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Network Rail Budget Slashed Again

The budget for rail enhancements has been reduced by another £500M, as the government again delays the publication of an updated Enhancements Pipeline. The Network Rail May 2021 Update shows the budget for rail enhancements is now £8.9bn, a £1.5bn reduction from the original £10.4bn settlement for Control Period 6, which is confirmed in the ORR’s Final Determination. £1bn was slashed from the budget last year as the government said that schemes needed to be reassessed for a post-Covid world.

An updated Enhancements Pipeline was expected to be published before the parliamentary summer recess, which began at the end of last week. Network Rail Andrew Haines had even said that he believed the pipeline was “days away”, when speaking at the end of June. However, the pipeline will now not be published until September at the earliest when parliament reconvenes.

Railway Industry Association (RIA) chief executive Darren Caplan said that the “lack of certainty” threatens to hamper the industry. "Without seeing the details of enhancement schemes around the country, and the Government’s plan for the railways in the north and midlands, rail suppliers of all types and sizes simply will not be able to prepare their teams, resources and business plans over the summer,” Caplan said. “This lack of certainty and visibility makes it more difficult to build and enhance the UK’s railway network as efficiently and cost-effectively as it otherwise could.”

He added: “We sympathise with the Government on the difficult impact the Coronavirus pandemic has had on budgets, yet we are simply seeking certainty and visibility on what the Government intends to do. This ‘summer of uncertainty’ will not help rail suppliers as they seek to deliver a world-class railway network to the timescale and budget the Government wants for the years ahead.”

When first unveiled in 2019, the pipeline included 58 proposed enhancement projects. The DfT had pledged to update the pipeline on a yearly basis but it has now been more than 20 months since it did so.

In September, Network Rail System Operator managing director Paul McMahon told a Westminster Policy Forum that schemes in the pipeline were being reassessed to see if they were still “justified” in light of the pandemic-driven fall in passenger numbers.

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