Future Railways: What can the Williams Review achieve?

December 04, 2018

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by Ruth Foster Assistant Director

Email +44 (0)7802 659175

by Charles Johnson-Ferguson UK Transport & Logistics Leader, PwC UK

Email +44 (0) 7841 561 340

The key themes outlined in the Government’s 2017 Strategic Vision for Rail were a more reliable railway, an expanded network, a better deal for passengers, a modern workforce and a productive and innovative sector. One year on, Keith Williams has been tasked with recommending how to deliver the Government’s vision for a world-class railway.

The Williams review is a great opportunity to take stock. The future of rail needs to be considered in its wider context – including the economic and social purpose of a transport service, other modes of transport and the potential for future innovation in the market – before determining what needs to happen within rail. Then the review can focus on how to get the most out of rail in three areas: delivering for customers, enhancing inter-modal integration and optimising the use of infrastructure and data. Once the context and approach are clear, the final piece of the jigsaw is the role of public sector, in funding, regulating and incentivising delivery.

Reviews and transformation of the rail sector are not new – from Beeching to privatisation to Brown and McNulty. So what game-changing ideas might this review consider?

First, the scope of the railway is extensive. The aim of the rail industry is more than running trains on tracks on time.  It is about getting people where they want to go, transporting freight and meeting the needs of society and the economy. To do this, the railways need to become more integrated with other modes of transport – car, cycling, bus, tram, plane, walking. This requires greater collaborative working between infrastructure providers, operators, different transport modes and customer-interfacing platforms.

The future transport ecosystem will involve customers paying for services across multiple modes via a single entity.  Both these services and the infrastructure on which they operate will be provided by many different organisations – customer service providers, mode operators and infrastructure providers.  This scenario requires a degree of control and cohesion – for example, regulation over the market for integrated customer services, control over quality and safety of mode provision and control over the construction and operation of infrastructure.

One way to drive this may be a public body – let’s call it a strategic transport authority – which takes policy direction from the DfT and oversees the various entities responsible for delivery – operating companies, local transport authorities, Network Rail routes. Such a body could be responsible for allocating budgets across road, rail, local transport authorities and letting contracts. It would need to be well structured, well scoped and have clear strategic guidelines from DfT within which to operate.

Linked to the theme that railways do not exist in a vacuum, more emphasis could be placed when letting contracts for passenger rail services (i.e. the next generation of train operator contracts) on the benefits to the communities they serve. Industry and local authorities should explore how the sector can play a part in improving prospects in socially deprived areas – increasingly these are regional towns (often served directly by railways) rather than intercity areas. The station in particular has the opportunity to be a centre and focal point for growth.

Second, the railway should embrace innovation and technology. Dynamic scheduling of services, with services being demand responsive, could give more flexibility to operators and maximise use of capacity.  Vast amounts of data exist: on infrastructure, train positioning, customers, journeys to mention a few,and this will increase dramatically with the introduction of digital railway technology. Capitalising on the use of this data (perhaps through creation of a dedicated railway data company) should drive better decisions about what demand is and how to supply it. This would also align to the Government’s transformation strategy, published in 2017, to make better use of data to provide public services.

Modular trains, capable of running on tracks and tramlines and roads, could slash the cost of underused rail services in the off-peak. It may be cheaper to use train “pods” in rural areas or off peak rather than conventional trains. It sounds radical, but so is the autonomous vehicle revolution. Those who plan for the future of rail need to ensure it will be relevant in the long-term.

Third, the industry needs to foster growth in UK business and capability. A radical way of enforcing this would be to require contracts (operations, infrastructure, technology, other) to be supplied or delivered in part by UK-based companies. Suppliers could also be tested on how they develop jobs, skills and training within local communities.

Finally, the review should be set in context of current trends in the industry.  When the railways were privatised in the mid-1990s, rail use was in decline and there was significant capacity on the railways. As a result, encouraging the private sector to bid for available train paths was a sensible and practical way of allocating capacity. Now, with passengers numbers more than double since privatisation, it may be time to revisit whether the present structure makes the best use of capacity. Implementing any strategic decisions of this nature will need to strike a balance between centralised decision making and allowing the market to innovate.

In a world outside the EU, having the capability to build rail infrastructure, run operations and implement technology solutions could be a major driver to the economy.  Increasing competition in the sector, creating skilled jobs and exporting UK expertise globally are aims which align with the government’s industrial strategy.

To be effective, the Williams Rail Review will need to have a vision for the future of transport, not just rail, in a world of rapidly evolving technology. It should also recognise the UK rail sector as a strategic social, economic and international asset - and propose structures and models which maximise returns to users, communities and businesses.

by Ruth Foster Assistant Director

Email +44 (0)7802 659175

by Charles Johnson-Ferguson UK Transport & Logistics Leader, PwC UK

Email +44 (0) 7841 561 340