Map produced by TfGM in 2011 showing lines under construction at the time. No public accountability exercise has been conducted since they opened to prove the cost-benefit analysis that secured funding was right

Economic impact of £1.5bn Metrolink extension unknown

Paul Unger

There have been no studies carried out by Transport for Greater Manchester or its partners into the economic impact that tripling the size of the tram network is having on the city region since work began in 2008 despite new lines and stations being built with money awarded by government on the basis of business plans pledging new jobs and improved business output.

Prior to 2010 the network had 37 stops and covered 24 miles, incorporating the Bury to Altrincham line and extension to Eccles. The network currently covers nearly 58 miles and has 93 stops across seven lines – hosting 33 million passenger journeys every year.

Passengers numbers have undoubtedly soared as the Metrolink catchment area has grown. October 2015 recorded the highest ever monthly figures of 3.1 million journeys, beating the previous record of 2.9 million in November 2014.

However, TfGM admits it has not examined who those extra passengers are and whether they fulfil the objectives of the £1.5bn business plan.

After nearly a decade of extensions funded almost entirely by the public purse there is no way of knowing if the greater tram use is the result of displacement of car journeys by people who already had jobs and shoppers who would have driven into the city to park instead, rather than new net gain economic activity.

Last year saw widespread disruption on the line due to the construction work that has closed the St Peter’s Square stop and dug up much of the city centre for the second city crossing, rerouting pedestrians, harming retail and restaurant trade and delaying road traffic trips around the city centre.

A TfGM spokesman said: “There is a clear commitment from TfGM to evaluate the Metrolink expansion project as it matures and reaches full impact.

“An outline monitoring and evaluation plan has been agreed with the Department for Transport in respect of Phase 3 [extension which began in 2008], which will see two reports published between spring 2016 and mid-2020.”

New tram stop and line openings in recent years:

  • MediaCityUK: opened September 2010
  • St Werburgh’s Road: July 2011
  • Oldham Mumps: June 2012
  • Rochdale & Droylsden: February 2013
  • East Didsbury: May 2013
  • Ashton-under-Lyne: October 2013
  • Oldham town centre: January 2014
  • Rochdale town centre: March 2014
  • Manchester Airport line: November 2014

The next line, to Trafford Park, received £350m backing from government in November 2014, promising to improve access to employment, business, retail and leisure opportunities and improve public transport. Construction is expected to start in 2016 and the line be operational by 2020.

Throught the rapid expansion period, TfGM, the official transport authority for the city region, has successfully bid to government for funding based on forecast regeneration and growth, connectivity with employment sites, attracting investment and providing an alternative to road travel. The tram is often cited by business leaders and investors in Manchester as one of the city’s main attractions.

Geographic convenience, simply linking places, was replaced as the test for tram investment by government more than 20 years ago by economic need: linking people to jobs. How many people in deprived areas of Oldham, Wythenshawe, Ashton have been helped into employment is unknown and the economic case untested.

The TfGM spokesman continued that the “evaluation approach builds over time, with an initial focus on our achievements in the short term, and early outputs – namely, lessons learnt from the construction process, effectiveness of delivery, costs, capacity, patronage and journey time changes, and more ‘immediate’ benefits such as improved access to healthcare, employment and education.

“As agreed with DfT, this part of the evaluation is due to be published in spring next year.

“It is expected to show that, in terms of access to healthcare, employment (16 to 70-year-olds), further education (16 to 19-year-olds), and more deprived areas, the results are broadly in line with expectations – increases of around 10%, with areas showing the greatest changes in accessibility being geographically close to the Metrolink extensions.

“The second part of the evaluation will look at the productivity of current businesses (expanding their access to customers and skilled employees), new business investment and local employment, environmental benefits – all of which are realised over time. As agreed with the DfT, this part of the evaluation – capturing those long-term economic outcomes – is due to be published in mid-2020.”

While Metrolink has its fans, it also faces frequent criticism for overcrowding, delays and the perceived high cost of tickets.

The economic impact might also backfire if the hike in house prices near to stations squeezes out local first-time buyers. A study by mortgage lender Nationwide in 2014 found a 5% premium for homes within 500 metres of a Metrolink tram stop.

One senior architect based in the city called Metrolink “a middle class perk [of working in Manchester]”. The managing director of a local planning consultancy said it echoed wider concerns about the Conservatives’ eagerness to push the Northern Powerhouse agenda without proving the business case. He asked “how do we know that better links between cities in the North would create growth, based on what analysis?”

Funding breakdown

Phase 3A: Oldham and Rochdale Loop line, as far as Rochdale train station; Droylsden line; Chorlton line; MediaCityUK line; the new Trafford Depot

Budget: £600m. Made up of £244m Department for Transport; £338m via mixture of Integrated Transport Block Local Transport Plan and borrowings repaid by Metrolink revenues; the MediaCityUK spur cost £18m and was funded entirely by a development consortium of Peel, Salford City Council and the now-defunct North West Development Agency, without TfGM or DfT funding

Phase 3B: Manchester Airport line; Droylsden to Ashton line; Chorlton to East Didsbury line; Oldham town centre line; Rochdale town centre line; Second City Crossing

Budget: £823m: £121m DfT; £604m prudential borrowings repaid by council tax levy and Metrolink revenues; £90m Integrated Transport Block Local Transport Plan; £8m other

The total budget rises to £1.5bn when the raft of improvements to the existing network – stops improvements, new ticket machines – is added.


Your Comments

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Absolutely astonishing!

Look at the sheer amount of scrutinised evidence that is required to try and wrestle just £15m out of the government to carry out the (still not done) Halton Curve project!

And here we are talking about the spend of £1.5bn!

And what, pray tell, would happen if the report says it was not worth doing? Will the Manchester authorities have to pay it back? Or will it simply be that other cities conveniently fall flat on their faces when in future they try and go for transport investment?

By Mike

Excellent journalism highlighting a real concern and holding power to account. Appreciate drawing those links (between infrastructure spend and jobs) is difficult and I guess if somebody is offering you the cash, you just take it and deal with the justification later. I doubt any other city would reject the funding due to uncertainty of how to report outputs.
All those tram stops and network maps look good though, eh? Like a proper big city we are…

By bob alatt

The benefits will take decades to be fully realised, so any analysis at present would be premature.

What is the point of this article? A common criticism of government is that it invests too much in London at the expense of the north. Metrolink is a great success story of local governance. It isn’t perfect, but its arguably the best public transport system outside the capital.

By syntax

Err, what exactly is the story here? TfGM are producing an interim monitoring and evaluation report and the full impact of performance vs predictions set down in the business plan will be evaluated at the end of the business plan period.

First two comments are pretty naive too.

By M&E

So the impact of £1.5bn of investment isn’t going to be demonstrated until after all the money has been spent? How is that at all efficient? Eight years between the start of work and a report showing it was worth it seems a bit slow off the mark…

By Err

The Metrolink has had a huge economic impact,without a doubt.This has been the catalyst for Manchester’s remarkable turnaround.Manchester is the only place outside the South East with more jobs than people to fill them.What surprises me,is why it took until 1992 before a conurbation of nearly 3 million had a proper transport system.You couldn’t make it up.Why was an underground not built in the 19th Century when Manchester was the workshop of the world? Answer,is all our wealth along with the rest of industrial Britain went to vanity projects in London.

By Elephant

The real issue here is that this is predominantly funded by local taxpayers and by users. Unlike the Underground, Merseyrail or T&W Metro, Metrolink receives no operational subsidy.

Instead, it’s quite the opposite, it pays for the infrastructure it uses. Lines opening ahead of schedule and higher than expected usage is making the service more money than anticipated. As a result, the service is able to pay back its infrastructure costs even quicker than expected, increasing the viability of new lines.

The service is a model for how to do things, especially in comparison to other schemes such as the trams in Edinburgh and the busway in Cambridge which were delayed and grossly over-budget.

Why does London get mammoth UK state handouts for infrastructure, when the majority of this £1.5bn scheme has been funded by Greater Manchester, Europe, the Private Sector and users? And why do other regional cities receive even less?

By Manchester Development Observer

To “err” – how can you evaluate a job or business that has not been formed yet?! Can I borrow your time machine?

By M&E

I don’t there really is an issue.

By syntax

I’m surprised at the director of a planning consultancy querying the link between infrastructure and economic growth. There are well established models and methodologies based on real life scenarios that allow you to predict such things and build a robust business case.

By M&E

“when the majority of this £1.5bn scheme has been funded by Greater Manchester, Europe, the Private Sector and users”

Ha ha, pull the other one. Would love to see your council tax bill. I know the metro link is expensive, but it’s not that expensive.

By Mike

The article states Metrolink construction work is “harming retail and restaurant trade and delaying road traffic trips around the city centre.” Where is PNW’s analysis to back this statement up? What’s good for the goose is surely good for the gander.

The truth is we don’t need analysis to prove Metrolink is good for the economy or that construction work is bad for business. We can see the truth with our own eyes.

I really think this is a very poor attempt at investigative journalism. The article is poorly written and doesn’t really draw any conclusions. On the one hand it implies Metrolink has failed to create any wealth but then complains about rising property prices. Then TfGM is chastised for not carrying out a full analysis before the article explains that long term effects can’t be isolated for several years.

By Honorary Manc

Get over yourself. Ask the shops and the basement Chinese restaurants hidden behind hoardings on Cross Street if it’s been good for trade. It’s a statement of fact. Yeh evidence could be provided but the fact remains, public money has to be accounted for. No one is saying it hasn’t had an impact but that’s it’s unknown. I would have thought that the impact was immediate and work to analyse the impact on Bury, or wherever, would happen in the year or two following each line opening. Why wait 10 years?

By TTRacer

TTRacer – you might well have thought the impact would be immediate, but you would be wrong to do so. The benefits take a long time to accrue, not a few years. Nobody is doubting some short term negative impact on businesses adjacent to road works – this happens for all types of construction inhibiting frontage access.

By syntax

If a company invests in a piece of expensive equipment based on a 10 year business plan, it does not evaluate the impact of that equipment on the performance of its business before it has been installed or only a couple of years into the business plan. It’s just the same for public infrastructure. Why is that so hard for some people to grasp?

TfGM are producing an interim evaluation and will evaluate performance against the full business case at the end of the plan period. There really is no story here.

By M&E

Correct, M&E, a total non-story this.

Must do better, Place NW.

By syntax

Syntax, where’s your lexicon, interim means midway through, not at the end, does it not? Now we know there’s an interim report due out in spring. We didn’t know that before. Would we have been told? And businesses monitor investment from day one, surely?

By TTRacer

M&E, I suspect the planning consultant wishes to prove that a report needs to be commissioned into the power of the powerhouse case. And who should he want to write it?

By Meandmemum

They are in fact doing an interim report anyway:

“An outline monitoring and evaluation plan has been agreed with the Department for Transport in respect of Phase 3 [extension which began in 2008], which will see two reports published between spring 2016 and mid-2020.”

My point is, that this won’t show up the full benefits, which will take decades to manifest.

Businesses being driven by short-term shareholder value can’t always be compared to long-term infrastructure investment.

By syntax

TTRacer – no lexicon, you just need to read the article properly, specifically paras 8 and 13, 14, 15 and 16.

By M&E