DfT annual reports and accounts

The Department for Transport has published its annual reports and accounts for the 2025-26 financial year, revealing significant cost overruns on major infrastructure projects and a growing maintenance backlog across the road and rail networks.

The documents show that HS2, the high-speed rail project now running between London and Birmingham with a planned extension to Manchester, has seen its projected cost rise by a further £8 billion, taking the total estimated bill to £115 billion. The department attributed the increase to inflation in construction materials, unexpected ground conditions and delays in securing planning approvals for the Manchester leg.

The roads budget tells a similar story. The maintenance backlog for local roads in England has grown to £14.4 billion, a figure that the Local Government Association described as a national embarrassment. The department acknowledged that current funding levels were insufficient to prevent further deterioration and said it was working with the Treasury on a long-term settlement.

On rail, the report confirmed that the transition to Great British Railways, the new public body that will oversee the network, is running approximately 18 months behind schedule. The department said the complexity of integrating track and train operations, combined with the need to negotiate with rolling stock companies and trade unions, had extended the timeline.

The accounts also detail the department's spending on active travel, electric vehicle charging infrastructure and bus services, all of which saw real-terms increases. The department's overall expenditure for the year was £43.7 billion, up 6 percent from the previous year, driven primarily by the infrastructure programme and the ongoing subsidy to the rail network.