Redundancies expected at Transport for the North as Grant Shapps demands 'efficiencies'

Redundancies are expected at Transport for the North as the organisation is forced to cut its core spending by more than a third.

TfN, a statutory sub-national transport body which employs around 120 people in Leeds and Manchester, had sought £10m in Government funding for the 2022/23 financial year but has only been allocated £6.5m.

It follows TfN being stripped of powers over the delivery of the Northern Powerhouse Rail network, with the Department of Transport moving from paying it to develop the route to an advisory “co-sponsorship” role. The news of the role change came in November - just a day after TfN had described the Government's Integrated Rail plan for the region as "woefully inadequate".

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In a letter sent to TfN chief executive Martin Tugwell earlier this week about the settlement for the next financial year, Transport Secretary Grant Shapps said: “We are all operating in a demanding fiscal environment.

Transport Secretary Grant Shapps has determined next year's funding settlement for Transport for the North, which is set to lead to redundancies.

“Over the coming months and years, it is incumbent upon all public sector organisations to ensure that activities are driving value for money and maximising the efficiency of taxpayer money.”

Mr Shapps said an additional £1.5m would be provided to support the finalisation of a business case for the Northern Powerhouse Rail programme and wider analytical work on the recently-published Integrated Rail Plan.

But he accepted the settlement will result in cutbacks for TfN.

Mr Shapps said: “In order for TfN to operate within this envelope, the organisation will need to identify appropriate savings and efficiencies. I strongly urge TfN to focus on its statutory functions, to carefully consider what activities provide the clearest additional value and benefit to the north of England, and to prioritise your business plan accordingly.”

The Transport Secretary highlighted that the 2022/23 grant is higher than what was provided for this year, which was £6m - but represented a 40 per cent cut on the £10m provided the year before.

A report going to the TfN board next week noted the 2021/22 cut was mitigated by the release of £2.5m from reserves and £1.5m from recharges into the NPR programme.

The TfN report said: “Neither of these is now possible given the change in working arrangements post-IRP. As a consequence, the full impact of the FY2021/22 funding cuts will now flow through into the organisation. The reduction in expenditure that is required is significant.”

It added: “A reduction of expenditure on core funded activity of over a third will be required, assuming a controlled release of reserves.”

A 37 per cent reduction in spending is anticipated for the next financial year, dropping from the current £10m to £6.6m. As part of the downgrade in responsibility for the Northern Powerhouse Rail project, 16 current TfN workers are to transfer to the Department for Transport at the start of April.

But the TfN report warned that further staffing cuts are now likely.

“Reductions of core funding at this level will have significant implications for TfN’s ability to deliver the objectives previously set out by the board,” it said.

“It is likely that addressing the funding challenge set out above will result in redundancies amongst TfN’s core-funded workforce. It is further likely that

TfN will instigate a voluntary redundancy process, the timing of which will be dependent on business planning.”

The report added “that staff morale is low, and that the ongoing uncertainties are having an increasingly disruptive impact on the organisation”.

A spokesperson for Transport for the North said: “TfN received a funding letter from the Department for Transport on 14 February 2022, setting out a one-year allocation for 2022/23. The details of this will be discussed at the TfN Board consultation call on 23 February 2022, which will be streamed live via the TfN website.”

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