Transport infrastructure is the foundation upon which a successful and fair economy is built.
Bus networks connect people to jobs and education. The railway links economic hubs and helps deliver connected growth. Cycling and walking initiatives also provide healthy and sustainable alternatives to cars.
The Transport Knowledge Hub was established this year to help stakeholders share their experience and to consider how investment in transport infrastructure can enable inclusive and sustainable economic growth. As a board member, I was delighted to attend our first national seminar last month on funding transport investment.
Good transport networks are a major contributor to land value. The seminar focused on the impact of transport investment on land value and how to capture this, thus unlocking innovative ways of financing infrastructure schemes. Such schemes offer enormous benefits by bringing people into town centres and providing the platform for development such as retail and commercial units around transport hubs. A packed room of local decision-makers, transport stakeholders and government officials discussed how best to quantify this uplift in value and how this can be ploughed back into future programmes.
As chief executive of Thames Valley Berkshire Local Enterprise Partnership, there were a number of pertinent lessons to take from the seminar.
Firstly, connectivity can have a significant impact on productivity and economic growth, but it is not the only driver. The impact of transport on land value is most beneficial when it involves a blend of transport, regeneration, housing and business support investment. KPMG’s Lewis Atter said if we want to invest at the scale necessary to rebalance the economy, “investment-led growth needs to generate significantly more revenue for the exchequer than normal growth”.
Rory Brooke from Savills identified the process for generating this value as investment in transport infrastructure proceeds. He noted that land values and commercial values rise first, with residential sale values mainly increasing after construction of the relevant transport infrastructure. We know transport can unlock value for local communities, but capturing this value and re-investing is going to be crucial.
Drawing on his experience of major transport investment in London, Transport for London’s Julian Ware addressed some innovative approaches to land value capture. A recent TfL report proposed a residential charge based on the property value premium arising from new transport investment, a business rates revaluation on growth retention or a development rights auction model.
While some of these learnings rely on London’s unique transport landscape, these solutions provide food for thought for local authorities and LEPs looking to capture the value of their transport investments and continue to drive inclusive growth in their regions.
Tim Smith, chief executive, Thames Valley Berkshire LEP