"Credible rail package" put forward for government's Spending Review, says Rail Minister

Rail Minister Lord Hendy said the Department for Transport has put forward what he called a “credible rail package” as part of the government’s Spending Review, due in June.

Government departments, including transport, are widely expected to face budget cuts in order to fund an increase in defence spending.

Speaking to RAIL at a Siemens event in Chippenham Lord Hendy said: “[Secretary of State] Heidi Alexander and I have put forward what we believe are quite credible spending plans at a time of quite difficult economic circumstances, to keep the railway going and improve it.”

He added: “I can’t say what the outcome will be, but the state of the asset has to be constantly renewed and upgraded, and successive governments have not argued about investment in the railway.”

Three quarters of the Department for Transport’s total £49bn annual spending is on the railway, when HS2 is included. But Lord Hendy appeared to suggest existing projects would not be affected.

“We are not afraid of this process. The rail network is the backbone of the economy, and connectivity creates growth, jobs and housing. So actually there is a strong case for the existing railway to work better than it does now. I am besieged, as Heidi is, with applications for large-scale investment to improve connectivity. We can’t do them all. But I think we have a pretty sound argument both for the renewal of the assets and their improvement.

RAIL asked the Minister and former head of Network Rail how realistic that assessment is, in the light of a Railway Industry Association survey which showed 85% of members expect to pause or reduce spending in 2025, due to a lack of government funding.

“If you include a massive government investment in HS2, spending is probably larger than it has been for generations,” Lord Hendy countered. “With my former Network Rail hat on, we got what we thought was quite a good settlement for CP7 [the current five-year financial period] and we defied people who thought it would be reduced.”

Lord Hendy highlighted that the first section of the East Coast digital signalling programme goes live in May: the first on the national network since the Cambrian line in Wales was upgraded 15 years ago.

“If the government wasn’t going to invest in things like the East Coast Main Line programme and the Transpennine Route Upgrade, then the Prime Minister would not have been up there last week celebrating it. And ETCS [digital signalling] on the East Coast I think will produce far more benefit in terms of capacity and reliability than anybody yet supposes.

“We have to justify it, but we are making the best case. I don’t think the railway can complain.”