Keeping the wheels from falling off: Why England needs a new urban transport investment fund

With each passing week, the public finances look more and more precarious. For England’s cities, the next decade is likely to be marked by a wide-ranging cutback in Government capital investment, with transport and other infrastructure projects pared back significantly. Despite transport’s role as an enabler of economic growth, it remains low on Ministers’ priority lists – well behind education, health and defence.

Yet public transport infrastructure needs – especially in England’s regional cities – remain significant. A decade of increased spending has not closed the ‘infrastructure gap’ faced by cities like Leeds, Manchester, Birmingham, Cambridge, Reading or Bristol. So if cities are to lead the economic recovery over the longer term, new sources of transport investment will be urgently required.

This Policy Solutions note sets out a blueprint for a new Urban Transport Investment Fund. The Fund is not a new Government spending programme – but a way to simultaneously deliver high-quality public transport infrastructure and returns for central government, local authorities and private-sector investors. Over the next year, we urge all major political parties to work with cities to build up detailed plans to launch a city-focused transport Fund, following the 2010 General Election.

Recommendations for Government:

1. Abandon the current local road pricing push by the end of 2009 if there are no takers and safeguard the £1bn congestion charging pot for long-term urban public transport investment. While we support the principle of local road pricing, the Government’s existing approach will not work in the current economic and political climate.
2. After the next general election, create a public-private Urban Transport Investment Fund, which will enable long-term investment in public transport at no net additional cost to the Treasury. This Fund could bring together up to £4bn for public transport investment in its initial phases.
3. Give Fund member cities greater power to invest in transport projects using Accelerated Development Zones’, which would allow them to borrow against future income streams to deliver much-needed infrastructure.