The North – the more you put in…

March 21, 2012

–Graeme Henderson is a Research Fellow at IPPR North. The opinions expressed are his own.–

George Osborne made it clear today that infrastructure investment is a central part of the Coalition’s plans to help accelerate us out of the current economic downturn, but in the build up to this year’s budget, a multitude of infrastructure proposals have been vying for the Chancellor’s attention. Announcements today that there will be further investment in work on the so called Northern Hub is therefore very welcome – to be most effective, infrastructure investment has to be targeted where it is needed most, and where it will make the greatest impact.

The Northern Hub is a network of rail connections and central Manchester improvements that will increase capacity and substantially reduce travel times between all the major Northern cities, stimulating economic growth throughout the region. However given that, as acknowledged by the Chancellor, there has been decades of under-investment in Northern transport, today is a good start in addressing this deficit, but it does not go far enough.

IPPR North’s Northern Economic Futures Commission has highlighted further rail priorities. For a start, northern rolling stock is in a much worse state when compared to franchises in the rest of the country: 87% of Northern Rail’s rolling stock was manufactured in the 1980s or earlier, whereas 64% of Southern’s rolling stock and 53% of South Eastern’s was manufactured since 2000 (link).

Equally important, there needs to be a link between High Speed 2 and the Midland Mainline. This would extend the benefits of HS2 across the North as soon as Phase One (London to Birmingham) is completed, and long in advance of the completion of the full Y-shaped network. This is crucial to prevent “leaking-by-linking”, i.e. the North losing business from a better connected Midlands, while it waits for the sections to Manchester and Leeds to be completed. On top of this, the Transpennine electrification proposals should be extended to reach Middlesbrough, Scarborough and Hull, and improvements are needed at each of Leeds, Liverpool Lime Street and Sheffield stations, to solve long-standing capacity issues.  All of these initiatives would cost £800m – a lot of money to be sure, but only around 2% of the HS2 budget.

Such spending would help redress decades of under-investment in the North’s transport infrastructure, but not the process that caused it. The current transport appraisal process heavily skews investment decisions in favour of areas of high population density and high salaries. This is good for London and the Greater South-East, but not the North. Another crucial change which needs to be made to the appraisal process is to better account for a project’s wider economic benefits.

These additional rail improvements and changing the transport appraisal process have the potential to kick-start the Northern economy and ensure it fully plays its part in leading the UK’s economic recovery. Today is a start, but no more than that.


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