Funding
many observers expect unregulated fares to rise in January at a greater rate than in the last couple of years. At £5.2bn in 2009-2010, government spending on rail amounted to
£87 for every person in the country, according to a calculation for The Economist. Rail accounts for only seven per cent of all journeys. And of those, four in five are for commuting to work or business trips. Three in five of those journeys are in London and the south east, which remains the most affluent part of the country. So for the government there is political capital at stake. The
railways are funded by all taxpayers, yet predominantly, they benefit the relatively well off. The greatest numbers to benefit are in a region where the political map is overwhelmingly coloured blue, and where commuters into London have little choice but to use the train. So it’s not such a clear-cut choice for the policy advisors. How willing are they to hurt those who will shout loudest when they feel the pain?
Will electrification be stalled? This is the peg on which all the rolling stock issues must hang. Electrifying diesel routes is perceived as green. So it’s a big tick in the government’s carbon target box. But it requires £1bn that the government doesn’t have. The money will have to come out of rail’s overall pot. Buying overhead wires from London to south Wales and Oxford, with important and beneficial infill projects in the north, will mean going without something else. It will also mean coming up with new rolling stock, so in reality £1bn is just the start.
Will IEP be cancelled? Most industry observers are certain that it will. An over-complex, hugely expensive flagship project with a Japanese contractor, the Intercity Express Programme (IEP) could be dismissed as a Labour- inspired spending spree that can no longer be justified. Cheaper, but potentially less satisfactory, options are on the table: refurbish 30-year-old HSTs to last another 20 years, or buy some off-the-shelf locomotives to haul refurbished carriages around. Alternatively, buy tried and tested European designs for express trains that could be up and running in three or four years. But the international trend has been firmly towards distributed
power with underfloor motors. And using diesel locos for the next 30 years would hardly be a step change in technology in line with carbon reduction targets. Again, it’s not a clear-cut choice. Hitachi has been working towards a simpler solution and claims its Super Express is now comparable in price to other electric multiple units. Its Class 395 trains in Kent were immediately reliable, and IEP would use as many proven components as possible. Hitachi promises an assembly plant in the north-east of England, claiming it would be the largest inward investment since Nissan’s Sunderland car factory in the 1980s. A sort of IEP-lite still has an outside chance of success.
Will other rolling stock be ordered? It has to be. And quite soon. The Thameslink project is well under way and it is going to require a lot of new trains. A preferred bidder was promised last year, and has been deferred several times since then. Thameslink will trigger a substantial cascade of second-hand stock on which a variety of regional capacity enhancements depend. This is inextricably linked with the electrification question. If the
Great Western is electrified, the complex cascade drawn up under Lord Adonis includes sending the Thameslink Class 319s to Reading, releasing the diesel Class 165 and 166 fleet to ease the strain further north.
‘IEP could be dismissed as a Labour-inspired spending spree that can no longer be justified’
But it looks like other areas with overcrowding may have to live
without the orders previously promised under the High Level Output Statement. Will South West Trains, for example, ever see the extra carriages that were once on offer?
Will HS2 go ahead? A dedicated high-speed line is a long-term aspiration, and the October review will have little impact on it. A compensation scheme has been launched for people whose lives and property are adversely affected by it, so the government remains serious about it. It is likely that the building of the line would be separate from
the overall transport budget. But if the preparation costs, including payments for planning blight, were to be met from a reduced transport budget, then cuts to other projects to fund it would be unavoidable. Money could be spent on buying land in Buckinghamshire, while potholes on roads worsen or speed restrictions on existing tracks increase. The DfT has estimated the preparation costs to be £2bn, of which £1bn would be for purchasing land.
Will there be longer franchises? An absolute certainty. The delay in re-letting the East Anglian and Thameside franchises, and the continued presence of East Coast in public hands, show that this is still work in progress. An adjustment of the current model will be welcomed by franchise holders, so long as it is in their interests. In other words, greater commercial freedom must bring them potential for greater commercial reward. We may – or may not – get an indication of the government’s
emerging strategy on franchises in the coming month. Watch for storms of protest from passenger groups who fear that loss-making, lightly-used evening and weekend services will be heavily cut under a lighter touch from the DfT.
Will Network Rail’s management be reformed? Probably. It has come in for so much criticism. We are being given hints that Iain Coucher’s replacement as chief executive will come from outside the rail industry. But this is most likely to be a question for another day. Network Rail’s large funding stream is essentially sewn up in the short term, and doing more than tinkering with the budget before 2014 seems less likely. And although the large bonuses for a handful of executives and questions over safety reporting have generated a stream of newspaper headlines over the summer, sorting out the overall budget for transport is higher up the transport secretary’s to-do list.
So how much will the Department for Transport budget be slashed? That’s what we’re all holding our breath for. Forty per cent is the worst-case scenario. Twenty to 25 per cent is widely predicted. With health, education and overseas aid largely ring-fenced, the Home Office and transport are seen as key targets. Road spending is bound to
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