wmr rail wider economic impacts modelling · wmr rail wider economic impacts modelling 106637...

WMR Rail Wider Economic Impacts Modelling 18/06/2018

Reference number 106637

WMR RAIL WIDER ECONOMIC IMPACTS MODELLING

WMR RAIL WIDER ECONOMIC IMPACTS MODELLING

IDENTIFICATION TABLE

Client/Project owner West Midlands Rail

Project WMR Rail Wider Economic Impacts Modelling

Study WMR Rail Wider Economic Impacts Modelling

Type of document Report

Date 18/06/2018

File name

Framework

Reference number 106637

Confidentiality Confidential

Language

Number of pages 43

APPROVAL

Version Name Position Date Modifications

1

Author James Jackson Principal Consultant

18/04/2018

Checked by

Approved by

Lee White Market Director

19/04/2018

2

Author James Jackson Associate 03/05/2018

Update following client comments

Checked by

Approved by

James Jackson Associate 03/05/2018

3

Author James Jackson Associate 18/06/2018

Update Checked by

Approved by

James Jackson Associate 18/06/2018

WMR Rail Wider Economic Impacts Modelling WMR Rail Wider Economic Impacts Modelling 106637

Report 18/06/2018 /43

TABLE OF CONTENTS

1. INTRODUCTION 5

2. MODELLING METHODOLOGY 6

2.2 THE APPROACH TO MODELLING 6

2.3 THE MODELLED YEAR 7

2.4 STRATEGIC & LOCAL MODELS 8

2.5 THE ECONOMY & POPULATION IN THE FORECAST YEAR 12

3. THE MODELLED SERVICE OPTIONS 17

4. RESULTS 20

4.1 INTRODUCTION 20

4.2 INTERPRETING THE OUTPUTS 20

4.3 OPTION SUMMARY RESULTS 21

4.4 IMPACT ON JOBS 22

4.5 CORRIDOR RESULTS 23

4.6 2025 MODEL RESULTS 26





5. VARIANT B RESULTS 37

5.2 IMPACT OF UK CENTRAL 40

6. CONCLUSIONS 41

7. APPENDIX A 42


Report 18/06/2018 /43

LIST OF FIGURES

Figure 1. GVA Results by Route Section 2025 27 Figure 2. GVA Results by Route Section 2027 29 Figure 3. GVA Results by Route Section 2032 32 Figure 4. GVA Results by Route Section 2034 34 Figure 5. GVA Results by Route Section Variant A 2047 36

LIST OF TABLES

Table 2. Key Variant B Locations 16 Table 3. Key Interventions 18 Table 4. New Stations 19 Table 5. Aggregate results (One Year GVA £m 2030 Values at 2010 Prices) Variant A 21 Table 6. Aggregate results (One Year GVA 2030 Values at 2010 Prices £m) Variant B 21 Table 7. Difference between Variant A & B (One Year GVA 2030 Values at 2010 Prices £m) 21 Table 8. % Difference between Variant A & B 22 Table 9. Equivalent Number of Jobs Generated in Variant A 23 Table 10. Local Model Results Variant A (£m GVA 2030 values at 2010 prices) 23 Table 11. Strategic Model Results Variant A (£m GVA 2030 values at 2010 prices) 24 Table 12. Total Model Results Variant A (£m GVA 2030 values at 2010 prices) 24 Table 13. Local Model Results Variant A (%) 24 Table 14. Strategic Model Results Variant A (%) 25 Table 15. Total Model Results Variant A (%) 25 Table 16. GVA by Route Section Results Variant A 2025 (£m GVA 2030 values at 2010 prices) 27 Table 17. GVA by Key Station Model Results 2025 (£m GVA 2030 values at 2010 prices) 28 Table 18. GVA by Route Section Results 2027 (£m GVA 2030 values at 2010 prices) 29 Table 19. GVA by Key Station Model Results 2027 (£m GVA 2030 values at 2010 prices) 30 Table 20. GVA by Route Section Results 2032 (£m GVA 2030 values at 2010 prices) 31 Table 21. GVA by Key Station Model Results 2032 (£m GVA 2030 values at 2010 prices) 32 Table 22. GVA by Route Section Results 2034 (£m GVA 2030 values at 2010 prices) 33 Table 23. GVA by Key Station Model Results 2034 (£m GVA 2030 values at 2010 prices) 34 Table 24. GVA by Route Section Results 2047 (£m GVA 2030 values at 2010 prices) 35 Table 25. GVA by Key Station Results 2047 (£m GVA 2030 values at 2010 prices) 36 Table 26. Total Model Results Variant A (£m GVA 2030 values at 2010 prices) 38 Table 27. Total Model Results Variant B (£m GVA 2030 values at 2010 prices) 38 Table 28. Difference between Variant A and B (£m GVA 2030 values at 2010 prices) 38 Table 29. Difference between Variant A and B (%) 39 Table 30. Variant B Results – Differences from Variant A 40 Table 31. Aggregate results (£m GVA 2030 values at 2010 prices) Variant A 41


Report 18/06/2018 /43

1. INTRODUCTION

1.1.1 This report presents the findings of work to examine the wider economic impacts of a number of service scenarios for the development of the West Midlands rail network over the period to 2047 and acts as supporting evidence for the West Midlands Rail Investment Strategy (WMRIS). The purpose of the work is to help provide evidence to support the case for further investment to deliver capacity to help meet future demand and address the aspirations of different stakeholder groups. In developing the vision for the network a horizon year of 2047 has been chosen to give an understanding of how the rail network may look in 30 years’ time.

1.1.2 The work has looked at five different future years over the period to 2047 with each representing incremental changes across the network. The changes to the timetable incorporate a mixture of committed changes (for example franchise commitments), the impact of committed or known schemes, such as HS2 and the aspirations of West Midlands Rail (WMR).

1.1.3 The measures considered within the tests that have been assessed include improvements in journey times, increases in service frequencies, the opening of new stations, the restructuring of services to incorporate new direct links and in some options the opening of a number of existing freight lines to passenger traffic. This represents a diverse mixture of interventions which would require a considerable investment to deliver, the WMRIS deals with this in more detail. It should also be considered that the timescales identified for the services changes are indicative, and some (especially those that are not committed) could move either forwards or back in any investment and delivery programme.

1.1.4 The central findings of the modelling work are that the delivery of the 2047 service specification would generate around £540m of additional GVA per annum (2030 values at 2010 prices) , this would represent around £2.7Bn over 30 years (when discounted in line with DfT guidance), or the equivalent of around 6,500 jobs. The addition of Strategic Development Sites would add around 15% to these values overall.

1.1.5 The remainder of this report sets out the methodology and assumptions used as part of the modelling process before moving on to look at the details of the different tests and their associated results.


Report 18/06/2018 /43

2. MODELLING METHODOLOGY

2.1.1 This chapter sets out the principles behind the modelling work and provides information on assumptions about future levels of economic development for an assessment year of 2030. A standard assessment year was chosen to allow a comparison between service options in a consistent manner. As a sensitivity test, as well as using forecast background growth (Variant A) we have also developed an assessment incorporating a range of Strategic Development Sites that sit outside the conventional forecasting tools, this is known as Variant B.

2.1.2 Chapter 3 provides further information on the details of the service options tested.

2.2 The Approach to Modelling

2.2.1 SYSTRA has carried out this work using an in-house model that is based on an approach developed by Network Rail as part of their series of Market Studies. The model produces an estimated change in the Gross Value Added (GVA) as a result of changes to rail services. These results are based largely on the impacts of agglomeration between economies. For example, if through improving the rail service, Wolverhampton and Birmingham are effectively brought ‘closer’ together then there will be an increase in the level of interaction between the two economies and an increase in overall GVA.

2.2.2 It should be noted that the work here is focussed on the agglomeration impacts of rail services (described below) and does not include the impact of other types of benefit for example the user benefits of rail services including matters such as journey time savings, this means that some interventions that are for example focussed on mode shift may not perform as well as other interventions within this assessment.

Agglomeration Economies

2.2.3 At their broadest level, agglomeration economies occur when individuals and businesses benefit from being “near” to other individuals, and exist when the spatial concentration of economic activity gives rise to increasing returns in production. Transport and communications play a crucial role because, in most contexts, speed and low costs in transportation and communication provide a direct substitute for physical proximity1.

2.2.4 Research2 has identified where improved rail connectivity between places of different size may provide economic benefits. The obvious example in UK terms is the difference between London and provincial cities where better connectivity will enable the smaller centres to become “a more attractive location; it starts off with lower wages and rents, and improved connectivity means that it will get better access to London’s large economic market and large base of suppliers”.

1 Daniel Graham & Patricia Melo, Advice on the Assessment of Wider Economic Impacts: a report for HS2, March 2010

2 Bridget Rosewell (Volterra Partners) and Tony Venables (University of Oxford) High Speed Rail, Transport Investment and Economic Impact,

2013


Report 18/06/2018 /43

Agglomeration Modelling Work

2.2.5 SYSTRA has modelled the potential wider economic benefits of a number of service options as a result of an increase in the number of services and the range of destinations served. Although based on a model specified by Network Rail it has been adapted by SYSTRA to include the impact of different sectors of the economy on the scale of benefits. The importance of this segmentation by economic sector has been highlighted in research on agglomeration and the ‘connectedness’ of locations; “there is some evidence that suggests that the strength of these relationships changes by economic sector, with some sectors likely to benefit more from concentration of activity than others”3.

2.2.6 The data incorporated into the modelling to define economic sectors was taken from Department for Transport WebTAG guidance on wider impacts (WebTAG Unit A2-1). The four sectors of the economy defined within the modelling are:

Construction; Manufacturing; Consumer services; Producer Services

2.2.7 While the first two sectors are relatively self-explanatory the components of the last two perhaps requires further definition, provided in the table below:

Table 1. Definition of Consumer & Producer Services Segments

CONSUMER SERVICES PRODUCER SERVICES

Motor Trade Financial

Wholesale Insurance

Retail Auxiliary/Financial

Hotel/Restaurants Machinery Renting

Land Transport Computer Services

Water Transport Research & Development

Travel Support Other Business Services

2.2.8 As well as economic inputs the model also utilises information on in-vehicle journey times, service frequencies, the need for interchange and access time to and from stations, as well as fares. The approach taken to estimating the frequency and interchange penalties follows the Rail Delivery Group Passenger Demand Forecasting Handbook guidance.

2.3 The Modelled Year

2.3.1 The future year chosen for the modelling work was 2030. Whilst the delivery of the service options extends as far forward as 2047 it was decided to use 2030 as an assessment year as this year represents the point by which the currency of the majority of the Local Plans for the

3 Daniel Graham & Patricia Melo, March 2010, op cit


Report 18/06/2018 /43

West Midlands area will have expired. Beyond this point there is less certainty around the quantum and location of development that will be delivered.

2.3.2 However it was also important to incorporate a number of large known strategic developments in the study area, that sit outside the Local Plans for their areas. To deal with this a sensitivity test known as “Variant B” was developed that incorporated both Local Plan growth to 2030 and these Strategic Development Options. The model test incorporating only known Local Plan growth included in the DfT TEMPRO programme is known as Variant A.

2.4 Strategic & Local Models

2.4.1 A requirement of the work was to examine a large network covering the local rail network in the West Midlands in detail as well as access to a range of strategic locations across the UK. To achieve this two models were developed covering long distance and local movements.

Strategic Model

2.4.2 The first was a strategic model covering locations outside of the West Midlands area, bounded by Glasgow and Edinburgh to the north, Lincoln and Cambridge to the east, London and Reading to the south and Plymouth and Cardiff to the South West and South Wales.

2.4.3 Within the West Midlands the strategic model contained seventeen key settlements that covered the main economic centres of each of the West Midlands Districts, plus Birmingham International (a significant centre of employment set to grow in the future) and University (a significant centre for jobs and education). These key stations were as follows:

Birmingham (New St, Moor St, Snow Hill) Birmingham International Coventry Northampton Leamington Spa Solihull Stourbridge Jn Worcester Hereford University Sandwell & Dudley Wolverhampton Stafford Stoke-on-Trent Telford Central Shrewsbury Walsall

2.4.4 It should be noted from the above that the three central stations in Birmingham (New St, Moor St, Snow Hill) are treated as a single station in this assessment in view of their proximity.

2.4.5 The catchment areas for these stations were defined as being slightly larger than those used for these stations in the Local Model described below. This was to reflect the more strategic nature of the trips being undertaken in this model.


Report 18/06/2018 /43

2.4.6 The figure on the page below presents the extent of the Strategic Model area.

Figure 1 Strategic Model Area


Report 18/06/2018 /43

Figure 2 Local Model Area showing Local Authority Area and Key Stations

Local Model

2.4.7 A second local model was developed to deal with the West Midlands Rail area, and provided coverage for every station within that area.

2.4.8 The model covered stations in the following Local Authority areas:

Wolverhampton Dudley Walsall Sandwell Birmingham Solihull Coventry Worcestershire4 Warwickshire Staffordshire5 Herefordshire6

4 Excluding stations on the North Cotswold Line east of Worcestershire Parkway 5 Excluding stations on the Stoke-on-Trent – Derby line 6 Excluding stations on Cardiff – Hereford – Shrewsbury line


Report 18/06/2018 /43

Shropshire7 Telford & Wrekin Stoke-on-Trent Northamptonshire8

2.4.9 Within the Local Model the links between each station and the 17 stations identified above in the Strategic Model were assessed. Additionally the links between each of the 17 stations were also assessed.

Station Catchments & Access Times

2.4.10 The two models have different approaches to the definition of catchment areas. In the case of the strategic model the majority of locations modelled are freestanding towns and cities rather than conurbations and therefore the built-up area was used as the catchment area for the station9. The detail of the catchment areas for each station were defined using Middle Super Output Areas (MSOAs), and the economic data for the model was taken from these MSOAs. Access distances to stations from each MSOA were calculated using ‘TRACC’ accessibility planning software.

2.4.11 Within the local model the catchment area coverage is much denser, with all areas of the local authorities described above included. In this model station catchments are allocated by allocating Lower Super Output Areas (LSOAs) to their nearest station, again using TRACC software. This approach provided a consistent approach across a large area, although in some cases it might be argued that those resident or employed in a particular LSOA may use a station further away if the services were better or if a station served different destinations and routes. The use of LSOAs does however provide a greater level of granularity in the definition of catchments than would be achievable with larger areas.

2.4.12 As in the strategic model access distances to stations were calculated using TRACC software. Having identified distances, mode weighted access times were calculated using information contained within the SYSTRA model.

Modelling New Stations

2.4.13 A feature of the service and route interventions was the opening of a number of new stations. All of these stations were contained within the local model area. The approach taken to modelling these new stations was as follows:

1. The catchments for the whole local model area were reassessed for each modelled year with the catchments for any new stations being identified as part of this;

2. The catchment areas were validated for new stations to ensure that they were realistic. This was achieved by calculating total journey time (access time and In Vehicle Time) to a key destination such as Birmingham to ensure that the new station was the most appropriate station choice;

7 Excluding stations on the Cardiff – Hereford – Shrewsbury – Crewe- line 8 Long Buckby and Northampton only 9 This is likely to underplay the size of the catchment areas as often passengers railhead at larger stations. Interpreting these longer distance station catchments can be complex especially in a relatively dense area such as this and therefore we have defined a more robust catchment area.


Report 18/06/2018 /43

3. When a new station opened in a modelled year the economic data for the catchment area was transferred from its previous station to its new station;

4. When a new station opens, by implication, the catchment for existing stations would reduce, the result of this is the GVA value associated with an existing station would reduce (assuming that there was no service improvement to offset this). This would however be offset by the increase in GVA from the new station and therefore the net impact would be an increase in GVA.

2.4.14 Whilst this process for dealing with new stations complicates the presentation of the results, because catchments start to alter between stations it does provide a fair assessment of the impact of new stations on the economy.

2.5 The Economy & Population in the Forecast Year

2.5.1 Given that this work examines the long term options for investment in the rail network over the next 25 years it is important to try and understand the future level of development across the study area. For the purposes of this modelling work there are two main factors that determine this:

The change in the number and location of jobs The change in the GDP per head over the intervening period

2.5.2 The change in GDP was addressed by using the GDP values identified within the DfT Wider Impacts dataset for 2026 and 2031 and interpolating between the two to obtain 2030 values. Over the period to 2030 GDP values per head are forecast to rise by 37% nationally, relative to the base year of 2017, indicating that the economy will have grown overall. This increase masks variation within individual sectors, for example, the construction sector reduces in scale by 5%, whilst at the other extreme the producer services sector increases GDP per worker by around 67% across this time period. The national figure also masks spatial variations across the country. Therefore it should be considered when examining the results that the GDP values presented are measured relative to a larger economy than exists presently.

2.5.3 In addition, to ensure compatibility with the DfT dataset used to provide GDP values, the results are presented in 2010 prices, this means that were any further tests conducted looking at other future assessment years the results would be comparable as the effects of background inflation (as opposed to real growth) would be removed from the results.

2.5.4 To understand changes in the volume and spatial distribution of employment over the next 12 years TEMPRO data from the DfT was used. TEMPRO data incorporates the majority of current Local Plan data for the study area. After the currency of the Local Plan data expires a series of assumptions are used by DfT to estimate further growth. However up to the modelled year of 2030 the vast majority of the data used will be from the Local Plan.

2.5.5 The figures below presents existing levels of employment and future levels of growth in the study area.


Report 18/06/2018 /43

Figure 3 West Midlands Employment 201710 Figure 4 West Midlands Central Area Employment 2017 to 2030


Report 18/06/2018 /43

Figure 5 West Midlands Employment change 2017 to 2030 (%) Figure 6 West Midlands Central Area Employment change 2017 to 2030 (%)

10 Only key stations shown in Figures 3 to 6


Report 18/06/2018 /43

2.5.6 The TEMPRO growth indicates substantial percentage increases in employment within the Black Country and other core parts of the West Midlands area. There is also notable growth in the Worcestershire area, although this will be developing from a lower base than in the more central part of the study area.

2.5.7 Following a process of Stakeholder Engagement and examination of available evidence a number of sites were identified for inclusion within Variant B, these were typically large sites that sit outside of existing Local Plans. Only larger sites were included as it was not practical to include all developments.

2.5.8 The figure below present the names and locations of the sites included within the Variant B scenario.

Figure 7 West Midlands Variant B Employment Sites 2017 to 2030 (%)

2.5.9 It can be seen that much of the focus of the Variant B development is on central parts of the West Midlands area. The most significant location is the UK Central site at Birmingham International which takes advantage of the development of HS2, the proximity of the Motorway network and the adjacent Birmingham Airport.


Report 18/06/2018 /43

2.5.10 The table below presents a list of the sites and an indicative and aspirational assessment of the number of additional jobs associated with them.

Table 2. Key Variant B Locations

LOCATION JOBS

Birmingham HS2 hub / UGC / UK central hub 77,500

A38 Urban Village 15,000

West Midlands (Freight) Interchange 10,000

Rugeley power station 7,000

Peddimore SUE 6,500

Ironbridge power station 4,500

i54 western extension 3,000

Bordesley Park Spatial Plan 3,000

Rugby Southern SUE 3,000

Land at Crab-Apple Way- Vale Business Park Extension (East), Evesham 2,500

Selly Oak and South Edgbaston 2,500

Lion Farm Playing Fields site near M5 J2 2,000

Longbridge 1,200

Barnsley Hall – near M42 J1 750

Land north of Craven Arms 150

2.5.11 The table clearly shows the scale of the development with UK Central leading followed by the proposed A38 Urban Village and the West Midlands Freight Interchange.

2.5.12 Section 4 of the report presents more detail on the differing impacts of Variant A and B.


Report 18/06/2018 /43

3. THE MODELLED SERVICE OPTIONS

3.1.1 As described above five different future years were assessed in the model, and all were assessed against the 2017 timetable. The five years covered the progression of the development of the network up until 2047. As noted in Section 1, 2047 was chosen to provide an understanding of how the rail network might look in 30 years time. A range of service changes took place in each modelled year, some of these were dependent on specific infrastructure interventions (such as the opening of HS2) whilst there was greater flexibility about the timing of some other changes. There was however a rationale for the choice of modelled years as set out below:

2025 – Completion of delivery of West Midlands Trains’ franchise commitments 2027 – Opening of HS2 Phase 1 and 2a – with associated timetable recast on classic

lines 2032 – Delivery of Midlands Hub providing an extra 10 paths each hour through

Central Birmingham 2034 – Opening of HS2 Phase 2b and associated timetable recasts 2047 – Completion of all other principal WMR and local authority aspirations

including opening of stations and new routes such as the Sutton Park line

3.1.2 The details of the service specifications were defined by WMR who identified a service specification for each modelled year for each of a number of corridors across the West Midlands network.

3.1.3 The corridors were defined as follows:

Chase Line – covering Birmingham – Walsall Rugeley and Walsall – Wolverhampton and Walsall – Aldridge when these routes are opened.

Coventry Corridor – covering Birmingham – Northampton and Nuneaton – Coventry – Leamington Spa

Cross City North – covering Birmingham – Lichfield Trent Valley and the extension to Burton-on-Trent (exclusive) via Alrewas when this is opened.

Leamington/Stratford Corridor – covering Birmingham to Leamington Spa via Solihull and Birmingham to Stratford-upon-Avon via Solihull or Whitlocks End

Stourbridge Corridor – covering Birmingham to Worcester (exclusive) via Stourbridge Junction and branches to Stourbridge Town, Brierley Hill and Safari Park

Stour Valley – covering Birmingham Wolverhampton – Stafford plus Wolverhampton – Shrewsbury

Cross City South – covering Birmingham to Hereford via Bromsgrove, the Camp Hill Line, the Redditch branch and Worcestershire Parkway

West Cost Mainline (WCML) and Trent Valley – covering Rugby – Stafford/Stoke-on-Trent and Crewe – Stoke-on-Trent

Water Orton – Birmingham covering Birmingham – Derby/Leicester and the Sutton Park Line.


Report 18/06/2018 /43

3.1.4 A series of outputs were also defined for strategic routes, these outputs largely reflected the anticipated service levels resulting from the opening of HS2 and the resulting recast of timetables on parallel routes.

3.1.5 There are a very considerable number of service changes in the service specification, however the most significant changes are summarised below. For many local stations service frequencies increase incrementally based around West Midland Rail’s 6-4-2 service frequency principle where all local stations have either 6, 4 or 2 trains per hour in each direction depending the level of demand at the stations.

Table 3. Key Interventions

YEAR INTERVENTION

2025

Operation of Camp Hill Circular service from Birmingham New St Opening of branches to Brierley Hill and Stourbridge Town Operation of direct Wolverhampton – Walsall service via Willenhall Increased number of cross Cross Birmingham services Enhanced services to Shrewsbury and Crewe

2027 Completion of HS2 Phase 1 & 2a and associated timetable recast. HS2 service patterns are consistent with current DfT Planning assumptions. Extension of services from Walsall to Aldridge

2032

Delivery of Birmingham Area Capacity Improvements (Currently known as Midlands Hub), the service enhancements associated with this are broadly consistent with but not identical to those being developed by Midlands Connect. Opening of intermediate stations to Water Orton and introduction of additional services to Leicester and Burton-on-Trent

2034 Completion of HS2 Phase 2b with operation of direct services and associated timetable recasts. Extension of services from Lichfield City to Burton-on-Trent via Alrewas

2047 Operation of services from Birmingham to Aldridge via Streetly, introduction of fast Redditch - Birmingham services, 4tph Brierley Hill – Birmingham and 6tph Birmingham International – Wolverhampton

3.1.6 As well as service changes the other key intervention relates to the opening of a number of new stations across the time period. These represent a mixture of new stations on existing lines and stations on new or reopened routes. The table below identifies these stations, their locations and year of opening. The opening of new stations has an impact on the results of the model as they serve to improve access to the rail network from the surrounding catchment area.


Report 18/06/2018 /43

Table 4. New Stations

YEAR NEW STATION ON EXISTING ROUTE NEW STATION ON NEW ROUTE

2025 Coventry Corridor: Kenilworth Cross City South: Worcestershire Parkway

Cross City South: Moseley, Kings Heath, Hazelwell Stourbridge: Safari Park, Brierley Hill Town, Brierley Hill Canal St Chase Line: Darlaston, Willenhall

2027 Coventry Corridor: Rugby Parkway Chase Line: Aldridge

2032 Water Orton: Fort Parkway, Castle Bromwich

2034 Cross City North: Alrewas

2047

Coventry Corridor: Hawkesbury, Coventry South, Coventry East Cross City South: Rushwick, Fernhill Heath Water Orton: Kingsbury, Galley Common Stour Valley: Shrewsbury East Parkway

Water Orton: Minworth, Walmley, Sutton Town, Streetly

3.1.7 The opening of new stations on new routes is dependent on the opening to passengers of a particular route and the operation of new services. However the phasing of the opening of new stations on existing routes could be altered or amended to fit around demand side issues such as new growth or supply side issues such as the delivery of additional capacity that would facilitate the opening of new stations.


Report 18/06/2018 /43

4. RESULTS

4.1 Introduction

4.1.1 This chapter contains the results of the modelling process of the six tests. A summary of the results is presented before more detail on each set of results is provided.

4.1.2 The following section provides guidance on the interpretation of the results.

4.2 Interpreting the Outputs

4.2.1 The outputs of the model are presented in terms of the uplift to Gross Value Added (GVA), and are relative to the existing level of service (December 2017 – May 2018 Working Timetable). In some cases this may mean that the value of improving links between two large economies that are already well served might be more limited than improving links between two smaller economies that are presently poorly served.

4.2.2 The model produces results measured in terms of Gross Domestic Product (GDP). However, these have been presented as GVA. The difference between GVA and GDP relates to the treatment of taxes and subsidy. In some sectors of the economy where substantial subsidy exists (for example agriculture) a significant disparity exists between GDP and GVA, however across most sectors and across the economy as a whole there is little difference between GDP and GVA values. A comparison of GVA and GDP values for a previous SYSTRA study showed that when GVA is expressed as a percentage of GDP the following results were obtained for the four economic sectors in the model:

Construction: 98.9% Manufacturing: 99.4% Consumer Services: 99.4% Producer Services: 99.7%

4.2.3 It can be seen from this that the difference between GVA and GDP is minimal and in effect the two metrics are analogous, and as such the GDP output values are presented as GVA results.

4.2.4 The monetary results have also been translated into an equivalent number of jobs created. This was achieved by dividing the total economic output generated for each origin destination pair by the average economic output of employees in the origin station catchment area. It should be noted that the additional economic output could be generated through greater productivity of existing employees rather than by maintaining productivity at a constant level and employing more people. It is very likely that the answer will lie between the two extremes with some increase in jobs and some increase in productivity.

4.2.5 The results presented are annual values for 2030 at 2010 prices, this is to say they include the impact of real GDP growth to 2030 as described in the previous chapter.

4.2.6 Finally it should be noted that as the modelled results incorporate planned future employment growth the geography of the results will vary compared to an assessment conducted using data on the economy in 2018.


Report 18/06/2018 /43

4.3 Option Summary Results

4.3.1 This section presents a summary of the results for the various options. For each option four separate model tests have been completed as follows:

Strategic Model – Variant A Strategic Model – Variant B Local Model – Variant A Local Model – Variant B

4.3.2 The tables below summarise the agglomeration impacts of the model for the different options. It should be noted that all results represent the difference between the test option and the existing 2017-18 timetable. For origin destination pairs where no change has been identified by WMR the 2017-18 timetable is assumed to remain in place in perpetuity for the purpose of the model.

4.3.3 The tables below presents the aggregate model results for the five different modelled years for both Variant A and Variant B.

Table 5. Aggregate results (One Year GVA £m 2030 Values at 2010 Prices) Variant A

TEST LOCAL MODEL STRATEGIC MODEL TOTAL

2025 £52 £7 £59

2027 £59 £215 £274

2032 £86 £239 £325

2034 £114 £374 £488

2047 £158 £382 £540

Table 6. Aggregate results (One Year GVA 2030 Values at 2010 Prices £m) Variant B


2025 £62 £9 £71

2027 £72 £237 £309

2032 £101 £262 £363

2034 £141 £421 £562

2047 £191 £430 £621

Table 7. Difference between Variant A & B (One Year GVA 2030 Values at 2010 Prices £m)


2025 £10 £2 £12

2027 £13 £22 £35

2032 £15 £23 £38

2034 £27 £47 £74

2047 £33 £48 £81


Report 18/06/2018 /43

Table 8. % Difference between Variant A & B


2025 19% 29% 20%

2027 22% 10% 13%

2032 17% 10% 12%

2034 24% 13% 15%

2047 21% 13% 15%

4.3.4 The table clearly shows that both the Strategic and Local Models generate significant benefits with improvement to local services generating between £158m and £191m of benefits per annum when all enhancements have been delivered, whilst the strategic model generates between £382m and £430m of benefits. There is however a clear difference in the progression of benefits between the two options. The benefits arising from the local model start strongly in 2025 and continue to progress through to 2047, with a number of key uplifts in benefits being driven by the Midlands Rail Hub. In contrast the impact of the Strategic Model is being driven by the completion of the HS2 network, with noticeable uplifts in 2027 and 2034 on the completion of Phase 1 and 2a of the network and then Phase 2b.

4.3.5 In practice whilst there is some level of certainty around the development of HS2 and its phasing (especially Phase 1) there is less certainty around the programme required to deliver benefit to the local network especially post 2025 after existing franchise commitments have been delivered, therefore the progression of benefits over time may vary in practice.

4.3.6 It can be seen that Variant B has quite a substantial impact on the Local and Strategic Model. Overall Variant B has a proportionately larger impact on the Local Model results, reflecting the impact of additional growth in a diverse range of locations, although the result is dominated by the impact of UK Central, located close to Birmingham International (Interchange) station. The proportional impact on the Strategic Model is less as the impacts in the Strategic model are driven by the proportionately large change in journey times delivered by HS2 rather than the size of the economy. In addition the nature of much of the Variant B development is such that principally flows from Birmingham International and New Street are impacted in the Strategic Model.

4.4 Impact on jobs

4.4.1 An assessment has also been made of the number of the equivalent number of jobs that would be generated as a result of the increase in GVA. The estimates presented are achieved by dividing the total GVA for a flow by the average GVA for the economy within the catchment of the origin station. It should be noted that GVA benefits can be achieved through improved productivity of existing workers rather than by the creation of new jobs. In practice some combination of an increased numbers of jobs and an increased levels of productivity would be the outcome, therefore the results presented should be seen as an maximum equivalent number of jobs.

4.4.2 The table below presents the estimated number of jobs.


Report 18/06/2018 /43

Table 9. Equivalent Number of Jobs Generated in Variant A


2025 734 96 830

2027 826 2,210 3,036

2032 1,192 2,502 3,694

2034 1,615 4,292 5,907

2047 2,177 4,387 6,564

4.4.3 The results reflect the GVA impacts but show that the equivalent of up to 6,564 jobs might be generated across the whole of the West Midlands area by the scheme.

4.5 Corridor Results

4.5.1 The tables below look at the impact on the seven identified corridors across the different modelled years both in absolute and proportional terms. The results presented cover the strategic and local models for Variant A for simplicity.

Table 10. Local Model Results Variant A (£m GVA 2030 values at 2010 prices)

CORRIDOR SECTION 2025 2027 2032 2034 2047

Chase £13.35 £19.75 £20.63 £26.94 £28.94

Coventry £14.39 £16.57 £17.24 £21.44 £37.90

Cross City North £0.58 -£2.86 -£9.37 -£3.76 -£4.65

Cross City South £9.54 £9.32 £10.32 £12.56 £20.86

Leamington & Stratford £0.92 £1.06 £5.56 £6.04 £9.85

Stourbridge £4.90 £5.22 £5.86 £6.21 £9.15

Stour Valley £8.97 £9.55 £11.99 £21.25 £25.33

Water Orton £0.40 £0.46 £20.72 £21.79 £28.92

WCML & Trent Valley -£0.99 £0.19 £0.69 £1.97 £1.49

HS2 - - - - -

Total £52.06 £59.26 £83.64 £114.44 £157.79


Report 18/06/2018 /43

Table 11. Strategic Model Results Variant A (£m GVA 2030 values at 2010 prices)


Chase £- £- £- £- £-

Coventry £2.16 £16.67 £23.27 £23.27 £23.27

Cross City North £- £- £- £- £-

Cross City South £0.47 £17.62 £24.56 £24.56 £29.16

Leamington & Stratford £- £1.03 £2.39 £2.39 £6.00

Stourbridge £- £- £- £- £-

Stour Valley £3.11 £3.36 £4.10 £4.10 £4.10

Water Orton £- £3.76 £11.60 -£26.41 -£26.13

WCML & Trent Valley £1.60 £1.60 £1.60 £1.60 £1.60

HS2 £- £170.76 £171.84 £344.27 £344.27

Total £7.34 £214.89 £239.36 £373.78 £382.27

Table 12. Total Model Results Variant A (£m GVA 2030 values at 2010 prices)


Chase £13.35 £19.75 £20.63 £26.94 £28.94

Coventry £16.55 £33.24 £40.51 £44.71 £61.17

Cross City North £0.58 -£2.86 -£9.37 -£3.76 -£4.65

Cross City South £10.01 £26.94 £34.88 £37.12 £50.02


Stourbridge £4.90 £5.22 £5.86 £6.21 £9.15

Stour Valley £12.08 £12.91 £16.09 £25.35 £29.43

Water Orton £0.40 £4.22 £32.32 -£4.62 £2.79


HS2 £0.00 £170.76 £171.84 £344.27 £344.27

Total £59.40 £274.15 £323.00 £488.22 £540.06

Table 13. Local Model Results Variant A (%)


Chase 26% 33% 25% 24% 18%

Coventry 28% 28% 21% 19% 24%

Cross City North 1% -5% -11% -3% -3%

Cross City South 18% 16% 12% 11% 13%

Leamington & Stratford 2% 2% 7% 5% 6%

Stourbridge 9% 9% 7% 5% 6%

Stour Valley 17% 16% 14% 19% 16%

Water Orton 1% 1% 25% 19% 18%

WCML & Trent Valley -2% 0% 1% 2% 1%

HS2 0% 0% 0% 0% 0%

Total 100% 100% 100% 100% 100%


Report 18/06/2018 /43

Table 14. Strategic Model Results Variant A (%)


Chase 0% 0% 0% 0% 0%

Coventry 29% 8% 10% 6% 6%

Cross City North 0% 0% 0% 0% 0%

Cross City South 6% 8% 10% 7% 8%



Stour Valley 42% 2% 2% 1% 1%

Water Orton 0% 2% 5% -7% -7%

WCML & Trent Valley 22% 1% 1% 0% 0%

HS2 0% 79% 72% 92% 90%

Total 100% 100% 100% 100% 100%

Table 15. Total Model Results Variant A (%)


Chase 22% 7% 6% 6% 5%

Coventry 28% 12% 13% 9% 11%

Cross City North 1% -1% -3% -1% -1%




Stour Valley 20% 5% 5% 5% 5%

Water Orton 1% 2% 10% -1% 1%

WCML & Trent Valley 1% 1% 1% 1% 1%

HS2 0% 62% 53% 71% 64%

Total 100% 100% 100% 100% 100%

4.5.2 The distribution of benefits across the corridors is in some ways unsurprising with the Coventry corridor showing the strongest results in the local model followed by the Chase Line and Water Orton corridors, whilst HS2 dominates the results for the Strategic Model once it comes on stream. However there are some subtleties within the results that are worth noting.

4.5.3 In the local model whilst the proportional impact is fairly consistent between 2025 and 2027 there is a change to the pattern in 2032 when the Water Orton corridor generates a very large impact as a result of the introduction of new stations and stopping services on this section of route. This is also reflected in the total results for 2032 where the Water Orton corridor jumps from 2% to 10% of the total impacts. However it should also be noted that from 2034 the net benefit on the corridor is converted to a net loss relative to 2017. This is a direct result of the opening of HS2 Phase 2B which both diverts flows from the Water Orton corridor to HS2 but also splits the catchments of Derby and Nottingham stations so that even where the service level is maintained there is a reduction in the size of the catchment of the economy being served.


Report 18/06/2018 /43

4.5.4 In terms of the Local Model results the Water Orton corridor is in many ways the largest winner from the proposed service changes, moving from having only 1% of the benefits in 2025 to 19% in 2047. This is a function of the substantial change in connectivity that occurs on this corridor which is currently the only corridor that lacks dedicated local rail services, with limited local connectivity instead being supported by strategic services.

4.5.5 The relevance of HS2 to the strategic results is also very clear. It can be seen that there would be very little benefit from the Strategic Model without HS2, demonstrating its importance in reducing journey times for long distance movements.

4.5.6 The following sub sections provide a breakdown of results looking at individual routes, and the results for the 17 key stations by modelled year. The results are presented for Variant A only for simplicity. Chapter 5 provides more detail on the Variant B results. It is recommended that this section is read in conjunction with the service specification diagrams.

4.6 2025 Model Results

4.6.1 The table below presents results at route level for 2025. The largest changes relate to the Birmingham – Coventry route, and the Stafford – Birmingham corridor. Much of the impact here is derived from the introduction of more direct cross Birmingham services which provide much improved connectivity between the significant economies on the route.

4.6.2 There are a number of groups of new services opened in this year, notably the Walsall – Wolverhampton service (with intermediate stations at Darlaston and Willenhall), generating £9.02m, the Camp Hill Lines generating £4.47m of benefit and the Brierley Hill and Safari Park branches on the Stourbridge Corridor generating only £0.12m. The Walsall – Wolverhampton corridor generates the greatest level of benefit as it links two significant centres of the West Midlands and opens two new stations where accessibility to the rail network was previously poor. The Camp Hill lines generate a lower level of benefit as although three new stations are opened the nature of the areas served are likely to be dominated more by commuters to Birmingham than the new stations acting as destinations. The Stourbridge Corridor Branches have a very limited impact with only £0.12m generated per annum. In the case of Safari Park this is due to the nature of the economy in the area but in the case of the Brierley Hill service it relates to the relatively unattractive (in terms of journey times to Birmingham) service that would be provided resulting in very small catchment for the stations, with it remaining quicker in many cases for passengers to drive to Cradley Heath station to access the rail network.

4.6.3 In addition the station at Kenilworth (only recently opened after the completion of this modelling work), represents a substantial part of the £4.01m uplift to the Coventry – Leamington Spa corridor, in addition to the operation of direct services from Leamington Spa to Nuneaton.

4.6.4 It will be noted that there are a small number of negative values the first of these relates to the Birmingham – Shirley – Stratford corridor where part of the catchment area for Spring Road and Yardley Wood stations have been abstracted to the new Camp Hill Line service. In contrast the more significant reduction on the WCML between Rugby and Stafford is related to the rerouting of the hourly Trent Valley service to avoid Stoke-On Trent and instead operate directly to Crewe, although the reconfiguration of services allows Stoke-On-Trent to receive a half hourly service to Birmingham. It will be seen that there only very minor impacts on strategic services, mostly related to comparatively minor changes to the timetable and


Report 18/06/2018 /43

supported by the operation of more Cross Birmingham services, a good example being the introduction of Rugeley – London via Walsall and Birmingham services.

Table 16. GVA by Route Section Results Variant A 2025 (£m GVA 2030 values at 2010 prices)

ROUTE SELECTION LOCAL STRATEGIC TOTAL

Camp Hill Lines £4.47 £- £4.47

Chase Line £4.34 £- £4.34

Birmingham – Coventry £7.22 £2.16 £9.39

Coventry – Leamington Spa £4.01 £- £4.01

Coventry – Nuneaton £3.15 £- £3.15

Crewe – Stoke £3.17 £- £3.17

Lichfield – Birmingham £0.58 £- £0.58

Redditch/Bromsgrove - Birmingham

£3.20 £0.47 £3.67

Droitwich Spa – Hereford £1.86 £- £1.86

Leamington Spa – Birmingham £1.18 £- £1.18

Stourbridge Corridor Branches £0.12 £- £0.12

Shrewsbury/Crewe/Stoke – Birmingham £8.97 £3.11 £12.08

Birmingham – Shirley – Stratford -£0.25 £- -£0.25

Sutton Park Line £- £- £-

WCML Rugby – Stafford -£4.15 £1.60 -£2.55

Birmingham – Burton/Nuneaton £0.40 £- £0.40

Worcester – Stourbridge – Birmingham

£4.78 £- £4.78

Wolverhampton - Walsall £9.02 £- £9.02

Figure 1. GVA Results by Route Section 2025

4.6.5 The table below presents the impact of the changes to the timetable on Key Stations. As might be expected the benefit attributed to Central Birmingham stations is not insignificant,

£(10.00) £(5.00)

£- £5.00

£10.00 £15.00 £20.00 £25.00 £30.00

2025 Model Results (£m pa)

Local Model Strategic Model


Report 18/06/2018 /43

however Northampton and Wolverhampton gain a greater benefit as a result of the operation of more Cross Birmingham services significantly improving connectivity and in the case of Wolverhampton the operation of direct services to Walsall. It will be noted that the results for Stoke-on-Trent are largely neutral, this is a function of the increase in service frequency to Birmingham offsetting the negative impacts of the loss of direct services along the WCML to Trent Valley stations.

Table 17. GVA by Key Station Model Results 2025 (£m GVA 2030 values at 2010 prices)

KEY STATIONS SECTION LOCAL STRATEGIC TOTAL

Birmingham BR £4.58 £0.08 £4.66

Birmingham International £1.47 £0.99 £2.46

Coventry £2.31 £0.57 £2.88

Hereford £0.56 £- £0.56

Leamington Spa £1.49 £- £1.49

Northampton £4.37 £0.80 £5.17

Sandwell & Dudley £1.56 £- £1.56

Solihull £1.05 £- £1.05

Stafford £1.91 £0.51 £2.42

Stoke-on-Trent £0.04 £0.03 £0.07

Stourbridge Junction £0.47 £- £0.47

University £0.46 £- £0.46

Walsall £0.99 £- £0.99

Wolverhampton £3.92 £0.69 £4.62

Worcester BR £1.52 £- £1.52


4.7.1 In 2027 the most significant change relates to the opening of HS2 Phase 1 and 2a delivering around £170m of benefits, clearly dwarfing the impact of other service changes. However there are some other changes to the local network which have an impact. The Chase Line shows an increase of £6.40m relative to 2025, this is a result of services being extended to the new station at Aldridge. It should however be noted that this results in a loss of £3.43m from the Birmingham – Lichfield service as the catchments in the area are altered to reflect the impact of Aldridge, giving a net increase (sum of the gain at Aldridge and loss to Cross City North) of £2.97m. In practice this would bring some benefits to the Cross City Line through a reduction in crowding allowing the route to better accommodate growth within its own catchment area. A significant impact can also be seen on the Droitwich – Hereford corridor with an increase of £17m of GVA per annum mostly attributed to an increase in GVA as a result of the operation of two trains per hour between Worcester and London and a reduction in journey times. The Coventry corridor also sees an uplift in benefit from a number of changes associated with alterations to services following the introduction of HS2 including the rerouting of Reading – Newcastle services via Coventry.


Report 18/06/2018 /43

Table 18. GVA by Route Section Results 2027 (£m GVA 2030 values at 2010 prices)

ROUTE SELECTION LOCAL STRATEGIC TOTAL NET INC ON 2025

Camp Hill Lines £4.47 £- £4.47 £0.00

Chase Line £10.73 £- £10.73 £6.40

Birmingham – Coventry £8.66 £16.35 £25.01 £15.63

Coventry – Leamington Spa £5.20 £0.41 £5.61 £1.60

Coventry – Nuneaton £2.70 £- £2.70 -£0.45

Crewe – Stoke £2.45 £- £2.45 -£0.71

Lichfield – Birmingham -£2.86 £- -£2.86 -£3.43


£2.91 £0.47 £3.38 -£0.29

Droitwich Spa – Hereford £1.93 £17.15 £19.08 £17.22

Leamington Spa – Birmingham £1.37 £1.03 £2.39 £1.22

Stourbridge Corridor Branches £0.13 £- £0.13 £0.02

Shrewsbury/Crewe/Stoke – Birmingham £9.55 £3.36 £12.91 £0.83

Birmingham – Shirley – Stratford -£0.31 £- -£0.31 -£0.05

Sutton Park Line £- £- £- £-

WCML Rugby – Stafford -£2.26 £1.60 -£0.66 £1.89

Birmingham – Burton/Nuneaton £0.46 £3.76 £4.22 £3.82


£5.09 £- £5.09 £0.31

Wolverhampton - Walsall £9.02 £- £9.02 £0.00

HS2 £- £170.76 £170.76 £170.76


4.7.2 As with the route based findings the results for Key Stations in 2027 is dominated by the impact of HS2 on Central Birmingham and Birmingham International, with Birmingham International also benefitting from an uplift associated with the rerouting of the Reading – Newcastle service. The only other significant impacts are at Worcester where the introduction

£(10.00)

£-

£10.00

£20.00

£30.00

£40.00

£50.00




Report 18/06/2018 /43

of two trains per hour to London (as described in para 4.6.1) and an associated change in journey times brings an uplift of around £6.71m.


KEY STATIONS SECTION STRATEGIC LOCAL TOTAL NET INC ON 2025

Birmingham BR £7.46 £62.99 £70.46 £65.79

Birmingham International £2.15 £16.77 £18.91 £16.46

Coventry £2.51 £3.02 £5.53 £2.65

Hereford £0.67 £2.27 £2.94 £2.38

Leamington Spa £2.00 £- £2.00 £0.51

Northampton £3.73 £0.80 £4.53 -£0.64

Sandwell & Dudley £1.44 £- £1.44 -£0.12

Solihull £1.30 £- £1.30 £0.25

Stafford £2.11 £3.89 £6.01 £3.59

Stoke-on-Trent £0.61 £0.03 £0.64 £0.56

Stourbridge Junction £0.56 £3.01 £3.57 £3.10

University £0.55 £0.69 £1.24 £0.78

Walsall £0.71 £0.30 £1.01 £0.03

Wolverhampton £3.84 £3.98 £7.83 £3.21

Worcester BR £1.60 £6.63 £8.23 £6.71


4.8.1 In 2032 there are a diverse range of impacts on the network. The impacts resulting from HS2 remain largely as they were in 2027 with only a small number of changes as a result of change to local connecting services. The largest single change comes from the opening of the Midland Hub which delivers £28m of benefit as a result of the introduction of local services on the Water Orton corridor allowing the speeding up of existing services as intermediate stops are removed and the opening of new stations at Fort Parkway and Castle Bromwich. However this comes at the cost of a reduction in benefit on the Birmingham – Lichfield route as catchments are transferred to the Water Orton corridor, however as mentioned above this gives the opportunity for the Cross City North corridor to use its capacity to better serve its remaining catchment This give a net impact of £21.59m per annum.

4.8.2 The next most significant impacts can be seen on the Coventry corridor, where the provision of an hourly direct service from Shrewsbury to London has a major impact on strategic flows through the area. It is worth noting however that the relevance of this service will depend heavily on the quality of interchange available with HS2 at Birmingham or Birmingham Interchange. If Interchange is relatively easy then the impact of this service will be more muted. It should also be considered that the service has been assessed against the typical off peak situation at present where there is no direct service and therefore does not incorporate the impact of the two direct services that operate each way at present.

4.8.3 The increase of £7.56m on the Redditch – Birmingham corridor can be attributed to the increase in frequency on the Camp Hill chord service form 1tph to 2tph in tandem with the introduction of two additional long distance services from Birmingham to the South West


Report 18/06/2018 /43

which also allows an increase in service frequency from 1tph to 3tph at Worcestershire Parkway.


ROUTE SELECTION LOCAL STRATEGIC TOTAL NET INC ON

2027

Camp Hill Lines £4.63 £- £4.63 £0.16

Chase Line £10.94 £- £10.94 £0.20


Coventry – Leamington Spa £5.20 £0.41 £5.61 £-

Coventry – Nuneaton £2.70 £- £2.70 £-

Crewe – Stoke £2.45 £- £2.45 £-



£3.71 £7.23 £10.94 £7.56



Stourbridge Corridor Branches £0.13 £- £0.13 £-

Shrewsbury/Crewe/Stoke – Birmingham

£11.99 £4.10 £16.09 £3.18

Birmingham – Shirley – Stratford £1.02 £- £1.02 £1.33


WCML Rugby – Stafford -£1.77 £1.60 -£0.17 £0.49

Birmingham – Burton/Nuneaton £20.72 £11.60 £32.32 £28.10


£5.73 £- £5.73 £0.63


HS2 £- £171.84 £171.84 £1.07


Report 18/06/2018 /43


4.8.4 Despite a significant number of services changes across the network in 2032 the impact on key stations is limited to Central Birmingham generating an additional £11.21m of GVA per annum. The dominance of Birmingham here is linked to the opening of the Midlands Hub which has a significant impact on the capacity of approach routes to Birmingham.


KEY STATIONS SECTION LOCAL STRATEGIC TOTAL NET INC ON 2027

Birmingham BR £11.40 £70.27 £81.67 £11.21


Coventry £4.11 £3.02 £7.13 £1.60

Hereford £0.78 £2.57 £3.35 £0.41

Leamington Spa £2.92 £0.76 £3.67 £1.67

Northampton £4.96 £0.80 £5.76 £1.23

Sandwell & Dudley £2.20 £- £2.20 £0.76

Solihull £2.15 £- £2.15 £0.85

Stafford £2.90 £3.90 £6.81 £0.80

Stoke-on-Trent £1.55 £0.06 £1.62 £0.98


University £0.76 £0.87 £1.63 £0.39

Walsall £0.96 £0.30 £1.27 £0.25

Wolverhampton £5.14 £4.00 £9.14 £1.32

Worcester BR £1.64 £6.69 £8.32 £0.10


4.9.1 As was the case in 2027 the most notable feature of the 2034 results is the opening of HS2 Phase 2b which generates around £172m of economic benefits over and above those generated by Phase 1 and 2a. The scale of the benefits indicates how significant the improvements in journey time are to places such as Leeds and Sheffield. Inevitably other

£(10.00)

£-

£10.00

£20.00

£30.00

£40.00

£50.00




Report 18/06/2018 /43

results are more muted. Frequency improvements on the Chase Line with 4tph to Hednesford generate an additional £5.8m of improvements. The Lichfield – Birmingham route sees a £5.61m improvement in GVA, partially offsetting the impacts of catchment changes that had effected this route. The reason for this uplift is the introduction of services to Burton-on-Trent via Alrewas.

4.9.2 There is also a £9.26m uplift on the Stafford – Birmingham corridor driven by an increase in the frequency of Wolverhampton – Birmingham International services from four to six trains per hour. It will be seen that there are also a number of net reductions in GVA relative to 2032. The most important of these is on the Water Orton corridor, where HS2 splits the existing catchments at Derby and Nottingham as a result of the opening of East Midlands Interchange, with the result that many existing trips from these stations shift to HS2 meaning that the absolute size of the economic linkages passing along the Water Orton corridor shrinks even though the service levels remain similar.



Camp Hill Lines £4.64 £- £4.64 £0.01

Chase Line £16.74 £- £16.74 £5.80



Coventry – Nuneaton £2.73 £- £2.73 £0.02

Crewe – Stoke £3.71 £- £3.71 £1.26

Lichfield – Birmingham -£3.76 £- -£3.76 £5.61


£4.14 £7.23 £11.37 £0.43







WCML Rugby – Stafford -£1.74 £1.60 -£0.14 -£0.03

Birmingham – Burton/Nuneaton £21.79 -£26.41 -£4.61 -£36.94


£6.06 £- £6.06 £0.33


HS2 £- £344.27 £344.27 £172.43


Report 18/06/2018 /43


4.9.3 The results for the key stations are unsurprising and show a significant uplift in benefit in Central Birmingham and at Birmingham International, with these two stations generating the bulk of the benefit to the West Midlands of HS2. Other stations show more muted impacts, with most generating some smaller benefits from HS2, and other more incremental changes. The main exception to this is Sandwell & Dudley which generates a £5.74m benefit, through a combination of minor benefits from HS2 and improvements in the frequency of the Wolverhampton – Birmingham International stopping service.



Birmingham BR £14.09 £103.89 £117.99 £36.32


Coventry £5.77 £5.23 £11.00 £3.87

Hereford £2.02 £3.20 £5.22 £1.87

Leamington Spa £3.39 £2.13 £5.52 £1.84

Northampton £6.44 £3.35 £9.79 £4.03

Sandwell & Dudley £3.13 £4.81 £7.94 £5.74

Solihull £2.63 £0.25 £2.88 £0.73

Stafford £3.99 £3.87 £7.86 £1.05

Stoke-on-Trent £3.40 -£1.41 £1.99 £0.24


University £1.03 £1.89 £2.92 £1.28

Walsall £1.91 £0.99 £2.90 £1.64

Wolverhampton £7.22 £4.79 £12.01 £2.86

Worcester BR £1.92 £7.85 £9.77 £1.45

£(30.00) £(20.00) £(10.00)

£- £10.00 £20.00 £30.00 £40.00 £50.00




Report 18/06/2018 /43


4.10.1 The final set of results for 2047 show a range of impacts. The largest single increase can be seen on the Coventry corridor. The main changes that drive this are frequency enhancements for intermediate stations between Birmingham International and Coventry and the opening of a new station at Coventry East which brings significant changes to the accessibility to the rail network for the Coventry area. Similarly the opening of a new station at Coventry South, which benefits from direct links to Birmingham, has an impact on services on the Coventry – Leamington Spa corridor.

4.10.2 An improvement in service levels from Worcester to Hereford providing 2tph from Birmingham to Hereford and 1tph from London to Hereford, coupled to the opening of new stations at Rushwick and Fernhill Heath brings £9.5m of GVA to the Droitwich Spa - Hereford corridor.

4.10.3 The provision of a 2tph Birmingham – Oxford service and 6tph from Birmingham to Dorridge supports an increase in GVA on this corridor of £6.34m, with the benefits being split evenly between the two service improvements. The other notable benefits come from further improvements to the Water Orton corridor where there are improvements in service frequency and the Sutton Park Line opens which brings around £3m of benefits per annum. The impact of the Sutton Park Line is diluted by the opening of the north part of the route from Walsall to Aldridge in 2027 which is attributed to the Chase Line whilst the station at Sutton Town adds little as it duplicates the station at Sutton Coldfield. However whilst the GVA impacts of the route may be limited it should be considered that the route will also be improving connectivity for the local population and the conventional transport benefits case for the route may be stronger.



Camp Hill Lines £4.95 £- £4.95 £0.31

Chase Line £18.42 £- £18.42 £1.68



Coventry – Nuneaton £2.73 £- £2.73 £0.00

Crewe – Stoke £3.52 £- £3.52 -£0.19


Redditch/Bromsgrove - Birmingham £6.71 £7.41 £14.11 £2.74






Sutton Park Line £3.05 £- £3.05 £3.05

WCML Rugby – Stafford -£2.02 £1.60 -£0.42 -£0.28

Birmingham – Burton/Nuneaton £25.86 -£26.13 -£0.26 £4.35

Worc – Stourbridge– Bham £8.92 £- £8.92 £2.86



Report 18/06/2018 /43

Figure 5. GVA Results by Route Section Variant A 2047

4.10.4 The results for the key stations again show the importance of Birmingham to the network. The next two largest increases were at Northampton and Hereford, the former as a result of frequency increases towards Birmingham and the latter as a result of the introduction of an hourly service to London and a rise from 2tph to 3tph between Hereford and Worcester.

Table 25. GVA by Key Station Results 2047 (£m GVA 2030 values at 2010 prices)


Birmingham BR £20.11 £105.37 £125.48 £7.49


Coventry £7.72 £5.23 £12.95 £1.95

Hereford £2.68 £4.73 £7.42 £2.20

Leamington Spa £4.86 £2.29 £7.16 £1.64

Northampton £9.18 £3.35 £12.53 £2.95

Sandwell & Dudley £4.28 £4.81 £9.09 £1.15

Solihull £4.48 £0.30 £4.78 £1.90

Stafford £4.75 £3.87 £8.62 £0.89

Stoke-on-Trent £4.19 -£1.41 £2.78 £0.33


University £1.61 £1.89 £3.49 £0.58

Walsall £2.09 £0.99 £3.08 £0.18

Wolverhampton £8.90 £4.79 £13.69 £1.69

Worcester BR £1.99 £8.78 £10.77 £1.00

£(10.00)

£-

£10.00

£20.00

£30.00

£40.00

£50.00




Report 18/06/2018 /43

5. VARIANT B RESULTS

5.1.1 In the first section of Chapter 4 we presented a summary of the difference in results between Variant A and Variant B. This showed that Variant B with an enhanced level of growth at strategic locations delivered up to an additional £85m of GVA overall relative to Variant A.

5.1.2 This chapter provides further disaggregation of the results with the aim of highlighting the differences between Variant A and B.

5.1.3 We focus the results here on the difference between the combined (local and strategic models) results for the two Variants. The tables on the page below present results for Variant A and B at corridor level, and the difference between the two.


Report 18/06/2018 /43

Table 26. Total Model Results Variant A (£m GVA 2030 values at 2010 prices)


Chase £13.35 £19.75 £20.63 £26.94 £28.94

Coventry £16.55 £33.24 £40.51 £44.71 £61.17

Cross City North £0.58 -£2.86 -£9.37 -£3.76 -£4.65

Cross City South £10.01 £26.94 £34.88 £37.12 £50.02


Stourbridge £4.90 £5.22 £5.86 £6.21 £9.15

Stour Valley £12.08 £12.91 £16.09 £25.35 £29.43

Water Orton £0.40 £4.22 £32.32 -£4.62 £2.79


HS2 £0.00 £170.76 £171.84 £344.27 £344.27

Total £59.40 £274.15 £323.00 £488.22 £540.06

Table 27. Total Model Results Variant B (£m GVA 2030 values at 2010 prices)


Chase £15.6 £23.8 £24.8 £32.4 £35.0

Coventry £18.4 £36.9 £44.4 £49.5 £69.0

Cross City North £0.7 -£3.2 -£10.9 -£0.4 -£1.4

Cross City South £11.5 £28.4 £36.7 £39.0 £52.9


Stourbridge £6.3 £7.2 £8.2 £8.9 £12.2

Stour Valley £15.1 £16.7 £20.5 £31.5 £36.4

Water Orton £0.5 £4.3 £35.7 -£3.6 £5.2


HS2 £- £191.40 £192.48 £391.72 £391.72

Total £70.3 £309.8 £362.9 £561.9 £621.2

Table 28. Difference between Variant A and B (£m GVA 2030 values at 2010 prices)


Chase £2.23 £4.08 £4.21 £5.46 £6.05

Coventry £1.82 £3.69 £3.86 £4.75 £7.88

Cross City North £0.12 -£0.39 -£1.56 £3.35 £3.29

Cross City South £1.53 £1.50 £1.80 £1.91 £2.85


Stourbridge £1.42 £2.01 £2.37 £2.64 £3.01

Stour Valley £3.04 £3.78 £4.44 £6.15 £6.95

Water Orton £0.07 £0.03 £3.34 £0.98 £2.38


HS2 £0.00 £20.64 £20.64 £47.45 £47.45

Total £10.87 £35.64 £39.92 £74.82 £82.16


Report 18/06/2018 /43

Table 29. Difference between Variant A and B (%)


Chase 17% 21% 20% 20% 21%

Coventry 11% 11% 10% 11% 13%

Cross City North 21% 13% 17% 11% 29%



Stourbridge 29% 38% 40% 43% 33%

Stour Valley 25% 29% 28% 24% 24%

Water Orton 18% 1% 10% -21% 85%

WCML & Trent Valley -97% 908% 249% 363% 678%

HS2 - 12% 12% 14% 14%

Total 18% 13% 12% 15% 15%

5.1.4 It can be seen that all corridors receive a benefit from Variant B relative to Variant A. This is a result of the overall increase in the size of the economy as a result of the additional jobs included in the model and the benefits of this impact on a wide range of stations across the area. This effect is strengthened by Birmingham International being a “Key” station which all other stations are linked to in the model, as the development of UK Central around Birmingham International has a very significant impact on the size of the economy in this area.

5.1.5 The importance of UK Central can also be seen in the impact on HS2 where Variant B generates an additional £47m over Variant A, a 14% increase on the already very significant impacts of HS2 overall.

5.1.6 An interesting pattern of results emerges when the percentage uplifts are examined, although it should be noted that in some cases these results are influenced by small or negative numbers. This is especially the case with the WCML & Trent Valley corridor where the absolute numbers are extremely small but the impact of Variant B is quite significant in percentage terms helped by the redevelopment of the Rugeley Power Station site. Similarly the results for the Water Orton corridor are complicated by the increase in GVA on this corridor supported by the introduction of local services offset by the reduction in GVA as a result of the reallocation of some movements to HS2.

5.1.7 The percentage impact on the Stourbridge Line is quite significant driven by a combination of UK Central and increased forecast levels of development in parts of central Birmingham for example within the catchment of Jewellery Quarter station.

5.1.8 The Stour Valley corridor also sees a considerable uplift, this is driven by Ironbridge Power Station (on the route to Shrewsbury), and the i54 Western Extension on the outskirts of Wolverhampton, but more significantly by UK Central in combination with the considerable improvement in cross Birmingham connectivity between the Stour Valley and Coventry corridors delivered by the changes to services.

5.1.9 The Chase Line also see a considerable uplift (21% in 2047) driven by the redevelopment of Rugeley Power Station and also by the development of direct links to UK Central.


Report 18/06/2018 /43

5.1.10 Overall Variant B adds around 15% to the total GVA impacts of the various service changes proposed. However it is important to consider that in many ways the delivery of rail services as a sustainable and rapid means of access will be a prerequisite to the delivery of a number of these sites and this is especially the case for UK Central.

5.2 Impact of UK Central

5.2.1 Given the scale of the proposed UK Central development at Birmingham International it was decided to try and identify the scale of the UK Central results as a proportion of the total additional GVA uplift associated with Variant B.

5.2.2 The table below presents the model results from Variant B with and without the UK Central results.

Table 30. Variant B Results – Differences from Variant A

YEAR VARIANT B

DIFFERENCE FROM VARIANT A

VARIANT B (NO UKC) DIFFERENCE FROM

VARIANT A

% ATTRIBUTABLE TO UKC

2025 £12 £2 83%

2027 £35 £1 97%

2032 £38 £3 92%

2034 £74 £7 91%

2047 £81 £9 89%

5.2.3 It can clearly be seen that the UK Central site represents the vast majority of the uplift in GVA between Variant A and Variant B. This finding is not surprising given the location of the site close to the centre of the rail network (and being served by HS2), and also given the transformational scale of the development proposed at this location.


Report 18/06/2018 /43

6. CONCLUSIONS

6.1.1 It can be seen from the results presented above that there is the potential for the rail network to support substantial growth in the economy over the coming years. Clearly much of this benefit (£344m) relates to the development of HS2 and the major changes it brings to Strategic Connectivity. The total impact in 2047 is around £540m of additional GVA per annum, and over 30 years this would represent an additional £2.7Bn generated for the West Midlands economy.

6.1.2 However, there are also a range of other benefits that relate to improvements to local service and the opening of new stations and routes. The table below shows a summary of the results for Variant A.

Table 31. Aggregate results (£m GVA 2030 values at 2010 prices) Variant A


2025 £52 £7 £59

2027 £59 £215 £274

2032 £86 £239 £325

2034 £114 £374 £488

2047 £158 £382 £540

6.1.3 The report has highlighted that much of the benefit on the local network comes from certain specific routes. For example the Water Orton corridor generates very large benefits as a result of the Midland Hub and the introduction of new local services.

6.1.4 An assessment of strategic development options suggests that a further 15% could be added to the GVA value generated, largely through the development of the UK Central employment site at Birmingham International. However it should also be considered that high quality and sustainable and rapid access by trail to these strategic sites may in any case be a prerequisite for their successful development.

6.1.5 However whilst it is clear that there are substantial benefits from investment there is a need to consider in more detail the infrastructure interventions required to deliver services and also the phasing of the introduction of service changes to ensure that the value of interventions can be maximised and delivered in a pragmatic manner.


Report 18/06/2018 /43

7. APPENDIX A

An issue that has been the source of discussion in the development of the modelling work has been the approach to increasing service frequency between Worcester and Hereford and whether this should be achieved by operating more services from Birmingham or London. The following tables compare the impact of operating two trains per hour between Worcester and Hereford from 2034 by either:

Operating 2TPH Birmingham – Hereford via Bromsgrove Operating 1TPH London Paddington – Hereford via Oxford and Worcester

supplementing the existing 1TPH Birmingham – Hereford

Table 1. GVA from Hereford for 2TPH Service Options (£m pa)

VARIANT A TOTAL VARIANT B TOTAL

2TPH Birmingham - Hereford £5,216,644 £5,317,643

2TPH Paddington - Hereford £6,086,337 £6,454,212

It can be seen that in both cases improving the London service generates a greater level of GVA than the Birmingham service. However from a West Midlands perspective increasing the Birmingham service would generate more benefit for the West Midlands as a whole, whilst improving the London service splits the benefits between the West Midlands and London areas.

SYSTRA provides advice on transport, to central, regional and local government, agencies, developers, operators and financiers.

A diverse group of results-oriented people, we are part of a strong team of professionals worldwide. Through client business planning, customer research and strategy development we create solutions that work for real people in the real world.

For more information visit www.systra.co.uk

Birmingham – Newhall Street 5th Floor, Lancaster House, Newhall St, Birmingham, B3 1NQ T: +44 (0)121 393 4841 Birmingham – Innovation Court Innovation Court, 121 Edmund Street, Birmingham B3 2HJ T: +44 (0)121 393 4841

Dublin 2nd Floor, Riverview House, 21-23 City Quay Dublin 2,Ireland T: +353 (0) 1 566 2028

Edinburgh – Thistle Street Prospect House, 5 Thistle Street, Edinburgh EH2 1DF United Kingdom T: +44 (0)131 460 1847 Edinburgh – Manor Place 37 Manor Place, Edinburgh, EH3 7EB Telephone +44 (0)131 460 1847

Glasgow – St Vincent St Seventh Floor, 124 St Vincent Street Glasgow G2 5HF United Kingdom T: +44 (0)141 468 4205

Glasgow – West George St 250 West George Street, Glasgow, G2 4QY T: +44 (0)141 468 4205 Leeds 100 Wellington Street, Leeds, LS1 1BA T: +44 (0)113 360 4842

London 3rd Floor, 5 Old Bailey, London EC4M 7BA United Kingdom T: +44 (0)20 3855 0079

Manchester – 16th Floor, City Tower 16th Floor, City Tower, Piccadilly Plaza Manchester M1 4BT United Kingdom T: +44 (0)161 504 5026 Newcastle Floor B, South Corridor, Milburn House, Dean Street, Newcastle, NE1 1LE United Kingdom T: +44 (0)191 249 3816

Perth 13 Rose Terrace, Perth PH1 5HA T: +44 (0)131 460 1847

Reading Soane Point, 6-8 Market Place, Reading, Berkshire, RG1 2EG T: +44 (0)118 206 0220

Woking Dukes Court, Duke Street Woking, Surrey GU21 5BH United Kingdom T: +44 (0)1483 357705

Other locations: France: Bordeaux, Lille, Lyon, Marseille, Paris Northern Europe: Astana, Copenhagen, Kiev, London, Moscow, Riga, Wroclaw Southern Europe & Mediterranean: Algiers, Baku, Bucharest, Madrid, Rabat, Rome, Sofia, Tunis Middle East: Cairo, Dubai, Riyadh Asia Pacific: Bangkok, Beijing, Brisbane, Delhi, Hanoi, Hong Kong, Manila, Seoul, Shanghai, Singapore, Shenzhen, Taipei Africa: Abidjan, Douala, Johannesburg, Kinshasa, Libreville, Nairobi Latin America: Lima, Mexico, Rio de Janeiro, Santiago, São Paulo North America: Little Falls, Los Angeles, Montreal, New-York, Philadelphia, Washington

wmr rail wider economic impacts modelling · wmr rail wider economic impacts modelling 106637...

Documents