LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 19th March 2021

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

KEY DECISION Yes

REPORT OF THE INTERIM DIRECTOR FOR STRATEGIC DELIVERY AND PORTFOLIO HOLDER: TRANSPORT AND AIR QUALITY

2021/22 TRANSPORT SETTLEMENT & TRANSPORT PIPELINE

1. PURPOSE OF REPORT

1.1. The aim of this report is twofold:

i) To recommend how the Combined Authority should best redistribute the 2021/22 Single Transport Pot of £31.3M received from the Department for Transport; and

ii) To agree the principles by which pre-development expenditure on the priority transport pipeline projects will be approved.

2. RECOMMENDATIONS

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

With respect to the Single Transport Pot “the settlement”:

(a) Accepts the single year (2021/22) funding settlement of £31.3 from DfT; (b) Approves the distribution of the settlement to Constituent Authorities and the Combined Authority as per Table 3 of this report; (c) Approves the re-allocation of the retained KRN element to Constituent Authorities as per Table 4 of this report; (d) Agrees to £2.637 M of the settlement to be allocated to the Combined Authority for Mayoral Priorities, for the pre-development of the transport pipeline priorities identified in this report; and (e) Notes the risks in perpetuating the formulaic approach to the distributing the settlement and resolves to undertake a review of evidence led approaches as early as possible in the forthcoming financial year.

With respect to the pre-development funding of the transport pipeline:

(f) Notes the recent refresh of the transport pipeline outlined in this report and the priority schemes (Appendix B) that have been identified for pre-development funding in 2021/22; (g) Approves the establishment of a “Transport Pre-Development” Thematic Fund of £4.5M to cover pre-development expenditure on the transport pipeline projects set out in Table 2 of this report and in line with the Combined Authority approved 2021/22 Budget; (h) If Members agreed to recommendation (g) above, note that officers will therefore be authorised to make expenditure decisions in excess of the key decision threshold (£150K). When such decisions occur, it will be in consultation with the Portfolio Holder (Transport) and be the subject of a published officer decision; (i) Note that should any additional/new projects be identified, the Interim Director of Strategic Delivery will consult the Portfolio Holder (Transport) to determine their inclusion in the refreshed Transport Pipeline and therefore able to secure funding from the Transport Pre Development Thematic Fund. Such determinations will be periodically reported to Members of the Combined Authority; and (j) Requests that progress on the development of projects identified within the refreshed transport pipeline is reported periodically to the Combined Authority.

3. BACKGROUND

Transport Single Capital Pot

3.1. The Transport Single Capital Pot (hereafter referred to as the settlement) has historically been used to support the delivery of small-scale works in local areas‟ transport plans and capital maintenance on the local highway network. Since 2014, the funding has come directly to the Combined Authority, as the local transport authority and, more recently, from 2016/17 as part of the wider five-year SIF allocation. The transport settlement has, however, been managed outside of the Strategic Investment (SIF) assurance framework process to allow funds to be deployed quickly and flexibly by the CA and the constituent local authorities for what are typically small-scale works. The settlement has amounted to £26.5M per annum, with 2020/21 being the last year of the five-year funding block.

3.2. Appendix A provides more context behind the settlement and how the funding has historically, been allocated between the Constituent Authorities and the Combined Authority.

3.3. The 2021/22 Combined Authority Budget Setting Report (22nd January 2021) noted that the settlement was subject to confirmation and a separate report would be submitted to Combined Authority with proposals for use once the funding had been confirmed.

3.4. Unlike the previous five-year block, the DfT has subsequently confirmed a single year settlement for 2021/22 totalling £31.3M. The breakdown of the settlement is shown in Table 1. In addition to the base items relating to Highways Maintenance and the Integrated Transport Block, further awards for pothole repair and a share of an incentive fund have been made. In total, from the £31.3M, £21.7M has been made available for activities related to highways maintenance. It is of note that:

 Whilst this exceeds the 2020/21 settlement of £26.5M, Members will recall that further funds of £17.6M were received in the summer of 2021, bringing the total settlement to c.£44M, of which c. £34.1M was for highway maintenance; and  The base settlement has actually reduced from £26.5M to £19.8M.  The completion of a self-assessment questionnaire, relating to efficiencies in delivery and working practices, will be used to establish the share of the incentive fund that the Combined Authority is eligible for. A value of £3M is assumed here on the assumption that the Combined Authority will receive 100% of their share.

Table 1 2021/22 Breakdown of 2021/22 Transport Settlement

Item £ M Compared to 2020/21 Settlement Highways Maintenance £9.3 (HM) 2020/21 base settlement was for Integrated Transport Block £26.5M, with £16.5M set aside for £10.479 (ITB) highways maintenance. A further award Potholes (PH) £9.386 of £17.6M was received outside of the Incentive (IN) £3.0* settlement, meaning that in 2021/22 in Total £31.266 total c.£34.1M was received for Of which Maintenance highways maintenance. £21.686 M Related (HM+ PH+IN) * Indicative

Transport Pipeline

3.5. Throughout the calendar year of 2020 an exercise was undertaken to refresh the Combined Authority‟s Transport Pipeline, with a view to:

 Facilitating delivery of future projects as efficiently and effectively as possible. This requires ensuring that the delivery is accelerated wherever possible, and development of schemes is proportionate;  Providing a level of confidence on deliverability, affordability and value for money and testing the feasibility of concepts in more depth;  Being forward thinking - helping to identify potential barriers to delivery before they occur and remove those barriers where appropriate;  Assisting in the planning of resources both internally and externally in advance; and  Promoting a collaborative approach with Constituent Authorities, with a combined objective to deliver, and secure shared ambition to deliver projects identified in the refreshed pipeline.

3.6. The outcome from this process was a list of 20 projects (including two studies) that have been prioritised for development and delivery between now and 2026. These are projects in addition to those that are currently programmed for delivery under the Transforming Cities Fund.

3.7. It is anticipated that capital funding from the DfT‟s Intra City Transport Fund (ICTF) and other new emerging funding opportunities such as the Levelling Up could be used to deliver these projects. The November 2020 Spending Review outlined that the ICTF would amount to £4.2Bn that would be available from financial year 2022/23 to deliver transport projects. Further announcements are expected later this year on the share of this fund that the Combined Authority can expect to receive. In addition, in the March 2021 Budget Report, the Chancellor of the Exchequer confirmed that the Liverpool City Region will receive £5.6M of resource funding to support project development for ICTF in the financial year 2021/22; and £1.89M revenue funding has been allocated from the DfT for the development of active travel projects, again for the 2021/22 financial year.

3.8. Appendix B provides a list of the prioritised transport projects. Consultation on this list has occurred informally and formally with a range of key member and officer groups in advance of this paper being presented to Members of the Combined Authority for consideration.

3.9. The 2021/22 Combined Authority Budget report provided £9.7M within the detailed capital programme to support project development. £5.2M of this is to support those projects that form Merseytravel‟s capital programme. The balance of £4.5M being made available for transport pipeline pre-development that sit within the Combined Authority and for those projects listed in Table 2.

Table 2 Pre-Development per 2021/22 Detailed Capital Programme

Project Constituent Authority Runcorn Busway Active Travel Corridor Halton East Runcorn Connectivity Halton Southport Eastern Access Sefton Maritime Corridor Sefton Birkenhead Central Gateway Wirral St Georges Gateway Liverpool Ropewalks Phase 2 Liverpool M57 J4 Multimodal Access Knowsley Huyton Active Travel Corridor (Wilson Road) Knowsley St Helens Town Centre Multimodal Interchange St Helens St Helens North Housing Access St Helens Rail Freight Connectivity (Study) Combined Authority Station Assessment Programme (Study) Combined Authority LCR Active Travel Corridors Combined Authority KRN Strategic Maintenance Combined Authority Tunnels Modernisation Combined Authority St Georges Tunnel Approach Combined Authority

4. PROPOSAL

Transport Settlement

4.1. Consultation on the settlement has occurred informally and formally with a range of key member and officer groups in advance of this paper being presented to Members of the Combined Authority for consideration. A range of options has been consulted on, each with a different level of KRN top slice, with the preferred transport settlement as shown in Table 3.

4.2. Of the £3M highway maintenance funding retained for the KRN, it is further proposed to re-allocate £2.75M of this back to the Constituent Authorities as shown in Table 4, with the balance of £0.25M retained by the Combined Authority for data collection/surveys for the highway assets on the KRN.

Table 3 Proposed Allocation of the 2021/22 Transport Settlement

Allocated to Highways Integrated Total £’000 Maintenance Transport £’000 £’000 Halton 2,387 460 2,847

Knowsley 1,985 530 2,515 Liverpool 4,516 1,740 6,256 St Helens 2,591 640 3,231 Authority Sefton 3,100 990 4,090 Wirral 3,540 1,150 4,690

Constituent Sub Total 18,119 5,510 23,629 Retained for KRN (top

3,000 3,000 slice) Mayoral Priorities 2,637 2,637 Evidence 1,000 1,000

Authority

Combined Bus Alliance 500 500 Retained by Rail 500 500 Total 21,119 10,147 31,266

Table 4 Proposed Re-Allocation of the KRN Top Slice

Re-Allocation £

Halton 362,450 Knowsley 301,125 Liverpool 685,300 St Helens 393,250 Sefton 470,525 Wirral 537,350 Retained for Combined Authority 250,000 Total 3,000,000

4.3. It should be noted from the Tables 3 and 4, that:

i) That the allocation of the Integrated Transport Budget to Constituent Authorities remains consistent in total value and distribution to that in financial year 2020/21; ii) Of the Integrated Transport Budget retained by the Combined Authority, allocations are consistent with that in financial year 2020/21 with the exception of the increase to Mayoral Priorities, which has increased from £2.5M to just over £2.6M. The Mayoral Priorities will be used to fund expenditure on transport pipeline pre-development; iii) Allocations of the highways maintenance and re-allocation of the KRN top slice is per existing formulae and thus consistent with the approach taken in financial year 2020/21; and iv) That the KRN top slice has been reduced from £5.5M in 2020/21 to £3M.

Transport Pre-Development

4.4. Noting the pipeline projects set out in Table 2, and the allocation of the transport settlement in Table 3, it is proposed that:

a) A “thematic pot” is established of £4.5M to manage the expenditure on the transport pipeline. Members will recall that the principle for managing Pre- Development Funding and Thematic Funds has been established in the Constitution specifically at Part 3, Section H paragraphs 1-6 inclusive and can be viewed here. This report seeks to establish a similar approach to this, noting that it is the whole of this fund that will be used for pre-development and not a specific % in the way that it is identified for the SIF funds.

b) If Members agree to establish the Thematic Fund, Members are asked to note that officers will become authorised to make expenditure decisions in excess of the key decision threshold (£150K). When such decisions occur, it will be in consultation with the Portfolio Holder (Transport) and be the subject of a published officer decision.

c) Members are also asked to note that should any additional/new projects be identified, the Interim Director of Strategic Delivery will consult the Portfolio Holder (Transport and Air Quality) to determine their inclusion in the refreshed Transport Pipeline. This will mean that new projects will therefore able to secure funding from the Transport Pre- Development Thematic Fund.

d) Periodically, reports on the progress of this pipeline will be brought to Members of the Combined Authority for future consideration.

5. RESOURCE IMPLICATIONS

5.1. Financial

The proposals in respect of the allocation of the single transport pot and the transport pipeline are affordable within the funding provided from DfT and that secured as part of the budget setting process.

5.2. Human Resources

None as a result of this report

5.3. Physical Assets

There are no physical asset implications arising as a result of the implementation of the recommendations in this report.

5.4. Information Technology

There are no information technology implications arising as a result of the implementation of the recommendations in this report.

6. LEGAL IMPLICATIONS

6.1. The constitutional implications of this report are contained in the recommendations and set out in Paragraph 4.4 of this report.

7. RISKS AND MITIGATION

7.1. There is a risk that the perpetuation of an historic formula approach to the allocation of the transport settlement does not enable the funding to be targeted where it will have the greatest impact.

7.2. In order to mitigate this, it is recommended the Combined Authority undertakes a review of evidence led approaches as early as possible in the forthcoming financial year once future years‟ budgets are known.

7.3. It should also be acknowledged that regardless of the allocations that have been proposed in this report the amount awarded in the transport settlement for highways maintenance is far too small overall. The evidence, as set out in previous Combined Authority Reports, a requirement to spend much greater amounts to arrest the decline in the conditions of the City Region‟s highway network.

8. EQUALITY AND DIVERSITY IMPLICATIONS

8.1. At this stage there are no equality and diversity implications, however these will be developed and considered in relation to each of the projects identified.

9. PRIVACY IMPLICATIONS

9.1. There are no specific privacy implications with the implementation of the recommendations in this report.

10. COMMUNICATION ISSUES

10.1. There are no specific communications issues with the implementation of the recommendations in this report.

11. CONCLUSION

11.1. Proposals for the allocation of the 2021/22 Single Transport Pot have been subject to consultation with key member and officer groups. The methodology for the allocation remains consistent to previous years, based on an agreed formulaic approach. An option that reduced the KRN top-slice was favoured and presented in this report for the approval of the Combined Authority.

11.2. Significant work has been undertaken to refresh the Combined Authorities transport pipeline. The projects that have been prioritised for pre-development funding in 2021/22 have been set out in this report, along with the recommendation for the establishment of a Thematic Pot and appropriate governance to manage expenditure against these projects.

Dr AILEEN JONES Interim Director Strategic Delivery Directorate

CLLR. LIAM ROBINSON Portfolio Holder: Transport and Air Quality Contact Officer(s): Nick Green: Economic Analyst Tel: 07500 573082

Appendices: Appendix A – Transport Settlement: Further Context Appendix B – Transport Pipeline Priority Projects

Appendix A – Transport Settlement: Further Context

1.1 Members will recall the long history of the £26.5m Transport Fund and its long history, stemming from “Integrated Transport Block” and “Highways Maintenance” allocations created by the Department for Transport (DfT) some 20 years ago. This funding sought to support the delivery of local areas‟ transport plans and the maintenance of the local highway network. The funding traditionally flowed from DfT to each constituent local authority and to Merseytravel on a formulaic basis

1.2 Since 2014, the funding has come directly to the LCRCA, as the local transport authority. Since 2016/17 is has come to the LCRCA as part of the wider five-year SIF allocation, highlighted Table 1 below, for the Authority to reallocate as part of the budget-setting process:

Table (1) Liverpool City Region’s Single Pot

1.3 Since 2016/17, the LCRCA has consistently agreed each year to manage the transport budget outside of the SIF and assurance framework processes. Allied to this, funds have been reallocated to the local authorities and to Merseytravel using historic, formula-based approaches in the main.

1.4 The approach to date has typically involved the continuation of a DfT-derived split of the £26.5m pot into two main tranches, despite the fact that the fund is not ringfenced, as follows:

 a £16.5 million split for capital highway maintenance works (with a top slice for the Key Route Network); and  £10 million for “integrated transport” measures.

1.5 An advantage of managing the fund is this way has concerned the freedoms and „light-touch‟ associated with it from the perspective of the local authorities and Merseytravel. It recognises that many small-scale, but strategically important measures like road safety schemes would not lend themselves to complex Green Book-style business case development processes. The approach has also provided freedoms and a degree of certainty for each local authority and to Merseytravel, to plan local budgets accordingly.

1.6 Options for revising the reallocation methodology were presented to Chief Executives as recently as December 2019, prior to the 2020/21 disbursements (the final year of the 5-year DfT allocation). These options looked to utilise a more sophisticated, evidenced-based, approach to funding the reallocations. Whilst there was some support for moving from a „business as usual‟ approach, broad agreement could not be reached due differences of view (with perceived winners and losers compared to the status quo).

1.7 For the period 2020/21, the final year of the settlement, the Transport Fund was reallocated between the Constituent Authorities and the Combined Authority as shown in Table 2.

Table (2) Reallocation of the Transport Fund in 2020/21 Reallocated to Highways Integrated Total £’000 Maintenance Transport £’000 £’000

Halton 1,449 460 1,909 Knowsley 1,205 530 1,735 Liverpool 2,742 1,740 4,482

Authority St Helens 1,573 640 2,213 Sefton 1,882 990 2,872 Wirral 2,149 1,150 3,299

Constituent Constituent Sub Total 11,000 5,510 16,510

Retained for KRN 5,500 5,500 Mayoral Priorities 2,500 2,500 Evidence 1000 1000

ombined Bus Alliance 500 500

Authority

C

Retained by Rail 500 500 Total 16,500 10,010 26,510

Appendix B – Transport Pipeline Prioritised Projects

Scheme name Sponsor Scheme description

Re-opening of St James rail station in Liverpool Baltic Rail Station (St Merseytravel Liverpool's Baltic Triangle area to support current and James) future regeneration Stanley Dock Rail Access Improvements to Sandhills station to support regeneration Merseytravel (Sandhills) at Stanley Dock Development project to establish freight solutions across Rail freight connectivity Merseytravel the City Region Development project to prioritise planned stations in the Station assessment Merseytravel current rail pipeline. Selection will focus on demand, programme timetabling and planned investments in the City Region A package of measures to prioritise bus travel on the 10A (Liverpool to St Helens), 53 route (Liverpool to Crosby Green Bus routes Merseytravel and port of Liverpool) and 83 (Liverpool to Liverpool airport) LCR active travel corridors Delivery of the 3rd phase of the LCR's strategic walking and Merseytravel (LCWIP phase 3) cycling corridors A package of maintenance linked to strategic interventions Key Route Network strategic Merseytravel and investments across the City Region along the Key maintenance Route Network Tunnels modernisation progra Reconfiguration of the toll plazas at Kingsway and mme (Kingsway and Merseytravel Queensway tunnels. Improving journey times and reducing Queensway) congestion Ensuring adequate flow of cars and buses between the St Georges tunnels approaches Merseytravel Queensway, Kingsway tunnel entrances and Liverpool city centre. Includes Scotland Road and Old Haymarket Repurposing a bus-only corridor to include active travel, Runcorn Busway active travel Halton linking Runcorn to major housing developments and corridor employment zones Active travel links East of Runcorn and dualling of A558 to East Runcorn Connectivity Halton unlock residential and employment land designated in (A558 Daresbury) Halton's local plan Highways and active travel improvements connecting to Southport Eastern Access Sefton Southport. Links to current investment around the town centre Highway improvements and active travel links between Maritime Corridor Sefton Switch Island and the Port of Liverpool Removal of the two flyovers to reduce severance between the town centre and a major housing site at Hind Street. Birkenhead Central Gateway Wirral Includes preferred highway alignment and green travel corridor linking Hind Street to Wirral Waters Connecting Liverpool John Moores University and the city centre for active travel. As well as highways improvements St Georges Gateway Liverpool between the Kingsway and Queensway tunnel entrances in Liverpool Scheme name Sponsor Scheme description

Walking and cycling links in the Ropewalks area of the city Ropewalks phase 2 Liverpool centre. Features include pedestrianisation of roads and reallocation of highways to support local businesses Active travel and highways improvements around the M57 J4 multimodal access Knowsley motorway junction Package of works along Wilson Road in Knowsley, Huyton active travel corridor Knowsley improving links between Huyton business park and major (Wilson Road) regeneration housing scheme at Halsnead St Helens Town Centre Improvements to the bus interchange, linking into work in St Helens Multimodal Interchange the town centre and active travel modes Improving connectivity between St Helens town centre and St St Helens a major housing development site at Cowley Hill on the Helens North Housing Access Key Route Network