My understanding of the problem is something like this:
State spending has expanded a lot in recent years, due to a combination of an ageing population,
the Baumol effect, and the triple lock on pensions. We also have less fiscal headroom than we did in the early 2010s due to rising inflation and borrowing costs, plus the Treasury has its own 'fiscal rules' which it insists on sticking to, albeit changing them every now and then. This means there is a desire in government to limit borrowing; how much is warranted by the economic climate and how much is ideology I honestly don't know. But what matters is that this means either spending has to be cut, or taxes have to rise.
It's no secret that this government really doesn't want to raise taxes anymore (the backbenchers would revolt); but they also don't want to cut day-to-day spending on things like health, education, pensions, etc. as people care deeply about this stuff. So capital expenditure is the first place they raid instead, with railways being an obvious target, since most people don't care about the investments being made as the effects are felt far in the future, and besides, only a minority of the public use trains anyway.
And to be clear, targeting capital expenditure in spending cuts isn't a new or exclusively Tory strategy: Alistair Darling did the exact same thing following the Great Recession. Politically it makes sense, but the cost of this short-termism builds up over time, and is probably a factor in explaining why the UK has such poor productivity.