3. RIA’S KEY ACTIONS FOR GOVERNMENT
i. Commit to investment pipeline certainty and transparency. Certainty and visibility of future investment plans generates best value for taxpayers and investors (read a longer review of the evidence on this here) It is crucial for making sure the industry gets the right skills and equipment in the right places to deliver efficiently. The Government needs to:
• Move away from boom and bust investment in key areas of railway spending: identify and commit to the required long-term rate of investment in key railway assets e.g. signalling, electrification, rolling stock and renewals.
• Honour the commitment to publish the Rail Network Enhancements Pipeline annually.
• Unlock private investment: allow new models for partnering with business that better share risk and reward; allow private finance solutions where the public sector is unable to make long-term investments.
• Mitigate the current drought with judicious rolling stock orders, allowing private finance to upgrade or renew older rolling stock with high quality low carbon trains bringing passenger benefits sooner and sustaining UK industrial capability.
• Adopt longer-term funding settlements for regional transport, such as Transport for the North and Transport for London, mirroring the five-year funding settlements for Network Rail.
ii. Invest in major infrastructure projects. Major rail projects are transformational for the communities they connect, wider economy, and in transitioning the UK to clean transport. They also support high skilled jobs during construction. Recent government commitments to HS2, East West Rail and Northern Powerhouse Rail are welcome. Other major schemes should be a question of ‘when, not if’: the UK will need this capacity, and early and consistent commitment is the way to secure best value for money and catalytic benefits from the economy. The Government needs to:
• Commit to delivering HS2 in full (including the Eastern Leg and Golborne Link, or replacement), to secure the benefits of the project
• Commit to Northern Powerhouse Rail, in full, and clarify the current scope.
• Identify and confirm in principle commitments to other strategically important rail projects that will be needed in future, including East West Rail, Midlands Rail Hub and Crossrail 2.
iii. Accelerate decarbonisation and green growth. On the current trajectory of investment, the UK will not meet its legal obligations on Net Zero. Starting a steady programme of investment now will reduce more carbon sooner, and be much more cost-effective than investing later. The Government needs to:
• Commit to a rolling programme of cost-effective electrification for intensively-used lines.
• Begin fleet orders of low carbon rolling stock which use new traction methods like hydrogen and battery
• Work with Network Rail to reward suppliers for reducing carbon – build this into contract design and actively plan to encourage innovation.
iv. Get on with rail reform. The industry still does not have clarity on Great British Railways or wider strategic direction. Lack of clarity about the structure of the railway can deter investment, and prevent rail from attracting the best people to key positions. The Government needs to:
• Provide clarity on Great British Railways, and ensure it meets RIA’s 5 tests for GBR; that is, no hiatus in current rail work, be clear and transparent with rail suppliers, be an open and accessible client, partner with the private sector, deliver financial sustainability so that rail can deliver for UK plc, and leave an ambitious, positive, legacy, including in safety, decarbonisation, exports and the economy.
• Publish and commit to a Long Term Strategy for rail. This should be part of joined-up multimodal transport thinking, and provide clarity on important strategic choices.
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v. Unlock innovation. Innovation is essential, not just for boosting efficiency and productivity, but for the railway to rise to challenges such as climate resilience. There is significant progress in research and development, however a step change in behaviour and approach is needed to ensure adoption of new technologies. The Government needs to:
• Build rail into national innovation strategies.
• Strengthen support during the innovation rollout and scale up: tax incentives should support both initial research and development as well as the adoption phase.
• Public procurement must support collaborative whole-system and long-term solutions, focused on outcomes.
• Support skills development and the creation of an innovation culture.
vi. Grow UK rail exports. UK rail has a global reputation, so there is great potential to grow rail exports, boosting UK trade and also increasing resilience of the UK supply chain e.g. creating new SME jobs. The Global Market Study conducted by European trade association UNIFE last autumn forecasts rail markets to grow by 3% every year to 2027. For the UK to benefit from and make a success of this, the Government needs to:
• Ensure UK railways are able to align as much as possible with international standards (otherwise there is a risk that, in extremis, UK suppliers might require two different production lines, one for the UK market and one for overseas).
• Continue to offer and improve the current level of support grants and training available to UK rail SMEs, who wish to export.
• Provide seed funding and initiatives to promote UK rail exports, especially by SMEs.
• Provide legal and regulatory certainty (especially avoiding the risk of different product standards) as the Government considers changes resulting from the Retained EU Law Bill: Government should commit to full and open impact assessments of the specific legislative changes
4. CONTEXT
4.1. The railway has always connected communities, allowed people to access jobs, supported leisure and tourism and allowed goods to travel across the country. As referenced above, rail supports £43 billion in economic growth, 710,00 jobs, and £14 billion in tax revenue.2
4.2. The evidence base on the wider benefits of rail is growing. A 2022 Oxford Economics report3 on the economic, environmental, and social opportunities that rail brings to the UK demonstrates a number of benefits:
• Time savings: public transport generates around £1.4 billion in time saving benefits every year for commuters in six of the UK’s largest cities from reduced congestion
• Higher wages: reducing journey times between Manchester and Leeds by 20 minutes could increase wages by approximately £600 per worker per year.
• Job opportunities: a 10% reduction in regional journey times could support from 1,950- 12,600 jobs dependent on the area
• Low carbon travel: by 2050 electric trains will produce 14 times fewer emissions than conventionally fuelled trains.
• Public health: £115 million per year in healthcare cost savings could be generated by improving public transport in six of the UK’s largest cities.
• Access to services: in addition to the economic benefits from accessibility, those with better public transport links are more likely to have access to services and participate socially.
4.3. Rail clearly supports the four ‘E’s of economic growth and prosperity: Enterprise, Education, Employment and Everywhere. As set out above, the rail sector is a vibrant industry supporting
2 https://www.riagb.org.uk/RIA/Newsroom/Publications%20Folder/OE_2021.aspx
3 https://www.riagb.org.uk/RIA/Newsroom/Publications%20Folder/OE_2022.aspx
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enterprise and innovation across the UK. Rail also supports hundreds of thousands of jobs. These jobs are not only spread out across the country, but they are also highly skilled and more productive than the UK average, contributing to a higher GVA per person.4 And finally, as evident above, rail connects people and places across the UK, contributing to levelling up. Clearly, the rail industry itself, and the rail services it ultimately delivers, has strong potential to boost productivity and grow a skilled workforce.
4.4. RIA recognises the unprecedented level of government financial support in recent years to keep the railways running following the Coronavirus pandemic. This support not only kept essential services operating, allowing key workers and goods to move across the UK, but it also provided a foundation for a strong return of passengers to rail since then. The data shows that over 2021 and 2022 there has been a continued recovery in passenger numbers, back to close to pre-pandemic levels, and still growing. By autumn 2022, according to DfT statistics calculated at the time, passenger numbers were averaging 90% of pre Covid levels, and even hit 99% on Friday 18 November.
4.5. While the passenger mix is different post-pandemic (with more leisure and less business travel) and revenues are still around 85% of pre-pandemic levels, it is notable that passenger levels have bounced back quickly following a decline due to industrial action and severe weather events. This should not be a surprise – rail usage has grown steadily for a very long time with the number of rail journeys having doubled in the 20 years up until the pandemic, along with significant growth in rail freight traffic, regardless of shocks such as the Coronavirus crisis. Government should take this opportunity to continue to grow revenues. A change in travel patterns may also offer an opportunity to work with industry to look at access reform.
4.6. The rail freight sector has continued to perform strongly, both during and since the pandemic, showing how it can support carbon reduction and take congestion off our roads. Rail freight takes on average nearly 8,000 lorry journeys off the road each day and there is scope to grow this.5
4.7. Underlying demand for reliable rail services is therefore extremely strong, and has clear potential for further growth, provided we create the capacity to meet latent demand
4.8. Globally, the rail sector is growing, with significant export opportunities for the UK. The UNIFE Global Market Study last autumn projects rail markets will grow 3% every year to 2027 6 Other countries continue to invest in their rail infrastructure, particularly high speed rail and electrification, where the UK lags behind with only 38% of the network electrified
4.9. Last autumn saw important UK Government commitments to some major rail projects, and a five year funding settlement for Network Rail in England and Wales, but these now need to be built on as part of a comprehensive package of economic and political commitments.
4.10. RIA has welcomed the High-Level Output Specification (HLOS) and Statement of Funds Available (SoFA) for the railway in England and Wales for April 2024 to March 2029, Control Period 7 (CP7), announced by the Department for Transport on 1 December 2022. This commits to £44bn of spending through Network Rail over the five year period. Whilst a direct comparison with the previous five year funding settlement (CP6) cannot be made because of differences in what is included, the new funding settlement appears to allow for a small increase in expenditure on Operations, Maintenance and Renewals (OMR) of the railway, in real terms. The HLOS also recognises the importance of a resilient and productive supply chain that invests in skills and innovation, and states an expectation that Network Rail must work collaboratively with the rail supply chain and exercise its role as an effective and engaged client, demonstrating a commitment
4 https://www.riagb.org.uk/RIA/Newsroom/Publications%20Folder/OE_2021.aspx
5 https://www.raildeliverygroup.com/media-centre-docman/12807-2021-04-role-and-value-of-rail-freight/file.html
6 https://www.unife.org/news/global-rail-supply-industry-resurgent-despite-crises/
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to being ‘open for business’, which is something RIA has been calling for many years. This way of working would offer significant opportunities to identify efficiencies.
4.11. RIA would now welcome further detail as Network Rail business plans develop, so that the supply chain can support CP7 delivery in the best way possible.
4.12. The rail network is one of the UK’s most valuable assets, with extraordinary potential to support green growth and wider social benefits right across the UK. This, however, requires:
• Making sure the railway continues to perform to a standard that means passengers and freight keep choosing to use it;
• Empowering private investment and commercial expertise to grow passengers and freight usage;
• Providing the incentives and investment needed for a Net Zero railway – the UK should be a leader, building and selling our expertise globally;
• Continuing to grow the rail network to improve services across all modes and connect new communities right across the UK; and
• Partnering intelligently with the private sector to maximise efficiency, and take a whole system and multi-modal view of investment decisions, as part of an integrated transport system.
4.13. UK transport is the highest contributor to carbon emissions, but rail is one of the lowest carbon modes of transport, contributing just 1.4% of transport emissions, despite carrying 10% of all journeys. 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.
4.14. There is huge scope to accelerate investment in greener technology – whether battery, hydrogen or low-carbon construction techniques. Companies at the forefront of this innovation need clear government commitments that the railway will use these innovations and for them to translate into commercial procurements.
4.15. There are clear lessons from recent UK railway history, showing the need for a long-term plan, and steady investment commitments. We are at risk of ignoring the evidence that a hiatus in decisions causes a boom-bust cycle, where particularly smaller companies can go out of business during downturns, and do not have the skills or plant in place to deliver efficiently when orders do finally come to market.
4.16. There are many schemes, which with the right balance of risk and reward and a long-term commitment from the public sector, the private sector could finance to bring forward more quickly. For example, transforming stations into accessible retail hubs at the heart of communities; and investing in infrastructure as a ‘service’, so that railway infrastructure operators can purchase the energy, signalling or telecoms required, without having to build it themselves.
4.17. Whilst public finances are constrained, and there are extra cost pressures as a result of high inflation (which RIA member businesses also face), we urge the Government to take a view across the whole economic cycle, and recognise that rail remains an essential investment, with a catalytic effect across the whole economy.
5. INVESTMENT PIPELINE CERTAINTY AND TRANSPARENCY
5.1. As well as an appropriate level of investment in the railway, it is equally important that suppliers have early visibility over plans, so they can invest in the equipment and skills needed to be ready to deliver. A clear and visible pipeline of work is by far the best way to keep costs down and deliver value for money.
5.2. A transparent pipeline lets businesses invest in the equipment and skills base that are needed. RIA members say that visibility of upcoming work for a minimum of five years is required to allow organisations to increase their current investment in graduates and trainees and be able to deliver
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the proposed volumes of work. It is critical that once the investment has taken place there is commitment and sufficient work to ensure competencies are maintained going forward.
5.3. Historically there is clear evidence of a ‘boom and bust’ approach to UK rail investment in: electrification; renewals; signalling; and rolling stock.7 This is highly inefficient for both the public sector and businesses. For example, downturns in the rolling stock market are associated with factory closures and job losses, increasing costs and delivery risks when orders then come back to the market. To deliver significant infrastructure investment efficiently, it takes time to skill up and prepare. It is not a coincidence that the UK has higher electrification costs than Germany, given historic fluctuations in investment levels 8
5.4. For rolling stock, there is currently a high level of uncertainty in the market. Some rolling stock assets are nearing the end of their natural life span and there is a need for decisions on life extension or renewal. There are significant opportunities for investment in carbon reduction through technologies such as bi- and tri-mode electric and diesel, battery, and hydrogen. There is a risk that previous level of stop-start investment, such as the hiatus of investment in rolling stock after privatisation, when the lack of orders led to UK rail manufacturing plant closures, is repeated. Rolling stock manufacturers, many of whom invested in the UK in anticipation of both a consistent UK market and export potential, are concerned that without new orders factories may be running below capacity or worse, with the related impacts on industry cost, skills and capability. There are similar concerns amongst suppliers who refurbish and upgrade existing rolling stock.
5.5. A longer-term approach to planning investment is needed, with the levels of investment required identified. For example, 65% of signalling on Network Rail’s network will need to be replaced with digital signalling within 15 years. Failure on this will raise costs, and means UK rail will not have the network needed in future. Also, better visibility of and engagement around upcoming procurements could help the supply chain deliver much more cost-effectively.
5.6. Where investment levels need to be increased, this does not necessarily have to be purchased immediately by the public sector. There is strong interest from a number of RIA members in new contractual models that allow upfront investment, with the private sector taking risk and reward for developing and providing infrastructure services. To succeed, such schemes generally need long term commitment from the Government that there will be a market for the services. They will also need the Government to look at the balance sheet implications of different contractual approaches, and identify alternatives that allow the private sector to bring forward investment
5.7. RIA welcomes the overall procurement reforms proposed by the ‘Transforming Public Procurement’ Bill currently moving through Government, especially the strengthened requirement for pre-market engagement and better visibility of pipelines for contracting authorities, and the increased regard for SMEs within the supply chain. RIA urges the Government to continue with regular engagement on this, and specifically to continue to engage with the private sector on procurement best practice.
5.8. RIA has also welcomed the recommendations and commitments set out in the Construction Playbook9 , and recommend that the Government continue to work towards these. This includes early supplier engagement and outcome-focused procurement.
5.9. So we ask Government to:
• Move away from boom and bust investment in key areas of railway spending: identify and commit to the required long-term rate of investment in key railway assets eg. signalling, electrification, rolling stock and renewals.
• Honour the commitment to publish the Rail Network Enhancements Pipeline annually.
7 A longer report on this can be found here
8 RIA Electrification Cost Challenge Report: https://bit.ly/3ibFXRx
9 See Construction Playbook here
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• Unlock private investment: allow new models for partnering with business that better share risk and reward; allow private finance solutions where the public sector is unable to make longterm investments.
• Mitigate the current drought with judicious rolling stock orders, allowing private finance to upgrade or renew older rolling stock with high quality low carbon trains bringing passenger benefits sooner and sustaining UK industrial capability.
• Adopt longer-term funding settlements for regional transport, such as Transport for the North and Transport for London, mirroring the five-year funding settlements for Network Rail.
6. THE VALUE OF DELIVERING MAJOR RAIL PROJECTS
6.1. As already set out above, delivering major rail projects creates significant value as a result of both construction and delivery activity and improved rail services, creating agglomeration benefits and contributing to levelling up. For every £1 spent in rail, £2.50 of income is generated elsewhere in the UK economy.
6.2. It was welcome news in the 17 November Autumn Statement that the Government is committing to HS2, ‘core’ Northern Powerhouse Rail, and East West Rail. The industry is ready to deliver transformational rail projects but will need clarity on which specific elements of these schemes are in scope, and it needs further commitments from the Government to ensure the rail supply sector can gear up and ensure it has the capabilities to deliver. For example, the Eastern Leg and the Golborne Link (or an effective replacement) needs to be delivered in full to get the full benefits of the HS2 scheme.
6.3. Other major schemes should be a question of ‘when, not if’: the UK will need this capacity, and early and consistent commitment is the way to secure best value for money and catalytic benefits from the economy. RIA calls on the Government to:
• Commit to delivering HS2 in full (including the Eastern Leg and Golborne Link, or replacement), to secure the benefits of the project
• Commit to Northern Powerhouse Rail, in full, and clarify the current scope.
• Identify and confirm in principle commitments to other strategically important rail projects that will be needed in future, including East West Rail, Midlands Rail Hub and Crossrail 2.
6.4. RIA’s report Learning from Major Rail Projects10 sets out the capabilities of the supply chain to deliver major projects on the railways. The key messages of the report are:
• Collaboration and Leadership: Create strategic partnerships with the contractors and clients that are based on shared goals. Recruit for and reward positive team behaviours, including a continuous learning and development culture and the ability to manage change effectively.
• Visibility and long-term investment: Once committed do not look back, share pipelines and plan long-term investment to drive competition, grow supply chain capability and efficiency and give confidence to private sector to invest in skills, assets and innovation.
• Innovation and SMEs: Support innovation at earliest stages of a project, take full advantage of supply chain capability including international, SME and cross sectoral ideas and expertise. Harness supply chain skills on system thinking and whole life value.
• Procurement: Engage suppliers early. Publishing transparent procurement pipelines and targeted outcome-focussed procurement models, support competition, efficiency, innovation and delivery. Effective procurement enables the development of intellectual property and unlocks collaborative funding and financing models.
• Economic, Environmental and Social Value: Recognise the full economic, environmental and social value that rail brings to the UK.
• People Trade and Exports: Celebrate the diversity of the supply chain and its people and promote UK rail expertise and capability internationally.
10 https://riagb.org.uk/RIA/Newsroom/Stories/Learning_from_Major_Projects.aspx
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7. DECARBONISATION AND GREEN GROWTH
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.11
7.2. For the industry to phase out diesel-only trains by 2040 and decarbonise the railway network by 2050, it needs a commitment from the Government to accelerate plans on rail electrification, as well as support fleet orders of hydrogen and battery trains on less intensively used parts of the network. Recent findings from the Office of Rail and Road show that 2.2km of electrified track was added to the UK rail network in the past year (April 2021 to March 2022), which is less than 1% of the annual target which is needed to achieve a fully net zero railway by 2050. 12
7.3. RIA has produced a number of reports on decarbonisation, including:
• Development of a Passenger Rail Traction Decarbonisation Strategy13 which outlines how the North of England would benefit from alternatives such as electrification, battery, and hydrogen.
• The 'Why Rail Electrification?' Report14 which sets out the reasons for beginning a programme of rail electrification now, in order to meet Net Zero legal commitments.
• A Hydrogen Train Briefing15 , highlighting the role hydrogen can play on the rail network.
7.4. The Government-commissioned Net Zero review by Chris Skidmore MP, published in January 2023, sets out a compelling case that investing in Net Zero infrastructure today will be cheaper than delaying, as well as increasing the economic and climate benefits.
7.5. The UK has already shown global leadership on Net Zero and is well placed to take advantage of the opportunities. There is an international race for capital and skills: the country has to act quickly and decisively to secure these outcomes.
7.6. Right now there is huge scope to accelerate investment in greener technology – whether battery, hydrogen or low-carbon construction techniques. However, companies at the forefront of this innovation need clear government commitments that the railway will use these innovations and for them to translate into commercial procurements. We have seen recent examples of companies investing in green technology entering administration. Firm investment decisions are needed now.
7.7. No less important than decarbonising rail traction is taking urgent action to reduce carbon emissions right through the supply chain. Many companies are already investing in lower carbon technologies, but these efforts are often not rewarded through procurements, where the cost of carbon is not fully counted. If contracts are designed to encourage businesses to innovate and pursue low carbon outcomes, positive results will follow.
7.8. The Government is already reforming approaches to public procurement. As part of this wider effort, tendering processes must properly value and incentivise decarbonisation and be open to unexpected solutions and different design approaches. The Treasury should also consider complementary tax incentives for low carbon construction approaches, further tilting the balance to green technology.
7.9. RIA is calling on the Government to:
• Commit to a rolling programme of cost-effective electrification for intensively used lines
11 See Transport Decarbonisation Plan here
12 https://www.newcivilengineer.com/latest/concerns-raised-over-rail-electrification-pace-with-only-2-2kmof-track-added-in-last-year-31-01-2023/?tkn=1
13 https://riagb.org.uk/RIA/Newsroom/Publications%20Folder/NRIL_Decarb.aspx
14 https://riagb.org.uk/RIA/Newsroom/Publications%20Folder/Why_Rail_Electrification_Report.aspx
15 https://riagb.org.uk/RIA/Newsroom/Publications%20Folder/Hydrogen_Train_Briefing.aspx
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• Begin fleet orders of low carbon rolling stock which use new traction methods like hydrogen and battery
• Work with Network Rail to reward suppliers for reducing carbon – build this into contract design and actively plan to encourage innovation
8. RAIL REFORM
8.1. The Williams Rail Review was launched in September 2018, and the industry still – at the time of writing in late January 2023– awaits clarity on Great British Railways or wider strategic direction.
8.2. A continuing concern is that present industry structures mean revenues and costs are managed separately, without a holistic assessment of the overall best value from initiatives.
8.3. Lack of clarity about the structure of the railway can deter investment, and in particular presents a risk to attracting and retaining the best people for key positions. So Government now needs to provide clarity on Great British Railways and, having done this, ensure the transition to a new operating model is completed to schedule and there is no work hiatus.
8.4. RIA has published ‘Five Tests for GBR’, which sets out the key areas which the new organisation will need to focus on to ensure the restructure is a success.16
1. No hiatus in current work: More than 70% of Network Rail's spend is with the private sectorand there cannot be a pause in this work;
2. Transparency: Be clear and transparent with rail suppliers, to allow them to deliver;
3. Partnership: Be an open and accessible client, and partner with the private sector for the best results;
4. Productivity: Ensure the rail industry is able to thrive – financial sustainability will ensure rail delivers for UK plc; and
5. Ambition: Leave a positive legacy, including in safety, decarbonisation, exports and the economy.
8.5. As part of rail reform, RIA urges the Government to adopt the proposal for a long term (30 year) strategy. This should not simply be a communication exercise – rather, it should identify the scale of investments likely to be needed and set out the long-term strategic choices such as around decarbonisation, rolling stock, investment in digital technologies.
8.6. The real value of such a strategy is that it continues to provide long term direction over the course of successive investment periods It will need to be a ‘living’ document, where the evidence base accumulates over time, and businesses can contribute intelligence and planning assumptions to strengthen the analysis. If successful, it should become a forum for a collaborative discussion between the public and private sector on long-term strategy for rail
8.7. The Government needs to:
• Provide clarity on Great British Railways, and ensure it meets RIA’s 5 tests for GBR
• Publish and commit to a Long Term Strategy for rail. This should be part of joined-up multimodal transport thinking, and provide clarity on important strategic choices.
9. UNLOCKING INNOVATION
9.1. Innovation is essential, not just for boosting efficiency and productivity, but for the railway to rise to challenges such as climate resilience and improving the passenger experience R&D and innovation funding and support for its rollout is essential to developing cleaner and more efficient ways of operating the railway. In particular, there needs to be a focus on the deployment of innovation in order to realise benefits.
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16
https://www.riagb.org.uk/RIA/Newsroom/Publications%20Folder/Five_Tests.aspx
9.2. There is significant progress in research and development, for example with the recent establishment of the Global Centre of Rail Excellence (GCRE) as a research hub in Wales. However, a step change in behaviour and approach is needed to ensure adoption of new technologies.
9.3. 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 – for example, using drones to inspect infrastructure, monitored passenger levels and improved cleaning services during Coronavirus, and enhanced customer experience.
9.4. 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.
9.5. The Williams-Shapps Plan for Rail acknowledged ‘there are too many taxpayer-funded organisations with split responsibilities and different priorities funding rail research’ 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 Management programme which leaves a gap between the needs of the whole system, including rolling stock.
9.6. Rail opportunities need to be recognised in national innovation strategies: for example, for battery, hydrogen and digital design capability (BIM, or Building Information Modelling). RIA welcomes 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.
9.7. 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.
9.8. The Government needs to:
• Increase investment in rail research, development, and innovation. This will leverage private sector investment by sharing risks at an early stage.
• Build rail into national innovation strategies.
• Strengthen support during the innovation rollout and scale up: tax incentives should support both initial research and development as well as the adoption phase.
• Public procurement must support collaborative whole-system and long-term solutions, focused on outcomes.
• Support skills development and the creation of an innovation culture.
9.9. RIA has published a Railway Innovation Strategy17, which expands on the above recommendations to set out how the sector can be more radical and overcome barriers to innovation, supporting the vital rollout phase ahead of the transition to Great British Railways.
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17 https://riagb.org.uk/Unlocking_Innovation/UI_News/A_Railway_Innovation_Strategy.aspx
10. GROWING UK RAILWAY EXPORTS OVERSEAS
10.1. The Government should support rail exporters seeking to market products and services overseas and ensure rail is a key part the UK’s plans for global trade opportunities. UK rail has a global reputation, and there is great potential to grow rail exports more, boosting the country’s trade and increasing resilience of the UK supply chain eg. creating new SME jobs. For this to be a success story, Government must ensure UK railways are able to align as much as possible with international standards (otherwise there is a risk that, in extremis, UK suppliers might require two different production lines, one for the UK market and one for overseas). Additionally, UK SMEs need to get the further support and grants they need.
10.2. The UK railway supply chain exports its world-leading products, services and capability to overseas markets, with rail exports totalling £600m in 2019. In March 2022, the UK and Turkey agreed a clean transport deal worth £1.7bn in a boost to the UK rail industry, demonstrating real potential, with the right support (from UK Export Finance in this case) that the Government can bring to support rail exporters. RIA also played an active part in supporting the Turkish client source UK rail products, demonstrating the benefits of RIA working with Government to promote rail exporters.18
10.3. Conversely the Department for International Trade (DIT) in 2022 replaced the Tradeshow Access Programme fund with the new UK Tradeshow Programme (UKTP). UKTP falls far short of providing the same level of financial support for businesses looking to attend trade shows and capitalise on worldwide rail export opportunities via international rail exhibitions.
10.4. Whilst the grants of TAP were relatively small, they were highly valued by SMEs. The UKTP programme is not aligned to the booking timelines of tradeshows, with the booking process for grants normally undertaken in the preceding year and UKTP grants process not launched until the spring of the following year. Additionally, the grant process is bureaucratic and fails to provide the funding grant levels necessary to help SMEs get to market.
10.5. Previous cost-benefit analysis of the original TAP scheme, commissioned by the 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 return on investment for the UK economy.
10.6. Suppliers need confidence about the standards they are working to. If the UK and the rest of the world have different standards it can undermine UK exports, and also increase costs for the UK’s own procurements. As part of the Retained EU Law review exercise there needs to be assurances that this risk is being properly assessed, with unintended consequences avoided and the necessary time taken to properly appraise proposals.
10.7. The Government needs to:
• Ensure UK railways are able to align as much as possible with international standards.
• Continue to offer and improve the current level of support grants and training available to UK rail SMEs, who wish to export.
• Provide seed funding and initiatives to promote UK rail exports, especially by SMEs.
• Provide legal and regulatory certainty (especially avoiding the risk of different product standards) as the Government considers changes resulting from the Retained EU Law Bill: Government should commit to full and open impact assessments of the specific legislative changes
For further information on any of the above issues, please contact RIA Policy Director Robert Cook at robert.cook@riagb.org.uk .
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18 https://www.riagb.org.uk/RIA/Newsroom/Press_Releases/UK_Turkey_Deal.aspx
