Government not clear enough how Northern Powerhouse Rail will benefit North, NAO says

The government has not been clear enough in setting out how its £45bn plans for Northern Powerhouse rail will benefit economic growth, the National Audit Office has said.

The government spending watchdog has said the flagship rail upgrade programme for the north of England must more closely align with national and regional growth strategy in a report on the project published today.

The Department for Transport (DfT) has been working for more than a decade on plans for the east-west rail link, which was thrown into doubt following the cancellation of the northern leg of HS2 in October 2023.

The government’s updated strategy for the programme, published in January 2026, downsized the scheme compared to its original 2018 vision but added an entirely new rail link between Manchester and Liverpool.

This would be built in three phases through a combination of new track and upgraded tracks and stations to provide more frequent trains and shorter journey times.

The NAO said the government had identified “important lessons” from HS2 and other major rail programmes, including the need for strong governance processes and effective contract and financial management.

It said the programme had also taken steps to manage how it fits with other rail upgrade programmes in the north of England, including the Transpennine Route Upgrade.

But the report said that despite progress in these areas, the government had “more work to do” to show how wider economic benefits for the north of England would be delivered by the rail programme.

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.”

The report said there had also been a lack of clear engagement from the government to regional local authorities, while appropriate governance arrangements between the national and local level were yet to be set up.

The NAO outlined a series of recommendations for the government during the programme’s early stages, including fully aligning its strategic case with its plan for regional economic growth.

It also said the government should establish how it will work with key strategic partners with clearly understood responsibilities and regularly assess how it is implementing lessons learned from other programmes.