After 12 years of planning, the north's flagship rail scheme still lacks a detailed design and a £45 billion budget the public accounts committee says was put in place before anyone knew what it was going to build.
A plan to transform rail services across the north of England is at risk of falling into the same situation that hit HS2, according to the parliamentary spending watchdog, which says the plan still lacks a proper design and realistic budget after more than a decade of planning.
In a scathing report, the Commons Public Accounts Committee (PAC) said Northern Powerhouse Rail lacked the details to talk about after 12 years on the drawing board, and warned that its £45 billion budget had been “blown out of reality”. As it stands, the committee said, the project may fail to deliver the promised improvements and risks becoming another government infrastructure albatross.
Initially conceived as a high-speed line linking Liverpool, Manchester and Leeds, the scheme has since been scaled back to a series of local developments aimed at delivering faster and more frequent services. The government renewed the program in January with a phased vision of 45 billion for northern countries, but the PAC does not believe the figures add up.
The committee said it was “unsure that the Department for Transport (DfT) has learned all the lessons from its previous failures in managing other rail projects”, pointing above all to the severed HS2 north-south connection. HS2 has blown its budget and could cost well over £100 billion despite now only running in Birmingham, and is expected to be at least five years late.
In terms of money, the PAC was not respectful. There was no “convincing strategy” to bring Northern Powerhouse Rail's targets within the £45 billion cap, and no explanation of how the Treasury arrived at this figure in the first place, with no formal design, scope or costs published yet.
Mr Clive Betts, Deputy Chairman of the PAC, said there is no doubt that the railways in the north need to be transformed to bring jobs, mobility and productivity. But as he took evidence from stakeholders, he warned: “Our committee has heard voices of concern about the same mistakes in loose governance that HS2 made early on.
“The bulk of the project is still almost a mystery. Both the Treasury and the DfT have questions to answer about the £45 million funding. We need to know how this figure was arrived at and how the DfT will proceed with it. Funding a project before it has been designed or priced is like putting a roof on a house before the foundations are built.”
Bettors have slammed the decision to let HS2 Ltd, the agency set up to deliver HS2, advise on Northern Powerhouse Rail, calling it ridiculous that a body with such a record of failure should shape the north's next big scheme.
The report comes as northern leaders push for a stronger commitment to the region. Greater Manchester Mayor Andy Burnham, a campaigner for funding disclosure who has warned the north is facing “Armageddon” without proper rail links, has continued to push for better transport links and a shift away from Westminster.
The committee wants clarity, and quickly. It called on the DfT, already stretched by HS2 and the creation of Great British Railways, a new publicly-owned company, to speak out: “Within six months, the department must write to us to confirm whether Northern Powerhouse Rail is a major project or not.”
That question is important because the answer determines how this program is managed, evaluated and funded, and what upsets the committee is that, since 12 years have passed, it has not been answered. Ministers have also faced pressure on cheaper alternatives elsewhere on the network, including a cut-price “HS2-light” line beyond Birmingham which has been mooted by officials.
The Department of Transportation stepped back. “Northern Powerhouse Rail will deliver the biggest investment in rail connectivity in a generation, giving the north the transport links it deserves and driving growth, jobs and investment across the region,” a spokesman said.
“NPR will not repeat the mistakes of HS2, which is why we have accepted all the recommendations of James Stewart's review and are taking a disciplined, phased approach, completing detailed technical work with all stakeholders before settling on specific major infrastructure options.
“Since announcing the NPR in January, we have worked closely with the mayors to take the work forward. New partnership forums are already in place to look at the next stage of development and Network Rail has started developing engineering designs.”
The full results are set out in the PAC report on Northern Powerhouse Rail, which draws on National Audit Office analysis which shows the DfT will have spent around £410m on the scheme by March 2026. For a scheme aimed at balancing the economy, the watchdog's message is unrelenting: draw first, call second, and put together a budget that you've come to know.
