Big spenders – but wisely?

The Prime Minister and the Chancellor have been to the magic money tree again with their announcements in the last week. First came Boris Johnson’s ‘build build build’ New Deal for Britain, based on massive construction programmes, and then substantial new support from Rishi Sunak to forestall unemployment through helping businesses employ and retain young people.

It would be tempting to think that if lots of schemes on transport and highway authority wishlists are now given the green light, then both the economy and our transport system will be the better for it. But is there not a danger of the money being ‘spaffed up the wall’, to put it in the PM’s language, if it is based upon erroneous assumptions about our future mobility patterns and needs, overlooks potential new behavioural and technological step changes, and does not reflect the resilience and adaptations to new circumstances we need in our existing systems?

LTT’s online discussion theme last week was ‘Calling the Future: what are the surprises in store that we’re not even planning for yet?’. Obviously none of the contributors could claim they were certain about things, but each in their own way opened up areas where the watchword had to be flexibility and a readiness to adjust rather than putting all the bets on assumed future scenarios.

Our contributor Peter Warman explores this conundrum further on page 14, and suggests that resilience and preparing for surprises has to be the best and most prudent way to proceed in such an uncertain world as ours. He explores the tools now available to understand and simulate all sorts of situations that might come up on the radar, including some we already know will be important but cannot be sure in what form.

Vanity projects and big investment statements of confidence (a field in which transport schemes often loom large) might look like a suitable response to our current short-term economic challenges as we come out of the pandemic recession, but at some point the old solutions may need to be put aside in favour of more creative ones.

Franklin D. Roosevelt’s 1933 New Deal measures may well have been suitable for its time, but we don’t live in that kind of analogue world anymore. There are lots of new challenges around now that didn’t exist then. The phrase ‘smart growth’ means different things to different people, but it could be time for us to think about the whole idea of conventionally measured economic growth, with the investment decisions embedded in it needing to be re-examined too.