Responsibility for policy and funding decisions related to transport sits at different levels of government – UK, regional and local.

The UK government sets the overall direction for transport policy in the country and controls national rail services. The Mayor of London (via Transport for London) is responsible for most public transport in the capital, and for maintaining the strategic road network.

London’s local authorities are responsible for the upkeep and management of their roads outside the strategic road network, and for improvements to the active travel environment.

What policy levers are available?

Local, regional and national government can influence the travel choices people make by:

• Investing in transport infrastructure through capital spending – including roads and rail lines – or revenue spending, specifically by subsidising public transport fares.
• Investing in maintaining and improving the travel environment – for instance by installing new lighting, improving the condition of the footway, or installing dropped kerbs.
• Restricting where people can use certain transport modes – explicitly (through restrictions on driving or parking) or implicitly (through not providing active or public transport options).
• Changing planning or other regulations – for example, requiring employers to restrict parking spaces or requiring developers to provide cycle storage.
• Changing the rules and legal obligations of drivers and riders – for example, through amendments to the Highway Code concerning which vehicles may be used on the road and at what speed.
• Changing public sector procurement and contracting rules – for example, requiring a certain level of service in rail franchise agreements.
• Providing information to Londoners about the sustainable travel options available to them and the support they can use to access them, including providing training (e.g. cycle training).
• Changing taxes and charges paid by individuals or households for different forms of transport, including vehicle taxation, driving charges, parking charges and public transport fares.

This project will consider most of these levers. The last, taxes and charges paid by individuals, will be considered in Centre for London’s next research deep dive as part of the transport programme, to be published in summer 2023.

The role of central government

The UK government sets the overall direction for transport policy in the UK, which is influenced in various ways. It sets climate targets – a significant metric, since transport accounts for one-quarter of the UK’s carbon emissions. ⁵² As part of these commitments, it will ban the sale of petrol and diesel cars by 2030. ⁵³ It sets fuel duty and road tax for cars and makes the rules about the tax treatment of travel for work. It decides whether to go ahead with big infrastructure projects like High Speed 2. It also controls the Highway Code – particularly relevant to whether e-scooters and other emerging forms of micromobility are allowed on the road. ⁵⁴

Although the Mayor of London controls most public transport in London, central government controls many of the national rail services that run through the capital through its contractual arrangements with Network Rail and the train operating companies. This includes the frequency of services, the cost of fares, the standards expected for punctuality and reliability, and the sanctions when these are not met. Many people in outer London are reliant on these lines, and there have been frequent reports that services have become less frequent or less reliable since the Covid-19 pandemic. ⁵⁵

The Mayor of London and GLA

The Mayor of London controls Transport for London (TfL), which runs most public transport in the capital and also controls and funds London’s strategic road network. ⁵⁶ TfL also runs the Santander cycle hire scheme as well as the Cycleways network of bike routes, most of which are focused on radial travel into central London.

Normally, Transport for London is financially self-sustaining, using fares and other commercial revenue to pay most of its running costs. But sharp decreases in passenger numbers during and after the COVID-19 pandemic meant that it required financial support from central government to continue to operate. After a series of short-term deals, there is now a settlement in place until the end of March 2024. ⁵⁷ As part of this settlement, the Mayor has agreed to certain conditions – such as fares rising at the same rate as National Rail. The process of agreeing funding has been acrimonious at times, ⁵⁸ and it is unclear how it will develop over the next two years.

Beyond their responsibility for Transport for London, the Mayor of London is able to impose driving charges such as the Congestion Charge or ULEZ. They can also influence transport through their responsibility for planning. For instance, the current London Plan has requirements to restrict the number of car parking spaces in new developments, and provide more cycle parking. ⁵⁹

Local government

London’s local authorities are responsible for the upkeep and management of all their roads, apart from those within the strategic road network (which only covers around five per cent of London’s roads).

This includes setting rules and charges for all on-street parking. Local authorities control the design and implementation of cycleways on their roads, and can also decide on other changes to make walking and cycling easier or more pleasant – including new pedestrian crossings, improved street lighting ⁶⁰, more benches, more greenery, and restrictions on driving in specified places and/or at specified times ⁶¹.

In addition, they can set up cycle parking on public land. Conversely, they can block TfL from introducing cycleways where these are not on strategic roads, though we are unaware of this having occurred in outer London. ⁶²

Local authorities can also determine whether and under what conditions shared schemes such as car clubs, the e-scooter trial and shared bike services can operate in their borough. ⁶³ This means that passengers can face artificial boundaries to their travel, such as e-scooters stopping on a borough border. Shared transport providers may also face very different costs in neighbouring boroughs, such as different fees for an on-street car club space.

Public funding for transport

Many interventions to increase use of sustainable modes of transport cost money – including both revenue and capital costs. Some changes will create in savings in the future, primarily through productivity or health improvements.

Options to increase funding for active and sustainable transport modes in London include:

• Increasing the costs of using non-sustainable modes. In particular, introducing pay-per-mile road user charging on a London or national basis, or higher parking charges such as a workplace parking levy.
• Increasing central government investment in transport – ideally through funding being devolved directly to regional and local government, rather than through competitive funding pots.
• Allowing the Mayor of London to raise more money in taxes and levies by changing the GLA Act to allow for some fiscal devolution.

It is also possible to raise more money through increased developer contributions and increased public transport fares. However, there are risks involved: if set too high, the former may disincentivise housing development in areas where it is much needed, and the latter is likely to discourage people from using public transport.