Chancellor Rachel Reeves’ spending review on 11th June 2025 highlighted plans to revitalize the UK’s transport infrastructure. With major investment pledged for rail, bus networks, and airport development, as well as a strong focus on boosting connectivity in regions outside of London, this marks a pivotal moment for the UK’s transport sector, and its role in driving nationwide growth.
Investment into Railway Projects
The Chancellor has pledged to invest further sums of money into ongoing long-term rail projects, such as £3.5 billion towards the TransPennine route upgrade, and £2.5 billion towards the East-West rail link. This represents a further commitment to modernise the main rail connection across the North of England, and the reestablishment of a direct Oxford to Cambridge rail link that was closed in the 1960’s. These projects promise to enhance regional connectivity, reduce journey times, and support the shift towards greener, lower-carbon transport.
For the logistics sector, improved rail networks are expected to ease road congestion and increase rail freight capacity.
However, concerns remain around the timescales needed to deliver these projects, as well as concerns around whether the investment is sufficient enough. With the East-West rail project expected to be operational by the early 2030s, coupled with lingering doubts as to whether the route will ever actually be completed in full, and the TransPennine route upgrade expected to be fully complete by 2041, there is still a long way to go. However, the announcement of the significant investment boost still marks a crucial step towards addressing decades of underinvestment into national infrastructure, especially outside of London.
Possibly more significant so far as new spending is concerned is the £15.6 billion announced for local transport projects in Greater Manchester, the West and East Midlands, West and South Yorkshire, Tyne & Wear, and Liverpool. These centre around light rail, tram/train, and mass transit systems and upgrades/extensions to existing networks.
Paul Wormald, Transport and Logistics expert at Hawsons stated,
“This investment is a welcome step forward for the UK’s transport and logistics sector. Upgraded rail infrastructure will boost freight capacity, reduce delivery times, and improve regional connectivity — all of which are vital for strengthening supply chains and driving economic growth. The development and extension of light rail systems in the regions should hopefully reduce congestion caused by commuter traffic, freeing up capacity on the roads for local freight traffic. However, whilst the spending announcement for projects outside of London is welcome, the sums announced only just tops the £18.9 billion spent on the Elizabeth Line in London, so it remains to be seen what long term appetite the government has to seeing these projects through to completion when their costs inevitably increase."
How important is the railway for UK Logistics?
In March 2023, approximately 8% of the UK’s total domestic freight movement was carried by rail — equating to 16 billion tonne-kilometres. Investing in and upgrading the UK’s rail infrastructure will deliver widespread benefits, not just for rail freight operators but also for road hauliers. Shifting more long-distance freight to rail can help reduce road congestion, shorten journey times, and significantly lower carbon emissions. This enables road transport to focus more efficiently on short-haul and last-mile deliveries, improving speed, reliability, and flexibility across the entire supply chain. Therefore, the Chancellor’s announcement to enhancing the rail network is a critical step toward strengthening the UK’s logistics ecosystem in the long term.
Transport & Logistics Accountants
At Hawsons Chartered Accountants, we have a dedicated team of specialist transport and logistics accountants. We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces. With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year round involvement, we can help you anticipate and deal with challenges quickly and effectively. Contact our transport and logistics sector specialists to see how we can support your organisation.
Free initial meeting
Paul Wormald
Partner, Doncaster
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