Curtin&Co give exclusive thoughts on the Oxford Cambridge ARC

Posted on: June 10th, 2019
Posted by: Adil Kotia
Categories: National

It is absolutely clear that Government at all levels has a commitment to delivering an Oxford Cambridge ARC.  That commitment is articulated in a number of ways, not least the joint declaration between Government and partners that was published in March. The reasons for the commitment are obvious: both the Cambridge and Oxford economies are booming, but more importantly, they have the potential to achieve more and contribute more to the exchequer.  But it doesn’t end there, there is also potential to extend the corridor at both ends and, indeed there are already active discussions that are aimed at achieving just that – such as to extend from Oxford to Bristol, or develop a new Arc linking Cambridge and Norwich aimed at maximising the intellectual capital that is currently being invested in agritech. For all of this ambition to be realised, in a country where the reputation of politics has never been lower, there is a genuine need to create a sense of aspiration around the Arc project and to develop a sense of pace that develops support and holds public confidence.

Arguably, HS2 provides a perfect example of what should not happen. The growing concern about the rising costs have partly arisen because of lack of pace, but it is accompanied by a lack of public clarity about what is to be gained from it.  A louder and louder voice of opposition to the scheme (from across the political divide) means there is a real potential threat to its eventual delivery. The latest cost estimate is £56b, which has risen from £36b. Interestingly, the original forecasts suggested that HS2 would generate about £71b in revenue (£27b in fares and £44b in economic benefits).  On the surface, this suggests that the costs of HS2 may reach a point where they outweigh the benefits; at no point has there been any attempt to communicate those benefits for the economies of affected areas. Certainly, there are many more schemes where the cost to benefit ratio is much higher than that being predicted for HS2. For example, the Mayor of the Cambridgeshire and Peterborough Combined Authority has been promoting a metro scheme for Cambridge where it is estimated that benefits will outweigh costs by somewhere between 2 and 4 to 1. This is not to say that HS2 should be cancelled, but that there needs to be a much clearer case for delivery – and that lesson needs to be learned as we start to get serious about the Oxford-Cambridge Arc.

Planning and housing is one area that needs to be examined closely. Most of the 31 local authorities involved in the Arc project had elections in May, and whilst it would be easy to say that the many surprises that happened were a simple reaction to the current Brexit chaos, many of those councils also faced a level of controversy around local plans and a resistance to housing growth, so that cannot be ruled out as a factor. Yet an analysis of the joint declaration on the Oxford Cambridge Arc is clear that more housing is essential. Since 2000, the median house price to income ratio along the Arc has risen from 5 (a figure which was on a par with National statistics) to over 10, whereas the National figure is now 8. Even before the Arc was becoming a meaningful project aimed at accelerating growth and demand for housing, we were not building enough homes to match the jobs growth along the corridor, and it meant that more and more people were finding home-ownership out of their reach and the cost of rental rising. This needs to be addressed quickly; to quote the joint declaration, rising housing unaffordability is “threatening to constrain the growth trajectory of the Arc.”

Another lesson from HS2 should be that slow progress leads to escalating cost (or at the very least a perception of it), and this is one of the factors that will lead to dissatisfaction and potentially, a political threat to the whole project.  The less clear the case, the wider the opposition; the stronger the opposition, the greater the political brake – and the greater the cost too.  The Ministerial Foreword to the declaration mentions the need for “new ways of working between the Government, local partners and, businesses” as a means of ensuring the undoubted benefits the improved infrastructure for the Arc will bring. There now needs to be a discussion about what that means. One way could be to delegate more to a local level, but certainly something is needed. At the last count, separating out the 4 Local Enterprise Partnerships, 31 local authorities and 10 universities, all of whom have a stake in the Arc, there were at least 8 different committees and boards cascading down from Ministerial to local Government level. That seems to be a means of demonstrating commitment and cohesion, which is fair enough. But I strongly suspect that businesses will look at this political structure with a sense of foreboding. It certainly does not look like a new way of working, nor does it look like a structure that can deliver any project with any pace.  When you consider that underneath those structures there are also a myriad of Parish Councils who will all want their say and who will inevitably be stirring the pot to try and get their way and it already looks very much like a project that is headed for trouble.

As well as revisiting that structure, there is a need for a serious thought about consultation.  The view of the Arc’s promoters is that this burden is (at the very least) shared with the private sector. Part of Curtin&Co’s specialisation is advocacy; finding the voice of support and making sure that it is represented as a project moves forwards.  We know that with any programme of development, of whatever size, the voice of opposition and concern is traditionally the loudest.  That does not mean that voice is the majority voice, but it can feel like that to local politicians and indeed to MPs; if we wish to avoid the HS2 scenario, then it is critical that real effort is made to identify and bring out the supportive voice so that politicians know that there is backing for the project. That does not mean we should not listen to the concerns, but getting the balance right means that they can be used to hone and improve the programme rather than become something that creates opposition amongst key influencers and decision-makers. This should also prevent the continuous tweaks and changes which are a partial cause of delays and cost-overruns in major projects.

We should be enthusiastic about the Oxford – Cambridge Arc it has the potential to both accelerate economic growth in an important sector of the UK economy and deliver housing in a way that stops the current acceleration of house prices which is causing disillusionment amongst people trying to get on the housing ladder.   But, surely we should also be looking at HS2 and trying to learn some lessons? The political structures should be honed so they deliver with vision and pace, using excellent consultation as means of ensuring a much needed project is delivered to budget and with clear, demonstrable public support.

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