Committee publication · Estimate memoranda · 20 May 2026

Department for Transport Estimates Memorandum 2026-27

Summary

This is the Department for Transport's Main Estimate memorandum for 2026-27, setting out parliamentary spending requests across Resource DEL (£7.9bn day-to-day costs), Capital DEL (£22.3bn infrastructure investment), and Annually Managed Expenditure. Key movements include East West Rail's capitalisation, increased funding for rail reform and Northern Powerhouse Rail, and transfers of transport spending to the Ministry of Housing for Integrated Settlements in six mayoral authorities.

Key findings

Resource DEL of £7,871m represents a £12.1bn reduction from 2025-26 largely due to reclassification of £9.6bn non-cash depreciation from RDEL to Resource AME; underlying transport spending increased with rail reform and NPR funding rises.
Capital DEL of £22,317m increases £678m (3%) including Road Investment Strategy 3 funding, Transport for London support (£918m), and HS2 spending (£7.1bn), offsetting £1.2bn CDEL transferred to MHCLG for Integrated Settlements.
Resource AME increased £11.8bn (76%) primarily due to £9.6bn Network Rail depreciation reclassification and £2.5bn National Highways depreciation reallocation from DEL.
Contingent liabilities decreased by £21.7m on rail leases but increased by £38.8m on legal claims; Channel Tunnel Rail Link exposure reduced £129m reflecting HS1 concession market conditions.
Department manages rail subsidy risk with £250m maximum exposure on Train Operating Company net subsidy through risk-sharing mechanism with HM Treasury; departmental unallocated provision of £51m held to cover first £100m of pressures.

Tone

Procedural

Topics

public-financetransport-infrastructurerail-servicesroads-highwayslocal-transport

Key actors

Department for Transport, HM Treasury, Network Rail, High Speed Two Limited, National Highways, Train Operating Companies, Transport for London, Great British Railways

Notable line

“West Rail (EWR) has reached the trigger point for capitalisation. This has moved its budget from RDEL to CDEL, with funding being transferred to the RNEP in Network Rail.”

Key Quotes

“From 2026/27, East West Rail (EWR) has reached the trigger point for capitalisation. This has moved its budget from RDEL to CDEL, with funding being transferred to the RNEP in Network Rail.”
— Department for Transport · Explaining key drivers of Resource DEL changes

“The Department agreed a new Risk sharing mechanism for the TOC net subsidy position with HMT at Phase 2 of SR25. The Department must cover the first £100m of rail pressure in 2026/27 against the net TOC position, with a maximum exposure of £250m, therefore, we felt it”
— Department for Transport · Departmental Unallocated Provision for rail subsidy risk

“Funding for Buses actually increased at SR25, however, DfT transferred RDEL Local Authority Bus Grant funding to MHCLG at the Main Estimates for the six of the MSAs getting Integrated Settlements.”
— Department for Transport · Explaining Support for Buses Resource DEL reduction despite SR25 funding increase

“The estimate for the existing contingent liability for Channel Tunnel Rail Link Act 1996 has reduced by £129 million since Supplementary Estimate 2025-26, from £3,739 million to £3,610 million.”
— Department for Transport · Contingent liabilities update reflecting HS1 concession market conditions

“Increased funding for Transport for London (TfL) secured through SR25, to support and maintain London's transport network.”
— Department for Transport · Key drivers of Capital DEL changes

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Source · parliament.uk record ↗