Chancellor's Budget statement - Rail

This from the Chancellor's Budget statement today...

I confirm today that Network Rail will extend the Northern Hub, adding to the electrification of the transpennine rail route, by upgrading the Hope Valley line between Manchester and Sheffield – and improving the Manchester to Preston and Blackpool, and Manchester to Bradford lines.

NR's Northern Hub twitter account, @NetworkRailNH, said:

#NorthernHub has been given £130m in today's Budget for three parts of the project - improving journey times and increasing capacity

And confirmed that the Hope Valley line will be:

Upgraded - extra track and platform at Dore, loop at Dore/Grindleford, capacity at Chinley, also line speeds.

Despite the Chancellor's ambiguous words no mention of electrification.

And, alas, no announcement of wires for the Midland Main Line either.

UPDATE: This from Captain Deltic...

So, @NetworkRailNH, said: #NorthernHub has been given £130m in today's Budget for three parts of the project - improving journey times and increasing capacity

Good grief, if Network Rail doesn't understand how the privatised railway works we really are in trouble.

The Government doesn't 'give' money for NR investment. It authorises NR to borrow the money to pay for the upgrade the value of which is then added to the Regulatory Asset Base where it then earns a return which is added to NR's agreed income determined by the Regulator much of which comes from the Direct Grant paid to NR by DfT.

In other words the Budget committed to paying the interest on the borrowing to fund the extra Northern Hub work on the 'never-never'.

(Shakes head in disbelief and goes back to writing about the last days of Railtrack where there was similar naivete).

UPDATE: This from NR's Internet Rapid(ish) Rebuttal Unit...

Of course we understand how RAB funding of projects works at Network Rail.

What we wanted to do yesterday is amplify the great news about the Northern Hub via Twitter.

Here's a challenge for you (and indeed other Railway Eye readers):

Using 140 characters or fewer, explain RAB funded-projects and permitted rate of return funded by network grant as agreed by the regulator.

DfT abolished as Treasury leads rail expansion

This from Rose and Crown...

Much gloom in Marsham Street as Osborne's finest achieve, in less than week, what numerous Transport Secretaries have failed to deliver in years!

Stand by for confirmation tomorrow of passenger friendly fare increases and a raft of network enhancements that might actually get the economy and country moving again.

No doubt the Treasury bean-counters have tired of DafT's navel gazing, reputation for inertia and over dependence on expensive Consultant's reports?

Caught on the back foot by HMT's whirlwind briefing the beleaguered inmates of Great Minster House were forced into feverish denials before sinking into sullen silence.

Meanwhile, the industry looks forward to welcoming an Autumn Statement that apparently contains trans-Pennine electrification, work to reopen the Varsity route and myriad smaller schemes.

Which begs the question: what is DafT for?

No matter!

Once Marsham Street has been abolished perhaps Gideon can use the money to buy trains for all this newly enhanced infrastructure?

DfT swings the Axe - Official

This from the DfT, explaining where the efficiency savings announced in today's budget will come from:

Today the Department for Transport (DfT) announces that it will deliver £90 million of savings, as its departmental contribution towards £11bn savings that are being made across Government.

DfT will meet this target through a range of activities, including:

• £40m from streamlining back office functions across finance, HR and procurement;
• £30m from reducing spending on consultancies;
• £15m from reducing spending on marketing and communications;
• £5m from the senior civil service pay freeze and reduction in sickness absence for all staff across the department.

In addition to these savings, DfT also expects the Highways Agency to save a further £90m by 2012/2013 as a result of more efficient highways maintenance and renewals through longer-term planning.

As IEP is now a dead duck the £30m savings on 'consultancies' should be easily achievable.

And as for the £15m savings on 'Marketing and Communications' these should already be in the bag.

After all when you keep re-announcing old news all you have to do is change the date at the top of the press release.

UPDATE: This from The Archer...

I've already had too much pre-budget priced red wine to be bothered to work this out so I need your help:

Is the £5m reduction from the pay freeze / new improved healthy staff the same percentage of the overall budget in this department as it is in other departments, health, education, etc...

If not, is transport better than the others or worse?

If the percentage is the same, what kind of fools do they take us for?!?

Do you think the Government is taking us for fools.

Has The Archer had too much wine?

If you're drinking cider do you now give a toss?

Either way let Eye know and when we return from the booze cruise we'll be sure to publish your comments.

Darling announces 200 earlier vehicles - again!

Telegrammed by our man at 222 Marylebone Road
Exciting news from the Chancellor's Pre Budget Report...

Introducing a green stimulus – ensuring part of the fiscal stimulus supports low-carbon growth and jobs by accelerating £535 million of capital spending on energy efficiency, rail transport, and adaptation measures. 76,000 low income households will benefit earlier from better heating and energy efficiency, up to 200 new rail carriages will be delivered earlier and 27,000 homes will benefit sooner from flood defences (cont. p94)

Earlier than what?

And could those 200 carriages refer to to the 202 DMU vehicles announced in similar terms in last year's Pre-Budget Report and subsequently abandoned.

We'd ask DfT if we thought the press office would understand the question.

We'd ask Stephen Hammond to raise it in Parliament, if we thought he would understand the question.

But as we suspect it's a cut and paste job from last year's Pre-Budget Report we'll do nothing but bury our head deep in our hands and weep.

After all does anyone believe a word that the 2009 Pre-Budget Report contains?

UPDATE: This, amazingly, from Hammond's 5th Surgeon...

Has 222 been on the Christmas gin?

The reason why the reference to 200 new vehicles looks like a cut'n'paste from the 2008 PBR is because it is from the 2008 PBR!

Not even this Chancellor would be craven enough to try and get away with the same nonsense twice... surely?

Into the limelight steps Chris Bolt!

Doomed, recession, doomed, budget, God help us all, Darling disaster and it's all the fault of that maniacal son of the manse the OESI!

Enough!

Steady the buffs!

As Darling confirmed today that it really has all gone terribly wrong The Evening Standard picked up the following (with a Bowler tip to Sri Carmichael):

The cuts include £538 million from Network Rail by reducing its grant and cutting the amount spent on operation, maintenance and renewal of infrastructure.

Interesting.

If this is money generously gifted by DafT then of course it is free to slash and burn at will.

BUT if it is part of ORRs regulatory settlement then there may be a small, but intractable problem.

Would the ORR care to clarify?

UPDATE: This just in from the ORR...

With the Chancellor's Red Book clocking in at a whopping 268 pages, some could be excused for not picking up the following roughly half-way through:

'Saving... £538 million from Network Rail as a result of the Office of Rail Regulation setting strict efficiency targets, reducing the grant which the department pays Network Rail, delivering greater value for money from public investment in the operation, maintenance and renewal of rail infrastructure'

We at ORR however know that the devil is in the detail; and reference to our 447-page Periodic Review 2008 determinations will show just how we expect Network Rail to spend less of the UK's cash, while delivering more capacity, greater reliability and an all-round safer railway for your buck.

Goodness me. Surely the Treasury hasn't been caught out recycling old news, yet again!

UPDATE: This from Ithuriel...

But Network Rail's CP4 Delivery Plan, in a scanty 76 pages, makes it equally clear that Iain Coucher and chums are still wondering how they are going to close the whopping gap between what Chris Bolt says the railway ought to cost and what Network Rail's engineers say it is going to cost to provide the railway specified in the HLOS.

The general theme appears to be that something will probably turn up in the form of a big yellow deus ex machina!

After all, bonuses depend on it and ORR believes that bonuses work...