Recent traffic statistics issued by Midland Expressway Limited reveal vehicle volumes on the M6 Toll have risen by 12 per cent over the past year – and by about a quarter over the past three years.
After many years of low – and sometimes declining – traffic levels, this is welcome news to those who have been concerned about the road giving the appearance of being deserted.
However, it is still too early to hail the investment in the M6 Toll as an unqualified success, since it has yet to achieve profitability. Also, the recent increase in traffic still leaves the road well below the predicted vehicle volume for which the motorway was originally designed.
Currently, the annual average daily traffic (AADT) is around 48,000, whereas the predicted figure was 75,000. Contrast that with the AADT on the busiest stretch of the original M6 (between junctions 8 and 10), which, during a season of peak congestion, can reach a figure as high as 125,000.
Nevertheless, the M6 Toll has experienced an upturn in fortunes in recent times – but what is behind this?
Three main factors immediately suggest themselves.
First: some extensive roadworks on the original M6 have, in recent months, caused journey times on that route to lengthen very considerably.
Second: motorists everywhere have been benefiting from some sharp falls in fuel prices.
Third: improvements in the economy at large have started to produce a general ‘feel-good’ factor, owing to rising wages, falling unemployment and declining mortgage interest, all of which have been encouraging motorists to place somewhat higher values upon savings in travelling time.
Since the onset of the ‘Great Recession’ in 2008, austerity measures of one kind or another had been having negative effects upon long-distance road travel by private car; the kind of travel for which a road like the M6 Toll is particularly well suited. Such travel usually involves discretionary expenditure – one of the first types of spending to be cut when the economy enters recession. Thus, in economists’ parlance, the demand for the M6 Toll can exhibit a high income-elasticity, when a 1 per cent fall in income leads to a greater than 1 per cent fall in traffic, and vice versa.
Some people have suggested that the one-way toll rates charged by Midland Expressway Limited are, at £5.50 for a private car and £11.00 for an HGV, rather expensive, and that this pricing policy has been holding back demand. If demand for the M6 Toll is highly income-elastic, is it also highly price-elastic?
The answer is probably not: a 10 per cent reduction in toll rates would be likely to lead to a less than 10 per cent rise in traffic volumes, which in that case would mean that total revenues would fall with a reduction in toll rates and only rise with an increase in toll rates.
A possible reason for the distinction is that a high income-elasticity applies to generated through-traffic – particularly traffic travelling along the north-west/south-east axis – whereas a low price-elasticity applies to traffic diverted from the original M6. Diverted traffic has lower price-elasticity because for many road users the M6 Toll is not a particularly close substitute for the original M6.
The volume of diverted traffic has certainly been disappointingly low since the M6 Toll opened in December 2003.
Much of the traffic on the original M6 cannot reasonably be expected to respond to a fall in toll rates if their journeys are to or from central Birmingham or somewhere on the western side of the conurbation. This can apply to many commuters, and to many HGVs making deliveries. It can even apply to some of the through-traffic, such as holidaymakers travelling on the north-west/south-west axis (for whom the alternative of using the M6 Toll/M42 route would more or less double the mileage between junction 11a on the M6 and junction 4a on the M5).
Nevertheless, some traffic has diverted, although this has not resulted in any appreciable reduction in congestion on the original M6.
There may be something of a network effect in operation here: as some traffic diverts to the M6 Toll, this initially reduces the generalised costs (of vehicle operation plus value of travel time) in using the original M6. That in turn could attract more traffic from neighbouring non-motorway roads (for example, the A34), on which the congestion problem may be even worse. The net result could be the restoration of traffic volumes on the original M6 to the same level as before.
This tends to point to the underlying problem to which the M6 Toll has not been able to make much of a contribution: namely, that there is a very high volume of local traffic between junctions 8 and 10 on the original M6; traffic that is responsible for numerous lengthy tailbacks, but traffic that has no possibility of diverting to the M6 Toll.
Dr Pat Hanlon
Senior Lecturer in Transport Economics, University of Birmingham