Transformational infrastructure for the North: Why we need a Great North Plan

International evidence shows that investing in infrastructure is essential to competing in the global economy and driving economic growth. Yet, for a highly developed country, the UK has underinvested in major infrastructure networks and is slipping down the world rankings in terms of infrastructure provision.

Building infrastructure often demands government involvement to support investments where the market cannot – for example, by readying unviable sites to mobilise private investment, providing and assembling land for projects, or providing loan guarantees for developers. Equally, public investment can help to redistribute the costs of investment more fairly across society by allowing the public purse to absorb the costs, rather than consumers through, for instance, higher utilities bills.

However, the way the government spends money is out of balance. Despite OECD research showing that money wisely invested in weaker economic regions can deliver higher rates of return through economic growth than investing in areas that need it less, London, with its dense infrastructure provision, is the overwhelming beneficiary of publicly leveraged investment.

In part, this imbalance reflects the fact that current methods of infrastructure appraisal are skewed in favour of direct user benefits rather than their wider economic benefits. But another reason for such regional disparities lies in the location of large-scale transformational infrastructure projects, such as London's programme of Crossrail, Thameslink and London Underground improvements. It is these major transformational projects, alongside smaller investments, which stand the greatest chance of rapidly enhancing northern productivity and economic growth, which will ultimately be to the benefit of the whole country.

To support a rebalancing of infrastructure investment, we make four key recommendations:

1. Public and private stakeholders in the north of England should galvanise their efforts to develop and promote transformational infrastructure projects in the North, with a view to bringing them to a national audience.
2. Northern leaders should work together to bring forward a long-term Northern Infrastructure Strategy, including a small number of key transformational infrastructure priorities. This strategy should build on the 'One North' plan for transport connectivity and Rail North body to galvanise collaboration in relation to rail franchising in the North.
3. An incoming government in 2015 should undertake a radical review of the national infrastructure pipeline in order to bring forward plans for a more balanced approach to infrastructure spending in the UK, with greater emphasis on transformational infrastructure projects in the north of England.
4. The current government must move more quickly and decisively to overhaul the existing transport appraisal processes in order to place greater emphasis on the wider economic benefits that might be derived through public investment in key infrastructure projects and to progress transport devolution to combined authorities and other transport bodies.

To help bring great infrastructure ideas for the north of England to a wider audience, IPPR North is running the Great North Plan competitions for young people and professionals. Visit http://www.GreatNorthPlan.com to find out more.