The results of the UK’s long-awaited Government Spending Review have been announced.
On the ‘GOV.UK’ website, under Spending Review and tucked between item 11 – a new £500 million crisis reserve will be set up – and item 13 – more money for Scotland, Wales and Northern Ireland – is the summary of the review’s effect on transport.
“New flexible season tickets will soon be available…”
“Better mobile connectivity will also be provided…”
“Commuters will also soon be able to claim compensation…”
And that’s all.
Readers may feel that there must be more to it, and there is. The Department for Transport gets three pages of the 156 of the full review report. In it is a specific comment about HS2:
“Construction will begin on HS2 during the Parliament, and the Spending Review confirms a funding envelope of £55.7 billion in 2015 prices, which will deliver HS2 from London to Birmingham by 2026, and to Leeds and Manchester by 2033. During construction, HS2 is anticipated to support up to 25,000 jobs and up to 2,000 apprenticeships.”
Other projects are also mentioned: “The government will also establish a new £300 million Transport Development Fund, supporting development work for transformative transport infrastructure projects. This could include providing development funding for projects such as Crossrail 2 and proposals emerging from the Northern Transport Strategy, following advice from the National Infrastructure Commission.”
The Secretary of State has stated, on several occasions, that Network Rail’s budget of £38.5 billion over CP5 is guaranteed, and there is no comment in the report that would indicate otherwise. Indeed, it mentions that the £46.7 billion capital investment by the DfT – which includes roads and local transport together with Network Rail’s investment programme – will deliver “the largest programme of rail investment since Victorian times.”
So the savings will come from the operating budget. Overall resource savings of 37 per cent by 2019-20 will come from: “reducing the subsidy paid to rail franchises through reaping the efficiency benefits of competition, and phasing out the TfL Resource grant, representing a 6 per cent efficiency saving to its annual budget.”
In other words, the improved franchising model will result in lower subsidies for train operators, and those savings have been calculated into the review. The TfL cut will save £700 million in 2019-20 and this will achieved by efficiency savings at TfL and by selling of some of its 5,700 acres of land which it owns in London.
The DfT will also release land – enough to build 38,500 homes.
Devolution is mentioned, to Mayor-led city regions, as are the new flexible season ticket arrangements, better Wi-Fi and mobile connectivity on trains, and freezing rail fares in real terms (aligned with the Retail Price Index).
So that’s it. Major projects continue, the new franchising model will bring savings that will be gratefully accepted, and some more land will get sold off.
It could be worse.
Report by Nigel Wordsworth
