Jo Johnson says regional transport investment can be fixed by new “rebalancing toolkit”

The minister resisted accusations of a funding gap in his first grilling by the Transport Select Committee, saying every investment must have a “business case”. 

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In his first appearance before the Transport Committee as Minister of State for Transport yesterday, Jo Johnson introduced a “rebalancing toolkit” scheme to support areas applying for investment in transport. The policy, he said, was designed to address the “productivity gap” between London and other regions.

At the same time, however, Johnson downplayed regional rail investment disparities, saying he had “not seen” Treasury figures showing that in the five years up to 2015/16, London received £20bn more transport investment than the North-East. He claimed that other statistics showed a more balanced picture of transport funding.

Johnson argued that the decision to invest in a region’s transport was made on the basis of the strength of the business case. He described the “rebalancing toolkit” as “a checklist of things that promoters of schemes can ensure they’ve thought about when developing a business case, so they don’t miss an opportunity to bring to light elements that are going to be attractive to funders.”

Committee member Graeme Morris MP questioned whether this toolkit would be skewed towards areas that are already “economically buoyant”, putting deprived areas at risk of being left behind. Johnson, however, claimed the toolkit would help reverse this trend

Committee chair Lilian Greenwood MP asked if the toolkit policy was “recognition” that there is an issue of investment disparity “that needs to be fixed”. Johnson said the wider context was demonstrated by figures from the Infrastructure and Projects Authority (IPA), which found that central government transport spending per head in the pipeline between 2017/18-2020/21 is highest in the North West.

But the think tank IPPR North has previously disputed the IPA figures on the basis that by only including spending up until 2021, they exclude over half - £42.5bn – of pipeline spending, of which “almost half (£19.8bn) is in London”. The figures also exclude TfL expenditure, on the basis that “from 2017/18 onwards it receives no direct central government funding.” IPPR argues while “it is technically true that central government doesn’t directly fund local spending in London, it effectively does so by allowing London to retain business rates.” Business rates collected elsewhere in the UK go back to central government before being allocated to local authorities.

The committee asked for an example of where the toolkit had made a positive impact, but the minister said as it was “early days”, and more time was needed to gather evidence.

Augusta Riddy is a Special Projects Writer at the New Statesman.