Improving rail links between cities in the north and midlands should be the first priority of a new approach to end stop-start investments and help level-up the UK as part of a wider economic strategy, according to a major new report by the National Infrastructure Commission (NIC).

However, the report has raised fears amongst regional industry leaders that suggestions of stalling HS2’s eastern leg between Birmingham and Leeds must not become a divide and conquer battle between the north and midlands on infrastructure investment that could cause “irreparable economic damage to communities across the region.”

The NIC was asked by the prime minister in February 2020 to undertake an assessment of proposed major rail schemes to help inform the government’s Integrated Rail Plan. The commission’s report highlights the strategic case for major rail investment across the north and midlands, and the need for the government’s forthcoming plan to set out a rolling programme of affordable investments.   

The report presents a detailed analysis of how different sets of schemes currently proposed within the north and midlands – including Northern Powerhouse Rail between Liverpool and Hull, the Midlands Engine Rail programme, and HS2 phase 2b linking Birmingham to Manchester via Crewe, and to Leeds via the East Midlands – might be sequenced and prioritised.  

Since rail performs most cost effectively when providing high capacity transport into and between large population centres, the commission’s analysis suggests that initially prioritising links between nearby cities is likely to achieve greater economic benefits more quickly for the midlands and the north than alternative schemes, based on their current state of development. 

The commission stresses that while higher local economic benefits are likely to be delivered by initially prioritising regional links, this does not rule out the further development of options to complete the HS2 Phase 2 eastern leg.  

The report says that, while it is for government to decide the appropriate level of spending on rail investments, the significant increase in the cost of many rail schemes since the National Infrastructure Assessment was published two years ago means that £86bn now only provides enough funding for upgrades and some new lines, which the commission believes is unlikely to meet the strategic objective of levelling-up in the north and the midlands. 

The commission advises that, as part of an adaptive approach, government could sensibly begin by committing to a core set of programmes. It notes that some elements of the major rail projects proposed for the midlands and the north, including the Transpennine Route Upgrade, Midland Main Line electrification and some Midlands Engine Rail schemes, present opportunities for earlier delivery as work is underway already, or because they are independent of other major schemes.  

The report notes that major changes in economic geography are unlikely to happen without improvements to rail, but that transport cannot deliver this alone. The commission therefore recommends that the government’s Integrated Rail Plan should form part of a wider approach developed with relevant local authorities to include housing, urban transport and skills. 

The commission also stresses that given the time it currently takes to bring new railway lines into service, government must consider ways of accelerating benefits to passengers in the north and midlands, including rolling stock upgrades and giving city leaders the long term funding to develop strategies for improving urban transport, which can bring benefits faster than major intercity rail.   

Sir John Armitt, chair of the National Infrastructure Commission, said: “Major rail schemes will be an important component in levelling up the country’s economic geography, but we should ensure public money is carefully spent where it can make the most difference. 

“The number and scale of rail schemes currently being proposed for the north and midlands mean that some form of prioritisation will be necessary, and we think there are ways of bringing forward benefits for communities and businesses while keeping options open for additional investments if the circumstances are right. 

“Our independent analysis offers government various ways of targeting spending depending on the precise economic and social outcomes it wants to achieve.” 

However, Maria Machancoses, director of sub-regional transport body Midlands Connect, said: “Some of the options in this report are very concerning. Sacrificing parts of the high speed network now would short-change millions of people across the midlands and undermine our efforts to deliver a transport network fit for the 21st century.

“HS2 must be delivered in its entirety, including its eastern leg from Birmingham to Leeds, alongside Midlands Engine Rail. To stall, scale down or delay now will cause irreparable economic damage to communities across the region – especially the east midlands, which has suffered from a chronic underinvestment in infrastructure for decades.

“It’s important that government follows the evidence and advice of its industry experts and rejects calls to alter HS2’s route or remit. As it did in the Oakervee Review, we are confident that government will follow the evidence and liaise with leaders in the midlands and the north to reject these unneccessary distractions and promote progress. Let me be clear, HS2 must be fully integrated with Midlands Engine Rail. We must stop this divide and conquer approach to infrastructure investment.”

Darren Caplan, chief executive of the Railway Industry Association (RIA), welcomed the NIC report, but also stressed that HS2 should be delivered in full. He said: “The Railway Industry Association welcomes this analysis, which particularly recognises the need for visibility and ending boom and bust profiles of work for rail suppliers, so they are best equipped to deliver effectively and efficiently.

“It is vital we deliver HS2, TransPennine Route Upgrade, Northern Powerhouse Rail and Midlands Engine Rail in full, whilst also delivering decarbonisation and digitalisation across the region’s rail network. If the government truly wishes to build back better it should make rail a key part of the UK’s economic recovery and not make the midlands and north choose between crucial schemes.”

Click here to download the NIC Rail Needs Assessment for the Midlands and the North: Final Report.