Large-scale developments in the North could be hit with greater local levies as councils seek to divert more cash towards transport infrastructure to support billions of pounds of investment, Transport Network can reveal.
The likely £15bn investment programme being developed by the new Transport for the North body is planned for the next 15 years and could largely be funded from central government but is likely to require local contributions too.
The transport group is made up of all the major cities in the North including Greater Manchester, Liverpool, Leeds, Sheffield and Newcastle together with Hull and Humber and is charged with producing a future works programme for government by March.
After chairing the group’s first partnership board meeting this week, the leader of Manchester City Council, Sir Richard Leese, told Transport Network northern transport upgrades could be locally supported using similar funding streams to those planned for the Nine Elms redevelopment in central London.
In Nine Elms upgrades to support some 16,000 new homes are being largely financed by a levy on development sites and though collecting business rates from new businesses as they move into the area.
‘It should certainly be a mixture of local and national funding, with local support for local transport linking with pan-northern infrastructure that should largely be funded through the national purse, he said.
‘In terms of our local contribution to these regional plans – there are a number of ways we could consider doing that. One we are doing with the current Greater Manchester Transport Fund is through our council tax base and the transport levy, secondly through the 'earn back' scheme under which we are already funding links in Stockport and South Manchester and are proposing to fund the next Metro link extension out to Trafford park. The third way we need to look at is similar to Tax Increment Financing (TIF) type schemes – in a similar way to what is proposed for Nine Elms in London.
‘There is the potential to earn funding through capturing increases in land value but of course that has to be converted into an amount of money that the procurement authorities can put their hands on. TIF schemes affectively do that because you capture business rates through new development. Certainly earn back has some relation to TIF but Nine Elms is the sort of thing we need to be looking at.’
Sir Richard dismissed any chance of a local congestion charge helping support Manchester’s contribution.
‘It is a categorical and emphatic "no". I think if road pricing is going to happen in the future it is going to be part of a national scheme rather than any local scheme. It is certainly not going to be a local issue in Manchester. I cannot see anyone in the foreseeable future even considering bringing the congestion charge debate back in Manchester,’ he said.
He went on to say that the Transport for the North plans would use similar evaluations to those of the Greater Manchester Transport Fund, which has ‘helped pioneer a broader analysis of transport schemes rather than the traditional way of simply doing it in passenger numbers and passenger speed’ Sir Richard said.
The fund has been praised by senior figures in the sector for determining projects based on gross value added potential, while refining the process with considerations of social and carbon benefits at a programme level.
‘That is clearly an analysis that will be bringing to bear to try and show a more accurate account of what the economic benefits will be,’ Sir Richard said.
Sir Richard revealed that one of Transport for the North’s work streams is looking at joining up smart ticketing systems across the region to ‘combine with the desire of government to have a national smart ticketing system’.
He also warned government not to try and pick out individual proposals from the final package as it would need to be taken as a whole.