MPs urge action on underfunding

The underfunding of transport projects outside London in recent years "cannot be allowed to continue", says a report from MPs.

MPs said less money is spent on transport projects outside London than in the capital
MPs said less money is spent on transport projects outside London than in the capital

Ministers must use the new funding arrangements for local projects to "ensure that there is a fairer allocation of funding", said the report from the House of Commons Transport Committee.

"No area across our nation should be second class in relation to the allocation of transport infrastructure funds," the MPs said.

The report looked into new arrangements, from 2015, for local decisions on transport spending.

Launching the report today , the committee's chairman Louise Ellman, Labour MP for Liverpool Riverside, 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 (the Institute of Public Policy Research) 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 went on: "The Government has again changed the system for distributing money to local areas for major transport projects, with much more emphasis now on competition for funding. This will not necessarily help regions get a fairer share of transport funding and could make the situation worse.

"Those Local Enterprise Partnerships (LEPs) which are well organised and resourced will have an advantage in bidding for funds. Other areas may lose out as a result. In addition, with greater reliance on competitive bidding for funds, we will see more money wasted on failed bids."

Mrs Ellman added that 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".

She said the Department for Transport (DfT) " must also make sure that strategically significant schemes such as access to ports don't get overlooked and that areas covered by a number of LEPs do not miss out because of fragmentation".

Mrs Ellman continued: "It is also unclear whether the £6 billion the DfT is contributing to the Single Local Growth Fund will all be used for transport purposes."

The committee called for the new funding arrangements to be reviewed by the end of the next Parliament to ensure that they were efficient and effective in providing funding for the most urgent transport priorities.

Mick Cash, acting general secretary of the RMT transport union, said: "The biggest block to the massive investment that our transport services are crying out for is the continuing impact of privatisation, which not only drains billions of pounds away in shareholder profits but also fragments and divides the industry, making planning and co-operation a nightmare.

"Until the millstone of private greed is lifted from our necks, our industry will never be able to deliver what the public clearly want - cohesive, safe and modern transport services run in the public interest, not for the benefit of spivs and speculators looking for a fast buck."

A Department for Transport spokesman said: "We have invested more than £6 billion in 2011/12 alone in developing transport infrastructure outside London.

"Our plans for major schemes like HS2 and the £600 million 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. Local Enterprise Partnerships understand local issues and solutions best and their priorities will drive local transport funding decisions."

He added: "We will give full consideration to the committee's report and respond fully in due course."

Shadow transport secretary Mary Creagh said: "This report raises serious questions about the Government's delivery of local transport schemes. Unnecessary competition between local transport bodies and repeated changes to local transport funding can lead to delayed delivery of new transport schemes and lack of accountability to local people.

"This Government's insistence on competitive bidding for transport funding could lead to areas most in need of new transport funding losing out."

Speaking on the BBC Radio 4 Today programme, Ms Ellman said: "It is inevitable the capital city will have more spending but this disparity is too high and it is time that there was more investment in the regions of the country. Transport expenditure is linked with economic development. We need to have that investment throughout the country.

"The disparity is clear over a large number of years... the pattern is the same over a large number of years. We have spoken about investment in London... All this is very much needed but it is saying we need a fair deal for the rest of the world, that's the South West as well as the North."

But Transport Minister Baroness Kramer said: "If you look at London, the dependence on public transport is so high and, of course, as well as residents, you have got to add in commuters, you have got to add in visitors.

"I'm trying to counter this very southern view of the world and, as a department, we are investing very, very heavily in those outer areas because it lays the framework for economic growth."

The Liberal Democrat said it was a "myth" that London always gets everything, adding: "We have launched into spending on transport infrastructure, frankly, on a scale that I don't think has been seen for decades because it is crucially important."

She also pointed out that the per passenger miles subsidy outside London is around 31p compared with less than 5p in the capital and insisted that HS2 was a " really important project for the Midlands and the North".