North East transport funding gap could get worse, warn MPs

The North East needs more transport investment - but the Government's planned changes might only make things worse, warn MPs

A East Coast train at Newcastle Central Station
A East Coast train at Newcastle Central Station

An unfair funding system which means the North East is starved of transport cash must end - but changes planned by the Government could make the situation worse, MPs have warned.

A Commons inquiry demanded action to end a bias in favour of London, which means funding for transport infrastructure such as new rail stations or road schemes comes to £2,595 per person in the capital but just £5.01 in the North East.

And MPs criticised a new funding system due to come into effect next year which puts Local Enterprise Partnerships, bodies led by employers and backed by local authorities, in charge of improving local transport.

In a new report, the Commons Transport Committee said: “There is a risk that some areas will be left behind.”

But the MPs warned: “The under-funding of transport projects outside Greater London in recent years cannot be allowed to continue. No area across our nation should be second class in relation to the allocation of transport infrastructure funds.”

The Committee highlighted research from think tank IPPR North which found there was a massive gap in spending per head on transport infrastructure. Every region outside London suffers as a result, but the North East has the lowest funding of any part of the UK.

Ministers have announced that Local Enterprises (LEPs) will become responsible for transport schemes from 2015. The Government is putting £2bn a year into a fund called the Single Local Growth Fund, and LEPs will draw up bids to try to win a share of the money.

In the North East this will include the North East LEP, covering County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland, and the Tees Valley LEP, covering Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton on Tees.

But the inquiry warned:

* Money could go to areas where LEPs had the resources to prepare impressive bids, not where it was most needed;

* There is no guarantee that the £2bn a year will be spent on transport, because LEPs can also bid to use the money on any scheme that is designed to help the economy grow;

* LEPs are not accountable to the public and most voters would expect their local council to be in charge of spending;

* While the new system is supposed to devolve power and funding to a local level, central government in London will decide which bids are succesful.

In particular, the MPs warned that there was no guarantee that the new system would ensure cash was distributed fairly.

Committee chair Louise Ellman said: “Far less money is spent on transport projects outside London than in the capital. This inequality has gone on for too long and has to change.

“For example, IPPR says that transport infrastructure spending is £2,500 per head in London compared with £5 per head in the North East. Even on the Government’s figures, transport spending per head in London is more than twice that in the English regions.”

She added: “The Government has again changed the system for distributing money to local areas for major transport projects, with much more emphasis now on competition for funding. This will not necessarily help regions get a fairer share of transport funding and could make the situation worse.”

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