Today’s Budget announcement from the Chancellor Rachel Reeves has confirmed a one-year freeze on rail fares and committed to funding for major rail projects across England.
The government will freeze all regulated rail fares in England for one year from March 2026, the first such freeze in three decades. The fare freeze applies to England only, as transport policy is devolved to Scotland, Wales and Northern Ireland.
The government is proceeding with the £11 billion Transpennine Route Upgrade. Regional investments include South Yorkshire’s Supertram renewal, a Metrolink extension to Stockport in Greater Manchester, and a £45 million multi-modal gateway at Leeds Rail Station. London will receive government support for Transport for London’s planned extension of the Docklands Light Railway to Thamesmead, though TfL and the Greater London Authority will fund the majority of costs. Wales will receive £445 million for rail infrastructure, including upgrades to the Core Valley Lines and enhancements at Cardiff Central Station.
The Budget confirmed Derby as the location for Great British Railway’s headquarters. East West Rail will proceed as part of the Oxford to Cambridge Growth Corridor development. The rail investments sit within a 10-year infrastructure strategy backed by £725 billion, which the government says will support regional economic growth and housing delivery targets.
Railway Industry Association (RIA) Chief Executive Darren Caplan said: “With rail making quite a few headlines recently, and passengers will welcome the freeze on rail fares, today’s Budget contained limited new measures affecting the railway industry and rail businesses. The Railway Industry Association and our members – many of whom have experienced difficult times this year commercially – will welcome the Government’s recognition of the value of rail investment to boosting the UK’s growth and productivity, and its commitment to funding major rail projects, including the recently-announced Docklands Light Railway extension, and continued support for Transpennine Route Upgrade, HS2, East West Rail and Midlands Rail Hub. RIA members around the country will be involved in delivering all of these schemes. However, we would like to have seen in this Budget more of the Government’s plans to encourage innovative funding models in rail – whether private or ‘third party’ investment, more direction on its long term strategy for rail, and an update announcement on Northern Powerhouse Rail, a major scheme which up until recently had general cross-party political support. We urge the Government to give more clarity on these issues, to both boost jobs, GVA and Treasury revenues to the benefit of UK plc, and also to ensure the rail supply sector can play its part to efficiently and cost-effectively deliver world-class UK transport infrastructure in the future.”
Andrew Dean, Partner in the Infrastructure, Projects & Procurement Group at law firm Bird & Bird said: “The Budget signals a clear commitment to regional connectivity and economic growth, with investment in rail projects across the Midlands, Trans-Pennines, and the Northern Growth Rail Corridor. However, it is important to note that rail infrastructure is almost entirely taxpayer-funded (not user and fare-funded). Many current needs – such as maintenance – are funded by government grants and borrowing. Meanwhile, future needs – such as electrification, digital signalling, climate resilience upgrades, and deferred projects like Northern Powerhouse Rail – exceed current funding. The NISTA 10-Year Strategy notes that public money alone cannot bridge the gap, and further private investment will be required. Freezing fares may grab headlines, but it doesn’t change the fundamentals: these projects must be backed by realistic timetables and clearly defined funding mechanisms. Communities will be watching to see whether these pledges turn into trains on track, not just plans on paper.”
James Hill, Urban Transit Director at Egis UK & Ireland, said: “Putting mayors in the driving seat of regional infrastructure has the potential to accelerate much-needed upgrades, particularly in transport, by reducing bureaucracy and enabling faster approvals. The West Midlands Metro, a project influenced by Egis’ design expertise and referenced by the chancellor, is a prime example of how light rail can transform connectivity. By linking communities across the region to better jobs and opportunities, these initiatives play a crucial role in driving economic growth, attracting private investment and improving quality of life. Continued investment in projects like these will be essential to unlocking regional potential and delivering sustainable economic development. Collaboration between government, industry and local authorities will ensure these ambitions come to fruition.”
Blake Richmond, CEO at Resonate Group, commented: “Our cities and regions are essential for growth, and freezing rail fares keeps train travel affordable, which not only eases the cost of commuting for workers but also supports the wider economy by encouraging spending, connecting people to jobs, and strengthening leisure market. We welcome further investment in data technologies and AI, which are key to modernising rail industry processes. By adopting smarter, data-driven systems, creates more opportunities to develop AI to optimise these flows across an increasingly connected transport system, supporting long-term economic growth and regional development.”
Commenting in response to confirmation that the DLR will be extended to Thamesmead, Alistair Geddes, Sector Director, Rail at Costain, said: “Upgrading the UK’s rail infrastructure helps to create a sustainable future that drives economic growth. Projects such as the Elizabeth Line have been transformational for communities in London and the surrounding areas. The industry will welcome the Chancellor’s commitment to UK rail infrastructure improvements across the UK, including the extension of the Docklands Light Railway, which will boost prosperity, support employment prospects and encourage investment in skills and education. For any large or complex infrastructure project, collaboration is key to success. Enduring relationships can be formed through alliances to build momentum and ensure schemes are delivered safely, on time and on budget.”
Director of Policy & Public Affairs at Civil Engineering Contractors Association (CECA) Ben Goodwin said: “Contractors will welcome the message in this Budget that infrastructure investment is central to the UK’s growth strategy.”
Amish Patel, Transport Leader at PwC, commented on the freeze on rail fares, saying: “Freezing rail fares provides immediate, visible support to passengers at a time when affordability remains a barrier to public transport use. From a network perspective, however, fare revenue is still a key pillar of rail’s funding model. To make this sustainable, and to give Great British Railways the best possible start, the sector will need clarity on how the treasury intends to bridge the funding gap while also modernising infrastructure, improving punctuality and accelerating digital transformation. The opportunity now is to treat this as a catalyst for wider reform rather than a standalone intervention.”
Andy Steel, Managing Director at QTS Group, said: “The Chancellor’s commitment to progressing key rail schemes, including the DLR extension and Northern Powerhouse Rail, are a welcome signal that the Government recognises the critical role rail infrastructure plays in driving long-term economic productivity. Major programmes of this nature deliver far more than improved journey times – they unlock additional network capacity, enable modal shift, and create the conditions for sustainable development. To maximise the benefit of this funding, we now need collective action. That means early contractor involvement, clarity of pipeline and genuine public–private sector collaboration. This will ensure these schemes are delivered efficiently, with minimal disruption to the operational network.”
Responding to the announcement of an extension to the Docklands Light Railway (DLR) yesterday, Mott MacDonald Managing Director for Transport in UK and Europe Ken Norbury said: “The DLR extension to Thamesmead investment will unlock thousands of homes and jobs and create public transport connectivity for one of London’s most underserved areas. We’ve been part of the DLR story since its inception and are already supporting this extension through land referencing for the Transport and Works Act Order and extensive environmental surveys.
Mott MacDonald Managing Director for buildings in UK and Europe Mark Ewen acknowledged that pledges to remove planning blockages around major transport hubs would also benefit other projects. He added: “Investment in urban regeneration schemes, new neighbourhood health centres and education facilities will help catalyse large-scale urban regeneration projects up and down the country. We’re seeing clients leading the charge in this space, with Places for London, the TfL Property Company and Network Rail’s newly formed “Platform4” bringing forward ambitious and progressive schemes on underutilised land. Alongside the work of private sector developers and local authority leaders, the focus on pace of delivery in today’s budget is welcome to help drive forward investment in vibrant and sustainable places for people and communities.”
Andy Milner, Chief Executive at Amey, said: “We welcome the Government’s renewed commitment to major infrastructure projects such as Northern Powerhouse Rail and the Lower Thames Crossing. As the government progresses with its infrastructure spending priorities, we would like to see further clarity and commitment to the recently published NISTA pipeline, including clear funding commitments and a greater role for public-private partnership models to accelerate delivery and maximise value. These investments are vital for improving connectivity and supporting regional growth. Early and transparent collaboration with partners will ensure these schemes can be delivered efficiently, sustainably, and in a way that maximises value for the regions they serve.”
