UK: The government needs to align the East West Rail project and housing development plans to maximise the economic benefits of the future railway, according to a report from the National Audit Office.
NAO says the Oxford to Cambridge railway reopening and construction project represents a £6bn to £7bn investment to support growth in an region of national economic importance, but it is not yet clear how the benefits will be achieved or how it aligns with other government aims.
The public spending watchdog’s report published on December 13 examines the evolving context for East West Rail, arrangements for project delivery and the Department for Transport’s assessment of costs and benefits. It does not look at value for money or progress with construction.
Changing context
The railway is intended to make the region more attractive to businesses and support the develop of new housing. However, the government has changed towards a more locally-led approach to housing development in the corridor, and NAO says this risks DfT and Department for Levelling Up, Housing & Communities policies being at cross-purposes.
The changes to housing plans mean that the benefit:cost estimates have fallen to between 30p and 60p of benefits for every £1 spent on the Bletchley – Bedford – Cambridge sections, known as Connection Stages 2 and 3. However, NAO notes that it is common for transport projects to achieve low benefit:cost ratios under the Green Book appraisal guidance issued by HM Treasury. Such assessments do not quantify the wider economic benefits, and DfT has concluded that there is a strong strategic case for the railway because of its role in overcoming constraints to economic growth in the Oxford – Cambridge region.
‘The rationale for East West Rail rests on its wider strategic aims of increasing economic growth in the Oxford to Cambridge region’, said NAO head Gareth Davies. To maximise these benefits, ‘government must ensure stronger strategic alignment between departments and with wider local growth initiatives, so that there is a shared, coherent vision for the future of the region, and the contribution that the East West Rail project will make’.
HM Treasury has established a cross-government board to develop a shared vision for growth associated with the project, while project promoter EWR Co is co-ordinating activity with local authorities, universities, local enterprise partnerships and sub-national body England’s Economic Heartland to identify growth opportunities.
Electrification
DfT has not yet decided how to power EWR trains, despite the ambition to remove diesel-only trains from the rail network by 2040.
The estimated £5·7bn to £6·6bn cost of the project does not include electrification, which could add a further £1bn.
DfT and EWR Co are currently considering non-diesel options for the line, including partial electrification, with further details to be announced in 2024.
Consultation
Most of the recommendations in the report are for the government to address, although NAO says some local residents have been unhappy about their engagement with EWR Co.
NAO says the project promoter should continue to revisit its approach to ensure the needs of all stakeholders are met, particularly those whose homes and businesses are affected.
Responses
EWR Co told Rail Business UK that the NAO report confirms that the case for the project ‘rests on the economic benefits that a new railway brings in terms of new businesses, jobs and investment, rather than just improved connectivity alone’, and ‘not all of these benefits are captured in the conventional benefit-cost ratio’.
A government spokesperson said ’as the NAO report recognises, the region’s huge economic potential is an important factor in the business case for East West Rail, and we will continue to work closely across government to ensure the full benefits of the rail investment are realised’.
In a joint statement, Chair of England’s Economic Heartland Cllr Liz Leffman and Chair of the East West Main Line Partnership Cllr Steven Broadbent said the remit of the NAO report meant ‘it doesn’t capture the way businesses, universities, communities and local authorities in the region have – and continue to – champion the case for a railway between Oxford and Cambridge over several decades.’
They said joint working between central government and local bodies is essential ‘to successfully balance two key priorities: unlocking locations for sustainable growth while ensuring our existing communities and businesses continue to flourish.’
They added ‘if an appraisal process is unable to adequately capture the benefits of a project which links three of the UK’s most dynamic and fast growing cities, in a region world-renowned for expertise in science and technology, where there is already significant levels of housing growth, but where poor east-west connectivity is clearly limiting its economic potential – then perhaps it is the process, rather than the project, that the NAO needs to be investigating.’
They said ‘speak to businesses big and small along the line – and the global companies thinking of investing here – and their message is quite simple: East West Rail just makes sense, get it built.’
