The success of the UK government’s flagship rail upgrade programme in northern England will depend on stronger coordination across government and closer links to wider economic policy, according to a new report by the National Audit Office (NAO), UK’s independent public spending watchdog.

The Northern Powerhouse Rail programme aims to improve east–west rail connections across the north of England by combining new rail lines with upgrades to existing tracks and stations. The government confirmed plans for the project in January 2026 as part of its broader regional growth strategy.

The NAO said the Department for Transport (DfT) had made progress in establishing the programme, including identifying lessons from earlier rail schemes and planning how it will interact with other projects such as the Transpennine Route Upgrade.

However, the audit office concluded that further work is needed to demonstrate how the scheme will deliver the wider economic benefits expected for the region. It said the government has yet to put in place clear governance arrangements between central departments and local authorities responsible for delivering those benefits.

The project has been under development for more than a decade. Planning has been affected by changes to the wider rail strategy, including the cancellation of the northern leg of High Speed 2 to Manchester in 2023, which altered the scope and expected benefits of Northern Powerhouse Rail.

According to the NAO, the programme is expected to be delivered in three phases. Initial work would involve upgrades to existing lines and stations between cities such as Bradford, Leeds, Sheffield and York, followed by a predominantly new line between Liverpool and Manchester and further improvements across the Pennines. The first phase is expected to be completed in the 2030s, with later phases extending into the 2040s.

The government has placed a funding cap of £45bn on the programme, meaning decisions may be required on which elements to prioritise. The NAO said the DfT should regularly review expected benefits against costs and clarify responsibilities for delivering the new infrastructure, particularly as the rail system undergoes reform and the planned creation of Great British Railways.

Regional stakeholders previously told the NAO that engagement with central government had been limited following changes to the project after 2023, which made it difficult for local authorities to advance related economic and planning initiatives.

Gareth Davies, head of the NAO, said improved rail infrastructure in northern England could help support productivity and growth, but added that more work is required to ensure the programme aligns with national and local economic plans.

The NAO recommended that the government clarify how it will work with strategic partners, ensure roles and responsibilities are clearly defined, and continue applying lessons learned from previous major rail programmes as the project develops.

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