Northern Powerhouse Rail: Considerable uncertainty still clouds project, PAC warns
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- Echoes of the same failures seen in HS2's governance provoke
particular concern - Public Accounts Committee report questions how
NPR will be delivered to budget It remains unclear how
government's ambitions for Northern Powerhouse Rail (NPR) will
translate into the promised benefits for the North. In a new
report, the Public Accounts Committee (PAC) warns that it is not
confident that the Department for Transport (DfT) has learned all
the lessons from its past...Request free
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- Echoes of the same failures seen in HS2's governance provoke particular concern - Public Accounts Committee report questions how NPR will be delivered to budget
It remains unclear how government's ambitions for Northern Powerhouse Rail (NPR) will translate into the promised benefits for the North. In a new report, the Public Accounts Committee (PAC) warns that it is not confident that the Department for Transport (DfT) has learned all the lessons from its past failures in its management of other rail projects, with clear risks that the full programme and benefits cannot be delivered within its £45bn funding cap. It has long been acknowledged that poor transport connections between cities in the North stifle productivity and limit opportunities for workers and businesses but despite more than 12 years of planning, NPR remains at an early stage. The PAC's report illustrates the considerable uncertainty still clouding the project, with journey times, frequency, capacity, the exact route of the new line, who will build these new lines, and how investment in urban and industrial regeneration will be prioritised, all not yet determined. The report calls on the DfT to set out how it will keep Parliament updated throughout the programme. The report highlights echoes of similar failures seen in the troubled HS2 programme, that risk being replicated on NPR. For instance, DfT lacks formal governance arrangements for joint decision-making with other Departments, and the PAC is further concerned that the system for working with local government will prove insufficient when it must make the difficult trade-offs that affect different areas disproportionately. For example, without the injection of sufficient local funds, an enhanced scope to increase local benefits in Manchester could be at the expense of benefits in another local area. This is particularly worrying as it was the lack of robust governance in the early stages of HS2 which led to all the problems from which it has still not recovered so far. The PAC further questioned why the DfT had appointed HS2 Ltd. to develop plans for the line from Liverpool to Manchester, given its track record of poor cost estimation. The report calls on government to explain how it will make sure HS2 Ltd's plans and cost estimates for phase 2 are realistic. The PAC considers HS2 Ltd.'s involvement heightens the serious risk posed to the final phase of NPR (needed for the full connectivity and benefits) if DfT cannot scope NPR within its £45bn funding cap, or if early cost estimates prove unrealistic. The PAC's inquiry found that the DfT had no convincing plan for managing spending or prioritising benefits to remain within the cap of £45bn, and is further concerned that areas less able to self-fund or attract private investment will be left behind. This cap was also determined before the entire project was designed, scoped and costed, making it unclear how HM Treasury arrived at the £45bn cap. DfT must now set out how it will manage its spending within this £45bn envelope, and the Treasury must similarly explain how the funding cap was determined. Clive Betts MP, Deputy Chair of the Public Accounts Committee, said: The government's growth strategy earlier this year signalled that there is still an appetite to finally deliver the transport infrastructure the North so badly needs. But the spectre of HS2 hangs over Northern Powerhouse Rail. Our Committee has heard troubling echoes of the same mistakes in loose governance that HS2 made early on, and so much of the project remains almost impressionistic, twelve years on. HS2 have even been brought on board to develop NPR's own plans. As HS2 has been a casebook example of how not to run a major project, so their involvement in NPR does not fill us with confidence. Both the Treasury and DfT have questions to answer about the project's £45bn funding cap. Given the fact that this project has not been fully scoped or designed, it is hard to see how the government was able to arrive at a hard £45bn cap. We have therefore written to the acting accounting officer asking that question. We need to know how this figure was arrived at and how DfT will keep to it. Capping a project's funding before it was even designed or costed feels like putting a roof on a house before the foundations are even laid. We also need to understand how mayoral authorities will have enough scrutiny for this project to be delivered successfully. Northern towns and cities desperately need better connectivity, and the growth that it will provide; what they and this Committee need right now, is a clear and deliverable plan to achieve that. PAC report conclusions and recommendations It is still not clear how the government's renewed ambition for Northern Powerhouse Rail will translate into the promised benefits for the North. Poor transport connections between cities in the north of England stifle productivity and limit opportunities for workers and businesses. The government announced Northern Powerhouse Rail in 2014 to address these problems, but successive governments have changed its scope several times, slowing progress. We welcome the clarity provided in the government's January 2026 Northern Growth Strategy, which sets out the programme's high-level scope and timings and sets the expectation it will enable wider economic benefits alongside the transport improvements. However, considerable uncertainty remains. For example, the Department is yet to take key decisions such as the exact route of the new line and who will build the new lines. To succeed in the long run, the Department will need to ensure its Northern Powerhouse Rail plan remains aligned with the government's Northern Growth Strategy priorities. Recommendation 1.
There is a clear risk that the Department will not be able to manage the programme within its £45 billion funding cap. HM Treasury has set a £45 billion funding cap for the programme. This may help affordability, but we are unclear how HM Treasury determined the cap before the entire project is designed, scoped and costed. The final phase of Northern Powerhouse Rail needed for the full connectivity and benefits is at risk if the Department cannot scope the programme within the cap or if early cost estimates prove unrealistic. This serious risk is heightened by High Speed Two Limited's (HS2 Ltd's) responsibility for producing some of the cost estimates and the Department's poor record on rail infrastructure costs and cost estimation. Yet the Department has no convincing plan for managing spending or prioritising benefits to remain within the cap. It also lacks a comprehensive approach to supporting local funding contributions and revenue-raising where local areas seek additional local benefits. We are concerned that areas less able to self-fund or attract private investment will be left behind and that the Department has not properly explored elements such as land value capture. Recommendation 2.
The Department has not yet put in place appropriate governance arrangements with other central government departments. Northern Powerhouse Rail requires input from and coordination with other central government departments like HM Treasury and the Ministry of Housing, Communities and Local Government (MHCLG) to ensure it enables the wider economic benefits intended for the North, such as urban regeneration and industrial growth. However, no formal governance is in place to bring the relevant central government departments together on joint decision-making. In 2025, the government announced changes to how it manages mega-projects to help remove obstacles to delivery for its largest and most complex projects. Northern Powerhouse Rail has all but one of the characteristics of a mega-project based on the Office of Value for Money's definition, but the government is not yet treating it as one. Whether it is formally a mega-project or not, the Department must ensure governance is as clear and effective as possible. Recommendation 3.
The Department's arrangements for working with local government do not appear sufficient to manage the trade-offs it will need to make on funding and scope. The Department has agreements in place with individual local areas and is working with local leaders in sub-regional groups to develop plans, build consensus and provide transparency on trade-offs and decisions. These groups do not make decisions on the programme, but they can make recommendations to Ministers. While HM Treasury is confident the arrangements are working well currently, we are concerned the system will not hold when it needs to make difficult trade-off decisions on scope and funding that affect different local areas disproportionately. For example, without the injection of sufficient local funds, an enhanced scope to increase local benefits in Manchester could be at the expense of benefits in another local area. Much appears to be resting on the Northern Growth Envoy's ability to mediate between local areas and central government, but this is a new and untested role. Recommendation 4. The Department should set out the principles by which it will work with local government and confirm by when it will update us on the arrangements in place. The Department has not yet set out how Northern Powerhouse Rail will work alongside national and local transport plans and priorities.The government intends for Northern Powerhouse Rail to support future work to improve north-south connections on the West Coast Main Line into Manchester. We have previously heard this line will reach capacity by the 2030s, but the Department does not expect the relevant phase of Northern Powerhouse Rail to be complete until the mid-2040s. It is not clear how the Department plans to bridge this gap between the capacity requirements and the programme timelines. The Department must also ensure that local transport plans are well integrated across the Northern Powerhouse Rail route as a whole this will be key to a successful transport system for passengers. The Department is working individually with local areas to ensure Northern Powerhouse Rail joins up with local plans, but it is not clear how the Department is ensuring coherence across the whole route. Recommendation 5. The Department should clarify:
We are not convinced that the Department has embedded all lessons from past failures into its management of the programme. We recognise that the Department has adapted its approach to Northern Powerhouse Rail in response to lessons from High Speed Two (HS2) and other major rail programmes. It is also learning from the success of programmes like the Transpennine Route Upgrade. However, the Government Internal Audit Agency found that there is more work for the Department to do to embed lessons consistently across all its teams and programmes. The Northern Powerhouse Rail programme will span decades and cost tens of billions, so it is key that the lessons are embedded now and into the future. We also fear Northern Powerhouse Rail may face cost pressures from planning and biodiversity requirements it is not clear how the government's recent planning reforms will enable the Department to avoid the expensive measures needed on other projects, such as HS2's costly bat tunnel. Recommendation 6. Within six months, the Department should set out:
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