Redirecting HS2 funds creates new work opportunities

Rishi Sunak’s decision to scrap the northern leg of HS2 and divert the savings to other transport projects in the North and Midlands should give a welcome boost to civil engineering workloads in the regions.

Under its Network North initiative, the Government has pledged to devote the £36 billion saved from HS2, to fund ‘hundreds’ of smaller rail, roads, and bus projects to unlock growth in urban and rural areas. Meanwhile, an additional £12 billion has been allocated to deliver faster transport links between Liverpool and Manchester.

Glenigan customers can see all details on the myriad schemes due to be progressed under Network North on Glenigan Project ID:23317633.

The redirection should reinforce the already-improving prospects for civils contractors. The October Glenigan Construction Review shows that thanks to the go-ahead for some major projects, the value of detailed civil engineering planning approvals doubled in July-September compared to the previous three months and stood six times higher than the period a year ago.

Underlying detailed civils planning approvals (for projects under £100 million) were up 15 per cent on the previous year but were still down on a year ago. But the diversion of HS2 funds to areas such as ‘billions’ on fixing potholes and smaller transport schemes could now hasten a revival of smaller and medium-sized civils projects.

Even before news on Network North, the latest Glenigan Construction Industry Forecast 2023-25 was predicting that the value of underlying civils project starts will rise by 11% next year and increase slightly in 2025.

Billions for rail in the North

Improving rail connections will be at the core of the Government’s plan, with new schemes set to get underway sooner thanks to a reinvestment of some £19.8 billion in the North of England.

The projects will include a new £2 billion station at Bradford and a new connection to Manchester; £2.5 billion to deliver a new mass transit system in West Yorkshire and £3 billion for upgrades and electrified lines between Manchester and Sheffield, Sheffield and Leeds, Sheffield and Hull, and Hull-Leeds (Project ID: 14234320).

Meanwhile, nearly £4 billion in additional funding will be made available for local transport in the North’s six city regions; Greater Manchester, Liverpool City Region, North East, Sheffield City Region, Tees Valley and West Yorkshire. Elsewhere, a new £2.5 billion fund will be diverted to local transport across the North in smaller towns, cities and across the countryside.

Smaller civils contractors should also benefit from a new £3.3 billion fund for road resurfacing and what the Government describes as ‘landmark investments’ in roads, reopened train lines and new stations.

Reinvestment in the Midlands

Civils contractors working in the Midlands stand to gain from the £9.6 billion earmarked for reinvestment in the region. The Midlands Rail Hub is to be funded in full with £1.75 billion for a project to connect 50 stations, double capacity, and improve east-west rail links, particularly between Leicester, Nottingham, Coventry, Derby, Hereford and Worcester (Project ID: 21480349).

Over £1.5 billion of local transport funding is to be made available for the new East Midlands Mayor (which covers local authorities in Derby, Derbyshire, Nottingham, and Nottinghamshire) and over £1 billion for extra local transport funding for the West Midlands City Region (covering local authorities in Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall, and Wolverhampton).

A new £2.2 billion fund will be spent on local transport across smaller cities and towns and the countryside in the West and East Midlands.

The reinvestment also involves funding for reopened train lines and new stations in the region such as the £4.5 million Ivanhoe Line between Burton and Leicester (Project ID: 22250975).

Meanwhile, road schemes in the Midlands will be developed to benefit major companies working in the region. These include Rolls Royce, Toyota and Magna Park Corby, where masterlead outline plans have been approved for a £367.5 million warehouse development (Project ID: 18448465).

The HS2 reinvestment will also bring £6.5 billion in transport funding for the rest of the country, which includes rail improvements in the South West.

It will also ensure some major road schemes are delivered, and local authority spending on maintenance should benefit from ‘billions’ to be spent to fix potholes.

Major projects set to go ahead include transforming the A10 Ely Junction near Cambridgeshire; a £290 million scheme which is at the pre-tender stage (Project ID: 20170830).

Work should also start on improvements to the A75 between Gretna and Stranraer in Scotland, where a £500 million upgrade is also at the pre-tender stage (Project ID: 23317668).

Meanwhile, the £1 billion electrification of the North Wales Main Line between Holyhead and Crewe is also to go ahead (Project ID: 23317676).