Rishi Sunak imposes austerity on railway infrastructure investment with £1bn cuts

Jon Stone
·3-min read
Local rail projects will be scrapped or postponed (Getty Images)
Local rail projects will be scrapped or postponed (Getty Images)

The government has quietly cut £1 billion from the rail infrastructure investment budget, effectively cancelling improvement schemes across the country.

The austerity comes after the Chancellor promised "record" infrastructure investment, and casts doubt on Tory claims to be "levelling up".

The rail industry warned that the austerity meant it was now "unclear what schemes will be going ahead and what will not be".

Network Rail's budget for 2019-24 had been set at £10.4bn but it has now fallen to just £9.4 billion, rail minister Chris Heaton-Harris announced this week.

The government did not mention the cuts in the spending review documentation unveiled by Rishi Sunak earlier this month.

The reductions come at a time of record low interest rates on government borrowing, meaning investment is cheaper than ever.

But some small-state Conservatives are concerned about the level of spending and investment during the coronavirus crisis and want the government to reduce its spending.

Despite reducing public investment in the network, since the start of the pandemic government has spent £3.5 billion in day-to-day support for private train operating companies to keep the trains running.

The cuts, which was only revealed in a reply to a parliamentary written question, will affect smaller local schemes and are unlikely to land on projects like HS2 or Northern Powerhouse Rail, which are government priorities.

Darren Caplan, chief executive of the Railway Industry Association, said: “Recent confirmation, following the Spending Review, that rail enhancements investment will reduce by more than £1 billion over the current five year funding period, is very disappointing.

REUTERS
REUTERS

"Rail enhancements are essential in ensuring our rail network is fit for the future, improving reliability, connectivity, customer experience and helping to reduce carbon emissions.

"Taking our foot off the pedal now on rail investment will not help for when passengers return following the Coronavirus pandemic.

“The rail industry still doesn’t have sight of what rail enhancement projects are coming up – we were told earlier this year that there are more than 80 projects in the Government’s Rail Network Enhancements Pipeline, yet with the news today that there is over £1 billion less in the funding pot, it is unclear what schemes will be going ahead and what will not be."

In a written answer to a parliamentary question about Network Rail's budget, Mr Heaton Harris, the rail minister, said: "Network Rail’s operations, maintenance and renewals budgets have not been changed as a result of Spending Review 2020 and workbanks will continue to be based on the five-year regulatory funding settlement for 2019-2024.

"The Spending Review settlement means that the comparable figure for the enhancements budget over the same period would now be £9.4bn. As part of SR2020 over £2 billion of funding has been confirmed in 2021-22 for rail services and builds on the estimated £12.8 billion of support for transport services that the government has already committed to provide in 2020-21

"The Spending Review Settlement includes over £58 billion of investment confirmed for road and rail transport between 2021-22 and 2024-25, delivering some of government’s largest capital portfolios and levelling up across the country. This includes record investment in strategic roads and rail."

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