Opening of tramline to Dudley faces huge delay – find out why

The bombshell news was revealed in a report to next week's board meeting of the West Midlands Combined Authority, which revealed a £36 million shortfall in the scheme's finances.

Anne Shaw, executive director of Transport for West Midlands, said rising inflation and the continued impact of the coronavirus had placed the scheme under increased financial pressure.

Plans for new railway stations at Darlaston and Willenhall are also facing financial pressures after the authority revealed it needed to find an extra £121 million to finance its commitments.

The first stage of the tram extension, from Wednesbury to Dudley town centre, was due to open this year.

But the West Midlands Combined Authority today revealed that it would not now open until autumn next year.

A further extension, running from Dudley to the Merry Hill shopping centre, may now not open until 2027, said Anne Shaw, executive director for transport at the combined authority. And the final section, which would convert with Brierley Hill town centre, may not go ahead at all.

The second stage was planned to run from Dudley to Brierley Hill, via the Waterfront office park and Merry Hill shopping centre.

But board members are now being recommended to submit a reduced scheme, which will terminate at Merry Hill, but leave the door open for a future extension to Brierley Hill should the funding become available.

Metro director Amanda White said: "Now a full refresh of the business case has been completed it is clear that there are insufficient funds available, and there is not currently an economically viable business case justification to build the scheme all the way to Brierley Hill High Street."

The plan will go before the authority board at a meeting at Dudley Council House on Friday next week.

The report further warned that the cost-benefit analysis for the Dudley-Merry Hill stretch of the scheme, which still requires government approval, was resting on a knife edge. But is said that abandoning the second phase would lead to a £15 million increase in the cost of the first stage.

It is the second time that the scheme has been hit by financial difficulties.

In June 2022, rising costs led to the second stage, from Dudley to Brierley Hill, being put on hold, until funding was secured. Dudley Council agreed to contribute £35 million towards the shortfall, and in October last year, then prime minister Rishi Sunak announced that funding would be diverted from the abandoned HS2 northern leg to ensure the scheme went ahead.

But the latest report says that Dudley Council's contribution towards the cost was no longer forthcoming.

The report said that the Government had, in principle, agreed to provide £212.5 million to ensure the second phase, from Dudley-Brierley Hill went ahead, although this would be subject to it meeting the requirements of a business case being made.

The second phase has been split into three sections, the first from Dudley to the Waterfront, the second from the Waterfront to Merry Hill, and a third section from Merry Hill to Brierley Hill town centre.

But the report said the Waterfront-Merry Hill section of the line, estimated to cost £135, provided a cost-benefit ratio of just 1.01 – only fractionally above the minimum score of one to make it viable.

But Mrs Shaw said the ratio might improve slightly as talks took place with Dudley Council to see if any further benefits could be factored in.

Richard Parker, the new elected mayor for the West Midlands, accused his predecessor Andy Street of promising transport schemes without the funding to deliver them.

He said he had now instigated an in-depth review of all the combined authority's transport projects.

"Before I was elected I could see that the previous mayor’s grand promises for additional transport connectivity in the region weren’t being delivered," said Mr Parker.

"That’s why since being elected I have made it my business to understand what is happening with the delivery of capital and transport projects.

"I am now very concerned about number of significant issues that have been brought to my attention regarding the funding, delivery and delay of major transport projects in the region."

He said the combined authority team had already made some changes to the way it worked.

"But I want to go further and that is why I have instigated an in-depth independent review of all transport projects, to be undertaken in partnership with our local authorities.

"These projects need to be delivered. But they need to be delivered in the right way which means working with real figures, with actual funding, realistic timescales and not making promises that simply can’t be kept."