How will Transport projects fare in the months and years to come

[Xenophon PCDGS]

With yesterday's announcement by the Government that only the NHS and the Defence ministries are being protected against the stated 25% to 40% cuts demanded from other ministries, much as we dislike the idea, Transport most certainly falls into that category.

I will now look forward with interest to see how current Transport projects fare in discussions in the months and years to come of the current Government. I say this with only a philosophical interest in the matter, as being three score years and ten, I will have relocated to the Great Engine Shed in the Sky when many of the large projects ever do come to full fruition.

 

[CdBrux]

I think DfT / NR will be finding plots of land to sell. In some cases obviously redundant railway land near rail stations should be a good place for housing: right next to public transport and so helping to increase patronage of the railways!

 

[Yew]

There will obviously be cutbacks to satisfy Dave and Gideons idelogical desire to make the state smaller, so their rich mates can get richer, all shielded under the guise of 'balancign the books' as if the finances of the country are comparable to the finances of the Eton tuck shop. i dont buy any suggestions that such darastic budget cuts can be undertaken without affecting either future projects (such as the MML electrification that seems to be currently on the balance) or current frontline services.

 

[61653 HTAFC]

Projects will certainly be reviewed, but I fear that the review, in shorthand, will consist of:
Is the project in London or the South? Then it goes ahead.
Is the project in the dirty North? Then it gets cut.

 

[DarloRich]

All projects subject to review/value for money assessment i would assume, except perhaps GW electrification to Swindon by the time IEP comes on line.

You can also add overseas development to your list of immune departments.

 

[petersi]

I not convinced it is going to be north /south.I my opinion it will be initially it will be most projects that have not reached end of Grip 3 will be held off for review for CP6.

Then a few choice projects for CP6. My guess is trans Pennine electrification will go into CP6 Midland main line will stay on hold.

Then a very limited number of other upgrade projects in CP6

 

[LNW-GW Joint]

There is chat about devolving NR to its 8 Routes, and then inviting concessions to run and fund some of them.
I should think the bureaucracy at the middle of DfT/ORR/NR is going to be rationalised and devolved.
The DfT, like other departments, has 3 months to propose a new structure and agree it with the Treasury, saving 25% overall.
They also have to offer a 40% lower budget for discussion - some of these ideas might also be taken up.
Projects and franchised rail services are probably not at particular risk, except perhaps some vanity projects with a poor business case.
Another tactic might be to cut the budget empirically, and then devolve that budget to the regions (eg Rail North) and let them take the hard decisions.

 

[misterredmist]

I dare say there's a lot dependent upon how the cuts are made. I believe there'll be plenty of fat to trim on high salaried,high pensioned unproductive pen pushers at Ministries and Local Government who can be slain.

It's a shame that there's still cuts to be made, undoubtedly a lot of it has to do with Brown and his pal's destruction of the nation and it's finances pre 2010.

I'd have thought though that the Govt HAS to keep a lot of infrastructure projects going - they are NEEDED and, they create jobs, revenue and economic benefits, which in turn produce more jobs and HMRC revenues.

As for the where those projects occur, well, we all know London centricity will win the day in any either/or play-off.....

 

[hwl]

Are the proposed 25% or 40% cuts only in the departments annually managed expenditure or in capital projects as well?

 

[FenMan]

It's a shame that there's still cuts to be made, undoubtedly a lot of it has to do with Brown and his pal's destruction of the nation and it's finances pre 2010.

I'd have thought though that the Govt HAS to keep a lot of infrastructure projects going - they are NEEDED and, they create jobs, revenue and economic benefits, which in turn produce more jobs and HMRC revenues.

As for the where those projects occur, well, we all know London centricity will win the day in any either/or play-off.....

The empirical evidence does not support "a lot of it has to do with Brown and his pal's destruction of the nation and it's finances". Repeated assertions by politicians of a particularly party and their supporters in the press is not evidence, although, unfortunately, a lot of people bought th is version of events.

Anyway, to the point. The coalition government was very keen on maintaining and even expanding expenditure on infrastructure whilst reining in current expenditure. I've seen no evidence that this government will be any different, except that VFM criteria and timing will be scrutinised more strictly. Which will be no bad thing, particularly if applied to HS2! Indeed, we've already seen evidence of this approach at Network Rail.

 

[GRALISTAIR]

I think HS2 will be delayed a year or two - not stopped. I think some beaurocracy will be cut. I think MML wil be delayed until CP6. I think it would be madness to cut too many capital projects. Thank god we have a fiscally sound government in office rather than Brown and cronies. I think a cat will be pulled out of the bag and some projects in the north will go ahead.

 

[LNW-GW Joint]

Are the proposed 25% or 40% cuts only in the departments annually managed expenditure or in capital projects as well?

Opex - annual budgets.
Capital projects have a separate budget but play into this in terms of annual depreciation and interest.
The DfT budget will be a mix of staff costs (salaries, offices etc), consultancy (a big figure) and annual funding on things like rail franchises and subsidies.
Many of these costs are fixed by franchise agreements which last a number of years, so can't be cut suddenly.
NR's borrowing costs come into this too, because they now sit on the Treasury's books.
NR's operating cost is fixed for a 5-year period 2014-19 (CP5), outside the DfT.
The ORR will also be another central cost to be reduced.
HS2 is a significant opex cost until it gets the go-ahead as a capital project.
That's my understanding of how it works, anyway.
I don't know how they are going to square the circle without axing something important.

 

[AM9]

I think HS2 will be delayed a year or two - not stopped. I think some beaurocracy will be cut. I think MML wil be delayed until CP6. I think it would be madness to cut too many capital projects. Thank god we have a fiscally sound government in office rather than Brown and cronies. I think a cat will be pulled out of the bag and some projects in the north will go ahead.

Probably just as they are warming up for the next general election.

 

[GRALISTAIR]

Probably just as they are warming up for the next general election.

Well I think you have stated what I and probably many others too, are thinking.

 

[hwl]

Opex - annual budgets.
Capital projects have a separate budget but play into this in terms of annual depreciation and interest.
The DfT budget will be a mix of staff costs (salaries, offices etc), consultancy (a big figure) and annual funding on things like rail franchises and subsidies.
Many of these costs are fixed by franchise agreements which last a number of years, so can't be cut suddenly.
NR's borrowing costs come into this too, because they now sit on the Treasury's books.
NR's operating cost is fixed for a 5-year period 2014-19 (CP5), outside the DfT.
The ORR will also be another central cost to be reduced.
HS2 is a significant opex cost until it gets the go-ahead as a capital project.
That's my understanding of how it works, anyway.
I don't know how they are going to square the circle without axing something important.

That matches my understanding too.
So an easy win for DfT is getting HS2 approved as soon as possible.

With the number of franchises or management contracts being renewed /re-tendered at the moment and over the next few years there should be a steady stream of subsidy reduction.
The GLA (TfL) grant is already scheduled for a big reduction and electric vehicle subsidy could be much lower when it gets reviewed.

 

[misterredmist]

The empirical evidence does not support "a lot of it has to do with Brown and his pal's destruction of the nation and it's finances". Repeated assertions by politicians of a particularly party and their supporters in the press is not evidence, although, unfortunately, a lot of people bought th is version of events.

Anyway, to the point. The coalition government was very keen on maintaining and even expanding expenditure on infrastructure whilst reining in current expenditure. I've seen no evidence that this government will be any different, except that VFM criteria and timing will be scrutinised more strictly. Which will be no bad thing, particularly if applied to HS2! Indeed, we've already seen evidence of this approach at Network Rail.

The evidence that our National Debt went to well over a Trillion Pounds from nowhere near that and that under the previous Labour Govt and their non-regulation of the likes of "Fred the Shred's" RBS being bailed to the tune of BILLIONS by Joe Public rather makes a mockery of your statement......it's not "political persuasion" it's financial fact...............that's all.....
--- old post above --- --- new post below ---

I think HS2 will be delayed a year or two - not stopped. I think some beaurocracy will be cut. I think MML wil be delayed until CP6. I think it would be madness to cut too many capital projects. Thank god we have a fiscally sound government in office rather than Brown and cronies. I think a cat will be pulled out of the bag and some projects in the north will go ahead.

HS2 always seems to get a bad press , but I think , may be deliberately, the politicians have always gone at it from an economic angle rather than the fact that, with the WCML creaking at the seems and getting worse, a new line is actually ESSENTIAL....... we will see, notice how Crossrail went well under the radar, yet the costs are phenomenal, but I don't argue the fact that it's needed too.........

Delays, cancellations to projects north of Milton Keynes, carry on as normal further south me thinks.....

 

[MidlandMainlie]

Osbourne's Northern Powerhouse will ensure that projects like the Northern hub upgrades go ahead, Transpennine electrification will reappear in a few years as part of a wider series of upgrades to track and signalling to be undertaken as part of the CP6 programme, MML electrification will also be delayed to CP6. I would be very surprised if there were delays to HS2, David Higgins intendens to hit the ground running and HS2 Ltd is gearing up for construction to start in 2017 after the hybrid bill actives royal assent at the end of 2016, delaying will add to the constriction coast of the project overall for very modest savings.

As for Beaurocracy at the DfT there will be some cutbacks but Patrick Macloughlin will be very keen not to repeat the mistakes of his preadcessor that led to the West Coast franchise fiasco.

 

[Xenophon PCDGS]

As for Beaurocracy at the DfT there will be some cutbacks but Partick Macloughlin will be very keen not to repeat the mistakes of his preadcessor that led to the West Coast franchise fiasco.

Does he often use his Caledonian first name these days?

 

[Gareth Marston]

If passenger revenue continues to grow at 8% like it did last year you've almost got 25%off the rail subsidy bill without looking and that's in year 1...720 million, rail may get away with it due to its continued growth.

 

[MidlandMainlie]

Does he often use his Caledonian first name these days?

Nope Paul, just I'm dyslexic and carn't spell Amended thanks.

 

[GRALISTAIR]

with the WCML creaking at the seems and getting worse, a new line is actually ESSENTIAL.....
Delays, cancellations to projects north of Milton Keynes, carry on as normal further south me thinks....[/QUOTE]

I agree and hope it goes ahead - I still think a delay of a year or so may happen.

The GWML is south of Milton Keynes

Osbourne's Northern Powerhouse will ensure that projects like the Northern hub upgrades go ahead, Transpennine electrification will reappear in a few years as part of a wider series of upgrades to track and signalling to be undertaken as part of the CP6 programme, MML electrification will also be delayed to CP6.

I think you are correct - makes sense to carry on with Lostock Jct to Wigan; Oxenholme- Windermere; and Vic -Stalybridge and associated - this last is needed for Transpennine anyway - so it continues.

What I would love is for Leeds- York to get done anyway during this Control Period - ECML diversionary route; could do new journeys eg Leeds -Glas-Edin-Newc- etc- and is needed also for Transpennine.

 

[muddythefish]

Projects will certainly be reviewed, but I fear that the review, in shorthand, will consist of:
Is the project in London or the South? Then it goes ahead.
Is the project in the dirty North? Then it gets cut.

Correct
--- old post above --- --- new post below ---

There will obviously be cutbacks to satisfy Dave and Gideons idelogical desire to make the state smaller, so their rich mates can get richer, all shielded under the guise of 'balancign the books' as if the finances of the country are comparable to the finances of the Eton tuck shop. i dont buy any suggestions that such darastic budget cuts can be undertaken without affecting either future projects (such as the MML electrification that seems to be currently on the balance) or current frontline services.

Even more correct
--- old post above --- --- new post below ---

It's a shame that there's still cuts to be made, undoubtedly a lot of it has to do with Brown and his pal's destruction of the nation and it's finances pre 2010.

.

Standard right wing rhetoric and complete nonsense - as has been shown many times
--- old post above --- --- new post below ---

Osbourne's Northern Powerhouse will ensure that projects like the Northern hub upgrades go ahead, Transpennine electrification will reappear in a few years as part of a wider series of upgrades to track and signalling to be undertaken as part of the CP6 programme, MML electrification will also be delayed to CP6. I would be very surprised if there were delays to HS2, David Higgins intendens to hit the ground running and HS2 Ltd is gearing up for construction to start in 2017 after the hybrid bill actives royal assent at the end of 2016, delaying will add to the constriction coast of the project overall for very modest savings.

.

Do you really think so? Many think the Northern Powerhouse concept is nothing more than a pre-election con.

One thing is absolutely certain though - rail projects will be binned while the £15bn road programme will go ahead.

 

[Xenophon PCDGS]

We on a transport website will look at matters with our own views of how any affected Transport matters may or may not proceed at the hoped-for starting time, but Transport is just one of the ministries involved. There will be those who will argue that the Transport projects are utterly essential to enable economic progression to continue at the rate envisaged.

Will there be those on this website of a similar interest in other ministry's scheduled programmes that will also put their own slightly enhanced viewpoints on how their ministry will also fare?

Should this be the case, the target 25% to 40% figure would seem to pose a major problem, as each ministry will wish to protect itself whilst at the same time being very hard on other ministries efforts to make their savings.

 

[ScotGG]

A bit disappointing that the inevitable north v south arguments started. I could name MANY services in both north and south struggling with insufficient capacity as the population shoots up - the fastest in the EU. ALL areas of the UK lack what is needed. Govt loves playing divide and rule though and north v south arguments falls slap, bang into it, instead of asking why govt of all colours never thought of how to cope with a rising population and funding transport adequately. Even in the south, Thameslink is 18 years late and Crossrail 20+ years delayed. Govt only paying a third of the £15b cost too. So £5b spread over 10 years. Hardly big money but they still had to be dragged kicking and screaming to approve it.

The old Lab v Tory arguments are amusing too. Labour didn't regulate and was in awe of the City, supported BY the tories. Labour have a heavy responsibility. Then the Tories come in, and with the Lib Dems say they will eradicate the deficit by 2015. This year it will be £70b+, which is pretty much the highest of any EU country. Even higher than those failing economies in the Med. We are only keeping our head above water due to being able to print more of sterling and QE. To those who think all is fixed in the UK look at the numbers on the ONS and EUROSTAT websites. The UK's are terrible. All parties have a woeful economic record. None invested in assets like housing or transport. It was mainly borrowing for consumption.

 

[MidlandMainlie]

Do you really think so? Many think the Northern Powerhouse concept is nothing more than a pre-election con.

One thing is absolutely certain though - rail projects will be binned while the £15bn road programme will go ahead.

If it is nothing more than a pre-election con then it would have quietly been forgotten by now, the fact that Osbourne has mentioned it several times since the election including in his first speech as Chancellor after the election and during his emergency budget speech shows that is something he takes seriously.

The thing to remember with Osbourne is that he is a very canny politician and strategist (just look at how the living wage announcement has wrong footed Labour). In a few years time David Cameron will stand down as PM and Osbourne has made no secret of the fact he wants to succeed him as PM, part of achieving will be to build support amongst conservative colleagues in the North (of which Osbourne is a part as MP for Tatton) for a leadership bid against Borris who will be the London centric candidate. The Northern Powerhouse and HS2 help Osbourne achieve this by showing he is on the side of the neglected North and will also help to put the Tories in a position to win the 2020 election against Labour by further undermining the party in their heartlands.

 

[CdBrux]

What I would love is for Leeds- York to get done anyway during this Control Period - ECML diversionary route; could do new journeys eg Leeds -Glas-Edin-Newc- etc- and is needed also for Transpennine.

Would Leeds - York allow any existing service to switch from diesel to electric?

 

[muddythefish]

If it is nothing more than a pre-election con then it would have quietly been forgotten by now, the fact that Osbourne has mentioned it several times since the election including in his first speech as Chancellor after the election and during his emergency budget speech shows that is something he takes seriously.

The thing to remember with Osbourne is that he is a very canny politician and strategist (just look at how the living wage announcement has wrong footed Labour). In a few years time David Cameron will stand down as PM and Osbourne has made no secret of the fact he wants to succeed him as PM, part of achieving will be to build support amongst conservative colleagues in the North (of which Osbourne is a part as MP for Tatton) for a leadership bid against Borris who will be the London centric candidate. The Northern Powerhouse and HS2 help Osbourne achieve this by showing he is on the side of the neglected North and will also help to put the Tories in a position to win the 2020 election against Labour by further undermining the party in their heartlands.

If that is the case then one of his first actions after the election - "pausing" (how long does a pause last - 10 years or more?) electrification schemes in the north and midlands - is a very strange way of going about it. I think you're being naive - in my view the "northern powerhouse" is nothing but hot air unless there is real and new money to back it up. So far, there's been nothing.

 

[Moonshot]

You would have to wonder if privatising Network Rail doesnt make a reappearance on the political landscape.

 

[MidlandMainlie]

If that is the case then one of his first actions after the election - "pausing" (how long does a pause last - 10 years or more?) electrification schemes in the north and midlands - is a very strange way of going about it. I think you're being naive - in my view the "northern powerhouse" is nothing but hot air unless there is real and new money to back it up. So far, there's been nothing.

Not if the schemes reappear in the 2017/18 HLOS for funding in CP6 which I think is likely. The pausing allows resources and man power to be thrown at GW electrification, as that nears completion MML and Transpennine will be back on the agenda.

 

[CdBrux]

Not if the schemes reappear in the 2017/18 HLOS for funding in CP6 which I think is likely. The pausing allows resources and man power to be thrown at GW electrification, as that nears completion MML and Transpennine will be back on the agenda.

And, in the case of Transpennine, to give time for NR to work out what really needs to be done to deliver the project requirements in terms of capacity and speed, which we now are told the original project would not do after all (NR having originally said it would). It's possible there may also be some interaction with 'HS3' proposals but I recognise this is less likely.

I think judgement needs to be reserved for a year after which we should expect to see a revised TP project on the table that actually delivers increased capacity and speed, with a robust costing and planning.