McLoughlin resets £38bn rail investment programme

25 Jun 15

Transport Secretary Patrick McLoughlin has scaled back the government’s £38bn rail investment programme, suspending electrification work in the North and Midlands.

In a statement to the House of Commons, McLoughlin said aspects of Network Rail’s investment programme were costing more and taking longer than anticipated. In particular, construction rates were slow and the signalling supply chain was weak, while councils were taking longer to issue planning consents than had been expected.

The programme, which the government describes as the most ambitious since the Victorian age, needed to be reset, the transport secretary told MPs.

Among the action being taken is a pause to electrification of the Midland mainline and the Transpennine route. However, electrification of the Great Western Line remains a top priority, he said.

On the Transpennine line, which is key to the government’s ambitions for a Northern Powerhouse, McLoughlin said: “We need to be much more ambitious for that route.”

He added that the government was already working with businesses and cities to help bring in a fast high-capacity Transpennine electric route.

However, the IPPR North think-tank said the announcement was a major setback to the government’s northern ambitious.

Director Ed Cox said: “The North already loses out substantially when it comes to public investment in its dated, poorly integrated and under-funded transport network. Now it will see projects already too far back in the queue fall further behind, which will hamper the area’s ability to grow and compete.

“Promises of bigger and better mean little to the immediate needs of the North and seeing politicians and bureaucrats trading blame helps nobody.”

McLoughlin also announced some major changes to Network’s Rail management and governance. Current chair Richard Parry-Jones is stepping down and will be replaced by Sir Peter Hendy, the current transport commissioner in London. Hendy has been tasked with developing proposals by the autumn on how the rail upgrade programme can be carried out.

In addition, Dame Colette Bowe, an economist and former chair of Ofcom, will review the lessons learned from the investment programme so far and make recommendations for better investment planning in future. Her report is also expected in the autumn.

Network Rail chief executive Mark Carne said the organisation has been overly optimistic about its ability to meet some very ambitious targets, especially when the network operates at full capacity for much of the time.

He said: “I recognise that these delays will cause disappointment for some passengers for which I can only apologise. I welcome the fact that the transport secretary has asked Sir Peter Hendy to work with me and my team to develop proposals for re-planning the programme over the next few months.”

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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