Continued investment in projects such as Crossrail and upgrades to the Tube is “crucial” if the capital is to retain its competitiveness according to a new report by GLA Economics.
Today’s report, Public spending priorities in London, has been produced by Professor Tony Travers and a team from the London School of Economics and can be downloaded from the Greater London Authority website.
The report finds that “growth in the London economy has benefitted both Londoners but also particularly the rest of the economy” and warns that if the capital is to continue to produce tax receipts which are then distributed around the UK, future allocations of public investment should “take account of the potential for public expenditure allocations to deliver higher output and tax income.”
Professor Travers said the mechanism for distributing public funds, which takes account of regional needs, had “hitherto taken little account of their different propensities for growth” and said the return on investment in increased tax receipts “should also be an important consideration at this time for the wider UK economy.”
London Mayor Boris has used the report’s publication to warn the new coalition Government not to starve the capital of funds when Chancellor George Osborne unveils his emergency Budget later this month.
Speaking on Monday the Mayor said: “I want to remind the Government that growth is essential to the health of our public finances. Only by continuing to invest in London and the South East- the engine room of the national economy- will the nation as a whole be able to grow its way out of trouble. The UK cannot afford the cost to the economy if the capital is starved of vital investment in infrastructure projects like Crossrail and the upgrade of the Tube.”