Can we end aviation dependency, and meanwhile how to spend the profits?

 

Last year Manchester City Council received what was described as a windfall of some £14m from its share of Manchester Airport Group. The other Greater Manchester councils have received a smaller, proportionate share.

This year the figure is £16.23m according to Manchester Evening News. It might seem puzzling that this is termed a windfall, since so long as Manchester Airport Group returns a profit, then there is a constant stream of money. But maybe it is safe to regard it as an unreliable, since levels of aviation are vulnerable to economic downturns, and while we know that there will be another financial crash, we don’t know when it will come.

In this piece we will,

1) consider what the airport contributes to Manchester’s well-being, and the costs involved,

2) suggest that there should be a strategy to use the funds the airport brings in to reduce levels of flying while building up other areas of the economy,

3) comment on how the money might be used, suggesting some principles to guide the use of non-recurrent monies.

1) The airport’s contribution to our well-being.  £16 Million sounds like a lot of money, but in relation to the council’s overall budget of £555,164 it is relatively small (2.88%). The airport does make a significant contribution to levels of employment and income in the city and region (although this is often over-estimated), but if our assertion above about the vulnerability of aviation to economic shocks is correct, then putting a lot of eggs in this basket is not a good strategy. Elsewhere we have criticised at greater length the strategy of reliance on aviation-based inward investment.

We should also make the obvious point that, in addition to noise and green belt encroachment, air traffic is a very significant source of greenhouse gas emissions, yet there is a taboo about even discussing the matter in relation to Manchester’s carbon reduction plan: try inputting the search term aviation on the MACF website.

Here are our calculations on the carbon emissions and their rate of growth (note that we have not factored in the ”aviation multiplier” commonly used to recognise the particularly damaging impact of jet aircraft).

Airport growth and emissions: Manchester Airport Group
 
Manchester reported reported projection
  2011 2014 2015
tons CO2 2,201,717 2,488,779 2,607,293
annual growth   4.35% 4.76%
passengers 18,577,805 21,000,000 22,000,000
per capita 0.1185 0.1185 0.1185
       
       
Stansted reported reported projection
tons CO2 1,013,173 1,130,000 1,243,000
annual growth   -0.44% 10.00%
passengers 18238050 18,000,000 19,800,000
per capita 0.0556 0.0628 0.0628
       
Sources 1 1,2,3,4 1,2,3,4
Key to Sources
1 http://awsw.co.uk/allco2/index_co2.html
2 http://stopstanstedexpansion.com/documents/Estimation_of_CO2_emissions_2014_R.pdf
3 http://www.manchestereveningnews.co.uk/business/greater-manchester-councils-30m-windfall-7421612
4 http://www.ft.com/cms/s/0/36bd3f1a-0b8a-11e4-8693-00144feabdc0.html?siteedition=uk#axzz37cmialAm
calculated
Emissions estimates do not include a multiplier for the additional impact of aviation emissions.
Growth rates for 2014 are based on the average since 2011.

 

2) A strategy to reduce aviation dependency. Our view is that in a world with an outside chance of avoiding catastrophic climate change, we should have a strategy to firstly cease airport expansion and secondly to downsize this sector, reducing and ending the ‘aviation dependency’ of the region’s economy. Some of the profits from the current operation could and should be used to build this strategy. Again we have discussed this elsewhere, suggesting that we need to construct a post-growth replacement economy, that is selectively grown while the damaging sectors are progressively shrunk. But while we live in awe of ‘the market’ and depend on the growth of other economies (China comes to mind), then our leaders will remain too timid to take this necessary plunge.

3) Spending it. So that’s one way to spend some of the ‘windfall’. What principles should guide the spending of the rest of it? We know that one off sums can be difficult to put to good use. Much council expenditure, directly or in directly, is recurrent. That is to say it isn’t a one-off expenditure but requires money to be spent every year. That’s mostly because it pays people’s wages, and services the council pays for, whether direct, such as looking after people are labour intensive.

It is perhaps therefore not very surprising that the council’s ideas on how to spend last year’s windfall were seen by some as vague and cosmetic, although doubtless some good was achieved through the “clean and green” scheme.

There are some tricks in spending non-recurrent monies to get the best benefit. Here are some of them (and we aren’t suggesting that all the examples we mention can be funded from this year’s £16M).

Principle one is to spend on things that will make a positive impact on people’s lives. So spending on affordable housing, in the context of a shortage (as a result of years of neoliberal government policy), is a good example. It also means a ‘multiplier effect’ as jobs are created, and people spend their wages in the local economy.

So that’s principle number two: spend in ways that multiply the benefit. Spend on fitting highly effective insulation to the 90% of the housing stock that need it would save residents money by reducing fuel bills, create jobs and build skills, and reduce greenhouse gas emissions – not to mention reducing fuel imports to improve the UK’s trade deficit and reduce vulnerability to external shocks. That’s the idea behind the New Green Deal Group’s proposal for Green Quantitative Easing, but it could be done locally.

That in turn suggests principle three: spend for the benefit of future citizens and for environmental benefit. We need to really ‘clean up the city’, so it reduces its ecological footprint. Retrofitting insulation is just one example of this. How about kick starting community energy generation, community food production, or community textile production? Our idea of investing to reduce airport dependency is another.

Principle four is about another kind of multiplier effect – invest to reduce ongoing expenditure, so that the council has more money available, recurrently in future years. To give just one example, supported housing for learning disabled people is expensive to staff because it is based on the ordinary housing stock. Investing more money in well designed supported housing options could pay for itself quickly. Without any wishful thinking about ‘reducing welfare dependency’ or promoting overall economic growth (or returning to institutional human warehousing), judicious investment can mean there is more to spend in future years.

Local government has the responsibility to make good use of its resources. To do that, our present system, like it or not, vests that responsibility in elected members and officers. But it is always good practice to consult in a meaningful way and get ideas from people in the city.

Mark H Burton

 

This entry was posted in Climate Change, economics, Manchester City Council, news, transport and tagged , , , , , . Bookmark the permalink.

5 Responses to Can we end aviation dependency, and meanwhile how to spend the profits?

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