ian wray mega projects and regional revival: comparing ... · tyuk at salford quays is a...

TPR, 85 (6) 2014 doi:10.3828/tpr.2014.44

Ian Wray

Mega projects and regional revival: comparing proposals for Atlantic Gateway and high speed rail in northern England

Ian Wray is a Visiting Professor in the Department of Geography and Planning and Visiting Fellow in the Heseltine Institute for Public Policy and Practice, University of Liverpool. He was Chief Planner, Northwest Development Agency, 2000–10; email: [email protected] Paper submitted September 2013; revised paper accepted June 2014.

The paper considers two mega projects, which it is claimed will transform economic prospects in northern

England, specifically in the North West of England. They are Atlantic Gateway, a mega project driven

by the private sector, focused on ambitious plans for the redevelopment of brownfield sites; and High

Speed Two (HS2), a mega infrastructure project, led by the UK Government. Reviewing and comparing

the characteristics of both projects, the paper concludes that despite its private sector provenance,

Atlantic Gateway may have more in common with a developmental or goal-orientated approach to

strategic planning than High Speed Two, and be less exposed to the public sector financial risks often

experienced in mega projects.

Keywords: mega project, infrastructure, Atlantic Gateway, high speed rail, regional planning

Introduction: mega projects and British governance

With some arguable exceptions such as the 2012 Olympics, it is widely acknowl-edged that Britain does not excel at the planning or execution of major infrastruc-ture projects. The ‘Armitt Review’ found that the problem had its root causes in the UK’s lack of long-term strategic planning, policy uncertainty, lack of funding trans-parency and the length of planning processes (Armitt, 2013). In his seminal book on great planning disasters, Peter Hall dissects four celebrated examples: London’s third airport, London’s motorways, the Anglo-French Concorde and the British National Library (Hall, 1980). Some of these ‘cause celebre’ failures are still with us. The present British coalition government has launched a commission chaired by Sir Howard Davies to once again examine the options for an expansion of London’s airport capacity, making its first report by the end of 2013 and producing its final report after the next general election in 2015 (Simmons, 2013).

An explanation lies in economic and political history. As the historian Peter Mathias puts it: ‘Britain saw an industrial revolution by consent. It owed nothing to planners and nothing to policemen’ (Mathias, 2001, 4). Arguably, the lack of an absolutist state tradition was (and perhaps remains) a crucial asset, helping to underpin the emergence of political pluralism and inclusive institutions (Acemoglu and Robinson,

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2012). Yet the resonance for British strategic planning and political decision-making is clear enough: contemporary Britain has few of the characteristics of Johnson’s ‘developmental state’ (Johnson, 1982), by which he means a state that concerns itself with setting and achieving social and economic goals. The ‘regulatory state’, of which Britain is perhaps the best example, was early to industrialise, had little to do with new forms of economic activity and took on regulatory functions purely in the interest of maintaining competition, consumer protection and so forth. In Britain, big infrastruc-ture planning can be frustrating and frustrated.

There are those who are sceptical about the benefits of strategic planning in general and mega projects in particular. These sceptics tend to fall into two camps: first, there are the ‘forecasting doubters’, who doubt whether long-term planning is possible at all; second, the ‘planning doubters’, who argue that those involved in planning large-scale projects often overestimate their benefits and underestimate their costs.

Nassim Nicholas Taleb is a ‘forecasting doubter’. His provocative book argues that forecasting is a delusion, that the future cannot be extrapolated for the past and that massive discontinuities, ‘outliers’ and random events play a much bigger role in the future than we might like to believe (Taleb, 2007).

Taleb argues that we cannot really plan, because we do not understand the future. The inability to predict ‘outliers’, he argues, implies the inability to predict the course of history. The only rational response is to rely less on top-down planning and more on ‘tinkering’ and recognising opportunities as they arise; the reason free markets work is because they allow people to be lucky, thanks to the process of trial and error. In the wake of the 2008 financial crisis, this apparently extreme point of view has been influential. Taleb’s argument suggests that the best we can hope for is a cautious incrementalism; and this is certainly what Simmons implies in his persuasive consideration of current options for the expansion of London’s airport capacity (Simmons, 2013). Simmons argues that the development of a new mega project airport for London in the Thames Estuary cannot possibly open before 2030, by which time competitor airports elsewhere will have reacted to London’s capacity shortage, casting doubt on potential demand and thus funding. He argues in favour of an incremental strategy, which expands existing facilities such as Stansted and does not disrupt or close Heathrow, with the subsequent risk of economic damage to its buoyant subregion.

Bent Flyveberg is a ‘planning doubter’. With his colleagues Nils Bruzelius and Werner Rothengatter, he argues that we cannot trust the mega project promoters and their consultants (Flyveberg et al., 2003), who operate self-servingly, misinforming governments, the public and the media, in order to get their projects approved and constructed. Cost estimates are regularly understated and underestimated, demand is overstated, there is spin as well as substance in mega project economics, environmental impacts are undervalued and delusion is employed by politicians and promoters alike,

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in order to get high-risk projects started. Flyveberg et al. argue that governments should reduce these risks by taking a more active role in engaging stakeholders and the public in mega projects; by refusing to give sovereign guarantees to lenders or act as promoters; by increasing the involvement of private consortia and private risk capital; and by reducing the opportunities for influence by private lobbying groups engaged in ‘rent-seeking’ behaviours. They should promote transparency, as public scrutiny is the main and most effective means of enforcing accountability. Since the role of government is to represent and protect the public interest, all relevant government documents should be made available to the public.

Yet there remains strong belief in mega projects as a potential solution to regional problems, and, indeed, it can be argued that cost-benefit analysis and a purely economic evaluation is an inappropriate and misleading tool for evaluating the complexity inherent in mega projects (Omega Centre, 2012). This paper dissects two currently proposed mega projects in northern England, both of which have been given explicit government support at the highest levels, on the basis that they have the potential to bring significant benefit to the regional economy. First, Atlantic Gateway, a mega project that relies on private sector initiative and investment and focuses in large part on the more effective use of inherited basic infrastructure assets. Second, high speed rail, a mega project that has emerged from the government and requires government initiative and funding and entirely new basic infrastructure. The paper reviews both projects, using the insights of Johnson (1982), Taleb (2007), Flyveberg et al. (2003) and the Omega Centre (2012) as a critical lens through which to reach conclusions on their respective characteristics and the wider implications for infra-structure planning in the UK.

Ocean Gateway and Atlantic Gateway

In September 2008, John Whittaker, Chairman of Peel Holdings, unveiled Ocean Gateway – Peel’s plan for the development of its estates in Manchester, Salford, Warrington, Wirral, Ellesmere Port, Liverpool and Sefton and along the Manchester Ship Canal between Ellesmere Port and Salford. At that time, Peel valued its assets at close to £7 billion (Peel Holdings, 2008). Peel is one of the largest companies in the North West. Headquartered in Manchester, it is a privately owned conglom-erate, focused on property, development and transport. In 1987, Peel acquired the Manchester Ship Canal and became the owner of a port, a canal and extensive areas of derelict and disused land. Subsequently, Peel bought Liverpool Airport and the Port of Liverpool (also including large areas of unused dock estate), as well as port and airport assets beyond the North West (Ex Urbe, 2013).

There can be little doubt that Peel is by far the largest individual owner of potential development land between, close to and within the cities of Liverpool and

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Manchester. The company’s ambition, and the scale of its landholdings, is probably without parallel in the UK. Peel has compared its initiative with the Thames Gateway – a long-term development package designed to extend London’s dockland redevelop-ment eastwards into Kent. The parallel is certainly relevant, but with some provisos. Realising the vision for the Thames Gateway would involve lining up the efforts and plans of many different landowners and developers. Across much of Ocean Gateway there is one significant owner, one significant developer and, in certain respects, one significant infrastructure provider. Given the historical importance of Peel’s landhold-ings and the long-term nature of its plans, some parallels might also be drawn with the land management and investment strategies of London’s great estates (New London Architecture, 2013).

Figure 1 The Atlantic Gateway. Source: Atlantic Gateway (2011).


Peel’s Ocean Gateway portfolio included more than forty separate development projects, ranging from the modest to the colossal. The recently completed MediaCi-tyUK at Salford Quays is a media-focused development that houses the activities that the BBC has relocated to Salford, including children’s broadcasting, sport and Radio Five, as well as Granada TV, all within an 80 hectare development. At Port Salford, on land adjacent to the Ship Canal, there are proposals for a large-scale intermodal freight terminal. At the Port of Liverpool, it has consent for and has started construc-tion of a new ‘in-river terminal’, capable of taking the largest new ‘post-Panamax’ container ships. Peel is also part-owner of the rejuvenated Cammell Laird shipbuilders in Birkenhead (Peel Holdings, 2009).

Perhaps the most ambitious proposals are the redevelopment of Liverpool’s derelict North Docks and Birkenhead Docks as, respectively, Liverpool Waters and Wirral Waters, both designated as a single Enterprise Zone. Peel has consent for the Wirral scheme and for a Liverpool counterpart, bringing long-term investment in the order of £10 billion to 320 hectares of land.

The former Northwest Development Agency (NWDA) supported Peel’s vision, rebranding and widening the concept as Atlantic Gateway. The connected economic geography, stated the Agency, provides a unique opportunity for Atlantic Gateway to become one of Europe’s leading low carbon, economic growth areas – second only to London on the UK context (NWDA, 2010). Echoing this view, Lord Heseltine and Sir Terry Leahy have claimed that if anywhere in the UK can develop the critical mass and momentum to become an alternative growth pole to London, it is Atlantic Gateway (Heseltine and Leahy, 2011).

It is not easy to tease out the metamorphosis from Ocean Gateway to Atlantic Gateway. Clearly, Ocean Gateway was Peel’s proposal, predating Atlantic Gateway, and many of the projects identified in Ocean Gateway remain central to the Atlantic Gateway strategy. But, as we shall see below, Atlantic Gateway considerably widened the concept, reflected independent thinking in the Development Agency and proved to be consistent with the content of earlier public sector regional planning strategies. Such evolutionary change is not unusual; the Omega Centre found that most of the international mega projects they had studied were subject to an organic process of development, which often produced fundamental changes in both the scope and scale of a project (Omega Centre, 2012).

Rediscovering the Mersey Belt

Atlantic Gateway appears to be a new idea, yet the principles which lie behind it have a long history. The centrepiece of the Strategic Plan for the North West (SPNW Joint Planning Team, 1974) was a proposal to concentrate development and resources in the area between Manchester and Liverpool – the so-called ‘Mersey Belt’ – rather

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than disperse it more widely across the region. As Glasson observed in 1974, with Manchester and Liverpool only 30 miles apart, the North West ‘cannot afford to ignore the potential of this inter conurbation zone, which is undoubtedly the area of greatest economic potential possessing localisation and urbanization economies’ (Glasson, 1974, 254).

The same commitment to the inter-conurbation zone was reiterated in the region’s first Regional Planning Guidance (GONW, 1996) and again in the region’s first Regional Economic Strategy. Prepared by the fledgling Northwest Development Agency, the economic strategy drew attention to the northern and southern compo-nents of what was still referred to as the Mersey Belt, identifying a ‘Metropolitan Axis’ north of the River Mersey, with important assets in the two city centres, but widespread problems of deprivation, housing and poor environment, as well as a ‘Southern Crescent’, south of the Mersey. The Southern Crescent excluded the two city centres, but included areas with high economic growth rates and high quality environments (NWDA, 2000).

Whilst factually correct, the Southern Crescent concept was politically divisive. It drew criticism from the excluded big cities and northern boroughs, as well as the anti-development southern boroughs and shires. Atlantic Gateway bridges that political divide by including the two big city centres and deprived parts of Salford and Wirral, as well as other areas in Cheshire adjacent to the Manchester Ship Canal.

Before Peel revealed their Ocean Gateway concept, initial work had begun on a single regional strategy for the North West. An unpublished paper (NWDA, 2007) advanced a spatial hypothesis for that strategy. It did so against the following strategic backcloth:

• climate change and potential resource scarcity;• the unassailable dominance of London in the UK’s economy;• the UK’s ageing population, set against forecasts of a relatively large working-

age population in Manchester;• potential shifts between the service and manufacturing sectors post-credit

crunch; and• the cultural richness and diversity of the North West’s cities as an alternative to

London.The paper argued that the North West’s greatest assets were its opportunities of scale, suggesting a strategy building on these in the area within and between Liverpool and Manchester (and Preston), linking the three cities by rail electrification.

To explore this thinking, an objective spatial evidence base study was commis-sioned from the University of Manchester (Centre for Urban Policy Studies, 2009). This research involved a multivariate statistical analysis of a range of area develop-ment indicators across the whole of the North West, in order to determine definitively the areas of greatest need and greatest economic potential. An analysis of past and


recent economic performance used data related to working age population, employ-ment, unemployment, house prices and small firm birth and death rates. Subjecting these data sets to principal components analysis enabled scores on major compo-nents or factors to be generated and mapped, representing data that are highly inter-correlated. Deprivation was measured across the region using the index of multiple deprivation, bringing Liverpool’s problems sharply to the fore.

Agglomeration economies were measured by a proxy approach using a market potential technique. Market potential considers the economic ‘mass’ of a particular place, in relation to all others in the region. Aggregated accessibility scores were calcu-lated for all districts for total population, working age population employment by district and knowledge-based employment by district.

All the market potential analysis pointed to the same conclusions. Manchester is the clear leader with the highest potential for developing agglomeration econo-mies. Liverpool stands alone on the next tier. Below these come the many Greater Manchester and Merseyside districts, especially between Manchester and Liverpool. This statistical analysis, conducted quite independently of work on Ocean or Atlantic Gateway, showed decisively that the inter-conurbation zone, including the two big cities, was the area of greatest potential in terms of potential for agglomeration economies.

Atlantic Gateway and its Board

The Chancellor of the Exchequer gave his support to working ‘with Merseyside’ to realise Atlantic Gateway in his 2011 ‘Autumn Statement’ (HM Treasury, 2011) and arrangements are in hand to advance the concept in the absence of the now-abolished Regional Development Agency. An Atlantic Gateway Partnership Board has been created. According to Peel Holdings, following the abolition of the Regional Devel-opment Agency, the North West Regional Leaders Group (a local authority polit-ical body) took the view that Atlantic Gateway should be retained as a coordinating mechanism for the Local Enterprise Partnerships, and the City Region Chief Execu-tives were influential in determining the mix of projects.1

The Board is described as a private sector mechanism for maximising investment opportunities and its role is to provide strategic leadership and oversee the devel-opment of its investment priorities (Atlantic Gateway, 2011). It is chaired by Geoff Muirhead, the former Chief Executive of Manchester Airport Group. An Executive Director has been appointed – Baroness Susan Williams, former Conservative leader of Trafford Metropolitan Borough Council. Excluding the Executive Director, there are sixteen Board Members: of these, eleven represent or have close connections with

1 Personal information.

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the private sector (three also represent Local Enterprise Partnerships); three are local government politicians; and there is one representative each from the voluntary sector and the Environment Agency. In addition, three local authority Chief Executives (from Halton, Warrington and Trafford) are identified as Advisory Members. It is not yet clear how the arrangements are funded, nor whether they are adequate in terms of powers, human resources and financial resources to take forward an initiative on this scale (though it appears that core funding from Peel is important).

Because of its origins in private sector leadership, the plan is incisive and focused, both geographically and in terms of project priorities. By the same token, it lacks a clear sense of democratic ownership and political leadership. This is a significant weakness, given the historically poor relationships between Liverpool and Manchester, who despite (or perhaps because of) their close proximity have traditionally seen themselves as rivals rather than allies.

The plan is anchored by the claim that Atlantic Gateway is the most significant opportunity in the UK to accelerate major projects and deliver economic growth, especially in high growth sectors and large scale infrastructure projects, thus providing opportunities for investment funds and sovereign wealth funds to develop long-term interests in the UK. It follows that the Gateway should have a central role in the emerging National Infrastructure Plan Phase 2, the investment priorities of the Green Investment Bank, for UK science funding and in forthcoming European infrastructure funding, including the European Investment Bank, cohesion policy and the funding of transitional areas.

The business plan: themes and priorities

The business plan identifies five themes:• growth – driving growth through innovation;• connectivity – creating a globally connected gateway;• infrastructure – developing low carbon infrastructure and technologies;• sustainability – improving the quality of the environment; and• talent – attracting and retaining talent to drive economic growth.

Taking forward the leadership role and establishing the brand will call for a collective Atlantic Gateway response and support from the UK Government. The plan seeks recognition of Atlantic Gateway as a major mechanism by government; recognition of its infrastructure needs in national investment plans; a cross-government working team; and a civil service representative on the Partnership Board. A senior civil servant from the Department of Communities and Local Government now attends Board meetings as an observer.

The top three priorities identified in the plan are the development of Sci-Tech Daresbury as a northern catalyst for investment in innovation, the development of


the port and logistics network and the Northern Hub rail investment programme. Despite its scale and importance, Liverpool and Wirral Waters have not been included as priorities in the business plan. It would appear that the exclusion of these projects is related to objections from Greater Manchester, arguing that evidence is needed of the regional significance of the schemes (GMCA, 2012). Manchester has not been a strong supporter of Atlantic Gateway.

Daresbury is identified as a key priority in the business plan. Daresbury, it is said, is recognised nationally as one of the major investment locations for UK innovation and science and is closely linked with Harwell. Since the Chancellor’s spending review in October 2010, this is doubtful (HM Treasury, 2010). The Chancellor was anxious to protect investment in science and education and in total the education budget was cut by only 3.4 per cent. Announcing several major commitments to funding in new and expanded scientific projects, he said that he was ‘protecting the science budget at £4.6 billion a year’. However, the four major national science projects on the Chancellor’s list were all located in London and the south: the UK Centre for Medical Research and Innovation at St. Pancras, the Molecular Biology Lab in Cambridge, the Animal Health Institute at Pilbright and the Diamond Synchrotron in Oxford.

There appears to be no definitive evidence on the distribution of government research activity and funding across the UK. Consultants SQW, for example, stated that they found it difficult to locate data on the regional distribution of non-university research (SQW, 2011). Similarly, there does not appear to be definitive research on the historic role of government research institutes in developing the UK’s Research and Development (R&D) base, although it appears that in the 1940s, for example, govern-ment research institutes were critical and central to pathfinding UK innovation in jet engines, the nuclear sector, radar and electronic computers (Edgerton, 2011). Tackling a critical, long-term issue such as this will be a huge challenge for Atlantic Gateway.

Both the Northern Hub and high speed rail are identified as priorities for rail investment. The Department for Transport is now committed to some elements of the Northern Hub in 2014 to 2019 and to the principle of increasing capacity and accel-erating journey times between key cities, alongside electrification of the Liverpool Manchester and Manchester Leeds routes (DfT, 2005). No corresponding commit-ments have been made to introduce fast trains, double-track sections, passing loops, line speed improvements and station refurbishment between Liverpool, Manchester and Leeds, although many of these works were identified as necessary in the detailed ‘Manchester Hub Rail Study’ (Network Rail, 2009a).

The Department for Transport’s ‘Railways Act Statement’ for 2014 to 2019 makes a priority commitment to the development of a new ‘north-south’ Electric Spine from the South Coast to the East Midlands (DfT, 2005). The case for a parallel Northern Electric Spine, utilising existing alignments and tilting trains and delivering a low cost, ‘low speed-high speed’ system could have been explored, but is not on Atlantic

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Gateway’s agenda. Such a system might lead to a dramatic integration of three very large northern labour market areas, generating agglomeration economies alongside time savings (Thrower and Wray, 2013). Again, addressing such a complex issue will be a demanding task for Atlantic Gateway’s slim resources.

The benefits

According to the business plan, there is potential for 250,000 new jobs to be created in Atlantic Gateway by 2030, with 140,000 of these being associated with identified Atlantic Gateway priorities, and involving £14 billion of new investment. It goes on to estimate the proportion of this impact which can be attributed to Atlantic Gateway, having made allowances for leakage, displacement, multiplier effects and benefits realised if the projects had not proceeded. The estimates suggest an additional 130,000 jobs, generating an additional £75 billion of GVA and an increase in economic growth in the area from 2.5 per cent to 2.9 per cent – a development which, if realised, would substantially close the growth gap with London and the South East.

The business plan does anticipate additional ‘intangible’ benefits. Here, the analysis could be strengthened. Intangible and cumulative benefits could be very wide-ranging. If Atlantic Gateway is successful, it could lead to significantly reduced costs for public sector infrastructure provision elsewhere in the UK, especially if London begins to experience negative economic impacts (diseconomies) from further growth. The Organisation for Economic Cooperation and Development (OECD), for example, recently concluded that cities can reach a point where external diseconomies outweigh centripetal forces and become less competitive. At least one-third of OECD metro-politan regions now rank systematically lower than the national average on almost all economic indicators. The research indicates that excessive urban concentration may entail a privatisation of benefits alongside a socialisation of costs (OECD, 2010).

Despite its relatively recent origin in Peel’s ambitions, the Atlantic Gateway strategy appears to be soundly based and well-related to previous planning strategies. It is likely to be politically acceptable (with the possible exception of Manchester) and well linked to the regions’ key assets and opportunities. What has changed is the concentra-tion of strategic landholdings and other strategic infrastructure assets in the Mersey Belt area in the ownership of a single private sector company with the financial and political muscle to take forward large scale developments. This is a major opportunity for decisive leadership in the North West region. However, it also poses some sensitive issues in terms of land and infrastructure ownership, the corresponding concentration of power and influence and, indeed, whether new political and governance structures may be desirable, both as a form of democratic and institutional counterbalance and in order to underpin the ambitious and complex objectives and goals that are identi-fied in the Atlantic Gateway strategy.


High speed rail

Despite the difficult economic outlook, the UK Government remains publicly committed to high speed rail across the party divide. It has overturned the conclu-sions of an earlier research study led by Sir Rod Eddington, appointed by Alistair Darling, as Chancellor of the Exchequer, to carry out a wide-ranging review of transport priorities (reporting in 2006). Eddington’s conclusions were not sympathetic to high speed rail, arguing that because the UK is already well-connected, the key economic challenge is to improve the performance of the existing network. Histori-cally, new transport connections have played a pivotal role in economic growth, but in mature economies with well-developed networks it is transport constraints that are most likely to impact on productivity. Government should focus policy on improving the performance of existing networks. ‘Build it and they will come’ is a dangerous approach to take with transport projects. The UK’s economic geography means that the principal task is not to put in place very high speed networks to bring distant towns and cities closer together. A new high speed rail line between two cities would not offer the economy significant new opportunities if those cites were already simply a day trip away from each other by existing links. Ambitions and dreams of exten-sive new networks – that will only ever make marginal contributions to the domestic connectivity of the UK – should be put on hold (HM Treasury, 2006). These are the conclusions one might expect to hear from a government machine that reflects the characteristics of Johnson’s regulatory state (Johnson, 1982).

Responding to Eddington’s conclusions, the government reiterated the line that transport policy cannot become the pursuit of ‘grand projéts’, which can develop their own momentum, driven by lobbying rather than analysis (DfT, 2007). It acknowl-edged that greater capacity would be needed for routes like the West Coast Main Line (WCML), but suggested that new conventional rail lines or motorway widening, rather than high speed rail, might be the better option.

Lobbying organisations and the rail industry itself challenged the departmental view. ‘Fast Forward;, a campaign for high speed rail led by transport consultant Jim Steer, undertook its own programme of research, arguing that high speed rail was needed to provide sufficient high quality transport capacity across the UK, stimu-late a more efficient economy and reduce carbon emissions (Greengauge 21, 2009). Network Rail issued a strategic business case for new lines (Network Rail, 2009b). It concluded that by 2020 the West Coast Main Line from London to Birmingham and the North West would be full, with no spare capacity for passengers or freight. Key target markets from London to Birmingham and Manchester would best be served by a new high speed line.

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The Command Paper and government commitment

The UK Government’s conversion to the case for high speed rail resulted from powerful and personal ministerial commitment from Lord Andrew Adonis, who sought to build widespread and cross-party support for the project. The case was set out in the Command Paper ‘High Speed Rail’ in March 2010 (DfT, 2010). Over the next twenty to thirty years, the UK will require a step change in transport capacity between its main cities. High speed rail is the most effective way to achieve this, giving a balance of capacity, connectivity and sustainability benefits, and should form part of a wider strategy for sustainably enhancing national, regional and local networks. The initial high speed core network should link London to Birmingham, Manchester, the East Midlands, Sheffield and Leeds with a Y-shaped network of around 335 miles. This would bring the Midlands within half an hour of London and give journey times of around seventy-five minutes to Leeds, Sheffield and Manchester. The network should include connections to existing tracks so that direct high speed services can be operated at the outset to cities such as Edinburgh, Glasgow and Liverpool.

The Command Paper accepted that new high speed rail was superior to road widening or improvements to existing rail routes, offering significant connectivity benefits and capacity increases, whist remaining consistent with government policy to reduce greenhouse gas emissions. In cost-benefit terms, the project would deliver good value for money, with well over £2 of benefits for every £1 spent.

By an accident of geography, the impact on urban connectivity on the proposed East Coast route differs sharply from the impact on the West Coast. On the East Coast, the route shown in the Command Paper would link together three relatively close urban concentrations on a north-south axis – Leeds, Sheffield and the East Midlands conurbations. All three locations would be directly served by high speed trains operating on new high speed tracks. So, in addition to reducing journey times to London, HS2 would sharply reduce rail travel times between the three areas (and with Birmingham), bringing together three labour markets into one and potentially generating powerful agglomeration economies. On the West Coast, by contrast, the route would travel non-stop between Birmingham and Manchester, with high speed tracks terminating at Manchester and without high speed tracks to Liverpool, 30 miles to the west of Manchester. It could not, therefore, generate additional agglom-eration economies by bringing together the two labour markets of Manchester and Liverpool. Liverpool, connected by high speed trains on non-high speed tracks, would suffer a time penalty to London in relation to Manchester (Thrower and Wray, 2013). European researchers suggest that high speed rail could offer intermediate-sized cities new opportunities to improve metropolitan accessibility and to intercept passengers who may previously have travelled past these cities (in air transport, for example), radically reshaping their overall level of urban connectivity. However, this opportu-


Figure 2 Proposals for the UK High Speed Two rail network. Source: Department for Transport, 2013.

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nity will be missed if high speed rail drastically reduces the number of intermediate stops (Urena et al., 2009), as is proposed in the UK.

The coalition government’s ‘Programme for Government’ made a specific commit-ment to pursuing the high speed rail policy, saying that it would establish a high speed rail network as part of its programme for creating a low carbon economy (HM Government, 2010a; 2010b). A further consultation on station locations and routes north of Birmingham to Leeds and Manchester was underway in 2013. However, whilst the government’s commitment is now said to be unequivocal, no commitment was made to high speed rail in the Queen’s speech (Hall, 2012). Serious questions have been raised about the strategic rationale for the project, the need for extra rail capacity in the West Coast Main Line and the benefit-cost ratio calculations used by the Department for Transport (DfT) (National Audit Office, 2013). However, cost-benefit analysis is a relatively narrow frame of reference and cannot be expected to encompass the potential regional benefits and transformational changes that might be released by a successful high speed rail mega project. Popular and political debate on high speed rail has focused on whether the scheme is ‘value for money’, as measured by forecasts of demand and the aggregate time savings of passengers (converted into monetary values). The result has been a slightly arcane ‘business case’ discussion about whether business travellers with laptop computers and mobile phones would actually save any time, rather than debates about potential long-term impacts on regional development, city regeneration or sustainable transport. A wider approach to evaluation based on a policy-led multi-criteria assessment would have been more insightful and rewarding (Omega Centre, 2012).

Evidence on transformational benefits

Transport economists largely conclude that cross-border infrastructure makes it easier for firms in lagging regions to access new customers, but exposes them to more intense competition from prosperous regions. Their models indicate that with weaker conditions (such as skills) in lagging regions, new infrastructure connecting regions is more likely to widen regional inequalities. The arrival of high speed trains (HSTs) in non-capital regions can have an impact within regions, deflecting growth so that it assists agglomeration in the larger regional cities. Yet empirical studies have found otherwise. An early empirical study (Bonnafous, 1987) provided counter-evidence to the modeller’s predictions. It found that with two-hour Train á Grande Vitesse (TGV) accessibility between Paris and Lyon, specialised services firms in the Rhône-Alps region had no need to relocate to Paris.

A recent empirical study in the UK looked at the impact on economic geography of the high speed train services introduced with conventional trains on conventional lines in the UK during the 1970s: the InterCity 125 and 225 services. It concluded that


these high speed services led to substantial and demonstrable effects in aiding this transition within a two-hour travel limit of London, thus helping to generate renewed economic growth, but that the effects have not been automatic or universal (Chen and Hall, 2011).

For towns within one hour from London, there were favourable spill-over effects in places with HST services, where these demonstrated high GVA activities with reverse commuting from London – places such as Reading, Swindon and Peterbor-ough. With the arrival of HSTs, well-established regional capitals (e.g. Bristol, Leeds, Cardiff) appeared to experience a revival from 1960’s decline, growing their hinter-lands with high GVAs and knowledge-intensive industries. The Bristol City Region has particularly good rail links with London. Comparative research on the fortunes of the UK’s core cities, using employment time series dating back to the 1980s, indicates that it has consistently performed better than its big city comparators (Champion and Townshend, 2012). In relation to the 1989 to 1993 recession, Bristol was the first city to return to its pre-recession employment peak (in 1996). In relation to the 2007 to 2010 recession, Bristol was the only big city, including London, to register employ-ment growth, when other cities, including London, saw rates of decline between 2.2 per cent and 8.0 per cent.

Benefits to cities or regions: comparing North West England with northern France

Further UK research has compared experience of rail upgrades in North West England and Nord Pas de Calais, centred on Lille, noting the risk that as high speed rail services expand, smaller, less attractive (and de-industrialising) places will be overlooked. The parallels between North West England and Nord Pas de Calais are instructive: both have been important centres for textile manufacturing in the nineteenth century and both potentially could be brought within a one-hour travel time of their capitals. A survey of the literature on high speed rail impacts suggests that in Europe it generally tends to reinforce larger places, although there are examples of smaller places such as Ciudad Real, which is one hour from Madrid by high speed rail, which have transformed their prospects. In France, high speed rail connected cities have shown increased demand for commuting to Paris in the one-hour travel zone, the Lille-Paris route having the largest number of commuters (Chen, 2013; Chen and Hall, 2012).

Different opportunities and strategies were adopted to capitalise on true high speed rail services in France, and in Britain the introduction of quasi high speed services, using tilting train technology on the upgraded existing West Coast Main Line. The former had brought Lille within one hour of Paris; the latter, Manchester within about two hours of London. In overall terms, the gap between Nord Pas De

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Calais and Paris shrank, whereas in England, with the more limited speed upgrade, the gap between the North West and London widened.

Critical factors accounted for these differences. The West Coast modernisation was poorly organised by the government. The transport improvements were modest, and there was no accompanying transformation of existing stations on the route. Thus, the opportunity to transform a regional image was lost. UK modernisation was a market-led approach, focusing on profitable destinations and opportunities, rather than designed to ‘irrigate’ less favoured regions. High speed services were given priority over intra-regional services. Three separate regional bodies in North West England (Regional Development Agency, Government Office and Regional Assembly) proved ineffectual in coordinating investment.

Governance structures were inclusive in France, but exclusive in England. In France, Lille’s high speed rail hub was connected to Paris and Brussels international airports. The national strategic planning agency DATAR promoted a ‘Cooperation Metropolitaine’, and the president of the Lille metropolis, Pierre Mauroy, embraced the former coal-mining areas and non-industrial areas in his plans.

Chen and Hall argue that HST must not be pursued in isolation, but as an integral part of regional development. Whilst other European researchers have accepted Chen and Hall’s finding that circumstances in many UK cities are determined by their relative accessibility to London, they argue that the beneficial impacts are far from uniformly positive (Martinez et al., 2012). Analysing the potential impact on total rail journey times to London, they identify a large number of (mostly smaller) places on the current rail network that will suffer a time penalty. Many locations in the East Midlands, for example, are adversely affected. Conversely, locations in Atlantic Gateway (with the important exception of Chester) are positively affected.

Conclusions: comparing and evaluating megaprojects

Though both have been driven forward by visionary individuals, Lord Adonis and John Whittaker, high speed rail and Atlantic Gateway have sharply contrasting characteris-tics. Atlantic Gateway, which might perhaps be regarded more as a conceptual strategy than a conventional mega project, has its origins in the private sector. It is being driven forward by the private sector. It will rely in large part on private sector funding for a mixture of related infrastructure and regeneration projects, often on brownfield land, to be delivered incrementally, over a long time span. Not only is Atlantic Gateway driven by the private sector; it has its distant origins in private sector and municipal initiative in the shape of the Manchester Ship Canal. Without the colossal land assembly and infra-structure projects carried out in the nineteenth century for the canal, Atlantic Gateway would not exist (and neither, at least in its current form, would Peel Holdings). Peel is taking forward an opportunistic strategy built on a serendipitous inheritance.


It could therefore be argued that Atlantic Gateway unwittingly passes many of the tests proposed by Flyveberg et al. (2003) for successful and transparent mega projects. There are no sovereign guarantees for Atlantic Gateway schemes. They have to stand up as individual investment projects, though doubtless public funds will be sought if they are available. Private funding and private consortia are very much at the forefront. Transparency and scrutiny is provided by the ‘regulatory state’ workings of the land-use planning process; the activities of ‘rent-seeking’ lobbies with manipula-tive financial agendas are absent. Peel, of course, has its own motives, which are clear enough to all involved: to maximise development gains. Atlantic Gateway is thus part of a long tradition of British planning projects, led by the private sector as developer, landowner or both. Moreover, it appears to pass some of the tests that might be implied by Taleb. It is centred on flexible opportunity seeking behaviour, rooted in pragmatism and incrementalism.

Although there is no state direction or confirmed financial support for Atlantic Gateway, the project is wide-ranging and if successful would help to bring together city region interests in Liverpool and Manchester at a regional scale; and the govern-ment has expressed its support in principle (through the Chancellor’s statement) at the highest level. It seems doubtful whether existing policy and implementation mecha-nisms for the delivery of Atlantic Gateway, beyond the narrow frame of individual property developments, are sufficiently powerful or effective. Atlantic Gateway may have been blessed by the Chancellor of the Exchequer, but it needs public sector support and direction, both to underpin its physical projects (through assistance with land assembly and planning consents, for example) and tackle higher level policy issues, such as national rail and scientific research investment priorities. It needs enhanced political machinery, perhaps in the form of elected metropolitan governance and directly elected metropolitan mayors, to provide political weight in arguments about national resource allocation, and crucially to create a powerful countervailing and properly accountable form of subregional and local democracy.

High Speed Two has many of the characteristics of a traditional state-led mega project. It is dependent on public funding and public initiative. Public sector mecha-nisms in the form of a Parliamentary Bill will be used to secure development consents. Serious doubts have been expressed about the strategic case (National Audit Office, 2013). The project has its origins in lobbying, especially from the rail industry and the lobbying group Greengauge 21. Unavoidably, there is an element of producer interest. Little thought seems to have been given to wider planning issues, such as development opportunities at stations, the impact on intra-regional equity in the North West region, the potential for links into the wider existing rail network and, indeed, the scope for its improvement. The most glaring example of this traditional ‘silo-based’ approach is the impact on Liverpool. Liverpool will rely on traditional rail links to get high speed trains from the proposed dedicated high speed line near Crewe into Liverpool

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city centre. But there appears to be no consideration or budgetary provision for the improvement of these links, and the likely outcome is that the city will be at a travel time disadvantage compared with Manchester.

These are very different projects. Arguably, successful regional revival needs both types of project; together, they could bring powerful synergies. Both approaches have their weaknesses, in terms of potential for delivery and wider social benefits. Both might benefit from a stronger local government dimension, with some form of city regional governance able to negotiate on an equal footing with the scheme promoters, capable of seeing and pursuing the wider public interest, able to secure intelligent transpar-ency and capable of bringing forward opportunities beyond the remit or capability of individual scheme promoters. Doubtless, twenty-first century Britain will remain an essentially regulatory state; yet it is apparent that even the nineteenth century British state had the benefit of powerful and well-resourced city governance (Hunt, 2004).

How should mega projects be evaluated? In relation to High Speed Two, Britain’s National Audit Office appeared to have difficulty grappling with the issue. On the one hand, the government was making the case for the project in terms of potential trans-formational change and regional benefits (the sort of long-term societal objectives which characterise Johnson’s developmental state). On the other, the key justification revolved around traditional cost-benefit analysis, centred on demand forecasts and aggregated time savings, as monetised and discounted.

None of this is particularly relevant to the transformational issues. High Speed Two is being viewed essentially as another big capital project; an exercise in catering for forecast demand (with all the uncertainties Taleb warns of), rather than an exercise in visionary planning to shape the future and change the trends. Much of the debate on High Speed Two still centres on the forecast financial picture, rather than the longer term objectives that might be realised, such as a long-term shift to electrified and thus potentially sustainable transit systems, and the potentially centripetal and positive impacts on built form and urban regeneration of rail-based transport.

Self (1975) brilliantly contrasted the tendencies of planning and cost-benefit analysis as alternative methods of strategic decision-taking: with cost-benefit analysis focused on quantification, analysis and measurement, on economic tests of welfare maximisation and detailed disaggregative techniques; and planning centred on imagi-native synthesis, long-term thinking, goals and policies and empirical studies. Self foresaw the arguments for multi-criteria evaluation spelled out by the Omega Centre (2012). Despite its origins in the private sector (and private interests), Atlantic Gateway, it might be argued, seems to have more in common with Self ’s traditional planning approach. A private sector landowner appears to have a stronger grip on long-term strategic planning than the UK government itself. This surprising conclusion prompts a deeper and more urgent issue: perhaps the UK’s pluralistic and inclusive institu-tional framework is less susceptible to the risks of ill-conceived mega projects and


better equipped to handle a potentially more turbulent, volatile and unpredictable future; and all the more so, as 60 per cent of UK economic infrastructure is now in private rather than public ownership – the highest proportion in the world (Armitt, 2013). The question is whether this issue can best be tackled by a centralised parlia-mentary planning process, as Armitt proposes, or whether decentralised mechanisms and political institutions are better placed to secure the progress which will be needed.

Acknowledgements

The author would like to acknowledge research sponsorship from the N8 partnership of universities.

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