Report calls for more investment in London’s public transport

A report has been published that puts forward an argument that contrary to headlines and political posturing, public transport investment is not massively biased towards London. Obviously, a report written by the GLA is going to come out in favour of investment in London, but it’s more subtle than that.

There’s a lot of political posturing calling for less money in London and more elsewhere. That’s short-sighted as the argument should be for more everywhere — especially at the moment when interest rates are so low that investment is unusually affordable.

Unlike general spending on running costs, investment is something that the next few generations of UK residents also benefit from – so the cost of paying down the debt is more evenly spread between the beneficiaries.

A notable statement in the report is that “Unlike in England, the share of journeys on public transport [in London] is rising”, which supports the argument that more investment leads to more use and hence more investment in public transport outside London will have a positive effect.

One of the difficulties in comparing London to the regions is that Greater London is almost entirely urban, whereas other cities would need to absorb a lot of rural transport facilities to provide the same level of scale as TfL. That skews the investment forecasts as they do tend to favour urban development, for many reasons, and can make London seem as if it is getting more spending than it deserves.

Recent reports have highlighted this apparent bias, such as the IPPR North report, but those reports often include TfL as if it is government spending (a technicality, it’s classed as a local authority in some regards), but TfL receives no government funding – it’s entirely London taxes and fares.

In fact, if you consider that a lot of people commute into London from the wider South-East, compare London’s commuter belt to the commuter belt of other cities, and London’s apparent funding bonus pretty much vanishes.

You can find statistics to prove any case you want, but if you look at a common measure, the “profit” generated by people – output minus input — then London plus its commuter belt generated 47% of the UK’s gross added value in 2017 — and the expenditure on public transport in the same year represented 2.1% of the total.

While that was higher than the UK average of 1.8%, it was comparable to Wales and less than was spent in the North West or Scotland.

As any London commuter will attest, public transport in London is massively overcrowded. In proportionate terms, only Cambridge has more passengers above capacity (PIXC) than London, and only Birmingham has more services with PIXC.

So London transport is bursting at the seams, and a few places outside London suffer the same problem. The biggest problem outside London isn’t overcrowding, as people don’t even have an option to use public transport because it doesn’t even exist.

What’s needed is more spending to improve public transport outside London, but also a huge investment in London to make what already exists bearable to use.

So, to keep transport investment across the UK at the current level just to rob London to feed Birmingham is a short-termist approach. Transport investment is the very opposite of short-termisim, it’s decades and even centuries of benefit.

Long term investment in public transport is a public good, it helps to reduce road congestion, which at this moment in time also reduces pollution. The shift over time to electric cars will reduce pollution further, but unless mass transportation is improved, then road congestion will keep getting worse.

Buses, trains and trams move far more people and do so faster than fleets of cars can ever achieve.

Improved public transport also leads to the big driver of economic growth — that’s productivity. If trains are reliable and regular, then people’s work and living patterns are improved, leading to the economic growth that then funds the investment.

There’s a rule of thumb that a train every 10 minutes is treated by people as turn-up-and-go, whereas less frequent trains are treated as timetabled services — and when you can just turn up whenever, the daily work pattern can be more flexible, and hence productive.

Increasing the number of trains in the regions boosts productivity, hence the investment in services such as HS2 to boost regional rail capacity by shifting intercity services onto a dedicated line. However, in London, the existing railways are pretty much at bursting point already. Save lengthening some trains, it’s difficult to increase the carrying capacity of the network without building new railways – such as Crossrail 2.

Fortunately, there is a lot of funding available to invest in transport, especially at the moment when borrowing costs are at historic lows.

Instinctively, your correspondent is wary of borrowing to fund day-to-day running costs as that’s what taxes are for, but is in favour of borrowing for investment. Where investment can take a decade or more to be delivered, and the benefits last generations, it makes sense to phase the cost over a few generations as well – hence long term government debt, which is very cheap, is a cost-effective way of funding long term investment.

Which is why headline numbers such as £100 billion for HS2 are not as dire as they sound because the bulk of that is for infrastructure that’s designed to last over a century.

To put that into context, at current prices, Network Rail will spend around £10 billion per year just maintaining the existing network. Over a ten-year time frame, Network Rail will spend as much as HS2, and no new railway would be added.

Transport for London spends around £2 billion a year on maintenance just in London, expected to rise to £3.3 billion per year by 2040.

So investment numbers can sound huge – billions here, there and everywhere, but as a percentage of government spending (£810 billion in 2017/18), they are comparatively small, and are, unlike a lot of government spending, long term investments rather than day-to-day running costs.

Add in the fact that investment brings economic and societal benefits, and the case for more investment in public transport is clear – not just in the regions that need transport where none exists, but in the cities where what exists cannot cope with the numbers who want to use it.

Public transport is probably the only industry where people are clamouring to use the service, but are constantly pushed away by short-term government policies.

The report is focused on defending London spending in face of political pressure to avoid spending money in London, but in fact, it supports the wider argument that the entire UK needs an investment boost.

What’s needed is less London-bashing, and more infrastructure championing.

The report, Transport expenditure in London is available to download here.