Around 20% of the £1bn Network Rail has spent on major upgrade work to trans-Pennine rail links has been wasted on 'work no longer needed', Parliament’s spending watchdog has said.
In a new report on the Transpennine rail upgrade (TPRU) programme, the National Audit Office (NAO) identified a number of concerns including money wasted by shifting priorities, inflationary pressures and the fact that new rolling stock for the route is currently unfunded.
Work on the programme first started in 2015 but was paused and since 2017, the DfT ‘has repeatedly altered the scope of the Programme to meet differing ministerial priorities and budget constraints’.
The NAO added: ‘As a result, £190 million of the £1 billion Network Rail has spent on the Programme has been on work no longer needed.’
The report noted that the Government has put it on a firmer footing, ‘but there remains a risk of delays and cost increases, and it is not yet clear how the upgrade's intended benefits will be achieved’.
The NAO pointed out that the Department for Transport (DfT) first announced its intention to improve the route in 2011 but 'has taken too long to decide how to upgrade it’. It added that in the decade to 2020 passenger journeys on the route increased significantly, resulting in overcrowding.
Inflation may throw scheme off track
The report notes that it is not yet clear how the DfT and Network Rail will manage the cost of inflation and that the two bodies have not yet agreed on how sharp rises in the cost of energy and materials will be funded.
The NAO noted in particular that while some elements of the programme are in construction, many projects are still at an early stage. It recommended that the DfT and Network Rail should review their business case approvals strategy and how this will manage the uncertainty in design and cost arising from this.
It added: ‘The strategy should include setting out what the focus of future update approvals will be to reduce the risk of scope changes being introduced back into the Programme.’
The NAO also raised the possibility that Network Rail may have to deal with increased costs by delaying work on the programme, or by delaying or de-scoping other rail programmes.
The DfT said that because of the complexity of the upgrade and the differing maturity of projects it is working with Network Rail to make sure that projects are only committed for delivery once they reach the appropriate stage of detailed design.
Funding not yet in the bag
The DfT has confirmed that the £9bn envelope for programme, which was re-announced by transport secretary Grant Shapps this week, was already agreed as part of last autumn’s Integrated Rail Plan.
However, the Treasury so far has only provided funding to the programme totalling just under £3bn to the end of the current financial year, and the DfT is expected to submit further funding bids as part of future business cases.
As part of what should be a final business case in 2024, the DfT and Network Rail are expected to have refined cost and schedule estimates for the full budget.
The NAO also pointed out that the DfT has not yet committed to funding the rolling stock needed to achieve the programme's full benefits, noting that the upgraded route will require electric trains that are compatible with new signalling systems.
‘Until funding is confirmed there is no certainty that rolling stock will be at the required level.’
Meg Hillier MP, chair of the Public Accounts Committee, said: ‘It took 10 years for the TPRU to gain traction and money was wasted along the way, but the programme is finally moving forward.
‘DfT appears to have put things on a firmer footing, but the path is littered with cautionary tales of transport projects that later went off the rails. At such an early stage, there are still a great many hurdles to overcome.
‘There are still worrying question marks over how the benefits of the upgrades will actually be achieved. Benefit to public must be at the forefront of everyone’s mind. The people in the north of England deserve a transport system that meets their needs.’
A DfT spokesperson said: ‘Our unprecedented investment of over £9bn in the Transpennine Route Upgrade will improve connectivity, create jobs, and foster economic growth across the North.
‘The extra funding will enable more tracks to be built, digital signalling, and for the route to be fully electrified.’