planning policy so that a sound plan should identify local housing needs using a clear justified method?

Yes

Question 4 Do you agree with our approach in circumstances when plan makers deviate from the proposed method, including the level of scrutiny we expect from the Planning Inspector?

No

If this new methodology is introduced as the National approach there is no reason to allow Local Authorities to deviate from this methodology. All Local Authorities should have to use the approved methodology and therefore there will be a consistency through all Local Plans and this would prevent wasted time at Enquiry in Public (EIP) with parties debating the technicalities of their preferred approach – this make EIPs more costly and less transparent.

Page 143 Question 5(a) Do you agree that the SoS should have discretion to defer the period for using the baseline for some local authorities? If so how best could this be achieved, what minimum requirements should be in place before the SoS may exercise his discretion, and for how long should such a deferral be permitted?

Yes

The SoS should have discretion but only to be used in exceptional circumstances.

Question 5(b) Do you consider that authorities that have an adopted joint local plan, or which are covered by an adopted spatial development strategy, should be able to assess their five year land supply and / or be measured for the purposes of the Housing Delivery Test, across the area as a whole?

Yes

Question 5(c) Do you consider that authorities that are not able to use the new method for calculating local housing need should be able to use an existing or emerging local plan figure for housing need for the purposes of calculating five year land supply and to be measured for the purposes of the Housing Delivery Test?

No

See Answer 4 – all Local Authorities should have to use the agreed National methodology.

Question 6 Do you agree with the proposed transitional arrangements for introducing the standard approach for calculating local housing need?

Yes

Statement of Common Ground

Question 7(a) Do you agree with the proposed administrative arrangements for preparing the statement of common ground? and

Question 7(b) How do you consider a statement of common ground should be implemented in areas where there is a Mayor with strategic plan-making powers?

A Mayor with strategic planning powers should be the co-ordinator of a Statement of Common Ground covering their respective Combined Authority. Having Local Plan / Spatial Development Strategy powers provide the Mayor with the prime co-ordination role as their powers will overlap the Local Authority areas, for example, the Liverpool City Region Combined Authority has co-ordinated the LCR SHELMA and is leading on the Page 144 technical consultation exercise. As Statements of Common Ground will vary with which Local Authority has a role in which technical area, for example, any coastal working in the LCR will not be relevant to all Local Authorities, but the Mayor will have oversight.

Question 7(c) Do you consider there to be a role for directly elected Mayors without strategic plan- making powers, in the production of a statement of common ground?

No formal role however their oversight may be useful.

Question 8 Do you agree that the proposed content and timescales for publication of the statement of common ground are appropriate and will support more effective co-operation on strategic cross-boundary planning matters?

No

The continual reviews of the Statement of Common Ground especially across Mayoral Combined Authorities will place an undue workload pressure on those areas. For example in the LCR there are 6 Authorities if the Statement of Common Ground has to be reviewed at 4 key stages of the Local Plan process for each Local Authority that would involve a minimum 24 reviews and for Greater Manchester and London the reviews would be continual.

Question 9(a) Do you agree with the proposal to amend the tests of soundness to include that:

(i) Plans should be prepared based on a strategy informed by agreements over the wide area; and (ii) Plans should be based on effective joint working on cross-boundary strategic priorities which are evidenced in the statement of common ground?

Yes

Question 9(b) Do you agree to the proposed transitional arrangements for amending the tests of soundness to ensure effective co-operation?

Yes

Question 10(a) Do you have any suggestions on how to streamline the process for identifying the housing need for individual groups and what experience could be used to help plan to meet the need of particular groups?

Question 10(b) Do you agree that the current definition of older people within the NPPF is still fit for purpose?

Page 145 Neighbourhood Planning

Question 11(a) Should a local plan set out the housing need for designated neighbourhood planning areas and parished areas within the area?

No

The Housing Need for these smaller administrative areas is not simple to calculate as the data used does not come in parish or neighbourhood plan areas (especially as Neighbourhood Plan areas are often defined to suit the purposes of the Neighbourhood Plan group rather than necessarily along administrative boundaries).

Question 11(b) Do you agree with the proposal for a formula based approach to apportion housing need to neighbourhood plan bodies in circumstances where the local plan cannot be relied on as a basis for calculating housing need?

No

The apportionment should reflect the housing allocations set out in the Local Plan plus an additional windfall value. This will ensure that Neighbourhood / parish plans reflect the Local Plan which they must be in conformity with. If there is a large development opportunity within a Neighbourhood Plan area it is essential that the Neighbourhood Plan reflects this and promotes the delivery of the site rather than having an aggregated number which may be less than the capacity of the allocated development site.

Proposed approach to Viability Assessment

Question 12 Do you agree that local plans should identify the infrastructure and affordable housing needed, how these will be funded and the contributions developers will be expected to make?

Yes

If Local Authorities are to ensure that they are meeting the needs of their communities there needs to be a clear identification of the affordable housing and infrastructure needs. In order to identify a development site the Local Authority should set out what infrastructure is required to ensure that the site is deliverable and does not have a negative impact on the community. This ensures that the developer (who will financially benefit from the development) pays for the infrastructure / affordable housing etc rather than the Council or the local community as Council Tax payers.

However it is essential that this does not replace the need for Combined Authority / HCA / National funding for larger scale infrastructure projects, especially those that are no viable to be funded via developer contribution.

Question 13 In reviewing guidance on testing plans and policies for viability, what amendments could be made to improve current practice? Page 146

Question 14 Do you agree that where policy requirements have been tested for their viability, the issue should not usually need to be tested again at the planning application stage?

Yes unless there has been a fundamental change in circumstance (for example an Economic Crash)

Question 15 How can Government ensure that infrastructure providers, including housing associations, are engaged throughout the process, including in circumstances where a viability assessment may be required?

It is in the interests of the Local Authority to keep the Developer engaged throughout the process as otherwise it will be scrutinised at the Enquiry in Public which will create an additional time and cost burden on the Council. It is therefore considered unnecessary for Government to legislate on developer engagement.

Question 16 What factors should we take into account in updating guidance to encourage viability assessments to be simpler, quicker and more transparent, for example through a standardised report or summary format?

Viability assessments are extremely complex and are used to ensure that developers secure a competitive return for a developer / landowner and this compromises the ability of the Local Authority to deliver high quality housing to address the needs of its community. If a developer chooses to pay in excess of the market value of a site why should the local community loose out on the delivery of its housing needs / housing mix. In all of the viability the landowner who secures the most significant uplift in value and therefore profit has no role in the viability assessment their profit remains untouched in terms of the delivery of local housing needs and infrastructure.

Question 17(a) Do you agree that local planning authorities should set out in plans how they will monitor and report on planning agreements to help ensure that communities can easily understand what infrastructure and affordable housing has been secured and delivered through developer contributions? and

Question 17(b) What factors should we take into account in preparing guidance on a standard approach to monitoring and reporting planning obligations? and

Page 147 Question 17(c) How can local planning authorities and applicants work together to better publicise infrastructure and affordable housing secured through new development once development has commenced, or at other stages of the process?

Local Authorities should set out how this will be done but it is not necessary to be part of the Local Plan. The Local Plan / Infrastructure Plan should set out what is required but how it is reported / monitored should be contained in a separate document. An alternative would be to provide 6 monthly reports to the relevant Planning Committee at the Local Authority as this would be in the public domain and be open to scrutiny.

Planning fees

Question 18(a) Do you agree that a further 20% fee increase should be applied to those local planning authorities who are delivering the homes their communities need? What should the criteria be to measure this? No

Local planning authorities do not deliver housing - they grant the consents that developers build out. It is not logical to hold local planning authorities responsible for the actions of developers. It would be more appropriate to assess local planning authorities performance against the number of residential units granted planning permission. There does need to be a reward for those Local Authorities / Combined Authority Areas that are actively promoting growth.

Question 18(b) Do you think there are more appropriate circumstances when a local planning authority should be able to charge the further 20%? If so, do you have views on how these circumstances could work in practice?

The quality of the service provided is important it is not simply the speed of determining applications.

Question 18(c) Should any additional fee increase be applied nationally once all local planning authorities meet the required criteria, or only to individual authorities who meet them?

Any additional 20% fee increase should be applied to individual Authorities that achieve the requisite targets – otherwise if it is on a national basis then those Authorities that are performing well will be held back by those that are not achieving their targets and there would be little incentive to improve on an Authority by Authority basis.

Question 18(d) Are there any other issues we should consider in developing a framework for this additional fee increase?

The principle of local fee setting should be introduced to allow Local Authorities to create a self-funded planning service and assess their fees against land and development values.

Page 148 Other issues

Question 19 Having regard to the measures we have already identified in the Housing White Paper, are there any other actions that could increase build out rates?

Planning has unfortunately been seen, particularly by Central Government as the default barrier to housing delivery – the Liverpool City Region considers this misinformed. The LCR Planning services have invested heavily in creating a pro-growth agenda and ensuring that there is housing growth in the right areas. For example St Helens Council is joint first nationally for the speed of determination of major planning applications. It is well documented that local planning authorities, and particularly in the Liverpool City Region, approve significantly higher numbers of residential units than are built out, this clearly demonstrates that it is not the LCR Local Authorities that are the barrier to housing development.

Major constraints include:-

 Access to finance –for those looking to purchase a property is constrained, availability of affordable finance would stimulate the housing market  Access to finance - for those looking to build houses ie available funding for housing delivery. The level of funding devolved to the LCR is relatively small in comparison to the overall Government funding and an increase in that level of devolved funding would allow the LCR to stimulate growth - please see the LCR CAs Devolution ask regarding devolved control of HCA funding and the LCRs HIF ask.  Regulation of the private rented sector - private sector landlords are purchasing properties to rent to students and driving up residential house prices which local people cannot compete with. This prices locals out of the housing market and therefore stifles growth. The public sector rented sector is heavily regulated while there is a much reduced regulation of the private sector these should be better balanced to ensure all tenants (whatever sector) are ensured good quality accommodation.  Simplification of the Local Plans process - due to the complexity of the Local Plan process, including requirements of legislation and Government Guidance, the Local Plan process, which allocates the housing land, takes many years and is not reactive enough.  Funding of construction skills – there is a lack of suitably qualified skilled construction workers, a developer has recently quoted a 67% increase in costs for suitably qualified brick layers for their development in the Liverpool City Region. Funding and training opportunities need to be provided to suitably train new entrants into the construction industry to ensure that the labour force is there to build the new homes.

Page 149 This page is intentionally left blank Agenda Item 11

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 November 2017

Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

REPORT OF THE TREASURER

COMBINED AUTHORITY BUDGET MONITORING STATEMENT & TREASURY MANAGEMENT POSITION UPDATE 1 July 2017 to 30 September 2017 (Quarter 2)

1. PURPOSE OF THE REPORT

1.1 The purpose of this report is to provide members of the Liverpool City Region Combined Authority with a budget update for the second quarter of 2017/18 and an update on its treasury management activity.

2. RECOMMENDATIONS

2.1 Liverpool City Region Combined Authority is recommended to:-

(a) note the contents of the Combined Authority Budget Monitoring Statement; (b) note the contents of the Treasury Management position update; and (c) approve the updated Treasury Limits and Prudential Indicators.

3. BACKGROUND

3.1 The Combined Authority established its budget for 2017-18 at its meeting of 3 February 2017. This budget provided for the first year of the Mayoral Combined Authority and as such, was very much a transitional budget. The budget provided for a range of transport functions associated with Merseytravel but as a result of the creation of the Mayoral Combined Authority includes more significant non-transport activities than were the case in 2016-17, including the costs associated with the election.

3.2 The Combined Authority has delegated detailed financial and performance monitoring with respect to transport activities to the Transport Committee, however all strategic financial decisions remain with the Combined Authority.

3.3 The financial performance of the Combined Authority is shown in Section 4 of this report. An update on the Treasury Management activity and revised Prudential Indicators is provided in Section 5. Page 151 4. FINANCIAL REPFORMANCE

4.1 Revenue Performance

4.1.1 Combined Authority revenue expenditure in 2017/18 remains largely in the form of pre-determined grants to Merseytravel and capital charges inherited from the Integrated Transport Authority: however with effect from 1 April 2017, the revenue budget for the Combined Authority includes significant non transport costs. These arise as a consequence of the transition to a Mayoral Combined Authority and the operation of the Single Investment Fund. Table 1 below provides an overview of the Combined Authority’s financial performance for the period to 30 September 2017.

Table 1 – Liverpool City Region Combined Authority Budget Monitoring Statement Quarter 2 2017-18 Allowed Revised Projected Variance Budget Budget Outturn £’000 £’000 £’000 £’000 Combined Authority running 6,218 6,000 6,000 218 costs (Table 2) Single Investment Fund 0 4,474 4,474 (4,474) revenue schemes Merseytravel grant 92,020 92,020 92,020 - Tunnels operating grant 27,740 27,740 27,740 - Highways funding allocation 26,500 26,500 26,500 - Pothole action fund 1,346 1,346 1,346 - Treasury management 16,614 15,323 15,323 1,291 Special rail grant 82,130 82,130 82,130 - Transport grant to Halton 3,000 3,000 3,000 - 255,568 258,533 258,533 (2,965) Funded by: Transport levy (95,400) (95,400) (95,400) - Halton differential levy (3,000) (3,000) (3,000) - Mersey tunnels income (41,000) (41,000) (41,000) - Gain share income (4,392) (7,657) (7,657) 3,265 Highways funding (26,500) (26,500) (26,500) - Pothole action fund (1,346) (1,346) (1,346) - Charges for services (300) 0 0 (300) Contributions from reserves (1,500) (1,500) (1,500) - Special rail grant (82,130) (82,130) (82,130) - (255,568) (258,533) (258,533) Net Budget Requirement - - - -

4.1.2 As indicated in the financial performance report submitted to the Combined Authority on 18 August 2017, Combined Authority revenue expenditure has been disaggregated in the table above to provide a more detailed breakdown of expenditure and to reflect the increased clarity over spend priorities. It is envisaged that the level of detail for reporting purposes will be enhanced further as the Combined Authority structure and functions become more defined.

4.1.3 The table below provides a more detailed breakdown of the revised budget and projected outturn for Combined Authority running costs broken down by the

Page 152 thematic areas of spend. The table excludes the income and expenditure lines that are in effect pass through costs to the constituent local authorities.

Table 2 - Liverpool City Region Combined Authority Projected Revenue Outturn Quarter 2 2017-18 Direct Combined Authority Running Costs Revised Projected Budget Outturn £’000 £’000 Single Investment Fund Running Costs 894 894 Election Costs 1,000 1,000 Employment and Skills 700 700 General Running Costs 3,406 3,406

Total Expenditure 6,000 6,000

4.1.4 The revenue costs shown in the table above relate to the costs directly attributable to the running of the Combined Authority; and those schemes that have been submitted through the first Single Investment Fund call that require revenue funding. The Single Investment Fund revenue schemes included above are those that have been approved by the Combined Authority and are subject to Grant Funding Agreements. Projected outturn is based on the recipient’s forecast spend profiles at this time. These will be subject to regular scrutiny and any changes from the agreed profile reported back to the Combined Authority as appropriate.

4.1.5 Whilst the allowed budget for the Combined Authority was set at a strategic level, certain assumptions were made regarding high level costs that would be incurred. The table below details the significant variances between projected outturn and allowed budget together with the reasons for these. The revised budget has been amended to take account of the issues highlighted below.

Table 3 - Revenue Budget Variations against Allowed Budget Area (Favourable)/ Explanation Unfavourable Variance (£’000) Debt (1,291) Projected investment income £500k higher Management than anticipated due to higher cash balances Costs and favourable rates in the market; interest payments lower than budgeted £381k; and costs associated with servicing new debt not incurred due to ability defer borrowing until 2018/19 and beyond £409k Mayoral 570 This reflects the anticipated spend before the Priorities end of the year on supporting the tidal energy project, digital connectivity and the collaborative services agenda Single 4,474 These costs will be met from the Gain Share Investment revenue funding that is available for 2017-18. Fund Revenue These schemes have been approved since Schemes the original budget was agreed in February 2017.

Page 153 4.2 Capital Spend

4.2.1 Within its capacity as the Accountable Body, the Combined Authority receives capital grant in respect of the Local Growth Fund programme, devolution monies received from central government (Gain Share funding) and direct transport related grants. Whilst funding is treated as a single pot, currently the transport elements of the funding are hypothecated to the extent that these are allocated to partners either through allocation or bid to be spend on transport related schemes. The apportionment of this funding was detailed in the February 2017 budget setting report. Gain Share funding has been provided to the Combined Authority to support its devolution agenda.

4.2.2 Local Growth funds have been received by the Local Enterprise Partnership (LEP) on the back of successful bids for these funds with the Combined Authority fulfilling the Accountable Body role for these funds. To date bids have been made and received against three rounds of Local Growth Fund allocations with funding provided for specific thematic areas. Whilst a significant proportion of the Local Growth Fund 1 funds have been committed, with the agreement of the LEP, uncommitted Local Growth Fund funds are being administered as part of the single capital pot. The table below summarises the capital funding streams allocated to the Combined Authority for the current financial year, together with the approved budget for each funding stream taking account of previous year slippage.

Table 4 - Liverpool City Region Combined Authority Single Pot Funding Streams Projected Outturn Quarter 2 2017-18 Funding Revised Budget Allocation £’000 £’000 Local Growth Fund 1 25,602 75,600 Local Growth Fund 2 11,200 30,300 Local Growth Fund 3 16,761 16,761 Gain Share Capital Funding 22,500 45,000 Gain Share Revenue Funding 0 3,265

4.2.3 The table overleaf provides a more detailed analysis of performance to 30 September 2017 in respect of the Local Growth Fund 1 and 2 schemes that have been approved by the Combined Authority.

Page 154 Table 5 - Local Growth Fund Monitoring Update Quarter 2 2017-18 Scheme Approved Projected Projected Budget Outturn Slippage/ £’m £’m Underspend £’m Approved and Grant Funding Agreement Signed Access & Connectivity Improvements 1.55 0.3 1.2 to Knowsley Industrial Park Newton le Willows Interchange 8.45 8.44 0.01 Halton Curve 12.95 12.95 0.00 Maghull North 10.18 9.09 1.09 A565 North Liverpool Key Corridors 8.93 8.23 0.70 M58 Junction Improvements 0.74 1.18 (0.44) STEP 8.12 11.14 (3.02) Silver Jubilee Bridge 1.53 0.93 0.60 Windle Island 3.63 3.63 0.00 City of Liverpool College 2.07 2.06 0.01 Myerscough 2.00 2.00 0.00 Alstom 0.87 1.33 (0.46) Approved but no Grant Funding Agreement Signed City Centre Connectivity Digital Starting Point 0.22 0.22 0.00 Extreme Low Energy 0.44 0.44 0.00 Enterprising Futures 1.35 1.35 0.00 Greenbank Skills for Growth 0.32 0.32 0.00 Liverpool South Work & Wellbeing 0.75 0.75 0.00 Everton Learning & Skills 0.29 0.29 0.00 WELD Tech Futures 0.33 0.33 0.00 Health Engagement Hub 2.00 2.00 0.00 Littlewoods Studio 4.95 4.95 0.00

4.2.4 The figures above are based on the figures reported as part of the Quarter 1 grant monitoring and reporting claims. Based on these figures there is a net projected underspend and unallocated funds of £33.87m against the budgeted allocations for Local Growth Fund 1 and 2. Of the underspend it is envisaged £32.6m will be re- phased into 2018-19 or approved and spent. The Access and Connectivity to Knowsley Industrial Park scheme is showing an underspend of £1.2m which Knowsley MBC as the lead authority has submitted a change control request indicating that this funding is no longer required to deliver the scheme. As such this funding will be released back into the unallocated pot and form part of the single capital pot available to support the Single Investment Fund.

4.2.5 The estimated outturn spend for those schemes in receipt of Combined Authority approval but yet to sign a Grant Funding Agreement has been assumed to be the amount sought for the year. Clearly the actual amount claimed will be impacted by the timing of the signed Grant Funding Agreement and progress against these schemes will be reported back to the Combined Authority as part of the reporting cycle.

4.2.6 A report was considered by the Combined Authority on 20 October 2017 at which a report was tabled which proposed the allocation of £25m of Local Growth Fund 3 funding to commission Key Route Network related projects. The report proposes

Page 155 that the full year’s allocation of Local Growth Fund 3 monies will be committed but not spent.

4.2.7 The table below details performance to 30 September 2017 on the Single Investment Fund Schemes approved by the Combined Authority (both revenue and capital).

Table 6 - Single Investment Fund Position Statement as at Quarter 2 2017-18 Scheme Approved Projected Projected Budget Outturn Slippage £’m £’m £’m Approved and Grant Funding Agreement Signed (Revenue) IFB 2018 2.20 2.20 0.00 Alstom Training Academy 0.40 0.40 0.00 Approved but no Grant Funding Agreement Signed (Revenue) Liverpool Film and Content Fund 0.05 0.05 0.00 Internationalization 0.10 0.10 0.00 Cultural Events 1.60 1.60 0.00 Future Proof M6 J23 0.12 0.12 0.00 Total Revenue 4.47 4.47 0.00 Approved and Grant Funding Agreement Signed (Capital) CEDIR 1.78 1.78 0.00 Approved but no Grant Funding Agreement Signed (Capital) Liverpool Film and Content Fund 0.40 0.40 0.00 Sequiris Fill Finish Project 1.00 1.00 0.00 Chancerygate 0.57 0.57 0.00 Mere Grange 1.52 1.52 0.00 Alchemy Phase 2 1.84 1.84 0.00 Venus 210 Knowsley 0.25 0.25 0.00 Total Capital 5.58 5.58 0.00

4.2.8 Against a total revised budget of £45m, £37.64m of the funding has yet to be committed through the approval process. As noted in the report to the Combined Authority on 18 August 2017, as a result of the first call against the Single Investment Fund, 78 projects with a value of £279m are being progressed through the process to approval. It is anticipated that further spend will commence as further schemes are approved and the position will be reported back to Combined Authority in due course. As in previous years the Combined Authority will look to maximise grant application as part of its wider capital funding strategy.

4.3 Other Capital Expenditure

4.3.1 As part of a commercial letting arrangement with a third party, an amount was made available to support the fit-out of part of Mann Island. This will be repaid through the tenancy agreement over the initial duration of the lease.

4.3.2 The largest element of the Liverpool City Region Combined Authority’s other capital activity is the replacement of rolling stock programme which is being delivered by Merseytravel. Construction of new depot facilities is underway. Network Rail have accelerated part of the programme of infrastructure works which will require the Combined Authority to bring forward up to £15m spend from 2018/19 into the current year. Page 156

4.3.3 This will be funded from earmarked reserves already approved by the Combined Authority and has no overall impact on the cost of the project.

5. INTERIM TREASURY MANAGEMENT STRATEGY REPORT 2017/18

5.1 Context

5.1.1 In accordance with the CIPFA Code of Practice for Treasury Management in Public Services, the Combined Authority is required to produce an interim report which provides a review of the Treasury Management Strategy Statement and Annual Investment Strategy, together with an update on investments and borrowing and a review of its Treasury Limits and Prudential Indicators.

5.1.2 The Combined Authority’s Treasury Management Strategy was approved at its meeting on 21 April 2017. At the mid point in the year it is felt pertinent to provide the Authority with an update on progress against the original approved strategy.

5.1.3 The interim report has been prepared in accordance with CIPFA’s Code of Practice on Treasury Management and covers the following:

 an update on interest rates;  a review of Treasury Management Strategy Statement and Annual Investment Strategy;  an update on current investments and borrowing profiles; and  a review of compliance with Treasury Limits and Prudential Indicators for 2017/18 together with forward estimates.

5.2 Interest Rates Forecasts

5.2.1 The Authority’s treasury advisors, Capita Asset Services have provided the following forecast for interest rates.

Table 7 – Forecasts for Interest Rates (November 2017)

5.2.2 Based on the decision of the Monetary Policy Committee on 2 November 2017 to increase the Bank Rate from 0.25% to 0.50%, the Authority’s treasury advisors, Capita are reviewing their forecasts for interest rates, as detailed above. The current forecasts whilst cautious suggest a gradual increase in interest rates sooner than was envisaged at the time of writing the Treasury Management Strategy. The issue currently being debated is whether this rate rise will prove to be a one off increase to withdraw the emergency Bank Rate cut of 0.25% in August 2016 as a result of the EU Referendum or whether they will embark on a series of further Base

Page 157 Rate increases during 2018. Based on the minutes of the meeting it appears that the MPC foresee interest rates rising twice in the next two years to reach 1%.

5.2.3 It is Capita’s view that the overall balance of risk to economic recovery in the UK is on the downside but there are some significant variables that could impact, including the final shape and form of any Brexit deal, weak growth or recession in the UK’s major trading partners, the US and EU, failure of monetary policy to stimulate sustained growth and the impact of changes to monetary policy amongst the UK’s main partners, specifically changes to US interest rates.

5.3 Treasury Management Strategy and Annual Investment Strategy Update

5.3.1 The Treasury Management Strategy Statement, which includes the Annual Investment Strategy, was considered and approved by the Combined Authority at its meeting on 21 April 2017. The Investment Strategy outlined the Authority’s investment priorities which can be summarised as achieving the best return available on fund whilst maintaining the security of capital and liquidity of investments.

5.3.2 The investment strategy detailed in the Treasury Management Strategy Statement is currently being adhered to and forms the basis on which Officers have operated thus far this year. It is not envisaged that any changes will be made to this before the end of the year. The counterparty criteria flows from the investment strategy and forms the practical basis on which decisions regarding those institutions with whom the Authority will make investments are made. The counterparty criteria is monitored throughout the year to ensure that any proposed changes would be reported back to the Authority.

5.4 Investments

5.4.1 As at 30 September 2017, the Combined Authority held investments of £324.4m (£278m at 30 September 2016). The chart below details the maturity profile of the Combined Authority’s investments.

Page 158

5.4.2 At the mid point of the year, cash holdings have increased from the same point in 2016-17. The reason for the movement in cash holdings can be largely attributed to the current profile of income from grants such as Local Growth Fund and Gain Share, being received earlier in the year and in advance of spend profiles, which are anticipated to occur later in the year. It is therefore expected that the level of investments held by the Authority will decrease by the end of the financial year.

5.4.3. Despite the limited availability of high quality counterparties and continued low rates of return available within the market, the Authority’s weighted average rate of return is 0.62% compared with 0.79% in 2016-17. Whilst the Authority has continued to maintain a good level of return commensurate with its key investment priorities of security and liquidity, the investment environment has been subdued with limited numbers of high quality counterparties participating in the market. Whilst there has been recent fluctuation within rates being offered, it is not anticipated that the fundamentals of the market will change in the short time. It is therefore envisaged that returns on investments will remain subdued for some time.

5.5 Borrowing

5.5.1 As at 30 September 2017, the Combined Authority has outstanding debt of £177.67m together with £19.45m debt transferred on the abolition of the former Merseyside County Council. The chart below shows the profile of residual maturities for external debt (excluding transferred debt).

5.5.2 Based on its capital financing requirement, the Authority has an underlying need to borrow: based on the capital programme for the next three years, it is envisaged that significant borrowing will be undertaken which will reduce the under borrowed position. Interest rates and trends will be monitored closely to ensure that any borrowing is secured at the optimal point.

Page 159 5.5.3 The Authority has a strategy of running down cash balances in lieu of new borrowing to help minimise credit risk. This borrowing strategy is considered to still be fit for purpose.

5.5.4 As part of its treasury management activity, the Authority will consider any options to restructure its debt portfolio to improve the profile or cash flow associated with debt servicing. In the current climate and with the current structure of Public Works Loan Board interest rates, there have been no viable debt restructuring opportunities.

5.6 Treasury Limits and Prudential Indicators

5.6.1 It is a statutory duty under Section 3 of the Local Government Act 2003 for local government bodies to determine and keep under review how much they can afford to borrow. The Combined Authority’s Treasury Limits and Prudential Indicators were outlined in the approved Treasury Management Strategy. During the year the Combined Authority has operated within these limits. A copy of the current and latest projected Treasury Limits and Prudential Indicators are shown in Table 7 overleaf. Revisions have been made to the estimates to take account of anticipated level of capital expenditure over the medium term.

Table 8 - Revised Treasury Limits and Prudential Indicators 2017/18 to 2020/21

2017/18 2018/19 2019/20 2020/21 Revised Forward Forward Forward Indicator Description Estimate Estimate Estimate Estimate Proposed capital spend to Capital Spend which the Authority plans to 119.26 236.45 158.19 146.71 commit Additional borrowing In year requirement for capital 25.10 187.00 123.00 85.00 Requirement expenditure This is the aggregation of Capital historic and cumulative capital Financing expenditure which has yet to 230.39 409.18 524.30 601.73 Requirement be paid for through either capital or revenue resources

Ratio Identified the impact and trend Financing Cost of revenue costs of capital 19.51% 19.15% 18.81% 18.48% to Income financing decisions on the Stream revenue budget

Represents the absolute limit of borrowing that could be Authorised raised and afforded in the Limit for 230.39 409.18 524.30 601.73 short term however this is Borrowing likely to be unsustainable in the long term

Operational Represents the level beyond Limit for which debt is not normally 218.84 340.75 418.08 469.04 Borrowing expected to exceed

Page 160 2017/18 2018/19 2019/20 2020/21 Revised Forward Forward Forward Indicator Description Estimate Estimate Estimate Estimate Upper Limit for Fixed Interest These limits seek to ensure 100.00% 100.00% 100.00% 100.00% Rate Exposure that the Authority does not Upper Limit for expose itself to an Variable inappropriate level of interest 30.00% 30.00% 30.00% 30.00% Interest Rate rate risk Exposure

This indicator can highlight Gross Debt where an authority may be 38.50 228.11 354.05 442.30 and the CFR borrowing in advance of need

6. RESOURCE IMPLICATIONS

6.1 Financial

The financial implications of the report are detailed above.

6.2 Human Resources

None as a direct result of this report.

6.3 Physical Assets

None as a direct result of this report.

6.4 Information Technology

None as a direct result of this report.

7. RISKS AND MITIGATION

None as a direct result of this report.

8. EQUALITY AND DIVERSITY IMPLICATIONS

None as a direct result of this report.

9. COMMUNICATION ISSUES

None as a direct result of this report.

Page 161 10. CONCLUSION

10.1 The Liverpool City Region Combined Authority is performing within its original budget allocation for 2017/18 and the risk of a material overspend remains low.

10.2 The transitional nature of the first year of the Mayoral Combined Authority means that there are several large variances between the original budget and this revised budget. These relate for the most part to Single Investment Fund revenue schemes that have been approved during the year.

10.3 These revenue schemes have been supported using the Gainshare Revenue allocation for 2017/18 and that which was carried forward from 2016/17. The Liverpool City Region Combined Authority’s reliance on Gainshare to support both the Single Investment Fund and its running costs is a potential financial risk that will need to be addressed through the budget setting process for 2018/19 and beyond.

JOHN FOGARTY Treasurer

Contact Officers:- Sarah Johnston, Head of Finance, Merseytravel (0151 330 1015) Liz Carridge, Corporate Communications Manager, Merseytravel (0151 330 1151)

Appendices:- None

Page 162 Agenda Item 12

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 20 November 2017

Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

Non Key Decision

REPORT OF THE INTERIM HEAD OF PAID SERVICE

LIVERPOOL CITY REGION COMBINED AUTHORITY APPOINTMENTS

1. PURPOSE OF THE REPORT

1.1 The purpose of the report is to recommend appointments to Combined Authority Committees.

2. RECOMMENDATIONS

2.1 Liverpool City Region Combined Authority are recommended to:-

a) Appoint the Member to the Overview and Scrutiny Committee as set out in Section 3.

3. APPOINTMENTS

3.1 The Combined Authority is recommended to appoint the following Member to the Committee below:-

Overview and Scrutiny Committee

Member Wirral MBC Councillor Gillian Wood (Labour) to replace Councillor Anita Leech (Labour)

Page 163

4. CONCLUSION

4.1 This report has recommended appointments to the Liverpool City Region Combined Authority.

FRANK ROGERS Interim Head of Paid Service

Contact Officer:- Sue Jarvis, Liverpool City Region Combined Authority (0151 330 1225)

Page 164 Agenda Item 15

Transport Committee

Transport Committee

5 October 2017

Present: Councillor L Robinson, Chair Councillor G Friel, Deputy Chair

Councillors R Abbey, J Bradshaw, A Carr, G Cross, K Deakin, S Foulkes, K McGlashan, P McKinley, V McNeill, M Rasmussen, K Roberts, L Rowlands, J Stockton, P Thomas, J Williams and M Wynn

Apologies for absence were submitted by Councillors T Crone, J Dodd, G Flatley, H Howard, A Jones, N Nicholas, G Philbin and J Wolfson

37. Declarations of Interest

There were no declarations of interest received.

38. Minutes of the Last Meeting

Resolved that the minutes of the last meeting held on 7 September 2017 be approved as a correct record.

In response to the questions raised under minute 31, the following answers were noted:-

(i) the re-routing of the 82 service would be addressed as part of item 9 on the agenda.

(ii) with regard to the transfer of passengers from supported to commercial services, some assumptions were being made around this as it was not known for definite without asking every passenger and the networks could take a year or more to settle down following change. The basis for the assumptions were:

 Merseytravel‟s analysis work of the St Helens review showed an overall increase in patronage in the first six months following the

Page 165 Transport Committee

review (other post implementation reviews were to follow);  Merseytravel‟s work ensured that people could still access the network, but may need to do their journeys differently, so there was an assumption this was being done; and  commercial fare paying patronage was growing overall (16.2% over the past three years).

(iii) the concerns relating to the reliability of the 38 service during the upcoming roadworks in Rainford had been communicated to Arriva as the operator of the service.

39. Multi-Operator Ticketing Scheme - Product and Pricing Update and Proposals

The Committee considered a report of Merseytravel concerning ticketing recommendations relating to specific scheme arrangements, product and price charges for all Merseytravel tickets and to note the sales growth in relation to the Solo family of tickets following the changes introduced in April 2017.

Councillor Rasmussen commended MyTicket, which had benefitted a significant amount of young people, but raised concern at the 20p increase and asked if this was a result of a warning from the operators that they would cease to offer the ticket if the price was not increased.

Officers advised that as the ticket was not currently in the Multi-Operator Ticketing Scheme a number of the medium to smaller operators had voiced their intention to do this. Some other operators had agreed to maintain the price, whilst some had advised they would increase the price regardless. Ensuring the simplicity of ticketing was key and, although Merseytravel had taken the decision to increase the price of the ticket with reluctance, it had been done to make the purchase of the product as easy as possible for young people. If agreed, the proposal brought before the Committee to include MyTicket in the Multi-Operator Ticketing Scheme would mean that Committee approval would be required for any future price increases.

Councillor Abbey commented that Merseytravel had no control over fare prices; however the Multi-Operator

Page 166

Transport Committee

Ticketing Scheme did provide a small element of regulation. He further raised the issue of the speed of recognition of his Walrus card on bus services. This was not as quick as promised and caused significant delays to journeys.

Officers reminded the Committee that the Merseytravel Multi-Operator Ticketing Scheme was voluntary for operators to join and all ticketing proposals had to be developed in consultation with those operators involved. With regard to the comments relating to Walrus, this would be investigated and a full response provided.

Councillor McGlashan referred to the claims of the operators that the significant increase in patronage, predominantly due to MyTicket, had not resulted in increased revenue due to the increase in age of eligibility to 19 years old and questioned how this could be believed without seeing evidence from the operators. He further commented that, during the time of the Merseyside Integrated Transport Authority, the operators were invited to Committee meetings to discuss matters relating to their services and suggested that this be introduced again.

Officers advised that discussions had been held at a senior level between Merseytravel and the operators and whilst all would agree the introduction of MyTicket had led to increased patronage, there were differing opinions on whether it had led to an increase in revenue due to the increase in age. Fraudulent purchases of MyTicket by passengers older than the specified age was a big concern and there were currently mixed feelings about introducing ID checks for young people.

In response to a question from Councillor Stockton as to whether there was a review mechanism for MyTicket and if a return to the original ticket price would be considered should sales decrease, Officers explained that all tickets in the Multi-Operator Ticketing Scheme were subject to review. The Ticketing Steering Group would undertake a review of MyTicket based on performance against price and would submit recommendations to the Committee if necessary.

Councillor Stockton added his thanks to the Officers involved for their work on MyTicket and the Multi- Operator Ticketing Scheme.

Page 167 Transport Committee

Councillor Robinson echoed this thanks and reminded the Committee that all ticket increases were in line with inflation. He added that although the decision to increase MyTicket was not necessarily welcomed, the reasoning behind it was understood.

After attending a meeting where „The Hive‟ Youth Zone in Wirral and affordable ticketing was raised, Councillor Rowlands asked if there was anything that Merseytravel could do in relation to this. Councillor Robinson advised that this was one of the drivers for the introduction of MyTicket and was happy to continue the discussions regarding affordable travel to the facility.

Councillor Abbey commented that the increased price of £2.20 was still affordable and for an all day, all areas ticket provided good value. Accessibility was the main issue and this was down to the commercial operators to fill the gaps in the network as Merseytravel no longer had the resources to do it.

Resolved that:-

(a) the annual price recommendations for the Merseytravel Multi-Operator Ticketing Scheme products to be fully implemented either by 3 January 2018 or August 2018 for Trio, Railpass, Solo and Saveaway ticket as outlined in Appendix 1 and 2 of the report be approved;

(b) the change to the increase in Term Time ticket prices in August, which is later in the year when compared to previous annual fare increases (usually January) be approved;

(c) to allow for staff and operator communications, the withdrawal of the Adult Annual Off-Peak Trio from sale from 30 October 2017 be approved;

(d) the retail of the new variants (three and five days) of the Adult Solo Day tickets at the proposed price points outlined in Appendix 2, until January 2019 be approved;

(e) inclusion of MyTicket in the Merseytravel Multi- Operator Ticketing Scheme (Pre-paid Ticketing Scheme) with immediate effect be approved;

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(f) the price increase of 20p on the Young Persons‟ MyTicket product to £2.20 from 1 November 2017 be approved; and

(g) the positive sales growth performance of the Solo family of tickets following the changes introduced in April 2017 be noted.

40. Quarterly Bus Update

The Committee considered a report of Merseytravel concerning key activities being progressed by Merseytravel‟s Bus Department.

Councillor Abbey thanked the Officers who had supported the Transport Committee Members to bring the concept of the Bus Alliance to fruition. He further raised concern regarding the age of Arriva vehicles being used on Wirral services, one of which was 20 years old, and the transfer of the hybrid vehicles to services in Liverpool. The Alliance was a partnership and although Arriva had made some improvements there was more still that needed to be done. The Buses Bill provided Merseytravel with various opportunities and he recommended that these be clearly explained to the operators.

Officers advised that the rail replacement operation introduced during the closure of the Merseyrail Loop Line caused displacement of some vehicles in Wirral but further investigation would be undertaken into why they had not been re-introduced to the network and also into the move of hybrid vehicles to Liverpool. It was recommended that a meeting be held with Councillor Abbey, Merseytravel‟s Head of Bus and the Arriva Merseyside‟s Area Managing Director.

Councillor Abbey appreciated the displacement but did not understand the reasoning behind the age of the replacement vehicles. Improving air quality was a major issue for the Liverpool City Region and 20 year old vehicles went against this. He welcomed the suggestion of a meeting with Arriva in order to understand their long term plan around the age of their fleet.

In relation to the recent re-routing of the 82 service, Councillor Rasmussen criticised the decision to not undertake any form of consultation with passengers. Those living in Speke did not have access to a station so

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relied heavily on bus services. The 82 service operated by Stagecoach terminated at Garston so Speke residents had to use the Arriva service and therefore could not benefit from the cheaper fares offered by Stagecoach. This re-routing had added further inconvenience to passengers as it was now more difficult to access Liverpool College and those commuting to work now had to travel to the Pier Head and get another bus out of town. This decision was not fair to the users of the service and required urgent review. She also echoed the comments made by Councillor McGlashan during the previous item regarding operators being invited to Committee meetings.

Councillor Robinson shared Councillor Rasmussen‟s concerns. Merseytravel had just completed their Network Reviews and were proud of the level of consultation that was undertaken during this process. The decision to re- route the 82 service was the traditional bus industry method of make the change first and tell passengers afterwards; however this was no longer how it should be done and consideration of passengers should come first. He and Councillor Steve Munby had met with the operators of the service to highlight the issue and they had agreed to develop alternative proposals. Attempts were being made to rectify the situation, but there was no excuse for how it came about.

With reference to 3.1.2 of the report and the mention of an overall 16.2% growth in fare paying patronage and a 142% increase in young person‟s patronage, Councillor McGlashan commented that it would be useful to see those figures converted into numbers of passengers. It would then also provide a better idea of the revenue bus operators were receiving. He also referred to the „Tyred‟ campaign and asked if the 10 year age limit related to the manufacture date of the tyre or when it was re-treaded. Councillor McGlashan lastly commended the detail contained within the equality and diversity implications section of the report.

With regard to the converting of patronage percentages, Officers explained that although some Merseytravel Officers received the actual passenger numbers, these were subject to legal agreements and could not be shared further in order to protect the commercial interests of the operators. The last Bus Update received by the Committee reported an 80% growth in young person‟s

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patronage, which equated to 5 million extra journeys per year.

In response to the point about tyres, it was advised that there was no legal age limit; however when Merseytravel gathered the information from operators, it was noted that there were no re-treaded or re-moulded tyres being purchased which gave Officers a lot of confidence.

Councillor Stockton referred to the series of re-routings in Halton that had been announced by Arriva and included major changes to the 79C and 82A services and also to the 14A, 61A and 62A. Like the 82 re-routing in Liverpool, there had been no consultation prior to these changes and the timing was completely inappropriate given the impending opening of the Mersey Gateway Crossing. A meeting was due to be held the following day between Halton Council and Arriva to discuss the issue.

Councillor Williams mentioned a similar occurrence in South Wirral where Arriva cut key routes without consultation, some of which affected the most vulnerable people. This was one of the major perils of de-regulation.

Councillor Carr referred to the Alliance partners, Arriva and Stagecoach, who had an age limit on their vehicles of seven years. This ability for investment gave monopoly of the network to larger operators and he questioned at what cost was this investment to the smaller operators who were not able to match it. He further enquired as to whether Merseytravel challenged any proposed changes to routes.

Officers explained that when the Alliance was set up it was made clear that Merseytravel wanted all operators to join and that still remained the position; however there was a process to undertake in order to become a member. Councillor Carr‟s view that smaller operators were not able to invest was not necessarily shared, as if these operators wanted to continue to provide bus services continual investment was necessary. Consultation had been undertaken with the Confederation of Passenger Transport and a representative of theirs would be meeting with the smaller operators to discuss joining the Alliance. An Associate Member status had been introduced as a way of encouraging them to join without having to fulfil all of the obligations of the Alliance straight away. With regard to route changes, it was clarified that any changes were legally required to be

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notified to the North West Traffic Commissioner but there was no formal opportunity for challenge.

Councillor McGlashan once again expressed the importance of operators being invited to the Committee in order to provide answers to the questions raised.

Councillor Robinson agreed, although the Committee received regular presentations from both bus and rail operators, it would be useful for representatives to be present to answer specific questions about their services. He further added that although the debate during this item had been challenging, it was important to note the good achievements detailed in the report, particularly that the Liverpool City Region was the only Combined Authority in the country to introduce a 10 year age limit on tyres and the significant achievement in patronage growth; at best other parts of the country were seeing static passenger numbers and some were experiencing a decline. Thanks to Merseytravel driven initiatives, young person‟s patronage had doubled and it was important to encourage public transport usage at a young age in the hopes that it continued during later life. There was still a significant amount of work to be done but the accomplishments to date should be commended.

Resolved that the contents of the report be noted.

41. Maghull North Station Northern Line Clock face Timetable Proposal - May 2018

The Committee considered a report of Merseytravel concerning a proposal submitted by Merseyrail to implement a revised Northern Line Timetable from May 2018 based on clock face principles in order to allow stopping services to call at Maghull North Station.

Councillor Abbey left the meeting

Councillor Carr commented that this station was long overdue and thanked Officers for the work undertaken on the project. He also asked whether there were any proposals to change the zonal system for pre-paid tickets and was advised that this was linked to the wider Smarter Ticketing Programme; discussions were commencing

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regarding simplifying the Trio ticket zones and Maghull North Station would be flagged up as part of this.

Councillor Friel asked why the zones around Maghull North station would need to be reviewed when the next station on the line, Town Green, was part of Lancashire. Officers advised that as part of the on-going work with Transport for the North, it was important to ensure that the ticketing scheme was future proof and meet the requirements of contactless travel across the whole of the North of England.

In response to a question from Councillor McKinley regarding whether the revised timetable would have any adverse effect on those passengers changing trains at Sandhill Station, Officers clarified that trains into Liverpool Central would remain on the same timetable and trains from Liverpool Central would arrive five minutes later.

Resolved that:-

(a) the proposal to implement a revised Northern Line Timetable based on clock face principles from 20 May 2018; and

(b) the passenger service implications arising from the proposal be noted.

42. Network Rail's Consultation on Variable Charges and Station Charges in Control Period 6 (CP6)

The Committee considered a report of Merseytravel concerning the Liverpool City Region‟s response to Network Rail‟s Consultation on Variable Charges and Station Charges in Control Period 6.

Councillor Robinson commended Officers on an adept response.

Resolved that:-

(a) the contents of the report be noted; and

(b) the Merseytravel approval of the response to the Network Rail consultation, attached as Appendix A to the report, be endorsed.

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43. East Midlands Franchise Consultation: Response of the Liverpool City Region

The Committee considered a report of Merseytravel concerning the Liverpool City Region‟s response to the Department for Transport‟s consultation on the specification for the replacement East Midlands Franchise.

Councillor Stockton enquired and received explanation that proposed improvements to the standard of services were similar to those offered on the TransPennine Express franchise, including first class carriages, new trains and improved advanced booking.

Councillor Robinson commented that the Liverpool to Norwich service was particularly vital as it provided Widnes with an inter-city service. The Crewe to Derby service was also important as it would provide better links for the Liverpool City Region to other parts of the country. He commended the detailed response to the consultation.

Resolved that the Liverpool City Region‟s response to the Department for Transport‟s consultation on the specification for the replacement of the East Midlands Franchise be approved.

44. Public Question Time

The Committee were advised that one question had been received for this item from Mr Norman Mills.

Mr Mills was invited to address his question to the relevant Committee Member:-

“Who or what has driven this decision to so drastically alter the route of the number 82 bus - so that huge numbers of residents of this City are being so badly let down and hugely inconvenienced?

Large numbers of residents who have always used the number 82 bus to reach their destination in the Renshaw Street/Lime street areas - will now instead be carried by the number 82 bus all the way to the bus station terminal instead . Many of these passengers are elderly - or may have walking disabilities - and will - at present - therefore have to pay to take another bus back to their desired destination in the Renshaw/Lime Street areas.

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If the Merseytravel committee agree to allow this bus route to be so radically altered - they will be punishing very large numbers of residents of the City. Why should passengers in future be so heavily inconvenienced - that they have to take an extra bus ride - and have to pay the extra monies for this - when the present route of this Bus service actually meets their need?

Therefore, I would ask the vital questions

1) Who is responsible for ' pushing' for this huge change in the number 82 Bus service and what was the original ' driver' for wanting to make these changes?

2) What meaningful Consultation has taken place with the public users of the service?

I suggest that there are other alternatives which should be looked at in some depth - which would still allow the passengers on the number 82 bus route to be carried to their desired destinations in Renshaw Street/Lime Street.”

This question was addressed to both the Chair of the Committee and the Lead Member for Bus; Councillor Robinson provided the answer to the Committee:-

“We appreciate your concerns regarding these changes and would like to explain the reasoning behind this.

The decision to change the route was taken jointly by the bus operators, Arriva and Stagecoach, in agreement with Merseytravel. The primary aim was to alleviate some of the congestion on Hanover Street and surrounding areas, by rerouting the service along Park Lane to Liverpool ONE Bus Station. The congestion on Hanover Street, particularly at evenings and weekends, has for a considerable amount of time caused significant delays to bus services. Both Arriva and Stagecoach have found that in the past, diverting the 82 service along Park Lane has allowed services to run much more reliably and has greatly reduced congestion in the area.

Please understand this is not a decision that has been taken lightly. We appreciate this may inconvenience some passengers, particularly those wishing to travel towards Lime Street Station. However, there are a number of high frequency services which start from

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Liverpool ONE bus station e.g. 10A, 79, or 86, that stop closer to Lime Street Station on their outbound journey. These could be possible options as connecting services for some passengers.

Merseytravel acknowledge that there should have been better engagement with the operators to ensure that they carried out a detailed customer engagement consultation. Please be assured that works are ongoing, lessons have been learnt and that these lessons will shape the process going forward.

On 25 September 2017 Councillor Steve Munby and I met with representatives from both Arriva and Stagecoach and have collectively agreed for the matter to reviewed and alternative options to be brought back for discussion.

We accept that collectively we may not have not done enough to inform passengers about the change to the service and apologise for the confusion this has caused. As with any significant change to the bus network we are monitoring the situation closely and passenger feedback is greatly valued.” Councillor Robinson thanks Mr Mills for his question but advised that, as a political candidate, it was not appropriate for him to submit questions via a mechanism intended for use by members of the public. He encouraged him to direct these via the Liberal Democrat Transport Committee Members in future.

Resolved that:- (a) the question and response be noted; and (b) a written response be provided to the questioner within 10 working days of the meeting.

45. Petitions and Statements

The Committee were advised that no petitions or statements had been received.

46. Any Other Urgent Business Approved by the Chair

The Combined Authority‟s Head of Paid Service referred to a letter that the Members of the Transport Committee,

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the Metro Mayor and other Members of the Combined Authority had recently received from the RMT, in relation to a presentation he had given to the meeting of the Combined Authority on 15 September 2017. The letter had also been published on the RMT website.

He requested that it be placed on public record that he refuted the allegations made within the letter and confirmed that he was producing a detailed response, which would be shared with Members of the Transport Committee.

CHAIR

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