20 August 2019

Rebalancing Britain: Devolution is the key to levelling up transport

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Leftwing thinktank IPPR North has published a short paper on transport investment in different parts of the UK. To anyone from or living in the north, a quick glance at its executive summary makes for grim but not particularly surprising reading.

Looking at historic data, IPPR North argue that over the past decade average annual public spending on transport totalled £739 per capita in London, compared to just £305 per capita in the north.

The government also comes in for criticism over its estimate for planned future infrastructure spending, which has the North West as the region with the highest expected funding per capita, and London in the bottom half of the table.

IPPR North argue that when viewed over a truly long-term time frame, and when spending undertaken by Transport for London (TfL) is included, the capital again comes out on top.

To be fair to the paper’s author, the analysis broadly stacks up. London has, of late, seen higher per capita funding than other regions. On future spending, it seems apt to take a longer-term view on projects, while including TfL’s spending is prudent, too (London has a special arrangement with government which means that instead of receiving a grant from Whitehall to spend on transport, it can use money raised from business rates instead).

Moreover, the justifications IPPR North present as to why transport spending is higher in London than the north appear equally logical.

First on their list is the existence of a well-resourced institution in the form TfL being able to more effectively leverage in public funding for big projects, which ultimately leads to the observable discrepancies with other regions which don’t have a TfL equivalent.

Second, they consider current transport appraisal methodologies, which can make or break whether a transport project gets approved and funded. Under existing methodologies, there is evidence to suggest they favour already economically successful areas. Needless to say, this creates an implicit bias towards affluent places like London.

Lastly, the report cites political pressure and influence leading to unfair funding. Decisions to invest in transport projects are ultimately political choices. This politicisation therefore, can undo any sort of safeguarding against one region or another receiving more than its fair share of funding. If a minister wants a project in a certain part of the country to go ahead, you can bet it will – regardless of what this entails for regional spending equality. The centralised nature of government decision making also means that spending can all too often take place in a London-centric manner.

This said, the headline figures stated in the report should be taken with a pinch of salt.

First of all, it must be recognised that a key reason as to why Londoners have more spent on them is that it simply costs more to build and maintain transport infrastructure in the capital to begin with. Whether it’s the cost of acquiring land for new stations, or paying employees’ wages – as long as London (and indeed any built-up urban area) remains the wealth generator it is, operating in it will always command a premium, and this has to be reflected in the funding.

London’s population also plays a big role in giving the impression of privilege when it comes to transport funding. Specifically, the number of people in the capital swells during the daytime, as workers commute in, primarily from the Home Counties. These extra people all add to the strain put on London’s trains, tubes and buses.

Yet when it comes to crudely dividing a region’s transport spend by its residents to work out per capita figures, these commuters go unnoticed – adding to the impression that London receives more than its fair share of transport funding.

In a similar vein, consider the flocks of tourists who descend onto the capital each year. Again, they all represent extra people making use of transport, without necessarily being accounted for in the statistical analysis. Of course, visitors to the UK also venture outside of the M25, but according to Britain’s tourism agency, over 3 million more people visited London alone in 2018 than the whole of the rest of England.

So, while the IPPR North report is right to highlight some genuine reasons that London appears privileged in its transport funding, the real picture is more complicated than the one they paint.

Certainly, the remaining challenges should all be looked at further. Perhaps the single best way to address them would be the continuation of the devolution process which George Osborne accelerated when he was Chancellor. Giving local places, represented by powerful figureheads like metro mayors, more responsibility for their transport not only increases the likelihood of sensible and appropriate decision-making, but also gives them a stronger voice when it comes to lobbying the Treasury for the resources they require.

The north has incredible potential, yet is held back by often appalling transport connectivity. Extra central government money alone will not address the systemic issues that have long blighted the region. The Prime Minister, who’s spoken passionately for the need to ‘level up’ all parts of the UK, should carry on strengthening the programme of devolution and empower local bodies to sort out their transport themselves.

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Eamonn Ives is a Researcher at the Centre for Policy Studies