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The Progressive Policy Think Tank

Transport Secretary urged to close £1,600 per person London-North spending gap

IPPR analysis reveals stark spending split - North will get average £280 per person and London £1,870
  • England's North East will see £300 per person, the North West £290, Yorkshire & Humber £250, and London £1,900, for key infrastructure between 2016/17 and 2020/21.
  • Total spend on Crossrail alone will be £4.6bn during this period, and will exceed spending on all projects in the North (£4.3bn).
  • Secretary of State urged to adopt pro-business “North First” agenda to boost UK-wide growth. Such a ‘North First’ approach to transport, which makes the most of the North’s economic assets, would boost productivity.
  • All parts of the UK have the potential for growth, but the North’s world-class cities, ports, universities, energy assets and bodies like Transport for the North make it ideally placed to create inclusive growth and build Theresa May's "better Britain", the analysis shows; and the North should "Take Control" of its own funding decisions.
Fresh figures reveal the North of England is six-times less funded than London on infrastructure, according to a leading think-tank’s analysis.
The stark contrast is outlined in a letter from IPPR North to the new Secretary of State for Transport, urging him to develop a “North First” approach to infrastructure investment.
Most of the UK’s future infrastucture investment is in London and England's South-East, the letter warns.
But a focus on the North of England, including its world-leading cities, ports, national parks, energy assets, £300 billion economy and 15 million citizens, could unlock real and fair prosperity.
Ed Cox, Director of IPPR North, said:
“The referendum result showed that now more than ever, we need a ‘North First’ approach to investment.
“To build Theresa May’s ‘Better Britain’, we must focus on a better North.
“The North of England’s £300bn economy is worth more than those of Scotland, Wales and Northern Ireland combined. Focusing on this is going to be critical in creating the prosperity our country is going to need over the coming years.
“The North must also “Take Control” of its own funding decisions. The evidence shows that this would help boost growth, ditching HM Treasury’s outdated and ineffective model, better suited to mitigating congestion than driving new economic growth."
The letter also urges the Transport Secretary to focus on four key priorities:
  • As part of the government’s new industrial strategy, using record-low interest rates to raise £50 billion “catch-up cash” to invest in northern road and rail priorities, to unlock the vital private and foreign investment that such schemes will ultimately need. Theresa May and Phillip Hammond have indicated support for increased borrowing on infrastructure as part of a new industrial strategy, and this must be pushed.
  • Persuading HM Treasury to overhaul its flawed funding model, which is outdated and not suited to driving economic growth. New ways of assessing the benefits of transport scheme, and devolving 10-year budgets, will make for much more effective long-term planning.
  • Introducing a new Clean Air Act for major cities to tackle toxic air, which kills 40,000 people a year and costs the NHS and the wider economy more than £20 billion a year.
  • Ensuring the passage of the Buses Bill through parliament – which, with the creation of Metro Mayors with London-style transport powers in major English cities from next year, will make a genuine difference to the daily lives of millions.
The letter invites the Secretary of State to visit the North and see first-hand the lack of investment – and the growth that a “North First” policy on transport investment could unlock.
This makes economic sense as well as being fairer, the think-tank argues; there is strong emerging evidence that the way the Treasury calculates the economic ‘return’ on infrastructure investment is seriously flawed.
Likewise, with small businesses becoming a much larger part of the economy, local decision-making is closely linked to growth rates.
IPPR also urges work to be brought urgently forward on the so-called “HS3” (east-west crossing) – even if this means taking priority over HS2 (north-south).
Tom Kibasi, Director of IPPR, added:
“The time it takes to travel, on hugely dated infrastructure, between our great regional cities is a national disgrace – this is just not what happens in Germany, Japan or France, with their fantastic rail links, or the United States, with its highly developed regional air travel.
“Given the Brexit result, the North of England must urgently see growing prosperity. A proper east-west crossing would boost northern and UK growth, and must now take priority above all other major transport projects, including Crossrail 2 and HS2.”
ends

Contact:
Ash Singleton, a.singleton@ippr.org, 07887 422 789

Notes:
Why ‘North First’?
All parts of the country have the potential to thrive - but the North especially so:
  • Groups of northern cities are collectively not as strong as they could be.
  • The North has significant non-city strengths – such as ports, energy assets and national parks – which add to its potential.
  • The North is ready to take control: the new Transport for the North body, and the wave of Metro Mayors being created in major cities, make it ideally placed to deliver inclusive prosperity.
Methodology
These figures are based on HM Treasury’s Spring 2016 edition of the National Infrastructure Pipeline and ONS sources for population and commuters. The figures show what the government plans to spend on transport infrastructure between 2016/17 and 2020/2021, Only spending that includes public funding is used – projects either publicly funded, or funded by a combination of public and private funding. Figures are in constant prices, with population growth factored in where appropriate.
SPEND SPEND PER CAPITA* SPEND PER COMMUTER**
London £17,063,246,127 £1,869 £4,271
London without Crossrail £12,450,144,254 £1,364 £3,117
Crossrail £4,613,101,873 £505 £1,155
East of England £2,347,011,109 £375 £935
North East £806,352,394 £304 £802
South East £2,662,220,173 £289 £713
North West £2,100,763,232 £289 £740
North £4,258,370,496 £277 £710
West Midlands £1,563,033,104 £266 £696
Yorkshire & the Humber £1,351,254,870 £247 £629
South West £1,227,418,171 £219 £576
East Midlands £924,321,977 £193 £481
*(2016-2021 AVERAGE)
** Commuters to and from the region in 2011
Sources: HM Treasury (2016), National Infrastructure Pipeline Spreadsheet, Spring 2016 update; ONS (2016) Subnational Population Projections for Local Authorities in England; and ONS (2016) Census: WU01UK - Location of usual residence and place of work by sex.