Transport funding explains GDP gap, says PTEG

A new report from local transport authority group, PTEG, claims the Government could make ‘transport work harder for jobs and long term economic growth’ through stepping up investment in urban transport in the city regions. It suggests lower levels of transport spend can explain the 2% GDP gap with Germany.

PTEG’s report shows that between 1990 and 2004 increased spending in Germany on transport and communications accounts for 2% higher GDP growth in Germany than in the UK. Investing in transport improvements in congested urban areas has a bigger impact on economic growth than nearly any other type of public spending, according to the study. It highlighted the idea that capital investment in local transport outside London was the hardest hit area of transport spending in the 2010 Spending Review. It claimed that although spending levels are on an upward trajectory again, they still lag behind the growth in spending in other areas of transport. The report summarises some of the latest academic research showing urban clusters cannot develop to their full potential without high quality and efficient transport networks.

The report finds that: A doubling of economic density leads to an average increase in productivity of 4% for manufacturing firms and 12% for the service sector as a whole; 63% of all jobs in England are within 40km of London or the Core Cities (28% of England’s land mass); and a survey by the British Chambers of Commerce (BCC) found congestion to be a problem for around 90% of businesses, with around 45% viewing it as a significant problem.

Chair of PTEG, David Brown, said, ‘This research finds that urban transport is one of the best investments the Government can make in order to let business do what it wants to do which is to cluster together efficiently for easier access to staff, clients and shared resources. Transport is fundamental to this and nowhere more so than in city centres where so many high value business activities are concentrated and where public transport and active travel come into their own. The report shows the need for a more joined up approach from Government in recognising the broad benefits of urban transport investment. It’s clear that some parts of Government get it, but others don’t. More widely, without adequate revenue budgets local transport authorities will simply not be able to retain the staff needed to deliver the capital projects that Government wants, efficiently and effectively, or even at all.’




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