The future of our network23 August 2022
This is a guest post by Andy Bagnall from Rail Partners
Thirty years ago, the Government ushered in a new era for our railways through privatisation of the network.
That system was transformational: restoring our railway’s finances, replacing outdated rolling stock and doubling passenger numbers. However, over time, fragmentation through franchising also brought confusion, with complex fares and on occasion chaotic timetabling.
And while the rail freight sector has largely recovered from the pandemic, the passenger sector is facing an accumulative shortfall of £20 billion in fares revenue by 2025, a gap currently being plugged by taxpayers. Change is essential.
In 2021, the Government outlined the biggest reform of the network for a generation. Its plans for the creation of a new public body, Great British Railways, (GBR) will bring the network under a single national leadership that owns the infrastructure, sets fares and timetables and oversees the service.
That does not mean, however, that the private sector no longer has a crucial role to play in driving the direction of modernisation on our railways.
Rail Partners, which launched this week, supports the Government’s ambition to build a more modern transport system. Our organisation was formed to harness private sector creativity and innovation in support of another new chapter for rail, and to develop solutions to systemic problems that will help put the industry back on a financially sustainable footing.
In the wake of the pandemic, our railways face complex challenges. We need to attract customers back to the railways to increase revenue, whilst reducing the need for taxpayer support.
We believe there are five priority areas of reform and actions the Government should take to ensure success.
- GBR should be a guiding mind, not a controlling mind. A strong, independent public sector body at the centre of a reformed system with the necessary freedom from Government. Ministers need to set objectives for rail, but then give GBR the freedom to act. GBR then needs to set the direction of travel but give operators the freedom within their contracts to respond to customer needs. To ensure success, the Office of Rail and Road needs to have all the necessary regulatory powers to hold GBR accountable for its performance in delivering a safe, punctual and reliable railway.
- New rail contracts are key to an effective public-private partnership. New Passenger Service Contracts must harness private sector creativity and entrepreneurialism to grow revenue, reduce waste, make best use of existing assets and drive modal shift. Contracts need to give operators the incentives and levers they need, including those related to fares and timetabling, to respond to customers and deliver a transformed passenger experience.
- A retail revolution with modern products helping to grow new markets, including an acceleration towards single leg pricing and more ‘pay as you go’ fares. Digital tickets, as in other sectors, should be the norm, available on more journeys with greater coverage of tap-in tap-out technology.
- We need to be ambitious for freight with a new target to treble volumes by 2050. This is a vital part of our net zero ambitions as a country. Each freight train takes up to 76 lorries off our roads. Rail freight also contributes an estimated £2.45 billion to UK plc every year, with over 90 per cent of the economic benefits occurring outside of the South East.
- Government and industry must encourage consumer support for a more environmentally friendly form of transport. This can be done through fare levels, discounts and new marketing initiatives to bring people back to rail. The railways also need a sustained programme of electrification as well as the development of a framework that supports private sector investment in innovative green technologies.
As we recover from the pandemic and reform our network, we must choose the right way forward.
If we implement reform in the wrong way, we will only subject the system to more cost pressures and ultimately reduced service levels as a result.
Implemented in the right way, where the private sector is harnessed to innovate and respond to customer needs in a partnership with GBR, then our railways will experience growing passenger numbers and more freight on the network.
This would support Britain’s net zero targets, speed economic growth across the country and restore pride and unity to an industry battered by the pandemic and strained by strike action.
Rail Partners was formed by major transport business to advocate for a better railway that delivers for passengers, freight customers and taxpayers.
The expertise of Rail Partners will be dedicated to creating a network that will bring improve passenger and freight customer experience – and our prospectus: Working Together for a Better Railway, sets out our priorities for a thriving railway in more detail.
I know the industry faces major challenges ahead, but I am optimistic about the future of our railways and I am proud to lead Rail Partners which will play such a crucial role in the new railway renaissance.
Andy Bagnall is Chief Executive at Rail Partners