Spending Review 2021 – RIA Submission 1. INTRODUCTION 1.1
This submission constitutes the Railway Industry Association’s response to the Government Spending Review 2021.
2. BACKGROUND TO RIA 2.1
RIA is the trade association for UK-based suppliers to the UK and world-wide railways. It has over 300 companies in membership covering all aspects of rolling stock and infrastructure supply and covering a diverse range of products and services. As well as most of the Tier 1 contractors and large, multi-national companies, over 60% of RIA’s membership base is comprised of SMEs. Our member companies span the lengths and breadths of the country – a map can be seen here.
2.2
Our Oxford Economics 2021 report 1 shows that the UK rail sector before the Coronavirus pandemic was growing, sector contributing up to 2019 annually over £43bn Gross Value Added (GVA) to the UK economy compared to £36bn in 2016, and supports some 710,000 jobs and generates £14bn in tax revenues, compared to 600,000 jobs and £11bn tax revenues in 2016. The OE report also highlights that for every £100 million investment in rail 1,400 jobs are created in rail and 2,400 jobs including those in the wider economy.
2.3
According to the report, for every £1 invested, rail supports £2.50 in the wider economy, up from £2.20 in 2016 - meaning rail is not just an important sector in its own right, but it is also crucial for UK plc, its economy and connectivity. Rail has been a growing industry with the number of rail journeys having double in the 20 years up until the pandemic, along with significant growth in rail freight traffic, regardless of shocks such as the present Coronavirus crisis. The full report Oxford Economics report can be accessed here.
2.4
RIA provides its members with extensive services, including: • Representation of the supply industry’s interests to Government, Network Rail (NR), HS2, Transport for London (TfL), Transport Scotland and Transport for Wales, Office of Rail and Road (ORR), RSSB, and other key clients and stakeholders; • Providing opportunities for dialogue and networking between members, including several • Special and Technical Interest Groups; • Supply chain improvement initiatives; • Provision of technical, commercial and political information every week; • Export promotional activity, through briefings, rail trade missions overseas, hosting inwards visits; and • Organising Great branded UK Pavilions presence at key exhibitions overseas.
2.5
RIA recognises that equality diversity and inclusion drive innovation, financial performance and success. Together with Women in Rail, RIA is promoting an Equality ,Diversity and Inclusion Charter for rail, which has the potential to support social mobility, grow UK STEM skills, create local opportunities, and increase the talent pool from which the future leadership of the rail sector will be drawn.
3. EXECUTIVE SUMMARY 3.1
1
RIA understands the impact that the Coronavirus pandemic has had and will continue to have on public finances, and are grateful for the support the Government has provided to keep the railways running over the past 18 months. During the pandemic, funding from Government helped keep essential services
https://riagb.org.uk/RIA/Newsroom/Publications%20Folder/OE_2021.aspx
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Spending Review 2021 – RIA Submission operating, transporting key workers and goods across the UK. Rail suppliers have also played their part by continuing to invest in skills, assets and innovation. 3.2
Now, as we come out of Coronavirus restrictions in Autumn 2021, rail can be a key driver of economic growth, supporting jobs in every region, helping the UK reach its net zero ambitions and grow UK exports across the globe. In the Transport Secretary Grant Shapps’ own words, “not two World Wars, not recessions and depressions, not the Spanish Flu… stopped the inexorable growth of the railways”. So, when the UK is looking to build back better and cleaner, continuing to invest in rail can help be the catalyst for this recovery.
3.3
With this in mind, in this submission RIA has called for commitment from this Government to continue investment, and smooth funding profiles and work pipeline visibility, to enable more efficient delivery and increased productivity. We also ask for well as decisions on projects, programmes and decarbonisation to be made as soon as possible.
3.4
We are urging the Government not to delay these decisions, given the increase in costs associated with doing so. As the UK railways undergo significant structural changes and transition to Great British Railways (GBR), as set out in the Williams-Shapps Plan for Rail, we need to ensure there is no hiatus in work and no short-term reduction in funding.
3.5
In this paper, we have set out six actions that RIA and its members believe the Government should take as we emerge from the pandemic. These will help the industry build operate, maintain and upgrade our network, in an efficient way and at good value for the UK taxpayer.
3.6
Action 1: Commit to at least an equal level of funding for Control Period 7 (CP7) than that provided in CP6, acknowledging that rail will require Government support to return to pre-pandemic growth. A Government that supports the rail industry will see investment returned, as rail funding catalyses economic growth, jobs and investment: in the most recent analysis, for every £1 spent in rail, £2.50 is generated in the wider economy. Also, rail investment will need to be delivered consistently over the full term of the Control Period to avoid ‘boom and bust’ cycles in the supply chain
3.7
Action 2: RIA asks that the remaining £9.4bn of the enhancements budget be spent by the end of CP6, March 2024, to avoid funding for these schemes to be lost or delayed significantly, which would in effect mean a reduction of budget.
3.8
Action 3: Guarantee funding for previously-committed to major projects – in order to succeed in levelling up the UK. This means delivering HS2 in full (including the Eastern Leg) , Northern Powerhouse Rail, Transpennine Route Upgrade, East West Rail and Midlands Rail Hub.
3.9
Action 4: Launch the rolling programme of rail electrification and fleet orders of hydrogen and battery trains promised in the Transport Decarbonisation Plan, and set out in the Traction Decarbonisation Network Strategy. The decarbonisation of the rail network needs to take place as soon as possible to maximise carbon reduction, enable cost-effective delivery and cut costs in the long-term.
3.10
Action 5: Fund Network Rail’s Long-term Deployment Plan for digital signalling, support TfL and HS1’s digital signalling investment, and ensure a steady ramping up of digital signalling work. Commit to rolling out digital technologies, such as e-ticketing, across rail and tram networks in every region of the UK.
3.11
Action 6: Support rail exporters seeking to market products and services overseas and ensure rail is a key part our plans for global trade opportunities, including restoring funding for SMEs in the industry to
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Spending Review 2021 – RIA Submission attend overseas trade shows and pursue export opportunities, which ended with the closure of the Tradeshow Access Programme (TAP). 4. CONTEXT 4.1
The railway industry is a critical economic sector. According to data just before the Coronavirus pandemic, it was contributing £43bn GVA per year to the UK and supporting 710,000 jobs across the country.
4.2
In March 2020 passenger levels dropped to their lowest in almost 200 years, as the country ground to a halt in the first Coronavirus lockdown. Since then, passenger numbers have gone up and down as various restrictions have been reinforced and eased. By September 2021, however, they had rebounded to levels of over 60% on mainline rail, and are continuing to rise steadily at the time of submission. The rail freight sector proved its value during the pandemic and has largely recovered to pre-pandemic levels showing how it can support modal-shift and carbon reduction.
4.3
The supply sector responded well to the pandemic, continuing essential maintenance and renewals and ensuring critical goods and services continued to flow across the country. This was supported by significant funding from Government since March 2020 of at least £8.5 billion. This created a significant reduction in revenue for a sector which provided over £14 billion in tax revenue to the Treasury only two years ago, so there is a greater need to focus on efficiency and value for money for the taxpayer. Whilst Government continued to fund rail services and investment the private sector investors also supported rail – managing losses on EU services for example and continuing to invest in innovations such as hydrogen, battery and data solutions. Rail suppliers from amongst RIA membership, focused on supporting their manufacturers across the UK, including investing in advance and bringing forward planned projects where possible.
4.4
While short-term projects and essential work have continued, the uncertainty caused by Coronavirus has impacted major programmes and upgrades, and caused delays to long-term industry plans and work pipelines damaging supplier confidence to invest.
4.5
In June 2021, the Government published its much-delayed Williams-Shapps Plan for Rail, which sets out wholesale changes for the industry and includes the blueprint to establish Great British Railways, with greater control for the Government over both train and track. The Plan identifies that passenger numbers on the national rail, light rail and metro networks require building up. To do so, it highlights the needs for a 30-year strategic vision for the sector, and the importance of issues such as digitalisation and innovation to improve the passenger experience. RIA agrees with this.
4.6
As the COP26 Climate Conference approaches in November 2021, the race to decarbonise UK transport, which remains the most polluting sector in the UK, will be one of the most pressing challenges the country faces. Rail is a low carbon mode of transport, contributing just 1.4% of transport emissions, despite carrying 10% of all journeys, and nationally accounts for only 0.5% of all emissions 2. Yet, to achieve the UK Government's legal commitment to Net Zero by 2050 and its aim to take all diesel-only trains – both passenger and freight - off the rail network by 2040, decisions are needed now. Rail can also support wider transport decarbonisation by enabling modal shift toward public transport and for transporting goods.
2
Source: https://riagb.org.uk/RIA/Newsroom/Stories/RailDecarb21.aspx
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Spending Review 2021 – RIA Submission 4.7
The recent Transport Decarbonisation Plan outlined this Government’s ambition to continue cutting emissions from the sector. Crucially for rail, this commits to further electrification and hydrogen and battery trains, and growing the amount of goods transported by rail freight. This commitment now needs to be acted upon.
4.8
Looking ahead, the Government has suggested that almost half of the UK’s future infrastructure pipeline forecast will be privately financed to help deliver levelling up and net zero agendas. RIA believes that there is significant appetite and opportunity to invest and finance either new or existing rail infrastructure, including depots, stations and signalling – helping to unleash the ‘investment big bang’ the Prime Minister and Chancellor have called for.
4.9
However, there remain critical announcements setting out the Government’s priorities for years ahead, that the industry has not yet had sight of, the Rail Network Enhancements Pipeline (RNEP) and Integrated Rail Plan for the North and Midlands chief among them. The absence of these plans creates real uncertainty for the sector as it looks to support the economic recovery. Such certainty is desperately needed to underpin investment decisions in the people, assets and innovation that drive productivity and economic growth.
5. A LONG-TERM PLAN FOR INFRASTRUCTURE 5.1
Rail projects are vital to increasing much-needed capacity on the network to support modal shift, improving the passenger experience and delivering a clean transport system. They also support high-skilled jobs, help drive investment in all corners of the country and boost economic growth nationally.
5.2
For example, HS2 is estimated to support 34,000 jobs at the peak of construction 3 and Transport for the North has estimated that – combined with HS2 and the Transpennine Route Upgrade – Northern Powerhouse Rail could lead to 74,000 jobs being created by 2060 4. HS2 can support over 500,000 jobs through the project’s wider economic impact. Oxford Economics research suggests that every £100 million investment in rail supports 1,400 jobs in rail and 2,400 jobs including those in the wider economy 5.
5.3
The Integrated Rail Plan for Midlands and North is due to confirm whether the Government will go ahead with HS2 and NPR in full. Delays to these projects will however significantly increase costs, and create uncertainty in the supply chain, affecting the rail industry’s ability to create and maintain jobs. RIA has heard from its members that this uncertainty has stopped them hiring or they have begun redeploying staff to new projects or sectors. Cutting sections of the projects all together would significantly hamper efforts to connect and bring jobs and investment to communities in all regions of the country.
5.4
Enhancements – upgrades to the network – help improve the passenger experience and will be important for decarbonising the railways. In the current funding cycle, Control Period 6 (CP6), enhancement decision-making was moved to the Department for Transport (DfT) and is now decided through a stage-gate process known as the Rail Network Enhancements Pipeline (RNEP), in which the DfT and HMT must approve every project throughout the project life cycle. The most recent update to the RNEP was published in October 2019. Although the DfT said the RNEP would be updated every year, there is currently a gap of two years between updates. The
Source: https://mediacentre.hs2.org.uk/news/minister-in-crewe-to-welcome-jobs-boost-on-hs2 Source: HM Treasury: National Infrastructure Strategy, November 2020 5 Source: https://riagb.org.uk/RIA/Newsroom/Publications%20Folder/OE_2021.aspx 3 4
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Spending Review 2021 – RIA Submission consequent uncertainty prevents suppliers making business investment decisions, including in jobs. 5.5
Over the last two years, the industry has seen cuts to the enhancements budget, of £1bn+ 6. However, it has not been communicated to the industry by either the DfT or Network Rail how this reduction will impact the list of planned projects and what schemes will or will not be proceeding.
5.6
The Infrastructure and Projects Authority (IPA) published an Investment Pipeline in September 2021, outlining 53 rail projects worth more than £56bn 7. This includes a series of rail enhancements, but it does not confirm at which stage they are in the process of delivery and confirmed dates for construction.
5.7
The lack of visibility for suppliers of upcoming work impacts their ability to plan and build capability and increases costs of projects. As the Williams-Shapps Plan for Rail recognises, there is likely to be a role for increasingly devolving decision-making on enhancements from DfT to transport authorities and bodies with local knowledge and understanding of the projects, such as Transport for the North. The industry is eager to work with the DfT to deliver enhancements efficiently.
5.8
On renewals, RIA has long campaigned to smooth out the peaks and troughs in funding for renewals. Renewals of the rail network are funded in five yearly cycles, known as Control Periods (CPs). Work is usually concentrated into the middle years of the CP creating a ‘boom and bust’ profile of work for suppliers. This inconsistency in work means the industry has to prepare for a significant ramp up in work before, when the ‘bust’ approaches, having to close facilities shut, and disband work teams and losing jobs; and multi-national companies move to other non rail sectors or overseas, and SMEs struggle to find work and some go out of business altogether. Although this issue is now more widely recognised, it remains vital that renewals are smoothed out over CPs and major rail projects are considered in relation to other work across the UK, particularly as preparations are made for CP7.
5.9
Regional and city transport bodies have also faced uncertainty over funding. In the last two years during the pandemic, Transport for London (TfL) for example has received three separate, short-term funding packages the most recent of which will expire at the end of this year. A longer-term approach to funding transport bodies – similar to Network Rail’s five-year Control Periods – would provide the certainty that rail businesses need to support London’s railway, and deliver critical upgrades, as increased passengers and freight return to the network.
5.10
Action 1: Commit to at least an equal level of funding for Control Period 7 (CP7) than that provided in CP6, acknowledging that rail will require Government support to return to prepandemic growth. A Government that supports the rail industry will see investment returned, as rail funding catalyses economic growth, jobs and investment: in the most recent analysis, for every £1 spent in rail, £2.50 is generated in the wider economy. Also, rail investment will need to be delivered consistently over the full term of the Control Period to avoid ‘boom and bust’ cycles in the supply chain.
5.11
Action 2: The current process to progress rail schemes involves the annual publication of a Rail Network Enhancements Pipeline (RNEP) by the Department for Transport. However, having not been updated in almost two years – at the time of writing – rail suppliers have been left in the
6 7
Source: Network Rail – ‘Our Targets for CP6’ Source: Infrastructure and Projects Authority – Transforming Infrastructure Performance: Roadmap to 2030
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Spending Review 2021 – RIA Submission dark on future projects. Whilst the IPA’s recent procurement pipeline includes many rail schemes and major projects, it is not fully funded. Of the £10.4bn original enhancements budget, RIA asks that the remaining £9.4bn be spent by the end of CP6, March 2024, to avoid funding for these schemes to be lost or delayed significantly, which would in effect mean a reduction of budget and loss of capability. 5.12
Action 3: Guarantee funding for previously-committed to major projects – in order to succeed in levelling up the UK. This means delivering HS2 in full (including the Eastern Leg), Northern Powerhouse Rail, Transpennine Route Upgrade, East West Rail and Midlands Rail Hub.
6. A STABLE AND SUSTAINABLE ROLLING STOCK MARKET 6.1
The UK has excellent rolling stock capability, yet its market is facing a period of prolonged volatility and uncertainty.
6.2
Recent franchising policy has encouraged the provision of new rolling stock which has led to a period of volatility that may impact the ability of the industry to deliver and sustain the current capability. Much of the current national passenger train fleet has already or will shortly be replaced following a large volume of orders (some 7,200 vehicles).
6.3
Further orders for new trains in the coming years will be fewer and demand to refurbish trains already in use on the network will increase. However, the past trend towards the use of new trains has resulted in a steep downturn in the train refurbishment market presently, meaning the refurbishment industry may not have the capability to deliver when the current stock needed refurbishing. The refurbishment supply chain is a critical component of the industry, maintaining, repurposing and delivering high-quality upgrades to trains already in service on the network, which can transform the passenger experience. The uncertainty in this area has forced several businesses to close and losing further suppliers could lead to job cuts, reductions in skilled labour and would make it harder for the industry to address performance, reliability or decarbonisation challenges on the network in the future.
6.4
The Williams-Shapps Plan for Rail recognised the importance of increased private sector investment and innovation, notably its critical role in financing and delivering rolling stock to transform our railways. We warmly welcome the Government’s continued support for market-led rolling stock procurement. Rolling stock leasing companies and maintenance service providers deliver a valuable service to the rail industry and wider economy. They offer significant technical expertise and valued asset management of train fleets, investing in innovative technologies and services that have a direct benefit to the passengers who use their vehicles and supporting the sector’s transition to net zero. This will need to be recognised as GBR is established.
6.5
The Transport Decarbonisation Plan is a potential opportunity for the industry as this will increase the demand for particularly electric but also battery and hydrogen passenger trains. There is also likely to be a need for a large number of electric freight locomotives which, with appropriate requirements for UK content could create new capability. However, insufficient detail of the potential roll out programme is available to allow rolling stock businesses to plan nor is it clear when responsibility will transition from Government to GBR for procuring rolling stock.
6.6
This market will also need to avoid a hiatus in decision making and require long-term certainty as Great British Railways takes control of procurement of new rolling stock. The supply chain is seeking effective and transparent consultation on the Whole Industry Strategic Plan (WISP).
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Spending Review 2021 – RIA Submission 7. A ZERO EMISSIONS RAILWAY 7.1
The Transport Decarbonisation Plan, released on 14 July 2021, clearly set out the need for cutting emissions from transport and creating a net zero railway. Although rail is not a major contributor of carbon emissions, emitting just 1.4% of transport emissions, rail will need to play its part in achieving the Government’s Net Zero target and also offers the opportunity for modal shift.
7.2
The Plan extended a target to take all diesel-only trains off the network by 2040, including both passenger and freight trains. In 2019, it was reported that 96% of UK rail freight is transported by diesel 8. And so to reach the target in less than 20 years, action is needed now.
7.3
Electrification will be the primary way in which the railways can reach zero traction emissions. This was identified in the Government’s Transport Decarbonisation Plan, which supports the findings from Network Rail’s Traction Decarbonisation Network Strategy (TDNS). This called for the vast majority, roughly 86% of the network, to be electrified. The other 14% will be a mix of battery and hydrogen trains.
7.4
Investment in electrification has until now been inconsistent in a ‘boom and bust’ approach. We understand it will now be decided by the RNEP process, highlighted in section 5. We believe this is the wrong approach as the TDNS sets out a programme business case and, whilst there is an optimum roll out plan to be developed, individual routes should not have to make their own business case or go through the whole RNEP process. We say this given the background that a) most of the network needs to be electrified to achieve net zero and b) the TDNS Programme had a net positive business case.
7.5
We acknowledge the need to ensure electrification is cost-effective , but previous discussion on cost has focused on a few past problem projects, neglecting more recent schemes delivered to time and to budget. As set out in RIA’s Electrification Cost Challenge report in March 2019, the industry has learnt clear lessons from previous projects, including the need for a smooth profile of consistent work. The report showed that with a rolling programme, costs could be driven down by up to 50% of past problem projects, notably the Great Western Electrification Scheme 9.
7.6
In the UK, this inconsistent approach over several decades has meant only 38% of the network is electrified. Looking at the UK’s similar counterparts, there is a stark difference with those who have a rolling programme. Germany has electrified over 60% at a consistent 200 km a year and Scotland has a rolling programme which is also delivering cost efficiently once initial lessons were learnt.
7.7
RIA estimates that, to reach the TDNS target for electrified railway, the UK will need to electrify roughly 450km a year. Moreover, given the lead time on design and route clearance before electrification can start, we call for these processes to be started in CP6. We further ask for projects with designs in place such as Transpennine, Midland Main Line and Great Western commence construction in order to keep scarce electrification resources in place. Finally, we call for an industry programme ramp up to sustain and grow the resources that will be required for the full programme. All this needs to start in 2021.
7.8
Battery and hydrogen will also play a key role in reaching a net zero railway, as the TDNS and Transport Decarbonisation Plan identifies. Additionally, both technologies could also contribute to larger and earlier carbon reductions by providing interim passenger services on some routes
8 9
Source: David Shirres submission to Transport Committee inquiry on Trains Fit for the Future inquiry Source: https://www.riagb.org.uk/RIA/Newsroom/Stories/Electrification_Cost_Challenge_Report.aspx
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Spending Review 2021 – RIA Submission which will not be electrified until later in the programme. However, there is no clear funding commitment from Government for the roll out of low carbon rolling stock fleets. 7.9
Every tonne of carbon we save now, will be 29 tonnes by 2050, conversely if we wait until 2049 to take the same action, we only save 1 tonne. So with under 30 years to reach Net Zero, there is an imperative to start work now. This is important both for carbon reduction but also to retain skills and capability, as there are no significant electrification projects currently in construction. An apprentice starting in the industry today, with a pipeline of electrification or battery and hydrogen train orders to 2050, will have almost 30 years of guaranteed work ahead, on projects across the UK. Rail’s strength in mass transit also means that it provides a predictable demand and efficient use of potentially scare energy resources.
7.10
Action 4: Launch the rolling programme of rail electrification and fleet orders of hydrogen and battery trains, promised in the Transport Decarbonisation Plan, and set out in the Traction Decarbonisation Network Strategy. The decarbonisation of the rail network needs to take place as soon as possible to maximise carbon reduction, enable cost-effective delivery and cut costs in the long-term. For more on this, see the RIA RailDecarb21 campaign.
8. A RELIABLE, DIGITALLY CAPABLE RAILWAY 8.1
A digital railway offers significant benefits for UK passengers, improving reliability and frequency of services, and improving safety on the railways more broadly.
8.2
Rolling out digital signalling urgently is not a ‘nice to have’ decision, it is essential. Much of the UK’s signalling infrastructure is outdated and at least 60% will become life-expired in the next 15 years. Yet there has been little progress on this area so far in Control Period 6. It is also essential that the establishment of Great British Railways does not delay this work further. HS1 and Transport for London also need to continue investment in digital signalling.
8.3
Whilst Network Rail – which owns, operates and develops the UK’s railway infrastructure – has developed a Long-term Deployment Plan for digital rail; currently only East Coast Mainline investment and the supporting cab-fitment has been funded. Similarly with other areas of the industry, a rolling programme is the most cost-effective way to roll out digital signalling. We suggest that this is steadily ramped up from now, to give the supply chain time to develop capability and competitiveness. As it stands, the lack of clarity over funding and delay on other projects will mean that the UK lags behind its own targets for digital signalling by CP7 and will not achieve the cost reductions set out in the Rail Sector Deal.
8.4
RIA acknowledges the need for a competitive signalling unit cost, and is committed to working with Government and Network Rail to drive these down, under the Rail Sector Deal. This partnership approach is essential as typically only 50% of the cost is in the control of the supplier. A rolling programme of investment would enable competition and support efficient delivery – it is good for the taxpayer, the passenger and the supply chain as delivery becomes increasingly efficient over time. The East Coast digital project could be used a benchmark for how to deliver a programme effectively and to budget, and should inform the Government’s decision making on future projects.
8.5
Data will also play an increasingly important role, particularly on projects under development such as HS2. Outside London the UK again lags behind other countries in providing information to passengers and operators. Funding for the Rail Data Marketplace, announced by Rail Minister Chris Heaton-Harris in July 2021 is a good start, but for the impact to be felt nationwide more needs to be done. 8 / 10
Spending Review 2021 – RIA Submission
8.6
Action 5: Fund Network Rail’s Long-term Deployment Plan for digital signalling, support TfL and HS1’s digital signalling investment and ensure a steady ramping up of digital signalling work. Consider options for asset financing models. Commit to rolling out digital technologies, such as e-ticketing, across rail and tram networks in every region of the UK.
9. ENABLE THE RAILWAY TO CONTINUE INNOVATING 9.1
Innovation drives down costs and increase efficiency, with new products, new ways of working and construction methods. As a sector, rail is already innovative with projects delivered that have helped cut carbon emissions and resources required in construction, used drones to inspect infrastructure, monitored passenger levels and improved cleaning services during Coronavirus and enhanced the customer experience.
9.2
Funding for innovation across the industry can be fragmented and more could be done to create an environment which incentivises and supports innovation through procurement – for example more targeted innovation, effective use of procurement tools such as the Innovation Partnership Procedure and creative match funding to leverage Government rail funding.
9.3
The Williams-Shapps Plan for Rail acknowledged ‘there are too many taxpayer-funded organisations with split responsibilities and different priorities funding rail research’ 10. It also recognised the importance of innovation and working with private businesses and academia. Network Rail’s Research & Development initiative successfully leveraged £112 million in matched funding, and has enabled the development of a wide range of innovative products and services for the railways across all disciplines in the industry. Good though this programme is, it is an Infrastructure Managers’ programme which leaves a gap between the needs of the whole system including rolling stock.
9.4
Rail opportunities need to be recognised in national innovation strategies: for example, for battery, hydrogen and digital design capability (BIM). We also welcome the innovative approach to funding local heavy, light and very light rail projects through both the Department for Transport’s Restoring Your Railway Fund and the Government’s Levelling Up Fund. Light rail and metro lines can help boost cities and towns across the UK, and have proved hugely successful in city regions such as the West Midlands and Greater Manchester. The innovative very light rail project in Coventry will help transform the city at good value for the taxpayer.
9.5
The Government should help encourage innovation both through funding opportunities for supply chain companies and enable clients to procure for innovation. The level of public funding for infrastructure research should be at least maintained at current levels with a proportionate increase to support the whole rail system including rolling stock.
10. GROWING UK RAILWAY EXPORTS OVERSEAS 10.1
The UK railway supply chain exports its world-leading products, services and capability to overseas markets, with rail exports totaling £600mn in 2019. The Rail Supply Group has set a target of doubling rail in exports by 2025, and with the UK continuing to negotiate new free trade deals with partners across the world there are opportunities for UK-based rail exporters.
10
Source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/994603/gbr-williamsshapps-plan-for-rail.pdf p.92
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Spending Review 2021 – RIA Submission 10.2
Unfortunately however, the Department for International Trade (DIT) recently confirmed it will scrap the Tradeshow Access Programme fund. TAP provided financial support to businesses looking to attend trade shows and capitalise on worldwide rail export opportunities via international rail exhibitions. The grants allocated under the scheme were relatively small – with around 194 grants allocated to businesses since 2016. Each grant is valued between £1,500 to £2,500 and are highly valued by the SMEs that use them.
10.3
Previous cost-benefit analysis of the TAP, commissioned by DIT (a London Economics 2008 study), found: “The total benefit of the programme in 2007/2008 amounted to £57.1 million. Given the programme costs of £11.2 million, the estimated benefit-cost ratio is 5.1”. This is a tangible ROI for the UK economy.
10.4
The TAP grants are also used to support not just rail but many other industries, like fashion and manufacturing. The decision to close the programme does seriously impinge on the ability for UK SMEs to sell their products and services across the World at a crucial time.
10.5
Action 6: Support rail exporters seeking to market products and services overseas and ensure rail is a key part our plans for global trade opportunities, including restoring funding for SMEs in the industry to attend overseas trade shows and pursue export opportunities, which ended with the closure of the Tradeshow Access Programme (TAP).
RIA is happy to provide further information on any of the above issues. Please do not hesitate to get in touch with RIA Policy Director Kate Jennings if you have any further questions, at Kate.Jennings@riagb.org.uk or on 020 7201 0777.
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