The National Infrastructure Commission (NIC) has today published its report for the Chancellor on the case for investment in intercity links in the north of England to support the economic potential of the Northern Powerhouse. The NIC’s report draws on analysis by Frontier Economics, also published today.
As an independent advisor for Government, the NIC has been exploring the role of improving intercity connectivity to promote growth in the north of England. Frontier was asked by the NIC to deliver an evidence-based assessment of the channels through which improvements in intercity transport links could contribute to economic performance and the conditions under which such investment would be more likely to unlock economic growth potential.
Frontier’s report presents a framework to understand the drivers of economic growth in cities, highlighting in particular the complementary nature of these drivers. Combining a review of evidence with new analysis of the potential impact on economic performance when intercity transport links are improved, the report finds that:
The extent to which inter-city transport connections are able to drive economic performance depends on whether other complementary drivers such as skills, housing and intra-city transport connections are in place.
Reducing rail travel time between the largest cities in the north (Leeds and Manchester) from 49 to 30 minutes improves the ‘accessibility’ to economic activity for workers and firms in all size of the largest city regions in the Northern Powerhouse. This translates into gains in total earnings in these regions, estimated at £30 million per year, or £62 million when impacts on the wider Northern area and beyond are There are also likely to be gains in economic performance when transport links between other northern city regions are improved.
Gains in economic performance are likely to be greater where: cities are large and fast growing; there are sufficient workers with high or intermediate skill levels; there are relatively high shares of sectors for which face-to-face or business-to-business contacts are important; and cities have commutable travel times between them with adequate intra-city transport networks (so that intercity commuters do not simply become congested when they reach the city).
Frontier regularly advises major government departments on transport policy and economic growth policy.
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