Northern Powerhouse Rail must learn from megaproject mistakes, NAO warns

The Department for Transport (DfT) must continue identifying lessons from other major rail projects, such as Crossrail and HS2, to avoid similar failings on Northern Powerhouse Rail, according to the National Audit Office (NAO).

A new NAO report acknowledges that DfT is “taking a planned approach to identifying relevant lessons and good practice to inform its management of Northern Powerhouse Rail”.

But despite progress in these areas, there is more work to be done to ensure the programme avoids the issues faced by previous megaprojects, the report adds.

DfT has been working on plans for Northern Powerhouse Rail for more than a decade. In that time, it has had to make key decisions on the overall scope of the programme following the cancellation of the HS2 connection to Manchester in October 2023.

In January 2026, the Government Internal Audit Agency reviewed DfT’s department-wide approach to lesson learning. It found that, while DfT has a well-designed and clear lessons-learned framework, programme and project teams within DfT did not consistently share and apply the lessons identified.

The NAO has identified 10 key lessons for the programme, drawn from its past work on major rail projects, lessons-learned reports and good practice guides on major project delivery.

DfT has been advised to establish six of the lessons as part of its business case for the programme. These are strategic case; scope; benefits; working with strategic partners; governance; and managing interdependencies.

As part of further planning, the NAO has recommended a focus on the remaining four lessons: stakeholder management; culture; cost and schedule estimation and reporting; and obtaining legal consent through a hybrid bill.

Call for better collaboration

The NAO report also calls for the Northern Powerhouse Rail programme to more closely align with national and local growth plans, as well as demonstrate better collaboration between central and local authorities.

Until the government’s January 2026 announcement as part of its wider Northern Growth Strategy, regional stakeholders in the north indicated that poor engagement and a lack of clarity from central government had hampered their ability to progress local plans.

The government has not yet set up appropriate governance arrangements between national and local levels, or between the different central government departments responsible for delivering the programme’s benefits, the report says.

The NAO is calling for DfT to determine who will be responsible for building the new rail lines, how the creation of Great British Railways as part of wider rail reforms will affect the programme, and how it can best maximise the benefits from the programme, given the £45 billion funding cap.

Key recommendations

To manage Northern Powerhouse Rail effectively and secure value for money, the NAO recommends that, at this early stage of the programme, DfT:

Fully aligns its strategic case for the programme with the government’s developing Northern Growth Strategy.

Establishes how it will work with key strategic partners in decision-making and funding as part of programme governance, ensuring that roles and responsibilities are clear and understood.

Reviews the benefits it can deliver from each phase of the programme against the expected cost.

Regularly assesses how effectively it is implementing relevant lessons learned from other programmes.

Gareth Davies, head of the NAO, said: “Improving rail service and infrastructure in the north of England is a vital enabler of economic growth and productivity.

“DfT has taken steps to set up Northern Powerhouse Rail for success, including identifying key lessons from other programmes. But further work is needed to ensure it aligns with national and local growth plans.”

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