7 Conclusion
90. The scale of the current five-year £35
billion rail investment programme—£16 billion of which
comes directly from Government grants—is significant against
any yardstick. The severity of the recession, and the magnitude
of the national deficit, makes it difficult to sustain such levels
of investment in the short and medium term. We believe, however,
that the Government is right to deliver on the investment commitments
it made prior to the crisis—not just to renew and maintain
the existing railway network but to enhance the network to make
it bigger, faster and greener. The fact is that many parts of
the network are creaking at the seams following the unprecedented
passenger growth over the past 15 years. Investment in rail enhancements
can positively benefit the economy through reducing journey times,
providing access to employment, contributing to the regeneration
of local areas and, in the short-term, providing much-needed construction
jobs. Failure to invest now to enhance the network, and to alleviate
capacity constraints, will only damage the prosperity of the railways
in the long term.
91. The next funding settlement for 2014-2019
is not likely to be so generous. Strict prioritisation of projects
will be necessary and difficult decisions have to be made. However,
we have identified some of the high-priority projects and schemes
that must be considered serious contenders for investment in Control
Period 5, if not before. Again, we believe the Government should
continue to focus on enhancing the network: be it through further
electrification of the network, particularly the Midland Main
Line, or through investment in the "Manchester Hub"
to resolve the severe capacity constraints experienced across
the North of England. Freight investment should at the very least
be maintained at current levels and we would like to see the Government
more active in encouraging integration of rail with other modes
of transport in a focused and proactive manner. Integration can
be facilitated through simple measures such as better car parks
at stations or more complex ones, such as the roll-out of smartcards
outside of the capital. Finally, we expect the Government to react
positively to proposals to develop new rail lines, or reopening
old ones, serving communities with little or no access to the
rail network.
92. A longer-term investment priority must be
the development of Britain's second high speed rail line. Whilst
we recognise that the bulk of the investment may not be made until
after Control Period 5, it is essential that the billions of pounds
required for a new high-speed rail line does not detract from
investment on the existing railway network in the meantime. After
all, the vast majority of passenger journeys will continue to
be made on the traditional network. The current outlook for the
railways is already positive. We hope that the development of
a new high speed line, from London to the north of the country,
will signal yet a further important and exciting step-change in
the history of our railways.
Conclusions and recommendations
The value of rail enhancements
1. There are differing views on the economic and environmental benefits of investing to enhance the railway network. It is clear, however, that enhancements to the railway network provide good value-for-money in many cases and are a worthwhile investment of public funds. Rail network enhancements can have important economic benefits and help to regenerate, and connect, local communities. If extra transport capacity is needed, rail is also more environmentally friendly than road or air. The UK's challenging climate change targets increase the attractiveness of investing in the network, to encourage modal shift in terms of both passenger and freight transport and to make the railway network itself greener.
(Paragraph 27)
2. We welcome the scale of the current investment programme and we commend the Government for its commitment to the railways. The Government is right to prioritise increasing capacity during the current control period, and we are pleased that the Government is investing in growth. We call for this to continue across the country in the next period.
(Paragraph 28)
Improving the process of investment decision-making
3. Prioritisation methodology can never take account of all the economic and other impacts of transport schemes. There are always likely to be some social, environmental and economic impacts that are hard to monetise. Too often, however, the Government prioritises its spending on rail projects based on current and forecast demand, which has contributed to a disproportionate increase in the ratio of investment into London compared to the regions. If this continues, the effect will be to increase disparity between spending in London and the South East and other regions, creating a 'vicious cycle' of demand-led investment. The Department needs to develop its methodology to make its appraisal of projects more dynamic to integrate wider social, environmental and economic considerations, including the impact of transport investment on the GDP of regions and secure better integration with regional economic and social objectives.
(Paragraph 34)
4. The last High Level Output Specification (HLOS) and Periodic Review processes generally worked well. We welcome and support the Office of Rail Regulation's recent commitment to improving the representation of passengers, freight users and regional representatives in the next Periodic Review. The Government must, however, go further. It needs to set out a clear plan for improved consultation with regional representatives in advance of the next HLOS.
(Paragraph 40)
Security of the current investment programme
5. Given current levels of overcrowding on parts of the network along with passenger demand forecasts, it is vital that current and planned projects to increase capacity continue to the present timescale. We welcome the strong assurances from the Government and the Office of Rail Regulation that the Control Period 4 funding settlement for the next four years is secure. Cuts in transport investment are easy to make, but are costly in the long term, undermining future growth prospects and depriving future generations of a lasting legacy of good transport services. Investment in improving transport infrastructure should be based on the long-term needs of the economy and society, not directed by the need for immediate public expenditure savings.
(Paragraph 47)
6. The Government was right to revise its rolling stock plans in light of its electrification announcement. We are concerned, however, by the postponements in issuing the plan and by the uncertainty and confusion caused by the delay within the industry. Rolling stock is required urgently in several parts of the country. We urge the Government to set out its revised rolling stock proposals as soon as possible to provide the industry with certainty about future capabilities and to improve the travelling experience of passengers on overcrowded parts of the network.
(Paragraph 50)
Priorities in the medium to long term
7. London has benefited greatly from the Control Period 4 package, and is likely to benefit further from projects such as Crossrail which has received the go-ahead in the last few years. London's rail network will continue to require investment in Control Period 5, especially to increase capacity on certain commuter routes. However, projects to enhance capacity elsewhere on the network, particularly in the North, are long overdue, and the balance between investment in the South East and elsewhere needs to be realigned.
(Paragraph 57)
8. The problems of the Manchester Hub can not be ignored any longer. The current capacity constraints of the Hub are constraining rail growth across the whole of the North of England. The case for making the Manchester Hub the top priority capacity scheme for the next control period appears very persuasive. We welcome indications from Network Rail, the Government and the industry that it will be considered a high priority after 2014.
(Paragraph 58)
9. We have previously supported electrification of the network, and we welcome the Government's change of position on this matter. The electrification of the Great Western Main Line and four lines in the North West should be considered only important first steps in the electrification of the network. Funding for Control Period 5 is likely to be under pressure. However, further electrification of the network should be considered one of the top investment priorities for the period. We would support electrification of the Midland Main Line in particular as a major electrification project to be undertaken in Control Period 5.
(Paragraph 63)
10. Prior to the 2009 change in policy, we had criticised the Government for not giving small-scale infill electrification projects the consideration they deserve. In the current financial climate, the attractiveness of such schemes is even greater as they are often relatively cheap and represent particularly good value-for-money. The Government should ensure that the next stage of its electrification strategy gives priority to a range of small-scale infill schemes over the short to medium term.
(Paragraph 64)
11. We welcome the Government's change of policy on high speed rail. Nevertheless, new high speed lines will not be operational for a decade or more. It is essential that investment in a high speed rail network does not detract from necessary medium term investment on the "classic" network. Capacity constraints on the classic network look set to worsen in the next decade and we must continue to invest to address these problems. After all, the majority of passenger and freight rail journeys will continue to be made on the classic network. The bulk of funding needed for new high speed rail line is, in any case, unlikely to be invested before Control Period 6, or later.
(Paragraph 71)
12. The Government cannot be expected, at this stage, to explain precisely how it would balance the funding between investment in high speed rail and the maintenance of existing investment levels on the classic rail network. In its response to the High Speed Two study, however, the Government must explain how this balance will be struck, the mechanisms by which a high speed line would be funded, and how investment on the classic network will be maintained at an appropriate level.
(Paragraph 72)
13. We recognise concerns about the potential competitive disadvantage faced by regions not served by the initial high speed line. It is helpful, therefore, that High Speed Two Ltd will be proposing options to extend high speed services, and high speed lines, to a range of areas in the North East as well as the North West. It is very important that, from as early a stage as possible in the development of high-speed services, new high speed rail lines are interoperable with the existing network.
(Paragraph 77)
14. We were not satisfied by the Minister's response regarding the proposals to "connect communities". For relatively modest costs, these schemes to open new lines and stations, and re-open old lines, can be of great value to communities and passenger usage has often exceeded expectations. The Government should take a more positive and pro-active policy position to encourage local authorities to seriously consider these schemes and align them to regional economic and social objectives and strategies. The Government should fund schemes where it is confident about high passenger patronage directly through the national rail investment programme. Alternatively, where the opportunity exists, it should encourage private investment through the franchise system.
(Paragraph 82)
15. The need to invest in UK rail freight is more clear and pressing than ever in the context of the UK's climate change targets. We would expect the funding committed to the Strategic Freight Network to be, at the very least, maintained by the Government in the next control period. The current proposals to develop the Strategic Freight Network after 2014 should be given a high priority and must be aligned with economic and environmental objectives.
(Paragraph 85)
16. It is unacceptable that investment in schemes and projects that integrate rail with other transport modes has not always matched the Government's rhetoric. The Government must ensure that investment in rail takes into account good integration with other modes of transport. The recent strategy to increase the use of smart and integrated ticketing outside London is a step in the right direction. The Government must, however, make faster progress in this area. This is the only way to achieve a genuinely convenient and accessible public transport system for passengers which presents a real alternative to the car.
(Paragraph 89)
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