Essential infrastructure investments remained in place following last October’s spending review. Projects were approved with the aim of modernising the rail network, speeding up journey times and improving the passenger experience. Also, as part of the further £8bn investment announced, £900m has been allocated to rail electrification projects on the lines between London and Didcot, Newbury and Oxford and between Liverpool, Manchester, Preston and Blackpool. Last November the Transport Secretary also announced 650 further carriages to ease overcrowding, amounting to 2,100 new carriages proposed by 2019. Meanwhile, the Sustainable Transport Fund will form part of a strategy to promote inward investment, enhance city competitiveness and improve the quality of life of communities and commuters alike.
Sir Roy McNulty’s Value for Money report aims to drive down costs and release potential savings of £600-£1,000m per annum, without cutting services, by 2019. This target will be met by getting Network Rail and train operators to work together more efficiently, aligning incentives and working more closely at a local level. The rail industry’s high cost base currently makes it one of the most expensive in Europe and the report indicates that there is scope to significantly reduce costs. The Office of Rail Regulation reported that the efficiency gap between Network Rail and the rest of Europe was 34-40%.
In January this year fares rose an average 5.8%, provoking public anger and leading many commentators to question if such rises will have a detrimental effect on the industry. Added to this was the damning report from the House of Commons Public Accounts Committee, which concluded: ‘It is not at all clear to passengers where the money from increased fares has been spent.’ The committee’s Chairman Margaret Hodge recommended that rail operators take measures to avoid overcrowding and meet the costs of doing so. “At present there is no incentive for the rail industry to supply extra capacity without additional public subsidy.”
It seems for the railway industry it is both the best of times and it is the worst of times. On the one hand, key projects and significant investment have been ring-fenced to help ensure our railways are fit for the 21st Century; on the other hand, industry reforms, relentless efficiency drives and customer dismay present a real challenge for rail transport. Join us at Rail: Value for Money – Investment, Efficiency and Reform to listen to industry experts, debate key policies and projects, and explore how to improve our railways.