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Rail in the November 2017 UK budget

22 Nov 2017

UK: A new railcard, replacement of the Tyne & Wear Metro fleet, signalling and communications upgrades and the East West Rail corridor were among the rail projects highlighted in the budget presented to parliament by Chancellor of the Exchequer Philip Hammond on November 22.

A £1·7bn Transforming Cities Fund will support intra-city transport, targeting projects which drive productivity by improving connectivity, reducing congestion and using new technology. Half of this will be allocated competitively and half per capita to the six combined authorities with elected metro mayors.

The Chancellor announced that £84m would be provided for digital cab signalling, and £5m would be allocated for developing digital railway upgrades in southeast England, east London, and to facilitate more frequent and reliable services on the branch to Moorgate in London.

From spring 2018 there will be a new railcard offering a one-third off-peak discount to passengers aged 26 to 30; the government anticipates this will increase the number of journeys made.

The government is to consult on commercial options to improve mobile communications for passengers, and will provide up to £35m to upgrade Network Rail’s test track at Melton Mowbray, install trackside infrastructure on the Trans-Pennine route between Manchester, Leeds and York and support the roll-out of full-fibre and 5G networks.

In October the government announced £300m towards ensuring High Speed 2 infrastructure can accommodate future Northern Powerhouse and Midlands rail services between Liverpool and Manchester, Sheffield, Leeds and York, as well as to Leicester and other destinations in the East Midlands and London. This will also enable future services between Liverpool and Leeds to operate via Manchester Piccadilly station.

Hammond said the government would provide £337m to replace the Tyne & Wear Metro fleet with ‘modern energy-efficient trains’.

The western section of East West Rail is scheduled to be complete by 2024, allowing passenger services to operate between Oxford and Bedford, and from Aylesbury to Milton Keynes. An East West Rail Co is being established to accelerate delivery of the central section between Bedford and Cambridge, leveraging private-sector investment and aiming for completion by the mid-2020s.

The government has committed £5m to develop proposals for Cambridge South station, and is starting a study on the enhancements needed to accommodate future rail growth across Cambridgeshire. The government will also provide £300 000 to co-fund a study of opportunities for new stations, services and routes in Oxfordshire, as a first step towards opening a station at Cowley.

The government will provide £2m to develop options to address constraints on the Coventry – Leamington route.

Hammond said the government recognised the need for investment in London’s infrastructure to support its growth, and would continue to work with Transport for London on developing ‘fair and affordable’ plans for Crossrail 2, including an independent review of financing.

In Wales, the government will invest in infrastructure upgrades that will provide direct services from Pembroke Dock to London via Carmarthen on Intercity Express trains. Additionally, the Department for Transport continues to develop proposals for a number of potential schemes including station improvements at Cardiff Central and Swansea, upgrading the slow lines between Cardiff and Severn Tunnel Junction, and improving journey times between Swansea and Cardiff, from South Wales to Bristol and London and on the North Wales Main Line. The government will also consider proposals to improve journey times on the Wrexham – Bidston route and provide necessary funding to develop the business case.

The National Infrastructure Commission is to undertake a study into the future of freight infrastructure for publication in spring 2019.

Industry responses

Commenting on the budget, Paul Plummer, Chief Executive of the Rail Delivery Group, said it was ‘good news that there is support for local decision-making, and investment in skills and infrastructure, particularly in the north of England’. He also welcomes the announcement that the government had ‘chosen to build on the forthcoming trial of the 26-30 Railcard by Greater Anglia on behalf of the wider industry.’

Darren Caplan, Chief Executive of the Railway Industry Association, said ‘we can applaud the Treasury’s decision to allow Network Rail to allocate an additional £200m to spend on renewals in Control Period 5. This would not have happened if the rail sector had not made the case for funding the CP5 shortfall up to March 2019, and it will certainly go some way to helping deliver a better railway’. However, RIA was ‘disappointed not to get the full £500m brought forward from CP6 and we continue to urge the Treasury to fully fund the remaining CP5 shortfall; but it is good that significant funds have been unlocked in the meantime.

‘Longer-term, we look forward to working with government, Network Rail and others to improve the funding mechanism for the rail system to avoid “boom and bust” at the beginning and end of control periods, which makes renewing the railways up to 30% more expensive, and ultimately threatens jobs and investment and the ability of SMEs in the rail supply sector to survive.’

Mayor of London Sadiq Khan said he cautiously welcomed the ‘warm words’ of support for Crossrail 2, but urged the government to progress delivery of the scheme which he said was ‘essential for the future prosperity of London and the southeast.’

Ed Thomas, UK Head of Transport at KPMG, said ‘a clear connection was made between the proposed additional 1 million homes in the Oxford – Milton Keynes –Cambridge corridor and investment in new rail and road links along it. Whilst no new money was announced today, the scale of this housing ambition is likely to mean that government will ultimately support the East West Rail and roads schemes that are under development with public funding. Previously, it had been looking to purely privately-funded solutions’, he noted.