Major transport infrastructure projects Contents

1Levelling up

Definition

11.In the National Infrastructure Strategy, the Government pledged to deliver major infrastructure investments across the country, “prioritising those areas that have received less support in the past” as part of its commitment to “level up” the UK.16 Regardless of where they are constructed, major transport infrastructure projects can create jobs, because individual project spend occurs across the country according to “where the supply chain is”.17 In addition, major projects often involve components that have been assembled off site.18 Of the contracts monitored by Crossrail from the start of the Crossrail project in 2009 to 2013, 43% of businesses that won work were based outside London and the South-East and 62% were based outside London.19

12.The National Audit Office (NAO) observed that the extent to which the scope of a project aligns with its strategic objectives is a key indicator of success in the delivery of major projects.20 If a policy priority, such as levelling up, cannot be defined, a project risks changing scope, because its objective is obscure. The NIC’s annual monitoring report stated that although the Government highlighted the role for infrastructure investment in rebalancing regional growth, it “has yet to set out a sufficiently ambitious long-term plan to achieve this”.21

13.Informed witnesses highlighted the importance of defining “levelling up”.22 Siemens Mobility told us that “if we have a definition, we can make sure that we meet the requirements” to deliver on the Government’s policy objectives.23 Midlands Connect stated that a definition will ensure that businesses “can all work off the same instructions”.24 The Secretary of State for Transport defined “levelling up” in a transport context as being about making sure that [people in constituencies outside of London and the South-East] have reasonably comparative opportunities, in transport terms, to move around and travel as if they were living in London and the south-east”.25 He added that “it should be things that [people in constituencies outside London and the South-East] notice. It should be things that they feel make the quality of their life, their work and social environment better, because they are able to get around their town or location better”.26 It is difficult to conceive how London Underground might be replicated in rural Britain. High-capacity, rapid transit is financially viable only in urban conurbations. The Secretary of State for Transport did not set out metrics to underpin that definition and did not articulate how transport infrastructure development supports the Government’s “levelling up” agenda.

14.We asked the Secretary of State for Transport to cite an example of an infrastructure intervention that helped to “level up” a region of the UK. He did not cite an example of a major transport infrastructure project in his response.27 Instead, he explained that the Government had reversed a Beeching cut by reopening the railway station at Horden, County Durham. The Secretary of State for Transport said that reopening Horden station “has a massive ability to re-link that area”. He asserted that the station will help to serve “tens of thousands of people… in the immediate catchment area”.28 He did not provide quantitative evidence of the economic or social benefits that this rail station will bring to the local region.

15.The Department’s director general of corporate delivery, Nick Joyce, cited Mersey Gateway as an example of an infrastructure intervention that “levelled up” a region of the UK. He said that “people who live on one side can get more easily to the opportunities on the other, and families are not disconnected”.29 The bridge opened in the autumn of 2017 and tolls are currently being levied to pay for the project. Halton Borough Council chief executive, David Parr, asserted that the bridge has been a “really big success”, because “there’s an awful lot of private investment coming into the area and we don’t think that’s a coincidence”.30 However, he acknowledged that ensuring that people from Halton can access jobs generated by such investment is a challenge. He explained that the council is working to upskill local residents to meet the requirements of businesses in the conurbation.31 The Mersey Gateway Group stated that the project will create 4,640 permanent new jobs and will generate £61.9 million a year in gross value added from the new jobs by 2030.32 Those projections are currently untested.

16.Transport infrastructure projects do not necessarily drive prosperity, especially if one takes account of the costs of construction and operation. Funding a major transport infrastructure project that does not deliver intended benefits can also have adverse consequences, such as increasing greenhouse gas emissions, misallocating taxpayers’ money and wasting Government resources.

Case study: Humber bridge

17.We examined the example of the Humber bridge to see how transport infrastructure can affect local economies. The Humber bridge connects Hull with the East Midlands. It commenced construction in 1966 and opened to traffic in 1981.33 It cost £385 million to build at 2021 prices. It was financed by Government loans, which accrued interest. Those loans have yet to be fully repaid despite a toll being levied on bridge users. In 2012, former Chancellor of the Exchequer George Osborne reduced toll charges on the bridge from £3 to £1.50 each way for cars and removed motorcycle tolls. The lower tolls were introduced following the Government’s writing down almost 50% of the outstanding £330 million debt.34 Today, Hull has one of the highest unemployment rates in the country.35 Although the bridge reduced journey times for the local population and connected families and businesses, it did not produce tangible economic returns.36

18.The Government’s forthcoming “Levelling Up White Paper” must clarify how major transport infrastructure projects can contribute to levelling up.37 The Department plans to develop proposals for the “robust assessment and presentation of distributional and place-based impacts to support decision makers in better understanding impacts on priorities such as levelling up”.38 It is also reviewing its “rebalancing toolkit” and wider strategic case guidance to correspond with the 2020 updates to the Green Book.39 If those reviews are to be meaningful, the Department will need to define the “levelling up” policy agenda in a transport context in order to set a benchmark against which to test business cases.

19.To allow Parliament and the public to judge the effectiveness of the Government’s infrastructure plans, the Government must publish detailed metrics that define and measure the “levelling up” concept.

20.We are concerned that the Department did not explain how the construction of major transport infrastructure projects can support the “levelling up” policy agenda. We would be reassured if the Department were to set out a worked example illustrating how investment in major transport infrastructure projects drives growth and productivity.

16 HM Treasury, National Infrastructure Strategy, November 2020, p 11

17 Q19 [Mr Smallwood]

18 Ibid.

20 National Audit Office, Lessons learned from Major Programmes (November 2020), p 9

21 National Infrastructure Commission, Annual Monitoring Report 2021 (February 2021), p 22

22 Q83–Q85 [Mr Statham, Ms Humphrey, Mr Baldwin]

23 Q84 [Ms Humphrey]

24 Q83 [Mr Statham]

25 Q141 [The Secretary of State for Transport]

26 Ibid.

27 According to the Infrastructure and Projects Authority’s (IPA’s) Annual Report on Major Projects 2020–21, major projects on the Government Major Projects Portfolio are “typically those where approval is required from HMT, either because the budget exceeds a department’s delegated authority level and/or because the project is novel, complex, contentious, or requires primary legislation”. Projects on the GMPP receive independent scrutiny and assurance from the IPA.

28 Q146 [The Secretary of State for Transport]

29 Q147 [Mr Joyce]

31 Ibid.

32Benefits of the Mersey Gateway Project”, The Mersey Gateway, Accessed on 27 July 2021

35 Office for National Statistics, Claimant count by sex and age, via Nomis

36Humber Bridge”, Institution of Civil Engineers, Accessed on 27 July 2021

37Government to publish Levelling Up White Paper”, Prime Minister’s Office and Cabinet Office, 4 May 2012

38 The Department for Transport (MTP0045) para 47

39 The Department for Transport (MTP0045) para 48. The Department for Transport’s rebalancing toolkit provides guidance to help authors of strategic cases describe the impact of a project or programme on rebalancing growth across the country. It is optional and aimed at projects and programmes where rebalancing is an objective.




Published: 29 September 2021 Site information    Accessibility statement