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Budget 2018: Extra funding for major rail projects

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The era of austerity is finally coming to an end.

That was the headline statement from Chancellor of the Exchequer Philip Hammond who presented his 2018 Budget to Parliament on 29 October.

Although focused on investment in public services, supporting business and boosting living standards, extra money has been committed to some of the country’s major rail projects.

A further £37 million was announced in support of the development of Northern Powerhouse Rail, building on £300 million that has already been committed, and £20 million has been pledged to develop the business case for East West Rail.

Transport for the North (TfN) is expected to submit a business case for Northern Powerhouse Rail, which includes a mixture of new and upgraded routes, to government by the end of 2018. This will outline the costs and shape of the network and how it will boost connectivity and the economy of the North.

TfN chief executive Barry White said: “This money covers what we had asked government for to further develop Northern Powerhouse Rail during the next financial year as it moves closer to transforming lives in the North.

“The funding will allow us to further refine and develop this flagship programme, ensuring it delivers the economic returns it needs to as we progress towards a full business case and spades in the ground in the mid-2020s.”

The Transforming Cities Fund, launched by the government in 2017 to improve productivity and spread prosperity through investment in public transport, will be extended until 2023 thanks to £770 million that has been earmarked by Philip Hammond.

Finally, the Docklands Light Railway is set for a £291 million boost – money which will come from the Housing Infrastructure Fund – to finance improvements that will unlock 18,000 new homes in East London.

Railway Industry Association (RIA) chief executive Darren Caplan welcomed the extra funding for Northern Powerhouse Rail, East West Rail and the Docklands Light Railway, which will “unlock economic growth, investment and jobs in different regions of the country”.

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He urged the government to “move at a similar speed” when it comes to Crossrail 2 and to set out its response to the Independent Affordability Review, which is yet to report back, as soon as possible.

In his speech, Philip Hammond said the government will continue to work with Transport for London on the funding and financing of the capital’s new north-south link.

Nevertheless, Darren Caplan voiced RIA’s concern that ‘boom and bust’ rail funding, a pipeline of enhancements, electrification plans and match-funding for rolling stock research and development in CP6 were not addressed.

Elsewhere in the Budget, it was revealed that the sale of Network Rail’s commercial property business for £1.27 billion generated £170 million more than had been forecast in the Spring Statement. 

Changes for apprentices and passengers

The Chancellor of the Exchequer also used the opportunity to confirm that, from April, large businesses will be able to invest up to 25 per cent of their apprenticeship levy to support apprentices in their supply chain while smaller businesses will halve their contributions from 10 per cent to 5 per cent.

The IMechE’s head of education policy, Peter Finegold, welcomed the change.  He said: “Engineering has a long tradition of high quality apprenticeships. We hope these two measures announced in the Budget will contribute to continued progress to produce a generation of highly trained and adaptable technical experts.”

The Budget also confirmed the 26-30 railcard, announced a few days beforehand, will offer a one-third discount for 26 to 30 year-olds in England, Scotland and Wales and a more streamlined one-click process for compensating passengers affected by rail delays will be introduced as a requirement for future rail franchises.

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