1 Introduction
The challenge for transport
1. The UK's economic situation has changed dramatically
over the past three years. Steady GDP growth in the period 2000-2007
has given way to low or negative growth, an increased fiscal deficit
and higher levels of unemployment. Following the general election
in May 2010, the Coalition Government stated that reducing the
government deficit was its most urgent task and that it would
"support sustainable growth and enterprise, balanced across
all regions and all industries, and promote the green industries".[1]
2. Transport was expected to play a key part. The
Secretary of State for Transport, Rt Hon Philip Hammond MP, told
us that the Government's priorities for transport were to support
sustainable economic growth and to contribute to the Government's
2020 carbon reduction targets, within the overarching constraint
of reducing the deficit.[2]
Supporting the economy has long been an objective of government
transport policy. This Government, perhaps more than most,[3]
appears to be focusing on it more sharply, no doubt due to the
precarious state of the economy.
3. Investment in transport infrastructure was prioritised
in the October 2010 Spending Review, reflecting the Government's
view that long-term investment in transport infrastructure was
essential to competiveness and economic growth. Whereas the resource
budget for the Department for Transport (DfT) was cut by 21% (the
average across government departments), the capital programme
was reduced by only 11% compared with an average of 29%. According
to HM Treasury, in 2014-15 DfT capital investment will be higher
in real terms than in 2005-06.[4]
4. As well as supporting overall growth, the Government
has made clear its intention to use investment in transport, particularly
in high speed rail, as a means to rebalance the economy and to
reduce regional inequalities:
Our vision is a transport system that is an engine
for growth [...] to radically reshape our economic geography [...]
to help bridge the North-South divide that has limited for too
long growth outside the South East.[5]
5. We welcome the Secretary of State's focus on
using transport to support and stimulate the UK economy and to
reduce the economic disparities between different parts of the
country and we call on him to explain how his policy will achieve
that end.
Our inquiry
6. We believe that supporting sustainable economic
growth should be the overriding objective for the DfT. We have,
therefore, decided to inquire into how best transport can support
this objective. In particular:
- Have the UK's economic conditions
materially changed since the Eddington Transport Study in 2006[6]
and, if so, does this affect the relationship between transport
spending and UK economic growth?
- What type of transport spending should be prioritised,
in the context of an overall spending reduction, in order best
to support regional and national economic growth?
- What should be the balance between resource spending[7]
and capital investment?
- Are the current methods for assessing proposed
transport schemes satisfactory?
- How will schemes be planned in the absence of
regional bodies and following the revocation and abolition of
regional spatial strategies?
We have not attempted to assess the Government's
other main objective for transport—reducing carbon emissions.
7. Our purpose was not to comment on individual transport
schemes but on how priorities should be set, the process of scheme
appraisal and decision-making, and the structures within which
schemes are planned. Although many transport investment decisions
were announced in the Spending Review, the Government will be
taking further decisions on which schemes to support over the
coming months and years, including £600m for local authority
major schemes in the Department's new "development pool"
and bids for the £560m Local Sustainable Transport Fund.[8]
We noted also the Government's commitment to reforming the way
in which decisions are made on which transport projects to prioritise.[9]
We hope our Report and the supporting evidence proves of value
in these processes.
8. Our inquiry generated considerable interest and
we received written evidence from 117 organisations and individuals
as well as related correspondence. We held six oral evidence sessions,
including two in Hull and Birmingham where we were also able to
visit the local transport infrastructure and to meet local business
people and community representatives. We were advised throughout
by Dr Dan Graham, Transport Economist from Imperial College London,
and Mr Kelvin MacDonald of Spatial Effects Ltd, an independent
planning consultant.[10]
We are most grateful to all those who assisted us in our inquiry.
1 HM Government: The Coalition: our programme for
government, 20 May 2010 Back
2
Transport Committee, Secretary of State's Priorities for Transport,
oral evidence, 26 July 2010, Q 3 Back
3
Under the previous Government, the DfT had five strategic objectives,
including supporting economic growth. (DfT, Annual Report and
Resource Accounts 2008-09, HC454, 16 July 2009, p 14) Back
4
HM Treasury, Spending Review 2010, Cm 7942, October 2010,
pp 10, 11 and 46 Back
5
DfT, Business Plan 2010-11, November 2010, p 1 Back
6
The last major study of transport and the economy. See Chapter
2 of our Report. Back
7
We have used the term 'resource' in this Report as it is the term
used in central government accounts; local government and others
tend to refer to 'revenue' or 'current' spending. Back
8
HC Deb, 4 February 2011, col 60WS Back
9
This was contained in Coalition Agreement and details are contained
in the DfT's Business Plan 2010-11, November 2010, Action 3.1
vii, p 9 Back
10
Dr Graham and Kelvin Macdonald made formal declarations of interests
which can be found in the formal minutes of the Transport Committee,
Session 2010-11, Appendix B Back
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