spending available for hospitals in the SE? Or HS1 all the capital for railways in England? A useful point for infrastructure:
Spending freeze to shunt major railway projects past general election
Rachel Reeves is expected to freeze spending on major new rail projects until after the next general election as Britain’s train network falls victim to a squeeze on the public finances.
Three major projects, all part way through completion, are set to soak up the Department for Transport’s funding allocation between now and the end of the decade, according to multiple senior industry figures.
They are the first phase of HS2 linking London with Birmingham, multi-billion pound upgrades to TransPennine infrastructure, and East West Rail, a new line that connects Oxford, Milton Keynes, Bedford and Cambridge.
Beyond them, spending on a major revamp of Britain’s Victorian rail infrastructure will be limited to safety-critical maintenance unless the Department for Transport can convince the Treasury to bring in private investment, sources added.
The revelations come as Heidi Alexander, the transport secretary, is to say on Monday that public ownership of railways is not a “silver bullet” for better performance, and that she will oversee a “relentless focus on passengers”.
Alexander will signal her plans to create a new app for train passengers with a new “best price guarantee” to ensure they always pay the lowest fares. She will also introduce more trials of tap in and out “pay as you go” services and publish performance league tables at stations as part of her mission to “rebuild passenger confidence one punctual, comfortable journey at a time”.
Speaking at a conference in Manchester, Alexander will say that the poor performance of publicly run railways, such as Northern, “reminds us that while public ownership will help better manage capacity, reduce costs and increase taxpayer value, it was never going to be a silver bullet”.
Alexander will say that the new unified, public body, Great British Railways, which will be set up by legislation to be introduced later this year, will be “second in size and importance only to the NHS”.
Greater integration of the rail network — with passengers moving more easily between services – is “non-negotiable”, she is expected to say.
Yet while ministers focus on train operators, industry sources fear for the future of rail infrastructure.
Rishi Sunak’s “Network North” programme, a series of rail and road projects designed to redirect the £36 billion previously allocated to building the now scrapped HS2 line beyond Birmingham to Manchester, are now under threat of significant delay or being shelved.
Network North promised a range of new rail projects, including a Midlands rail hub connecting 50 stations, as well as plans to electrify train lines in north Wales.
The expected delays to upgrades in Wales could ruffle feathers within the cabinet. Welsh secretary Jo Stevens last week said that rail was her “number one priority” for Wales in Reeves’ spending review.
Reeves may have even less money than she thought during the budget because of the UK’s sluggish growth. The chancellor is facing a £30 billion black hole if the spending plans are based on up-to-date economic forecasts rather than official growth projections, it was reported on Friday.
Crucially however, Reeves does not plan to scrap all upgrades to transport infrastructure, industry sources said.
Sir John Armitt, head of the National Infrastructure Commission, is writing a ten-year infrastructure plan for the government. Details of this are expected to be unveiled alongside Reeves’s spring forecast in late March. This will cover at least three years of day-to-day government spending and outline capital budgets for five years.
Armitt dropped the biggest hint yet on the government’s priorities when it comes to transport infrastructure investment. The former chairman of the Olympic Delivery Authority said that ministers ought to face the reality that “the bulk of the population is totally reliant on roads”.
He told the Commons transport committee: “The continued decarbonisation of road transport removes one of the traditional arguments that you should use a lot more rail because rail is less polluting than roads.
“That will not be the case in the future. I don’t see any great significant growth in rail, and there will be continued pressure on the roads.”
A government spokesman said: “At the autumn budget we set out plans to kick-start economic growth by getting Britain moving, securing the development and delivery of high-growth transport infrastructure projects, including HS2, the TransPennine route upgrade and East West Rail.”
The government insisted it “did not recognise’ senior industry executives’ claims about new projects being mothballed and said that ministers were “committed to delivering the infrastructure this country needs”.
A Treasury source added: “No decisions will be taken until the spending review, where every single pound of taxpayer’s money will be scrutinised.”
Transport officials have not lost all hope of accessing funds for new rail projects during this parliament, however. One option understood to be under consideration is to sell off new railway stations along the East West Rail line to the private sector.
Investors would charge state-owned train operators a fee for using the stations, or could even be paid by the state for every passenger that passes through the ticket barriers.
There is precedent for such privatisation of rail infrastructure. Heathrow airport charges train companies for using its stations and tracks; meanwhile the high-speed line between London St Pancras and Folkestone is owned by a consortium of private investors that levy “access charges” on Eurostar and South Eastern Trains.
Sources said that the East West Rail station sell-off could raise “hundreds of millions of pounds” that could then be used to pay for upgrades elsewhere.
But even this would not be enough to drag up Britain’s train network to being on a par with counterparts on the Continent. Just 39 per cent of the UK’s railways are electrified, compared with Italy, Spain and Germany where 65 per cent, 63 per cent and 60 per cent respectively of services are electric.
Leaked plans from Network Rail in 2020 estimated that it would cost £30 billion to make the railways greener. The proposals were shelved by the Treasury later the same year.
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