London Excluded from Reeves' Budgetary Review
London's transport growth might take a backseat in the upcoming spending review, predictions suggest.
Sadiq Khan, the London Mayor, has been advocating for the expansion of the DLR to Thamesmead and the Bakerloo line to Lewisham. However, obtaining the necessary funding to expand the transportation network seems uncertain, with estimates putting the cost of bringing the Bakerloo line further south between £5.2bn and £8.7bn.
The government is under pressure from its MPs to redirect capital spending away from the southeast and invest in infrastructure outside the region.
Recent research by the Institute of Public Policy Research reveals that London received 2.43 times as much public transport spending per capita than the North over the past decade. Moreover, London transport spending has increased 2.11 times faster annually than spending on transport in the North.
Chancellor Rachel Reeves has already pledged £15.6bn for regional transport - primarily in the North and Midlands - as part of the spending review package. Reeves aims to bridge the gap between regional growth and the brain drain to big cities like London, which attract young workers with higher wages.
Reeves stated that the aim is for people to be able to "stay in the place where they grew up, the place they want to live, where their families are."
Zero-Sum Growth?
Khan's team has eagerly pursued the power to implement a tourist levy and a substantial boost in funding for the Met. A close associate of the Mayor remarked, "it would be unacceptable if there are no major infrastructure projects for London announced in the Spending Review and the Met doesn't get the funding it needs."
"The way to level up other regions is not to level down London," the associate said.
Despite reports suggesting a real-terms increase in police funding, the Mayor's office has raised concerns that investment in the regions might come at the expense of investment in London. The argument is that England's capital should receive significant funding because "when London does well, it means the whole country does well."
"We know that and that it will simply not be possible to achieve national growth ambitions without the right investment and growth in our capital," the associate added. "We need backing for London as a global city that's pro-business, safe, and well-connected. It's absolutely crucial at this time of global uncertainty that we send the right message to attract investment, which helps to bring prosperity to the whole of the UK."
Chris Hayward, policy chairman of the City of London, stated that to sustain the capital's growth momentum, seen through a 25 percent increase in jobs since the pandemic, the spending review must prioritize London.
Compare and Contrast
A four-year settlement has been announced for Transport for London (TfL), providing stability and funding for the next few years. Additionally, there will be a fourfold increase in local transport grants by the end of this parliament, improving financing for local transport initiatives in London. The £3 bus cap has also been extended to March 2027.
A substantial £15.6 billion is allocated for transport spending in England's city regions. This includes funding for expanding metros in Tyne and Wear, Greater Manchester, and the West Midlands. There's also a renewed tram network in South Yorkshire, a new mass transit system in West Yorkshire, and investments in buses, train stations, and metro lines in areas like Rochdale, Merseyside, Birmingham, and across the North. Moreover, there's a green light for a new rail line between Liverpool and Manchester.
While regional spending is considerably higher in terms of specific infrastructure projects, London's funding is more focused on maintaining and improving existing services through the TfL settlement and increased local grants. The geographical spread of regional spending aims to enhance connectivity and public transport across the North and Midlands, whereas London's spending is more centralized. The nature of spending in both areas targets improvements in public transport, but the regional focus is on expanding and creating new infrastructure, while London's is on maintaining and enhancing existing services.
- The concern of Sadiq Khan's team is that the upcoming Spending Review might not prioritize major infrastructure projects for London, which could potentially impact London's economic growth and overall national growth.
- The Chancellor, Rachel Reeves, has allocated a significant amount of funding for transport in England's city regions, primarily in the North and Midlands, aiming to bridge the gap between regional growth and the brain drain to big cities like London. However, this regional focus could be perceived as potentially coming at the expense of investment in London.
- While the regional spending is geared towards expanding and creating new infrastructure, London's spending, as seen in the four-year settlement for Transport for London and increased local grants, is more focused on maintaining and improving existing services, ensuring London remains a pro-business, safe, and well-connected global city.
