Welsh Government spends £160m on railway line it’s not responsible for
THE Welsh Government has invested £160m upgrading a South Wales railway which is an investment responsibility of the UK Government.
Since 2008, it has spent what is a huge sum improving the Ebbw Vale Line, where new trains have just been pressed into service.
While the rail line is a responsibility of the UK Government, it failed to prioritise the line for improvement across numerous Network Rail fiveyear rail capital spending periods.
The lack of investment in the Welsh rail network – where only the core Valley Lines are devolved – is highlighted by the fact that it receives less than 2% in rail enhancement project spending, despite having around 10% of the total UK rail network.
The Ebbw Vale line, which runs for around 13 miles, was brought back into operation by the UK Government in 2008, having being in disuse for 40 years.
Funded by the Welsh Government, a new station at Pye Corner in Newport opened in 2014, serving passengers at the southern end of the network.
A year later 1.5 miles of new track were laid to extend the railway from Ebbw Vale Parkway to a brand-new station, Ebbw Vale Town.
The funding on the line has seen £90m directly from the Welsh Government, alongside a further £70m for further rail enhancement investment in the form of a non-interestbearing loan it provided Blaenau Gwent council in 2021. The loan is repayable over 50 years.
The council should not be liable for capital repayments, which are forecast to be met by revenues generated from new rail services.
The only contribution from the UK Government has been required signalling upgrading at the south end of the line at a cost of £17m.
So in total, the Welsh Government’s funding contribution comes in at £160m, money which could have been spent in areas of devolved responsibilities such as education and health.
The Welsh Government has said its required intervention highlights that Wales needs a fair funding deal on rail investment.
It said: “This again demonstrates the need for the full devolution of rail infrastructure aligned with a fair funding settlement from the UK Government.”
Not having rail infrastructure devolved has meant that Wales has been powerless, despite persistent calls from all the political parties in Wales for a reclassification of HS2 as an England-only project from the current England-and-Wales status, to prevent Wales losing out on a huge Barnett consequential.
Through the Barnett Formula, the
Welsh Government used to receive a transfer from changes to the budget of the Department of Transport (DfT) based on a comparability factor of around 90% – against a 5% UK population share calculation.
That transfer was based on any change to the DfT budget.
The comparability factor was high because non-devolved items were a very small part of its budget and Network Rail spending was not included.
However, with HS2 and Network Rail spending now included, and a much larger proportion of the DfT’s budget, the comparability factor for Wales has fallen to around 34%.
That squeeze doesn’t impact Scotland and Northern Ireland.
Even with HS2 now only going as far as Birmingham from London, the loss to Wales – if it continues to be classified as an England-and-Wales project – is still around £2bn, as opposed to estimates of around £5bn if it had reached the north of England.
While it would be a matter for the Welsh Government on where it spent any HS2 consequential, it most likely would have been used to fund not just the Ebbw Vale upgrade, but other much-needed rail enhancement projects across Wales.
However, if like the Scottish Government, the Welsh Government had taken up the offer of rail devolution back in 2005, most of the prevailing angst over rail underinvestment could have been avoided.
The upgrade of the Ebbw Vale Line, which includes a new sevenmile passing loop between Crosskeys and Aberbeeg, has now allowed Transport for Wales to run two trains per hour – one to Cardiff and a new direct service to Newport Station.
The Welsh Government’s at-arm’slength transport body, which operates services on the Wales and Borders network, has also introduced new Class 197 trains on the Ebbw Vale Line.
Built in Newport at the train-making factory of Spanish firm CAF, the Class 197 trains have started to enter service on mainline routes around Wales and the Borders.
They will be able to run up to a maximum of four carriages on the Ebbw Vale line.
Ken Skates, Cabinet Secretary for North Wales and Transport, said: “This is great news. These trains are modern and comfortable and provide a much-improved experience for passengers.
“This is another positive step for rail services in Wales.”
The trains are part of an £800m investment in new rolling stock funded by the Welsh Government, replacing trains that are aged between 30 and 40 years old.
Marie Daly, chief customer and culture officer at Transport for Wales, said: “Earlier this year we were able to launch brand new services to Newport from Ebbw Vale thanks to a £70m public investment in the stations, track and signalling, and these new trains are the next important step to help boost the economy and to encourage people to make more sustainable journeys.
“I’m delighted that our Ebbw Vale customers will be benefiting from our brand-new trains. The trains are comfortable, and offer greater capacity for our customers.”
There will be 77 Class 197 trains operating throughout Wales and along its border routes, forming the backbone of the mainline fleet.
Transport for Wales said with the transition ongoing, customers may still see some of the older trains in operation. However, these will gradually be phased out over the coming years.
The Class 197s will start operating to Pembroke Dock later this year and on the Cambrian line in 2025.