Railway upgrade plans could be at risk after it emerged that money raised from the sale of Network Rail assets may go straight to the Treasury instead being used to fund infrastructure enhancements.

Network Rail announced plans to sell off £1.8Bn worth of ‘non core assets’ – including surplus land and property – following 2015’s review of Control Period 5 (CP5) by chairman Sir Peter Hendy.

The review highlighted cost and time overruns in the original programme and set out a revised pipeline of CP5 upgrade works. The money from Network Rail’s asset sales had been earmarked to help fund this.

But concerns have now been raised that the rail operator could face a further funding gap after it emerged that the Government may instead require the money to help reduce the UK deficit.

Minutes from a September 2016 Network Rail board meeting, published recently, revealed that there is “a realistic prospect of a significant shortfall in funding” as a result of the Treasury’s requirement, which was described as “handicapping Network Rail’s use of the cash to fund rail enhancement schemes”.

The minutes show board members agreeing to look into exploring “additional loan facilities” in order to deliver the CP5 enhancement programme.

Commenting on the situation Bruce Williamson from campaign group Rail Future said: “It seems completely unfair that the money which is coming from the railway might go back to the Treasury when the railway so desperately needs investment.

“If you put this in the context of, for example, the stalled Great Western electrification project, it starts to look like the Government is not as committed to the railways as they might pretend to be.”

He added: “Anything that throws a spanner into the works is bad news for the railways and will have an inevitable impact on Network Rail’s plans.”

However a Department for Transport spokesperson has since said: “Network Rail is continuing to sell assets to generate more funding for the Railway Upgrade Plan. These proceeds will not be used to pay off the deficit.”

Photo: Network Rail