Construction of High Speed 2 (HS2) will begin in the current parliament, says Chancellor of the Exchequer George Osborne.
His transport plans were announced in his Spending Review and Autumn Statement today (November 25). The new railway is now estimated to cost £55.7 billion at 2015 prices, against initial estimates of £42.6bn at 2011 prices.
The route will open from London to Birmingham in 2026 and to Leeds and Manchester by 2033. HS2 is part of a five-year, £46.7bn settlement for the Department for Transport that will entail transport capital spending rising from £6.1bn in 2015-16 to £12.4bn per year in 2020-21.
However, Transport for London will have its resource grant phased out over the next five years, a move that the Government says will save more than £700 million in 2019-20. The Government argues that TfL could handle this cut by efficiency savings or by generating additional income from the 5,700 acres of land it owns in the capital. £11bn will be invested in transport in the capital, although it is currently unclear how that figure is split between modes.
Subsidy to rail franchises is set to fall, with the DfT saying this will be “through reaping the efficiency benefits of competition”. Again, details of cuts are unclear and may depend on the exact deals reached with franchisees in the coming year, but in total the DfT is tasked with making overall resource savings of 37% by 2019-20.
A new £300m Transport Development Fund is to be set up to support development work for infrastructure projects, which could include Crossrail 2 and rail schemes from the Northern Transport Strategy.
Network Rail capital expenditure is forecast to rise from £6.2bn in the current financial year to “7.4bn in 2016-17, falling to £4.3bn in 2018-19 and then rising again to £5.3bn in 2020-21”.
- Further coverage will appear in RAIL 789.