Northern Powerhouse Rail: Treasury accused of scaling down £40bn scheme to cut costs

The Treasury has been accused of plotting to scale down the Government’s Northern Powerhouse Rail (NPR) scheme in order to shave billions from its £40 billion price tag.

Conservative MPs and other sources close to the high-speed rail initiative, which was a Tory manifesto pledge at the last election, have warned that mandarins are trying to slash major elements and delay a decision on funding for it.

A source close to the project told The Telegraph on Tuesday that “Treasury officials are very much trying to slow the whole process down” and want the scheme to be shrunk as part of the “huge bun fight” coming over the comprehensive spending review this autumn, which will see multi-year budgets agreed across Whitehall, including the Department for Transport.

The Treasury was also accused of being behind the delayed publication of the Government’s integrated rail plan, which was initially due out by March. Northern leaders have repeatedly called for the urgent release of the strategy to give certainty around investment and delivery of the NPR scheme and High Speed 2 (HS2) in the north.

The scheme, sometimes referred to as High Speed 3, proposes a new line connecting Liverpool to Hull, via Manchester and Leeds. The second phase of HS2 involves two new high-speed rail lines northwards from Birmingham: one to Manchester and one to Leeds.

Boris Johnson’s plan for HS2 and Northern Powerhouse Rail

New Bradford station ‘could be scrapped’

Senior Tory MPs also accused the Exchequer of manoeuvring to save costs on the NPR, including by allegedly pushing to scrap plans for a Bradford centre train station on the new line and instead agree a cheaper route through greenfield sites on the city outskirts.

Henri Murison, director of the Northern Powerhouse Partnership, a network of business and civic leaders, weighed in to warn against scrapping a station in central Bradford.

“We would say that’s a massive missed opportunity. It’s the most diverse city in northern England. It’s been left behind somewhat in the past few decades, but it is really diverse and has lots of young talent,” he said.

One Conservative MP said the future of the NPR was shaping up as a major test of the Government’s pledge to review how it analyses investment, a crucial pillar of its plan to “level up” the North by ploughing in more funding.

“We hear from the Treasury how they’re specifically altering the Green Book to favour future growth in terms of its ‘value for money’ scoring. This is the first major test. If they fail to deliver, many northern MPs will question the truth of them altering the Green Book mechanism.”

A Treasury source said: “On NPR, basically no decisions have been made, we need agreement on a package of investment. Work is ongoing.”

Government ‘absolutely’ going ahead with rail plan

It comes after documents leaked to the Yorkshire Post this week purportedly showed that options had been drawn up on Whitehall to scrap the proposed high-speed rail line between Leeds and Manchester altogether, instead upgrading the existing Trans-Pennine line through Huddersfield and Dewsbury.

Downing Street insisted on Tuesday that it was committed to building a new railway line between Leeds and Manchester.

The Prime Minister’s spokesman said the Government was “absolutely” going ahead with the plan, adding: “The Integrated Rail Plan will soon outline exactly how major rail projects including HS2 phase 2b and Northern Powerhouse Rail will work together to deliver reliable train services that passengers need and deserve.”

Conservative MPs also insisted they did not believe the leaked option was under serious consideration. They said that on June 7, Boris Johnson enthusiastically restated his commitment to build the NPR during a virtual meeting with Tory MPs in the Northern Research Group.

Concerns about the funding that will be committed to the high-speed rail line come amid fraught debates within the Government over the cost of major reforms to social care and proposals for a tax raid on wealthy pensioners.

A crunch summit between the Prime Minister, the Chancellor of the Exchequer and the Health Secretary on overhauling social care, pencilled in for Tuesday, was cancelled at short notice after a split over how to fund reform erupted in public.

Matt Hancock, the Health Secretary, refused to comment on what he called “diary management” issues, but told Sky News: “The Prime Minister has committed to delivering this plan [on social care] before the end of the year and we’re going to do that.”

Rishi Sunak, the Chancellor, is said to have warned that Mr Johnson must work out how to pay for any of the multi-billion pound options to improve social care before proceeding with one, which could involve tax rises.

The Telegraph contacted the Treasury for comment.

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