The UK Government has cut £1bn from the rail infrastructure budget following a spending review.
According to the Financial Times, the five-year budget, which is set to run to 2024, was revised and the allocation was reduced from £10.4bn to £9.4bn.
UK Rail Minister Chris Heaton-Harris confirmed the move in response to a parliamentary written question.
However, the operating budget of Network Rail, which owns and manages most of the UK’s railway network, will remain unaffected.
The decision to reduce the budget is likely to impact the future of many projects that include electrification works, station upgrades and other infrastructural work.
The UK’s Railway Industry Association (RIA) has also expressed its disappointment with the budget cuts.
RIA chief executive Darren Caplan said: “Recent confirmation, following the Spending Review, that rail enhancements investment will reduce by more than £1bn over the current five year funding period, is very disappointing.
“Rail enhancements are essential in ensuring our rail network is fit for the future, improving reliability, connectivity, customer experience and helping to reduce carbon emissions.
“Taking our foot off the pedal now on rail investment will not help for when passengers return following the coronavirus pandemic.”
The step comes when the government has spent billions to run railway services during lockdown by subsidising operators.
The Financial Times report added that ridership dropped to 5% of the normal levels during the first lockdown in March. The number of passengers fell again after the UK entered another lockdown in November to restrict the spread of Covid-19.