Does transport policy need to better reflect the changing economy?

Central Government Transport Policy in England and Wales is increasingly focused on supporting improvements in the transport infrastructure aimed at meeting the supposed needs of businesses to keep people and goods on the move. It is questionable whether this is the right focus given the changing nature of economic activity as well as wider changes in society and some fundamental questions need to be asked about what (and who) is transport for.

The UK Department for Transport website describes the overarching objective of the Department as being : ‘We work with our agencies and partners to support the transport network that helps the UK’s businesses and gets people and goods travelling around the country. We plan and invest in transport infrastructure to keep the UK on the move.’

The overall thrust of the objectives concern infrastructure improvements funded through capital spending and this is evident from looking at the detail of departmental spending; as noted by the NAO, since 2010 ‘capital spending’ on transport has increased disproportionately compared to ‘revenue spending’ which supports day to day bus services and measures to encourage walking and cycling, for example.

Policy decisions about infrastructure spending are underpinned by what economists call agglomeration theory. This is based on the idea that spending on transport infrastructure brings firms closer to each other and their customers (in travel time terms), which in turn yield improvements in the economic performance of individual areas, regions and the national economy.

In the UK Department for Transport the forecast ‘value of time savings’ are at the heart of the method used to appraise transport proposals and advise decision makers about the value for money of different options for transport spending. This approach has, of course, been subject to a great deal of criticism for at least two decades. The assumption that the time people spend travelling is of no economic value has attracted particular criticism and Professor Glenn Lyons, and others, have pointed to a growing body of empirical evidence to suggest that people often spend a good deal of time on productive tasks whilst travelling and that time spent travelling plays an important ‘transitional’ role.

A related issue which has been aired extensively over the years and is explored further in a report published last month – Banks, bytes and bikes: The transport priorities of the new economy.
This highlights how transport needs in urban areas are changing amid the growth of the so-called “flat white economy”. It shows how business sectors such as communications, media and information increasingly favour urban locations which are seen as ‘good places’ to live and work and provide good access on foot, by bike and by public transport. It challenges ‘monolithic views’ of what business want from transport policy in favour of a more nuanced perspective which recognises that there is a new economy with new perspectives on transport priorities, including a need to address wider objectives around public health, better air quality and the need to reduce carbon emissions.

In their conclusions the authors pose two key questions.

  • Is the right balance currently being struck in supporting the transport needs of the new economy compared with other sectors of the economy, including, for example, on appraisal of schemes which traditionally favour projects which reduce journey times between places rather than those schemes which contribute to improving the places themselves?
  • Do these new sectors of the economy need to find their voice to ensure that a more accurate and nuanced view of business priorities is reflected in wider transport policy making?

But how do we achieve such a shift?

It is clear from key policy documents, including DfT annual reports, that we are a long way from bringing these and other fundamental questions about what transport policy is for to the centre of transport policy making . Indeed, as we reach the 20th anniversary of the publication of John Prescott’s White Paper ‘ New Deal for Transport: better for everyone’, some might argue that we are further away from this that at any point over the last two decades’.

Moreover, I know full well from the ten years I spent working as Head of Social Research at the Department for Transport (DfT) just how difficult it is to inject new thinking and particularly anything that entails grappling with policy objectives that cut across the remit of several departments.

But is such pessimism justified? There are opportunities ahead, not least the challenges thrown up by Artificial Intelligence (AI). It is evident from the literature on autonomous vehicles commonly known as driverless cars/vehicles, that there are a huge range of diverging views about how quickly these will become commonplace on our roads. The optimist in me would argue that surely policy discussion around the options here must go beyond what is technically possible and bring questions about what is (and equally pertinently – who is) transport policy for, taking account of wider societal changes and changes in the economy to the fore?

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