Insights
While the economic impacts of new rail lines and large road schemes have been greatly studied, far less is known about the economic effects of improvements to existing local public transport networks. That gap in the evidence matters. As local authorities and combined authorities develop their growth plans and transport strategies, they need to understand not just whether these investments work, but how, where, and for whom.
New research —refining earlier analysis and recently presented in a seminar as part of the wider What Works Growth collaboration with MCAs— helps to fill this gap. It evaluates the economic impacts of 16 public transport schemes across England —including bus corridors, trams and schemes that improve the accessibility of existing stations— delivered between 2010 and 2017. Beyond the results themselves, it also offers useful lessons for policymakers, transport planners and evaluators involved in designing and assessing similar programmes.
The economic effects of transport schemes are highly local
One of the clearest findings is that the economic effects of transport schemes are geographically concentrated. Within 500 metres of a scheme, areas experienced an increase in the average number of businesses, but a decline in median turnover and employment. Yet, aggregate economic activity remained unchanged.
For policymakers, the implication is important: transport investments can attract firms to the area, but overall economic activity in the local area may not change. Thus, displacement and relocation effects should be considered, not just growth in areas closest to the infrastructure.
Micro-businesses appear to benefit most, besides effects on housing markets
The increase in business numbers near transport schemes is largely driven by micro-firms —businesses with fewer than ten employees. Better transport connections can increase footfall, improve access to customers and workers, and make certain locations more attractive for small firms. For local policymakers interested in supporting high streets or local entrepreneurship, this is a potentially important benefit worth tracking in future evaluations.
Alongside these effects for businesses within 500 meters from schemes, the research finds impacts on house prices near transport schemes —improved transport access makes neighbourhoods more attractive places to live and house prices increase. Rising house prices raise important questions about affordability and who ultimately benefits from transport investments, and these wider distributional effects should form part of any comprehensive assessment.
Evaluation lessons: data, timing and scale
Beyond the substantive findings, the research offers three methodological lessons that are relevant to anyone commissioning or designing evaluations of similar schemes. The first is about data granularity. The analysis uses highly detailed geographic data, examining outcomes at the level of Output Areas rather than larger administrative units such as wards. Using finer-grained geography allows for a more precise identification of treatment and comparison areas, which ultimately helps detecting small local effects that would otherwise be hidden in larger administrative areas —for example, around one of the schemes analysed, there are more than 3,000 Output Areas compared with just 138 wards. This matters because impacts from transport schemes are often very localised.
The second lesson is about timing. Transport projects often take years to plan and construct, and that long timeline creates an opportunity for evaluation —but only if it is planned early. Outcomes need to be tracked using administrative data covering several years before and after scheme implementation, allowing to examine pre-intervention trends and isolate the impact of the investment more reliably. The lesson is simple: evaluation should be considered from the start of a programme, not added later. The analysis used data from 1997 to 2019 to evaluate the schemes.
The third concerns the feasibility of evaluating individual schemes. The answer depends mainly on the size of the scheme and the granularity of available data. Smaller schemes may affect only a limited number of areas, making robust evaluation more challenging. With sufficiently detailed data and appropriate methods, meaningful analysis remains possible.
What this means for local governments
Public transport investments remain central to local growth strategies across the UK, and the pressure to demonstrate their economic impact is growing —not least as places develop Local Growth Plans and navigate the intersection of transport policy with net zero commitments and devolution.
This research suggests that the economic impact of smaller transport schemes is real, but nuanced. Effects are localised, some reflect redistribution rather than new growth, and the benefits tend to accrue to the smallest businesses and to local property markets. Capturing these impacts credibly requires granular spatial data, long time horizons, and evaluation frameworks that are built into programme design from the outset.
As the evidence base continues to develop, better evaluation of smaller transport schemes —not just flagship infrastructure— will be essential to ensuring public investment is targeted and assessed effectively. For more on the evidence around transport and local growth, see here.
