Leave a comment
Be the first to add a comment.
Recently the news has been aflutter with stories about big, transformational transport projects. First, the London Infrastructure Plan 2050 put out a suite of integrated infrastructure investments for the capital’s growing population to the tune of £1.3 trillion. That was followed by ‘One North‘, announced by the Chancellor, which calls for a £15 billion investment in linking up the Northern cities through better transport. And finally, IPPR North produced a report today on the drastic differences in spending between London and the South East versus the rest of the country (n.b. for a response to these estimates, see Henry Overman’s blog here).
There are plenty of challenges with these big investments, be it £1,300 billion or £15 billion. Policymakers face a lot of uncertainty in the benefits the investment will bring, or exactly when they will be realised. Nobody knows what the programme will actually cost. Macroeconomic concerns, like the slow growth of the national economy and conditions in the EU, also play a role in determining borrowing rates and financial returns. Local challenges are vast as well, like how cities will cope with the increased pressures by being better connected through One North, the Northern Hub or HS2.
But the big question for me is: are we approaching these investments from the right point of view? For example, IPPR North has tended to take the view that London has too much investment at the expense of other regions – that some cities in the UK are taking more than their fair share to the detriment of others. But I think this risks missing the point that an investment in London is not at the loss of the North per se, because the benefits of better transport in London brings more national taxes to be invested across the country.
So instead of regarding investment only as a zero-sum game, the challenge is making sure that the country as a whole benefits from sound infrastructure investments. That’s why the One North programme should be welcomed and should not be thought of as eating into London’s Crossrail 2 budget, but as a way to generate more for the country to invest and grow in the long term. The non-financial and cross-cutting returns also need to be considered. Transport can open up new areas for homes and businesses to be built. It can improve access to jobs and make it easier for businesses to trade. These often go unaccounted for.
Yes, there will always be trade-offs. HM Treasury will have to make explicit decisions about which cities receive monies within their set budget. There is only so much money to go around. However, if the Government can put up just one third of the cash for Crossrail and get returns more widely, then is that not a good investment? Then if those Crossrail returns are used (and politicians need to ensure they are used for this) to grow the funding pot for future transport investment across the country, that moves the conversation on from a zero sum game to a win-win situation.
Cities need to work together to make the most of transport investments. They have a lot to learn from one another, for example from the way TfL invests in its network. The Centre is in discussions with TfL, Manchester and Leeds to see how these cities can share information to their mutual benefit in developing better transport for growing the economy.
Rather than looking at the proposals from London and the North as taking from one to give to the other, both would benefit more from looking at the way investments in their transport systems can share the returns locally and nationally, then determine if there is a better way to coordinate the two.
As the GLA put it, if HS2 is completed before tube upgrades, there will be a lot of folks waiting around Euston to get where they need to go. We would all be better off thinking about ways to make transport investments across the country a win-win situation by working more closely together.
Senior Consultant, City Economics at Arup
Be the first to add a comment.