The big questions about the UK Government's £445m rail announcement

Wales Online

2 days ago

The big questions about the UK Government's £445m rail announcement
There is a difference between the money being assigned to building new stations and the most recent cost estimate
There are plans for more train stations on the south Wales mainline
(Image: WalesOnline/Rob Browne )
A few hours before the chancellor Rachel Reeves delivered her spending review to MPs in the Commons, details of what she would announce for Welsh rail emerged. It would be, we heard, a package of almost half a billion pounds for rail infrastructure.
Yet what's now apparent is that there are still a lot of questions remaining to be answered about exactly what the money will be used for and the time period in which it will be spent.
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The opposition parties have jumped on the Chancellor's statement during her speech to the Commons that the money will be spent over 10 years. They claim this means it is far from generous and less than Wales would have received under the Tories.
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Yet briefings from Treasury officials and the Wales Office suggests it is more complex than that - although there is still a lack of detail about when the money will be spent, what it will be spent on and how much progress will be possible when the sum promised is less than the cost of the big ambitions for rail in Wales.
These are the big questions that remain following the Chancellor's speech
How long a period is the funding meant to cover?
How generous this £445m really is will depend on how long a period it's meant to cover.
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The Chancellor handed her opponents in Wales a stick with which to criticise this when she said that the funding was for ten years.
Her exact words were: "For 14 years, the Conservatives failed the people of Wales. Those days are over. Following representations from my right Honourable Friend the Welsh secretary, the First Minister for Wales and Welsh Labour MPs I am pleased to announce £445m for railways in Wales over 10 years including new funding for Padeswood sidings and Cardiff West junction."
The Treasury suggests it isn't this simple, that most of the money will have to be spent in the period of the spending review, which covers four years for infrastructure investment.
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But a smaller amount is budgeted for the development of projects and won't necessarily be spent in the next four years, hence the 10 year timeline.
However the Chancellor's words created significant uncertainty. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
Who will get to spend the money?
The £445m is not one big pot. Because most of the rail network in Wales is owned by the UK government, the bulk of the cash will be for Network Rail to spend. But there is also a pot of money for the Welsh Government to use to spend on the track it owns in the Valleys Lines. And a third pot to develop future projects.
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Wales Secretary Jo Stevens has said the scheme was made up of:
£300m of UK Government investment in heavy rail
£48m of money going to the Welsh Government to invest in the Core Valley Lines
Around £97m for developing future projects
She said: "There is an agreed pipeline of projects produced by the Wales Rail Board, agreed through Welsh Government, DFT, and that is what the delivery money will be spent on.
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"Separately, there's the £48m going directly to Welsh Government to spend on upgrades to the Core Valleys line and then there is a small element for development money that will be spent to develop the projects that will be ready in three years time."
Referring to the £97m for longer-term projects, she said: "[So] we will have projects that have been properly developed in order to deliver after the end of the spending review period. It stops that cliff edge, because you can't literally pick up a rail project on a Monday and say ' here's some money for it, we'll do it now', it takes years of development work to get them ready'.
Mr Jones said that this spending review allocates budgets until 29-30 but they were "pre-announcing additional funding that really shouldn't be announced until the spending review until 2027".
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"We want to get that certainty of funding to allow the development to kind of keep the projects rolling.
"The reason that you end up with the 10-year number is because essentially, the way we commit to that is by making the commitment in the 10-year infrastructure strategy but it doesn't mean that that money is spread out over a ten year period.
What exactly will it all pay for?
When the Government promises £66bn for HS2 we know what we're getting. A rail line that costs £66bn (or probably more by the time it has finished).
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But this announcement is different, it is a sum of money with a vague list of projects attached. Many of those projects, like the Burns stations, have a full price tag that is bigger at £320m than the sum of money available.
Ms Stevens and chief secretary to the Treasury Darren Jones said the reason for the £300m sum being allocated was that it was the most that it would be possible to spend on those projects during the three year period.
Ms Stevens said: "We have put in a maximum that it is possible to actually spend on delivery over the period of the spending review, so that will deliver projects directly; new stations, more and faster trains on key lines across north and south Wales that is as much as the rail sector can physically deliver over the period of the spending review."
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Mr Jones added: "We worked very hard to look at what the capacity is in terms of delivery in the time that we have and we have gone as far as we possibly can in maxing that out."
So how much progress will be made on those schemes in three years?
We tried to find out how much progress it would be possible to make on the big project mentioned in south Wales, the five new stations planned for the south Wales mainline known as the Burns stations, given the fact there isn't enough money in the £300m Network Rail portion of the budget to fund the full £320m cost.
Ms Stevens was unable to say. She said: "Today is about the broad figures.
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"We'll set out in coming weeks the specific projects," she said.
Asked if it was not simply known how the money would be divided, or whether we just won't see all five stations in the review period, we were referred to the Treasury.
We then went to the Treasury with the following questions:
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Does the Treasury mean "Burns Review stations" to be the five previously discussed at Cardiff East, Newport West, Maindy, Llanwern and Magor? Will all five of those be built? Have revised plans or costs been calculated?
We are awaiting those answers.