Pwyllgor yr Economi, Seilwaith a Sgiliau - Y Bumed Senedd

Economy, Infrastructure and Skills Committee - Fifth Senedd

21/06/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David J. Rowlands
Hefin David
Lee Waters
Mark Isherwood
Russell George Cadeirydd y Pwyllgor
Committee Chair
Vikki Howells

Y rhai eraill a oedd yn bresennol

Others in Attendance

Bridget Fox Ymgyrchydd dros Gludiant Cynaliadwy, Ymgyrch dros Gludiant Gwell
Sustainable Transport Campaigner, Campaign for Better Transport
Chris Nott Prif Bartner, Capital Law
Senior Partner, Capital Law
Elgan Morgan Rheolwr Polisi a Materion Cyhoeddus, Siambr Fasnach De Cymru
Policy & Public Affairs Manager, South Wales Chamber of Commerce
Ian Price Cyfarwyddwr Cynorthwyol, Cydffederasiwn Diwydiant Prydain yng Nghymru
Assistant Director, Confederation of British Industry Wales
Leighton Jenkins Cyfarwyddwr Cynorthwyol a Phennaeth Polisi, Cydffederasiwn Diwydiant Prydain yng Nghymru
Assistant Director and Head of Policy, Confederation of British Industry Wales
Matthew Williams Cynghorydd Polisi, Ffederasiwn Busnesau Bach
Policy Adviser, Federation of Small Businesses
Mike Colborne Rheolwr Cydymffurfiaeth, Owens Group
Compliance Manager, Owens Group
Mike Plaut Cadeirydd, Cydffederasiwn Diwydiant Prydain Cymru
Chair, Confederation of British Industry Wales
Steve Brooks Cyfarwyddwr Cenedlaethol, Sustrans Cymru
National Director, Sustrans Cymru
Stuart Pearson Uwch-bartner a Pennaeth Tim Adeiladu, Ynni a Phrosiectau, Capital Law
Senior Associate and Head of the Construction, Energy and Projects Team, Capital Law

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Abigail Phillips Ail Glerc
Second Clerk
Andrew Minnis Ymchwilydd
Researcher
Gareth Price Clerc
Clerk
Robert Lloyd-Williams Dirprwy Glerc
Deputy Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 09:15.

The meeting began at 09:15.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Bore da. Good morning. I'd like to welcome Members to the Economy, Infrastructure and Skills Committee this morning. I move to item 1. We have apologies this morning from Adam Price and from Joyce Watson, who, I understand, is on another committee today. Hefin David will be joining us shortly, and Mark Isherwood. I do understand that Lee has to go at about 11:15. Are there any declarations of interest this morning? No.

2. Cynaliadwyedd—Cyflwr y Ffyrdd yng Nghymru
2. Sustainability—State of Roads in Wales

In that case I move to item 2. This is in regard to our inquiry on the state of roads in Wales. I'd like to give a warm welcome to our first two witnesses this morning, and I'd be very grateful if you could just introduce yourselves for the record.

Thank you. My name is Bridget Fox. I'm the sustainable transport campaigner at Campaign for Better Transport.

I'm Steve Brooks. I'm the national director for Sustrans Cymru.

Thank you for joining us today.

'There is a well-documented crisis in the state of road maintenance across many parts of the UK'.

That was your evidence, Bridget, to us. What does that mean?

I don't think it's overstating it to say there is a crisis. There is a well-regarded annual survey of local highways authorities, known perhaps appropriately as the ALARM survey. Although it's compiled by the Asphalt Industry Alliance, who you might think had an interest in saying that there was a demand for asphalt, they don't need to make their case; it's made for them by the statistics that are supplied by local highways authorities and, therefore, they are as reputable as you can get. They have sometimes been presented in a rather more dramatic form. Last year, there was an insurance company that said if you put all the potholes on top of each other, you could reach the centre of the Earth, which is perhaps an eye-catching fact—and they did a graphic—but not terribly helpful in judging the quality of the roads in any one area. But the ALARM figures do paint quite a serious picture of a current acute problem with road maintenance, which is the result of a chronic problem of underinvestment in maintenance over the years, exacerbated by a combination of larger, heavier vehicles on the road and adverse weather conditions, which continue to make the problem worse.

That ALARM survey you referred to—it's quite a low take-up, isn't it, when you look at local authorities in Wales. I think it's 36 per cent.

Yes. Clearly, the more information you have, the better, but it's the best evidence we have. Of course, we would welcome more inquiries from local authorities to collect this kind of information. It's slightly outside our brief, but we certainly think it's a very useful exercise to collect that information.

So, how should public policy change, do you think, in regard to what you've said?

Well, we think it should prioritise maintenance ahead of new capacity. It seems common sense that in any field—not only roads or transport infrastructure—you would look after the asset you have and check that it's fit for purpose for its users and the people who are paying for it at the end of the day before you invest in more of the same, which will, of course, then need maintenance in its turn. The situation isn't as bad as it was. The ALARM survey a couple of years ago reported a £12 billion backlog, and that did prompt some reallocation of budgets—particularly in Wales, I believe—towards maintenance, but it hasn't addressed the underlying backlog. I think the ALARM survey said it would take 14 years to catch up, and that, of course, is assuming no new maintenance needs arrive in the meantime. So, it really is running to stand still.

If I could come to Steve Brooks. I looked at your evidence, and a comment from your evidence is:

'the historic funding situation of local authorities has negatively impacted on the condition of roads, particularly on the minor road network.'

So, what are the implications of that?

I'll just briefly concur with what Bridget said; Sustrans would support the Campaign for Better Transport and the argument that they make there. I think the concern for cyclists is basically where cyclists are cycling. So, in the survey that Bridget talks about, it classifies roads—the hierarchy of roads—and looks at the road condition index within that survey. So, you've got principal roads, non-principal roads and unclassified roads. We know that our evidence from Sustrans, and more broadly than that, suggests—and I think it's backed up by your evidence when you did the active travel inquiry—that safety is a huge concern for people who cycle. So, what you tend to see is that cyclists will quite often avoid principal routes because of actual or perceived issues around safety and will naturally try and go onto quieter roads. But it's those quieter roads that are less well maintained than the principal roads. So, that's where, for cyclists, you're almost in a perfect storm, because you're on one hand trying to act in a safe way by avoiding busy roads, but that's pushing you onto roads that are less well maintained, and then all those issues around potholes and everything kicks in. 

09:20

Okay. I expect Members are going to come in with some more detailed questions. I'll come to Vikki Howells first.

Thank you. My first question would be to you, then, Steve, talking about the need to maintain roads. In your evidence, you suggested that, when roadworks are in operation, cyclists and, to a lesser extent, pedestrians aren't well catered for. Can you expand on that comment for us?

Yes. I looked slightly ridiculous yesterday. I've spent a couple of days in Edinburgh at a Bike Life summit. We've had the Sustrans staff and local transport authority people from across the UK coming to talk about urban transport. So, I took a bit of time to walk around Edinburgh and have a look at how they do roadworks and take some photographs. So, I did look a bit odd when other people are taking photographs of castles, and I'm doing roadworks. I think, essentially, it kind of goes back to the wider transport world and where you place the car versus people. And quite often, car is king—and I purposely use a gendered noun there because it tends to benefit men. But the car is king, so the car will always be catered for. And then considerations of where pedestrians and where cyclists come are secondary to that.

So, very often, when you're thinking about roadworks, you will be thinking about preserving or maintaining traffic flow for cars, and then you start having those questions about, 'Okay, well, what do we need to do then to accommodate pedestrians and accommodate cyclists?' And there are some bad examples around Wales. You will probably know from casework where that happens, particularly accessibility for pedestrians—so, things like dropped kerbs, where they might be blocked. There are frequently issues around diversions, so, not just whether cyclists or pedestrians have been appropriately diverted, but also the impact that motor vehicle diversions might have on cyclists and pedestrians.

Again, I've seen instances where traffic signs—. So, there's quite a controlled regime in the UK around traffic signs, which is under the authority of the Department for Transport. Quite often, motor vehicles will be catered for very, very well with traffic signs, whereas pedestrians and cyclists might not. And that matters. It's not just a case of being really passionate to make sure the right font's used, or it's bilingual, or it's an appropriate size. That matters, because if you're a pedestrian or a cyclist and you come across roadworks, you're potentially in a situation where you've really, really got to think very, very quickly. So, taking an example as a cyclist, you might approach roadworks that you didn't expect to approach. If there's not adequate signage, you could be then suddenly placed in a position on the road where you're in conflict with cars. If the road has been poorly maintained, there are issues around potholes and all of those kinds of things, and it's not clear where you're supposed to go. So, suddenly, you're in a quite a scary situation, sometimes.

Isn't there a duty on local authorities or contractors to provide safe alternative routes for cyclists and pedestrians when roadworks are going on, or is there a difference between short-term and long-term roadworks in that regard?

Yes. All of this is—. I go back to some of the evidence I gave in the active travel Act inquiry. A lot of the policy is actually not bad. The active travel Act and the guidance that's within it—we all have comments on how things can be improved, but generally, the policy regime on this is not bad. It's when you actually get into the implementation and the practice on the ground. Too often, you see—whether it's for local authorities or other highways authorities—private contractors, who I don't think understand all the time their obligations and commitments that they're supposed to make. And it is a new way of thinking in terms of how you can better cater for pedestrians and cyclists. But again, to go back to the example of Edinburgh, if the committee really wanted to kind of—. A very good example is the junction where the A1 ends in Edinburgh city centre; it's the junction with the A900, I think, the Leith road. So, it's quite a complicated bit of roadworks—they're putting in a new gyratory. They're building their version of St David's 2, so it's quite complicated. And yet, for weeks, they've managed to put in place diversional signage that is fantastic for pedestrians and cyclists, and move that around as the work on the road has had to move around as well. So, it is complicated in one sense, because there are a lot of things you need to think about if you're a highways authority or a contractor, but at the end of the day, it's not difficult.

09:25

Thank you. I'd like to ask you both, also, about the current approach to funding and managing highway maintenance programmes, given the CBT's comment that

'This leaves little or no funding for wider road maintenance and enhancement, yet major sums are committed for building new roads or providing further capacity increases, which will add to the future maintenance bill'. 

I've already referred to the fact that if you don't maintain your current asset, then you extend the amount of the asset, whether it's roads or anything else, and you're therefore adding to your future maintenance bill. It seems imprudent. But, the other problem is, because there's such a demand for really basic maintenance—potholes being the classic example, or resurfacing, although there has been a marginal welcome increase in maintenance budgets—it is pretty much all going on that kind of reactive or short-term planned maintenance, rather than wider enhancements.

So, rather than building new road capacity, we would urge that people look at not only repairing and maintaining the asset that they've got, but looking at whether it can be what we call a green retrofit. Roads, now, are often built to quite high environmental standards, even if they prove controversial or expensive, but some of the older roads that we're all living with were designed to lower standards—they sever communities, they have bad visual impact on the landscape, and we now know more than we did about the impacts of noise, water, air and light pollution. And all of these can be mitigated, often by green infrastructure, which can make the roads more resilient in terms of introducing things like sustainable drainage or better safety measures. But all of that requires budget and a programme to be delivered, and if the attention is being given to a mix of potholes and new roads, then that vital middle area gets neglected.

Do you think there's a case for a separate funding stream, then, for those kinds of improvements?

We do, and when the Department for Transport was consulting on the first road investment strategy for Highways England in 2015—well, it started in 2015, but the consultation was earlier—we advocated that a proportion of that budget should be ring-fenced for just such measures, for retrospective improvements on the network, rather than extending it. We advocated for 30 per cent of the budget and I think we got about 2 per cent of the budget, but, you know, better than nothing. And that's spread across five designated funds within Highways England's budget, one of which is for environment and one of which is for what they rather excitingly call CSI—nothing to do with crime programmes, but cycling, safety and integration. And although those budgets aren't massive, they are welcome and they do focus attention, because often, if there's a budget, that will drive the programme, as I'm sure you know.

Again, I'd concur with all that. The point I would add is just the point on induced traffic. By and large, if you build more roads and increase the road capacity, those roads will fill up. It's kind of the equivalent of buying a larger pair of jeans after Christmas because you've put a bit of weight on, but rather than going on a diet, you just carry on eating the same amount and before you know it, at Easter, you need another pair of jeans. [Laughter.] It's a similar thing, in some instances. 

It's a personal one, as well, I should add. So, I think that's the difficulty, because exponentially, then, you're creating an even bigger problem for yourself, as Bridget says, because you're just growing. I haven't got the exact figures to hand for the amount—you might know them off the top of your head—of additional motorised vehicles on the roads in the UK and that increase over 10 years, but it's clear that you cannot sustain that kind of growth without really moving serious amounts of money around within your budget.

Thank you. One further question from me. We've got evidence about the way that road repairs are funded, particularly this mad March season of getting all the repairs done. I'd like to ask you both what you think about the importance of an effective long-term asset management approach to maintenance. How useful and important would that be for cyclists and pedestrians?

More broadly—and then to come back particularly on that—what local authorities have tended to do—and this isn't just a Welsh issue, it's common across the UK—is that local authorities will quite often focus on individual schemes, and that's the same with roadworks. And they will have a kind of plan for transport within their areas. But the danger is, quite often, that you can do roadworks, or you can do a scheme and you can look at it in that instance, rather than thinking about how it impacts the wider round. So, I think there's definitely more that local authorities can do to just think about what a programme of works might look like over a period of time and to think about what measures should be put in place over a longer period of time to accommodate walkers and cyclists. So, it may mean, for example, building a new temporary cycle way because you know that there's going to be a prolonged period of roadworks in a certain area.

09:30

Yes, I'd certainly agree with that. We were talking earlier about the problems of managing pedestrians and cyclists around roadworks, and it's much easier to do that if you're planning those works, and if it's scheduled utility works or a town-centre improvement scheme, whereas the reactive maintenance because there's a crisis—a pothole or some other crisis—by definition would be less well planned, and that's when you get a poor environment around it. We would certainly favour local authorities being able to plan over the longer term, so they could take more of a corridor planning approach, look at roads as part of place, not just as a bit of transport infrastructure in isolation, and then they could bring together biodiversity action plans, the walking and cycling network plans that are in the Active Travel (Wales) Act 2013 and so on, and look at all the impacts, the positive impacts, that investment in a place that has a road could do over the longer term. We recognise that local authorities are under huge pressure—limited budgets, limited money-raising powers. A lot of their budget is pre-allocated to statutory services, so it's not easy, but a lot of these investments would save money in the long term, if they were properly planned.

Thank you. Ken Skates, the Cabinet Secretary for Economy and Transport, told another committee earlier this year:

'all of our transport investments, particularly in terms of the capital, undergo environmental impact assessments, which I believe demonstrate how we're committed to sustainable transport development.'

So, I'm going to ask Steve if you agree with that, and then I'm going to ask Bridget what a sustainable highways policy looks like. Steve.

It's kind of a qualified answer—a 'yes' and a 'no'. I think there's potentially a problem with environmental impact assessments and other ways that we appraise transport schemes, and that's largely—it's almost parallel to the debate in economics about what you measure. What you measure is what is easier to count in some respects, and therefore you end up valuing the things that you can count, and that's why the whole debate about GDP and whether it captures proper economic activity. It's similar, I suppose, in terms of the transport field. There are certain things that you can count and quantify much more readily than other things, and, traditionally, things like journey times are easier to do, for example. There has been a process where—. So, for example, just moving slightly away, but just on WelTAG, the Welsh transport appraisal guidance, that's been revised in line with the Well-being of Future Generations (Wales) Act 2015. I think there's only one scheme so far that's been used on that.

I go back to, again, an earlier comment that I made, and it was part of our evidence last time, which is around that you can spend a lot of time perfecting tools like environmental impact assessments and identifying their flaws, but, unless you tackle the bigger problem, which is how people actually use them—so, how industry and Government have the capabilities and capacity to use them properly—it's not pointless that you've got the tools perfect, but, actually, you're missing a huge trick.

To give a very specific example of an environmental impact assessment, you could take a scheme that was perhaps—. Imagine a major route that was going through a town centre, there was a proposal to build a bypass around that town to take out heavy traffic from that town centre. On the basis of air quality, you could probably prove through an environmental impact assessment that it would have a positive impact on air quality, because you'd be removing a heavy flow of traffic from a contained space, but, overall, you know it's going to contribute more traffic.

And Bridget on the second point, in regard to what a sustainable transport policy—

Yes. Just to pick up on that first point, there's currently a group of non-governmental organisations, including ourselves, who are considering legal action with the Department for Transport over a road plan for expanding road capacity in the South Downs national park, because it seems a clear breach of the national park status, and yet the environmental impact assessment that Highways England have done said that, on balance, the economic value or the traffic-time savings balance out damage to the national park. So, there are problems with the EIAs.

Moving on to what a sustainable policy would look like, we would say there would be four strands to it. First of all, it would be what we call 'fix it first'—this emphasis on maintaining what you've got before building more of it; secondly, having an integrated approach, so, looking at roads in place, looking at all modes, not just what can we do for motorised users of the carriageway. The third is setting it in the context of an opportunity to show environmental leadership, so not only mitigating adverse environmental impacts, but can we deliver this in a way that actually makes a positive contribution to reducing air pollution, carbon dioxide emissions, promoting biodiversity. And, fourthly, actually committing the funding and powers to deliver it.

09:35

I'm not familiar with all the details of the Welsh Government's programme, so I don't want to comment, but those are the principles we would judge any programme against—the extent to which it would prioritise those ahead of building new capacity that wouldn't be maintained, which wouldn't be delivered in an integrated way, and which would undermine or, at best, be environmentally-neutral. 

Can I ask you about the first of your four elements—the 'fix it first' one, which you say should include 'green retrofit'? Can you tell us what that means? 

Yes, green retrofit is looking at a road and saying, if we're going to invest money in this road, whether it might be—. You might want to improve a junction for capacity reasons or for safety reasons, but then can we also—while we're spending money and attention looking at this road, are there other issues we can address? Could we make it not only more aesthetically attractive for road users, but make a more positive contribution to the surrounding environment, with better landscaping, with better screening of noise or light pollution, with upgrading the quality of the materials, and so on? There are arguments, for example, that the standard approach of concrete barriers—there may be equally safe and effective barriers that would be much more landscape-appropriate, using a range of materials, and that sort of thing. 

And would that extend to adding in cycle lanes or widening pavements? 

Absolutely and, you know, it's great to see the mapping of walking and cycling routes that's now happening with the active travel Act, but the delivery of those is over several years. If you're intervening in a road corridor, it's a great opportunity to look at that provision. The design manual for roads and bridges, which is UK-wide and is currently being revised, has an interim advice note on cycling provision, which I understand from allies in Cycling UK is really state of the art and excellent but, sadly, is not being delivered to that standard in practice. So, that's a real opportunity, if you're looking at a transport corridor, to see how could we add those enhancements. 

There is a tension, isn't there, because the appraisal guidance and the orthodox thinking is that anything in a transport corridor that impedes the flow of traffic is seen as an economic negative, and therefore should be discouraged. So, how do you square that with your green retrofit? 

Well, we'd say there are two aspects to that. Firstly, we think in some ways that WelTAG—. And, possibly, WelTAG are a bit out of date in that they tend to value travel time of motorists, economically, as greater than travel time of people using public transport, and that doesn't actually reflect trends in transport, particularly in urban areas, where more economically active people now are commuting by public transport. But, secondly, it ignores the congestion-reducing benefits of investing in things like bus lanes and cycle lanes, because of the modal shift these—. You know, the cyclists and bus passengers aren't additional journeys. They are journeys that have shifted, and a double-decker bus can take 70 single-occupancy cars off the road. So, that's a win not only for the bus passengers but also for essential road users who find that it helps address their congestion problems. So, it's better for performance of the network all round.   

Yes. Perhaps my questions are going to, in a way, ask you to be the devil's advocate as such, because we want to discuss the panel's views on the approach to major highway announcements. So, given CBT's comment that improving existing roads should be a greater priority than building new road capacity, under what circumstances should major highways announcement schemes be considered? 

We would say that new road capacity should be a last resort, because often the problems they're seeking to address are not, in fact, best addressed by building new roads. Obviously, if you're building a new settlement, you need to connect to it—it will need a road; every settlement has a road. But, generally, apart from new settlements or new developments, we would say we have enough roads; it's a matter of making the ones we've got work effectively. 

Typically, the premises for building new roads, apart from connecting new settlements, are either that they will reduce congestion or they will improve economic performance and, sadly, there is no positive evidence for either of those assertions, and, actually, there is evidence, certainly on congestion, that, apart from occasional short-term gains, in the long run, as we've heard, new roads generate new traffic. Now, you may regard that as not a bad thing, but it's certainly a thing. So, they don't—. It's a very poor way to reduce congestion. It's like digging a ditch in a swamp—it doesn't actually resolve the problem; it just diverts it. And it may actually induce additional road traffic, which then undermines many of the environmental and social policies the Government is seeking to pursue. And the economic benefits are, at best, unproven. There is some but not consistent correlation between building a new road and increased economic activity, but there's no evidence of causation. 

We were talking about the post-Christmas diet. If I eat chocolate and I get fat—I say 'if' of course—that may be a correlation, but if I feed my teenager bread and he grows taller, I would suggest that that's correlation but not necessarily causation; I suspect he might have grown anyway. And it's true of the economic activity from new roads. 

09:40

Yes. I think it speaks to a point as well that perhaps responds to Lee and the idea of that kind of orthodox thinking about road building—and, again, to play devil's advocate, and to be softer in the morning perhaps, in some senses, there's no surprise that that orthodoxy exists because there's nothing really to challenge it. So, you won't really find in any kind of public policy within Wales anything that challenges that orthodoxy in a meaningful way. You've obviously got pieces of legislation like the active travel Act and the future generations Act, but what I think we need, particularly with the new Welsh transport strategy, which Government has to prepare for 10 years, is, actually, that that's the document where it changes the orthodoxy, where it says, 'This is our vision for mobility and connectivity within Wales. These are the circumstances under which we would build a road, but our focus is on shifting people to more sustainable means.'

Perhaps moving on from that, on the assessment processes and prioritising investment and planning major enhancements, specifically, are the appraisal methods and assumptions of traffic forecasting models used effective and appropriate? Now, you've just sort of brought that up, as such, haven't you?

Yes. Again, it goes back to some of that concern around environmental impact assessments and the WelTAG process. There's a kind of, I suppose, a concept or an approach that is known as 'predict and provide'. So, traffic modelling is what is used to determine, to some degree, whether a new scheme should go ahead or not. Some unkind people might describe traffic modelling as traffic astrology, in the sense that it is trying to do something that is difficult or doesn't do it very, very well, but there are certainly limitations to traffic modelling. And, again, when you go back to that orthodoxy, it's kind of an old tool, which is being used to do old work. Welsh Government, I know, has commissioned recently, I think it was Cardiff University, to help them develop a new traffic model for south-east Wales. I'm not on top of the detail of that, but I know, on face value, there are concerns as to the extent to which that is accurate—so, for example, the extent to which it assumes people might walk or cycle if better facilities were available. The idea, as Bridget and I were talking about before—an assumption that people who are commuting are probably men, probably going to an office, probably at 9 o'clock and will probably come back at 6 o'clock, rather than perhaps a woman, who perhaps might be part-time, who perhaps might be going to a shop or to go and see her mum for caring responsibilities as well at some other part of the day. So, a lot of that kind of stuff isn't adequately taken care of. 

If we look at the economic benefits of investment in major highways, Bridget you've already touched on this, and CBT's comment is:

'The supposed benefits of new roads are often over-stated.'

What's the basis for that statement?

Yes, there was an interesting piece of work commissioned last year by the Campaign to Protect Rural England, but from a consultancy actually based in Wales, called Transport for Quality of Life, who looked at, I think, 80 what are called POPE reports—nothing to do with the Holy Father; these are post-opening project evaluation reports, produced after major road schemes. So, they are absolutely evidence-based, and they look at the real-world impacts compared to what was predicted or expected or hoped for. And they found that, across the board, traffic levels had increased not been reduced, that environmental impacts were generally worse than had been predicted and that economic benefits were generally less, and that, where there were increases in economic activity, it was impossible to attribute these solely to the road rather than the fact that there had been a major regeneration scheme or a new business park opened or something, which was not necessarily dependent on the road solely. And I commend that report to you. It's footnoted in our evidence submission. But there's been more recent research, most recently research by, I think, Dr Adrian Davis at the University of the West of England, Bristol, which has again looked at the pattern of road building and been unable to find any proven economic benefit. And, of course, there are huge upfront costs, capital costs, for building these things, revenue costs, as we've discussed, for maintaining them, revenue impacts if you don't maintain them, and the external costs, which are not taken into account in traditional cost-benefit analysis—all the additional costs from poor health, from social exclusion of a car-dependent society and so on. 

David, do you mind if I just bring Mark in on that issue, and I'll come back to you? Mark, did you want a question?

Yes, thank you. Just two very brief questions—one in the context of the comment you're making about new road building. Often, there are popular community campaigns, for bypasses, for example—we've got Caernarfon-Bontnewydd going ahead, we've got one in your patch in the process of development, and otherwise. Do your views extend to bypasses, or do they have a place to play in this, notwithstanding the need for them to offer more than just a stretch of tarmac?

And my second, related point, you referred to environmental impact assessments—should we also, early in the process, be looking at health impact assessments and economic or business impact assessments? For example, when the Aston Hill development was proposed in Flintshire, going back a decade ago, the inspector of public inquiry, after the public inquiry, concluded it shouldn't go ahead, and a lot of the evidence—and I was part of giving that evidence—focused on air quality and health impact, but it wasn't a mandatory part of the process. And, similarly, economic, you're talking about no evidence or benefit, but in certain cases businesses might argue—and have done in Caernarfon—that there might be a disbenefit to them individually because of a certain route. So, how should we be accommodating those considerations?

09:45

Just briefly, and I'm going to come back to David after, and then I want room for the last section as well.

Can I perhaps check the record, and write to you, because there's a lot in that, and there's a lot I want to say in that?

All I would quickly say is the Newtown bypass is going to be very, very interesting, and comparing that to Caernarfon, in terms of the process, and what the outcomes are. Again, WelTAG has been changed, so some of those health benefits that you say should be being assessed. But perhaps I could write to the committee.

I'd really welcome that. And thank you for patience on that, because we're a bit stretched for time. Thank you, Steve. Did you want to comment on any of that, Bridget?

Yes. I absolutely think that the widest possible range of impacts should be looked at, and I firmly believe that, if they were, we would see fewer big, expensive new road-building programmes come forward. And as you'll know, there are many that are very controversial in Wales at the moment, not least the new section of the M4. Bypasses is an interesting one. People often, quite naturally, want to reduce the adverse impacts of traffic through their communities—the noise, the danger, the health impacts—but they don't want to lose the people coming in to use shops, they don't want to lose the local economic activity. And so the best solutions would be to achieve better modal shift, to enable people still to access town centres, and community centres, but without the problems of heavy traffic. And that would reduce a lot of the press for bypasses. The other thing, of course, is we are seeing measures to—

Oh, I'm so sorry—my apologies, Mr Chairman.

No, no, you're fine—I'm grateful for your detailed answers. David, you've got more questions.

Yes, first of all, I found your comments—and reading the briefing notes as well—about the economic impact very, very interesting, and you're very sound, I think, in your views. Can I ask perhaps Steve: a Sustrans comment in relation to early contractor involvement that the ECI should allow effective early engagement, but, in practice, it seems that overall project costs still dictate the final outcome, and I've made a note here—do you mean by that, as construction progresses, such things as active travel enhancements fall by the wayside—if you'll excuse the pun there—perhaps because of budget overruns? Is that what happens?

Essentially, yes—if I had to answer that question in one word. We give in our written evidence an example from the A465, the Heads of the Valleys road. I think, just broadly, very quickly, generally we have quite good engagement with schemes—[Inaudible.] I think what you see are two things that run through that process—one might be technical difficulties that the project team who are building the road might encounter, which may curtail what they think is their ability to build decent active travel infrastructure. So, that can play out. The other thing, as you say, is funding as well. So, when you're looking to make savings, you start chipping off the stuff that you don't actually think is that important—

Yes, I think that's probably happened. I'm sure Hefin David would have brought this up with the—[Inaudible.]—business. That's not got anything.

Yes. So, in a sentence, I think there's a question of how you police schemes.

Okay. And lastly, just if I can, and this is a huge umbrella question, actually: what priorities would the witnesses identify for the national infrastructure commission for Wales in terms of highway projects?

Well, yes, as I said before, I think, clearly, if there are new developments being developed, they will need to have access, but we would say that one of the biggest ways you can shape the way people travel is how you plan your land use, and where you locate developments. So, we would say the first thing that a sound national infrastructure plan should look at is where you build the new homes and jobs, and, as far as possible, support urbanisation and densification, which deliver the greatest economic and social benefits and also preserves as much as possible the natural environment, which is in itself a huge asset in Wales. And that then you provide really good multimodal, low-carbon, affordable and accessible public transport connections for those developments. That would be our preferred approach. 

If there is a need to invest in road capacity to connect a site or to deliver safety issues, then that should be a priority, but building new road capacity for the sake of it, we would say, would be a poor priority, and we hope that this is a way, informed by the well-being of future generations Act that Wales can set a positive example for the rest of the UK.

09:50

Again, very quickly, I would have a lot to say about the national infrastructure commission for Wales. Perhaps it might be useful again for us to write to you with our evidence given to the consultation on its terms of reference and priorities. 

Specifically on the point about highways, I think I would like to see the commission look at how future roads intersect and interplay with pedestrians and particularly cycling routes as well, to go back to the point about the Caernarfon bypass and the impact it had a the Goat roundabout with part of the national cycle network. I think that's an area that the infrastructure commission could look at.

We'd hope that active travel and that would be in their remit, wouldn't it? So, we would hope that's their overall remit.

Thank you. You said earlier, Steve Brooks, that the policy framework isn't bad, but much of the implementation is more questionable. In your evidence, you just touched on the examples of both the A465 and the Newtown bypass, where what was complied with—the policies didn't quite reflect on what has been built on the ground. Can you just say a little bit more about that?

Yes. So, as I say, quite often at the early stage, we would be involved with the project team that are building a scheme and we will go in and give advice as to how enhancements to walking and cycling can be made—how walking and cycling provision can be taken into consideration. But our involvement tends to be at that early stage, and I think what we find is that then, as the project develops, we find out—sometimes from Assembly Members and sometimes from our own contacts, perhaps with the local authority—that plans will change. As I said, it can be an incident where, as was detailed in my written evidence on the A465, at the onset, it looked like there was going to be provision that would comply with the design standards and that we would be satisfied with from an active travel perspective. Once issues around money kick in, and that was a big issue on that scheme, active travel is very often viewed as the thing that you drop off first. It's the icing on the cake, rather than central to what the scheme is trying to achieve. So, that's where you then start seeing provision—literally things like provision for walking and cycling—narrowed and quite often to a point where, actually, you could argue that it's certainly not fit for purpose.

I think there are two things there for me in terms of how you would solve that problem. One is to go back to that question of practice and the extent to which Government is supporting industry and local government to implement the active travel Act effectively, so to really understand—you know, this design guidance is quite thick—but to actually help them understand and solve some of these problems. Because you're right—it goes back to orthodoxy and a way of thinking. The second is to think about quality assurance and that policing point, and how Welsh Government makes sure that schemes that are funded, and it could be an active travel scheme or it could be an integrated network map scheme in a local area or it could be a highway—. But it's how you are making sure that, if you're funding something, and you sign it off at the funding stage, what you actually get at the end of the day—what's built—is compliant.

So, just to be clear about what you're saying: when there's overrun and there's a value engineering exercise taking place, it's the active travel elements that get stripped out to save the money.

The active travel Act, which has come in since that project started, was meant to make things different, because it's meant to improve the facilities for walking and cycling. I think the first scheme built under that was the Caernarfon bypass, and I think you said earlier that it would be interesting to see how that differs from the Newtown bypass. How is that new framework implementing, now that this new legislation is in place?

Again, I think, in terms of legislation, when you have words like 'consider' and 'enhance' provision, you can, again, very often get into a debate about exactly what that means. Again, if it's helpful, I can write to the committee with our detailed evidence that we gave as part of the public inquiry on the Caernarfon bypass. I think, certainly, we had—. Just to reflect on our engagement with that, it is, again, difficult to engage when we're raising issues around safety, and I'm thinking specifically about the Goat roundabout on that scheme, where we had particular views on safety and how pedestrians and cyclists might cross over the new proposed bike paths. I think sometimes it is difficult to feel like you are being—I wouldn't say listened to, but kind of engaged with on a serious level. Again, it goes back to that orthodoxy, it goes back to the whole reason why we're building a bypass, and that's largely economic, the idea of shortening journey times, and, again, 'It's that green group banging on about cycling.'

09:55

If I can ask Bridget Fox, you mentioned earlier, and you quoted in your evidence, these 80 road schemes that were analysed—the POPE reports, you mentioned—and that they showed traffic increases of up to 47 per cent over 20 years. How do you think that should be fed into the modelling so that that doesn't happen?

It's a good question. We regularly have conversations with the Department for Transport and suggest that the case for new roads to deal with traffic congestion has simply not been made because, at best, you move the congestion elsewhere on the network. Even if the big new road itself is free-flowing, it will rejoin the existing network at some point. Traffic doesn't evaporate at either end. We've now seen the arguments move towards, 'Well, it's extra economic activity, and therefore the extra traffic is a good thing.' But, certainly, the argument that it cuts traffic is disproven. So, we do think that the wider mix of trends in travelling patterns, the disruption of traditional work patterns falling, the take-up of driving licences, falls in private car registrations—some of these are important trends that need to be taken into account, rather than the traditional 'predict and provide' of building even more roads. 

You've both mentioned your optimism that the future generations Act may bring a different approach, but the Government's lawyer in giving evidence to the inquiry has interpreted the Act in a way that the future generations commissioner does not agree with, and seems to be arguing that as long as the Act delivers on some of its—if it was a project, rather, and in this case it was the M4—if it delivers on some of the goals, namely economic development, then that cancels out some of the other provisions. What's your view on that interpretation of the Act, and if that is the case, are you still optimistic about the Act having any meaningful impact?

We objected to the M4 plans, I should say, and we of course agree with the commissioner on that. It does seem to me that if the—. The Act is an inspiring piece of legislation and could really, as I say, show leadership to the rest of the UK and beyond, but it seems to me it will have real value when it does materially change the outcomes of something like a big piece of infrastructure like the M4, which in the old way of thinking would have gone ahead because economic gains were seen to trump environmental gains, which is the problem of conventional modelling and conventional environmental impact assessments. It could actually have said, 'No, this is the wrong kind of investment for the well-being of future generations.' I hope that it's not too late for the commissioner to be listened to.

I might be a tad controversial here—

I'm just being careful to choose my words. I think the Act is—. I think there's danger that people overplay the importance of the Act. I've been working in the field of sustainable development for 20 years. We've been doing this kind of stuff for 20 years. Welsh Government have been trying to grapple with sustainability for 20 years. The future generations Act is not year zero. Getting Government to act in a way that is sustainable, where you properly balance out some of the economic, cultural, social and environmental things, is really difficult to do—where you think in the long term. That is really difficult to do.

But perhaps speaking personally and stepping back a little bit from Sustrans, there's also an issue around mandate and political decision making. At the end of the day, I think the decision to build that bypass is wrong for a number of reasons—social, environmental and financial—but I find it difficult to argue that the Government doesn't have a legal right or it's in some way contravening the future generations Act if it were to build it. At the end of the day, that Act is just an Act that compels Government to think in a certain way. I think its limitation is it doesn't force Government to act in a certain way. That's a different debate about whether you should have a piece of legislation that would compel a Government to make a decision in that way.

So, you don't agree with the future generations commissioner's interpretation of the Act.

I would agree with the commissioner when she states, for all the reasons that she has done, that building the road is wrong. I think the strongest argument for not building the road is a political policy question of priorities, rather than a legal question of whether or not it complies with the Act.

10:00

Bridget Fox, Steve Brooks, thank you for your time this morning. We're very grateful for your written evidence and your oral evidence this morning. And, Steve, you've offered to give us some additional evidence—I'm very grateful for that—and that will be taken in equal weight to what you have said this morning. We're very grateful for your time this morning. Thank you very much.

We're still in public session, but, for our next panel, we've got 35 minutes. So, I've got Vikki leading, then David Rowlands and then Lee coming in. And, Hefin, you come in, and Mark, as you feel in this session as well.

I've got Vikki, then I'm going to come to you, and then I'm going to come to Lee. And then Mark and David come in as you want.

And then we've got a break. In that break we can have a look at the other sections as well.

3. Panel sy'n cynrychioli busnesau bach—Cyflwr y Ffyrdd yng Nghymru
3. Panel representing small businesses—State of Roads in Wales

Bore da. Good morning. Two Members have just popped out. They'll be back in shortly now, I expect. But can I welcome you both to the committee this morning and, perhaps, if you could just introduce yourselves, briefly, for the record? 

I'm Matthew Williams. I'm the policy adviser for the Federation of Small Businesses in Wales.

I'm Elgan Morgan, the policy and public affairs manager for the South Wales Chamber of Commerce.

The evidence we've received so far is suggesting that local roads maintained by local authorities are in a far worse state than the trunk road and the motorway network. So, if you agree with that, what effect does that have on business?

I think, certainly, the perception of our members is that the local roads are in a worse state than the trunk road network. I think we've got evidence from route work we carried out in 2016, and further back in 2014, on that basis. I would caveat that slightly with the idea that most of our members will be using local roads more often than they use the trunk road network. Their exposure to that network and any poor maintenance or poor quality of that network is much greater than their exposure to any issues on the trunk road network. And, I think, from other work that we've carried out, we also see that, where our members are using the trunk road network, they seem to expect journeys to take more time, and those kinds of issues. Whereas, on the local roads that they're using, perhaps, daily, they seem to expect that they should be able to travel more freely on those.

We regularly ask our members for their priorities and things, and the quality of roads very, very rarely comes up, if I'm honest, when you're comparing it with other priorities—skills and so on. But when you ask the question, 'What's the situation with the roads?', then they can talk about it for days. And, yes, it is the local roads, but it's not actually the quality of the road. What does come up within the initial priorities, though, is the more strategic level transport network issues rather than the actual quality of the roads.

All sorts of things, from the M4 relief road to needing more access into west Wales and issues, then, with north Wales.

Thank you, Chair. Thinking about the approach to planning and delivering highways maintenance programmes in Wales, do you think highway authorities plan and co-ordinate their maintenance effectively? I'm thinking, in particular, about the evidence of the 'mad March' season to complete projects before the end of the tax year, and does this affect Welsh businesses? Do highway authorities engage and communicate effectively with businesses about roadworks or consult with them about how to manage them effectively?

I should say that we've only got 35 minutes, so don't feel that you both have to answer every question. If one of you wants to take the lead on a particular question—. Who wants to go first? Matt Williams.

10:05

We surveyed members on this a couple of years ago, and what came up during that survey was that dissatisfaction with roadworks in particular was when they were poorly advertised and when they caused disruption to business. This came up specifically as happening during March and February—the post-winter maintenance periods, when there might be quite a lot of maintenance work going on.

Reading through other evidence submitted to this inquiry, I think we've been quite convinced by the case that has been made by others for multi-year budgeting that allows a slightly more asset management-based approach to road maintenance to be undertaken. I think we've found that quite a convincing case to make.

Okay, thank you. The CBT suggested that improving existing roads should be a greater priority than building new road capacity and that road investment should be refocused on maintenance, safety, environmental enhancements and resilience. What do you think of that comment?

We wouldn't necessarily disagree with it. There are places for some specific new roads, but, in general, it is about the improvement of existing roads, both in terms of just resurfacing and sometimes enlarging the road and getting better access into it.

Going back slightly to your last question, there are a few reasons that there's a big drive at the end of the financial year. Not only is it a case of money becoming available or that hasn't been spent and gets diverted into highways, but there's the effect that winter has on roads. Quite often, that's being done in that period because that's when potholes appear, and so on.

Yes, I just wanted to ask a very specific question about a piece of roadwork that's made national news, which is the Pwll-y-pant works at the Caerphilly roundabout. The headline on the BBC on 9 December was that it cost the Caerphilly economy £400,000. Can I ask whether you've had representations from members about that particular piece of work and what your views are on the kind of cost benefit that took place with that?

We've had no representations on it at all.

I'm not aware of any specific representation that's come to our office in Cardiff. However, we do have field staff who work in south Wales, who are probably more likely to get those kinds of representations.

Yes, we're absolutely aware of the headlines.

Taking that as, probably, an example for other projects, I think there were issues around the advertising and the way in which that contract was structured that meant that works were undertaken at, for example, times of the day that caused problems for businesses in that area. As far as I'm aware, the contract has been altered now so that they can undertake overnight works—

With extra money being put into it. Would it be worth looking at that as an example of lessons that could be learned for other projects in Wales?

I'd suggest that, probably, yes, it could be.

Can we look at the approach to prioritising and selecting major highways enhancement projects, and specifically whether the national transport finance panel and the local transport plans provide a clear pipeline of appropriate projects? Do these plans support and integrate the wider Welsh policy, particularly economic policy? 

I think there is a clear pipeline. There are lots of projects that could be brought forward that aren't. The problem is lack of money. The lack of money to actually do anything is what means that decisions have to be taken on, you know, which one we prioritise and so on. If we're going to look at decision making and the planning of things, we need to look at how the decision is taken. Why does it take so long, sometimes, to take a decision? A lot of our businesses that are in the supply chain for projects complain that they can't plan forward because they actually don't know whether their project is going to be delivered or not, and to always look at a project as being a yes/no. I'm jumping onto the M4 relief road a bit, but when a decision will be taken on it, it will be a 'yes' or 'no'. I know several people will be looking at, 'Well, we should be given an alternative,' but actually, at best, the decision will be, 'No, but we'll start looking at something else, which we eventually will probably come around and say "no" to again.' There is a lack of confidence in the business community that projects will eventually be delivered.

10:10

So, looking at the approach to the appraisal of projects, specifically the fact that the FSB welcomes WelTAG 2017's increased focus on public transport options, but suggests that

'guidance still appears to rely too heavily on predictive traffic forecasts, evidence suggests that this has led to some poor investment choices in recent decades.'

There is a '[when] evidence suggests' in that.

I think the arguments around predictive traffic forecasting and predict-and-provide models of investment for road infrastructure are quite well rehearsed elsewhere. We published some work that Stuart Cole undertook for us a couple of years ago on transport infrastructure decisions in Wales that went through some of those arguments, and I know there are reams of other arguments in that sphere. We are—caveated— relatively pleased with the new WelTAG guidance. However, only one project, as far as we're aware, has been taken forward under the new guidance so far, so we've got to wait and see how it works out in the long run. From our perspective, there is a distinction between travel to and travel for work—the difference between commuters and essential business travel. We welcome investment in public transport in order to take commuting traffic off the roads, so that our members, whether they're tradespeople or through to large haulage firms, et cetera, are able to use the roads when they need to. I think the new WelTAG guidance makes a better balance between those options.

Comparing local and trunk road enhancements, it's suggested that we're giving too much money to the larger projects, the motorway projects, rather than local. So, is a focus on trunk road and motorway projects appropriate?

I would take a slightly different tack with your questioning. I don't think it's the case that we should be putting the money into a local road instead of trunk roads; we should be putting more money into local roads.

It's the problem, yes. As long as we keep looking at project A or project B, when both of them are needed, then we're not going to move on and get the transformational change that we need in this country.

Because it's been suggested that things like the M4 motorway, obviously, and the huge cost of that enhancement, will inevitably impact on the money available for local roads and local authority roads.

Yes. As I say, it's needed. We think it's needed. Certainly, a solution to the problems at the Brynglas tunnels is needed, and if there is an alternative solution, then go ahead and do that. But taking the attitude that we shouldn't be building the M4 relief road and that we shouldn't be doing anything, isn't going to move the economy of south Wales forward.

Yes, I think, obliquely, Elgan, you touched on the fact that CECA has criticised the approach to project procurement and slow decision when approving schemes—you've already spoken about that—suggesting that these limit value for money in major enhancements. You would probably agree with that, as well as the comments you've made with regard to holding back and the procurement people not being able to look forward. 

Do you have any views on the use of private finance in road schemes, specifically the Welsh Government's mutual investment model? Do you think that that may be a way forward?

Obviously, any balance of private and public needs to be done carefully, but the principle of private financing paying for things is not something we would object to. 

10:15

Yes. Similarly, we're not opposed to the idea of private investment in the road network. We understand that there are difficulties with those approaches—or there have been difficulties with some of those approaches—and that it needs to be managed carefully, but with the current funding envelope as it is, anything that creates extra investment should be explored. 

Yes. We've had evidence that PPI and this new model is fairly different to—.

Thank you. A couple of business-focused questions—not specific, but still relevant. We heard Hefin refer to a local example: a few years ago, we had a situation on the A55 in north Wales when a number of roadworks were launched at the same time, during daylight hours, causing huge congestion. I know the FSB themselves were very vocal at the time in highlighting this. The north Wales growth bid is now proposing a regional transport body, which could, amongst other things, be a clearing house for scheduling and planning for roads maintenance and improvement. What voice do you think we should or could be exploiting at a regional level, if at all, to help address that? 

And for my second point, I'll use an example of the Caernarfon-Bontnewydd bypass. When the then Minister announced a preferred route, a business/economic impact assessment hadn't been completed. By the time it was completed, the evidence from the SMEs on the route was that this would be economically damaging to them and would lead to job losses. But, by then, we were already getting into contracting with the company that's going to be delivering the improvements, and, effectively, you're setting business against business because the contractor needs the project to go forward because they've planned their business cycle, their cash flow, and their employment and training on this, and you've got the businesses on the route saying, 'This is going to cause us significant damage.' So, how critical is it that, before decisions on preferred routes are made or local schemes are determined, the business sector—particularly the small and medium-sized businesses on or near the routes—are properly consulted and reports are produced before decisions are reached? 

Yes. I think it's important to consult everybody, but there will come a point where a political decision has to be taken. There are lots of projects where some businesses will benefit and some businesses will be damaged, and somebody has to then step back and look at the greater good or bad and make a decision based on that. But consulting and communicating is the important bit, so that when that person makes that decision, they have all the information before them.

Can I come in on the regional point? In terms of the regional conversation, such as the city deals and the growth deals, we need to ensure that they bear in mind local routes as well as, kind of—I'll think about how I phrase this, but—there's, perhaps, a preoccupation with east-west trade routes, and this is probably true of all the proposed growth deals, all the established city deals, whether it's cross-border flow along the M4 or cross-border flow along the A55 or cross-border flow in mid Wales, and that equally important in a lot of these areas is, quite often, north-south flow to those roads. So, you'll have roads through the Valleys linking in to the M4, roads in north Wales linking in to the A55 to enable businesses based in the periphery of those regions to access the more populated parts of those regions, and we're not seeing those conversations being had. So, in the Cardiff city deal, aside from the metro, obviously, the only major road project that we've seen come forward is the link road to the airport. It may be the case that that's needed, but it's probably not the kind of local enhancement for the purposes of local business that we might be looking at. 

Chair, can I just add to that? Part of your question was based around projects taking place at the same time. One of the issues there is that, when that happens, it also drives the local supply chain out of being able to fulfil all of the projects. Better planning can offer help to local businesses to be able to supply into it.

10:20

Thank you, Chair. Did I just understand, earlier on in your evidence, that you think that all local road repairs should be undertaken? Is that right?

Okay, which the Campaign for Better Transport estimates would cost £9.31 billion over 14 years. Then you also said we should build the M4 relief road, which is going to cost somewhere between £1.5 billion and £2 billion. Is that correct also?

So, clearly, there's going to be an opportunity cost to this. Where do you think that funding should come from, and have you done any analysis of how that money might be best spent to have a different impact on the economy that you represent?

We haven't gone into that much detail, but the history of underinvesting in our transport network has not been helping the economy at all. If we want an economy that moves forward, that isn't one of the most poor parts of Europe, despite being in a G7 country, then we have to make some transformational changes. Doing things piecemeal isn't achieving anything.

What evidence are you basing it on that investment in transport is the best way to bring about transformational change to the economy?

I can't give you any exact details, but most of the world where they are seeing economic growth, which we need, they are investing in their transport.

Because, the traditional cost-benefit analyses, which heavily favour car-based schemes, even those show that the return on investment for transport infrastructure has been pretty low. To be rated as a high-value scheme, using the Treasury tools, you're only having to achieve something like a £1.50 return for £1 investment, which, compared to other types of economic investment, is a very low return. So, I'm puzzled by your claims, given that the evidence shows that transport infrastructure—there may be all sorts of good reasons for investing in transport infrastructure, but return on investment for the economy doesn't seem to be among them.

The fundamental thing is that businesses need to be able to move around, and they are telling us constantly, over decades, that they're having difficulty doing this. Taking the attitude that we shouldn't be investing in transport is, I think, part of the problem not the solution.

Can I just add that, when I'm talking about transport, I'm not just talking about roads or car-based travel?

Fundamentally, yes, but all of it needs to be looked at. Roads also include other non-car transport.

All I'm suggesting is that if you're saying that the problem is businesses not being able to move around, that's a problem of congestion. Are there not other ways of tackling congestion other than building roads? Because the evidence we've just had from the Campaign for Better Transport shows that their analysis of 80 recent road schemes shows that, actually, traffic increases not decreases because of new roads.

Yes, there are things that can be done to ease congestion without needing more roads, but do that, then. The problem is: that's not been happening.

Right. So, yours is just a call for action to doing something. You're neutral—

Something. Nothing actually is happening at the moment. There's a lot of talk around the metro, which is brilliant—we fully support the metro—but we have a concern that, actually, all it's going to be is more trains on existing rail. Unless you come up with the rest of the network that links into it—more stations and everything—then all you've got is the current system.

Okay. Thank you. Can I ask the Federation of Small Businesses about your view on the Well-being of Future Generations (Wales) Act and whether or not you think this has any impact or any real meaning in how it's being implemented to do things differently?

10:25

We fully support the future generations Act. We recognise the challenges that the Act was brought in to seek to meet. I think we're very early in the days of that Act bedding in, and the commissioner is very early in setting up her office. In the grand scheme of things, we probably would like to see the commissioner's office devote a bit more resource to business engagement, so we can see what the Act will actually mean to our members in the medium and long term. But in general, we fully support the Act and the right of the commissioner to give her view on any piece of public investment in Wales.

And in terms of her submission to the M4 public inquiry, which goes to the heart of what the Act means, do you have a view on her argument?

As you'll know, we were opposed, and are opposed, to the M4 black route. The commissioner has taken a view on balancing the well-being goals, and she's well within her rights to do so. I think our argument on the black route would be slightly different, in that we would place more weight on there being potential other solutions to a traffic issue around Newport, and whether the use of that much spend on one project is a useful thing to do in terms of Wales's restricted funding envelope for capital projects.

Can I just mention something on the Act? The principle behind it is something we fully support. The concern that our members have is that it could be used as another reason to not do things. I go back to my point that things need to happen. If it's used as a way of not doing things, then it will not be a good thing.

The other point is that there is concern that, while looking 15 years ahead, which I think is the timescale in the Act, is good, actually, what you should be thinking of is over the next 30 years: from tomorrow to 30 years' time. There is a worry that authorities will be looking at what we need in 15, 30 years' time but ignoring what we need tomorrow.

Do Members have any additional questions? Is there anything this morning that you've felt that you haven't said that you think is important that we as a committee recommend to Government to make a change with regard to the state of our roads? Or, if I ask you another way: give us your top priority that you would like to see as a recommendation in our report.

Take a decision and actually build things. When it comes to transport, highways is a fundamental part of it, but actually the whole of transport needs actual things to happen, both from the point of view of the benefits that the infrastructure will bring, but also the benefits for the businesses that are in the supply chain—it will give them the security and the confidence that things will happen, not just lots of talk, lots of planning, and then nothing happening.

Have you got anything specific we can ask in our recommendations to Government?

I think we're quite convinced by the need for multi-year budgeting. Moving to asset management based approaches seems like quite a convincing case to us. More broadly than that, we would like to see more fully formed plans for transport. The national transport plan—and this goes back to a question asked earlier—does contain a pipeline project, but it doesn't place budgets against those projects. It doesn't assess the feasibility of the delivery of those projects, and it doesn't include road maintenance. It's simply new projects, and I think we would quite like to see it include those things.

Okay. Thank you. If you are following the rest of the proceedings of our inquiry, if there's anything that you feel you want to add, please do drop us a note. We're very grateful for your written and oral evidence to the committee, so thank you very much.

Gohiriwyd y cyfarfod rhwng 10:29 a 10:49. 

The meeting adjourned between 10:29 a 10:49.

10:45

Ailymgynullodd y pwyllgor yn gyhoeddus am 10:49.

The committee reconvened in public at 10:49.

4. Panel sy'n cynrychioli busnesau mawr—Cyflwr y Ffyrdd yng Nghymru
4. Panel representing big businesses—State of Roads in Wales

Welcome back. I'd like to welcome Members and the public watching to the Economy, Infrastructure and Skills Committee. I move to item 4—this is with regard to our inquiry on the state of roads in Wales. We've got panels this morning representing business, and in this particular panel we've got members from the Confederation of British Industry and other groups as well. I'd like to ask members if you could just introduce yourselves for the public record. If I start from my left.

10:50

Hello, I'm Mike Colborne. I'm the fleet compliance manager for Owens Group based in Llanelli.

Hi, I'm Mike Plaut. I'm chairman of CBI Wales and I run a business called Northmace based in north Cardiff.

Good morning. I'm Ian Price. I'm the director of CBI Wales.

Leighton Jenkins, head of policy, CBI Wales.

We're grateful for you being with us this morning. The evidence we've received so far on the state of local roads maintained by local authorities seem to be in a far worse state of repair than trunk roads and the motorway network. So, is that a view that you would hold as well? And if so, what effect is that having on business? Perhaps I'll look to Mike first.

The way business is running at the moment, everything is on efficiencies and being clean, green. One of our biggest problems is we have time-delivery slots for almost everything that we do within half an hour. We get held up regularly going into distribution centres, going into supermarkets. If we're not within the half-hour slot, we're sent away. So, the carbon footprint is out the window, the costs upon us are astronomical, and we're turning vehicles around all the time. Wasted revenues, wasted time. A lot of it is down to the condition of the road because there are so many pinch points that are choking us everywhere we go.

So, what are the issues that you would like to see Government address in priority?

Prioritise? Obviously around Newport there's severe congestion there all the time—

I suppose—sorry, I should say perhaps not—I'm not talking so much localised, but a bigger picture across Wales. What do you think Government needs to address?

We just need to open the roads and make it a bit more free-flowing for everybody. We've got to get Welsh industry opened up, and the only way is to get the infrastructure moving in and out cleaner and faster than it is at the moment.

We just need to think a bit more smarter on the way we're planning our roads and everything else we're doing. There are lots of different ways, even when you come into urbanisations, where you're using bus routes just for buses and taxis. Why not put heavy goods vehicles in there as well? Because you move them through the cities and bigger towns faster; it frees up the roads for the cars on the other side. Obviously, we can't share our seats with anybody else to make us any greener than we are at the moment. We're already running everything we have as Euro 6 engines. We have the cleanest, greenest engines, as far as diesel goes—we're cleaner than the cars next to us. If you get us in and out, at least the congestion is reduced there as well. So, it's just your simple things and a bit more lateral thinking to help.

Okay. Members might pick up on some of the points you've mentioned a bit later on. If I could ask one of the members from the CBI with regard to—. Do you agree with the assessment that the local road network is in a worse state or repair than the trunk road and motorway network?

We absolutely agree with that. Not only is it true that business has a perception that roads are in a poor condition, particularly local roads, but if you look at the statistics, it also supports that.

The CBI infrastructure survey that happened a few months ago across all regions and nations of the UK—Welsh firms said they are the most dissatisfied of any part of the UK with our road network, and they had the least confidence of any part of the UK that the road network will improve in the short-to-medium term. There's a perception of unreliable journey times due to the aging additions of roads. If you look at the Welsh Government's Office for National Statistics stats on trunk roads, monitoring for skidding issues are at an eight-year high, and some local authority roads are in poor condition, including in places like Powys, where 20 per cent of the roads that they manage are in a poor condition. That leads to an impact on business confidence and business certainty when using those roads. So, there's a perception and there's also very much a reality issue on the ground.

And the perception issue, the perceptions you mentioned, why is that the case in your view?

Well, because of use, I think. It's as simple as that. When a particular firm uses—. They either avoid using local roads as much as they possibly can because of the issues with constant maintenance or potholes or congestion or traffic, or if they do use them, they are constantly coming up against that poor condition of road and poor experience. And that's over a number of years, not just in the last few years.

10:55

As a businessman who travels a lot and has customers in a hundred countries around the world, I think framing this whole discussion is very important, because, actually, we don't have a God-given right to jobs in Wales and we also need to ensure we're competitive. I think if people travel to places like India, China, what was the eastern bloc, they will see the competition, they will see the infrastructure that's being built. If we want jobs, we're going to have to do something about it. There isn't an option, really. If we want to see a Wales that's prosperous, a Wales that has high employment, we've actually got to put the infrastructure there. If we don't have the infrastructure, we will not have companies coming into Wales and companies expanding that are here in Wales. Even things like Aston Martin—it's superb we've got that brand in Wales—if we don't give them the infrastructure, will they still be here in 10, 20 years' time? So, I just want to try and frame this conversation—it's about jobs. It really is about jobs.

I visit businesses on a fairly regular basis, and one of the biggest challenges is getting their product to market, particularly automotive, where the challenges are that they're in a supply chain and they're operating in a just-in-time environment. There is a real danger that if they continue to be challenged by the—I'm not specifically saying just the roads, other methods of transporting goods, whether it's rail—. Unless we improve the whole infrastructure, I think there's a real challenge that we will start to see some—certainly the businesses at the further ends of the supply chain may be looking at locations inside England instead.

Okay. Members will want to come in with some specific questions. Lee Waters.

Thank you. I'd like to ask Mike Colborne a couple of questions if I might. Clearly, there's the condition of the roads and then there's the sufficiency of the roads—are there enough of them? Now, the evidence from the whole panel this morning has been that the congestion is the problem. Your evidence was about it affecting your ability to do just-in-time deliveries. So, then there's the question of: are there other ways of reducing the congestion to free it up for essential business traffic? Now, I'm just interested in your perception in terms of the way to do that. Is it through increasing capacity, building more roads, or is it about the better management of the existing road network?

I think you've got to balance both and plan it a little bit better. None of us are naive enough to believe that there's going to be a single fix for it all. Yes, more capacity is needed. We can see, from our own perceptions in our own cars, that congestion is getting worse and worse. There are more vehicles on the road now than there have ever been. We can't work any smarter than we are—we plan everything to minute details, minute miles. We trunk where we can into hubs; we then do, potentially, final-mile deliveries from there. But if we're held up anywhere along that route, then there are penalty clauses on us on the back end as well. We're penalised on all ends.

So, there's a strong feeling that creating more roads will reduce congestion. We've just had some evidence that is based on a study of 80 road schemes, judging what they thought they would achieve and what they actually achieved over 20 years, and this analysis found that instead of actually cutting congestion, traffic increased by up to 47 per cent over 20 years, on average, over these 80 road schemes. So, I understand the perception that building a road scheme would relieve congestion, but the evidence doesn't quite show that.

But is it borne all the way through—when they did their initial analysis on what their projections were, were the projections on the levels of car ownership and everything else borne through to the end, or are they just focusing on that there is a bigger number at the back end and focusing on the poor point of it?

Well, we're going to get further detail on how they came to those figures, but it does strike me that Owens is part of the Freight Transport Association and has lobbied on the new black route M4. You've said already, before the road is built, that the three lanes that are currently planned in each direction should be increased to four lanes. So, you're already saying that this new road, which is going to cost an enormous amount of money, is not going to be enough to deal with the likely increase in traffic that the new road will generate. So, you're saying that a well?

11:00

Well, I don't think there's ever going to be a correct answer. There's always going to be an issue because of the way car ownership and vehicle ownership and everything is needed. Until people don't need stuff anymore, then they won't need us.

But it's never going to be enough, either, is it? So, you just keep building more roads—

No, I know, but 98 per cent of what's in your supermarket is what's supplied by a heavy goods vehicle.

Sure. My initial question to you was: are there other ways of reducing congestion to allow that traffic to flow?

As I said, potentially looking at using bus lanes smarter, and when you build the roads correctly that you have adequate space for vulnerable road users, away from where, potentially, the heavy goods and dangerous vehicles could be.

Okay. Just finally, just for clarity for the record, you believe that the three lanes that they're going to build on the black route won't be enough to deal with the traffic and that there should be a fourth lane.

Personally, I'm not taking any view on that—

That's what the Freight Transport Association, which you're part of, has said.

We are part of the set. We don't always agree with everything they say, so it's something I would have to look at more myself. I'm personally not going to make any further comment on that.

That's fine. I should just say, you don't need to press the mikes—they come on as if by magic. Leighton Jenkins, you wanted to come in on this.

I just wanted to go back—the problem with this scenario is that we all end up in a binary discussion about if you build more roads, would you increase congestion? And the problem is that we can trade studies. So, I can show you a World Economic Forum study of 160 big pieces of economic literature of road capacity across the world on road projects that show that, actually, new roads can increase economic development and don't lead to more congestion.

So, what we need to do is to have a common-sense look at what we actually need on the M4 and realise that, actually, this road has been needed for a long time, and increasing capacity and removing pinch points can work alongside things like metro and public transport and other things. As Mike said, it's a more complicated picture than more roads versus fewer roads.

It would be better than it is at the moment, which is coming to a halt pretty much all the time.

We're going to come on to some specific questions on the M4, so if we could just park that for a moment, because I don't want to take over this session that we've got with all questions on the M4, but we will come back to that for sure. Vikki Howells.

Thank you, Chair. Moving to a more broad theme, then, about the planning and delivery of highways maintenance programmes in Wales, do you think highways authorities plan and co-ordinate their maintenance effectively? We've been looking at evidence, particularly, of the rush to complete projects around the time of March, understanding, of course, that there's wear and tear on the roads from winter at that time too, but is there a way that maintenance could be co-ordinated better throughout the year, so that there's less of an impact on Welsh businesses? And do highways authorities actually engage and communicate with businesses effectively about these kinds of schemes?

We get very, very little communication, I've got to be honest, from any of the road networks. Highways England are very good, to be honest, at notifying us of what's coming up. The Road Haulage Association and Freight Transport Association notify us in advance of roadworks coming up. I see nothing coming from the Welsh Assembly of major road schemes coming towards us. In fact, if there was adverse weather coming in and we had buildings in a floodplain, Natural Resources Wales would be weeks in advance telling us and notifying us, e-mailing and everything else, that potentially there could be a flood in our area and to plan ahead, but, unfortunately, we get nothing form our local authorities as to what roads they're planning to do and what the timescales are going to be. We see it when a sign appears on the side of the motorway or road or wherever it might be, and the potential consequences in advance, and we plan from signage on the side of the road.

I just think that, at the moment, I've been travelling quite a lot on the roads recently and just around here, getting back from Heathrow, bits of the M4 are closed and then you've got the tunnels closed, you've got the Heads of the Valleys closed and we've got Caerphilly roundabout closed. So, if you're into south-east Wales, you're pretty stuffed, let alone going to Swansea—

No, there are continual roadworks around there.

Well, I think it's inaccurate to say that Caerphilly roundabout is closed.

Sorry, I apologise. But there are queues, so we avoid it.

I was just going to make the point, going back to the question, I think there isn't any co-ordination between any of the various bodies, and quite often there isn't co-ordination between the local authorities either. I think Mike's point about the first indication of something happening is quite often when you encounter a sign is regular, and that applies to closures on the M4 as well, out-of-hours closures. Everybody accepts that work has to be done and there's a need to do it, but I think some prior notice would really be helpful, and I don't think that's happening at the moment.

11:05

I'll come back to Vikki in a moment, but I think, Mike Plaut, you mentioned that Highways England were doing good works, or was it—[Interruption.] Sorry, Mike. What are they doing that works?

Highways England, obviously, they're responsible for all the motorways and A roads in England. They notify the Road Haulage Association, FTA, all the trade associations, well in advance. They've come to the national Road Haulage Association regional councils and actually given us PowerPoint presentations with timescales and maps of everything that's planned, right up to 2030.

Does the trunk road network in Wales—the trunk road agencies—not do that and offer that facility?

I don't see anything coming from the Welsh authorities in the same manner. At the moment, if you look just—. We'll take yesterday for an example. So, you've got a pinch point around the Cedar Tree roundabout in Caerphilly. If you drop down through Bedwas and come down towards Newport, then you've got the Tredegar Park roundabout, which is one as well. The eastbound tunnel was shut last night, diverting everything through Newport as well—

The trunk road agencies have websites with the information on, but you're saying that should be more—

It should be more vocalised and made more public.

And you're saying if you were in England and there was a similar situation then you believe—

In England, there is better notification right the way across to the trade associations and input through the national panels.

Well, through the—. I receive an e-mail a couple of times a week from the Freight Transport Association on what's coming up, and, if there's adverse weather or things, they're going to warn us. When there were high winds in Scotland last week, we had that ahead of time. I personally don't see any of that happening or coming from the Welsh Assembly.

Hefin—. Vikki, you've still got questions. Do you mind if Hefin just comes in? I'll come back to you. Hefin David.

Just seeing as the Pwll-y-Pant roundabout was mentioned, I get a weekly e-mail from the council. It's not the Welsh Government that is managing those works; it's the responsibility of Caerphilly council. But I get a weekly e-mail with updates of what's happening and what's planned, with a programmed series of events that are going on for the next few weeks. So, are you saying you don't get access to that information?

I'm not saying I don't get access to it. It's not made public enough for us to—

Please, if you wouldn't mind. Anything that would assist our planners in any way is just making us that little bit more efficient.

I suppose the concern I've got is that information, though, is out there and is very freely available— that information about the Pwll-y-pant works particularly.

Well, it's not being communicated well enough, then, to the trade associations—

We have the trunk road agencies coming in next week, so the points you've made, we'll certainly put to them. 

Thank you. Moving on to the quality of road repairs and a question for Leighton Jenkins, the FSB said its members are frustrated because they perceive that the quality of road repairs is often poor. Does the CBI share that concern?

I think we very much do. There's a problem, at the moment, with local roads, in that it's often a firefighting approach, in that, if you leave it to potholes, it's already too late and it causes major disruption and often the repairs are poor. It's understandable. In a period of tight budget settlements for local government, it's understandable that some tough decisions have to be made on budgets, but if a routine maintenance budget isn't maintained then business pays the price, and so do local commuters.

Thank you. One final question then, Chair, building on what you said there, Leighton, about austerity meaning that tough decisions need to be taken. The CBT suggested that improving existing roads should be a greater priority than building new road capacity, and that roads investment should be refocused on maintenance, safety, environmental enhancements and resilience. Any comments from the panel on that?

I just, very briefly, would say, obviously, it's not an either/or. All roads are used by different people for different purposes, and you can't cut one budget and hope that another won't suffer. I think the concern is that we need a highly maintained motorway network. This is the motorways and the roads that local authorities control. For many people, they're a business route. They're not something that they can optionally use; they must use them in order to do the business and support the economy. So, unfortunately, we need both, and we need increased investment in new roads and also a higher amount of money spent on maintaining existing roads. 

11:10

No, I agree with that—[Inaudible.] I think it shouldn't be a zero-sum game. You can't make choices like that. You've got to look to try and solve both problems rather than just going down one road, excuse the pun. 

Can we have a look at the approach to prioritising and selecting major highways enhancement projects in Wales—specifically, whether the national transport finance plan and the local transport
plans provide a clear pipeline of appropriate projects, and do these plans support and integrate with wider Welsh policy, particularly economic policy in Wales? 

I think, for us, it's a step in the right direction. It's useful to have everything in one place and have it annually reviewed. I think this is a common theme in our evidence today, but I think we would like a better pace and a higher scale of ambition when it comes to the projects that are mentioned in those schemes. But we understand the financial imperative underpinning the shift to a higher number of smaller interventions, which, it is believed, will have a better, longer-term benefit. We'll wait and see what happens there; that's a bit of an experiment with the plan under the Minister. But, obviously, there's the prioritisation of modal shift, and that's very, very important. We're not saying that roads are the be-all and end-all, you do require a modal shift, but you also have to remember that roads will remain the dominant form of transport for a lot of firms. 

The only thing that we don't really think is helpful is that, at the moment, they don't prioritise the projects within the national transport finance plan, and that makes it very difficult for the procurement benefits, to align up skills and training needs, if you don't have a perception in the private sector of what road is going to be next, and not only next but the next few and the next few. If they could prioritise it, that would be much more productive in terms of procurement.  

Would anybody else like to comment on that? The suggestion from the FSB is that the approach to traffic forecasting leads to poor investment choices, and evidence from the Campaign for Better Transport questions the extent to which road enhancement schemes cut congestion and bring economic benefits. This was brought up by Lee Waters a little earlier. What are your comments on that? Do you think the forecasting systems are right? Are the models right? 

This may shock you, but we have complete confidence in the Welsh Government's forecasting methods. If anything, we think they under-predict the likely growth in road congestion issues. As the Office for National Statistics stated in their latest bulletin on road congestion and road conditions in Wales, the traffic volume on motorways in 2016 was 3.7 billion vehicle km. This is the highest recorded figure, surpassing the previous peak in 2007 and 2015. That doesn't seem to be a signal that people are moving away from the car. 

Which may be a good thing, actually, if it's freeing up for other types of transport. 

The fact that CECA has criticised the approach to project procurement and slow decision making when approving schemes, suggesting that these limit value for money in major enhancement projects—we've seen this, obviously, with the M4 motorway, the hugely protracted time factor that's gone on there.  

An anecdote, just so that you know, is that the original M4, when it was planned out, was planned out in 1942, and you will probably remember there was something else going on in 1942, but it didn't divert the Department for Transport at the time from coming around and thinking, 'We probably need a motorway here'. If you cast aside in the next few months the decision with the black route, don't believe that the blue route can be pulled out of a hat within months. It will probably take eight years, just like the last wave of the black route has taken. So, the reason we called for the national infrastructure commission in the first place in our manifesto before the last Assembly election was the hope that we would speed up the process for deciding new infrastructure projects—not limit the democratic debate, but have a confined space in which you can have a lively discussion but then come to a decision. And, at the moment, we're not there yet. 

11:15

I think the process takes too long. To be fair, I don't think Wales is any worse than other parts of the UK when it comes to decision making. One of our members is just about to start work on the Caernarfon bypass, and that decision-making process has taken far too long as well. So, I think it's common, but it's common across the UK, and I think some of it is down to procurement, but, equally, some of it is down to the process that we currently follow, so maybe that needs improving as well. 

But, if we're looking to attract companies from abroad, the idea that these decisions take a long time is taken into account. We have one member that came to something recently, who'll be nameless, but they were competing for investment in Wales, and it had taken them years to build a factory, and they said, 'Well, they're up against places like Germany that do it in about a third of the time.' Therefore, the main board weren't that keen on future investment in Wales because of the time it takes. And it's the same with the infrastructure. If you put a plant somewhere on the basis of just in time and you're expecting the road to be built and the road isn't built—. So, we do need to get to—.

Yes. If I can just look at the relative importance of trunk roads and highways, as opposed to local roads, where do you think the money ought to be going? Which would give the greater economic value, then, to—?

Well, if you look at strategic economic planning, if you look at the metro, if you look at the start that is happening right now with chief regional officers developing regional economic plans, if you look at city deal and growth deal plans, they all envisage business parks, more distribution centres. That has to be planned over the long term, so that's going to increase capacity. So, you have to prioritise those roads that underpin the economic development that you wish to see. And, at the moment, we seem just to be making remedial repairs rather than planning for future capacity need. And that has to be a shift. You've seen in China—there was a story the other day of a bridge built in nine hours. It doesn't have to be this way, and there is another way other than a 28-year discussion on one stretch of road. 

Obviously, the M4—we must come back to that, because it's the biggest project in Wales, so it's going to suck an awful lot of money out of the budget that's available. Mike, what do you think? Do you think that money ought to be spent on the M4—you're in haulage—as opposed to local trunk roads? Where do you feel that it ought to be spent?

Obviously, from a personal point of view, as a company, we would want the M4 to be built, no ifs or buts. But we also realise it needs to be a balanced approach for all roads, because we deliver on everything. We do everything from port to door. We do last mile deliveries, but we also do the full trunk from John o'Groats to Land's End. We need all roads to be sufficient for the vehicles we've got, because if we're coming to pinchpoints all the time, we, as a company, are just wasting money; we're wasting time and resources, and we're already tight on schedules, not only on delivery points, but on drivers' hours regulations and everything else that we have. So, potentially, where we have a pinchpoint, our miles per gallon go down possibly by two miles per gallon. And the pinchpoints are around where our least green areas are—Port Talbot, Cardiff, Newport especially—and, if we're just sat there waiting to go, we're just wasting everybody's money. 

Yes, there is just one. The last matter is: one of the things that could be used obviously to do, I must say, major projects, because they are talking about a baseline of £300 million, is MIM, which is the investment model that the Welsh Government—. Do you have any—?

Just to add on that point about cost-effectiveness, the idea that roads are planned and plucked out of a hat is sometimes believed and is a common misconception. For example, the M4 relief road has a benefit-cost ratio of 2.22 per cent. These are rigorous assessments—that for every £1 invested it will deliver £2 return in economic gain, and that's the Welsh Government's analysis. In terms of MIMs, I think it's a very interesting model. It is a public-private partnership model that transfers risk to the private sector. That's great. I think it's early days still in terms of how it will be developed in terms of economic infrastructure as opposed to social infrastructure. But the key thing is pace and scale. It's great having MIMs there, but, if you don't have the capacity and the money within the budget to actually roll out the MIMs on a broad range of schemes, then it's still a niche solution to a more complicated problem.

11:20

We're struggling for time a little bit. Thank you for your questions, David. I've got Mark Isherwood and Lee Waters, and then I want to come to Hefin David to lead on the last section. So, just brief questions and answers, if possible. Mark Isherwood.

Yes, very quickly. You referred to Caernarfon-Bontnewydd, and I'm familiar with the situation, and clearly the successful contractor—your member—had a clear business need, having won the contract, to see that through. A lot of delay, however, was caused by local businesses, because the business impact assessment had not been completed at the time that the decision was taken on the preferred route. So, how important is it, therefore, that local businesses are involved in deciding on priorities and preferred routes before the contract is put out to tender? And are there any models you can point to in Wales or elsewhere where that happens better that we could look at?

Yes. In answer to your question, I think the problem is that, whenever you try and do anything, there are often objections from all parties. And I agree that—as I said earlier, I think the process needs to be improved, and needs to be streamlined. And I think if we can improve the process so that that means that, when the contract is awarded, you can immediately proceed, rather than what happens at the moment, which is that the contract is awarded and then everybody expects spades in the ground and then they find various other objections down the road. That can be ever so frustrating—(1) for the contractors and (2) for the people involved, or who want to see the road built. So, I think that's got to be addressed again.

I think that, key to that point, the information was available at the beginning, but, because the formal impact assessment wasn't concluded, things were out of step, and it ended up with the costly consequences that you described. But do you know of any models where affected business in a locality is better engaged?

I think, because of time, we can write to you on that.

Yes. Tempting as it is to get into the figures that Leighton Jenkins has quoted about the time-saving benefits and the economic modelling, suffice it to say there are other studies that call that into question, but put that to one side. In terms of the impact of automation, I'd just like to ask you about that. Because, obviously, as you said, the debate around the M4 in particular has been going on for some 30 years; the challenges we know that are going to come in the next 30 years are going to be very different. So, what's your best estimate of the likely impact that smoother-running traffic flow, through a gradual automation of the motor car, is going to have on road capacity?

Just to answer that briefly, we can share with you a Princeton study, which you may be aware of, which says that, in the long term, autonomous vehicles do have the potential to increase road capacity and the efficiency of the use, but that's a very long-term goal. There is this Princeton study that actually says, in the short term—so the five, 10 years of autonomous vehicles being introduced, and they haven't been introduced yet—they will actually reduce road capacity, because they actually drive in accordance with the rules, which a lot of existing users don't. So, you actually need a ubiquitous 5G network in order to support autonomous vehicles, you need 3D digital mapping—that's also ubiquitous—and you also need 95 per cent of all vehicles on the road to be autonomous in order to interact and communicate with each other, in order to act as a collective to reduce the use of the road that they take up. So, they definitely will increase road capacity, but it's that question of when they will do that, and on that the jury is out.

Isn't there also a figure on how much more space they need?

Yes, we can share that with you. They actually take up much more space in the short term—the five, 10 years—of autonomous vehicles actually becoming a reality, and they're not a reality yet.

Right. Thank you. I'll come to our last section in a moment. What I will say is that, at the end, I will ask each of you to make any final comments. We have got, a fortnight today, the Welsh Local Government Association coming in, the trunk road agencies, and the relevant Minister is coming in to committee. So, I will ask each of you, succinctly, to tell us what you think we should be asking them, and what you think your top priority should be in our recommendations to Government from a strategic point of view. So, I will ask that at the end of the session. I come now to Hefin David.

Can we just take this opportunity to explore on the record your views of the future generation commissioner's evidence to the M4 relief road inquiry, where she said that as equal a weight as possible should be given to each element, not allowing one element to tip the scale—namely the economic element of the future generations Act—so that economic priorities shouldn't be prioritised over environmental priorities. I think, Mike Plaut in particular, you've been critical of that.

11:25

I made a general comment, not a personal comment attacking the commissioner in any way, but a general comment that I believe that, if we are to see a prosperous Wales, we needed more engagement between the commission and business, which hadn't been happening. There was a lot of frustration amongst our members, saying 'Why isn't something happening?', which is why we went public and said things in public. 

The issue, for me, is that—. That point is something where Welsh Government and the commission have, obviously, two different views on how the Act should be looked at—what should have priority, what shouldn't. I'm not a lawyer and that's for them to decide. Wearing my hat as a business person, I'm just keen that, in the future, people have jobs. I love the idea of what we're standing for here with the commission and everything: some of it is apple pie and motherhood, which we all like—it's great. We all want to see these things: a healthier Wales, a resilient Wales, a more equal Wales, cohesive communities, a vibrant culture and a globally responsible Wales, but, being a business organisation, I want to see a prosperous Wales with jobs, competitive. I know how competitive it is in the world and, actually, I think that unless we actually start realising how competitive it is, we're going to lose out in Wales—we're going to have less money for health, less money for everything else. So, as a business organisation, I wanted to put prosperous Wales up there so that it doesn't get forgotten about.

As an observer from the outside, watching and reading these media reports, it seemed to be quite a direct criticism of the future generations commissioner, though. I appreciate you saying that it's not personal, but did you use the word 'cherry-picking'—that she was cherry-picking the Act to defend not going ahead with the—?

I don't think I made any specific comments on it.

I don't know—I haven't got the thing in front of me. I haven't got the transcript; you probably have.

No, I haven't, only what I've read, and those words were quoted in the press. But you're saying those words weren't yours.

I don't know. I can't remember what I said, I'm afraid. All I can say is that a lot of people seem to want to involve us in a fight between us and the commission. There isn't a fight; we made a statement saying the issues we had. They have since engaged with us. We have a good relationship with them. 

I'm not trying to involve you in a fight, by the way—I just wanted some clarity as to what was said.

We are doing quite a bit of joint work at the moment, interestingly enough, going back to your point.

Absolutely, and it's never been in question. What we feel is that there hasn't been enough, or definitely wasn't enough, interaction with the business community.

So, would you reverse that view that you introduced, that we should have a rethink of the well-being of future generations Act? Do you think that that was probably something that was said in the heat of the moment when, in fact, the Act is pretty robust?

I think the issue for us is around the interpretation of the Act and, at the moment, you've got two differing interpretations of the Act: you've got the commissioner's interpretation, and you've got John Davies's interpretation, who gave evidence to the M4 inquiry, which talks about a balancing of the well-being factors. That is not great for business, because we need certainty. So, for us, we believe that the John Davies interpretation is the way to go. I think the Welsh Government and the future generations commissioner need to speak and agree on an interpretation and then come forward with the one—it's not helpful to have two.

I'll come back to you in a moment, Hefin. I know, Lee Waters, you've said that, for good reasons, you have to go early. Is there anything you want to ask before you have to leave?

I'd just like to clarify that point to Leighton Jenkins on the lack of clarity on the views. Do you think a judicial review would be helpful, then, to get legal clarity on which view is right?

I'm reluctant to go to lawyers. Hopefully, the Welsh Government and the future generations commissioner could agree a sensible interpretation. Obviously, it's been a bit of a bruising exercise with them having two different interpretations. I think it should be a democratic process. There should be a consultation and then we should have a public discussion about which interpretation we feel more comfortable with, as a country.

So, perhaps we can read too much into this idea of a rethinking of the Act—you're not talking about rescinding it; you're actually talking about how it's interpreted and clarity then.

There does need to be a rethinking of the interpretation of the Act if there are two different interpretations around.

11:30

'Rethink' is quite a strong word, isn't it? It implies rethinking the legislation—

Well, there are two thoughts on the Act. One is the commissioner's; one is the Welsh Government's.

This is semantics. I think what we were trying to say is that there is a confusion, and, if the commissioner is interpreting it in one way and the Government's interpreting it in another, we need to have a rethink on how we're approaching the interpretation of the Act.

I think it's helpful to take the opportunity to put that on the record, though, because, as you say, you can't remember what you said—

I don't think you probably could from what you said there—

Well, I read what I read in the press, and it's a case of putting this on the record today. So, what you say today will be transcribed and will stand.

I think we want evidence-based interventions by the commissioner, which are based on economic facts and economic reality. That's what we—

I think that's helpful and clear. I think that's very helpful and clear. So, what about the importance of ensuring provision for active travellers in the construction and maintenance of these kinds of projects? How do you feel about the fact that the Civil Engineering Contractors Association said that the needs of cyclists and pedestrians need to be given far higher priority in terms of any decision-making process? Do you think that's fair?

Mike, do you want to raise the—[Inaudible.]

We are members of FORS and CLOCS, which prioritise the needs of vulnerable road users—cyclists, pedestrians and everything else. When planning is done, you've got to take them into consideration as well, and potential segregation of those from the vehicles that are moving, but also as well, let's take it very back to basics to school—the safe cycle scheme has finished. For cyclists going out on the road, there are no safety requirements, there's no prior learning, there's no insurance, nothing needed. So, when things go wrong, it's always potentially the bigger vehicle that's on the road that's going to be blamed, and we're having to put camera systems and telematics into our vehicles as self-defence, ahead of what's coming up. Because it's poor, the interaction.

I believe there has to be some kind of segregation of both, but also an allocation in the planning for both. So, whether you have cycle lanes or whatever else you think it may be, whether it's subways to segregate them away, there are lots of things but, on the infrastructure we've got at the moment, it isn't suitable. Let's jump out of Wales a minute and say we jump into London at the moment. Put yourself in a car anywhere around Shepherd's Bush or anywhere around the A4 in London at 5 o'clock in the evening or 8 o'clock in the morning and it is—. Catastrophe is just waiting to happen, purely because, although they want to get onto Boris bikes, and Sadiq Khan wants to push more cycle lanes and everything else, there is nowhere for them to go. It just isn't there. All these big cities want what they want, but, if we can't get in to deliver it, you're not going to have it. You're not going to deliver a pallet on a bike.

Any further questions, Hefin? No. Right. In two weeks' time, we have the Welsh Government Ministers before us in committee, we have the Welsh Local Government Association and the trunk road agencies. What I would like to know from each of you just briefly is what you think we should be challenging them on, and what questions should we be putting to them. We've got our own views on what we think we should be putting to them from the evidence we've received so far, but what do you think we should be—? What challenge should we be bringing to them? And if I could also ask, if you could give us your top strategic priority that you think we should be recommending that Government needs to do to address the state of our roads, tell us what that is as well. We have to be brief, though, because we're just a bit over time. Who would like to go first on that? Mike Plaut, you look like you're eager to go.

I'd just like us—. It's all about competitiveness and how do we ensure that Wales has competitive infrastructure going forward. That's what I would love to see answered. And, if it's roads, how do we get an infrastructure that is fit for the purpose?

I think, sadly, we've got to make some brave decisions and look at what bang for the buck we'll get. Down in south Wales, I believe that the M4 is needed not just for south-east Wales but for west Wales and the Valleys, and the south bit of mid Wales. If the north bits of the Valleys and the south bits of mid Wales and west Wales are going to be open for business, we're going to need to build the M4 relief road.

Going back to the original point, I think there needs to be a far more joined-up approach to everything than there is at the moment. I think the point about the various roadworks going on at the same time—. From a personal experience, I drove back from Cardiff at 11 o'clock one evening recently and the M4 was closed twice. 

11:35

The organisations are there. Going back to Leighton's point about regional working, if all these organisations were working in a more co-ordinated approach, I think you'd avoid some of the challenges that are currently coming about. I think, at the moment, they don't seem to do that. Things seem to happen in isolation. I think it's a challenge. 

I can give Mike the contacts for Caerphilly council's communication unit, so Pwll-y-pant should be a little bit better for your organisation. 

The challenge is that when you make a journey you can cross multiple authorities. 

These are challenges that we'll put to our witnesses in two weeks' time. 

And any projects, I think, again, reflect economic need, so, if you're looking at the economic need of it when approaching it—.

I am particularly looking at what you think should be a strategic recommendation we should be making to Government. 

One thing to ask—. You asked about questions or issues for the WLGA and the trunk road agency. I think we have a lot of sympathy for them in that they have to maintain an extensive road network with diminishing budgets. So, what would be interesting, from our perspective, is to see what funding solutions—. Because the MIM is too big. So, what would they want to see in terms of a local funding solution to increase the maintenance and the building of new roads in a local area, how do we increase the pace and scale and what could business do to help them make it more efficient and more effective. 

Are we not communicating our needs in a longer-term view that helps them or hinders them planning their road capacity and their road building and maintaining schedule? 

I think we could be clearer about what we need, but, to be fair, I think we've been quite clear about what we need in terms of infrastructure and priorities. The question is around delivery. It's not really so much about clarification from business. I think you need something like the national infrastructure commission that has a finite time period for discussing these projects and commits to delivering them once the conversation is over, rather than endless discussion. 

I'll look to the businessman now, and if you were the First Minister, what would be your—? If you were the new First Minister later this year, what would be your action to get the state of our roads organised? 

As a business, we just need to get from point A to point B as quickly and as cleanly as possible. Whatever roads are decided upon, let's just get ahead and do it. Let's stop talking, let's have a bit more action. And when it's going to happen, give us start and end points so that we can plan to, and if the end point is going to be pushed on then they issue penalty clauses, and they should be open and honest as to what those clauses are and who's paying for it.  

In the whole process. This M4 relief road, whether it's black, blue, green, purple or whatever one you want it to be—it's been going on for so long now, we're at the point of, 'Is it ever going to happen?' We just seem to be stuck, or if we're not, we're in low first gear without ever seeing a chance of getting into second. 

Okay. Thank you for your time. We appreciate you're all busy in different jobs and we very much appreciate your time coming to committee this morning. There were a couple of offers of some written evidence on some areas. We would appreciate that, and that will be taken in equal weight to what you've said this morning with regard to concluding our inquiry. So, we appreciate you all coming in this morning. 

Very quickly. Mike, I use the approach to the tunnels in Newport all the time, and I find that the actual traffic signals for slowing down traffic causes the tailback. Do you think that that's the case? 

11:40
5. Model Buddsoddi Cydfuddiannol—Cyflwr y Ffyrdd yng Nghymru
5. Mutual Investment Model—State of Roads in Wales

I move to item 5 with regard to our inquiry into the state of roads in Wales. This is our last panel this morning. We've already had representations from the FSB, the CBI and others. We're very grateful for your time this morning. Perhaps it would be useful if you just introduced yourselves for the public record. 

I'm Christopher Nott, and I'm a senior partner of Capital Law in Cardiff.

I'm Stuart Pearson. I'm a senior associate and head of the construction, energy and projects team at Capital Law.

Thank you. We're very grateful for your time this morning to help us with our inquiry. I'll come straight to Vikki Howells.

Thank you. Could you help to aid my understanding of the mutual investment model? Exactly how is it different from standard public-private partnership or private finance initiative approaches? What are the key features that are different?

Of course. Firstly, if I can just say before I answer that specific question that the submission that we made to you was on behalf of our firm as a whole. We're very keen to do what we can to support the work of the Welsh Government, but that was the work of a number of lawyers of different specialisms. Today, you have two lawyers with two specialisms, so, if we get a question that actually relates to the skill set of one of our colleagues, we'll give you our best answer but we'll follow it up with a specific answer from them as well.

In layman's terms, they all look and smell alike, and they're all animals from the same gene pool, but it's in the detail. Effectively, MIM learns the lessons of PPP/PFI, and it turns on the shifting of risk. So, in PPP/PFI, the risk was put into the project, but a shift in risk shifts cost, and that cost grew down the pipeline and gave those funding arrangements a bad name. In MIM, the analysis of risk is done at the front end in a very detailed procurement process so that the contractor knows exactly what they're going to build and the financier knows exactly what they're going to finance. That's essentially the difference: by having a sophisticated procurement process, you can evaluate risk before it's passed on and before it's funded.

Thank you. Those differences between MIM and PPP or PFI—how are they likely to have an impact on the delivery of schemes, then, in practice?

Well, if one develops a sophisticated procurement process—of course, this thing turns on the ability to have a sophisticated procurement process—it unlocks almost infinite capital. You almost don't become capital constrained, except in this way, which is that that procurement process has a cost—the public body that is leading the procurement has to bear that cost. You're going to ask me in a moment, 'What would that cost be?', but it's a relatively small amount of money in the context of the overall scheme. If you can take projects that are—if I can call it this—MIM-able or potentially MIM-able, and then make them MIM-ready by that procurement process, you have the potential to unlock huge amounts of capital. 

Thank you. One final question, then: there is some evidence that suggests that MIM would be more expensive than direct funding or borrowing to fund highway schemes. Is that true when lifetime costs, including maintenance and management of highways, are taken into consideration? Under what circumstances would you say that MIM provides value for money?

The answer to the first question is 'almost certainly'. It's almost certainly going to be more expensive than the cost of providing your own public capital or doing direct borrowing, but you can reduce that gap by—. If you have a comprehensive procurement process, which manages the risk down, that prices the capital more cheaply and you narrow the gap between the public cost, the cost of the public capital, direct borrowing and the cost of the MIM money. It's in how you do it.

11:45

And over a lifetime of a project, then, is that where savings could also be made?

Well, in lots of ways, we couldn't say to you what would be the cost of MIM money, because it would vary on a project-by-project basis. The better the procurement and the more the risk is managed, the cheaper the money. Over the lifetime of the project, if you're managing the risk out, what you do is you separate out planned maintenance and unplanned maintenance; call it 'hard maintenance' and 'soft maintenance'. Hard maintenance is a pre-planned, pre-costed programme—you know, 'We will paint the bridge every three years', or 'We will repair this stretch of road every two years.' Soft maintenance is, 'There's been an accident and all the crash barriers have come down and we've now got to send out people.' How do you cost that? If the public authority, if I use that general phrase, take responsibility for the soft, unplanned maintenance, where you can't price it precisely, that makes a more MIM-able project. I'm talking in acronyms now.

MIM, as I understand it, requires a detailed procurement process, and we've heard that the highways scheme procurement processes are poor. So, is that a risk for MIM?

Yes. From what we see, the metro procurement process demonstrated a capacity to do such things pretty well, but MIM-able depends upon building and setting very high the standard of the procurement process, because it's that process that manages the risk. So, the more detailed it becomes, the fewer contingent items that you have in the costing process. The fewer contingent items you have, the more certainty you have over pricing and the lower risk you have, but it turns on one's confidence in the ability to procure.

Here's a question I never thought I'd ask as an Assembly Member: what are the characteristics of a MIM-able highway project?

I'm almost going to repeat the answer I've given before. What you've got on a highways project are lots of stakeholders: you've got planning, you've got local communities, you've got economic—. We were watching the discussion you were just having with members of the CBI. You've got all of those parties. You have to work through the consultation with all of them to remove all of that out. All of that discussion has to be had, and decisions of certainty have to have been arrived at, at the same time as you're pricing the project correctly.

Okay. So, these are big-ticket projects. You wouldn't use them for minor—

Local repair and maintenance programmes wouldn't be MIM-able, then, in that case.

Okay. So, what about—? Let me get a sense of scale, then. If you've got a local authority trunk road scheme, would that be open to this kind of approach? I'm thinking about the pinch-point issues and—.

Well, you've got two factors that come into play. One is that you really need a scheme of £200 million to £300 million in order to get the scale of funding that you need at the low price that you need to make this really cost-effective. And secondly, the procurement process—the thoroughness of the procurement process lends itself to bigger schemes. But there's also always the concept of pooling from a local authority basis. Can I just make a local authority point? At the risk of really not wanting—. We're trying to be apolitical. One can see how the Welsh Government has gone on a procurement journey, and one can see how the procurement process was done, for example, with the metro. One struggles to see how a local authority, whose procurement function is geared towards lower-ticket items, could make something MIM-able, and whether there is the notion of a centre of excellence where the Welsh Government helps here, by developing the skills that are needed to make something MIM-able, that cascades that best practice down or connects that best practice with local authorities. 

11:50

Okay. We've talked today about the Pwll-y-Pant roundabout in Caerphilly. I don't know if you're familiar with that one. It's a local authority scheme using Welsh Government money that just about fits that financial criteria that you've identified, but, as you say, the skills involved are key. And, I suppose, leading on to my last question, then: MIM is in early stages in Wales, should we be cautious about the deployment of this process, particularly given some of the things you've already said? So, what kind of expansion and deployment should we expect to see in the next few years of MIM projects? 

Caution, yes, because for the reason I've mentioned, it turns on one's ability to procure brilliantly. So, let's develop it on one project or a small number of projects. But the bigger picture, though, is developing the MIM-able pipeline. There's no reason why one can't look forward four, five, six years and identify the sorts of projects that one might be working on, which gives the contractors and the funders and everybody visibility of where we might be going if this particular scheme works well. 

So, could there be a point at which we reach a critical mass where we can develop a MIM culture of development? 

Yes. That's kind of the point, yes. 

Looking at a different aspect of procurement, evidence from the civil engineers suggests that the approach to procurement in Wales is highly variable, bureaucratic, and focused on lowest price. Do you agree with that statement? What specific steps will you take to improve the procurement process? 

Yes, that's right. That's our experience. What this process gives us the opportunity to do is to move towards a best value procurement process, rather than a lowest cost procurement process. The method that's used at the moment, essentially, is called an open process: 'Here's my specification, what price will you give me?' That leads to bidding against low value against that specification, whereas if you have early contractor involvement, and what you have is a dialogue whereby public authority and the contractor, with the financier in the background, have a dialogue over what it is one wants, you can move towards best value. This brings in the well-being of future generations Act as an opportunity, because you can—. Let's take a silly example. If you had a dialogue over a road surface, 'This is a long-term, high-quality, environmentally friendly solution, but it's expensive', and, 'Here is the cheapest solution that's not environmentally friendly and will wear out', rather than say, 'Give me that' or 'Give me that', you have a dialogue about, actually, there might be a way in the middle ground in which you can develop that, so that you can have a best-value culture. 

Fine. The Association for Consultancy and Engineering suggests that there is a lack of visibility in the pipeline of major highway announcement projects in Wales. What do you think are the implications of this for securing value for money in the procurement process?

That's right also. The more visibility that one can have about what projects might be and what the scale of them might be and what the timing of them might be, the more people are able to align their resources and the more dialogue that one can have. The corollary of that is the more dialogue you've got, the more people in the public sector you've got having that dialogue, the more the cost of having a dialogue goes up. And, so, the recognition is that there is a need to capitalise the front end of this in a proportionate way—to capitalise the front end of it so that one can have this early contractor involvement on a significant scale across a range of projects.

We all know that the future generations Act and the active travel Act overarch a great many of these developments, as such. Evidence suggests that there is still some way to go in terms of implementing the well-being of future generations Act. Do you have any views on how might the contract in the procurement process for highways be used to support the implementation of the Act? 

Well, it seems to us that this more comprehensive early procurement process, where you have early contractor engagement, lends itself ideally to the well-being of future generations Act—the application of it—because you have the opportunity to have a dialogue about how you can make changes. If you take my two examples of road surfacing, this one will fit the objectives, or could fit the five ways of working, whereas this one might not. So, this might be the cheaper solution, but applying the Act, you could work it that way. It seems to be a way in which you can bring it into the normality of the way in which we operate.

11:55

Okay. We heard a little bit of evidence earlier on that the old procurement project may have been finalised, but a little further down the lane because of financing going wrong, things like footpaths and cycle paths tend to be thrown aside as the casualties of funding. How could we overcome that?

Well, it comes back pretty much to the same point, which is that in a comprehensive procurement exercise you will have worked out exactly what the costs of all of those will be. They will not be left to contingent elements. So, you will say, 'Alongside this dual carriageway we will have a dual track secure cycle. That will cost x.' It will be built at the same time, and when anyone starts the project, that's in the centre of it, not a marginal item that gets talked out as the costs go up.

The Government already uses early contractor involvement. What do they need to do differently? How can that be improved?

The general concept of early contractor involvement fits in with all the sorts of ideas we've been talking about already, and getting that contractor involved, working collaboratively, provides insight from the industry and, in theory, is an exceptional way of delivering projects. Where the criticism comes from is that the contractor you've got involved from the outset is placing themselves to be the contractor for the project itself. There are a couple of examples where actually using a couple of contractors in the early contractor involvement scheme then brings back that competition level, and then you've got a competition for delivering the project as well, and you get a wider view at the early stage. But it comes back to a cost point: having two contractors involved is going to increase the procurement process and the costs generally at that stage. So, I think it's looking at the nature of the project, the value of the project, and whether doing that is proportionate to the project itself, because it will.

Yes, I've understood that. It's bringing in two companies where, at the moment, you're just using one company. You think that that would be a good approach for the Government to take.

Yes, I think it would, definitely. In the larger scale projects, introducing greater competition can only drive cost and project specification.

It would transfer to smaller projects as well. I guess it's that cost of doing so. Would it become disproportionate to have two main contractors competing with each other, in effect?

You've talked about the benefits of contractor involvement. What are the risks, and which projects would it be best suited to?

What was the second part of the question?

So, early contractor involvement and which projects would it be best suited to.

Well, what are the risks? We heard the benefits. Are there any risks; what are they; is it universally applicable, or are there particular projects it's best suited to?

Okay. The main risk is my point around: you have a contractor involved at an early stage who basically puts themselves in pole position for delivering the main project. That, for me, is the main risk. The benefits do tend to outweigh that because you have collaborative working and you can iron out the issues along the way. But the main risk is that one contractor who understands the project is going to be in pole position to deliver the main project. I'm sorry, what was the second half of your question?

What particular type of project is this best suited to? Or do you see it as universal?

I see it as pretty much universal. Again, there needs to be a sort of cost analysis as to the benefit of involving a contractor early on, because is it proportionate to the overall value of the project to have a contractor from the outset? Because you are getting the benefit of a contractor with knowledge of delivering these projects, whereas the tendency is, authorities may not have that high level of experience of delivering particular projects.

12:00

If I could just supplement that by saying that I think another risk is in the procurement methodology itself and in the building of an effective procurement team, because a lot of trust and confidence will be put in that process and repeated time and time again.

And how early should early be? We heard evidence earlier about delays in delivery on contracted projects, such as Caernarfon-Bontnewydd. A lot of that was because the commissioning or the contracting occurred and the decision on preferred routes had occurred before the direct engagement with local businesses and local communities, and before the outcome of the business economic impact assessment. Should that be occurring before the early contractor involvement, before the decision on the preferred routes is taken, or are you saying that we should be engaging with those contractors even before that local engagement has occurred?

For me, early is as early as possible, really, and for engagement in that process to understand the issues around the project and to engage with the key stakeholders, which the criticism tends to be that delivering projects like this takes a long time. So, having all those stakeholders, including the contractor, involved as early as possible will allow the process of understanding risk and managing that risk to operate alongside the statutory processes—planning, public inquiries, et cetera, et cetera.

Risk of conflict of interest if the contractor's business priorities may differ from the business priorities of the local business community.

But all we're asking the contractor to do is provide insight to the project to help work up a scheme, aren't we?

Okay. How do you respond to the suggestion from the civil engineers that procuring authorities tend to want to transfer the risk to the contractor, negatively affecting value for money?

Well, they do. It's pretty much where PPI, PFI, fell down. It was over that crude—can I call it crude—that cruder shifting of risk that leads to bigger contingencies that loses value for money. What the MIM process does—it's better to say it allows the joint evaluation of risk, and the joint pricing of risk, by a much more comprehensive procurement specification model. And at that point in time, when that's understood, the risk can be priced and then it's passed on. So, it's passed on at the moment that you can—. It's passed on after the process rather than earlier in it.

Again, referring, I suppose, a little bit to the earlier point. We heard reference to approval processes and political processes delaying delivery on projects. How do you feel the process could be better streamlined to protect the rights of individuals, communities, businesses, environmental interests and what have you, ensuring that the merits of schemes are properly assessed before we start spending big bucks?

Well, I don't want to give a blasé answer, but these things will always take time. I mean, 20-odd years and 30-odd years are extreme examples, but as a lawyer who gets involved representing a range of parties that might be involved in these projects, there is a need for stakeholders to have their voice; there is a need for a proper planning process.

We can always put tighter time frames around things, tighter time frames around consultation and the like, but what, in our view, is more effective is having a longer view on the pipeline across a range of projects, so one knows what's coming down the pipeline, and getting that debate and discussion out early—getting the discussion started early. If you start it early, then you can finish it early, and also run the procurement process when you get any more certainty in parallel with it. Do you want to add to that?

No. The only example I would use is that A465 dualling has been in the pipeline for some time. It has got stakeholder support, and to all intents and purposes, is running well and evolving well. So, I think that's a good example of where that working with the scheme that's in place—the statutory planning obligations and getting that stakeholder involvement early on—has allowed that scheme to move on.

12:05

Thank you very much for your comprehensive written evidence to us and your evidence this morning. Your professional input has been very helpful to our inquiry, so we appreciate your valuable time with us this morning. So, diolch yn fawr. Thank you very much.

6. Papurau i'w nodi
6. Papers to note

I move to item 6. There are a number of papers to note. Are Members happy? Noted. That brings our meeting to a close. So, we're back next in public session in two weeks' time for our final session on the state of Welsh roads.

Daeth y cyfarfod i ben am 12:06.

The meeting ended at 12:06.