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IPPR - New transport figures reveal London gets £1,500 per head more than the North – but North West powerhouse ‘catching-up’

London will see £1,500 more in transport spending per person than the North over the coming years, the latest analysis from leading think-tank IPPR North reveals.

  • IPPR North annual analysis shows Yorkshire and the Humber will get £190 per head, North East £220, North West £680 and London £1,940 per head for transport from 2016/17 onwards – see notes.
  • More than money – Transport for the North should get Transport for London investment powers, report argues.
  • ‘Northern Infrastructure Bonds’ suggested to fund ‘HS3’ linking North’s great cities and other key projects.
  • East-west crossing “vital” as we leave the EU – northern prosperity is national prosperity, and the North's £300bn economy key to UK's future.​

The stark contrast is outlined in a new study on how bodies like Transport for the North could fund a new high-speed rail service between Northern cities, including by new Northern Infrastructure Bonds.

IPPR North's report Paying for Our Progress finds an east-west ‘HS3’ – also known as ‘Northern Powerhouse rail’ or ‘Crossrail for the North’ – is key to rebalancing the UK economy post-Brexit and in creating a country that works ‘for everyone’.  (http://www.ippr.org/publications/paying-for-our-progress)

The North West looks to be benefiting from the government’s Northern Powerhouse, it adds, with the area set to see £680 per head of investment – more than any region outside London, though still less than a third of the capital’s per-head spending.

This shows long-term projects finally coming to fruition: the M60 Quadrant and the ‘Northern Hub’, which could be the precursor to ‘HS3’.

The news comes after the Prime Minister launched her industrial strategy green paper in the North West last month, stressing her commitment to the Northern Powerhouse programme started by George Osborne.

An independent study of the North’s untapped potential in 2016 set out how new investments including ‘HS3’ could unlock up to £97 billion and create 850,000 new jobs by 2050.

The report notes that Britain lags behind other major economies on transport investment, with lower spending levels than Germany, France and the US.

This is in part due to more freedoms to invest in infrastructure overseas. IPPR North suggests how these could be applied to boost areas outside London:

  • to fund a high-speed service between the North’s big cities, the Treasury should allow for new Northern Infrastructure Bonds, which would raise capital on the pensions market for northern infrastructure projects
  • the Transport for the North body should be given TfL-style powers to invest, and the National Infrastructure Commission granted greater room to set infrastructure priorities.
  • in its Budget next month, HM Treasury should announce new funding in northern infrastructure, with a view to leveraging private sector funding.

Grace Blakeley, researcher at IPPR North and report author, said infrastructure investment will benefit the national and northern economy:

“It currently takes longer to travel by train from Liverpool to Hull than from London to Paris – building better links between the North’s cities will boost the nation’s economy by driving up northern productivity.

“The spending gap between London and the North remains huge but this is about more than money, the North needs to take back control over transport spending too, to sensibly invest in a range of northern infrastructure projects and unlock more potential.

“In particular, new bonds could help raise vital funds from long term investors, such as pension funds – like we see in the US and other countries.”

Ed Cox, director of IPPR North, said the North and other regions should take back control over transport investment:

“With the government pre-occupied with Brexit, giving more power to regions to take control over infrastructure is key to creating a country that works ‘for everyone’: we’re not asking for simple handouts, we’re asking for powers to finance this ourselves as London currently does.

“There is a long, long way to go to rebalance the UK but these figures suggest we’re seeing the green shoots of the Northern Powerhouse idea being more than mere bluster.

“We must however make more progress if we want to see spades in the ground anytime soon.

“Britain is tasked with overhauling our economy after we leave the EU, and our report details how exactly we pay for this vital project – northern prosperity is national prosperity.”

The report was launched at Manchester’s town hall on Monday 20 February, with speakers including Grace Blakeley and Ed Cox of IPPR North and Andrew Herring of leading law firm Squire Patton Boggs.

Contact:

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

Notes:

IPPR North is the dedicated think-tank for the North of England.

HS3, Northern Powerhouse Rail and a ‘Crossrail for the North’ are generally interchangeable terms to refer to faster east-west links between the North of England’s big cities.

In 2016, the National Infrastructure Commission recommended the Treasury commissioned a new study exploring how this could happen. IPPR North calls for HS3 to be brought forward urgently in light of Britain’s departure from the European Union.

Methodology

The transport investment figures used above are based on HM Treasury and the Infrastructure and Projects Authority’s Autumn 2016 publication of the National Infrastructure and Construction Pipeline, and ONS sources for population data. The figures show what the government plans to spend on transport infrastructure from 2016/17 onwards. 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. It only includes those projects which are attributed to regions, and not those which are country-wide (such as HS2).

 

TOTAL SPEND 2016/17 ONWARDS  

PER CENT OF TOTAL  

PER CAPITA*  

North East

£588,561,974

1.8%

£222

North West

£4,949,281,857

15.1%

£682

Yorkshire and the Humber   

£1,038,966,827

3.2%

£190

East Midlands

£1,057,289,263

3.2%

£221

West Midlands

£1,491,766,636

4.6%

£254

East of England

£2,588,026,910

7.9%

£413

London

£17,736,887,830

54.2%

£1,943

South East

£2,080,133,194

6.4%

£226

South West

£1,189,202,792

3.6%

£212

English regions

£32,720,117,282

100.0%

£582

North

£6,576,810,657

20.1%

£427

*2016-2021 average

 

 

 

Sources: IPPR North analysis of HM Treasury and the Infrastructure and Projects Authority (2016), National Infrastructure and Construction Pipeline Spreadsheet, Autumn 2016 update; ONS (2016) Subnational Population Projections for Local Authorities in England.

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