The government’s overall argument is that for every £1 billion of tax-payers’ money invested nearly £3 billion-worth of sustained economic activity is generated. This claim of a threefold multiplier effect is disingenuous for two reasons:
- Almost all government-sponsored projects involve private investors’ money going in alongside taxpayers’ money and the two sets of investors have to share the benefits.
- The idea of a simple "multiplier effect" popularised by Maynard Keynes and his allies was taken up by the Treasury in the 1950s and 1960s and incorporated in its computer model of the UK economy. However, this has been by stages rejected in favour of a "New Keynesian" approach which gives less emphasis to multiplier effects.
Transport
In London, the government’s plans for subsidising major projects for building roads, rail lines, water and waste facilities overlap with the Mayor of London’s plan which is now out to consultation. CPRE London will be collaborating with other charities under the umbrella of the Campaign for Better Transport to challenge the Mayor’s proposals to spend up to £100 bn on new roads. We will argue for better focused investment in a range of green projects.
Housing
We will also argue for boosting the supply of affordable and sustainable homes using new investment vehicles and where appropriate community-based management. The government’s new announcements include several commitments to add to the funding of the Mayor of London’s proposed major housing projects. These are:
- agreeing a loan of £55 million to support the extension of the London Overground to Barking Riverside to unlock the already-planned delivery of 11,000 homes. (Our office manager recently toured this site with the London Society; she agrees that this area should be enabled to accommodate much more affordable housing adding to well-designed examples already built.)
- supporting the London Borough of Barnet and GLA regeneration project at Brent Cross which could deliver 7,500 homes, subject to acceptance of a full business case linking with the extension of Brent Cross Shopping Mall and nearby business parks.
(This borough features in research by CPRE’s Luke Burroughs which underpins the Campaign’s national drive to support more sustainable homes on brownfield sites. However, our members in this borough have expressed concern that appropriate social infrastructure will not be delivered to keep pace with the planned population rise.) - taking forward the already-announced commitment to build the first new garden city for almost 100 years at Ebbsfleet, which will deliver up to 15,000 new homes. (The coalition government has accepted the case made by TCPA and encouraged by the Wolfson Prize for new garden cities to be added in a belt around London. We oppose this half-formed plan on various grounds, including that better attention should be given to the maintenance and development of the existing New Towns built mainly in the 1950s and 1960s to relieve London pressures.)
- finally, the government has made a splash about its support for the planned "redevelopment" of the Queen Elizabeth II Olympic Park by building a new cultural quarter alongside the three housing projects on its eastern side. (Our honorary secretary is participating in a collective effort led by the London Tenants Federation, responding to the London Legacy Development Corporation’s Local Plan, which calls for investment in affordable homes and accessible jobs.)
Conclusion
CPRE London will continue to work with allies to highlight the links between national and London long-term plans for major infrastructure investment and to point out the dangers of badly thought-through mega-projects. We will call for a re-alignment of strategy towards local community needs.