Written evidence submitted by Hampshire County Council (MTP0020)

1. Introduction - About Hampshire the place and why Hampshire County Council is responding to the Committee’s Call for Evidence.

Hampshire is one of the largest English counties, covering 1,400 square miles, with 85% of its area classified as rural and a third of the county falling within a national park or designated Area of Outstanding Natural Beauty (AONB). Its unique urban rural mix, coupled with its growing population – already over 1.38m and set to reach 1.5m by 2026 - adds to its housing, digital and transport infrastructure pressures. Although Hampshire has a relatively strong economy (£46.5bn GDP in 2018) significant pockets of deprivation exist in areas such as Rushmoor in the north of the county and in Gosport & Havant in the south. Improving Hampshire’s transport infrastructure is vital for those communities and to help unleash the potential of Hampshire’s key growth sectors, such the aerospace and defence sector, whose businesses frequently cite poor transport and digital connectivity as being key barriers to growth. The future capacity and efficiency of Hampshire transport network (road and rail) will also be critical to UK’s economic recovery from the pandemic and adjustments post Brexit as its provides a strategic gateway for international trade via the Port of Southampton.

Hampshire County Council spends around £1.9bn per annum serving its residents and local businesses. As a strategic authority it works closely with the local planning authorities, its two Local Enterprise Partnerships, the unitary cities of Portsmouth and Southampton and, critically, with central government and national agencies to advance sustainable growth across the sub region. With a strong track record of using its scale, capacity, and expertise to deliver infrastructure, it remains committed to supporting Hampshire’s economy and high- quality environment through delivery of an ambitious capital programme. In turn, that will support the objectives of the its new emerging Local Transport Plan which aligns to the Government’s aim of reaching net zero carbon by 2050. However, success will heavily depend on how future transport infrastructure projects are appraised and funded.

2. Transport infrastructure strategy and priorities  The Government’s transport infrastructure priorities, including those set out in the National Infrastructure Strategy

Whilst many of the Government’s transport priorities are laudable, the challenge of delivering a high-quality, reliable and carbon neutral transport network will remain unless a more strategic (multi-modal) approach is taken to transport planning and it is backed up by long-term certainty over investment. As highlighted below, the continuation of short-term competitive funding for narrowly specified projects, with tight bidding times, makes the timely delivery of comprehensive transport packages extremely difficult. This, in turn, risks delaying economic recovery. The certainty of multi-year funding enjoyed by Highways England and Network Rail should be extended to strategic authorities and, in order to maximise return on investment there should be a more integrated approach to infrastructure investment.

 the contribution transport infrastructure can make to the Government’s ‘levelling-up’ agenda and the economic growth of the UK’s towns, cities and regions outside London; Well targeted, strategic transport infrastructure, combined with more investment in local infrastructure, is essential to secure the UK’s long-term prosperity and ensure its local communities – whether located in the north or south of England - are not left behind.

A more genuine place-based approach to economic recovery and transport investment decisions is required to enable each region to maximise its economic potential. For example, Hampshire, which is one of the largest counties in England and often considered to be a desirable place to live and work, is now increasingly challenged by the high cost of housing and inadequate transport and digital infrastructure. Its growing infrastructure deficit inhibits the growth of its high value sectors, such as aerospace & defence and ICT, which could otherwise drive forward inclusive growth.

The Government’s ‘levelling up’ agenda should consider both national and place-based challenges. It should consider both the economic potential and the challenges faced in areas such as Hampshire where, due to its large rural and polycentric geography, its communities remain heavily reliant on the road network to access services and employment. From the national perspective, Hampshire’s transport network also provides a critical gateway for UK trade to international markets, via the Port of Southampton (see below).

Hampshire’s economy has been relatively strong (£46.5bn GDP in 2018) however, its productivity has continually lagged behind the South East average. Moreover, improvements in its transport infrastructure are needed to help address the significant pockets of deprivation found in Hampshire’s Economic Area. For example, deprivation in Rushmoor in north as well as in its urban south, particularly in the cities of Southampton and Portsmouth and the neighbouring districts, such as Havant where 29% of the district falls in the bottom 20% of LSOAs in England. Unemployed claimant benefit rates in these areas are continuing to rise during the pandemic. Therefore, in terms of the levelling up agenda, it crucial that funding is made available to deliver local transport schemes, such as rapid transit schemes, to ensure that these communities are not overlooked and left behind.

 to what extent the coronavirus pandemic and its longer-term implications affects the necessity and cost-effectiveness of current and future major transport infrastructure projects;

Economic recovery from the pandemic, combined with major adjustments the UK needs to make post EU exit transition, only increases the necessity of certain strategic transport infrastructure. As the UK looks to grow its trade with markets beyond the EU, its manufacturing base in the North and Midlands will need far more efficient and reliable surface access to international gateways. This includes the need for far better surface access to the deep water international port of Southampton - the nation’s second most important sea port by the export value and which already handles over £40 billion of UK exports each year - 90% of which goes to non-EU markets. Improved road and rail access is vital if the UK is to realise the full benefits of this hub port which allows interconnectivity between shipping lines which, when combined with its the proximity to international shipping lanes, provides UK businesses with a major commercial advantage. Improvements to the strategic corridor between the Midlands and the Port of Southampton (including the upgrade of the A34 to motorway standard and addressing pinch points such as J9 of the M3/A34 and the “last mile” to the port) is hugely important to support UK supply chains, the export of container goods as well as the export of built automotive products from the Midlands. Equally important is the need to free up rail freight paths and increase the size of freight trains that can access the Port of Southampton in ode to reduce pressure on the highway network and minimise traffic emissions.

Hampshire County Council has repeatedly warned about the fragmented approach taken by various national agencies to improving surface access between the Midlands and the South Coast, advocating the need for a whole route corridor approach. It therefore welcomes the work being undertaken by Transport for the South East on freight and international gateways to identify the strategic interventions required to improve the efficiency of the freight sector.

The coronavirus pandemic has also accelerated societal changes, including the greater use of digital technology and significant changes in commuting patterns as more people choose to work from home. The changes have come at a tipping point for the climate agenda with the Government having recently restated its commitment to achieve its net zero targets by 2050. Therefore, with flexible working set to increase and the need to decarbonise transport, the necessity and cost effectiveness of major transport infrastructure projects should at least be reviewed in light of increased investment that is now required to deliver local sustainable transport solutions.

 how major transport projects can be delivered while ensuring the Government meets its decarbonisation 2050 net-zero targets;

As indicated above, there needs to be a more balanced approach to funding nationally significant transport projects AND local, place-based, transport schemes which are specifically designed to achieve modal shift and improve air quality.

Despite welcome announcements in the Spending Review, there is still a need to address the disparity in the funding between the English Local Road Network (ELRN) and the Strategic Road Network (SRN) which makes up less than 3% of the network but continues to receive the lion’s share of funding (£27bn RIS2). Addressing this is not only essential because of the economic importance the ELRN (as highlighted by the Transport Select Committee in July 2019) but also because of worsening financial position of local highway authorities who already face an £11bn backlog in highway repairs and are now seeking to deliver ambitious Local Transport Plans to support the Government’s decarbonisation 2050 net zero targets. Their lack of revenue funding is already impacting their ability to undertake essential feasibility studies and develop the business cases needed secure capital funds to deliver the sustainable transport infrastructure schemes required. Therefore, given today’s focus on active travel and smaller schemes, the Department for Transport should devolve a higher proportion of funding into direct grants for Local Transport Plan capital improvements. This would bring about an enhanced focus on improving local urban environments and aid the green and healthy economic recovery desired as opposed to primarily targeting investment in the SRN which may simply encourage longer distance car journeys.

Furthermore, mitigation of the carbon impacts from nationally significant infrastructure projects should be considered in the widest context. For example, the importance of delivering greater modal shift from road to rail by bringing forward both western and southern direct rail access to Heathrow will be particularly important if the expansion of airport goes ahead. 3. Appraisal and funding of transport infrastructure  The effectiveness of the Government’s decision-making and appraisal processes for transport infrastructure projects and any changes required to the ‘Green Book’

Hampshire County Council welcomes the recent review of the Green Book and the Government’s intention to improve infrastructure delivery by amending the appraisal methodology take account of wider economic, social and environmental benefits of a project. We await to see how this will have affected DfT’s Web Tag appraisal criteria but we welcome ICE’s recommendation that net zero should be appraised through the existing Five Case Model, providing the net-zero target is explicitly and clearly stated as a key objective and reinforced in the methodologies and guidance in the Five Case Model. We would also like to see a more comprehensive approach taken to assessing cost benefit ratios, for example in terms of Highways England schemes and the impact they may have on the adjacent local network in order to encourage greater cooperation and deliver more comprehensive transport packages that benefit the whole region.

There should be greater emphasis on qualitative outputs, particularly in terms of assessing transport projects designed to improve the climate and social environment of a place, for example public transport, transport interchanges and other improvements to the public realm and we support the Transport Planning Society’s call in its State of the Nations report that future systems for transport appraisal, forecasts and modelling be adjusted to better reflect current realities and priorities, notably decarbonising transport, support for disadvantaged communities and the promotion of active travel. For example, the travel time savings for motorists dominate in the economic appraisal with time savings for other road users undervalued leaving sustainable transport disadvantaged by the current appraisal scheme. There is a need to review how carbon from transport schemes is measured and calculated to ensure standardisation across transport schemes and possible sectors.

As a strategic infrastructure provider the County Council is also increasingly involved in promoting and delivering major transport infrastructure schemes designed to bring forward housing and employment. However, securing the necessary funding for such schemes is further complicated by the different appraisal methodologies used by in Whitehall and Government Agencies (DfT, Homes England etc). It would be helpful if the adjustments to the Green Book could also lead to a more consistent approach to appraisals. Hampshire County Council would urge the Select Committee to give consideration to the recent recommendations made by the Climate Change Committee to Government in its report Local Government and the Sixth Carbon Budget:

“Provide coherent cross-departmental support on climate action, building on the positive models of OLEV, HNDU and Sustainable Scotland Network support to local authorities. This should support local authority staff to deliver on buildings and transport decarbonisation in particular. Such offices should enable seamless communication between government officials and local authority officers.

Introduce significant, non-competitive long-term investment in retrofit, heat decarbonisation infrastructure and public transport and give flexibility to local authorities to blend budgets to deliver multiple co-benefits. Short-term competitive funding for narrowly specified projects with tight bidding times makes it very hard for authorities with less capacity to apply and concentrate funding in certain areas. HMT should ensure that funding is made over longer time periods to enable better delivery. Align public spending with Net Zero: Review the Government’s Green Book policy guidance, and business case tools, such as DfT’s WebTag, to incorporate a stronger focus on carbon reduction and co-benefits in business cases and financial appraisal.”

January 2021