How do we grow the economy while achieving better social outcomes? It is the key question for any new government. Looking back at the first seven months of the Labour agenda, they have an obvious focus on international investment, with £63bn in private sector commitments announced in October and chancellor Rachel Reeves making it a central theme of her November Mansion House speech, but at the same time the new government are focussed on stimulating our national and regional economies through targeted spending.
A clear and obvious candidate for this targeted spending has been transport. Transport is key because it creates high profile outcomes for places like the North of England, with a boost to regional economies through greater connectivity and localised spending multipliers via the supply chain. With large amounts invested in something like new or improved railway and bus networks, there is also huge scope to deliver social value at the same time.
Regional vs national spend
However, a distinction must be made between regional transport investment and strategic national infrastructure. While for the latter regional authorities play only a stakeholder role, devolution of transport spend has meant that increasingly, regional spend is now placed in the hands of our Metro Mayors, with successes such as Manchester’s Bee Network having increased bus passenger numbers, and a recent report by the Urban Transport Group recommending further devolution.
But what are the differences between local and national objectives? Historically, national transport initiatives have prioritised speed and cost of construction over long-term social impacts, such as employment opportunities, skills enhancement, and community development. But with greater devolution a paradigm shift is underway, reflected in the government’s proposals to potentially change the Green Book, which sets out the guiding rules for how HM Treasury appraises decisions and projects that require public funding.
A new approach to investment decisions
A critical element of this transformation is reforming Business Case Methodology. Current approaches, which are skewed towards return on investment, often fail to adequately support regional projects outside London because they are hard to justify in terms of short-term returns (often discounting longer, more socially beneficial benefits such as secondary job creation). Tailored, localised methodologies will ensure transport investments are more responsive to local needs, maximising social outcomes and better balancing national growth.
Equally important is embracing a holistic approach to delivery. Fragmented project methodologies often result in inefficiencies, increased costs, and objectives that don’t match up. Continuity from strategy through to execution is essential for effective transport investments. This approach enables cohesive planning and execution, ensuring projects deliver maximum economic and social returns.
Defining projects early to leverage the private sector
Early project definition is critical to distinguishing between nationally significant megaprojects and regional initiatives. This definition determines the stakeholders, funding mechanisms, and social value opportunities that can and should be considered. Defining a project from the outset essentially allows for better alignment of resources and strategies, unlocking the full potential of these investments.
Once a project is defined, early engagement with the private sector can identify innovative mechanisms for funding and finance. Given the scarcity of public funding, it is essential to explore opportunities to leveraging private sector money and expertise, which not only enhance the viability of projects but also ensure they are delivered efficiently and effectively.
Catalysts for regional economy growth
The synergy between growth, investment and transportation in Birmingham is a good example of how these investments can boost a regional economy. Despite HS2’s controversies, the new high-speed line to London has spurred regeneration near Birmingham’s Curzon Street station, as well as prompting the redesigning of nearby Centenary Square. Our research shows that projected economic benefits include 704,000 sqm of commercial space, 41,000 homes, and over 30,000 job opportunities, although it is important to note that these are only potential figures that reflect the ongoing planning stages.
Looking ahead, the expansion of East-West Rail offers another opportunity to reshape connectivity and support balanced growth across the home counties. The same is true of the Trans Pennine Upgrade (TRU), a multi-billion pound investment to improve the railway between York and Manchester via Leeds, that is spurring investment while attempting to empower communities and local charities through initiatives such as the TRU Community Fund.
A vision for growth
As the new government’s decision-making process evolves, with the likelihood of ever-greater devolution, it is essential to recognise that communities should be involved. From the Labour growth diagram, shown below, it is obvious this needs to come early in the process, at the policy/strategy stage so it can run through concept, design and delivery. The way to do this is by implementing effective collaboration across government, regional decision-makers and stakeholders (including community groups). This would leverage strategic insight from across the board, transforming transport infrastructure into a catalyst for social transformation and economic prosperity.
This collaborative methodology can harness partnerships with clients, financiers, and engineering consultants like Arcadis and Atkins, who can use in-house expertise to engineer the right solutions to address these challenges and develop workable solutions that suit all parties. By aligning growth agendas with innovative strategies and funding mechanisms, the future of UK transport infrastructure can become a beacon of sustainability, inclusion, and shared success.
At this stage of the government cycle, the time to develop this collaborative investment strategy is now. Together, we can harness expertise, insight and understanding from across the country to steer transport investments towards a future of effectively connected cities, empowered communities and sustainable and balanced growth, that puts social outcomes at its heart.
