The UK’s 2012 Budget, announced by Chancellor of the Exchequer George Osborne, signals the coalition government’s continued belief in developing transport and infrastructure as a central driver of the nation’s economic recovery. The level of state spending on transport remains almost identical to last year, 2011, with transport spending representing just more than 3.2% of the government’s total expenditure.

Osborne also announced a number of new transport projects and feasibility studies for the next year, with the budget document noting that more details will be released throughout the summer and autumn.

Business leaders have so far expressed cautious optimism about the package of new infrastructure projects. Engineering recruitment company Roevin’s managing director Mark Tully commented that the investment announced today will provide a boost to the engineering jobs market.

"From house-building to road and train infrastructure improvements, the government’s investment pledges will provide extensive opportunities for UK engineers," he said.

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Transport budget

The UK Government has maintained a relatively steady level of investment in the transport sector over the last five budgets.


Rail projects: Northern Hub prioritised and on-track

"Business leaders have expressed cautious optimism about the package of new infrastructure projects."

The rail projects being given priority funding in this year’s budget represent a continuation of the commitments previously made in November 2011’s National Infrastructure Plan 2011.

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Foremost among these is a £130m investment in the Northern Hub rail network in the north of England, with the aim of improving service and upgrading capacity between cities like Manchester, Sheffield, Bradford, Preston and Blackpool, as well as others.

Specifically, the money will go towards increasing capacity on the Hope Valley line between Manchester and Sheffield, to double the number of fast trains on the service, plus electrification of the TransPennine rail link between Manchester and Leeds.

"Today’s announcement of further funding for the initial stages of the Northern Hub is a welcome show of confidence in rail bringing benefits to passengers as well as driving economic growth," commented Network Rail chief executive David Higgins.

"To realise the project’s total value of £4bn to the northern economy and create between 20,000 and 30,000 new jobs, the final stages of funding will need to be supported in the rail budgets to be announced later this year."

The budget document also notes it will carry on working with the Welsh government to decide whether to electrify the Welsh Valley lines, committing to a final decision this summer. It should be noted, however, that the investment announced at the Northern Hub and in Wales are described by the budget document as "subject to value for money", which seems to give the government a back-out clause if the cost is judged to outweigh the benefits.

In London, meanwhile, Osborne said the government will continue to work with Boris Johnson to "go on investing in London transport, lengthening commuter trains, extending the Underground and exploring new river crossings in east London". With major Tube upgrades and the Crossrail project already in full swing, it appears that transport investment will continue to be a major priority for the capital.