Transport Insights

The Department for Transport (DfT) has backtracked on its claim that a major National Highways road scheme that it secretly shelved was officially “paused” as a result, which explains why the government-owned company ran up a £70m bill for an “enhancement” that never happened.

But there remains the scandal of how both National Highways and regulator the Office of Rail and Road (ORR) lied to Parliament and the public by pretending that the A1 Morpeth to Ellingham was going ahead imminently, despite being defunded and deprioritised, and how the ORR falsely attributed a quarter-billion-pound to the shelved scheme.

The story of the various deceptions perpetrated by these various bodies and how they destroy any pretence that the Road Investment Strategy (RIS) process allows transparency and oversight of National Highways’ enhancements programme is a long and complicated one.

It begins with a Treasury decision to defund and deprioritise the scheme as part of the 2021 Spending Review (SR21).

This decision was taken on value for money grounds in a context where National Highways was failing to spend its budget, meaning that the scheme could be afforded but was not cost effective.

When National Highways became aware of the SR21 decisions, it interpreted them as meaning that the Morpeth to Ellingham scheme was “paused” and said in a February 2022 change control document sent to the DfT that this would be formalised through a separate change control document.

The DfT has previously insisted that the first change control form formally paused the scheme, which was obviously untrue, but in any case on 31 March 2022 a senior National Highways official told the DfT’s Kate Cohen:

We note the instruction that A1 Morpeth to Ellingham remains a formally committed scheme (even though it was deprioritised in SR21). We will continue the development of this project including any support necessary to progress the DCO application for this scheme, a decision on which is due in June 2022. We look forward to receiving further advice on action needed for this scheme and note that any further development costs estimated at £3m to the deferred planning decision will be a pressure on the SR21 funding settlement.

In addition, as I have reported, the DfT’s annual performance report to Parliament in July 2022 implicitly listed the scheme as “in development” rather than paused.

Despite its previous assertion that the scheme was paused in February 2002, the DfT has now insisted that the description of the scheme as “in development” was correct. It has also told me that no reply was sent to National Highways to tell it not to continue to throw taxpayers’ money at a shelved scheme.

This is the heart of the scandal. The scheme was kept as a “formally committed” scheme under RIS 2 and not “paused” in order that the decision to deprioritise it and withdraw funding could be kept from Parliament and the public.

Complicit in this deception were National Highways, which included the scheme in its 2022-23 delivery plan, despite knowing that it was deprioritised, defunded and effectively shelved, and the ORR which also reported the expectation that the scheme would start work during that financial year.

The ORR has confirmed that it had the information that should have stopped it going along with the lie:

In February 2022 we were informed that A1 Morpeth to Ellingham was “deprioritised in SR21”.  However, the scheme remained committed under RIS2 until a formal change had been agreed by the Secretary of State for Transport, as legislated under the Infrastructure Act 2015. 

The regulator, if it was not entirely incompetent, must have known that this “committed” status did not mean that work on the deprioritised and defunded scheme would magically start imminently.

It compounded the lie by blaming the scheme for most of a huge overspend on National Highways’ enhancements budget, despite knowing that the fictional overspend resulted from the scheme’s costs being in the budget without funding to pay for them.

This is where the story takes a bizarre turn. I made a freedom of information (FOI) request to the ORR to see what discussions led to these lies, covering the period February 2022 to publication of the relevant report in July 2022. It claimed that it had identified so many potentially relevant documents during this period, using the search term “Morpeth” that it would exceed the cost limits in the FOI Act to find relevant information:

• 581 emails of which 427 had attachment(s);

• 21 documents in SharePoint; and

• 29 additional documents in SharePoint (migrated from a previous system)

In September 2022 the scheme was cited as one on which work would be accelerated (it had already missed its start of works date) under Kwasi Kwarteng’s Growth Plan as part of his disastrous Budget, albeit:

Presence on this list does not guarantee, where applicable, funding…

Eventually, in February 2023, National Highways submitted a change control form, which I have now obtained from the DfT, for the…

Removal of the 2022/23 Q2 Start of Works (SoW) and 2024/25 Open for Traffic (OfT) commitment dates from the Delivery Plan

…on the grounds that ministers had repeatedly put back a decision on the scheme’s development consent order (DCO). The idea that the scheme was merely awaiting a DCO decision was part of the deception involved in pretending that it had not been shelved.

The scheme’s appearance in the Tories’ widely ridiculed Network North plan to redistribute (non-existent) funds from scrapping phase 2 of HS2 caused some bafflement, as the government had never admitted that the scheme was not already funded.

Then, in spring 2024, just ahead of the general election, ministers finally signed off the DCO as a political statement to pretend that the unfunded and deprioritised scheme would go ahead.

By the time Labour scrapped the scheme, on value for money grounds, National Highways had wasted £70m on it.

But, as I have said, the scandal goes beyond the sunk costs. It exposes the myth of parliamentary oversight of National Highways. If everyone, including the company’s regulator, can be co-opted into pretending that a shelved scheme is still going ahead, none of the mechanisms for reporting to Parliament can be trusted.