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Wednesbury to Brierley Hill Midland Metro

Volume 450: debated on Wednesday 25 October 2006

I am delighted to be able to discuss this important issue and pleased that the Minister is here to respond. Although the title of the debate refers directly to Midland Metro and its possible future routing through the black country, hon. Members should recognise that the context of that extension is not solely one of transport. It is set within a wider sub-regional framework now known as “Black Country Study”.

I shall take a little time to set the scene, Mrs. Dean—a rhyme there. Very nice. I must outline the importance of “Black Country Study”, which sets the context for the crucial Midland Metro extension and how it will support the key aims identified. The study began three years ago when the region’s political and business leaders recognised the need to consider radical change in the sub-region to counter the decline of the past 30 years.

The process got under way when a 30-year future vision was agreed with partners, which provides the driving force for change. There is now a sub-regional study for the black country to outline the priorities for the regeneration of its physical, environmental, social and economic fabric. The West Midlands regional assembly, as the regional planning body, has accepted the study as a supporting document for the draft regional spatial strategy phase 1 revision, submitted to the Government on 31 May. Hon. Members will know that regional spatial strategies guide major transport, land use and regeneration decisions, in this case until 2021.

Across the black country there are important challenges, some of which have been ignored by successive Governments. An example of the fundamental challenges in Stourbridge and in most of our part of the west midlands is provided by the large number of people who leave the region’s villages, towns, cities and boroughs, including Dudley, Sandwell, Walsall and Wolverhampton. There is a high number of low-skilled workers, which means an over-reliance on basic, manually-based jobs.

The black country’s ability to retain people with higher skills and attract new highly skilled workers is severely restricted, and only limited measures are in place to protect and enhance the environment to create a safe, attractive and healthy place to live and work. I am delighted to say that “Black Country Study” seeks to address those matters.

I came into politics to help to improve the quality of life of local people, and as a Labour Member I am proud to serve my community while a proposal such as the study is being considered. There must be an urban renaissance in our region, and a key constituent part of that can be delivered through major investment projects such as the proposed extension of Midland Metro. I was recently astounded to learn that of the 2 million trips, not including walking and cycling, that are made every day in the black country, 83 per cent. are by car and only 17 per cent. by public transport.

Although the population is forecast to decline in the next 30 years, transport models show that there will still be a rise in the number of trips made daily. Of the new trips, the trend is for more to be made by car and fewer by public transport. Clearly, that is unsustainable, particularly considering the planned expansion in employment, population and housing.

Public transport overall is declining in the black country, but rail use is increasing in line with national trends outside London. Bus operators in the west midlands have reported more than 30 locations where delays on the road network are unacceptable and seriously affect reliability. For instance, many bridges in the black country still have limited head room or cannot carry the largest heavy goods vehicles. That restricts our freight operations and hampers the development of some areas.

The majority of public transport trips are made by bus. The quality, performance and perception of those services mean that they often fail to provide a truly acceptable alternative to car use. Those who cannot afford a car or who cannot drive may suffer from social exclusion, because employment and leisure opportunities are no longer contained within traditional town centres. Car ownership in the black country is lower than the national average, with between 25 and 37 per cent. of households still not having access to a car.

Each local transport plan area has been required by the Government to assess the accessibility of key services in that area, including access to work, education, health care and fresh food. Although accessibility to such services in the black country is good, there are a number of gaps in the commercial network. For instance, there is a particular problem with evening services that enable residents to reach educational and recreational opportunities and, as I have stated, with new areas of employment that are no longer always located in town or city centres.

There is a solution to those problems—Midland Metro. The first line of the proposed network of light rail routes opened in 1999. It is a light rail tram system that runs from Birmingham to Wolverhampton, via West Bromwich and Wednesbury. The service provides a reliable and convenient transport link between two cities, over a distance of 21 km. The system is owned and promoted by the public transport body Centro—the passenger transport executive for the west midlands—and operated through a concession by Travel Midlands Metro.

In the first year of operation, 17 per cent. of users gave up their car journeys in favour of using the metro, and that figure has steadily increased to 37 per cent. Light rail has consistently achieved a 20 per cent. modal shift from car to tram. We in the region would like the Government to demonstrate a commitment to the metro as the most appropriate mode of transport along main routes where demand is high, and to help us to address road congestion, which is estimated to cost about £2.2 billion a year.

The proposed phase 1 extensions to Midland Metro that we are discussing form part of a two-pronged proposal. The first prong is the extension from the existing terminus of line 1 through the heart of Birmingham city centre to Edgbaston, while the other runs from Wednesbury to Brierley Hill. Both routes, which are being procured together as one project, fall into the high-value-for-money category in the Department for Transport guidelines and are in a state of readiness for the tendering process in 2007, which would lead to a start on site in 2008-09. However, this requires Government commitment to funding.

Although the metro is a top priority in the region, by political agreement regionally it was not prioritised for the regional funding allocations. It was recognised that the metro’s funding would be sourced through the transport innovation fund, with the expectation that funding through the TIF would be available to ensure that the project could be delivered at the earliest opportunity. I understand that discussions on that are taking place with officials in the Department.

It would cost £384 million to build the route. Contributions of more than 25 per cent. have already been secured from local sources, including private sector developers. Of that 25 per cent., Westfield, the owners of the Merry Hill shopping centre, has committed £36.5 million, which is one of the largest private sector contributions of its kind for a light rail scheme.

That is good news, not only for my hon. Friend the Minister and my right hon. Friend the Chancellor of the Exchequer, but for my constituents and the wider black country. Delivery of that key piece of infrastructure will mean that wealth creation can be stimulated and that the black country economy can start to thrive and address years of decline. The clear evidence from the existing Midland Metro routes suggests that further investment to expand the network would yield a similar positive impact, which I am sure the Government are keen to promote. Midland Metro is a key part of the overall strategy and a vital part of the public transport strategy.

I would like to examine the impact on the strategic centres of extending Midland Metro from Wednesbury to Brierley Hill, as proposed in “Black Country Study”, which will be crucial when the Government make their decision on funding streams linked to whether the proposal proceeds. The centre access packages proposed for Brierley Hill, Walsall, West Bromwich and Wolverhampton have common elements, including a focus on measures to change people’s opportunities to access strategic centres, while interventions to help them to make sustainable travel choices underline the strategy.

As well as that element, there is a focus on public transport, with priority being placed on the development of Midland Metro and linking together each of the four strategic centres, providing access to those centres for households in the proposed housing corridors.

The route of the Midland Metro extension connects some of the most deprived wards in the area, in terms of economic and social conditions and access to quality facilities and modern job opportunities. Those wards lie in the south black country and west Birmingham regeneration zone, which was set up as one of the delivery vehicles for the west midlands economic strategy.

The fundamental uplift in public transport resulting from the Midland Metro extension would not only greatly enhance the indigenous attractions of those areas for new economic investment, but would transform accessibility and the lives of residents in those wards by giving access to expanding modern job opportunities, as well as the retail, leisure and community facilities at Brierley Hill and Merry Hill, via Dudley town centre.

Similarly, the extension would facilitate transport to other major centres and their economic opportunities, in particular Wolverhampton and Birmingham, via the existing line 1.

About 2,000 of my constituents rely on employment opportunities around the Merry Hill site, and it is estimated that an additional 4,000 jobs would be generated by the metro extensions. Imagine what that could do for the life chances of the wider black country. A further benefit for my constituents and the area of Brierley Hill, in which the Merry Hill shopping centre is located, is the planned metro stops that will assist the well-developed plans to integrate Brierley Hill high street, the Waterfront and Merry Hill.

The Midland Metro extension will underpin the regeneration process in other key locations along the route, including Golds Hill and Dudley town centre. In the latter case, important town centre schemes are coming forward—notably the regeneration proposals for the area of Dudley zoo and castle—that have an important role in the strategy for Dudley, focusing on enhancing its tourism and leisure facilities. The realisation of the Midland Metro extension would therefore be immensely supportive of those local initiatives.

The proposed metro route meets Government guidance on major transport schemes by fitting in with the region’s objectives for local transport schemes and offers value-for-money investment for the whole region, not just the black country. Centro has developed a strategy for implementation of the route that will ensure that projects stay within budget and can be delivered within the agreed timetable. Private sector funding demonstrates that commercial confidence in the scheme exists.

Midland Metro, as outlined to the Chamber, is an integral component for improving the black country and is a critical element of “Black Country Study”, for which hon. and right hon. Members have demonstrated their support via early-day motion 2249. As mentioned previously, “Black Country Study” is the urban renaissance strategy for the black country. It sets out why the black country needs to change, what needs to be done, where that change is going to take place and how it will be brought about. The delivery of the Midland Metro extension underpins the emphasis of the whole study and is vital to its success.

I ask the Minister to work with us in the black country and the west midlands to help to deliver the scheme for our region. To fail at this point could condemn the region to terminal decline.

It is a pleasure to be back in this Chamber and serving under your chairmanship after an extended break of four and a half hours, Mrs. Dean.

I congratulate my hon. Friend the Member for Stourbridge (Lynda Waltho) on securing this debate. I am grateful for the opportunity to hear first hand her views on the proposed extension of the Midland Metro from Wednesbury to Brierley Hill, an issue on which she has been an energetic and effective campaigner on behalf of her constituents. This debate is an appropriate opportunity to reaffirm the Government’s position on tramways and light rail schemes in general. I shall then respond specifically to my hon. Friend’s comments.

Light rail can bring considerable benefits. It can deliver quicker, more reliable journeys, taking passengers directly into the heart of a city, avoiding traffic congestion and greatly improving accessibility. We have always recognised that trams can be very effective in attracting people away from their cars and we will continue to support light rail schemes when they are the best solution for local circumstances—usually corridors with high traffic and passenger flows.

Our support for light rail schemes in the right circumstances was demonstrated by the announcement by my right hon. Friend the Secretary of State for Transport in July that the Department was conditionally approving a scheme to extend the Manchester Metrolink system. Just this morning, my right hon. Friend gave initial approval to extend the Nottingham express transit system.

However, we will not support light rail schemes regardless of cost. On most corridors, a well designed and promoted bus-based system is likely to provide a more cost-effective solution. When light rail schemes, including extensions to existing systems, are promoted, they will need to be developed as part of an integrated approach to tackling an area’s problems. The Government will expect proposals for light rail schemes to be fully integrated with other forms of transport—for example, through integrated ticketing, bus quality partnerships or quality contracts, the provision of park and ride facilities, and complimentary parking policies. Proposals will also need to be supported by commitments to complementary measures to deliver the benefits of increased public transport usage and reduced congestion. The Government will continue to work closely with individual promoters and the light rail industry to seek to ensure that such benefits can be realised and that the costs of tram systems are minimised and properly controlled.

That brings me—seamlessly, I hope—to the comments made by my hon. Friend the Member for Stourbridge. I would like to congratulate the regional assembly and the Black Country Consortium on delivering “Black Country Study”, which my hon. Friend mentioned. As my hon. Friend said, transforming the black country is crucial to the success of the regional spatial strategy and to the west midlands as a whole, and the work will help to ensure delivery. I also place on record our recognition of the massive personal contribution made by a small number of individuals to the study and to the future of the black country.

The draft revision of the spatial strategy specifically highlights the need for urban regeneration of the black country and recognises the need for an integrated public transport network to serve Brierley Hill, as well as Merry Hill in Dudley, a new strategic centre. Such a network would link them to the other strategic and local centres within the sub-region.

Although the metro is viewed as valuable for achieving those aims, the region recognised that quality alternatives also will need to be considered in parallel. Public consultation on the draft revision to the spatial strategy has ended, and it will now be examined by an independent panel, to be appointed by the Secretary of State for Communities and Local Government in January next year. We also need to remember the work jointly carried out by all the authorities in the west midlands to examine congestion and how they might tackle it. As my hon. Friend correctly pointed out, the authorities are considering making a bid to the transport innovation fund, to which I shall return later.

At this point, it is worth recapping a little of the metro’s history. Midland Metro line 1, between Birmingham Snow Hill and Wolverhampton, opened in 1999 and has provided much-needed transport links to deprived communities and helped to regenerate those areas. Line 1 also helps to reduce congestion; 14 per cent. of metro passengers previously made the journey by car, so the line has removed 600,000 car trips per year from local roads.

However, line 1 suffered some initial teething troubles. It attracted criticism from the National Audit Office for its initially poor service and failure to meet its frequency and reliability targets. Although those have since improved and the line now regularly delivers a high quality of service and reliability, we need to ensure that lessons are learned and taken account of in respect of the proposed extensions.

In December 2000, the Government granted initial approval for two proposed extensions to Midland Metro. In addition to the Wednesbury to Brierley Hill extension, a second extension would provide a city centre link between Birmingham Snow Hill and Five Ways, terminating at Edgbaston shopping centre.

When approval was granted in 2000, it was estimated that the scheme would cost £165.5 million in 1999 prices; estimates for the Wednesbury to Brierley Hill extension and the city centre line were £114.1 million and £51.4 million respectively. Our approval letter said that full approval of the project would depend on whether an updated economic appraisal confirmed that the scheme represented good value for money, and on satisfactory funding arrangements being agreed.

Since approval was given, we have improved our approval process. Full approval is now given only after a promoter has obtained final prices from bidders. The actual costs of a scheme are therefore known before we give the promoters the go-ahead to start construction. We hope that that will help us avoid a repeat of recent experiences of light rail schemes when full approval had to be revoked due to significant cost increases.

At the point at which full approval was given in the past, we have introduced a new approval stage: conditional approval. That is applied for once the necessary legal powers—under Transport and Works Act 1992 orders or other planning permissions—are in place. When granted, that will be the Department’s commitment to provide funding, subject to the costs not increasing after procurement and the scope of the scheme remaining the same.

That is the stage that the Midland Metro extensions are now at. The promoters require conditional approval before they start their procurement process. However, since our initial approval was granted, the source of potential funding for the scheme has changed, as my hon. Friend mentioned. In January this year, the west midlands regional bodies provided advice to the Government on the regional funding allocation for the west midlands. They said:

“Expansion of the Midland Metro is a top priority for the Region. However, the cost of the Phase 1 extensions would utilise virtually all the Transport RFA for a period of years and this is not realistic. This project is therefore assumed to be funded through the Transport Innovation Fund (TIF) with no funding from RFA.”

In February this year, my officials had a number of meetings with the promoters to discuss their proposals for the Midland Metro extensions and the implication of funding the extensions through the transport innovation fund.

TIF funding for schemes intended to help address congestion will be awarded on a competitive basis, as set out in our guidance published in January 2006. In considering bids for TIF funding, we will look at how the full package stacks up. That means that we would need to consider the proposed Midland Metro extensions in the context of the full TIF package to be developed by the west midlands authorities.

I agree with my hon. Friend the Member for Stourbridge (Lynda Waltho) that there is a need for some of the regional areas to be connected up, and perhaps the metro is the answer. The Minister is right to point out the real urban issues in connecting urban lines. Such issues have not been thought out in my constituency, and a huge escalation in price has meant that the projects will never take off. It would be very wise for the local authorities and transport authorities to establish how they can provide an effective bus service to ensure that my constituents are able to use services into the city centre and to areas that connect those communities together.

I hope that my hon. Friend will forgive me if I am not led down the road of commenting on the likelihood or otherwise of that particular TIF funding application. However, I accept that he has strong views on the issue, on which he has campaigned vociferously for a number of years.

In the light of the fact that we will consider the Midland Metro extension in the context of the full TIF package, my officials wrote to the promoters in March to explain that we could not give the scheme any form of financial approval separately from, and in advance of, receiving and considering the TIF bid in 2007. The promoters told us that they nevertheless still wished to send the Department their outline business case for the extensions as soon as it was ready, and they did that in July this year.

We agreed that, as far as we were able, we would undertake an appraisal of the scheme. However, although we can explore the assumptions and calculations underlying the bid, we are not able to provide a definitive assessment of the value for money of the scheme on its own. It will ultimately need to be considered alongside the other measures that form part of the west midlands TIF bid.

The outline business case estimates that the extensions will cost some £383 million, as my hon. Friend said. However, the promoters made that estimate based on receiving conditional approval in 2006, which of course will now not happen. The earliest that conditional approval could be granted in accordance with the anticipated TIF timeline is late next year or early 2008. Based on an approval date of January 2008, the promoters estimate that the total cost would be some £409 million.

My officials have been working closely with the promoters since receiving their outline business case and will continue to assess the case as far as possible. However, as I said before, given the source of funding available, it can be approved only if the west midlands authorities’ TIF bid is also approved.

It might be helpful if I said a bit more about the transport innovation fund itself. It represents a new approach to achieving the key objectives of tackling congestion and improving productivity. We have announced that up to £200 million a year, and possibly more in subsequent years, will be made available to tackle congestion. We are inviting authorities to bid for resources and to develop packages of measures that will tackle congestion effectively though a combination of demand management and encouraging modal shift.

The TIF starts in 2008, but £18 million has been made available in advance for local authorities to develop demand management proposals, and the west midlands has been awarded £2.6 million of that sum. We welcomed the recent publication of the first phase of the work, and my Department is following it up with the authorities. Subject to ongoing work, we expect a full business case in July next year. We look forward to receiving it and to working with the west midlands in carrying out a full assessment of the bid.