Over the past decade, UK government expenditure on transport has almost doubled and now stands at a historic high of £22.3bn. Yet, the UK still only spends around 1.7% of its GDP on transport - and this is not enough to help UK cities bridge the infrastructure gap with their European counterparts.
And the situation is likely to deteriorate. With UK Government debt currently at 56.6% of GDP the next Government - whatever its political colour - will need to bring public finances back into balance. With Conservatives and Labour promising to ring-fence other priority areas such as development aid and health spending, transport investment is vulnerable to major cuts. In this climate, is it possible to make the case for continued transport investment?
What is clear is that better transport links are needed in UK cities. Effective and efficient public transport networks are key characteristics of the strong and healthy city economies of London, Paris or Madrid. It is in these and other cities that the majority of national GDP is created. Investing in major city transport systems means investing in a nation's overall future productivity.
Since the deregulation of transport in the 1980s, public transport services in Britain's cities outside London have become increasingly fragmented and uncoordinated. While London is easily navigable by public transport, with its single network map and Oyster card ticketing system, transport in Britain's regional cities can be confusing and expensive.
Public transport ticketing for example can be complicated and difficult to use. 37 different bus companies operate across West Yorkshire offering 88 different ticket types. In other regional cities near monopolies mean tickets can be prohibitively expensive - so much so that the Office for Fair Trading has launched an inquiry into bus fares. A monthly bus pass in Bristol costs £106, double the price of a bus pass in London.
Inadequate public transport links slow down Britain's regional cities and limit labour mobility. They also reduce the attractiveness of UK cities for investors, compared to better connected European counterparts such as Lyon, Amsterdam or Munich.
Cities like Sheffield, Sunderland or Reading need good transport links to cities nearby, as well as efficient and effective intra-city public transport connections. These help widen the labour market and enable local companies to increase their potential pool of clients and suppliers. Reading benefits from its excellent rail links to London with over 10% of its workforce commuting to London. Hastings is only located 26 kilometres further away from the London than Reading, yet the journey time is four times as long. As a result only 2% of its workforce makes the commute. With little scope for upgrading this connection, Hastings is likely to remain isolated.
Improved bus services have a crucial role to play in tackling congestion and helping commuters and residents travel from A to B, yet the role of the bus is often overlooked. While Network Rail is responsible for inter-urban rail connections, no similar body exists within British transport planning responsible for inter-urban transport connections by bus.
Better coordinated inter-city bus connections can make a real difference to many of Britain's regional cities - facilitating access to jobs for those at the lower end of the labour market. Rapid bus transit between Bradford and Leeds could help Bradford's deprived communities access more service jobs in nearby Leeds.
Effective and efficient public transport networks are key characteristics of strong and healthy city economies. And, with transport a key emitter of carbon dioxide, public transport also represents a key lever for cities in achieving their carbon targets.
The case for future transport investment may be clear, but future sources of funding are not. Over the next few years national and city governments across Europe will need to look for innovative new ways to keep their cities on the move.
In Britain, one solution could be to set up an infrastructure bank pooling existing public and leveraging private funds for which cities bid. This concept is similar to JESSICA, the ‘Joint European Support for Sustainable Investment in City Areas' initiative by the European Commission and the European Investment Bank, or organisations such as KfW in Germany. In the UK, several small scale schemes already exist, such as the South West or the planned South East Regional Infrastructure Fund which forward fund infrastructure projects. However, these schemes lack sufficient scale and are relatively wide in their funding remit.
In its earliest years of operation a dedicated Urban Transport Investment Fund could bring together between £2bn and £4bn, with contributions from local authorities, re-prioritised Department for Transport funds, such as the £1bn Transport Innovation Fund, which had been set aside for congestion charging schemes, and over the medium term private investors.
Investment by local authorities would help leverage private sector funds, a common characteristic of infrastructure investment in other European countries. It would also give cities an ownership stake in the fund and help them gain critical scale. A £2bn fund could finance the Sheffield Supertram, the Midlands Metro extension in Birmingham and at the same time eight other projects of a similar scale.
Britain's cities are key drivers of the UK economy - and investing in their transport infrastructure means investing in Britain's future. Despite a comparatively high level of investment in recent years, Britain's regional cities still lag behind their European counterparts. A dedicated Urban Transport Investment fund would help bridge the gap and provide the necessary funds to make investment happen in an age of fiscal constraint.
A version of this article first appeared in Regional Review
