The government’s flagship rail upgrade programme for the north of England must more closely align with national and local growth plans and involve better collaboration between central and local authorities to fully realise the benefits, according to a new National Audit Office (NAO) report.
The government announced its plans for Northern Powerhouse Rail in January 2026 with the aim of improving east-west rail connections across the north of England.
This will be achieved in three phases through a combination of new track and upgraded tracks and stations to provide more frequent trains and shorter journey times between Liverpool and Manchester to the west of the Pennines, and Leeds, York and other cities to the east. It may ultimately benefit millions of people.
The Department for Transport (DfT) has been working on plans for Northern Powerhouse Rail for over a decade, during which time it has had to make key decisions on the overall scope of the programme following the cancellation of the HS2 connection to Manchester in October 2023.
Gareth Davies, head of the NAO, said: “Improving rail service and infrastructure in the north of England is a vital enabler of economic growth and productivity.
“DfT has taken steps to set up Northern Powerhouse Rail for success, including identifying key lessons from other programmes. But further work is needed to ensure it aligns with national and local growth plans.”
DfT has identified important lessons from HS2 and other major rail programmes, including having in place strong governance processes, the right skills and capabilities, and effective contract and financial management.
It has also taken steps to manage how Northern Powerhouse Rail fits with other rail upgrade programmes in the north of England, most significantly the Transpennine Route Upgrade.
Despite progress in these areas, the government has more work to do to show how it plans to deliver the wider economic benefits for the north of England enabled by Northern Powerhouse Rail.
Until the government’s January 2026 announcement as part of its wider Northern Growth Strategy, regional stakeholders in the north indicated that poor engagement and a lack of clarity from central government had hampered their ability to progress local plans.
The government has not yet set up appropriate governance arrangements between the national and local level or between the different central government departments responsible for delivering the programme’s benefits.
DfT must also determine who will be responsible for building the new rail lines, how the creation of Great British Railways as part of wider rail reforms will affect the programme, and how it can best maximise the benefits from the programme given the £45 billion funding cap.
To manage Northern Powerhouse Rail effectively and secure value for money, the NAO recommends that, at this early stage of the programme, DfT:
- fully aligns its strategic case for the programme with the government’s developing Northern Growth Strategy
- establishes how it will work with key strategic partners in decision-making and funding as part of programme governance, ensuring that roles and responsibilities are clear and understood
- reviews the benefits it can deliver from each phase of the programme against their expected cost
- regularly assesses how effectively it is implementing relevant lessons learned from other programmes
