On the wrong track?

IPPR North, economy, finance, regional issues, transport

Author(s):  Ed Cox
Published date:  24 Jan 2012
Source:  LGA firstonline

Many local authorities have been frustrated with their limited powers over infrastructure spending and investment. Recent announcements about high speed rail links (HS2) between London, Birmingham, Manchester and Leeds suggest the government recognises the importance of major infrastructure investment in driving economic growth. And last autumn the Chancellor announced £30 billion of spending in a newly updated National Infrastructure Plan.

However, IPPR North analysis of these new figures reveals a worrying and unbalanced pattern of investment. London and the South East together account for 84 per cent of planned public spending on major transport infrastructure - compared to just 6 per cent in the North (just 0.04 per cent in the North East).

This equates to £2,731 per head for Londoners, compared to £201 in Yorkshire and the Humber, £134 in the North West and just £5 per head in the North East. Even if you remove the apparently essential Crossrail, London Underground and Thameslink projects, the Greater South East still receives 40 per cent of all spending.

Timing is a factor too. Eighteen major transport projects have already started in London and the South East, compared to one in the North West, three in Yorkshire and the Humber and none in the North East, meaning any short-term boost to the economy is likely to be concentrated in the South East.

There are both political and technical reasons for these imbalances. Governments of both colours have directed resources to London and the South East for political gain. But official guidance for transport projects also privileges projects in areas of high population density over those which might bring wider economic benefits. Many local authorities will have come across these unjust methodologies before, and something must be done.

New ‘City Deals’ may result in new powers for local authorities to collaborate and pool resources on small infrastructure projects. There is also £500m available in the Growing Places Fund for ‘critical infrastructure improvements’.

However, despite these changes, most of the big infrastructure decisions will inevitably be taken nationally, and that’s where things need to change. Never before has the need for ‘rebalancing’ been so pressing to get the whole UK economy back on track: northern prosperity is national prosperity.

By line:

Ed Cox is Director of IPPR North.