Estimated reading time: 6 Minutes
26 February 2019
Operating and funding railways in Wales is complex due to the nature of the devolution settlement. This blog explains how new railway stations may be delivered in Wales.
For general background, see our blog on the future of railways in Wales.
Twenty years after devolution was established, responsibility for the procurement and management of the Welsh rail franchise has been devolved and the Welsh Government has powers to invest in rail, including infrastructure and stations. However, unlike in Scotland, responsibility for both rail infrastructure and the funding of Network Rail rests with the Secretary of State for Transport is responsible for both rail infrastructure and the funding of Network Rail.
How are new stations funded in Wales?
In England and Wales, Network Rail is the asset owner and rail network operator for rail infrastructure, while the Secretary of State is responsible for specifying enhancements to be delivered and setting out the funding available.
Rail planning takes place in five-yearly Control Periods (CP) – the next CP (CP6) runs from April 2019 to March 2024. Before each CP, the Secretary of State produces a High Level Output Specification (HLOS) and Statement of Funds Available (SoFA), setting out what Network Rail should achieve. For CP6 the Secretary of State has introduced a new “pipeline approach” for rail enhancement proposals – basically new rail infrastructure. This aims to create a rolling programme of rail investment.
The UK Government’s New Stations Fund is the likely funding source for most new rail stations that the Welsh Government proposes. Network Rail provided information on the criteria and guidance for applicants for the last round. However, the New Stations Fund is not currently open, so future criteria have not been published. Network Rail also provides information on funds to improve existing stations.
Station proposals can be developed by other means. For example, the planned Cardiff Parkway station will be largely privately funded, with Welsh Government support. Also, the Secretary of State for Wales has recently commissioned a scoping study for a potential West Wales Parkway station, although media reports suggested he is “committed in principle” to its delivery, the funding mechanism remains unclear.
In May 2018, the Welsh Government commissioned Professor Mark Barry at Cardiff University to make the case for investment in the rail network. The resulting report, The Rail Network in Wales – the case for investment, outlines a vision for rail in Wales and the most likely interventions required to deliver this vision.
Prof. Barry identifies a number of potential new stations across Wales including at: Deeside Industrial Park on the Wrexham-Bidston Borderlands line; ‘selected new stations’ across the North Wales Main Line including Gaerwen, Holywell Junction and South Cheshire Parkway; and Magor, Llanwern, St Mellons (Cardiff Parkway), Rover Way, Miskin-Junction 34, Brackla, Cockett and St. Clears along the South Wales Main Line.
While the report makes the case to develop these new stations, and a number are already included in the Welsh Government’s on-going three stage assessment process (below), funding still needs to be secured for their delivery.
How does the Welsh Government promote delivery of new stations?
The Welsh Government developed a three stage assessment process (PDF,448KB) to prioritise new station proposals. This is designed so that prioritised proposals have developed business cases which gives them the best chance of securing funding when the UK Government makes it available. It also aims to limit costly work (cost estimates and timetable modelling) to the highest priority projects. The Welsh Government’s 2015 National Transport Finance Plan (NTFP) committed to:
Develop assessment criteria and, using those criteria, a prioritised list of new station proposals for further consideration (in relation to securing funding from the rail industry).
The (then) Cabinet Secretary for Economy and Infrastructure, Ken Skates wrote to all Assembly Members in June 2017 (PDF,444KB), he said:
… by undertaking this work [the Welsh Government is] increasing the ability of station proposals to be in a position to benefit from [future] funding calls [made by the UK Government]
The same letter (PDF,448KB) provided detail on the approach to selection and assessment – the criteria are laid out in Appendix 1. In brief, the stages consist of:
- Stage 1: New station proposals are put forward from many sources. They are selected to be taken forward on a regional basis using the Welsh Transport Appraisal Guidance (WelTAG) criteria, consideration of the Well–being of Future Generations (Wales) Act 2015 goals and other mechanisms. Prioritised proposals go to stage 2 for further study.
- Stage 2: Using in-house resources and technical advice, this involves; assessment of financial and economic cases, standardised assessment of anticipated demand, accessibility assessment by Transport for Wales (TfW) and deliverability advice from Network Rail. The total process is expected to take around 6 months and once complete, the next group of regional stations may be considered, if appropriate.
- Stage 3: The highest priorities are developed and assessed further in preparation for a funding call. This includes a WelTAG Stage One Report, business case and Network Rail’s Governance for Railway Investment Projects (GRIP) process.
Which new stations proposals are going through the three tier assessment?
The Welsh Government’s 2015 NTFP listed proposed stations for assessment. On 26 April 2017, the (then) Cabinet Secretary wrote to Assembly Members (PDF,228KB) announcing new stations going to stage 2, after assessing 46 proposals in stage 1.
After this announcement, Carno Station was added to the stage 2 assessment list following public campaigning. Bow St Station received UK Government New Stations Fund funding, so was committed for delivery and removed from the list.
The subsequent NTFP 2017 update (December 2017) committed to take forward the following stations for further stage 2 assessment by the end of 2018:
- South East Wales: Ely Mill/Victoria Park, Llanwern, Newport Road/Rover Way and St Mellons;
- South West Wales: Cockett, Landore, St Clears;
- North Wales: Deeside Industrial Park/Northern Gateway, North Wrexham, South Wrexham, Llangefni;
- Mid Wales: Carno.
The NTFP 2017 update also committed to take further proposals forward to Stage 2 Assessment in 2018.
What about new stations on the “Core Valleys Lines”?
Stations on the Core Valleys Lines are an exception to the processes described above. Work is underway to transfer these lines to Welsh Government ownership, to enable delivery of phase 2 of the South Wales Metro. Obligations are also placed on the Operator and Development Partner (ODP) for the Wales and Borders Franchise, Keolis Amey operating as TfWRail, to deliver new stations on the Metro network as part of the Transport for Wales ODP Grant Agreement (PDF,7.8MB).
In June 2018 the (then) Cabinet Secretary for Economy and Transport, Ken Skates, announced the award of the new Wales and Borders Franchise, stating:
new stations will be built in Cardiff at Loudoun Square, Crwys Road, Gabalfa and at the Flourish [in Cardiff Bay]
The Transport for Wales ODP Grant Agreement outlines ODP obligations to deliver new Treforest Estate and Gabalfa stations by 31 October 2025 and 31 March 2027 respectively, using funding provided through the agreement. It also includes commitments to spend a minimum sum on other assets if planning permission isn’t granted. The agreement doesn’t mention delivery dates for Crwys Road, Loudon Square and Flourish stations but it outlines a target date of 31 March 2024 to achieve secure station accreditation for each station, suggesting all three will be constructed by then.
How can the Welsh Government fund rail infrastructure?
Because rail infrastructure is not devolved, the Welsh Block Grant does not include funding for rail infrastructure investment (PDF,1.33MB). However, the Welsh Government can elect to spend money from the Block Grant on infrastructure or seek other sources of funding, such as European Structural Funds.
During evidence to the Economy, Infrastructure and Skills Committee on 5 December 2018, the (then) Cabinet Secretary and the Welsh Government’s Director of Economic Infrastructure outlined how the Welsh Government can seek private sector and more innovative funding sources (land value capture) for station improvements and new station developments. They said:
… the contract that we signed with KeolisAmey does include for investment of nearly £200 million in station improvements across Wales. That’s over and above what the UK Government should be spending on its own assets … we’re also, elsewhere in Wales, where there’s a commercial case … looking to work with commercial partners to develop stations ….
The Welsh Government has called for the devolution of funding for rail infrastructure. During a plenary debate on the future of Wales’ railway on 5 February, Ken Skates, Minister for Economy and Transport said:
… with the right powers and the necessary funding, we could be doing much more — more services to improve access to jobs and leisure activities; more attractive journey times to encourage people to move from their own private vehicles; and more stations to connect our communities.
In June 2018, the Welsh Government publicised a £5 billion investment in rail infrastructure over 15 years. With a long list of station proposals in development, many communities in Wales will be waiting to see whether they can access the improvements promised through the new rail franchise.
Article by Robert Byrne, Senedd Research, National Assembly for Wales
Senedd Research acknowledges the parliamentary fellowship provided to Robert Byrne by the Engineering and Physical Sciences Research Council which enabled this Research Briefing to be completed.