Lower levels of transport spend can explain 2% GDP gap with Germany
A new report from pteg says: ‘It is time to let transport work harder for jobs and long term economic growth’ through stepping up investment in urban transport in the city regions.
The report (which will be launched at an event at in the Members Dining Room of the House of Commons at 4pm today) shows that:
- Between 1990 and 2004 increased spending in Germany on transport and communications accounts for 2% higher GDP growth in Germany than in the UK
- Investing in transport improvements in congested urban areas has a bigger impact on economic growth than nearly any other type of public spending
- Capital investment in local transport outside London was the hardest hit area of transport spending in the 2010 Spending Review and although spending levels are on an upward trajectory again, they still lag behind the growth in spending in other areas of transport
- Revenue support for urban transport mostly comes from the CLG who are reducing local government funding fastest in the most heavily congested urban areas
The report summarises some of the latest academic research which shows the importance of agglomeration economies (the way in which high value sectors of the economy cluster together in cities) in driving wider national economies. It also shows that these urban clusters cannot develop to their full potential without high quality and efficient transport networks.
The report finds that:
- A doubling of economic density leads to an average increase in productivity of 4% for manufacturing firms and 12% for the service sector as a whole
- 63% of all jobs in England are within 40km of London or the Core Cities (28% of England’s land mass)
- A survey by the British Chambers of Commerce (BCC) found congestion to be a problem for around 90% of businesses, with around 45% viewing it as a significant problem
Chair of pteg, David Brown, said:
‘The 2013 Spending Review put a welcome emphasis on better transport as a foundation for growth. However, what this report shows is how much harder transport could work for the economy, if there was much more focus on concentrating transport investment on congested city regions. This research finds that urban transport is one of the best investments the Government can make in order to let business do what it wants to do which is to cluster together efficiently for easier access to staff, clients and shared resources. Transport is fundamental to this and nowhere more so than in city centres where so many high value business activities are concentrated and where public transport and active travel come into their own.’
David Brown added:
‘The report shows the need for a more joined up approach from Government in recognising the broad benefits of urban transport investment. It’s clear that some parts of Government get it, but others don’t. For example it makes no sense for the Treasury to promote spending on local transport where it is most effective whilst the CLG is busy reducing revenue spending fastest in our most congested cities. More widely without adequate revenue budgets local transport authorities will simply not be able to retain the staff needed to deliver the capital projects that Government wants, efficiently and effectively, or even at all.’
For more contact Jonathan Bray on 0113 251 7445 / 0781 804 1485
The report now forms part of pteg’s extensive evidence base for urban transport investment which is brought together in a single website – www.transportworks.org
pteg represents the six transport authorities serving the largest city regions outside London (Greater Manchester, South Yorkshire, West Yorkshire, Tyne and Wear, Merseyside, West Midlands) and with a combined population of more than eleven million people.
This report summarises some of the latest academic research which shows the importance of agglomeration economies (the way in which high value sectors of the economy cluster together in cities) in driving wider national economies. It also shows that these urban clusters cannot develop to their full potential without high quality and efficient transport networks.