Spending Review: Colossal £25bn for HS2 eclipses other transport pledges
HS2’s colossal funding package eclipses all other railway investment pledges that Chancellor Rachel Reeves announced in her Spending Review.
Reeves pledged £3.5bn investment into the Transpennine route upgrade and £2.5bn for East-West rail as part of the Spending Review.
The Chancellor also set out plans to “take forward” the UK’s ambitions for Northern Powerhouse Rail, the Liverpool-Manchester rail route dubbed ‘High Speed 3’.
Overall, the government has earmarked £10.3bn for investment into railway enhancement projects, excluding HS2.
The deeply troubled high-speed railway project connecting London and Birmingham is set to receive more than double that total by itself, with £25.3bn agreed as part of a four-year settlement.
“This funding will support the full reset of the HS2 programme under the leadership of the new chief executive, addressing longstanding delivery challenges,” the government said.
Details of how Northern Powerhouse Rail will be funded will be revealed in the Infrastructure Strategy, and are heavily dependent on the outcome of a review into HS2’s costs.
Reeves said her plans for the scheme would be set out “in the coming weeks”.
HS2 funding an ‘important step forward’
The Department for Transport (DfT)’s total settlement provides funding of £31.5bn between 2028 to 2029.
Capital investment will increase average real terms growth rate of 3.9 per cent per year over the next five years, excluding spending on HS2.
The Transpennine Route Upgrade aims to reduce journey times between Manchester and Leeds from 55 to 41 minutes, delivered by the early 2030s.
The East-West Rail project aims to link Oxford and Cambridge, providing a direct connection between the two university cities for the first time since the 1960s.
Reeves said she had “heard the representations of … members for Milton Keynes North, Milton Keynes Central, and Buckingham & Bletchley.
“And I can tell the House today, to connect Oxford and Cambridge, and to back Milton Keynes’ leading tech sector, I am providing a further £2.5bn for the continued delivery of East-West rail.”
The High Speed Rail Group said funding for HS2 marked an “important step forward in rebuilding confidence and certainty around Britain’s biggest infrastructure project.”
“This sort of funding agreement creates the platform from which HS2 and its suppliers can carry out the much needed ‘reset’ of the project and bring clarity on both anticipated costs and programme.
“With this certainty in place the supply chain will now work with HS2 Ltd to drive the productivity improvements the project needs and the government reasonably demand.”
Mark Wild, Chief Executive of HS2 Ltd, said: “This multi-year financial settlement gives greater certainty to the delivery of HS2 and provides the foundations for the comprehensive reset of the project.
“However, continued funding can’t be taken for granted: it’s rightly dependent on HS2 taking responsibility, boosting productivity, and breaking the cycle of cost increases and delays. That’s why we’re not standing still as we reset; we’re embarking on immediate reforms to ensure every penny is spent efficiently and transparently, with a rigorous focus on value for the taxpayer, and safely improving performance across the project.
“HS2 is vital for our railways and is already supporting 33,000 UK jobs while providing a £20bn boost to the economies of the West Midlands and London.”