Transport expenditure in London

Current Issues Note 54 sets out the rationale for investing in transport infrastructure and presents data on the current and planned levels of transport expenditure, with an emphasis on London.

• The public sector spent £8.5 billion on transport in London during 2015-16. London received more than a quarter of the UK’s expenditure on transport, but this is reflective of the demand and need for transport in the capital. For instance, London has one of the lowest amounts of railway expenditure and road spending per ‘user’ in Great Britain; total spending is in proportion to the size of the economy; and London receives less in public expenditure as a whole than what it contributes in tax.
• Public sector spending on transport is increasingly being funded directly by London taxpayers – something not captured in the expenditure data. For example, more than half of the cost of Crossrail 1 is funded directly by London businesses and Londoners. Importantly, the share of transport expenditure borne locally is likely to increase in the future as and when more fiscal powers are devolved to London.
• Investing in London’s transport network should not be seen as being at the expense of other parts of the UK. In fact, London’s growth is beneficial to the rest of the UK through supply chain effects, remaining internationally competitive and being a net contributor to the UK’s public finances. Consequently, investing in London’s transport system should not be seen as a ‘zero-sum game’ as essentially when London grows, the rest of the UK grows.