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A look ahead to 2023 from Lucy Prior MBE, Business Growth Director of Trough-Tec Systems
This time last year, this introduction piece was authored by Ian Fitzpatrick, CEO and Principal of the National College for Advanced Transport and Infrastructure. His summary of 2021 reflected on the ongoing impact of Covid, falling passenger numbers and a need to catalyse levelling up.
Looking back on 2022, Lucy Prior, Business Growth Director of TroughTec Systems feels that this was a year of confusion; a year in which the railway industry experienced some extremely positive events, versus more sobering incidents and edicts.
I feel 2022 was a year of progress, but also a year that endured some significant pause points. We experienced real industry highs: according to the Department for Transport (DfT) rail passenger numbers reached 99 per cent of pre-Covid levels in November. But we also experienced some real lows including widespread industrial action.
We also saw the DfT published its High-Level Output Specification (HLOS) and Statement of Funds Available (SoFA) for Control Period 7. Analysis of these funds shows that the Department has increased the value of expenditure on Operations, Maintenance and Renewals (OMR) for the railway, but the cost-of-living crisis and uncertainty in interest and inflation rates means it is unclear yet if the funds available will actually cover all the investment needed.
Reassuringly the Government stated within the HLOS that: ‘there remains an urgent need for continued modernisation and significant efficiency improvements to bear down on the cost of the railway’ but that it ‘strongly supports’ railway’s recovery.
It is very easy to automatically translate cost-cutting and costsensitivity as being over-focussed on unit prices, and assuming that lifecycle costs and other more complicated ways of assessing value will be overlooked. I have made this assumption myself openly in certain forums and appreciate the fact that my assumptions are always counter-challenged (as well as agreed with), and crucially that we all agree that we can and must do better.
The Williams-Shapps Plan for Rail set the tone for costsensitivity by describing a need for ‘a new focus on the escalations in cost, goldplating and over-specification that have occurred since privatisation’, and I agree with this sentiment.
As an industry we must face up to the persistent challenge to ‘do more with less’, however we cannot accept a reductionist approach that means that cheapest wins. For the railway to properly recover and for our mutual end-customers to trust us, and to either keep coming back, or for new customers to transition to rail, we must demonstrate that value for money and long-term performance trumps cheapest up-front cost.
The most significant aspect, in my opinion, of assessing value for money is in ensuring that decision making centres on sustainability. Sustainability in environmental terms and of the supply chain. The clients at the upper end of the supply chain all arguably have the clout and prowess to centre cost management on sustainabilityfocussed judgements, and in doing so they should be at the forefront of contributing to the UK’s commitment to Net Zero, by supporting Network Rail in achieving its own science-based targets. It is important to remember that Network Rail was the first railway company to commit to cutting emissions which limit warming to 1.5 degrees Celsius: this fact must be the one that influences all cost and value related decision making.
In December 2022, Andrew Haines, Chief Executive at Network Rail and Great British Railways Transition Team Lead spoke at an event in Sheffield, hosted by Arup at which he described a need for the railway: ‘to invest in both building the right things and in the way we work for customers’. He explained that whilst about nine per cent of passengers travel by rail and about ten per cent of freight is moved by rail our mode only accounts for about one per cent of emissions. How much better it could be for our industry and for the planet if we could encourage more to move by rail?
Taking the reopening of the Dartmoor Line as an example; it is widely reported that the project was completed on-time and significantly under budget, with immediate positive effects. An ongoing effect of the project is that private car usage in the region has reduced, this illustrated by a reduction in congestion on local roads. The project also succeeded in ensuring that local bus operators were engaged in the project to provide direct bus links into the train station. This is a perfect example of sustainability-centred decision making on a large scale.
The last time I wrote this introduction article for the Rail Professional Supply Chain Directory I looked at how we should ensure that we design and supply railway systems that can support a more diverse customer profile by operating a railway that responds to peoples’ different needs and requirements.
Back then (January 2020) Covid was simply a rumbling on the international headlines. Since then, our customer profile has undoubtedly changed, as have our customers’ expectations and travel patterns. A recent report by the World Economic Forum and the World Travel and Tourism Council (WEC and WTTC, November 2022) found that 80 per cent of travellers agreed that sustainable travel is a ‘priority’ for them, 71 per cent of them hoping to travel more sustainably; however, the ‘say-do-gap’ still persists; barriers prevent these customers from making the choice they want to make. Interestingly these travellers’ barriers to being able to make the more sustainable choice were due in part to the following issues:
• Limited availability: not enough options available. • Lack of awareness: not knowing what sustainable products are available. • Low credibility: lack of transparency and consistency in information presented about a product’s sustainability credentials. • Price: more sustainable options come at a higher price.
Ironically, I see deep synergies in these barriers to those faced across the rail supply chain. Whilst I do support the argument that we can no longer afford to over-specify, and that we do need to ensure that public money is spent carefully there is a need for the commercial client to not forfeit sustainability in favour of lower cost.
In the same report the WTTC argues that: ‘the private sector … has a crucial role to play [and] a responsibility to proactively participate in driving decarbonisation … This is especially important for larger businesses, which, in a sector comprised predominantly of SMEs, play an even greater role as enablers and supporters.’
My ask for 2023 and beyond is that the supply chain, its clients, and our mutual end customers are willing to make the most sustainable, most value-led choices. Value itself must relate to our products’ and services’ contributions to Net Zero.
As a supply chain we must strive to provide even more environmentally sustainable options, and we must work hard at making sure the market is aware of these options. In doing so we must also be willing to provide evidence to prove our eco-credentials. And our clients, those larger businesses that are obliged to help drive decarbonisation must be willing to look at these newer, greener options. They must simultaneously help support a culture-change through which those products that do offer better overall efficiencies and sustainability gains are fairly judged against the established and / or cheaper option. Reading back over Andrew Haine’s transcript of his speech in Sheffield I agree that: ‘Network Rail’s different parts must work better together… we can truly create a simpler, better [greener] railway for everyone.’
Lucy Prior, Business Growth Director of Trough-Tec Systems
