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New opportunities in transport investment for growth?

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WWG transport blog (1)

In February, the government announced the new Local Transport Fund – a package of £4.7bn of spending, funded from the scrapping of HS2, that will be allocated to local authorities in the North of England and the Midlands. Places will be able to spend funds on a range of transport investments, with the aim of improving connectivity within and between towns and cities.

There will be many outcomes that areas might want to achieve with their new transport money, including improved local economic performance. This blog highlights some of our evidence resources that can help places think through the likely impacts.

Road building and expansion

Our transport evidence review looks at impact evaluations of the economic effects of road infrastructure projects. The project specifics vary, from highway building to expanding road width, but all essentially concern increased capacity or connectivity.

Overall, the evidence of local economic impacts is somewhat mixed (and there’s not much of it). Where there are robust impact evaluations, they suggest that road projects can have positive effects on employment, the number of businesses in an area, or even productivity, though not in all cases.

The evidence suggests new road projects can increase property prices., While this indicates some kind of amenity benefit from projects, the effects of those higher prices on the local population may be negative if they are not accompanied by higher wages.

Rail investment

Our rapid evidence review on rail investment summarises impact evaluation evidence on the local economic effects. This covers projects from light rail and metro services to intercity and high-speed rail – most of the studies look at the effects of new stations or extended rail lines.

As for roads, the evidence for rail’s local economic impact is also mixed. While several studies find increased employment and numbers of businesses around new stations, or around stations of extended lines, some studies don’t find an effect, and others suggest that where there are effects they come from displacement – i.e. businesses simply moving to be closer to the station.

Again, the evidence suggests property prices increase where new projects are situated, raising the same issue as discussed above.

Active travel

As part of our evidence briefing on the local economic impacts of public spaces, we conducted a rapid evidence review on active travel infrastructure investment – specifically investments to support and encourage walking and cycling.

The impact evaluation evidence here – while limited – suggests that these interventions can increase uptake of active travel. Cycling infrastructure such as cycle superhighways and segregated cycle lanes tend to have a positive impact on rates of cycling. And one-study found “mini-holland” style cycling infrastructure increases both cycling and walking.

It’s far less clear whether increased active travel has any effect on local economic outcomes. Four of the studies in the rapid evidence review look at this, and they find unclear and mixed results. More of the studies look at property prices, with a majority finding some positive effects, indicating that as with the other transport investments discussed, this is an important aspect to consider.

Improving and maintaining transport infrastructure is no silver bullet for improving local economic performance but well thought-through and targeted projects can help. Our evidence resources and logic model guidance aim to complement local information in helping places design such projects.