The Tories’ £4.2bn sounds like a lot of money to sort out local transport. It really, really isn’t

A tram in Manchester. Image: Getty.

There is an ongoing issue in reporting public spending, which one might term the Big/Small Problem. Some numbers that sound absolutely massive may, in context, be quite small – an extra billion on the NHS, for example, sounds like a lot of money, but in the contest of the £120bn annual health budget is actually sod all.

The Big/Small Problem offers a very useful tool for politicians who want to make it look like they’re addressing a problem when they’re actually not doing anything of the sort. This, I suspect, is exactly what’s going in with the £4.2bn Local Public Transport Fund announced by the Conservatives this morning.

This money, which transport secretary Grant Shapps says would be provided by the Tories’ beneficent decision not to cut corporation tax, would go towards “more frequent and better services, more electrification, modern buses and trains and contactless smart ticketing”. It would “kick start the transformation of services so they match those in London”.

Two things about all this have caused one of my eyebrows to raise so far it’s getting caught in my hair. One is that the government says the money would be available to the eight mayoral or combined authority areas that cover the big English conurbations outside London: the North East, Tees Valley, West Yorkshire, Sheffield City Region, Greater Manchester, Liverpool City Region, West Midlands and West of England.

The striking thing here is the inclusion of those words “or combined authority”. In recent years funding of this sort has tended to be on offer to areas with metro mayors only. That, though, would exclude West Yorkshire, which as it happens contains quite a few key marginals. It smells to me like the government is weakening its commitment to mayoralties as a way of generating good headlines in a part of the country that’s electorally useful.

That, though, is a relatively minor quibble compared to the shameless use of the Big/Small Problem to disguise the fact this fund is, well, not quite the square root of bugger all, but also not a transformational sum of money either. It’s £4.2bn over five years, which works out to £840m a year. To put that in context: the Northern line extension to Battersea, which will add two stations to the tube network, is currently priced at £1.1bn.

I’m being a bit cheeky here (though admittedly not as cheeky as the government), because of course major transport works tend not to happen in a single year. A better way of critiquing these figures is to note that the funding will be available to eight different city regions. Split the money eight ways and you get – drumroll, please – £525m.

Once again, this is objectively a lot of money and yet also in this specific context not very much at all. Manchester Metrolink’s Second City Crossing, a 1.3km stretch of track across the city centre intended to improve capacity on the tram network, cost £165m all on its own. A second line of the Midlands Metro, which will link Wednesbury and Brierly Hill to the network, will cost £450m, despite the fact it uses a disused rail line. The 14km Edinburgh Tram line cost over £1bn; a 4.6km extension to Newhaven will cost another £207m.

So I don’t want to be too sniffy about how much £525m will buy you – It clearly buys you something. But it’s not going to come even close to sorting out the transport problems of a conurbation like West Yorkshire, said to be the largest urban area in Europe not to have any form of tram or metro network. It’s a fraction of the money you’d need to spend to build a tram network as good as Manchester’s. The idea that it’s enough to get close to a London-style transport network is laughable.

In practice, not every conurbation will get £525m. They’ll have to bid for the money, so some will get more – others may get nothing. But, as with the Tories’ ridiculous claim that a £500m fund will be enough to undo the Beeching axe, this policy isn’t really about transforming transport – as Stephen has noted, buses are a far better way of doing that. Instead, it’s about making it sound like a Conservative government will invest in parts of the country that are desperate for it, even though it almost certainly won’t. Anyone would think there’s an election on.


What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.

Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.