
On track to prosperity: Great Northern Rail
Article
It’s time the North saw real change for better transport, delivering prosperity and better lives: a long-term plan for Great Northern Rail
“It is time to come out fighting to ensure that economic growth, productivity and prosperity are shared more equally across our country,” argued Lord Blunkett in Yorkshire’s Plan for Rail.
We agree. It’s time that the North saw real change for better transport, reviving our transport network, and delivering prosperity and betters lives, as the prime minister and chancellor set out in March.
Today, we are setting out the scale of what we are fighting for: a real drive to catch up to the £140 billion of missing investment in northern transport since 2009/10. To continue closing this historic gap, building on last week’s £15.6 billion investment in city region transport, we want to see transformational investment in regional transport in the North and a plan to get the most out of every penny spent.
The missing piece
For many decades, underinvestment in the fundamental drivers of growth has held back the North’s economy and created cavernous divides between our regions. This has with real consequences for the quality, and even length, of people’s lives. It also makes it difficult for many to trust that our political system can deliver more than a feeling of neglect.
The investment fuel needed to power regional economies has been concentrated for too long in one corner of the country. Take spending on growth, which shows a staggering gap between London and the Greater South East and the rest of England, which has remained throughout both the Northern Powerhouse and Levelling Up eras.
The investment fuel needed to power regional economies has been concentrated for too long in one corner of the country
Zooming in to transport spending shows this even more clearly. Looking at historic transport spending, we find that:
London received on average 2.43 times as much public transport spending per capita than the North and almost double (1.96) the overall UK average over the last 10 years of available data (2013/14–2022/23).
- London received £1,182.52 per capita each year.
- The North received £486.20 per capita each year.
- The UK as a whole received £603.22 per capita each year over the period.
The gap between per capita transport spending in London and in the North has grown in recent years.
Over the last decade (ie 2013/14 onwards):
- annual spending on transport in London per head has increased £498.77
- annual spending on the North per head increased £236
- annual spending on the UK per head increased £270.23.
Spending on London has increased 1.85 times more per capita than across the UK overall and 2.11 times faster than the North on average each year over the past decade. And this holds true if we look back to the period since 2009/10—with London’s increase 2.11 times faster than the North and 1.72 faster than the UK overall.
Had London-level spending per head been received from 2009/10 onwards, then by 2023/23 the North would have seen £140.42 billion more in transport spending. This £140 billion catch-up cash is worth more than the entirety of capital spending on transport in the North since the millennium, which we estimate to have been £82.52 billion since 1999/2000.
This is a debt owed to the North, created by the decisions of the past several governments. It which has amounted to hamstringing our transport networks—leaving us with old and tired rolling stock, unreliable and inefficient infrastructure, and the daily experience of frustration and delay. Meanwhile, growth-focussed major projects like the Elizabeth Line in London demonstrate both the skew and the benefit of investment in transport in the Greater South East.
“Economic growth is the number one mission of the government… with more people in good jobs, higher living standards, and productivity growth in every part of the United Kingdom.” This is the clarion call intended to define decisions made by this government.
[...]the quality of rail links between major towns and cities in the North and Midlands is a ‘major’ factor in the UK’s stagnant productivity growth
It is a worthy goal. The failure to drive up economic growth in our regions and major cities outside the Greater South East is a key element of why we find ourselves stuck with low and slow growth, creating fiscal headaches, undermining opportunity, and limiting living standards.
But such a goal for growth depends upon a positive story of how we get there. That story must correct what we know has been going wrong: weak private and public investment is a driver of our weak productivity and slow growth.
Transport is crucial to this. The former National Infrastructure Commission clearly found that the quality of rail links between major towns and cities in the North and Midlands is a ‘major’ factor in the UK’s stagnant productivity growth. Indeed, the Northern Powerhouse Independent Economic Review update in 2023 found the productivity gap between the North and the rest of England has been stubbornly flat since 2016.
Fixing this means replacing the litany of broken and unfulfilled promises: the constant pairing back of investment in the North whether the Northern Way, the Northern Hub, HS2 (on several occasions), and the Integrated Rail Plan. The abandonment of strategic thinking for rail investment across the North, paralysing development, harming growth, and leaving worsening constraints where congestion and unreliability around key hubs like Leeds, Sheffield, and Manchester ripple across the North as cancellations and delays.
These problems are linked to a systemic undervaluing of investment in the North and investment in transport, particularly in HM Treasury.
Our longstanding economic growth model has focussed on furthering investment in already highly productive places, overlooking the long-term potential of places further behind. It is transformative investment that such places needed, a full tank of investment fuel to move them up to a higher altitude of growth.
Yet transformative growth projects are consistently underestimated in the UK, and even the Department for Transport has recognised a need to better understand the impacts of their own proposals to strengthen their own case. Meanwhile, investments often overperform estimates in their initial investment case like the Northumberland Line between Ashington and Newcastle, only half open, and the Elizabeth Line both outperforming initial estimates.
Last week, the government signalled its recognition of this, with the Chancellor investing heavily in city regional transport and recognising the need for a “new economic model – driven by investment in all parts of the country, not just a few.”
Getting investment up, shifting regional economies up to higher growth paths, and turning around the historic missing piece of growth-enabling investment in transport are key to the prize of higher growth.
The prize
Investing in transformative and integrated transport schemes, especially rail, offers political, socioeconomic, and environmental rewards. Improving public transport is popular and highly visible to the public. Governments that do this well can reap political rewards while growing the share of passengers and freight using sustainable public transport like trains.
The North has the potential to act much more like a single joined-up economy with multiple centres, rather several disconnected economies. This potential is accessed by efficiently linking its numerous, and relatively close together, towns and cities, growth assets, and international connections. Yet for now, too many people cannot access the North’s economic centres in a timely and reliable way, and places like Sheffield and Bradford are poorly connected to international gateways like Manchester Airport.
[...]too many people cannot access the North’s economic centres in a timely and reliable way
Fixing this would unlock latent benefits like agglomeration benefits, larger labour markets, and freight opportunities that could align with increases density of our economic hubs in terms of jobs and housing, all adding up to stronger productivity and better opportunity.
Rail investment is central to reaping these benefits, with its ability to efficiently move large numbers of passengers and goods where there is sufficient capacity, speed, and resilience. Intra-city transport improvements, as backed by the Chancellor last week, are also important in bettering each cities’ economy and extending benefits of improved regional connectivity. Investment in transport both within and between places is complimentary and joined-up policy seeks to integrate them. Regional schemes can help extend and complement local transport schemes like those backed last week.
These investments, together, can also catalyse regeneration and development. For example, at a major hub station like Manchester Piccadilly, the right station and development plans could support 14,000 new jobs, and at Leeds, improvements to Leeds station and mass transit could underpin 4,000 new homes. New stations and routes can unlock housing development, like the proposed Haxby station in North Yorkshire, and better connect housing, employment, and industry, as proposals for the Leamside Line in the North East seek to do. Another example is the Rotherham Gateway—providing a mainline station for Rotherham opening up new connections, growth opportunities, and unlocking Rotherham’s largest housing development site.
This prize is significant—increasing investment in growth-enabling policy areas like transport, skills, and innovation could add £118 billion the North’s economy by 2050. While recent proposals like the Northern Arc target 500,000 new homes and a £90 billion contribution to the economy by 2040, and Yorkshire’s plan identifies up to 83,000 jobs and 210,000 new homes could be supported by rail investment.
Such benefits are derived not only from investment in transport alone, but in also aligning this with a robust growth strategy: delivering new homes, regenerating key locations, delivering new employment locations, and accompanying skills, innovation, and industrial policy.
The prize of transformational investment in northern transport is the fuel for a flight to growth, driving up national prosperity and placing us on a longer-term growth path.
The ask
Securing this requires transformational investment in the North’s transport integrated into an ambitious growth vision, aligning long-term strategic thinking and healthy delivery.
In the absence of central government strategy behind Northern Powerhouse Rail, mayors have filled the void with their proposals: Northern Arc, Yorkshire’s Plan for Rail, alongside pan-northern proposals for Northern Powerhouse Rail. These proposals ought not be seen as in competition, rather complementary contributions to a coherent pan-regional approach will be.
For example, the Northern Arc’s proposal for a Liverpool-Manchester Railway via Warrington, Yorkshire’s proposals for maximising onward connectivity of the Transpennine route upgrade, and advancing strategic schemes like Manchester to Leeds via Bradford can align to deliver significant benefits.
Central government can back these plans together, integrating them into a Great Northern Rail network, stretching from Liverpool to Hull and Newcastle—crossing a wide range of economic development and housing growth opportunities. The East-West spine of Northern Powerhouse Rail remains a vital component of these plans, with a new high-speed route from Liverpool to Leeds via Manchester. It should be integrated into upgraded connectivity to Sheffield and Hull—including electrification of the midland mainline—and onward connectivity to Newcastle with connections and upgrades to the east coast mainline.
This vision does not require one single large project and is neither about piecemeal projects; it requires significant, sustained investment through a modular strategy, delivered with the North’s catch-up cash and closing transport investment divides. This phased but future-proof approach would build upon the ‘no regrets’ and phased delivery proposed in existing plans, with a focus on building up delivery and creating the kind of investment pipeline that can sustain and protect careers. For example, addressing capacity constraints at Sheffield is a ’no regrets’ initial scheme enabling the vision above to be delivered in full.
It also offers the potential to bring back North-South high-speed connectivity and capacity, by designing the network in such a way that connections to HS2 both east and west of the Pennines could be progressed in the future.
Fixing historic underinvestment in this way will improve connectivity
The Northern Arc proposal is estimated at £17 billion; Yorkshire’s Plan for Rail is a £14 billion package, and historic estimates of Northern Powerhouse Rail suggest around £39 billion (2019 prices). These are transformative investments—though they are still likely to be lower than the £140 billion of missing transport investment in the North, and will be delivered through a phased approach over multiple Parliaments, complementing investment in local public transport too.
This modular, future-proof, and sustained investment approach demands a commitment to a long-term strategy—with the government’s 10-year infrastructure strategy being one enabler. A strong partnership with government will be needed for local leaders to build an accompanying growth strategy. This would seek to maximise transformative benefits of investment, build up from local opportunities, and capitalise on the existing intelligence from exercises like the region’s Independent Prosperity review. Following the path of transport investment and boosting national growth, it would craft a compelling Great Northern Growth Corridor.
Conclusion
The government’s priorities for rail investment in the North are there for the backing. They comprise a bold transformational agenda that sets up the North for a more prosperous 2030s and 2040s than 2010s. This agenda is a transformational package of futureproof rail investments and a growth strategy; all backed with the catch-up cash owed to the North.
Fixing historic underinvestment in this way will improve connectivity, and in doing so will better unlock the region’s connectivity, the growth and regeneration benefits that this provides, and push the North to a higher growth path that supports a more prosperous economy for the whole nation.
This spending review is an opportunity to correct course. The test for regional investment will be that it is catching up, not falling further behind.
A note on our methodology
As we did in 2019 and 2021, IPPR North have updated our transport spending analysis using ONS data and exploring per capita spending scenarios. Like our previous analyses, we include total transport spending (capital and current) and only include public spending (ie excluding private spending leveraged in by public spending), because this is not included in the ONS analysis of HMT data. We have long defended this analysis and method as an appropriate way of exploring the transport spending inequalities that exist in the UK—though our historic analysis has not usually been directly challenged (to current knowledge).
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