Foreword
1.2 Jim Brewin Chief Director UK & Ireland, Hitachi Rail
This report by the Purpose Coalition reveals the vital role that Hitachi Rail plays in the UK, and why I am proud to represent a team that connects the economy and people.
Hitachi Rail always invests in the domestic markets where it operates. This approach has enabled us to invest over £2.6 billion in the UK economy since 2015, with manufacturing and maintenance operations delivering £645 million gross value added to the UK economy, and supporting 9,787 jobs across Scotland, Wales and England. The national economic benefits are clear.
At the local level, Hitachi Rail’s investment in maintenance and manufacturing has created high-skilled and well-paid jobs in areas where they are less available. Moreover, our facilities and operations have stimulated the growth of the supply chain and skills sector, delivering a benefit that goes beyond money and investment.
These benefits are undoubtedly felt in, and around, our manufacturing facility in Newton Aycliffe. Growing up in County Durham, I know the value of Hitachi Rail’s investment in the North East. It delivers pride and opportunity. This is why our UK factory has been levelling up in action.
It is our ambition for Newton Aycliffe to continue its vital role in the North East economy. This is why we are exploring ways to make the factory a leader in battery train technology and connect us to the exciting North East battery cluster that has emerged around the automotive sector.
The economic benefit of Hitachi Rail is clear, tangible and measurable. However, trains, manufacturing and maintenance is more than that. Trains do more than just get people from A to B. They connect people and opportunities. It is these intangible, harder to define, and often overlooked social benefits of 1.4 billion rail journeys, which make rail such an important part of our everyday lives.
That’s why we partnered with the Purpose Coalition, an organisation that understands the importance of promoting social value in policy making. Their ‘Purpose Goals’ are aligned with the UN Sustainable Development Goals, which means the Purpose Coalition shares the same values and objectives as Hitachi.
Together, we can shine a light on the social value of Hitachi Rail’s investment in rail and the UK. This includes the work we do to help create our next generation workforce through our partnerships with South Durham UTC and Primary Engineer. Coupled with the fact that improved connectivity provided by reliable Hitachi Rail fleets can help tackle economic disparities and improve equal opportunity.
Therefore, I am honoured that the Purpose Coalition analysis of Hitachi Rail’s business concludes that we meet five key Purpose Goals: Goal 2, Successful School Years, Goal 3, Positive Destinations Post 16+, Goal 9, Extending Enterprise, Goal 11, Infrastructure for Opportunity, and Goal 13, Harness the Energy Transition and Net Zero.
2. Introduction
This report will set out how the Purpose Coalition recognises the importance of rail investment to ensure Britain has the infrastructure ready for the demands of the future economy and society; and recognises Hitachi Rail as an industry leader in the rail sector in terms of its socioeconomic impact for colleagues, customers, and society.
This report will also apply the organisation as a case study for the potential impact rail infrastructure can have on local communities across the country - levelling up less advantaged and traditionally poorly connected regions.
The Purpose Coalition brings together businesses that are showing real leadership on how they positively impact wider society. It measures organisations against a set of sector-relevant social impact criteria.
The Purpose Goals focus on key life stages and highlight the main issues that need to be resolved in order to level the playing field in the UK and level up communities across the country. They are intended to guide ambition, provoke action and measure progress.
A significant part of this is providing thought leadership in specific industries and sectors. Hitachi Rail has a wealth of knowledge and expertise, as well as regional links across diverse communities all over the UK. In applying the Purpose Goals to its current work, it can communicate best practice to industry partners, as well as identify opportunities in specific areas where a more effective regulatory framework could produce even more effective outcomes.
One of these key goals is Infrastructure for Opportunity. Rail is a fundamental part of this. It connects people directly to opportunities - in a fast, reliable, and sustainable way. For so many, it is the only route to work, university, medical appointments, school, or a job interview. Rail is the method of travel of the future, and has been key to the development of the UK.
Rail is also central in connecting people with experiences. It transports holidaymakers to and from their break - boosting growth in local communities in the process - as well as connecting families at seasonal peaks.
Hitachi Rail has stood out as a leader in the rail sector, across operations, services, and maintenance (OSM). Its almost 2,000 strong workforce provide the physical infrastructure and vehicle maintenance necessary for a railway system that is a social and economic bedrock of Britain.
3. On track for the future: the socioeconomic case for investing in rail infrastructure
A growing economy and a thriving society relies on resilient infrastructure. A significant part of this infrastructure mix is reliable and appealing railways.
The size of the UK lends itself to a fast and innovative railway network. Often, when Britain is at its best - so are its railways. Our train system makes a crucial economic, social, and regional contribution in communities up and down the country.
3.1. The national economic case
A well-functioning rail system is essential for a thriving economy and society.
The rail sector in Britain contributes significantly to economic growth - an impressive £43 billion added to Gross Value Added (GVA). This injection of capital into the economy also translates into £14 billion in tax revenue that is essential for funding public services and investments.
Rail also plays a substantial role in job creation, employing over 710,000 people across a number of sectors. This not only provides financial stability for many but also bolsters economic activity by increasing consumer spending.
Particularly impressive is the rail industry’s multiplier effect. For every £1 invested in rail infrastructure and services, it generates £2.50 in income throughout the wider economy. This demonstrates the sector’s capacity to stimulate economic activity far beyond its direct contributions.
Compared to its economic output, the industry’s environmental impact is relatively small. It accounts for just 1.4 percent of Carbon Dioxide equivalent (CO2e) emissions while contributing 2 percent to the country’s Gross Domestic Product (GDP). This reflects the sector’s role as a net-positive, driving green growth and sustainable development.
Railways are a vital component of Britain’s infrastructure, promoting economic growth, job opportunities,
tax revenue, and sustainable development. Prioritising investment in the rail sector not only strengthens the nation’s economic resilience but also aligns with its commitment to a greener, more sustainable future.
3.2. The social case
Efficiently connecting people and places brings a range of additional benefits and helps to ease congestion elsewhere on the transport network. Public transport as a whole generates around £1.4 billion in time saving benefits every year for commuters in six of the UK’s largest cities as a result of reduced congestion.
Moving people across the country, to and from cities and major transport hubs, contributes to economic growth. As well as the economic benefits that stem from accessibility, those with better public transport links are more likely to have access to services and participate socially.
Rail inherently performs well in four key areas of the Government’s Social Value Model; COVID-19 recovery, wellbeing, tackling economic inequality, and equal opportunity.
Crucially, railway infrastructure is central in boosting social mobility across the UK. It supports social and leisure opportunities as well as physical mobility and inclusion. In the UK, more than one in five households do not have access to a car, and this increases to nearly two thirds amongst the most disadvantaged households.
There is also a direct link between a lack of rail transport and poverty. The number of people in ‘transport poverty’ - people living in areas of low income, more than one mile from the nearest bus or train station, and where it would take longer than an hour to access goods and services - is 2.4% of the overall population.This percentage is increased amongst individuals from lower socioeconomic backgrounds and underrepresented groups.
Local railway stations also connect people with social engagement opportunities. Across the UK over 2022, 74 rail community partnerships and around 1,200 station groups that deliver community gardening, arts projects, community events and other activities.
Rail is also a key boost to wellbeing. Railway infrastructure directly improves access to healthcare and leisure activities. Despite the challenge of the Covid-19 pandemic, leisure travel has recovered particularly well. Rail travel has had to adapt, however rail passenger numbers hit a record post-pandemic high - averaging over 98% of pre-covid levels in April 2023.
There is also direct a link between poorer public transport and worse health. Hospitals are one of the most difficult services to reach in the UK without a car. This directly translates to poorer health outcomes for people and families without cars who are often disproportionately from lower socioeconomic backgrounds. Despite its successes, rail and other modes of public transport need to be a focus of infrastructure investment. Two-thirds of elderly people - 7.8 millioncannot reach a hospital within 30 minutes by public transport.
When compared to the health impacts of cars, rail is also a net positive for population health. It promotes cleaner air in areas in London and across the M25, as well as being a much safer mode of transport with less accidents.
Addressing the UK’s climate change and transport emissions targets also necessitates not only the adoption of electric vehicles but a fundamental shift from cars to trains, especially in urban areas grappling with high traffic congestion. Promoting this modal shift is vital for reducing emissions, alleviating congestion, and fostering more sustainable urban mobility solutions. Hitachi Rail and its battery-powered innovation is driving this vital step-change.
9 On Track for the Future
4. Hitachi Rail as a case study
Hitachi Rail has demonstrated clear and meaningful leadership within the rail sector in terms of boosting social mobility, maximising social return on investment and wider economic impact of the company itself and the impact it has on communities around its key sites.
This has been shown particularly through the lens of five key Purpose Goals: Goal 2, Successful School Years, Goal 3, Positive Destinations Post 16+, Goal 9, Extending Enterprise, Goal 11, Infrastructure for Opportunity, and Goal 13, Harness the Energy Transition and Net Zero. Hitachi Rail has an impact against a significant number of the 14 Purpose Goals, however it is strategically tracking itself against the five that are most relevant and most effectively benchmark its best practice.
Positive destinations Post 16+ 3 Successful school years 2 Strong foundations in Early Years 1 Right advice and experiences 4 Fair career progression 6 Open recruitment 5 Widening access to savings & credit 7 Good health and well-being 8 Closing the digital divide 10 Extending enterprise 9 Building homes & sustainable communities 12 Infrastructure for opportunity 11 Achieve equality, through diversity & inclusion 14 Harness the energy transition 13
Hitachi Rail has demonstrated clear and meaningful leadership within the rail sector
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£600
Million annually
and support more than >
9,700
Jobs throughout the UK
national economy and support more than 9,700 jobs throughout the UK.
Crucially, in the North-East, it has forged a talent pipeline that is driving County Durham and the wider region forward - its factory has been the spearhead for the £2.6 billion the organisation has invested in the UK economy since 2015. Its Newton Aycliffe Factory builds and maintains the trains that keeps the country moving and has helped to create a comprehensive UK supply chain. Overall, the components of Hitachi Rail contribute over £600 million annually to the
Its large-scale operations are also directly connecting people with opportunity, and its employment opportunities - underpinned by close technical training links - are driving social mobility for individuals and levelling up communities on the ground.
As a case study, Hitachi Rail illustrates howin partnership with the innovative and dedicated private sector leaders - we can begin to get the UK back on track.
Hitachi Rail’s footprint is felt right across the country.
Hitachi Rail components contribute over >
11 Hitachi Rail as a Case Study
4.1. Goal 2 Successful School Years
Successful school years are a crucial part of not only a young person’s academic development but also their wider personal development. The so-called attainment gap between the most and least privileged remains stubbornly high. Even prior to COVID-19, research suggested that by the time disadvantaged young people finish secondary education the difference in learning between them and their peers equated to 19 months by Key Stage 4.
Large-scale technical-based organisations like Hitachi Rail play a crucial role in levelling up the communities they operate in through the provision of crucial skills development at critical points in a young person’s life - boosting individual social mobility and providing a talent pipeline for the region.
Hitachi Rail has two education programmes that promote STEM education – Primary Engineer and South Durham UTC. It is important that STEM is promoted both at a primary school level and post-GCSE. Promote STEM across age groups is necessary to grow our own domestic skills base and close the skills gap to ensure there is the next generation of rail engineers.
4.1.1.
The Primary Engineer Rail Project Hitachi Rail has an established partnership with Primary Engineer, a strategic training school, to collaborate on a rail Science, Technology, Engineering, and Mathematics (STEM) education programme. The scheme has so far been delivered to a staggering 18,000 children in 150 schools. The Primary Engineer Rail Project, fully funded by Hitachi Rail, is critical in driving an increase in crucial STEM learning sectors, and addressing the UK’s skills gap.
The Primary Engineer Rail Project reaches out to primary schools located near Hitachi Rail facilities across the UK, spanning Ashford, Doncaster, Bristol, Newton Aycliffe, Glasgow, and Edinburgh. This strategic expansion aims to inspire the next generation of engineers across diverse regions.
4.1.2. Hands-On Learning for Young Innovators
The project’s dynamic curriculum engages young learners in immersive STEM experiences. Key Stage 1 children embark on the journey of building a train from a simple shoebox, while Key
Stage 2 students delve into constructing electrically-powered trains. The emphasis of the programme is on making STEM learning enjoyable and accessible to a wide audience.
4.1.3. Empowering Educators and Employees
Hitachi Rail’s commitment extends beyond funding. It includes teacher training to equip educators with the tools to deliver curriculum-based engineering projects. Additionally, Hitachi employees actively engage with teachers and students, providing hands-on support and sharing insights on promoting engineering in schools.
4.1.4. Inspiring the Next Generation
Hitachi Rail’s sustained support for the Primary Engineer Rail Project is an example of its dedication to encouraging STEM careers and nurturing the future cohort of engineers and innovators. It recognises the importance of influencing career choices at an early stage, and using the initiative it aims to broaden horizons and instil a passion for STEM, particularly among female students, before they reach pivotal moments in their academic journey.
Successful school years 2
It is important that STEM is promoted both at a primary school level and post-GCSE.
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4.1.5. South Durham University Technical College Overview
Located at the Newton Aycliffe Business Park, South Durham University Technical College (UTC) is transforming the educational landscape for young people in the North-East. With an impressive overall investment of £10 million - shared between its founders Hitachi Rail, Gestamp, and the University of Sunderland - the College is delivering a skilled talent pipeline in strategic fields of engineering and advanced manufacturing.
4.1.6. Practical Learning
Hitachi Rail’s commitment to the importance and fostering of practical learning experiences in the communities it serves is a cornerstone of its involvement with the UTC.
It organises industrial site visits, acknowledging the importance of providing students with immersive experiences that deepen their understanding of industry operations. Hitachi Rail is also providing the state-of-the-art equipment that is crucial to empower students with the tools needed to thrive in increasingly technology-driven industries.
The lack of access for disadvantaged and underrepresented young people
to access these experiences and use of the technology is often limited and acts as a barrier to opportunity when compared to more advantaged counterparts.
4.1.7. Nurturing Skilled Talent
South Durham UTC welcomed up to 150 14-year-old students in its first few years since 2016, the UTC’s long-term vision is to accommodate between 550 and 600 pupils overall. Hitachi Rail is directly supporting the UTC, linking up its students with potential work experience, apprenticeships, and employment opportunities within the organisation.
Hitachi Rail contributes also to the educational experience at the UTC by providing specialised lectures, guidance, and mentorship programmes from its experts. Hitachi Rail also offers guaranteed interviews, preparing students to seamlessly transition into an employment or training opportunity once completing their school years.
It acknowledges its role as an anchor organisation in the Durham region, nurturing the professional growth and development of the future workforce as well as breaking down barriers for the region’s less advantaged young people.
Summary
Hitachi Rail’s partnership with South Durham University Technical College (UTC) is making a substantial impact on supporting children throughout their educational journey and expanding opportunity avenues in the region.
This collaboration, underpinned by a significant £10 million investment, plays a pivotal role in nurturing the educational development of young people across the North-East. By providing students with practical learning experiences, industrial site visits, and access to cutting-edge equipment, Hitachi Rail is not only breaking down barriers for disadvantaged children but also offering them opportunities to explore the world of engineering and advanced manufacturing.
This hands-on approach not only enriches their academic growth while at school but also opens doors to potential work experiences, apprenticeships, and future employment opportunities within Hitachi Rail. By actively engaging with South Durham UTC, Hitachi Rail is not only supporting children’s academic progress but also empowering them to pursue promising career paths.
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4.2. Goal 3 Positive Destinations Post 16+
Every young person and adult deserves the choice between a high quality route in education, employment, or training. Everyone is different so making the right choices as a young adult is keythat’s why we want to make sure that everyone has a positive destination post 16 and after GCSEs.
Businesses play a crucial role. They not only link up with schools,
colleges, and universities - providing training opportunities and expertise - they make crucial economic contributions to local and national economies through career development.
This is illustrated by Hitachi Rail through its employment opportunities created by the organisation’s sector-leading Operation, Service, and Maintenance (OSM) operations in strategic communities across the UK.
Businesses play a crucial role. They not only link up with schools, colleges, and universities - providing training opportunities and expertise - they make crucial economic contributions to local and national economies through career development.
Positive destinations Post
16+ 3
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4.2.1. Employment Opportunities
Hitachi Rail's OSM operations employ a substantial workforce across sixteen maintenance facilities. Approximately 1,695 individuals work in these depots, with the workforce divided into permanent and contingent workers.
4.2.2. Permanent Workers
There are 1,067 permanent staff members spread across the various depots. Doncaster and North Pole
(London) host the highest number of permanent workers - with 282 and 223 employees respectively. The distribution of permanent workers across depots ensures a diverse geographical impact.
4.2.3. Regional Impact
The company strategically sources its workforce from areas in close proximity to OSM depots. Due to the size of the depots and the location needed on the rail network, the depots are often positioned in social mobility coldspots.
Notably, a substantial percentage of staff reside in and around Doncaster14% - and Bristol - 9%. Sheffield, Tunbridge Wells, and Plymouth contribute significantly to the workforce as well5% combined across several postcodes. Other towns, such as Canterbury and Swansea, also account for a notable portion of staff numbers.
4.2.4. Salary Contribution
Hitachi Rail offers competitive salaries to its permanent maintenance staff. The average annual salary, excluding allowances, is 29 percent higher than the UK average earnings for full-time workers, as indicated by the 2022 Annual Survey of Hours and Earnings (ASHE).
Hitachi Rail’s broad range of OSM roles are skilled and well-compensated, delivering indirect benefits that extend throughout the broader economy, the communities it operates in, and the local economies where its colleagues live.
Summary
Hitachi Rail’s OSM operations play a pivotal role across communities, not only through its economic contributions but also by providing quality employment opportunities with above-average salaries. The company’s presence positively influences regional economies, fostering skilled and sustainable employment in these strategic areas. Hitachi Rail’s best practice in its OSM operations underscores the significance of the organisation’s commitment to levelling up and operating as a vehicle of social impact, enhancing the socio-economic outcomes in communities and regions across the country.
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Hitachi Rail’s broad range of OSM roles are skilled and well-compensated, delivering indirect benefits that extend throughout the broader economy, the communities it operates in, and the local economies where its colleagues live.
4.3. Goal 9 Extending Enterprise
Bringing opportunities to communities and having more opportunities on the doorstep is often discussed in terms of inward investment and getting businesses to be able to invest in places that have traditionally been social mobility coldspots. However, enabling people and communities to create their own jobs is perhaps the most powerful way of really driving opportunity on the doorstep.
Hitachi Rail’s significant presence across the UK, and its manufacturing prowess, mean through its extensive supply chain it is impacting and enriching communities right across the country.
4.3.1 Supply Chain Contribution
Hitachi Rail’s commitment to operating as a force for good across the UK extends beyond its core operations.
One significant aspect of this commitment is its impact on the supply chain ecosystem. The Office for National Statistics (ONS) highlights that the manufacturing sector in England alone generates an estimated £156 billion in GVA annually, employing 2 million people, with an average GVA per worker of £78,000.
Hitachi Rail’s yearly supply chain expenditure amounts to £157.4 million, this is £45.4m for the Newton Aycliffe programmes and £112.0m for the OSM business. This expenditure supports around 2,000 jobs per year in the wider UK supply chain.
Hitachi Rail’s significant presence across the UK, and its manufacturing prowess, mean through its extensive supply chain it is impacting and enriching communities right across the country.
A geographical analysis reveals the distribution of this expenditure across the UK:
Newton Aycliffe (Durham)
Doncaster
Craigentinny (Edinburgh)
Bounds Green (London)
North Pole (London)
Stoke Gifford (Bristol)
Maliphant (Swansea)
Ashford (Kent)
£45,400,000 £14,600,000 £6,904,000 £5,891,000 £67,852,000 £6,575,000 £3,238,000 £6,953,000
Total £157,413,000
Extending enterprise 9
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4.3.2 Induced Economic Impacts
Induced impacts are a measurement of the economic effect of wages of those employed directly by Hitachi Rail, and by organisation’s within its supply chain, and how this supports jobs in other sectors of the economy. For example, a Hitachi Rail employee may spend their income on clothing, groceries, and in restaurants - which in turn generates employment in a range of sectors across the wider economy. The total induced impacts of Hitachi’s UK Rail business amounts to an impressive £270 million.
Taking into account data from the ONS - which indicates an average GVA per job of £54,900 across the entire economy - the induced impacts of Hitachi Rail’s overall activities are estimated to support roughly 5,000 jobs annually. This figure is in addition to the significant 2,000 jobs supported indirectly through the organisation’s supply chain partners and the 3,000 employed directly by Hitachi Rail.
4.3.3 Overall Economic Contribution
Hitachi Rail’s presence across the UK is substantial. With nearly 3,000 staff overall, it serves as a significant employer across the nation. The organisation is a source of well-paid and highly skilled employment, with average staff earnings at Hitachi Rail exceeding the UK average.
Its supply chain extends and impacts communities across the country, encompassing small and medium-sized enterprises (SMEs) and international trading firms. These partnerships span diverse economic sectors and benefit a wide-range of regions and communities like County Durham, the Midlands, and Swindon.
Vital to communities across the country, the direct, indirect and induced economic impacts of Hitachi Rail contribute £645.6 million annually to the national economy and support more than 9,787 jobs throughout the UK.
Summary
In summary, Hitachi Rail’s OSM business, and its broader nationwide operations, are significant contributors to both economic growth and social development.
The company provides wellpaid, high-skilled employment opportunities through an extensive network of suppliers - including a wide range of SMEs - contributing significantly to regional and national economies. Hitachi Rail’s commitment to the deliverance of social value extends beyond its railway services, positively impacting communities and boosting social mobility.
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4.4. Goal 11 Infrastructure for Opportunity
Hitachi Rail is in a unique position as an anchor railway organisation that is directly developing and maintaining the physical infrastructure - the construction and maintenance of its trains - that connect people and places to opportunity.
Hitachi Rail’s OSM business also plays a critical role in maintaining and delivering consistent fleet qualityensuring availability and reliability. Hitachi Rail fleets have been award winning and set new standards for fleet reliability, underpinning the UK’s railway infrastructure.
In Summer 2023, three Hitachi fleets were in the top 10 for UK reliability, with Hull Trains’ Class 802 fleet achieving being number one in the chart. This fleet took pole position with a MTIN MAA of 65,924 and was recognised as ‘best-inclass’ at national awards ceremony to recognise the most reliable fleets in the railway industry. Overall, Hitachi fleets are performing strongly, at almost two times above than industry average. Ensuring trains are reliable is fundamental for making trains an attractive mode of transport for passengers.
For communities with less opportunity on the doorstep, being able to get to opportunities where they are is absolutely essential. That’s why direct investment in, and the maintenance of, trains and train fleets that connect people up with opportunities matters so much. It’s an enabler that can unlock people’s chances to go for roles, educational opportunities, and training courses that might not be on the doorstep but can turbo charge their pathway.
4.4.1 Newton Aycliffe Manufacturing Facility Overview
Located in County Durham, Hitachi’s Newton Aycliffe Manufacturing Facility has played a pivotal role in the UK’s railway infrastructure, by building the trains that support billions of rail journeys every year.
This facility has successfully delivered British built trains for the national railway network, including Class 385 for ScotRail, Class 800 for Great Western Railway and London North Eastern Railway, Class 801 for London North Eastern Railway, Class 802 for Great Western Railway, Hull Trains, and TransPennine Express, as well as Class 803 for Lumo.
It also plays a crucial role in ongoing projects manufacturing train fleets for Avanti West Coast and East Midlands Railways.
4.4.2 Direct Impacts
Hitachi Rail’s plant at Newton Aycliffe has direct economic impacts, contributing to overall economic output and employment opportunities in a key strategic region of the country.
The core of this contribution arises from the assembly of passenger rolling stock. This GVA contribution includes employee incomes - wages - and the profit generated from rolling stock assembly.
Approximately 700 people work at the Newton Aycliffe factory, some of which are directly involved in the crucial Avanti West Coast and East Midlands Railway programmes. These railway lines link up London with the North East and the North West of the country - which is vital to the functioning of the railway system as a whole.
The direct impact of the Newton Aycliffe facility is evaluated at an impressive £139.7 million. These impacts are measured as a contribution to GVA, expressed as the sum of the gross incomes of workers wages, and profits. from the assembly of rolling stock.
4.4.3 Geographic Significance
The employees working at the facility are drawn from across the North East, with high concentrations of staff hailing from Newton Aycliffe, Darlington, Ferryhill, and Bishop Auckland.
The facility’s presence promotes high wage, high skilled employment across a broad region, traditionally associated as a social mobility coldspot, benefiting the North East and North Yorkshire.
The average employee salary at Newton Aycliffe is above the overall mean average of the UK and significantly exceeds the County Durham average.
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4.4.4 Indirect Impacts
The indirect impacts of Hitachi Rail’s operations in Newton Aycliffe stem from employment and the GVA from its wide-ranging supply chain.
The organisation sources nearly 40% of its supply chain spend for ongoing manufacturing programmes across the UK, amounting to £136.1 million in indirect economic impact through its supply chain. This, derived from both domestic and international sources, has a significant impact on the overall manufacturing industry in Britain.
4.4.5 Induced Impacts
Induced impacts are generated when the wages of those directly employed by Hitachi Rail and its supply chain contribute to employment in other sectors of the economy.
Using a multiplier of 0.5, it is estimated that the induced impacts of the two ongoing manufacturing programmes at Newton Aycliffe alone support the equivalent of approximately 800 jobs annually.
Crucially, for every £100 of Hitachi Rail direct and indirect economic impact, there is an additional £50 of induced impact in the wider economy. These induced impacts amount to £137.9 million overall.
Overall, Newton Aycliffe’s direct, indirect, and induced impacts on British business is significant - amounting to a total of £413.7 million and an impressive 2,100 jobs.
Summary
Hitachi Rail’s Newton Aycliffe facility illustrates the organisation’s role in building and maintaining state of the art trains that are supporting the running of the railway system across the country. The fleets are also central in driving growth, leading UK manufacturing capabilities, and connecting people with opportunity in local economies right across the country.
With nearly 700 employees, the facility offers well-compensated, highly-skilled employment, surpassing County Durham’s average earnings. Hitachi Rail’s supply chain spans the country, including a number of small and medium-sized enterprises and international trading firms - contributing to a number of different sectors as well as supporting the local economies its partners are based in.
Hitachi Rail’s Newton Aycliffe Manufacturing Facility serves as an anchor location to the region - providing vital infrastructure that keeps Britain moving, boosting social mobility while driving economic growth and innovation.
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Located in County Durham, Hitachi’s Newton Aycliffe Manufacturing Facility has played a pivotal role in the UK’s railway infrastructure, building the trains that support billions of rail journeys every year.
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4.5. Goal 13 Harness the Energy Transition and Net Zero
People and the planet are two sides of the same coin. As we progress further with the energy transition it will become an ever more fundamental part of the debate on social impact and social mobility.
The Department for Transport has stated “rail is one of the most efficient ways of moving high volumes of people into city centres and moving people over long distances”. Therefore it is already part of the solution in reducing transport emissions. This is vital because transport is now the largest emitter of UK greenhouse gases. Encouraging people away from planes and cars, and onto trains, needs to be the cornerstone of any decarbonisation plans.
Although rail may only be responsible for 1.4% transport emissions. The industry wants, and needs, to move to 100% zero tailpipe emissions. Not only to decarbonise but improve air quality. This is why Hitachi Rail is developing pioneering battery technology to provide zero-emission travel beyond existing wires. Doing so, will provide modern trains to areas and routes that might not be electrified, while also providing the greenest form of transport can further incentivise rail patronage.
Meanwhile the development of battery technology in the UK also presents an unique opportunity to see new careers and new roles but in the very places where they can make the most difference on levelling up and tangible green growth.
4.5.1. Leading a Sustainable Future in Rail
Hitachi Rail is poised to revolutionise the UK’s rail infrastructure, ushering in a new era of sustainability and cost-efficiency. At the heart of this transformation is its battery technology, offering the potential to decarbonise rail travel while delivering significant Government savings, particularly through reduced rolling stock and electrification expenses.
4.5.2. Innovative Battery Solution
Hitachi Rail’s cutting-edge battery solution is ready for immediate implementation. By replacing diesel engines during routine heavy maintenance overhauls, operators can achieve immediate fuel cost savings of 20% to 30%, and an impressive 20% reduction in overall maintenance expenses.
4.5.3. Phased Approach to Decarbonisation
The organisation’s phased approach to battery technology implementation is vital in leading the rail industry toward full intercity decarbonisation by the 2040s.
This comprehensive strategy is spread over four distinct phases:
• Phase 1a & 1b (2023-2024): Battery trial and static charging tests.
• Phase 2a & 2b (2024-2024): Intercity battery pilot on select routes and subsequent rollout.
• Phase 3 (2027-2035): Gradual removal of diesel engines.
• Phase 4 (2035-2045): Integration of next-generation battery technology and adoption of fully battery-electric intercity trains.
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Harness the Energy Transition and Net Zero
4.5.4. Targeted Decarbonisation of Key Routes
Hitachi identifies specific intercity routes with short non-electrified sections - 70 km or less - for swift decarbonisation by replacing diesel trains with battery-powered counterparts, commencing in 2024.
The critical routes identified for decarbonisation include London Kings Cross to Hull via Selby, London Kings Cross to Harrogate via Leeds, London Kings Cross to Lincoln via Newark Northgate, London Paddington to Oxford services, Newbury to Bedwyn, and London Paddington to Bristol Temple Meads services via Chippenham. Hitachi Rail’s battery technology strategically avoids electrifying challenging and costly areas like tunnels and bridges, yielding significant public savings.
4.5.5. Economic and Environmental Benefits
Besides environmental benefits, this innovation holds economic potential and supports local communities.
The replacement of 687 diesel engines creates new skills and jobs, with a £500 million supply chain opportunity for suppliers. This development positions the North-East of England as a potential hub for battery technology in Europe.
When compared to the health impacts of cars, rail is also a net positive for population health. It promotes cleaner air in areas in London and across the M25, as well as being a much safer mode of transport with less accidents. Addressing the UK’s climate change and transport emissions targets also necessitates not only the adoption of electric vehicles but a fundamental shift from cars to trains, especially in urban areas grappling with high traffic congestion. Promoting this modal shift is vital for reducing emissions, alleviating congestion, and fostering more sustainable urban mobility solutions. Hitachi Rail and its batterypowered innovation is driving this vital step-change.
4.5.6. Collaboration for Advancement
Effective collaboration with the Department for Transport (DfT) is essential for advancing this transformative technology. Hitachi Rail seeks to establish a DfT Taskforce dedicated to strengthening the battery trial and advancing the business case, utilising Hitachi’s real-world evidence base to inform government policies aimed at reducing electrification costs, achieving decarbonisation, and enhancing air quality.
Summary
The organisation’s extensive experience in battery train technology - coupled with its substantial presence in the UK intercity train market - positions the company as a pivotal player in Britain’s push to achieve net-zero carbon emissions. Removing the existing 687 diesel engines as well as directly decarbonising and streamlining the county’s railway system. This transition not only supports green jobs and growth but also fosters the evergrowing UK battery industry, creating new opportunities and driving economic growthpotentially reaching £1.4 billion for the country’s battery sector. In the process, it can transform the North East of England into a centre of excellence for battery technology in Europe, safeguarding global competitiveness and opening significant export avenues.
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Hitachi Rail is poised to revolutionise the UK’s rail infrastructure, ushering in a new era of sustainability and cost-efficiency.
5. Analysis and Wider Insights
5.1 Analysis
Beyond the immediate and tangible outcomes of its operations, Hitachi Rail’s work has far-reaching and profound impacts across the UK and its diverse regions. These wider impacts highlight the company’s role as a pivotal player in shaping the future of the rail sector and in fostering positive change across communities and industries.
Hitachi Rail’s commitment to creating jobs and stimulating local economies extends well beyond its direct employment figures. The organisation’s significant supply chain expenditure of £157.4 million annually supports thousands of jobs across the UK and levelling up all over Britain. This transfer of funds into various sectors - including manufacturing, engineering, and logistics - contributes to the overall economic growth of regions and the nation as a whole at a critical socioeconomic time.
The strategic placement of Hitachi Rail’s facilities in social mobility coldspots has a transformative effect on areas across the UK. By providing high quality, skilled employment opportunities the company improves the living standards of these local communities. The presence of a major employer like Hitachi Rail can also attract other businesses and investments, stimulating further regional development.
Its relationship with the local communities it operates extends to its sector-leading supply chain agenda. Hitachi Rail’s supply chain network encompasses not only large corporations but also local SMEs,
critical to the regions and local economies they operate in. This creates a diverse ecosystem of businesses that benefit from the company’s activities. SMEs, in particular, receive vital support and opportunities to grow, contributing to the resilience and diversity of the national economy.
Hitachi Rail also partners with key local schools and technical colleges, raising attainment and investing in the development of a skilled talent pipeline as well as a critical domestic skills base. This not only benefits the rail industry but also offers a wider societal impact. The knowledge and skills developed in young adults and trainees benefit themselves directly, and ensure each becomes invaluable assets for the broader local community and jobs market - continuing a company culture of lifelong learning and professional development.
The organisation’s emphasis on hiring from social mobility coldspots and providing the technical training links that directly addresses issues of social mobility and inclusion is having a significant impact on the ground. By offering wellcompensated, high-skilled employment opportunities, the company empowers individuals and communities - opening doors and breaking down the barriers to opportunity.
Hitachi Rail is also leading the way on research and development, driving innovation across the rail sector. The advancements and technologies on battery-powered trains developed by the company have the potential to shape
the future of transportation - making it more efficient, sustainable, and accessible. These innovations can lead to broader benefits for society by reducing environmental impact - enhancing transport options - as well as contributing the UK’s leadership on the global pathway to net-zero and energy resilience.
Through its rail infrastructure projects, Hitachi Rail plays a crucial role in enhancing connectivity and accessibility for people across the UK. Improved transportation networks enable individuals to access opportunities in education, employment, and various services more easily. This can lead to reduced inequalities and improved overall quality of life.
Rail transportation’s connectivity benefits align with the Government’s Social Value Model, addressing pressing concernsCOVID-19 recovery, wellbeing, economic equality, and equal opportunities. Notably, it acts as a catalyst for social mobility, particularly benefiting disadvantaged households and underrepresented groups.
A lack of access to rail services correlates with poverty, especially among those from lower socioeconomic backgrounds. Rail stations serve as hubs for community activities and engagement, enriching local life. It also enhances overall wellbeing through directly improving access to healthcare and leisure activities. Poor access to public transport links leads to worse health outcomes, particularly affecting individuals without access to cars, often from less privileged backgrounds.
Overall, Hitachi Rail’s social impact and measurable social value transcends the boundaries of its core rail operations, creating a web of positive impacts that extend into the broader economy, local communities, and the workforce of the future.
5.2 Wider Insights
Investment in the rail industry is not merely a financial commitment but a strategic choice that holds profound implications for both social and economic development across Britain. While Hitachi Rail’s work serves as a compelling case study, it is indicative of broader industry trends and reinforces the need for sustained investment in rail infrastructure.
The rail industry has the transformative power to uplift regions that have long suffered from underinvestment. By improving transportation networks, rail infrastructure facilitates greater connectivity and accessibility, reducing disparities in access to education, employment, and essential services.
Rail projects act as catalysts for local communities. They create jobs, stimulate economic activity, and contribute to the overall wellbeing of the areas they serve. Such initiatives often lead to higher living standards, reduced social isolation, and a sense of pride among residents.
Investments in rail infrastructure have a direct impact on social mobility. Reduced journey times make it easier for individuals from all backgrounds to access employment opportunities, educational institutions, and healthcare services, breaking down socioeconomic barriers.
Economically, the rail industry - when adequately funded - becomes a vehicle of equal opportunity through its vast employment opportunities. It supports a wide range of jobs, from engineers and construction workers to station staff and maintenance crews. It is estimated that 10%reduction in regional journey times could potentially generate thousands of new jobs across different regions.
Improved rail connectivity also has the potential to increase wages. As journey times decrease, employees save time and energy, which can translate into increased productivity and higher wages. A 20 minute reduction in travel time between major cities, such as Manchester and Leeds, could equate to approximately £600 per worker annually, boosting disposable income and local economies.
Investment in rail infrastructure stimulates economic growth at multiple levels. It supports businesses along the supply chain, from manufacturing to logistics, bolstering the national economy. By enhancing transportation links, it also fosters trade and commerce, making regions more attractive to businesses and investments.
Investing in the rail sector is also crucial to the future of the UK - it promotes sustainability and innovation. Modernising rail networks leads to more efficient, environmentally friendly transportation options. This shift towards cleaner and more sustainable modes of transport aligns with broader environmental goals and reduces the carbon footprint of the entire transport sector.
The case - illustrated by Hitachi Rail - for continual investment in the rail industry illustrates the central role that the rail sector plays in shaping the nation’s social fabric and economic prosperity. By committing to sustained investments in infrastructure projects, policymakers can unlock the potential for improved social mobility, job creation, wage growth, economic expansion, and sustainable transportation systems - ultimately benefiting both the UK’s citizens and its long-term economic prospects, as well as getting Britain back on track.
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