THE Chancellor George Osborne has promised to maintain investment in major railway projects, although the Department for Transport is one of four government departments which must reduce its 'day to day' spending by 8 per cent a year for the next four years.
During a speech in London, the Chancellor said: "These savings will be achieved by a combination of further efficiencies in departments, closing low value programmes, and focusing on our priorities as a country.
"These provisional settlements apply to the day to day resource spending of the central departments -- they are not the capital budgets of these departments.
"For as I set out last week at the Launch of the National Infrastructure Commission - we will continue to invest in the things that make our economy more productive.
"We will spend £100 billion on our infrastructure over the Parliament -- updating our roads and railways; investing in flood defences to protect our homes and businesses; and delivering superfast broadband across the country."
The other departments included in the new round of economies cover local government, the environment and the Treasury itself.
The proposed economies come as Network Rail's own budgets are being reviewed. The transport secretary 'paused' some electrification schemes in June, and although he has since announced that they are to go ahead, project timetables have been extended. As a result, for example, the Midland Main Line will not now be electrified between Kettering, Nottingham and Sheffield until the early 2020s.
Railway finances are also affected by a government undertaking to restrain increases in regulated fares to the equivalent rise in the Retail Price Index each year, effectively 'freezing' them in real terms for the life of this Parliament.