The inner workings of the Department for Transport and Government finances are revealed in this fascinating interview with former Permanent Secretary of both the Department for Transport and the Home Office, Sir Philip Rutnam.

Having spent his career as a senior civil servant, including in roles within the Treasury, there is no one better to tell the inside story of the Government’s relationship with railways.

In the interview:

00:00 Intro

How does public expenditure work?
02:55 What are comprehensive spending reviews?
05:49 Is capital versus opex a relevant distinction or is it all just cash?
07:38 We hear a lot about Fiscal Rules. What are they and why do they matter?
11:54 Capital is all about creating wealth. Are Fiscal Rules counterproductive here?
14:53 In the March 2024 budget, the Chancellor said he was going to protect the 1.0% real increase in public expenditure. What does that mean and if it’s just a forecast, can’t it just get changed? And does it have any effect on railway finances?

19:00 HS2
20:00 Was the cancellation of HS2 Phase 2a a triumph of the Treasury mindset over the Department for Transport mindset? Had the Treasury never bought into it?
24:14 How was it possible for Prime Minister Rishi Sunak to cancel HS2 Phase 2 without any parliamentary scrutiny or debate?
26:13 Did the cancellation of HS2 Phase 2a make a mockery of the parliamentary process?
27:42 How it was going to be funded? And is it an urban myth that the money can’t be reallocated elsewhere?
32:00 Network North
35:19 If you were still Permanent Secretary at the Department for Transport, what would your strategy be to deal with capacity on the WCML?
39:53 The role of private finance

Business Cases
42:29 Do you think traditional cost benefit analysis / Webtag is appropriate anymore?
47:06 What about wider economic benefits?
50:01 What about the Scottish model? Could we learn from that?

Outlook for Public Finances
51:43 Assuming Labour do win, how much manoeuvring room does Rachel Reeve have?
56:30 Great British Railways, Rail Reform Bill – good, bad, anything to make a difference?

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Credits:
Presenters - Nigel Harris (@railnigel on X) & Richard Bowker CBE (@SRichardBowker). General Manager: Stef Foster (@stefatrail)