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03.06.14

Transport funding too London-centric – MPs

Funding for local transport schemes must be distributed more equally across the country rather than being so London-centric, otherwise some parts of the UK may get left behind, according to MPs on the Transport Select Committee.

In its ‘Local transport expenditure: Who decides?’ report, the committee looked closely at the new arrangements for local decisions on transport spending from 2015, which would be based on competition for Local Growth Fund allocations.

Following the inquiry, the Committee concluded that:

  • Competitive bidding for funds might result in wasted expenditure on unsuccessful bids and could favour better-resourced authorities.
  • Strategically significant transport projects may not be funded if they do not deliver immediate benefits for LEPs or local authorities.
  • Regional economies may not be sufficiently well developed to allow the private sector to invest significant sums in local transport schemes.

Louise Ellman MP, chair of the Committee, said: “Far less money is spent on transport projects outside London than in the capital. This inequality has gone on for too long and has to change.

“For example, IPPR says that transport infrastructure spending is £2,500 per head in London compared with £5 per head in the north east. Even on the government’s figures, transport spending per head in London is more than twice that in the English regions.

She added that going forward under the new arrangements Local Enterprise Partnerships (LEPs) which were well organised and resourced would have an advantage in bidding for funds – meaning other areas may lose out as a result.

“The government’s focus on using competition to bring in private sector funding for projects could disadvantage the regions, where there tends to be less private sector money available compared with London,” added Ellman.

The committee added that the DfT must closely monitor how the new provisions work in practice. The key test of the new arrangements is whether transport spending is distributed more equitably across England, concluded the MPs.

But a Department for Transport spokesman said: “We have invested more than £6bn in 2011-12 alone in developing transport infrastructure outside London.  Our plans for major schemes like HS2 and the £600m Northern Hub, which will transform rail in the North, as well as countless local road projects across England show how committed we are to delivering improvements that benefit all areas of England, not just the capital.

“LEPs understand local issues and solutions best and their priorities will drive local transport funding decisions. We will give full consideration to the committee's report and respond fully in due course.”

However, the Society of Local Authority Chief Executives (Solace) supports the transport committee’s findings and added that it has been “clear advocates” of investing in long-term economic projects, and that “prioritising immediate benefits for LEPs or local authorities is damaging over time”.

Graeme McDonald, Solace director, and a member of PSE’s editorial board, said: “With central government funding returning at just a fraction of that recommended by Heseltine, alternative sources of funding, such as community infrastructure levies and municipal bonds must be considered.”

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