Posted 9th November 2015 | 4 Comments
Major railway projects to continue
THE Chancellor George Osborne has promised to maintain investment in major railway projects, although the Department for Transport is one of four government departments which must reduce its 'day to day' spending by 8 per cent a year for the next four years.
During a speech in London, the Chancellor said: "These savings will be achieved by a combination of further efficiencies in departments, closing low value programmes, and focusing on our priorities as a country.
"These provisional settlements apply to the day to day resource spending of the central departments -- they are not the capital budgets of these departments.
"For as I set out last week at the Launch of the National Infrastructure Commission - we will continue to invest in the things that make our economy more productive.
"We will spend £100 billion on our infrastructure over the Parliament -- updating our roads and railways; investing in flood defences to protect our homes and businesses; and delivering superfast broadband across the country."
The other departments included in the new round of economies cover local government, the environment and the Treasury itself.
The proposed economies come as Network Rail's own budgets are being reviewed. The transport secretary 'paused' some electrification schemes in June, and although he has since announced that they are to go ahead, project timetables have been extended. As a result, for example, the Midland Main Line will not now be electrified between Kettering, Nottingham and Sheffield until the early 2020s.
Railway finances are also affected by a government undertaking to restrain increases in regulated fares to the equivalent rise in the Retail Price Index each year, effectively 'freezing' them in real terms for the life of this Parliament.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Dave Young, Hull
Get real Chris Green..
The Electrification from Selby to Hull is even privately financed and yet the Government cant give it the go ahead, it's disgraceful..
I was ashamed of this country when I used High Speed trains in Taiwan and China last year, you know China, Osbornes pals, also used Metro systems in Bangkok and Seoul which put us to shame, that's before we get onto places like Düsseldorf, Hamburg etc, we are light years behind. The country that gave the World the railways is now a joke, thanks to the Tories..
John Gilbert, Cradley, Herefordshire
Major railway projects may be going to continue, but at what speed? At a glacial or snail's pace I should imagine if one reads between the political lines - one is fully aware how politicians in this country operate; use of the long grass comes to mind We shall see.
Chris Green, Huddersfield
I am exhilarated that the TransPennine electrification project and others planned for the north will still be given the green light and not be cancelled altogether because the infrastructure up here badly needs investment. Our infrastructure is tired and simply cannot continue playing second fiddle to London's and the rest of the south. Up-to-date, 21st century-style infrastructure is what the north can look forward to in the coming years thanks to the Chancellor. No other government in the past has pumped as much money into the railways in the north, and we have to be thankful that Mr Osbourne came up with the plans that he did.
Chris Jones-Bridger, Buckley Flintshire
Once the smoke has cleared from the political spin it will be interesting to see what real investment spending survives from the much vaunted £38 billion CP5 settlement until 2019. NR budgets & forecasts have already been seriously damaged by the cost escalation associated with GWML electrification and the review by Sir Peter Hendy is imminent .Already plans for MML & TP electrification have slid into CP6. As forecasting for CP6 expenditure is shortly to get underway it will be interesting to see how much more enhancement work is deferred.
Perhaps it is fortunate that TOC premium/subsidy is showing a positive balance through improving revenues from traffic growth to protect service provision from punitive cost cutting.
Unfortunately the fragmented structure of the industry still means that there is too much costly duplication between businesses inflating the total cost.