The Economic Contribution of UK Rail, published 2021
And rail infrastructure supplies would reach a high of £12.8 billion in 2025-29, up from £7.8 billion in 2019, before edging down to £7.3 billion in 2045-49. 9.1.2 Infrastructure spending and output in the high scenario In the high scenario, total rail infrastructure spending is assumed to be 50% higher, on average for each five-year period, than in the baseline. However, all of this extra expenditure is assumed to relate to major new projects, so that: •
•
Land acquisition costs account for 7% of all additional spending, whereas in the base they account for 7% of spending on Crossrail 2 and the NRP only. Total capital supplies, including imported supplies, account for all additional spending other than land acquisition costs, with no additional capitalised work undertaken by Network Rail’s own workforce.
The proportionate split in these additional capital supplies, between direct imports and output of the UK rail supply sector, is assumed to be the same as in the base. On that basis, rail infrastructure spending would be 50% higher than otherwise throughout the future period, peaking at £23.1 billion per year in 2025-29 (at 2019 prices), and finishing at £13.8 billion per annum. Rail infrastructure output would be 46%-49% higher than otherwise, reaching £20.9 billion per year in 2025-29, and ending at £13.0 billion per year. And rail infrastructure supplies would be 52%-56% higher than in the baseline, peaking at £18.7 billion per annum in 2025-29 before easing back to £11.4 billion in 2045-49. 9.2 IMPACT ON GVA AND JOBS IN THE RAIL AND SUPPLY SECTORS Oxford Economics then made projections for GVA and jobs in the rail and supply sectors, on the basis of those alternative scenarios. 9.2.1 GVA and employment in the base scenario A model was built to forecast GVA and jobs on the basis of infrastructure spending, output, and supplies developing in line with the base scenario described above. In this model, the GVA of the rail and supply sectors was split into segments, dependent on different drivers of demand, as follows: • •
•
Network Rail’s own capitalised work, assumed to grow in line with that entity’s total capital expenditure, as described in Section 9.1.1 above. The remaining GVA of the rail transport system, assumed to grow in line with total UK domestic demand (i.e. spending on goods and services by UK resident households, businesses, and government). This growth is stronger than usual prior to 2025, as the economy and rail passenger numbers recover from the Covid-19 pandemic. But after that, the economy is expected to be operating close to full capacity, so that the rate of growth eases back to its long-term norm. GVA in the rail supply sector ultimately supported by capital supplies to Network Rail, and other public sector bodies responsible for rail infrastructure provision, assumed to grow in line with infrastructure supplies as described in Section 9.1.1 above.
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