Mayor debunks myth London receives more than fair share on transport schemes

Sadiq Khan has released a report which invalidates the myth that London receives more than its fair share of investment on transport schemes compared to the rest of the country.

The new report by GLA Economics argues that regional comparisons of transport spending are not being made on a like-for-like basis, and that they fail to account for the demand of transport, the size of the economy or the amount of tax raised by London.

The Mayor, addressing a forum at the City Hall, revealed that the amount being spent on railways per passenger journey and the amount spent on roads per million miles driven in London is amongst the lowest in Great Britain.

The report also argues that: comparing regions on how much transport expenditure they receive or on a per head basis does not properly account for the need or demand for transport; there were approximately 1.5 billion railway journeys across Great Britain in 2015-16, of which 63.8 per cent were in London; there were 316.7 billion vehicle miles across Great Britain in 2015 of which 18.2 billion were made in London; and the level of public sector spending on transport in London that comes directly from taxpayers is increasing and is not taken into account when comparing regional spending.

Around 79.4 per cent of the planned transport infrastructure in London will be funded entirely by the public sector, which is the lowest share among the English regions, and the level of local spending on transport is likely to increase as and when more fiscal powers are devolved to London.

The report also says that the amount spent on transport in London was only 2.2 per cent of its economic output in 2015-16 - broadly comparable with Wales and Scotland, London receives more taxes than it receives, and investment on transport in London is beneficial to the entire UK. Transport for London estimates that around 60 per cent of the money it spends on goods and services occurs outside of London and helps support 50,000 jobs.

Sadiq Khan, Mayor of London, said: “London is often accused of taking a bigger slice of the cake when it comes to public spending on transport. However, the capital faces a unique set of challenges relative to other regions of the UK, particularly the immense level of demand placed on our transport networks.

“To compare transport spending in London with any other UK region is just not comparing like with like and this report well and truly debunks the myth that we receive more than our fair share. Where London succeeds, the rest of the country succeeds and Crossrail is a great example of that. It will boost the national economy by billions of pounds and support thousands of new homes and jobs, not to mention improved transport links beyond London and into the wider South East.

“The Government’s Industrial Strategy has quite rightly identified investment in transport as one of its key objectives. But it is vital that they consider every possible circumstance of how and where that money is spent.”

John Dickie, Director of Strategy and Policy at London First, said: “This report shows that spending on transport in London and the South East reflects the high levels of need and demand, and is in proportion to the size of the regional economy. Moreover, Londoners and London’s businesses make a very substantial direct contribution, through fares and local taxes, to that spend.

“If we are to make a success of Brexit we need to invest in better connectivity across the whole of the UK, connecting the cities that are the collective engine of the economy and improving the services within them. Investing in London and the rest of the UK cannot be seen as an either/or choice – we must do both.”

Responding to the Mayor’s statement, Ed Cox, director of IPPR North, said: “It is ironic that the Mayor of London makes this call on the very day the government culls its plans for electrification of the East Midlands links with the North and Wales.

"Analysing transport spending data in this way is nothing short of a self-fulfilling prophecy. London has a vital role to play in the national economy but if we simply keep feeding the congestion beast we deny vital opportunities for growth elsewhere in the country.

"Using existing regional economic output as the basis for transport investment will simply exacerbate the inequalities that have already caused so much damage to our nation’s economic health and led to the resentment that fuelled the Brexit vote.

"The Mayor of London should be working with his counterparts in Birmingham, Manchester, Liverpool and Tees Valley to secure the greater devolution of powers over transport spending and other drivers of local growth, not joining up with lobbyists for further London exceptionalism which will further divide the nation."