Mayor busts myth London gets more than fair share of transport funding

20 July 2017
  • London Bridge has almost twice as many passengers a day as all Birmingham’s stations put together
  • Total amount spent on railways per journey in London is amongst lowest in UK

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

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

Addressing a forum attended by leading figures from the worlds of engineering, energy, planning and transport at City Hall today (20 July), the Mayor 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 new report by GLA Economics 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. In London the incredible demand from commuters means that comparing the number of users is more suitable. Around half of people working and living in London commute to their job via public transport. And the number of passengers using public transport in the capital at peak hours far exceeds those of other major cities. London Bridge Station alone has nearly double the number of passenger arrivals on any given day than all the stations in Birmingham combined. When those figures are considered London has one of the lowest amounts of railway and road spending per user in Great Britain.
  • There were approximately 1.5 billion railway journeys across Great Britain in 2015-16, of which almost two-thirds (63.8 per cent or 934.6 million journeys) were in London. When compared with public sector expenditure on railways, the amount spent per passenger journey in London was approximately £6.94 in 2015-16. That was below the GB average of £10.31 and one of the lowest among all the regions.
  • The latest estimates suggest that there were 316.7 billion vehicle miles across Great Britain in 2015, of which 18.2 billion (or 5.7 per cent) were made in London. On this basis, the amount of public sector expenditure spent on roads in London was approximately £23,700 per 1 million of vehicle miles in 2015-16. That was the second-lowest among the GB regions (below the GB average of £29,400) and, consequently, does not suggest that more is spent in London.
  • The level of public sector spending on transport in the capital that comes directly from London’s taxpayers is increasing and is not taken into account when comparing regional spending. More than half of the cost of Crossrail comes directly from London businesses and Londoners. The extension to the Northern Line is also being financed by a future growth in business rates that will be paid by firms in the capital.
  • Around 79.4 per cent of the planned transport infrastructure in London will be funded entirely by the public sector. That is by far the lowest share among the English regions, with the average for England being 90.5 per cent. That suggests London is paying proportionally more for its own infrastructure investments when compared to other regions.
  • The level of local spending on transport is also likely to increase as and when more fiscal powers are devolved to London.
  • Transport expenditure ought to be compared with the size of a region’s economic output. And when that is considered expenditure in London and the surrounding area is entirely proportionate to the size of the economy.
  • London’s share of total economic output for the UK in 2015 was 22.7 per cent, which was more than the North East (3 per cent), North West (9.4 per cent) and Yorkshire and the Humber (6.6 per cent) combined. The amount spent on transport in London was only 2.2 per cent of its economic output in 2015-16. While that was higher than the UK average of 1.8 per cent, it was broadly comparable with Wales and Scotland. When looking at the wider functional area of the Greater South East, which arguably enables a more like-for-like regional comparisons then transport expenditure was the equivalent of 1.8 per cent of its economic output.
  • London raises more in tax than it receives. London generated £136.7 billion in taxes in 2015-16. That was one-fifth of the UK total, making it the largest tax contribution for any UK region. However, London only received £110 billion in public expenditure during the same financial year.
  • 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.

The Mayor of London, Sadiq Khan, 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.”

The Mayor will also use the forum to introduce a new report commissioned by the GLA from Arup that sets out the key infrastructure projects needed up until 2031 across London, both to drive and enable growth. The ‘London Strategic Infrastructure Needs’ report examines the capital’s infrastructure requirements up until the early 2030s across sectors that include rail, road, electricity and heat, waste, water supply, water management and flood risk, digital connectivity, and green infrastructure.

Director of Strategy and Policy at London First, John Dickie, 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.”

Sadiq will look to secure the commitment of those attending the forum that they will use their best efforts to coordinate in delivering the infrastructure the city needs. He will also announce the creation of a new infrastructure group chaired by his Deputy Mayor for Planning, Regeneration and Skills, Jules Pipe, which will oversee development in the Capital.

Representatives of utility companies attending the forum will be thanked for their help funding the Mayor of London’s Infrastructure Mapping Application, an IT platform that contains data on all the major planned development in the city over this period (over 12,000 projects).

Notes to editors

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