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Transport spend per head is £2,700 for London but £5 per head in North East

IPPR North, transport

Published date:  19 Dec 2011

Transport spending system is broken

Londoners benefit from more money per head on transport spending than all of the other regions combined, a new report by the think tank IPPR North published next week reveals. Despite London being the UK capital and the host for the 2012 Olympics, the report says transport investment is still unbalanced.

IPPR North analysis shows transport spending is:

  • £2731 per head in London     
  • £792 per head in the South East       
  • £311 per head in the East Midlands  
  • £269 per head in the West Midlands 
  • £201 per head in Yorkshire & Humber
  • £134 per head in the North West
  • £43 per head in the East
  • £19 per head in the South West
  • £5 per head in the North East

Analysis by IPPR North shows that almost half of major transport projects involving public funding benefit only London and the South East accounting for 84 per cent of planned spending. This is compared to 6 per cent in the North of England as a whole and only 0.04 per cent in the North East.

Twelve out of the top 20 major infrastructure projects involving public funding benefit only London and the South East compared with just 5 of the top 20 in the North of England.

The report argues that, as a result, any short-term boost to the economy is likely to be concentrated in the South as 20 major transport projects have already started in London and the South East.

This is compared to one in the North West, two in Yorkshire & Humber and none in the North East despite infrastructure improvement being the second most important factor in driving growth in lagging regions.

IPPR North argue that the ‘cost benefit analysis’ equation that is currently used to decide where investment is targeted is wrong and reinforces the dominance of London and the South East while constraining growth in the North of England.

The report concludes that if decisions about transport spending continue to be made in this way it will lead to more congestion and a reduced quality of life for people in the capital.

IPPR North is calling for:

 

  • A review all post-2014 major infrastructure projects ahead of the 2014 Spending Review in order to place greater emphasis on achieving its own stated objective of rebalancing the economy between the North and the South;
  • A review the guidelines used to decide on transport spending to reduce the emphasis on ‘cost-benefit analysis’ in favour of the wider economic productivity effects;
  • The devolving of a significant proportion of post-2014 infrastructure funding to Local Enterprise Partnerships who can drive economic growth in their areas.

 

Ed Cox, Director of IPPR North said:

 

“Skewed spending benefiting London and the South East is nothing new but these new figures are truly shocking and will strike most people as deeply unfair. Of course every country has a capital city and some of London’s transport infrastructure wouldn’t be happening without the Olympics. But if the government continue to use a system that reinforces the dominance of London and the South East we’ll all be worse-off in the long-run as the South becomes more congested while the North continues to fall behind in terms of growth.

 

"There may be short term gains to be made in the capital but if we want the UK economy to be firing on all cylinders there needs to be a focus on growth in cities like Manchester, Leeds and Newcastle. If the government really wants to rebalance our economy then investment in infrastructure in the North would be a good place to start, after all, a National Infrastructure Plan should be just that – at the moment it clearly is not.”

 

Notes to Editors:

 

Capital Gains: An analysis of the Autumn Statement announcements on transport infrastructure will be published during the week beginning 19th December 2011.

Analysis by IPPR North is of figures from the National Infrastructure Plan published alongside the Government’s Autumn Statement in November 2011 which looks at infrastructure spending to 2015.

Analysis of the latest ONS unemployment figures by IPPR North reveals:

  • The employment rate is highest in the East of England and South East (74.2 per cent) and lowest in the North East (65.1 per cent);
  • The unemployment rate is highest in the North East (11.7 per cent) and lowest in the South East (6.1 per cent);
  • The inactivity rate is highest in the North East (26.1 per cent) and lowest in the East of England (19.9 per cent);
  • The Claimant Count rate is highest in the North East (7.3 per cent) and lowest in the South East (3.2 per cent).

HM Treasury’s Green Book – the manual by which investment decisions are appraised – and the accompanying New Approach to Appraisal (NATA) for transport projects are based on an appraisal process which considers a number of objectives through a process of cost-benefit analysis (CBA).

The current process for transport appraisal is skewed heavily in favour of those areas with the highest population density. As a result, projects in London and the South East always compare favourably in cost-benefit comparisons with other places. As London’s transport infrastructure and economy improves, so does its population density, and so the process becomes self-fulfilling.

Total number of transport projects in the pipeline for the regions, by project status & region:

Proposed

Planned

Confirmed

Started

Total

South East

4

2

6

11

23

London

0

2

1

7

10

East Midlands

1

4

1

3

9

North West

1

2

5

1

9

West Midlands

2

2

2

2

8

Yorkshire & Humber

2

1

2

2

7

East

2

1

1

2

6

South West

0

0

4

1

5

North East

2

0

1

0

3

Total

14

14

23

29

80

In summary:

London & South East

4

4

7

18

33

North

5

3

8

3

19

Contact:

Tamsin Crimmens, 07800 742 262, t.crimmens@ippr.org