Better rail services vital to rebalancing the economy

Date: 22/07/2010

As the public sector shrinks, improved rail links between cities and towns will form an important part of the new Government’s plans to rebalance the economy - by linking people to jobs.  This is according to a new report from the Centre for Cities.

The report On Track: Why rail matters sets out the vital role that the railways will play in boosting local economies and supporting jobs in the coming years, including vital private sector employment opportunities as spending cuts affect public sector employment.

The research looks at five planned improvements to the railway network and sets out the benefits they will bring to the economy of individual towns and cities, including cutting journey times and allowing passengers to use the time saved more productively. It also quantifies the tens of thousands of businesses and hundreds of thousands of people that could benefit from general investment in the rail network in the eight cities and towns examined.

Rail transport improvements can help improve job prospects for city residents and will benefit businesses across Britain:

NB: these cities are examples of areas where rail upgrades are planned.
*This data is for the Primary Urban Area rather than the Local Authority.  Scottish city “PUAs” are LA areas with the exception of Glasgow which includes West Dunbartonshire, East Dunbartonshire, East Renfrewshire, Renfrewshire and Glasgow City.  All other data in this table is for the Local Authority. 

The report highlights that it’s not just rail passengers that benefit from improvements to the UK rail network.  The wider economic benefits of rail investment are:

• Businesses can become more productive by accessing a larger pool of labour and choice of suppliers and through increased exposure to competition.  For example, over 20,000 businesses in Leeds and more than 15,000 in Glasgow could benefit from improvements to the rail network
  
  
• Cities and towns become better connected to each other and their wider outlying economies, helping them to play to their strengths while drawing upon complementary industries in surrounding cities.  For example Liverpool as a port and tourist destination and Manchester with its professional services cluster, Mediacity and international airport.
  
  
• Local residents can tap into higher wages and new employment opportunities that open up.  For example, median weekly earnings are 13% higher in Leeds than in Huddersfield and 10% more in Glasgow than Bathgate.  Both sets of cities and towns will benefit from being linked together. 

The employees that could benefit the most across the cities and towns studied were middle-skilled employees such as tradesmen, clerical workers, sales people and drivers.  In Sheffield, for example, nearly three times as many workers from middle-skilled groups would potentially benefit from rail improvements, compared to those with the highest skills.

At a time when public finances are constrained and with pressure on transport budgets, the Government and transport decision makers will need to focus on targeted high-return investments that support the growth of the private sector economy and open up job opportunities.

Claire Maugham, Deputy Chief Executive at the Centre for Cities said,

“We’re in a difficult jobs climate – and it’s unlikely that future job opportunities will be found on the doorstep.  City residents are increasingly commuting to other towns and cities to work.  And improvements to the rail network should be focused on helping them do so.

“Rail transport budgets will clearly be under pressure in the years to come.  Targeted high return investments should be seen as part of the wider solution to rebalancing the economy.”

Edward Welsh, Director of Corporate Affairs at the Association of Train Operating Companies (ATOC), which has supported the report, said:

“As we enter into a period of austerity, we need to focus limited funding on improvements which will bring the biggest benefits to passengers, taxpayers and the wider economy.” 

“Investment in the railways doesn’t just improve services for passengers, it brings significant benefits for the wider economy, connecting people to jobs and making businesses more productive by giving them wider access to markets. The railways will have a vital role to play in driving economic growth in the coming years as the economy becomes more reliant on the private sector." 

Welcoming the publication of the report, Paul Plummer, Network Rail's director, planning and development, said:

"Britain relies on rail, as this valuable report reveals. Our railways are nearly full and every year more people are choosing to travel by train. This is why we are working with government and the rest of the industry to plan ahead for the long term needs of the country, providing faster, more frequent rail journeys where this is good value for money.”

For more information, please contact:

Niamh Sands at Centre for Cities 020 7803 4309 / n.sands@centreforcities.org

Nick Mann at ATOC 020 7841 8069 / Nick.mann@atoc.org

Notes to editors

On Track: Why rail matters is available to download at www.centreforcities.org/ontrack

This report was produced in association with the Association of Train Operating Companies (ATOC)

The Centre for Cities is an independent research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for Whitehall, cities and business.

ATOC's mission is to work for passenger rail operators in serving customers and supporting a prosperous railway. Set up after privatisation in 1993, ATOC brings together all train companies to preserve and enhance the benefits for passengers of Britain’s national rail network.