‘All Change’ for the Railways

by Sara Price, Account Director

Change is fast approaching for the railways – the new government’s focus on infrastructure investment to deliver a ‘levelling up’ of the UK seems to have launched a period of rapid change for our railways.

This week’s briefing to the media about the Chancellor’s reaffirmation of his support for HS2 seems to be the signal that supporters of the scheme have been looking for. The Chancellor’s judgement that despite rising costs the economics of the scheme still add up give the Prime Minister the political cover to push ahead with a scheme that he has always maintained he instinctively supported. 

HS2 is the largest infrastructure project in Europe. Billions have already been spent on it and to back out now would not only be embarrassing and costly, it would raise questions about the UK’s ability to deliver any major infrastructure schemes. 

The deciding factor on the future of HS2 seems to have been that, despite calls for money to be invested elsewhere, no really significant ‘shovel ready’ alternative schemes are available. Investment in the classic network would mean years of disruption for incremental gains. While there is enthusiasm in the North about the potential for Northern Powerhouse Rail, the scheme is in its early stages and makes most sense being developed alongside the northern links of HS2. 

Without HS2, the Chancellor might have faced the embarrassing prospect of changing the Treasury rules to allow more borrowing on major infrastructure schemes and then be left with few major schemes to spend this new Treasury largesse on.

As well as developments in the politics of HS2, we have had a frequent service of other rail announcements over the past few days. For instance, the reopening of some Beeching era cuts, confirmation of the chosen route for East West Rail, and the announcement of the nationalisation of the Northern Rail franchise. They are all significant developments showing the political appetite for change for a sector which is seen as crucial to the UK’s economic future and our ability to deliver on the Government’s pledges on sustainability.

Faced with significant challenges around industrial action, ageing rolling stock and the impact of postponed infrastructure upgrade plans, Northern’s ambition to deliver better connectivity across cities in the North of England never materialised. The company became referred to as ‘Northern Fail’ with a track record of only 56% of trains on time.

While franchises returning to the public sector is not unprecedented – it has happened multiple times on the East Coast Line – it does seem as if we are approaching a watershed moment in the role of the private sector in UK railways. South West Railway is in jeopardy, and there is uncertainty over the TransPennine Express and West Midlands Trains franchises.

The industry is also expecting the launch of the long-awaited Williams Rail Review in February. When the review started in 2018 it was given the remit to suggest major changes to the structure of our railway system.  The review is expected to call for the current system of franchising to come to an end and lead to more public sector oversight across the rail system. 

Despite the political heat ahead of the election, perhaps the gap between the Conservative Government’s position on the railways and Labour’s pledge to bring railway franchises under public ownership wasn’t as wide as was claimed. Conservatives have taken note that Labour’s pledges since 2015 to take public control of the rail franchises have consistently been popular with voters.

What is clear is that for a Government which wants to be defined as one that will deliver for areas of the country which have been left behind, railways are at the heart of that vision. The sector needs to prepare itself for a rapid pace of change as the Government is uncoupled from previous ideological defences of the post 1994 privatised system in its quest to deliver for its new voters.   

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Sara Price

Account Director