East West Rail case to be examined by National Audit Office

Question marks are hanging over East West Rail after it emerged that the National Audit Office (NAO) is examining the case for the project.

The independent spending watchdog will investigate whether the £5bn rail project linking Cambridge and Oxford offers value for money for the taxpayer.

Campaign group Cambridge Approaches has consistently called on the East West Rail Company to publish its business case.

William Harrold, of Cambridge Approaches, said following the news of the investigation: “I am so pleased that the NAO are looking at this.

“We have suspected that there was a value for money problem with East West Rail for years. That’s why we asked for the business case. When the business case information came out in May, we knew there was a problem. Whether or not you want to supersize Cambridge, £4million capital cost per Cambridge commuter is terrible value for the taxpayer.”

Earlier this month, Prime Minister Rishi Sunak announced the decision to axe HS2 between Birmingham and Manchester after stating that the economic case for the line was no longer justified.

The NAO investigation will take place over a number of months and will look at how the context for the project has changed over time and the Department for Transport’s assessments of the economic and strategic case for the scheme.

The development will be welcomed by opponents – and alarm supporters.

Anthony Browne, the MP for South Cambridgeshire, responded: “I have always called for the EWR business case to be published and have always said that East West Rail must show that their project represents good value for money.

“I’m pleased that the NAO will now be looking into this and I look forward to seeing their report. Whatever the outcome, my commitment to ensuring that Cambourne has a station and a rail link to Cambridge (whether through EWR or other means) remains resolute and I will continue to campaign for better public transport links for this growing new town.”

In July, the Infrastructure and Projects Authority (IPA) said East West Rail was regarded as “feasible”, after it had deemed the final two stages of the route “unachievable” last year. It said issues, while ongoing, were now resolvable if “addressed promptly”.

East West Railway Company said the IPA’s revised opinion reflected “the hard work we have put in over the past year”.

The East West Rail scheme will create a link from Oxford to Cambridge, with services being introduced in three stages. The final stage will link Bedford and Cambridge.

Local authorities, business leaders and universities have said East West Rail is key to improving public transport links and generating economic growth.

But some communities through which the line will run have voiced alarm at its impact.

The NAO investigation comes after issues about the scheme were raised by the Conservative MP for North East Bedfordshire, Richard Fuller.

In a letter to the watchdog, Mr Fuller wrote: “The latest business case presented by East West Rail in May confirmed the poor value for money that the project offers for taxpayers. The May report focused on the high growth scenario so can be assumed to provide the ‘best case’ for economic return.

“The level one BCR for East West Rail on this ‘best case’, however, varied between 0.26 and 0.36 and at level two, BCR between 0.30 and 0.42.”

But at the time of the announcement, Dr Harrold said: “From this, we can see that East West Railway Company are flogging a dead horse. The Bedford to Cambridge section needs to be dropped, it has no rational business case or democratic credentials and the environmental impact of the railway, together with the assumed additional housing development, is appalling.”

He added: “To their credit, East West Railway Company have published a lot more of the business case. This shows that the level two benefit to cost ratio for their preferred route has fallen from 1.31 in 2020 to a ridiculous 0.3 today. There is no business case for this railway.”

In his letter, Mr Fuller also referred to the comments made by former transport secretary Grant Shapps, who said the project would be the first to face the axe when asked what he would cut from the transport budget.

He said: “I would cut East West Rail on what’s called two and three – the second and third tranches of it – that would save three to five million pounds straight away.”

Mr Fuller writes in his letter: “My own discussions with various ministers in various departments over the past two years have given me the impression that support has been inconsistent.”

Responding, the NAO said Mr Fuller had “raised several important issues with the progress of the East West Rail programme and its business case”.

“Following these inquiries, I have asked my team to undertake an investigation into these matters. This will result in a published report that is laid in Parliament,” wrote Gareth Davies, NAO comptroller and auditor general.

The Department for Transport (DfT) has said that by 2050, EWR could increase economic growth by £103bn.

A DfT spokesperson said: “East West Rail will serve as a catalyst for growth across the Oxford-Cambridge region by boosting local economies and bringing communities closer to job opportunities, families and friends.

“Work is already under way to deliver the first passenger service from Oxford to Bletchley and Milton Keynes by 2025 and in May, we set out our preferred route for the remaining stages of the project.”

The DfT says it will assist the NAO with its investigation.