Network Rail hit by £1bn funding cut

Britain’s rail infrastructure budget has been cut by £1 billion following the Chancellor’s Spending Review.

Rail minister Chris Heaton-Harris said Network Rail’s funding for enhancements during 2019-2024 is £9.4 billion.

This is down nearly 10% on the figure of £10.4 billion which rail regulator the Office of Rail and Road (ORR) previously calculated was the budget for the five-year period.

Rishi Sunak did not mention the reduction in last week’s Spending Review, telling the Commons the Government would deliver on its “record investment plans in infrastructure”.

A £1 billion shortfall in funding for Network Rail is likely to have a major impact on forthcoming projects.

The Railway Industry Association, a trade body representing rail supply firms, described the decision as “very disappointing”.

Chief executive Darren Caplan said: “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.”

He also urged the Government to reveal what enhancement schemes will be taking place in the coming years “to help rail businesses plan and invest, at what is such a critical time for the UK economy”.

Mick Whelan, general secretary of train drivers’ union Aslef, said: “This revelation puts a question mark over not only some long-planned and much-needed improvements to our transport infrastructure, but to the whole question of rebuilding this country after the pandemic.

“It’s time for the Government to come clean and tell us what they mean to do.”

Network Rail’s budget for operations, maintenance and renewals is unchanged.

During the Spending Review, a further £2.1 billion of taxpayers’ money was allocated to covering private train company losses during the coronavirus pandemic.

The Government took over rail franchise agreements from train operators in March, following the collapse in demand for travel caused by the virus crisis.

This involves taxpayers covering lost fare revenue and paying a fee of up to 1.5% of pre-pandemic operating costs to keep services running.

An estimated £8 billion will be spent in the current financial year, with a further £2.1 billion allocated for 2021/22.

A Department for Transport spokesman said: “Alongside the billions invested in supporting our railway through the pandemic, protecting services passengers depend on and frontline jobs, we continue to invest significant sums in modernising our railway for the reliable, punctual, safe journeys people deserve.

“We must ensure that, where necessary, projects are reviewed to reflect the changing demand for rail services as a result of the pandemic.

“We continue to deliver ambitious improvements, investing in key priorities including the Transpennine Route Upgrade, restoring lines and stations closed during the Beeching cuts, and in HS2, with an unrelenting focus on levelling up our country and ensuring all communities have the connections they need to support growth and prosperity.

“We must also strive for a better deal for taxpayers, given the scale of their support for railways. We are therefore closely examining all of our spending to ensure that it is efficient and represents value for the taxpayer.”

Meanwhile the ORR has raised concerns about Network Rail’s plan to deliver 2021 timetables in a “significantly more condensed timeframe” than normal.

It has called on the organisation to provide evidence it has “fully considered the risks” of this approach.

The chaotic introduction of new timetables in May 2018 led to major disruption.

ORR chief executive John Larkinson said: “In what has been an extremely tough year, Network Rail has been impressive in delivering four emergency timetables in very short order and in continuing to deliver efficiencies in a very challenging environment.

“But Network Rail needs to fully justify its approach to planning timetables for next year and beyond. It’s important that the rail industry remembers lessons from the 2018 timetable changes and does all it can to maintain passenger confidence in the published timetable.”

Network Rail chief executive Andrew Haines said staff responsible for setting timetables have done “extraordinary work” during the coronavirus pandemic.

He went on: “As we move into 2021, I am confident we will continue to meet the changing needs of Britain’s rail passengers as the country builds back better from Covid-19.”