The chief executive of Transport for the North (TfN) has warned that Government cuts to its funding will cause a ‘significant scaling back’ of its work, including its ability to progress Northern Powerhouse Rail (NPR).
In a letter sent last week to Barry White, the outgoing head of the sub-national transport body (STBs), Department for Transport (DfT) permanent secretary Bernadette Kelly, informed him that funding for the current financial year would be cut from £10m to £7m, with TfN receiving only £6m core funding in 2021/22.
In a further sign that current ministers are less keen on the role of STBs than their predecessors, Ms Kelly wrote that the cash was considered ‘an appropriate allocation to enable TfN as an organisation to focus on your core statutory functions’.
Ministers have stated that they do not believe that statutory status for STBs is necessary, leaving TfN as the only statutory body. However, other STBs regard its outspoken approach as potentially counterproductive and some may see the cut to its funding as an attempt by ministers to put it in its place.
Ms Kelly also confirmed that TfN’s Integrated and Smart Travel (IST) programme, which had been allocated £150m up to 2020/21 in the 2015 spending review, would not receive any further funding.
She added: ‘The Department will be considering cost-effective delivery models and funding streams to roll out [pay as you go] to urban and regional commuter areas, as part of wider rail reforms.’
In reply, Mr White described the ending of IST funding as ‘incredibly disappointing – particularly given the identification of key contactless initiatives that could have been developed quickly and have been awaiting funding decision for several months’.
He added: ‘The reduction [of core funding] will cause a significant scaling back of activity and lead to workforce reduction.’
Mr White disputed Ms Kelly’s claim that TfN would receive over £70m, including £67m to progress plans for NPR, pointing out that this money was not formally committed.
He also claimed that DfT funding ‘fails to recognise the significant core contribution to facilitating the NPR programme'.
He warned: ‘Cost allocation going forward will have to [be] reviewed to ensure these costs are fairly allocated.’
Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, slammed the decision to ‘pull promised investment from a body that has done more than any other to develop a cohesive vision for future transport across northern England' and urged ministers to reconsider.
He said: ‘The Conservative Party won a majority in 2019 in part through promising a levelling up agenda on the economy. Part of these plans has always been to deliver an infrastructure revolution in the north, to create economic growth, boost connectivity, and create jobs.
‘It is difficult to see how imposing budget cuts on Transport for the North, one of the most successful and ambitious sub-national transport Bodies, will do anything other than undermine this agenda and set back the Government’s stated policy of narrowing the economic gap between the south-east of England and the rest of the UK.’
Following a meeting the TfN board on Thursday (14 January), its finance director, Iain Craven, said: 'TfN’s Board has clearly indicated its disappointment and concern that, at a time when the Government’s levelling up agenda is needed most, funding is being cut, putting Northern investment and jobs at risk. It falls substantially short of what we outlined the North would need to level-up infrastructure and accelerate benefits to the region.
'There is a real worry that this signals a diminishing ambition for the North, rather than pump-priming the region’s economic recovery.
'Establishing Transport for the North was a symbolic moment for devolving power to Northern leaders, one that fully supports the levelling-up agenda.
'Our members have clearly indicated the ambition that, over time, TfN should have a greater role and more budget oversight, but the opposite is proposed.
'Further to the discussion at today’s board, we would strongly urge that this decision is reviewed.'