UK road and rail projects facing cancellation in bid to fill ?20bn budget ‘black hole’

A number of infrastructure projects, including road and rail, have been cancelled by Chancellor Rachel Reeves in a bid to shore up the nation’s finances.

In a speech to parliament, Reeves called out the previous Conservative government for leaving a GBP20bn “black hole” in Britain’s finances and said that difficult decisions had to be made in a bid to stabilise the UK’s financial position.

She said the projects needed to be cut because “the previous government refused to publicly cancel [them] despite knowing full well they were unaffordable”.

The proposed Stonehenge road tunnel is one of the most significant infrastructure projects that found itself on the chopping block yesterday. The GBP1.7bn tunnel would have removed the view of road traffic for tourists visiting the ancient heritage site and made general improvements to the nearby landscape. It was first proposed in 2013 and received planning permission in 2020 after approval from Rishi Sunak, who was Chancellor at the time.

But cancellation of the project will be welcomed by campaigners who had launched various legal challenges since its approval because of concerns that the government had failed to consider alternative schemes.

Last year, Unesco also warned that Stonehenge could lose its status as a World Heritage Site if the tunnel went ahead without amendments to the original plan.

The GBP320m Arundel bypass on the A27 was also scrapped – a project that National Highways had previously said would reduce congestion and increase road capacity and safety.

The Conservative government had already put the project on hold until next year.

The RAC motoring group’s head of policy, Simon Williams, said: “These budget cuts have created more questions than answers about exactly when we’ll start to see the government improve the condition of Britain’s broken roads.”

With regards to rail, Reeves announced the cancellation of the GBP500m Restoring Your Railway Fund – originally announced in 2020 as a way to start restoring rail lines and stations that had originally been shuttered in the 1960s and 1970s after the publication of the infamous Beeching report.

She said the fund had not been costed, and that the decision will save GBP76m next year alone. However, individual Restoring Your Railway projects will be reconsidered through a review by the transport secretary.

While not part of the initial swathe of cancellations, the final section of HS2 – which will bring the line into the Euston terminal – is also understood to be under threat. The proposal would see HS2 end at Old Oak Common in west London rather than run to Euston – considerably extending the journey for many Londoners.

Reports originally emerged in 2023 that the previous government was considering cancelling the final section[1] of the line because of the impact of soaring inflation on the project.

Scrapping the Euston link would save at least GBP4.8bn, estimates suggest.

Rishi Sunak had reportedly already made up his mind to cancel the link, although nothing was announced before the Conservatives lost the general election earlier this month.

While nothing has been confirmed yet, Cabinet Office minister Pat McFadden said the HS2 route would be re-examined as part of the money-saving exercise.

“We have inherited a very difficult situation on HS2,” he said. “The previous government chopped it bit by bit so we are left with the bit that we have got left.

We will have to examine that like all the other projects.”

References

1. ^ considering cancelling the final section (eandt.theiet.org)