Following on from the announcement the previous week on the changes to Network Rail’s investment plans for the current Control Period (CP5 2014-19), resulting in the delays to a number of high profile schemes, George Osborne’s budget saw further updates on the government’s plans for the industry.
The budget, held on Wednesday 8 July, was the first budget for almost 20 years to be solely a Conservative one and saw George Osborne make a number of significant announcements on transport in general and the railways in particular.
In terms of the railway industry, one of the key features of the budget was the chancellor’s announcement that, for the duration of the current parliament (ie up to 2020), rises in regulated fares will be capped at the Retail Price Index rate of inflation.
£30 million spread over three years was to be allocated to Transport for the North — a new statutory body to be established by the end of 2015 designed to further the concept of the Northern Powerhouse — to assist in the development of a smart ticketing system to serve the railways in and around Hull, Sheffield, Leeds, Manchester and Liverpool. Further announcements on the development of the Northern Rail Strategy were to be made in the budget next year and initial plans to be outlined in the spending review due later in 2015.
Amongst the other announcements, the chancellor confirmed that the Department of Transport had asked the railway industry to look at the possibility of extending services over HS1 to Rye and Hastings as part of the forthcoming Kent Route Study. This is currently on-going and is expected to provide a report in 2016 with a view to any work being undertaken as part of Network Rail’s Control Period 6 investment from 2019 onwards.
Another scheme for the south-east that received a boost was that for the possible re-opening of the line from Uckfield to Lewes. Campaigners for this route have argued for some years that congestion on the existing London-Brighton line plus the lack of a duplicate route, make reopening of the line south of Uckfield essential. The line was originally listed for closure by Beeching and closed south of Uckfield on 4 May 1969 (formally; the last trains had operated on 24 February and were replaced by buses between then and the date of formal closure). The budget included a pledge to extend the scope of a reopening study. This study will now look at a range of options for improving railway services between London and the south coast.
The chancellor also confirmed that a further £20 million would be allocated to the New Stations Fund. One of the first to benefit is likely to be a new station on the ex-Great Western main line between Taunton and Castle Cary — Somerton or Langport are names mentioned. There is also the possibility of a new station on the Robin Hood line between Nottingham, Mansfield and Worksop to serve the Ollerton/Edwinstowe area, although this would require a development of a business case.
Further changes to Network Rail were also foreshadowed in the budget with the announcement that the government had asked Nicola Shaw, currently the chief executive of High Speed 1, to advise on the future shape of Network Rail’s structure and finance. Working with the newly appointed chairman of Network Rail, Sir Peter Hendy, and recently appointed special director Richard Brown, it is expected that Shaw will make her report early next year so that the chancellor will be in a position to incorporate any proposed changes in the 2016 budget. The government also intimated that it was looking to see much greater focus on the Train Operating Companies and how the TOCs can get more out of the existing railway infrastructure; this would be achieved by seeing Network Rail devolve more power to route managers and granting greater powers to the TOCs.
Alongside other policies to raise tax and cut expenditure with a view to achieving a budget surplus towards the end of the parliament, the chancellor also confirmed that a number of railway assets were to be sold off. He confirmed that the government was proceeding with the sale of the property development at King’s Cross; this was part of the greater High Speed 1 project and the sale was expected to generate £345 million when completed by the end of 2015. There was also to be a ‘dedicated body’ established to look at realising the value of land held by Network Rail with a view to sale.