Government shelves railways upgrade plan due to rising costs and delays

Putting off rail links to the North puts the Northern Powerhouse at risk

The Government postponed a number of railway infrastructure modernisation schemes because of rising costs and project delays.

In a statement to Parliament Transport Secretary Patrick McLoughlin said he was pausing key parts of the £38.5bn Network Rail upgrade programme.

“I do not pretend that everything is perfect, because it isn’t,” he told MPs.

“Much of this work should have been done decades ago – successive governments have failed to invest in our rail network.

“I know that members and their constituents want to see these improvements, and I am determined they will happen – but in parts of this programme Network Rail’s performance has not been good enough.”

Mr McLoughlin said the organisation responsible for Britain’s rail infrastructure had blamed irregularities in the supply chain for signals and difficulties gaining planning permission for some upgrades, but that these were “no excuse”.

Casualties of the announcement include a “pause” on upgrades to the Midland mainline to Sheffield and the Transpennine route between Manchester and Leeds.

Some aspects of the announcement appear to undermine George Osborne’s stated goal of creating a “northern powerhouse”, of which improved regional transport links are a large part.

The Government's flagship HS2 scheme appears to be unaffected by the policy change.

The Network Rail upgrade plan, launched by the Coalition, was billed as the largest modernisation of the railways since Victorian times”.

There will be change at the top of Network Rail, with London’s transport commissioner Sir Peter Hendy taking charge.

Involvement of the group’s 46 ‘public members’ who scrutinise its activities will also be ended, and directors will be denied a bonus this year after chaos at London King’s Cross over Christmas and at London Bridge.

The background to the changes is increased scrutiny of the organisation in light of its official reclassification as part of the British state, along with its £38bn debt.