Post CSR, Rail Investment and Wales (updated!)

PS Summary Headline. The CSR has provided, in effect, less than £300M of “new” money for enhancements (not to be confused or conflated with “Operations, Maintenance and Renewals – OMR) to the NR network in Wales (as it includes previously announced schemes like Metro Central and NWML level crossings, etc). The deal for the CVL (which is a fully devolved asset) for enhancements and OMR (which constitute a block grant transfer to WG) is also significantly less than it should be! WG can and probably will top this up with further capital pushing the envelope a little further. Such funding, like the £1Bn WG has committed to the current phase of the South Wales Metro, has to come from WG block grant that does not contain a provision for rail capital investment and has to in effect come from funds intended for devolved matters like Health, Education etc.

The only way to address this persistent funding dysfunction is to fully devolve rail powers and funding. For a full background on all that is “wrong” with the rail industry eco system in Wales (and why HS2s problems are a lot do to with its focus on speed instead of capacity which is far more important!) then see
Chapter 1 of my book
Chapter 13 of my book

A very quick blog to follow up my “pre-CSR” blog and looking through some of the details in “Spending Review 2025” re: UK Government rail enhancement commitments in Wales (I have also added a PS at the end to address a claim the UK Conservative Government committed over £1.1Bn in the 2014-2024 period).

I’ve also made a few updates as at late June/early July as it now seems to me that the funding offered is actually less than I originally thought – and it is also clear that there was (and probably still is) some confusion as to what is “in” and what is “out”?

A number of things stand out for me.

First, yes, lets welcome the efforts of politicians; so, FM Eluned Morgan, SoS Jo Stevens, Cab Sec Ken Skates, Cab Sec Mark Drakeford (and no doubt local MPs like Jessica Morden) and officials at WG, TfW, Wales Office, NR and DfT (again they know who they are!) and congratulate them for securing circa £350M of capital for rail enhancement into Wales in the CSR period to March 2030 and I now understand potentially £95M in the period immediately after .

Despite the confusion and clumsy comms its looks to be over the period to March 2030 (so in effect 4 years from April 2026). At this stage it looks to me (further clarification and confirmation needed) that this money will be directed at:

• The Burns services and stations (I prefer to call them the Metro Impact Study stations!) and does also include the necessary Relief Line upgrade (I estimate all 5 Burns station will cost £300~400M and the Relief Line Upgrade ~£50M) Whether all the stations will get funded, or how they will be phased is still unclear. Furthermore, the status of Cardiff Parkway and associated development will likely be given a boost by this news
  
  
• Cardiff West junction – a tactical at-grade measure to alleviate capacity constraints on the Network Rail asset which directly impacts capacity and efficiency of CVL Metro services ( I estimate £30-40M). I have been “going on” about this for over ten years! (In time and with future NW Corridor Crossrail expansion, we may well need a more significant grade separated intervention here)
  
  
• Padeswood freight siding on the Borderlands (Wrexham-Liverpool). This is essential, long overdue and necessary to support higher frequency services on the Wrexham-Bidston line and eventual integration with Merseyrail services. (I estimate £30-40M)
  
  
• Level crossing removals on the NWML (despite being previoulsy annoucned) – essential to increase capacity, reliability and the introduction of additional services along the North Wales coast. I estimate £30M
  
  
• This is where is starts to get confusing. Like the Relief Lines, Metro Central is included in this figure.
  
• If one adds the estimated £60M for Metro/Cardiff Central and £30M for NWML Level Crossings, then this reduces the available new investment for additional schemes. However, we also need to recognise that the Level Up funding from Crossrail Phase 1 of £50M to 2028 is relevant but does not come from the DfT budget and
  
  
• An allocation (£48M – so £12M pa) to Welsh Government to directly fund further enhancement to the Core Valley Lines (and I hope measures to increase capacity on the Coryton Line to 4tph!). This figure should have been at three or four times more pa, and the separate OMR arrangement which I believe is circa £40M pa at the moment should also be at least double that figure (esp given NR Wales Route OMR is circa £400m pa!).
  
  I would also clearly point out that this figure should not really be included in the PR spin as funding from Uk Gov. The CVL is a fully devolved asset and so the block grant adjustment (which needs to be bigger) should not be viewed as a UK Gov contribution to rail enhancement in Wales!
  
  
• Although nothing on further SWML electrification toward Swansea….and no mention of a “Swansea Metro“?; nor of further north Wales measures, Marches Line, Crossrail Phase 2, etc
  

So, my guestimates for enhancements on the NR asset in Wales (so excluding the CVL) over the CSR period (capital to March 2030 – so 4 years from April 2026), in table form, with item capex and running total (with some rounding up and down!)…..

Enhancement Intervention on NR Asset in Wales	Est Capex	Running Total
5 * Burns Stations (~£70m each)	£350M	£350M
Relief Lines Upgrade	£50M	£400M
Cardiff West Junction	£30M	£430M
Padeswood Sidings	£30M	£460M
NWML Level Crossings	£30M	£490M
Metro Central contribution	£80M	£570M

So, all the above might need £570M….Vs a core commitment in CSR period (ignoring the CVL) of £300M (tbc see below!) so it does not all fit, albeit some of the “Burns stations” could be completed post the CSR period and draw from the other £95M hinted at?

PS July – Noting that NWML level crossing, Metro Central were already announced, it looks like only circa £210M of new money in the CSR period for all non CVL rail enhancement in Wales!

PS This list is also a long way short of the £4Bn rail enhancement schemes in Wales I set out to 2040 in my pre CSR blog

The relevant sections from the CSR publication…..

Then, looking across the CSR to March 2030 one can also see the commitments to rail enhancements in England. There are a total of over £34Bn of enhancements, with the bulk, £25Bn, to HS2. Remember, Wales (see above) gets just circa £300M for enhancements to the NR asset over the same period. (UK Gov also committed over £500m to the Lower Thames Crossing! which will likely cost circa £10Bn to complete- more roads! – this is important as road funding in England comes out of the same DfT pot as rail infrastructure in Wales whilst rail remains non-devolved in Wales)

This leads to some questions. Why, given there are over £3Bn of rail enhancement schemes in Wales subject to ongoing business case development, was so little allocated to Wales relative to England; 100 times more in England vs a more population appropriate population based 20 times?

I would also observe that it is TfW that is the organisation that should lead on delivering this £500~600M programme and not NRs Western and Wales Region (yes the latter can support/help – esp some of the key track components for which they are responsible). TfW have teams and supply chains in place already delivering £100M+ pa of rail projects. NR would have to build entirely new teams and supply chains from scratch, whilst TfW would lose its capacity, capability and importantly all the tacit knowledge it has built up over the last few years! That would be pretty daft and poor use of public money would it not! In fact, give the now very good working relationship between TfW and NR in the Wales Route then a GBR Cymru working hand in hand with TfW would seem a good arrangement.

Who is the thinking controlling mind in Wales re rail…..?

We also need to recognise that all transport policy in Wales is set out by Welsh Government, regions and local authorities; having the UK control decision making re the NR asset in Wales “does not work” in delivery of that policy. We also don’t want to wait to see if Welsh schemes are included the future “industry strategic plan” mentioned. In Wales TfW have been developing a range of rail schemes across Wales (as I set out in the other CSR blog) and have a prioritised assessment in development via the Wales Rail Board – publish that?

As I stated in my “pre-CSR blog” and in my letter to UK Transport SoS Heidi Alexander there will likely be well over £80Bn of rail enhancements in England to 2040 (finishing HS2 probably in the mid/late 2030s, ongoing TRU, East West rail, etc). Wales should be securing a 5% and complementary investment, so circa £4Bn+ to 2040 or roughly a minimum of £250M pa. The Network North Wales Vision and Swansea Metro, let alone a full Cardiff Crossrail and Marches Line Upgrade will need to see funding capacity shift up a gear if we want to see them all delivered in the next fifteen years!

So yes, pleased with the funding commitments. But this clearly is the high-water mark for Wales re: UK Government rail enhancement investment. We have the same party in power at the Senedd and Westminster, much news and PR about the rail underfunding issues and a Senedd election next year. Yet still Wales seems grossly underfunded compared to the rest of the UK.

In fact, the conservatives actually invested about £700~800M (not £1Bn I explain why below!) in the period 2015-2024 (mainly for GWEP in Wales and DfT’s small contribution to the South Wales Metro); a little less pa than this £500m over five years. Both less than the figure Wales actually needs.

PS – please can we drop the apologetics and obfuscation that somehow suggests Wales would only be due circa £400M from a likely £60-70Bn HS2 project in England – it’s embarrassing. See this Barnet formula explainer! In short if rail was fully and properly devolved then the necessary block grant adjustment would facilitate extra funding to WG. Worth restating again the DfT comparability factor for Wales is only 33% (see latest statement of funding policy for devolved nations) so Wales only gets a third of a 5% share in terms of DfT Barnett changes (and to note I believe -tbc- DfT budget overall is reduced a little there are no Barnett DfT allocations at all (remember these are typically calculated at a department level – not project level! hence the importance re: funding of a fully devolved settlement)

We also have to ask what happens in 2029, with the risk of a very different government at Westminster who could pull the little funding we have. What does Wales do then…the current mechanism is no way to proceed. For all the reasons I set out in my book change is essential

More strategically from a UK perspective, is it right that the nations and regions have to engage in a bun fight with the Treasury in London, accompanied by no small measure of pork barrel politics, to secure funding for essential economic infrastructure (especially outside London). This is the real issue and one which I assert seriously impacts the UK economy.

Surely it is abundantly clear that the UK is too centralised, and that the regions of England as well as Scotland and Wales need to be empowered fiscally to majority fund and deliver their own economic infrastructure – including rail. A degree of fiscal innovation is also needed with perhaps Versement type local taxation as I suggested here.

For Wales, I am even more persuaded that nothing less than full devolution of rail and an appropriate block grant adjustment is now essential. I restate that case in my response to the GB Railways Bill published in November 2025

Given out of the DfT annual budget of ~£37Bn NR costs are ~£16Bn pa and HS2 ~£7Bn pa (so a total ~£23Bn), then if fully devolved, this should trigger a block grant adjustment to Wales of circa £1.1Bn pa, and leave the DfT Barnett comparability factor for Wales back at a healthy 90+% (like Scotland and Northern Ireland )

(and as a bare minimum we need, asap, to see some of permanent formal block grant adjustment (unlike the current arrangement) to enable WG/TfW to fund maintenance/enhancements on the CVL, which is “devolved”, noting NR has a 5-year settlement of ~£2Bn for OMR on the Wales Route in CP7 2024-2029 os ~£400m pa)).

In so doing, can we also establish a UK wide and equitable “insurance process” for dealing with historic liabilities in economic infrastructure and climate change mitigation interventions – such measures should not be conflated with rail enhancement investment.

This is what a sensible union of countries and regions would do?

PS Did the Conservative UK Government invest more in Rail Enhancements in Wales in an earlier 10-year period from 2014-24? Answer – No (but it wasn’t that far off!)

I’d like to add a quick response to claims that the UK Conservative Government contributed circa £1.1Bn to enhance Wales’s rail infrastructure in the 2014-2024 period (so CP5 and CP6) based on the Welsh Government (WG) analysis published in 2020. I actually helped prepare that analysis so can add some “context”.

Yes , no doubt the UK Government did fund the electrification of the Great Western Mainline (GWML) and the South Wales Main line (SWML) to Cardiff (not to Swansea though!) and have made a contribution to the South Wales Metro. On the face of it then, the claim looks robust especially given the figures presented in the WG analysis.

However, one should be minded that the analysis was presented to show the most favourable interpretation of UK Government rail enhancement investment in Wales. This was intended to provide a solid and defendable baseline that could be robustly defended when making the case for the funding gap and mitigation thereof.

Most relevant is that the WG analysis were for enhancements to the NR “Wales Route”, which extends beyond the border. For example, the SWML electrification included ALL costs for the wiring of the Severn Tunnel and the section from Pilning (which makes up a large proportion of the £750M figure quoted). Given benefits fall both sides of the border then a smaller figure would be appropriate to use in terms of UK rail enhancement investment in Wales from that programme. There is also an allocation in CP6 for Metro Central in that analysis – this investment now falls into CP7.

So yes, the figure quoted is broadly correct but given these observations a more realistic figure for that 10-yr period is probably circa £700-800M; not £1.1Bn. This compares to what I understand now to be circa £450M over five years (yes this is still a little unclear) from the CSR.

However, it should also be clearly stated, and this is perhaps a more fundamental issue, that the bulk of the cost of the South Wales Metro, probably now approaching £1Bn of the circa £1.3Bn total, falls to Welsh Government. The DfT picked up circa £190M and European funding circa another £130M. The DfT funding for the Metro was agreed and pre-dates the city deal. The additional city deal funding was directed at a whole range of projects most non-transport. Worth stating (see section in my book!) that the city deal funding was wrapped around the Metro.

The fundamental point here is that WG have had to find nearly £1Bn out of a block grant that did not, and still does not, include any provision for rail capital funding – so has to come from funds “intended” for devolved matters like Health, Education – a double whammy re WG finances. So, the claim of £1.1Bn – which I think is more like £700~800M should be amended down significantly because of this constitutional funding dysfunction.

And to be clear, this South Wales Metro project is only happening because of Welsh Government AND devolution, the UK Government were never keen and were dragged into it reluctantly by Welsh Government (again see my book!)

All the above further strengthens the case for fully and properly devolving rail and making the appropriate and substantive block grant adjustment more pressing. We should not have to engage in a Westminster bun fight to fund our transport infrastructure. I think the same applies to the regions of England. Whilst the whole CSR thing is great for “watchers” it’s no way to run a country especially re: capital investment in essential economic infrastructure (esp. outside London!). This is a constitutional and economic issue, not a political one … ok it is political!

That 2020 WG analysis could probably do with an update to reflect the above!