CITY COUNCIL Development, Environment and Leisure Directorate

REPORT TO CABINET DATE 28 April 2004

REPORT “F” EXECUTIVE DIRECTOR OF REPORT OF DEVELOPMENT, ENVIRONMENT & ITEM LEISURE

SUBJECT Supertram Extensions

SUMMARY

To update Members on the outcomes of public consultation, discussions with the Department for Transport, and further study work on Supertram Extensions since the previous report to Cabinet on 25th June 2003. To ask Cabinet to welcome the South Passenger Transport Authority’s 1st April 2004 decision to consult further with the District Authorities on whether to proceed with a full funding application to the Department for Transport for a ‘reduced network’ of Supertram Extensions comprising: * Royal Hallamshire Hospital to Rotherham Parkgate via and Meadowhall; * Sheffield City Centre to a Park & Ride facility at Canklow Meadows (east of M1 junction 33) via Waverley/Orgreave.

RECOMMENDATIONS

Members are asked to:

 Note the outcomes of the further study work and discussions with the Department for Transport, as summarised in this Report;

 Approve that, subject to agreement by the other South Yorkshire Districts and final approval by the PTA in the summer, a formal Local Transport Plan ‘Annex E’ major scheme funding submission be produced and taken forward to the Department for Transport for a ‘truncated’ network of extensions consisting of: * University/Hospitals loop to Rotherham Parkgate; and * Sheffield to Waverley/Orgreave and beyond to a Park & Ride site by the M1 at Canklow Meadows, if affordable.  In the light of the above being seen as the strongest possibilities for achieving funding success, agree, for the short to medium term at least, that the following be not pursued as tram extensions, with a view instead to consideration of bus-based alternatives: * Sheffield University/Hospitals to Ranmoor (weaker economic case and little public support); * Sheffield to Dore (weaker economic case and high construction costs); * Canklow Meadows to Hellaby (weaker economic case and high construction costs).  Approve that an additional extension route to the Northern General Hospital remain under consideration, subject to the issues described in the Report regarding the likely need for Sheffield City Council to be responsible for identifying the c.£10million additional ‘local contribution’ which this would entail.  Note that, for those routes not to be pursued at present, including the Northern General Hospital, consideration should be given to bus-based alternatives.

RELEVANT SCRUTINY BOARD IF DECISION CALLED IN DEL

FINANCIAL IMPLICATIONS NO PARAGRAPHS 9.1-9.4

CLEARED BY M HOOLE

BACKGROUND PAPERS South Yorkshire Passenger Transport Authority Reports: Supertram Extensions – Consultation Findings, 4 March 2004; Supertram Network Extensions, 1 April 2004.

CONTACT POINT FOR ACCESS David Curtis TEL NO: 35499

AREA(S) AFFECTED (if extension to Northern General Hospital is included), , Manor/Castle/Woodthorpe, Park/, //Broomhill, South West, South

CATEGORY OF REPORT

1 OPEN

CLOSED Paragraphs(s) REPORT OF HEAD OF DEVELOPMENT SERVICES

REPORT TO CABINET 28 APRIL 2004

SUPERTRAM EXTENSIONS

1 PURPOSE OF REPORT

1.1 To update Members on the outcomes of public consultation, discussions with the Department for Transport, and further study work on Supertram Extensions since the previous report to Cabinet on 25th June 2003. To ask Cabinet to welcome the South Yorkshire Passenger Transport Authority’s 1st April 2004 decision to consult further with the South Yorkshire District Authorities on whether to proceed with a full funding application to the Department for Transport for a ‘reduced network’ of Supertram Extensions comprising: * Royal Hallamshire Hospital to Rotherham Parkgate via Sheffield City Centre and Meadowhall; * Sheffield City Centre to a Park & Ride facility at Canklow Meadows (east of M1 junction 33) via Waverley/Orgreave.

1.2 Background papers for this report are the reports to the South Yorkshire Passenger Transport Authority, and their appendices, as follows: * Supertram Extensions – Consultation Findings, 4 March 2004; * Supertram Network Extensions, 1 April 2004.

These are available on the South Yorkshire Passenger Transport Authority website at www.southyorks.org.uk/pta .

2 INTRODUCTION AND BACKGROUND

2.1 was opened in stages in 1994 and 1995. Its 30 kilometre network now carries some 12 million passengers -- twice that of the local rail network. Recent surveys have also shown that up to 25% of its passengers have a car available as an alternative for their journey. It has been highly successful in terms of opening up access to the Lower Don Valley and is now seen as one of the major successes in Sheffield.

2.2 In 2000 a study looked at the feasibility of a short extension of Supertram to serve the University and Royal Hallamshire Hospital (RHH). Whilst of obvious use, it was hard to show that the extra patronage which would be created would be sufficient to justify the cost of the extra trams required to operate this. It was concluded that this would be better justified as part of a wider extension of the network since the Government, in publishing its 10-Year Transport Plan, had indicated a willingness to expand the number of Light Rail schemes.

2.3 As a consequence, in 2001, a wide-ranging assessment was carried out by the PTE and all four Districts in South Yorkshire to identify possible extensions and priorities for

2 Supertram development. That work concluded that the following extensions should be further assessed:

 Dore and ;  Ranmoor and the RHH;  Northern General Hospital;  Low Edges;  branching off the existing Meadowhall route to Waverley/Orgreave, and on to Hellaby/Maltby in south Rotherham;  extending the Meadowhall route to Rotherham town centre and Manvers.

2.4 Consultants Faber Maunsell were commissioned in 2002 to look in detail at these proposals, and ascertain the extent to which any or all of the above routes would meet the policy agenda of the Local Authorities and would represent viable and feasible proposals in the context of the Department for Transport’s funding criteria. This project was coordinated by South Yorkshire Passenger Transport Executive, with a Steering Group also comprising officers from Sheffield City Council, Rotherham MBC, and Stagecoach (the current operator of the Supertram system). The processes and final results of this study work were presented to Cabinet on 25 June 2003. Its recommendations were as follows: * the following ‘preferred’ core network (estimated capital cost £383million) be taken forward to discussions with the Department for Transport, prior to potentially assembling a more formal funding application:  Ranmoor to Rotherham Parkgate via RHH, Sheffield City Centre and Meadowhall;  Dore to Hellaby via Sheffield City Centre and Waverley/Orgreave; * extensions to serve the Northern General Hospital from Sheffield, and also Manvers from Rotherham, should remain under consideration. (The Northern General Hospital extension would increase the network cost to £423million, but would also add significant social and regeneration benefits).

2.5 The report also noted the potential funding difficulty facing the South Yorkshire Authorities in taking this scheme forwards. As far as the capital costs of the extensions are concerned, current Government rules on funding for Light Rail schemes such as this mean that only 75% of the capital cost will be borne centrally, leaving 25% (i.e. approximately £100million) to be found ‘locally’ in the form, for example, of grants from Objective 1, local LTP allocations, and developer contributions. A maximum of £15million from Objective 1 and LTP is thought to be realistic and, given the nature of current economic conditions in the area, significant large-scale developer funding is unlikely. This would clearly leave a very significant shortfall.

2.6 It was therefore proposed that, given the particularly difficult economic situation in South Yorkshire, a relaxation of the Department for Transport’s normal policy be sought to allow a higher than 75% contribution from the centre. In particular, it would be stressed to them that the Supertram Extensions on the proposed routes would bring wide economic benefits (i.e. not just transport benefits) and would thus make a major contribution to the successful regeneration of the South Yorkshire economy. Furthermore, the case would be made that without these Supertram Extensions, it would be almost certain that a number of the major development proposals in the East End of Sheffield would have to be put on hold due to the lack of alternative means of dealing with the traffic generation

3 effects of the development of all the sites around the M1 Junctions 33 and 34 without the relieving impact of Supertram and other public transport measures.

3 PUBLIC CONSULTATION – FOR MAPS, SEE APPENDIX A

3.1 Cabinet on 25 June 2003 endorsed the PTA’s intention to carry out further public consultation and hold discussions with the Department for Transport over the affordability and case for investment in the following Supertram extensions:-

 Ranmoor to Rotherham Parkgate  Dore to Hellaby

as illustrated at Appendix A.

3.2 The total cost of this network was just under £400 million. All of these schemes met the DfT’s criteria for such schemes in that:-

* The projected revenue more than covered the operating costs; * They had a sufficiently strong social/cost benefit case; * They met the wider objectives of South Yorkshire and the Government.

3.3 The particular concerns that the PTA wanted to explore were:-

* The impact on communities served by the routes and the views of those communities;

* The DfT’s view on the robustness of the case for each of the above extensions and the current DfT approach towards funding such schemes.

3.4 Accordingly, detailed consultation on the potential extensions to the Supertram system took place in Autumn 2003. Public attitudes to the proposals for routes from Dore to Hellaby and from Ranmoor to Rotherham Parkgate were assessed using a number of approaches including:

* Distribution of a leaflet including a reply-paid questionnaire delivered throughout Rotherham and to addresses within one mile of the proposed route in Sheffield. The leaflet was also available at exhibitions, in public libraries and in response to requests for information;

* The project website, which included an on-line version of the questionnaire;

* Public exhibitions held at five locations in the corridors served by the proposed extensions;

* An interviewer-led survey with residents in the corridors;

* Focus Group surveys; and

* A telephone helpline.

4 3.5 Full details of the results of the consultation were published in the 4 March 2004 report to the South Yorkshire Passenger Transport Authority but, in summary, the surveys indicated that there is good support for extensions to Rotherham Parkgate and Dore:-

* The interview survey showed support for these routes at 80% and 77% respectively; * The leaflet survey showed support at 64% and 54% respectively.

Support centred around:-

* Improved access and choice; * Attractiveness and sustainability of Supertram; * Reduced congestion.

There were, however, significant concerns about the environmental impact of the route to Dore, particularly the proposed on-street sections south of Beauchief junction.

3.6 There is less support for extensions to Ranmoor and Hellaby:-

* The Interview survey showed support at 48% and 43% respectively (although these figures were still greater than those opposing the proposals); * The leaflet survey showed support at 24% and 15% respectively.

The majority of respondents to these two routes were concentrated in two specific areas: Endcliffe Vale Road in Sheffield and Bawtry Road in Rotherham. Their main concerns/comments were:-

* Construction disruption * Impact on residential/conservation areas * Expensive and waste of money * Other solutions were more appropriate

Some residents in Ranmoor who opposed the extension did, however, support an extension to the Hospitals and University.

4 FUNDING AND AFFORDABILITY

4.1 The situation regarding likely funding for these extensions has been ‘fluid’ over the months since the last Cabinet Report. The Department of Transport’s thinking is believed to have been influenced by a number of pressures:

* The likely outcome of the Government’s Spending Review for the next period;

* Requirements for investment in the rail network as a result of the Rail Regulator’s decision on Track Access Charges;

* Pressures on spending in other Government policy areas;

* Competition for other transport investment schemes;

5 * The Government’s increasing concern over the value for money of light rail schemes, given the discussions they had been having in Autumn 2003/Spring 2004 with the promoters of schemes elsewhere in the country which are having to be re-evaluated in the light of increased cost estimates.

4.2 The DfT’s position can best be described as that the Government still believes that light rail schemes perform an important part of an integrated transport network but those Authorities wishing to come forward with schemes should ensure that:-

* They are the most appropriate and cost-effective solution for the problems they are trying to address;

* They are capable of being funded and delivered. In particular, the DfT have strengthened their view that there must be a 25% local contribution to such schemes. A key dependency of the original decision of the PTA and Districts last summer was the ability for South Yorkshire to argue that there were special circumstances which might allow a lower level of intervention than 25% if the full network was to be developed. Discussions with the DfT, and others in the intervening period, have indicated that this will be difficult. Nonetheless, the regeneration and economic benefits that flow from transport investment in order to support such arguments have been identified.

4.3 These realisations led the PTE, in consultation with SCC Officers, to commission further consultancy study work on extension options which, although based on the original proposals, were somewhat less expensive and might therefore have a greater chance of successfully achieving funding from the DfT. Lower overall capital costs would also reduce the extent of the potentially problematic 25% local contribution.

5. RESULTS OF FURTHER STUDY WORK

5.1 For each of the options originally under consideration, and those which have been subsequently explored as a consequence of discussions with the DfT, the study work has looked at three key indicators:-

* the capital costs;

* the difference between operating cost and the farebox revenue (this must be positive);

* the economic ‘net present value’ (the difference between costs and benefits. It should be positive and be significant).

5.2 The conclusions that can be drawn from that analysis, based on the Department for Transport guidance and discussions with them since the 25 June 2003 Cabinet Report, are shown in Table 1 and described in this section.

6 TABLE 1: SUMMARY OF ECONOMIC APPRAISAL

SCHEME PRESENT NET BENEFIT COSTS VALUE PRESENT – COST (£ million) BENEFITS VALUE RATIO (£ million) Full original ‘preferred’ network, Ranmoor- 383 286 15 1.06 Rotherham Parkgate plus Dore-Hellaby, as per 25 June 2003 Cabinet Report, but re- assessed in the light of discussions and new guidance Sheffield University/Hospitals loop- 94 160 90 2.29 Rotherham Parkgate Sheffield University/Hospitals loop- 183 218 86 1.65 Rotherham Parkgate plus Sheffield-Canklow Meadows Northern General Hospital extension* 41* -15* -22* -2.14* *=not re-assessed under new guidance, but unlikely to be substantively different.

5.3 Ranmoor to Rotherham Parkgate

5.3.1 The original scheme for this route cost £115 million and in cost/benefit terms was the strongest case within the network. In view of the affordability issues, and local concerns, the study work looked at the impact of shortening the route by terminating it in the Sheffield University/Hospitals area. This has had the effect of reducing the capital cost by between £20 and £25 million, depending on whether it terminates in a loop or a spur. It does not, however, significantly change the overall operating cost/revenue ratio or the cost/benefit ratio and, as the cost is less, the local contribution required drops. The tram scheme between the University/Hospitals and Rotherham Parkgate compares favourably with alternative investment in bus and rail. (The University/Hospitals loop would run in an anti-clockwise direction only, leaving the existing line by University tram stop and routeing via Western Bank, Whitham Road, Newbould Lane and Glossop Road).

5.3.2 The issue can, therefore, be considered in two parts:-

(i) The case for extending the tram to Rotherham Parkgate and Sheffield University/Hospitals;

(ii) Whether, in the light of the public consultation (which expressed strong objections about extension beyond the University/Hospitals to Ranmoor), the expenditure of an additional £20million to serve Ranmoor would be justifiable if the route between Sheffield and Rotherham Parkgate were to go ahead.

5.4 Dore to Hellaby

5.4.1 As the strongest performing section of the originally proposed network in cost/benefit terms was that to Rotherham Parkgate, the DfT required each of the 7 extensions to be looked at incrementally in order to assess the case for further extensions, i.e. what would be the next most effective extension to add to that network? This could either be an extension to Dore or the extension to Hellaby (either fully to Hellaby or shortened to serve Waverley). The complete Dore to Hellaby route would cost in the region of £270 million and, in the light of the discussions with the DfT on affordability, would have to be at best a long-term aspiration.

5.4.2 Of the elements of this route, the section to Dore has a likely cost of £100 million. It principally met modal split objectives and City Centre regeneration benefits. The cost/benefit case was weaker than the other three routes when taken in isolation, although it benefited from being part of a network. In the short to medium-term, investment in bus and rail based solutions is likely to be a more affordable option.

5.4.3 The estimated cost of the extension from Sheffield to Hellaby was £170 million. Its cost/benefit case is stronger than the Dore extension. Nonetheless, together with the Rotherham Parkgate-Sheffield University/Hospitals extensions, it would cost £263 million. Given the DfT funding position and local funding issues, the study work looked at options for shortening the route but still ensuring that communities in Rotherham are effectively linked to Waverley (an important regeneration objective).

5.4.4 Curtailing the route at Canklow Meadows (east of the M1) reduces the costs by £80 million. Together with the Parkgate extension it would cost £183 million and would have a viable cost/benefit case. Shortening the route further to Waverley would bring additional savings in the total cost of the order of £20 million and still leave a total scheme that meets the Government’s criteria. Together with the Sheffield University/Hospitals-Parkgate extension it would cost £163 million. However, these options deliver Sheffield and Rotherham’s strategic and regeneration objectives less strongly than the original, longer route. Cabinet should note that it may well be possible to further reduce the costs of such an extension to Waverley by looking at sections of single line working – this should be looked at in more detail if this option is seen as a realistic way forward.

5.4.5 At the Department for Transport’s insistence, the study work also assessed the effect of alternative investment in a high-quality, segregated, bus rapid transport (BRT) network. The 1st April 2004 PTA Report outlined the costs and benefits of these options, showing that, in the short to medium-term, this could be a more cost-effective solution to the issues of connecting Sheffield and Rotherham to developments at Waverley. If the DfT were to indicate a willingness to fund this BRT alternative, but not Supertram Extensions, more detailed work would be required as to where to route such services, bearing in mind that they could potentially cover a wider area than fixed tram routes.

5.5 Other Extensions

5.5.1 Northern General Hospital: the report considered by Cabinet on 25 June 2003 noted that, whilst the potential extensions to the Northern General Hospital from Sheffield, and to Manvers in the Dearne Valley from Rotherham Parkgate, were not to be taken forward in view of their weaker economic cases, they should 8 remain under consideration as future options. The position has not changed on the viability of these schemes. The extension to Sheffield Northern General Hospital added £41million to the capital cost but had a negative cost/benefit ratio and its revenue did not cover its operating costs. However, if a smaller network is being pursued then either of these options could be revisited but, in the current approach being taken by the DfT, both would need to have their case strengthened and additional local contributions identified.

5.5.2 In Rotherham it has been clear that there is interest in a tram extension which links Rotherham Parkgate to Rotherham centre, Waverley and Sheffield. Work done in previous studies has indicated that such a route is likely to cost in the region of £200million and will have a less strong case than the extension to Rotherham Parkgate plus the best tram route from Sheffield to Waverley or bus-based investment package. The latter is likely to cost less and deliver a greater overall cost/benefit case. A Rotherham-Waverley-Sheffield tram route is, therefore, unlikely to be supported by the DfT, even when the Economic Impact Assessment is taken into account.

6. WAYS FORWARD

6.1 The 1st April 2004 PTA did not approve a particular course of action in relation to any of these schemes but recommended further discussion with the South Yorkshire District Councils, in the light of the issues described above, with a view to reaching an agreed way forward in July in order to inform the LTP process. It did, however, clearly indicate that:-

1) The strongest performing route is that between Sheffield University/Hospitals and Rotherham Parkgate and there is certainly potential for the 25% ‘local contribution’ to be funded from within South Yorkshire (principally through Objective 1 contributions and other funding sources) should the Department for Transport agree to fund 75%;

2) An addition to that network would be to look at the ways in which Waverley could be connected in to Sheffield and Rotherham but, before coming to that decision, there needs to be further discussion with Rotherham and Sheffield about the suitability of such extensions as opposed to developing a high-quality bus network.

3) In the short to medium-term, the solution to will have to be based around investment in the existing bus and rail networks with a view to possibly looking at a light rail extension in the longer-term.

4) On this basis, the tram extensions from Sheffield University/Hospitals to Ranmoor, from Sheffield City Centre to Dore, and from the M1 to Hellaby would not be pursued in the short to medium-term.

5) There will also need to be further discussion with all of the South Yorkshire Districts on the funding impact (alongside other transportation priorities) and the way in which any scheme is taken forward and developed.

9 6) The previously considered extensions to the Northern General Hospital and Manvers in the Dearne Valley do not perform as well individually as the strongest schemes but could be the subject of further analysis as part of a reduced network expansion.

7. ENVIRONMENTAL IMPLICATIONS

7.1 The South Yorkshire Local Transport Plan has improving and protecting the environment as one of its overall objectives. By providing a credible and attractive alternative to car use, Supertram has shown that it can do this by attracting existing car users, thus contributing to a reduction in car use, and therefore congestion, and therefore local air pollution. This is especially so at peak commuting times, and the proposals here would serve to extend this effect to new areas.

7.2 The predicted reductions in traffic flows on key roads will afford the opportunity to introduce public transport, traffic management, pedestrian and cycling measures that will bring further environmental and other benefits to local communities.

7.3 The report from the recent further study work gives detailed analysis of the environmental effects of the proposed extensions. In summary, overall effects are as follows:

 Traffic congestion – beneficial impact with potential to divert trips from car to Tram.  Noise – Slight adverse impact;  Local Air Quality – Minor beneficial impact;  Greenhouse Gases – Minor adverse impact;  Landscaping and Townscape – Moderate adverse impact (but mitigating measures should be possible);  Heritage Sites – Slight adverse impact;  Biodiversity – Minor adverse impact;  Water environment – Moderate adverse impact;

8 EQUAL OPPORTUNITY IMPLICATIONS

8.1 There are diverse local communities adjacent to the potential route extensions. By addressing severance issues created by existing poor quality transport links, and by opening up land for development, this project will improve access to jobs from the various local communities being served.

9 FINANCIAL IMPLICATIONS

9.1 The operating costs of any extensions will be the subject of a suitable arrangement with a franchised operator, and would not in themselves impact upon the Council’s Revenue Budget or PTA Levy.

9.2 As far as the capital costs of the extensions themselves are concerned, as described above, current Government rules on funding for tram schemes mean that ‘only’ 75% of the capital cost will be borne centrally, leaving 25% to be found ‘locally’ in the form, for example, of grants from Objective 1, local LTP allocations, and developer contributions. A maximum of £15 million from Objective 1 and LTP is thought to be realistic and, given the nature of current economic conditions in the area, significant large-scale developer 10 funding is unlikely. Clearly, this leaves a potentially significant shortfall, the exact size of which will depend on the extent of the extensions being taken forwards. As described above, there now seems no likelihood of the DfT relaxing its 75% central/25% ‘local’ funding split, despite the strong regeneration arguments that have been put to them in the case of South Yorkshire.

9.3 In the light of this, the issues around whether to pursue the option of a further extension to serve the Northern General Hospital are still the same as were described in the 25th June 2003 Cabinet Report. The extra capital cost of this would be approximately a further £41million, depending on the route chosen. Cost-benefit analysis carried out as part of the consultants’ study work shows that it basically has a negative case, in terms of operating account and overall economic net value. As set out above, it will be necessary for all of the Partners to identify sources of local funding to contribute to scheme costs for the network as a whole. It could be argued that local contributions to cover the Northern General Hospital extension would be a shared responsibility. However, given the discussion above about which potential networks now offer the best economic and funding cases, and that these do not include the Northern General Hospital, it is likely that Sheffield City Council would be responsible for finding a further local contribution of up to £10million if we were promoting this part of the scheme. There are several potential sources for this ‘local’ funding: * Local Transport Plan – although it should be noted that to one year’s entire ‘Integrated Transport’ allocation for the City is currently about £5million; * Burngreave New Deal, and indeed the Northern General Hospital itself, could be asked for contributions; * Objective 1 and SRB5 – although it is quite likely that the maximum possible contributions from these will already have been achieved to cover the wider funding gap for the rest of the network of extensions.

9.4 So, if it decides to pursue the Northern General Hospital option, Sheffield City Council will need to explore these local sources of finance, on top of assisting with the ‘local’ share of the main extensions.

10 RECOMMENDATIONS

10.1 Members are asked to:

 Note the outcomes of the further study work and discussions with the Department for Transport, as summarised in this Report;

 Approve that, subject to agreement by the other South Yorkshire Districts and final approval by the PTA in the summer, a formal Local Transport Plan ‘Annex E’ major scheme funding submission be produced and taken forward to the Department for Transport for a ‘truncated’ network of extensions consisting of: * University/Hospitals loop to Rotherham Parkgate; and * Sheffield to Waverley/Orgreave and beyond to a Park & Ride site by the M1 at Canklow Meadows, if affordable.

 In the light of the above being seen as the strongest possibilities for achieving funding success, agree, for the short to medium term at least, that the following be not

11 pursued as tram extensions, with a view instead to consideration of bus-based alternatives: * Sheffield University/Hospitals to Ranmoor (weaker economic case and little public support); * Sheffield to Dore (weaker economic case and high construction costs); * Canklow Meadows to Hellaby (weaker economic case and high construction costs).

 Approve that an additional extension route to the Northern General Hospital remain under consideration, subject to the issues described above regarding the likely need for Sheffield City Council to be responsible for identifying the c.£10million additional ‘local contribution’ which this would entail.

 Note that, for those routes not to be pursued at present, including the Northern General Hospital, consideration should be given to bus-based alternatives.

David Curtis, Head of Development Services

12 APPENDIX A

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