Context

By reference to a paywalled article in the Economist, EWRCo. imply that their railway increase the Gross Value Added (GVA) of the OxCam Arc to £274 billion/year from a base of £111billion/year. They also state that if 80,000 jobs could be created in Cambridge by 2050, then that would only create £4 billion GVA/year. But they claim their railway can only create 28,200 Cambridge jobs – so £1.4billion GVA/year. Quite a drop.

This article examines the 28,200 claim and, using EWRCo.’s “Theory of Change Trip End model”, explains why it should really be closer to 500 only Cambridge jobs. Considering the Capital cost of the railway in 2023 money, this would equate to £16.7million per Cambridge job.

For reference, the Elizabeth Line is carrying 500,000 commuters per day, presumably going to that number of jobs.

Background

On the 26th of May 2023 EWRCo. published an Economic and Technical Report (ETR). The appendices to the report contain an interesting set of estimates of the number of jobs that the railway would support in Cambridge. There is of course a close relationship between the number of regular commuters to Cambridge and the number of jobs supported in Cambridge.

Appendix 4 of the ETR explains EWRCo.’s favoured technique for this which they call ‘Theory of Change Trip End Modelling’. They build up the number of commuters to Cambridge by adding up the numbers from a set of origin-destination (OD) journey pairs. The Destination of the OD pair is always Cambridge; the Origin is taken from a set of EWR stations: Cambourne, Tempsford, Bedford, Stewartby, Ridgmont, Woburn Sands and Milton Keynes/Bletchley.

The equation is as follows:

[commuters from and OD pair]

= [rail mode share] * [market size] * [workers per pop.] * [origin population]

Where:

[origin population] = number of people residing within the 2km catchment area around the origin EWR station

[workers per pop.] = (no. of working people / population) at the origin

[market size] = fraction of commuters from the origin that travel to the destination by all modes.

[rail mode share] = fraction of commuters that use the railway.

The Conventional/Conservative Scenario

The 2011 census evidently asked people to say where they lived, where they worked and how they travelled to work. This allowed EWRCo. to work out the [rail mode share] and [market size] parameters for existing rail connected OD pairs around Cambridge as a function of the distance from Cambridge and in 2011. The figures from the 2021 census would have been affected by the pandemic.

The factors derived from this analysis were then applied to the new EWR stations and the results are presented in table 4.1 which is reproduced below. The name given for this model is either the conservative or the conventional scenario.

This scenario estimates 2,090 regular Cambridge commuters and assumes that 213,300 new people residing within 2km of an EWR station.

The model does not consider the following:

Cambridge South Station
Hauxton Park and Ride
The A428 Black Cat to Caxton Gibbet Scheme
GCP busways Cambourne to Cambridge and CSET
GCP congestion charge/enhanced bus services will encourage more use of park and ride and bus services.

All of these would tend to reduce the [rail mode share] or [market size] parameters either through more remote working, reducing congestion on the road or providing new modes of commuting.

The results of the conventional scenario also depend on new housing being signed off in the catchment areas of the new station by several uncoordinated local authorities. EWRCo. say that this is not in their control and therefore it is a significant risk to the commuter numbers and hence the business case for the railway.

Appendix 8 of the ETR gives new capital cost estimates for the chosen heavy rail solution (HR5). Recent rail projects have tended to overspend their budgets (HS2, Transpennine), so it is reasonable to add the risk to the estimated capital cost. This is £5.34billion in 2010 money. The Bank of England shows that the general economy has had 47% inflation from 2010 to the latest figures in June 2023. Ignoring the fact that construction costs have suffered more inflation than the general economy we can say that this figure in today’s money should be at least £7.85billion.

Dividing the capital cost by the number of commuters leads to the result that each Cambridge commuter costs £3.76million. Knowing the parameters of the conventional model allows us to calculate how many Cambridge commuters there would be if the new housing were not built. There would be 132 from Cambourne; 6 from Tempsford and 334 from Bedford leading to a total of 472 commuters to Cambridge; £16.7million each in case you were wondering.

Well done to Anthony Browne MP for staying on the fence about EWR to support the wishes of those 132 Cambourne commuters. But I am sure they would rather have the £16.7million each.

The Transformational Scenario

The good people at EWRCo. decided to go a different way with their analysis and created a new set of parameters for [rail mode share] and [market size]. The justification for the new parameter settings is as follows:

“Transformational scenario: Representing a plausible but very aspirational world where market sizes and mode shares represent around the limits of what is observed today for a given mode share, which may not be transferrable between contexts.”

Not entirely clear what this means, but these new parameters are used to create table 4.2

Now the number of EWR Cambridge commuters has increased four times to 7,990 (still £0.98million per commuter). I think EWRCo. are saying that if the parameters turn out to be the best ever seen everywhere this is what we might get.

How EWR will support 28,200 jobs in Cambridge (apparently).

Not satisfied with the aspirational 7,990 Cambridge commuters, appendix 4 goes on the claim that EWR will actually support 28,200 Cambridge jobs. They stick with the “transformational” parameter for [market size] and define three stages “Expand”, “Grow” and “Strengthen”.

“Expand” counts the number of existing residents somehow inspired to commute to Cambridge just because EWR is built – even if they do not use the railway. (+5500 Cambridge jobs)

“Grow” counts additional Cambridge commuters from the existing local plans to 2031 extended to 2050 by adding 50%. This is housing not designed around EWR stations, but amazingly, they show the best possible [market size] parameters from the Transformational scenario. (+7900 Cambridge jobs)

“Strengthen” counts Cambridge commuters from 69,400 EWR dependent housing around new stations. (+14,480 Cambridge jobs). Again, this is for all modes not just rail.

So, 20,000 of these 28,200 Cambridge commuters in this scenario do not travel on the EWR. The roads would clearly get busier.

In summary, EWRCo. claim 28,200 Cambridge jobs. As explained above I can only see 472 in their model.

Interaction with other plans to support the growth of Cambridge Jobs

The Greater Cambridge local plan to 2041 is being prepared and is well advanced. There is provision for 66,000 additional jobs which is the independently assessed level of job demand. The plan provides housing (57,000 houses) and other interventions to support these jobs. EWRCo. say that their jobs target is part of this total. That must mean they are assuming some of the local plan will be withdrawn to fit around EWR. I understand that developers would be likely to take legal action if this were the case.

The local plan is currently held up by lack of water infrastructure (9,000 houses around Bourn Airfield, Waterbeach new town and the Cambridge city edge cannot be signed off), a problem that will not be fixed until the late 2030s at the earliest. Note that Anglian Water is the second most indebted UK water company after Thames Water.

We now also have the Cambridge 2040 Plan from Secretary of State Michael Gove. A new quarter for Cambridge and a strategy of densifying Cambridge rather than sprawling over the whole area between Oxford and Cambridge. How can the Department for Transport continue with an EWR project that is part of a now clearly out of date DLUHC OxCam Arc strategy that has been replaced by a completely different strategy to densify Cambridge?

How many Cambridge jobs will East West Rail support?