I think everyone is hoping and assuming that growth and falls in interest rates will free up well over 5bn in English spending over the next couple of years, which would cover the 500m gap.Yes the cuts announced yesterday seem to relate mainly to revenue spend rather than capital spend. In any event the books can be balanced this year so any planned electrification work during 2024/25 which already had funding allocated should be unaffected. The budget black hole this year was nearly £1 billion so in addition to the £500 million of cuts the Scot Gov has utilised nearly £500 million of ScotWind money ie. receipts from auctioning seabed plots for offshore projects. ScotWind money won’t be available every year as it was a one off auction, so unless the Uk govt’s spending decisions result in real terms increases in Barnett consequentials the next few years are going to be very challenging for the Scot Gov whichever party is in power at Holyrood.
Hopefully both governments can get into a much more sensible place on investment spend as well over the next couple of years, whether that comes through more creative interpretations of fiscal rules, more PPI or something else.