A Silent Withdrawal

Strange that when I searched Google through Virgin Media or Tiscali with ‘Congestion charge revenues’ or ‘Manchester Congestion Charge’, it no longer comes up with the sponsored link for

 

 Sponsored Links:

Find out the FactsCongestion charge? Not until £3bn is invested in public transport

 www.gmfuturetransport.co.uk

 

 

It is not just the false claim that has disappeared, it is the whole sponsored link. On Virginmedia or Tiscali it does not not appear in the top 30 as a normal link. More folks read this blog than I realised, or maybe the folks at Stop the Charge picked upon the same issue.

 

There is still a claim the is not entirely true. Try searching ‘GM Future Transport’

 

First result is

 

1.                             Manchester Congestion Charge – GMPTA – TIF

How the GMPTA will spend up to £3 billion on improvements to public transport, partly funded by a weekday peak-time only Manchester congestion charge.
www.gmfuturetransport.co.uk/  

 

The problems with this are

 

1. The £3bn is just £2.77bn.

2. This includes a contingency, so will only be achieved if they go overspent.

3. It also includes £313m for the introduction of the congestion charge, which is not expenditure on public transport.

 

This leaves around £2bn for public transport if the authourities stay within budget.

 

PDFs are included below.

tiscalicouk_search_results-25th-oct1virginmedia-search-25th-oct2tiscalicouk_search_results-29th-oct2virginmedia-search-29th-oct2

Congestion Charge – Major Policy Shift, or False Claim?

Summary

 

The pro-congestion charge gmfuturetransport.co.uk has made what appears to be a false and misleading statement through their Google advertising.

In fairness to the public, they should either

1)    Make a full admission and apology to the mistake on the front page of their website, and immediate withdrawal of the offending statement.

2)    Admit that this is major policy change in that congestion charging will only be introduced if they go at least £1bn, or 50% overspent on their published plans.

 

The Offending Statement

 

When I Google “Congestion Charge Revenues” within the Tiscali.co.uk search box I get

 

 

Sponsored Links:

Find out the FactsCongestion charge? Not until £3bn is invested in public transport

 www.gmfuturetransport.co.uk

 

This is also found through virginmedia.com and, probably, any other UK website that has a Google search box.

 

Analysis

 

There are two ways of considering this

a)    That this is a false statement.

b)    That this is a true statement, and a major policy change.

 

This is a false statement as

 

1. The total package is £2.8bn, not £3bn.

2. This includes £313m for the congestion charge scheme. This is not investment in public transport, but a means of both funding the investments AND of winning customers for the new public transport services. That only leaves £2.5bn for investment in public transport.

3. The package includes a large amount of contingency. It is only if they go overspent that they will reach the amount.

4. On the website it says “Up to £3 billion spent on public transport improvements – at least 80% in place before congestion introduced”

(see http://www.gmfuturetransport.co.uk/consultation/whatyouthink/)

This is true only if the authourites plan to make payment before the contractors finish the work, they will not have spent the budget. Normal practice is to only make final payment once work has been fully completed and inspected. Often on building work, a retention is kept back to make sure any faults in the construction that become evident when the facilty is operational are rectified. If this is true, then the audit commission should be got involved, as it would be an imprudent application of public funds.

 

Major Policy Change

 

The statement “Congestion charge? Not until £3bn is invested in public transport” is true if

 

1)    There is a major change in policy. To me this implies we will only get the congestion charge if investment goes so massively overspent that it eats up the not only the contingency, but at least £1bn or 50% more than planned.(1) However, such a massive policy change would need to call on at least £900m of extra government funding, so would have to be re-submitted to tif.

2)    The investment in public transport also includes all UK government expenditure(2) on transport. Then they can introduce the expenditure straight away. However, for the statement to remain meaningful it would both be misleading and render the statement “Up to £3 billion spent on public transport improvements – at least 80% in place before congestion introduced” untrue and that should be withdrawn with full admission.

Notes

 

Note (1)

The tif package – figures
£m
Total package 2,800
Less Contingency -500   Estimate
Less Congestion package -300   Rounded down
Claimed Net Package 2,000
% overspend to get to £3bn 50%
80% of the package 1,600  

Note (2)

 

Whilst Chancellor of the Exchequer, Gordon Brown established the convention that any UK government expenditure is investment. I therefore follow the convention so as not to create confusion amongst the political classes.

Waste Recycling – Nappies this time

Just finished knocking out a couple of manic notes on waste, just to see this blog on the cost & benefits of nappies from the ASI. Like with the Manchester Conjestion Charge, it illustrates how properly looking at an issue, can provide a different answer to simply justifying the popular view.

When my kiddlewinks were babies, we used disposables. Here time was a factor, as well as avoiding a stinking job. However, again like the conjestion charge and recycling, people’s time is not valued. How long before some bright spark suggests that the truely green way is to hand wash in cold water and carbolic soap, and then putting it through a mangle? Need a strong bleach though, as the environmentally-friendly sorts do not work.   

 

 

Weighing up Waste Recycling – Impact on future generations

Tim Worstall’s article on waste got me thinking, manically.

 

The cry goes that we should not leave our rubbish, or more broadly our environmental problems, for future generations. However, this is only part of the issue. Future generations will benefit from better technology to deal will environmental problems. Further, with economic growth, they will have better resources to deal with this. This is not a trivial point. In real terms western countries are over 30 times richer per capita than 250 years ago. Looking at the UK, with GDP of £1200bn (USD2100bn), with a steady growth rate of 2%, would mean that the economy will be 7.24 times greater in one hundred years and 52.48 times richer in two hundred years. Reducing average output growth  by just 0.1% means that they will be 6.57 times richer in 100 years and 43.14 times richer in 200 years. If the future generations have to clean up our mess, in 100 years they will have £810bn (USD1420) extra to do it with (67% of current output), whereas in 200 years they will have £11,219bn (USD 19,633bn) extra to clean up with (935% of current output).

 

There is always a problem of running out of landfill, but this if a political rather than a physical problem. There is also a problem of containing the waste and containing the chemical run-off. The methane can be tapped and used as a fuel.

 

The limit to waste creation

 

If the waste is to be contained, the problem becomes one of a trade-off between re-processing or recycling now and generating sufficient capability of future generations to recycle later. There is a risk that the problem will become a runaway one, growing faster than the increased capacity to produce later. However, with proper assessment this then becomes a small risk. as the technological advances will mean the real cost of dealing with the issue reduces over time. It is the flip side of the growth equation. The best method of improving this is for small, but long-term incentives. In particular directing research along disparate avenues, like venture capitalists putting small amounts of money in various ventures. It is probably something for philanthropists, rather than governments, as it is necessary to be eclectic, but also cut funding should avenues not be fruitful.  

 

As a final point, what is most important is developing a framework for our thinking, not to provide solutions. One that goes beyond just listing the advantages and disadvantages, but relating them to one another. It is finding the best answer, not justifying our particular views with pseudo-facts.

Weighing up Waste Recycling – The personal perspective

Two cheers “Waste of Time” appeared in the Guardian on 13th October by Tim Worstall, on the costs and benefits of waste recycling. Like the Tif Manchester, it is another example where people’s time is not taken into account in making the governement making decisions.

It would be interesting to look at the total package. Such things to consider are

 

The neighbourhood impact

 

I have now got four wheelie bins for waste. A large black one for general waste, a large green one for garden waste (no pet litter or food waste), a slim blue one for paper (no cardboard, window envelopes) and a slim brown one for bottles. Then there is a plastic bag for tins and cans. Sorting the waste, I fill the green bin about every 2 to 4 weeks (the larger items going to the tip in my car), the bottle and paper bins about every 4 to 6 months and the black bin is almost full every week. A corner of my garden has become a recyling centre, and a portion of the shed as well. I may not have the tidiest garden, but it looks natural, expect for the “green centre”, that I try to hide with a “rustic” hedge.

 

The type of material

 

The best sort of material to recycle is garden waste. Properly managed it rots into a useful by product. Metal in big chunks can easily be recycled. But some must take more energy and time to recycle (taking the whole process into account) than cost of landfill and producing new.

 

The environmental impact

 

The government has now committed us to reducing our CO2 by 80% by 2050 – hopefully in my lifetime. Maybe it should start by reducing recycling to the point where the CO2 (or equivalent) produced by the whole process of recycling is less than the CO2 (or equivalent) produced by managed landfill and producing new. One thing to start warning people off is using hot water to rinse bottles etc, or going in the car to a recycling point with half a dozen bottles. The amount of CO2 impact is usually greater than just chucking the “recyclable” bits into the bin. The government should provide guidelines on this.

 

Analysis of the forecast impact of Tif Manchester

The two projections from pages 241 and 242 of the submission (Part 7), aiming to show the impact of the extra investments in public transport, along with the congestion charge. These I have combined to show the total changes projected, along with the total of public and private transport.

Figure 71 – Reference case:Difference in people Crossing the inner ring (2005 to 2016) p.241
Highway Bus Rail Metro-link Total Pt TOTAL Highway + Pt
Entering Regional centre 2,300 -1,300 1,300 4,000 4,000 6,300
Crossing Inner Charging Ring 8,400 -1,700 1,400 4,000 3,700 12,100
Figure 72 – TIF Package:Difference in people Crossing the inner ring (2005 to 2016) p.242
Highway Bus Rail Metro-link Total Pt TOTAL Highway + Pt
Entering Regional centre -3,300 5,800 2,100 2,400 10,300 7,000
Crossing Inner Charging Ring -6,400 7,200 2,300 2,800 12,300 5,900
Total Differences between people Crossing the rings if Tif Implemented (2005 to 2016)
Highway Bus Rail Metro-link Total Pt TOTAL Highway + Pt
Entering Regional centre -1,000 4,500 3,400 6,400 14,300 13,300
Crossing Inner Charging Ring 2,000 5,500 3,700 6,800 16,000 18,000

There are a number of comments to be made.

 

  1. Total travellers at peak time compared to employment growth.

 

Claims have been made that the difference in jobs will be 30,000 between the measures being enacted and not. With the measures, the region gets an extra 200,000 jobs, without 170,000.

Only a small proportion of these jobs will result in peak time travellers entering the regional centre, or crossing the inner charging ring, but the ratios should be similar. They are not.

The impact of the Tif Manchester on jobs and peak-time travellers
170,000 Jobs Extra 30,000 Jobs
Travellers Jobs / Traveller Travellers Jobs / Traveller
Entering Regional centre 6300 27.0 7000 4.3
Crossing Inner Charging Ring 12100 14.0 5900 5.1

Without Tif, the 170,000 extra jobs lead to only 6300 extra people entering the regional centre and 12100 crossing the inner charging ring. If these numbers all stack up, then it shows allowing congestion to increase would cause the new workers to locate close to their jobs, whilst improving transport will encourage people to live in the suburbs. But the differences are so huge, they can only mean that the extra travellers estimate is in no way related to the extra jobs. The figures do not stack up.

  1. Metrolink impact.

 

The impact of doubling carriages on the Altrinham/Bury line and added a spur to Trafford Park will increase peak passenger numbers by 4000. Adding a lines to East Didsbury and Rochdale/Oldham will add around 2400 to 2800 more. Clearly £1.2bn is not good value at peak times. Further, it puts the East Didsbury line in doubt. Between the regional centre boundary and the inner ring boundary, only a net 400 extra passengers are picked up. That is about 200 people from Chorlton and Didsbury areas using the Metrolink to travel into Manchester at peak times.

I believe the figures will be much greater. It is the model that is wrong. It is possibly the shift to the buses that is overstated.

Financially we have a problem. If you take out the cost of the congestion scheme, only 23% of the peak time growth in passengers on public transport will be on new Metrolink, but around half the cost.

 

  1. Buses

 

The buses are crucial to the whole plan, with over 55% of the growth in those travelling on public transport at peak times from the Tif Manchester using this mode of transport. The switch from cars will be mostly use Yet, as I blogged on 30th Sept (Flaw 2), there are good reasons to believe that people will continue to use the car over the bus. Those are

i)                  Cars are much quicker, and more reliable than buses. So even with if the average traffic speeds increase, people will spend much longer travelling by bus than they had previously done so by car.

ii)                With the congestion charge, traffic speeds at peak times are forecast to improve by 33%, but average bus journey times by just 12%. For those who can afford the congestion charge, the advantage of car over bus increases with the charge.

iii)             Many people will be able to afford the maximum £1200 congestion charge by keeping their cars for longer, or by switching to cheaper cars. The proposed fees are much too low.

iv)              The congestion charge is only impact on less than 20% of drivers. Even allowing for those who switch from cars to public transport, it is still a minority of car drivers. The congestion charge is not extensive enough, both is times, or in reach.

 

  1. Seasonal factors.

 

A further way that travelers can reduce the cost to them of the congestion charge is to use public transport in the summer, when the weather is pleasant, and to use their cars in the colder winter days, especially when travelling in the dark on the short days. That is when the benefits of travelling by car are the greatest it is more worthwhile to pay the premium. With a relatively low level of charge, this may be a pattern that emerges. It would mean there may be gridlock that can occur Christmas Eve would extend to other cold periods. This could also mean that not only would there be peak time public transport issues, but also seasonal ones as well.

 

Conclusion and implications

 

The numbers do not add up, nor do they correspond to other data on employment. The increase in volumes of travelers is not related to projected growth in the jobs; the impact of the new metrolink lines is understated for crossing the inner rings, and the switch from cars to buses is not simply not credible for the level and the extent of the charge.

The model and forecasts do not add up. I would strongly recommend that an independent auditor or economist checks the model and the results to see if the figures are credible, and to assess the risks.

 

How the projections can go wrong.

 

As an economics graduate and with over twenty years of management accounting experience, I can understand how the figures do not stack up.

1)    In compiling a model of human behaviour a number of simplifying assumptions and generalizations have to be made. With a complex issue like transport in a city over two million people, these are considerable. Using a simplified model based on existing structures to then look at the implications of a major structural change is fraught with dangers.

2)    There is little data on congestion charges so far, and the proposed Manchester charge will easily be the biggest charge area in the world. Therefore we can only draw tentative inferences from the few other examples. With a requirement to include congestion charging, it could be that there is an in-built bias towards the effectiveness of such schemes.

3)    When compiling a forecast with disparate elements, then totality of all the trends must form a credible picture. This will often mean adjustments to bring the factors into line. This has probably not occurred.

4)    In compiling the congestion charge model, political acceptability of the proposed charging structure may have overrode previous “optimal” charges. It could be that the forecast shifts from road use to public transport were based upon a more stringent congestion charging regime.

 

 

Flaw in the analysis of flaws

Further to my previous blog on the 30th September, I misintepreted the figures on the first of the two flaws.

This was with a comparison of two projections from the submission.

 

Figure 71 – Reference case:Difference in people Crossing the inner ring (2005 to 2016) p.241
Highway Bus Rail Metro-link Total Pt
Entering Regional centre 2,300 -1,300 1,300 4,000 4,000
Crossing Inner Charging Ring 8,400 -1,700 1,400 4,000 3,700
Figure 72 – TIF Package:Difference in people Crossing the inner ring (2005 to 2016) p.242
Highway Bus Rail Metro-link Total Pt
Entering Regional centre -3,300 5,800 2,100 2,400 10,300
Crossing Inner Charging Ring -6,400 7,200 2,300 2,800 12,300

I took the two tables to be separate forecasts. As such, there are fewer passengers using the Metrolink if it is extended, than if it is not.

However, on closer reading, figure 72 is the changes projected over and above the situation in Figure 71. Therefore the extension to the Metrolink, with lines to the regional centre will lead to an increase in those travelling on Metrolink by 2,800 at peak times.

The second flaw, looking at the impact of people switching from cars to buses is unaffected.

Further analysis is to be found in the next blog.

 

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