CP7 funding objectives published

[Snow1964]

DfT has today (1st December) launched initial funds and objectives for the 5 yearly Control period

Providing details of objectives and funding available for railway infrastructure between April 2024 and March 2029.

Maintaining and renewing our country’s rail infrastructure is critical to delivering the railway that passengers and freight countries expect and for supporting economic growth.

Every 5 years the government is required to set out what we wish to achieve from the operations, maintenance and renewal of the railway. This is done through a document known as a high-level output specification, and the funding available is set out through a statement of funds available.

I am today (1 December 2022) publishing the objectives and funds available for operational railway infrastructure in England and Wales for the next control period - control period 7. This covers the period April 2024 to March 2029.

Settlement for the next 5-year funding period for railway infrastructure in England and Wales

Providing details of objectives and funding available for railway infrastructure between April 2024 and March 2029.

www.gov.uk

Policy paper

Railways high level output specification 2022​

What the Secretary of State for Transport wants the railway to achieve during control period 7 (2024 to 2029).

Railways high level output specification 2022

What the Secretary of State for Transport wants the railway to achieve during control period 7 (2024 to 2029).

www.gov.uk

Policy paper

Railways statement of funds available 2022​

Sets out the public funds government is making available for the railway during control period 7, 2024 to 2029.

Statement of funds available​

£ million, cash	CP7
Network Rail expenditure	44,063
Supported by Network Grant	27,529

Railways statement of funds available 2022

Sets out the public funds government is making available for the railway during control period 7, 2024 to 2029.

www.gov.uk

 

[LNW-GW Joint]

£44.063 billion looks like a 12%-ish increase on CP6's £38 billion, so at first sight looks like a fairly generous proposal.
The linked HLOS is hard to analyse as it is full of generic terms, such as "improve level crossings".
It's difficult to tell how much NR has to do to live within the funding, reducing maintenance cost etc.
ORR will now start the negotiation to nail down NR's cost base.
Presumably the £27.5 billion Network Grant is money to fund the TOC commitments (increased access charges etc).

Edit:
Well, it looks like I was comparing CP7 with CP5, so it's really a cut of 10% or so from CP6's £48 billion.
The anticipated funding reduction is no doubt behind the current productivity drive within NR.

 

[Alfie1014]

CP5 was £38BN, CP6 was almost £48BN, so it’s a reduction more so in real terms. The Network Grant is down by about £8BN from CP6 too.

Also considering we’re in a climate crisis you’d have expected a decarbonisation objective front and centre rather than some half hearted mentions tagged on to other objectives!

 

[WatcherZero]

Saw it this morning, it was like the Government set out to deliberately obfuscate any meaningful information being conveyed.

CP6 SOFA Oct 2017/CP7 SOFA
NR Expenditure £47.9b / £44.06b
Network Grant £34.7b / £27.53b
Inflation adjustment 22% therefore after inflation in real terms
NR Expenditure 24.6% cut
Network Grant 45% cut

Network Grant is how much the government gives NR in subsidy (formerly it was given by the Dft via payments to the Tocs who then passed it on to NR but for last few years its been paid direct to NR), NR expenditure is how much NR is allowed to spend in total by charging TOC's access fees to raise further funds and from other commercial revenue, essentially its their credit limit.

 

[Bald Rick]

Saw it this morning, it was like the Government set out to deliberately obfuscate any meaningful information being conveyed.

CP6 SOFA Oct 2017/CP7 SOFA
NR Expenditure £47.9b / £44.06b
Network Grant £34.7b / £27.53b
Inflation adjustment 22% therefore after inflation in real terms
NR Expenditure 24.6% cut
Network Grant 45% cut

Network Grant is how much the government gives NR in subsidy (formerly it was given by the Dft via payments to the Tocs who then passed it on to NR but for last few years its been paid direct to NR), NR expenditure is how much NR is allowed to spend in total by charging TOC's access fees to raise further funds and from other commercial revenue, essentially its their credit limit.

Indeed. Big funding cut, and a big increase in access charges (Which for TOCs funded by Government will be a direct pass through).

 

[Bessie]

Do we have any idea how much electrification work this could cover?

 

[mcmad]

Do we have any idea how much electrification work this could cover?

none. This is the ongoing maintenance and renewals funding, enhancements (which covers new electrification) is dealt with separately through the (blocked) pipeline process.

 

[Nicholas Lewis]

none. This is the ongoing maintenance and renewals funding, enhancements (which covers new electrification) is dealt with separately through the (blocked) pipeline process.

A revised RNEP is coming according to Merriman

https://questions-statements.parliament.uk/written-questions/detail/2022-11-15/88002

Following the Autumn Statement on 17 November we are in the process of reviewing the RNEP and will make the outcome public once that work is complete.

Lets see if he manages to issue it as this is the umpteen time a minister has said a revised RNEP is coming over the last three years!!

Harper did say in topical questions last week they needed to work out what they can do with the money they've got given inflationary pressures before it would be updated as well.

 

[Bald Rick]

none. This is the ongoing maintenance and renewals funding, enhancements (which covers new electrification) is dealt with separately through the (blocked) pipeline process.

For clarity, this funding does include enhancements. It will include the electrification of MML and Transpennine. if there’s any more than that, we will have to wait for the RNEP to be published.

The authority for the enhancements is dealt with separately, but the budget is within the SoFA.

misinformed!

 

[GRALISTAIR]

For clarity, this funding does include enhancements. It will include the electrification of MML and Transpennine. if there’s any more than that, we will have to wait for the RNEP to be published.

+ Bolton to Wigan?

 

[Bald Rick]

+ Bolton to Wigan?

That’s mostly CP6, but yes.

 

[GRALISTAIR]

That’s mostly CP6, but yes.

Even better. Fantastic.

 

[WatcherZero]

Its half completed already

 

[snowball]

Its half completed already

Unless you count the fact that there are no wires, no masts and no foundations. Unless some have been put up but not mentioned on here.

 

[WatcherZero]

Pfft, far more to a project than construction.

 

[GRALISTAIR]

Its half completed already

Unless you count the fact that there are no wires, no masts and no foundations. Unless some have been put up but not mentioned on here.

Pfft, far more to a project than construction.

I agree there is more to a project than construction, but I would be grateful if you could expand a bit on what you mean by half completed, please.

 

[HSTEd]

Also considering we’re in a climate crisis you’d have expected a decarbonisation objective front and centre rather than some half hearted mentions tagged on to other objectives!

It's unlikely the railway will play any significant role in transport decarbonisation.

The industry is so dysfunctional that it has botched every major tranche of funding for modernisation it's been given in decades.

If I, as a climate mitigation researcher, was trying to design a decarbonisation focussed transport budget, I wouldn't be giving any significant additional money to the railway.

 

[Class 170101]

It's unlikely the railway will play any significant role in transport decarbonisation.

The industry is so dysfunctional that it has botched every major tranche of funding for modernisation it's been given in decades.

If I, as a climate mitigation researcher, was trying to design a decarbonisation focussed transport budget, I wouldn't be giving any significant additional money to the railway.

Its still going to need to be sorted out though. Diesel will become even more expensive if its not needed for cars anymore such that economies of scale reduce producing, refining etc the stuff.

 

[snowball]

Its still going to need to be sorted out though. Diesel will become even more expensive if its not needed for cars anymore such that economies of scale reduce producing, refining etc the stuff.

I think it will be a while before diesel ceases to be needed for lorries. There seems to be very little in the way of plausible plans for decarbonising HGVs.

 

[WatcherZero]

I agree there is more to a project than construction, but I would be grateful if you could expand a bit on what you mean by half completed, please.

I mean in a project Gantt from initial concept to testing and acceptance we are probably around the halfway point.

 

[GRALISTAIR]

I mean in a project Gantt from initial concept to testing and acceptance we are probably around the halfway point.

Thanks for that. I will still feel happier when the first base goes in.

 

[YorkshireBear]

Yeah definitely a real terms cut to renewals budgets. At least there is plenty of notice of the cut to replan all the workbanks.

 

[Xavi]

Given the current economic climate and 21/22 passenger numbers the SOFA was positive and could have been much worse. Providing inflation falls back to expected levels in 2023, it’s a good outcome, though I don’t anticipate CP7 enhancements (not part of this SoFA) to include anything significant beyond what’s already announced. Smaller schemes delivering best value will be the new norm.

Examples of the type of new enhancements to expect include Manchester Oxford Road (2 through platforms and middle turnback), Basingstoke freight capacity loop, Micheldever turnback and East Devon loop.

 

[mcmad]

For clarity, this funding does include enhancements. It will include the electrification of MML and Transpennine. if there’s any more than that, we will have to wait for the RNEP to be published.

The authority for the enhancements is dealt with separately, but the budget is within the SoFA.

"Funding for enhancements to the network is excluded from this SoFA, as are objectives pertaining to enhancements excluded from the 2022 HLOS."

 

[Bald Rick]

Given the current economic climate and 21/22 passenger numbers the SOFA was positive and could have been much worse.

good summary.

"Funding for enhancements to the network is excluded from this SoFA, as are objectives pertaining to enhancements excluded from the 2022 HLOS."

My apologies, you are quite right.

 

[clc]

When’s the Scottish HLOS due?

 

[mcmad]

When’s the Scottish HLOS due?

not out till mid January now I'm hearing

 

[clc]

not out till mid January now I'm hearing

Thanks.

 

[Class 170101]

Given the current economic climate and 21/22 passenger numbers

But are these the numbers the right numbers to be using? Should they not be more up to date than that?

 

[Xavi]

But are these the numbers the right numbers to be using? Should they not be more up to date than that?

I was considering what we might have expected from a government seeking to cut spending and, since this SoFA does not include enhancements, it’s a hell of a result. There’s ample funding to maintain and renew the existing network.