Chris Weatherburn, Account Director responsible for Rail in the Construction Practice, attended the Railway Industry Association last week. He gives his observations on the current mood of the industry, and his thoughts on what he learnt.

The RIA Annual Conference took place in London this week, where the mood mirrored the November weather, slightly gloomy. The theme for the conference was “Promoting the case for rail and investment in uncertain times“, suggesting the industry felt like it was not receiving the support it needed from politicians and policy makers.

Of course, discussion quickly turned to the recent news of the cancellation of HS2 Phase 2. Aside from Huw Merriman, Minister for Rail, and some notable beneficiaries from the North of the country, the news was discussed with near universal disappointment. Not only was the mood soured because of a likely lack of delivery on a project the supply chain had made plans for, but because the decision was made unilaterally by No.10, without any consultation with organisations like Railway Industry Association (RIA), but also the Great British Rail Transition Team, Regional Transport bodies, Network Rail, HS2 or indeed, anyone who represented the sector.

It was not just the cancellation of HS2 Phase 2 that concerned members and delegates. Many of the speakers spoke about the need to fight against the ‘managed decline’ of the industry, and repeatedly pointed to the need for reform across the sector. The need to bring track and train together with legislation was repeatedly mentioned. The need to create a coherent long-term strategy for the railways emphasised, not only for the customers, but also for the people who worked within the industry and for the supply chain which builds and maintains them.

A sector derailed?

Darren Caplan, Chief Executive of RIA opened the conference with a powerful speech, stating that the fact Britain cannot build infrastructure such as HS2 in this country is an embarrassment, and informed attendees of RIA board members’ desire and commitment to continue to lobby for HS2.

Darren mentioned that after the Williams review, Rail reform is still desperately needed in the form of Great British Rail. Yes, he accepted, times are difficult, but the medium-term future for rail is bright. Darren said that rail is still the backbone for transport in this country and supplies much needed connectivity between our communities. Rail is not in decline, and more of it is needed – not less. Perhaps speaking directly to the current Secretary of State for Rail and HS2 in the audience, he said that increased political support is needed for industry.

Further highlighting the seismic (as Darren Caplan referred to it) decision from No.10 to cancel the project was that HS2’s Chair, Sir John Thompson was expected to give a speech at the conference. Sadly, he could not attend as he had to urgently speak to decision makers, but he did send a video message thanking RIA for their support of High Speed Rail, reconfirming his commitment to Phase 1 of the project and emphasizing that neither he, nor HS2 as an entity were party to the decision to cancel elements of the project.

Stephen Morgan MP, Shadow Minister for Rail had understood his brief from Labour HQ. He mentioned the need for a long-term rail strategy, and that the Conservatives had given up on railways, even quoting the RIA Chief Executive by suggesting that they are putting industry into a position of ‘managed decline.’ He noted the scaling back of Norther Powerhouse Rail and the scrapping of HS2 as evidence of this – replacing it with Network North of which he argued 85% was already promised or committed to. The Shadow Minister bemoaned the loss of time, jobs, and money, and suggested a lack of a long-term vision.

So, what will Labour do differently? Stephen mentioned that Louise Haigh, Shadow Secretary of State for Transport since 2021 has committed to an independent expert enquiry into the cancellation of the HS2 project. Beyond that, he echoed Keir Starmer’s conference speech when he mentioned that since 2012, National Infrastructure projects have taken 65% longer (referencing the timespan of a DCO), and that Labour were committed to stopping this deceleration.

Stephen mentioned it was 4 years since an update to the Rail network enhancements pipeline (RNEP), with projects stalling because of political instability. Labour, he argued, wants to deliver substantial change and transformative plans for rail and transport infrastructure, depoliticizing it and focusing on delivering value for the passenger. There seemed to be a commitment to GBR in principle, but the Shadow Minister stopped short of committing to that entity.

The Shadow Minister reconfirmed that desire for public ownership of railways, and that there needs to be more collaboration with organizations who work within the industry. He finished by reiterating that decision making processes are too long and convoluted. He said that Labour wanted to accelerate the consenting process, and fast track projects of national importance.

Sir John Armitt CBE, Chair of the National Infrastructure Committee, spoke of his disappointment about the cancellation of HS2, and the need for more strategic thinking. He pointed out that the HS2 trains will now have to continue North on the West Coast Main Line and as a result will be slower and provide less capacity. He also commented that Birmingham to Manchester still needs further consideration, and that Network North has not been fully defined. It is not, in Sir John’s opinion, a strategy.

The suggestion of a need for more strategy was made earlier in the day by Rufus Boyd, Interim Lead Director, Great British Railways Transition Team, who argued for more strategic thinking, (predictably given his remit) and the need to ask hard truths. Why is it that as an industry, rail is good at promising, but not always delivering, for instance.

Sir John Armitt also repeated his slightly controversial question of ‘why does rail always have to gold plate everything?’ He argued that the industry will never meet the demands of all the people, all the time. He said that a project such as HS2 which considers the needs from communities through the Select Committee process was always going to be challenging, and implied that it was not necessarily the best way to make decisions when you consider national interest.

Sir John pointed toward the example of Eurostar, designing trains to run at 250mph, when the optimum operational speed is 155mph, considering energy usage and journey time. His message was that the sector should address what customers want and need, and to build consensus across industry, rather than to simply create grand projects in a vacuum.

 

Can the industry get back on track?

The conference was far from completely negative, however. The energy and enthusiasm for the industry was very much apparent, with speeches from all parts of the sector focusing on the need to be advocates for the railway, whilst acknowledging that it needs to modernize and be agile through unfavourable economic circumstances. The recent announcement that CP7 funding (the five-year settlement which determines the level of funding that Network Rail receives for its operation, maintenance, and renewals activities) has been ratified was welcome news, and there was positivity for many of the projects which might well be possible over the coming years.

Huw Merriman, The Secretary of State for Rail and HS2 set out some of the projects which he thought were most exciting about the Network North plans: an electrified line linking North Wales to Northern Powerhouse Rail, significant investment in Sheffield and Bradford comprising of electrification projects, and a £2bn new station created for Bradford. Leeds was also cited as potentially receiving £2.5bn for a new mass transport system, whilst the Midlands Rail Hub was said to have been promised £1.5bn to fully complete it.

Ely junction, with a suggested further six freight trains per day being highlighted as a success for the freight industry. On an updated freight growth target, the Secretary of State argued that twelve new pathways from Oxford, and the example of Southampton financially incentivizing more port traffic onto rail gave a cause for optimism of a more buoyant market.

£17bn has been ringfenced for Metro mayors as a part of the HS2 Phase 2 cancellation, a sign the Secretary of State argued, of devolution at work. These funds could be used for whatever transport projects that Mayors felt appropriate. The possibility of bringing the Leamside Line back into service was used as an example of a project which would not have received funding otherwise – CP7’s scope for enhancements is less than it has set aside for maintenance.

The Minister argued that these projects were more targeted, would enable the country to meet 2050 Net Zero targets more easily, and would give a higher financial return. He argued that this £36bn of additional funding for Network North is on top of the 12bn for Manchester to Liverpool, in addition to Phase 1 HS2 Birmingham to Euston.

A Nations and Regions panel comprised of Martin Tugwell, Chief Executive of Transport for the North, Rupert Clubb, Chief Officer of Transport for the South East, Shona Clive, Project lead for the Forth and Tay Offshore project, Simon Jones, CEO of the Global Centre for Rail Excellence, Stuart Harvey, Chief Capital Officer for Transport for London, and Vernon Everitt, Transport Commissioner for Greater Manchester.

The discussion from the panel promoted the importance of rail to regional prosperity and growth, whilst again highlighting the need for more Integration and strategic thinking in the future. Martin Tugwell was enthusiastic about the transformative potential for rail, commenting that rail passenger numbers have recovered in the North more than elsewhere, and that 33% of port inflow/outflow took place there, highlighting the importance of the freight industry. Rupert Clubb noted the challenges in planning transport solutions for thirty years, and cited specific examples that he would like to see improvement in, specifically Hastings to Charing Cross and Portsmouth to Southampton.

Stuart Harvey from TfL pointed out the importance of collaboration and the benefits of long-term investment. He suggested that projects such as the Bakerloo extension, Crossrail 2, the DLR to Thamesmead and Piccadilly and Bakerloo Line upgrades were high on the agenda. Vernan Everitt spoke about the value of having a single guiding mind when making decisions, citing the example of Metro Mayors Andy Street and Andy Burnham. Mr. Everitt spoke about Manchester being a trailblazer in introducing the Bee Network, a ‘one-stop-shop’ for all local transport and active travel journeys, integrating fares and ticketing.

John Larkinson, Chief Executive of the Office of Rail and Road suggested that the industry is in danger of being too ‘doom and gloom’ about the future, whilst acknowledging that it certainly faces challenges. Mr. Larkinson made the case that for Network Rail to receive the £43bn of CP7 funding, a near identical figure to CP6, the ORR has done well. He noted that the pot of money for renewals is lower than in CP6, whilst the amount set aside for maintenance is higher.

This reflects a desire to steady the ship ahead of some of the challenges that the industry faces in the forms of industrial action, reduced passenger numbers since Covid, and the unlikeness of any railway reform legislation making it into the Kings Speech, or before a new Government. Mr. Larkinson also emphasized the need to continue to find efficiencies in CP7, providing value for customers and funders, and highlighting that in the absence of rail reform legislation, the industry needs to take accountability and improve on alignment and the simplification of processes themselves.

There was also a fantastic panel talking about international opportunities for people in sector, with more than one panellist noting Britain’s reputation as a world leader. Ireland ‘s National Transport Authority is planning on spending £15bn on a mixture active travel, busses and two major rail projects including Metrolink, which connects Dublin Airport, Irish Rail, DART, Dublin Bus, and Luas services to create a fully integrated public transport network for the Greater Dublin Area (GDA).

Australia is spending huge amounts of money on rail enhancements, with the Sydney Metro being completed in 2024, creating 4 new lines and 46 new stations. The Melbourne Suburban Rail Loop will include 15 new stations, and is being constructed in 3 sections, completed by 2035. An Inland Rail 1600km freight line from Brisbane to Melbourne is being investigated, whilst the Government has also announced a new High Speed Rail authority will be established this year, the first phase connecting Sydney and Newcastle.

Helena Matos, Senior Project Manager for Infrastructure of Portugal spoke about their plans to create a new high-speed line between Porto to Lisbon, part of their 10bn fund for rail projects, focused on passenger service. There was also mention of ‘Ferrovia 2020’ plans Improve the freight connectivity over 1/3 of their network.

Andrew Haines, Chief Executive of Network Rail and Great British Rail Transition Team rounded off the conference by suggesting that the CP7 funding was ‘a generous gift’. Mr. Haines noted there have been bumpy times of late, highlighting not only the difficult current economic climate, but the challenges of so much recent political churn, and having a fourth Secretary of State since the announcement of Great British Rail.

However, he argued that in CP7, the railways sector has a ‘staggering level of confidence and financial security’ that most others would be envious of. Mr. Haines also noted the point made by PM Rishi Sunak that every penny saved from HS2 would be reinvested in transport solutions to the areas that would have received the HS2 funds – £20bn for the North, and £10bn for the Midlands. He argued this was effectively £80bn of funding over the next five years, which would not have been conceivable without the cancellation of HS2, as the Government would not have borrowed money to finance these schemes in isolation.

It is worth noting that there is currently no clear timetable for the release of these additional HS2 funds, and therefore that these spending commitments are speculative, and dependent on what happens in the next General Election.

If you’d like to discuss more about what Chris learnt from the conference, or to find out more about what services Copper can offer the rail industry, please contact: chris.weatherburn@copperconsultancy.com

 

For more information on RIA visit their website.