The Treasury isn't going to write a blank cheque, even if the scheme does have a strong business case (which we don't know it does - nothing is in the public domain about the case for Portishead independent of the other elements that made up Metrowest Phase 1 which have now already been delivered). They will need to know the actual committed cost, which a contractor isn't going to supply until they have a reasonable amount of design work done and confidence in things like ground conditions or the cost of materials. Which all takes time but has to be done to get a firm price the contractor is prepared to commit to. Operating costs probably aren't going in the right direction either.
Meanwhile on the benefits side on a commuter route COVID won't have helped, and 1 tph, whilst a good start, isn't that competitive with 3 buses an hour in the off peak when roads are less congested.
Very frustrating when so much local investment has gone in too, but not unsurprising.