Transport spending must be increased in the regions outside London to promote economic growth, MPs have been told.
A Commons inquiry was warned that dramatic differences in spending in the capital and the rest of the country were hampering attempts to “rebalance” the economy.
The Transport Select Committee is holding an inquiry into funding gaps, after Treasury figures confirmed the Government was still spending more than twice as much on transport in London as in the West Midlands – and the gap is getting worse.
Transport spending in the West Midlands in 2011-12 is £198 per person, down from £228 a year ago, while spending in London is £644 per person, up from £642 the year previously.
The figures do not take inflation into account, which means the capital has also suffered a spending cut in real terms. However, they illustrate that the gulf between the regions is widening.
MPs heard from witnesses including Jonathan Bray, of the Passenger Transport Executive Group, which represents transport authorities such as West Midlands body Centro, as well as Ed Cox, Director of think-tank IPPR North.
Mr Bray said: “We’ve always been clear that London needs and deserves a better transport system... what we’re saying is it’s time that the next tier of cities began to see something similar in terms of the sort of surge of spend we’ve seen, if we’re going to have a more balanced economy than we have at the moment.”
He pointed out that much of London’s public transport network was operated by publicly-owned bodies. For example, the underground system, or tube, is run by London Underground Ltd, which is owned by transport authority Transport for London.
Mr Bray said: “London has revenue from tube and buses. In our areas that goes straight into the private companies, we don’t see it.”
Mr Cox said that transport funding was currently allocated to areas with high level of congestion, but this tended to mean areas which already had high levels of economic activity - and the funding them spurred more economic growth in the same area.
Instead, funding be allocated partly on the basis of which areas need economic investment the most, he said.
“If we rebalance the way we spend we will actually see economic growth,” said Mr Cox.
The inquiry also heard from Henry Overman, Professor of Economic Geography, London School of Economics, who said the spending figures showing the spend per person could be misleading because people in London were more likely to use public transport.
The gap was much smaller if one looked at spending per passenger, he said.
Meanwhile, authorities across the region are pressing for the Midland Metro light rail system to be extended to make it easier for passengers to use the planned new high speed rail line, known as HS2.
Plans are already being developed to use the current Birmingham city centre extension, from Snow Hill to New Street, and add a new spur leading from Upper Bull Street across to Moor Street station and the forthcoming HS2 station near Curzon Street.
Plans are also progressing to take the existing Snow Hill to New Street Station extension, which is due to open in 2015, on through Paradise Circus to Centenary Square.
Centro chief executive Geoff Inskip said: “Construction is already under way on the metro extension from Snow Hill to New Street. Our challenge is to get the best from HS2 for people throughout the West Midlands and Metro is an essential part of that.
“We must ensure local and regional services connect seamlessly with the high-speed rail network so that everyone benefits.”
Mr Inskip said HS2 would bring 10,000 jobs and boost the West Midlands regional economy by £600 million each year.
But he added; “We know that using this capacity and fighting to deliver schemes such as extending Metro will more than double these benefits to 22,000 jobs and £1.5 billion per year.”
Council and business leaders in the West Midlands are in negotiation with the Government over proposals to create a new transport authority which would take control of funding from both local authorities and central government.
Although this would not necessarily bring more cash into the region, they argue the money would be better spent if it was controlled locally.
The Greater Birmingham and Solihull Local Enterprise Partnership, a body controlled by business leaders and local authorities, and the Black Country Local Enterprise Partnership have agreed in principle to create a single joint body.
The plans are included in proposals for a “City Deal phase two”, to be agreed between Birmingham and the Ministers.
