11-06-2025
Business Editor Sion Barry gives his verdict on Rachel Reeves' rail investment for Wales
Business Editor Sion Barry gives his verdict on Rachel Reeves' rail investment for Wales
She confirmed £445m over ten years but is that the real figure?
Rachel Reeves congratulated by the Prime Minister after delivering the Comprehensive Spending Review.
(Image: PA )
In her Comprehensive Spending Review Chancellor Rachel Reeves made scant reference to Wales, but on addressing rail funding she was unequivocal.
To cheers on her side of the House she said: 'For 14-years the Conservatives failed the people of Wales. Those days are over. Following representation from my right honourable friend the Welsh Secretary ( a smiling Jo Stevens) the First Minister for Wales (Eluned Morgan) and Welsh Labour MPs I am pleased to announce today £445m for rail in Wales over ten years.
"That's the difference made by two Labour governments (London and Cardiff) working together to undo a generation of under-funding and neglect.'
Hang on a minute £445m over ten years, did I hear that right? That would frankly be an utter joke and anualised at just £44.5m... cue incoming nukes from the opposition parties.
With £80bn of rail enhancement projects in England identified up to 2040, and with Wales having around 10% of the England and Wales rail network, that would be a derisory settlement. It has been getting a rail enhancement allocation of less than 2% going back decades and under UK governments of different political colours.
But what she should have clarified (and yes she had a lot to get through) is that around £300m from the ten year figure will be released over the next four years.
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It also means that once projects are signed off - and we have yet to see the confirmed list - they will receive further tranches of funding in the next comprehensive spending review as they will take more than four years to complete. So, over the next decade investment in Wales should be significantly more than the £445m referenced by the Chancellor.
What we now need to see is what projects will go into the Department for Transport's network rail enhancement pipeline for Wales over the next decade and potentially beyond. This is expected in the coming weeks.
Once we have that, with capital expenditure assigned, it will be relatively easy to work out whether Wales is getting an equitable deal on rail investment or not. if it is getting a fair slice of projects deemed as Wales and England, then most people would be happy with that - although I believe there is still a strong case for rail to be fully devolved to Wales.
So, until we have that definitive list, and whether that will include, as seems likely, the five Burns stations on the South Wales Mainline, it is like trying to complete a jigsaw without the picture on the box.
Perhaps if it was' bright and shiny' then the UK Government would be announcing, as they done in England, headline grabbing Welsh rail projects with total costs running into billions and delivered over a number spending review periods.
All that was mentioned by the Chancellor was the Cardiff West Junction project - needed to increase the number of trains per hour from the current two to four on the City Line that runs through Cardiff - with an estimated cost of £30m and work at Padeswood sidings in Flintshire, what will increase the number of trains able to run between Wrexham and Merseyside .
In the £445m is a one off settlement of £48m for the Welsh Government for the devolved Core Valley Lines.
Some £90m of the £450m is also be being kept back to effectively profile new projects that could be taken forward beyond the current four year comprehensive spending review period in a ten year rail plan for Wales.
That leaves around £300m in the tank for non-devolved rail projects in Wales over the next four years, of which around £60m the Chancellor has signalled is already allocated for the Cardiff West Junction (on a section of the City Line that comes under Network Rail) and the Padeswood sidings projects.
On the £48m for the Core Valley Lines, where the £1bn rail electrification project is nearing completion, that really isn't going to go very far. Some 100 kilometres of new electrified lines and infrastructure such as signalling, will require more maintenance work under so called operation, maintenance and renewal (OMR).
In the process of the Core Valley Lines asset being devolved to the Welsh Government, Network Rail had initially put a fanciful book value on it running into tens of millions of pounds. If the UK Government were looking to transfer the asset say to sovereign wealth fund then fair enough, but looking to charge another government in the UK?
They had seemingly forgotten that they were just custodians of a public rail asset paid for and maintained by the UK taxpayer - which of course includes those in Wales.
The Welsh Government managed to agree a nominal sum of £1. However, the UK Treasury should have agreed an allocation in the annual block grant to the Welsh Government to fund the required OMR work on the Core Valley Lines.
As it stands £48m over four years, and the Welsh Government has yet to confirm it will be deployed for that purpose, is far short of what is required.
As well as a fairer OMR funding deal for the Core Valley Lines, the UK Government also needs to recognise, for Barnett consequential purposes, that this significant part of the rail network in Wales is devolved.
That would provide a higher comparative figure for Wales which triggers the level of Barnet Formula consequentials the Welsh Government gets from an overall rise in DfT spending. For Wales the comparative figure is now just 33.5%, while for Northern Ireland and Scotland it is nearly 96%.
What has been confirmed is a step in the right direction after years of rail underinvestment in Wales. The Wales Rail Board, has worked up a priority list of much needed rail enhancement projects for Wales. For them all to be realiised then Secretary of State for Transport, Heidi Alexander, will have to assign a bigger share of her departmental budget to Wales.
Even if the £300m leverages additional funding in further spending reviews, and while yes a significant improvement, Wales should be getting a rail enhancement project investment of between £200m to £300m annually over the next 15 years to deliver up to £4bn of new rail investment.
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What the Chancellor has announced will fall short of that.
