Keeping London at the forefront of global business
working with and for the whole UK
Why investing in infrastructure is key to recovering from the pandemic
9 July 2020
In the aftermath of the 2008 financial crisis, a central focus for London First was continuing to make the case for Crossrail – a vital but expensive project which was yet to break ground; and so all too vulnerable to the cuts in public expenditure that loomed on the horizon. Our arguments then were two-fold. In the short term, it provided jobs and a fiscal stimulus. Indeed, the case was made that Crossrail was vital to Britain’s economic recovery — even without a railway at the end of the project. But of course, it does come with a railway and, albeit a bit later than anticipated, that will have a transformative effect on the economy of the South East, improving productivity by increasing connectivity.
As we look for measures to support the UK’s recovery from the coronavirus pandemic, a comprehensive programme of economic infrastructure modernisation will be key. As well as providing a short-term stimulus, it will help meet the Government’s central pre-pandemic economic priority of levelling up the British economy, improving productivity across the whole of the UK.
Public investment in transport infrastructure must be at the centre of this programme and, fortunately, there is a blueprint. The National Infrastructure Commission published its national infrastructure assessment in 2018, which set out a comprehensive approach towards national scale projects – like HS2, Northern Powerhouse Rail and Crossrail II – as well as devolution, to provide locally prioritised smaller schemes. We now need the Government to publish its response, the National Infrastructure Strategy, sooner rather than later, so that the private sector can start to plan its delivery.
London would benefit from further devolution just as much as the UK’s other city regions. While Transport for London (TfL) is a large and capable transport provider, the devolution of operational freedoms to London has not been accompanied by the devolution of resources – and the pandemic has shown the lack of resilience in the current model. TfL is highly reliant on its farebox income and the managed reduction in passenger numbers has created a financial crisis. Central government stepped in to provide emergency support – and could not resist in tinkering with the Mayor’s control — and to add debt to TfL’s balance sheet. A very different approach was taken to the national rail network, where funding was provided with no strings attached under the emergency management framework arrangements.
As we look to the future, we need create a more sustainable solution for the network and this means joining up the operation/investment in the network with financing and funding powers and public accountability.
The best way of doing this is further devolution to the Mayor, matching resource choices with accountability. Such an approach would have the added benefit of enabling the Mayor and TfL to take a more strategic approach to all transport modes in London, with an ability to offset concerns that, for example, allowing an increase in micromobility options might cannibalise revenue from the public transport farebox. It will also support some of the post-pandemic changes to demand. While the medium-term changes to working patterns are uncertain, it is reasonable to plan on fewer people making daily journeys in and out of the office five days a week – which in turn has implications for fare structures based on that stable pattern of revenue.
For too long, public transport investment has been short-term in its certainty and seen as a zero-sum game between regions. It is time to use the National Infrastructure Strategy as a means of setting national priorities and create greater local revenue raising, spending prioritisation and delivery capabilities across the country, so that city-regions can make their own choices as to how best drive recovery.
I look forward to discussing these and other issues with politicians, policy makers and businesses at the London Infrastructure Summit in October. Our sixth summit will be our first virtual gathering and I hope you will be able to join us. There’s rarely been a more transformational movement for planning the capital and the country’s infrastructure.
Share this page
Join our Mailing List