Memorandum by the Strategic Rail Authority
The Government's 10 Year Plan sought to reverse
almost three decades of limited funding and investment, declining
market shares of both passenger and freight coupled with a massive
and uncontrolled increase in private car usage, and provided an
integrated approach to public transport and an increasing role
for the railway. The accidents at Ladbroke Grove, Hatfield and
Selby, the widespread disruption to the network that followed
Hatfield and the placing of Railtrack in administration have combined
to damage confidence in the railway. Accordingly, the Strategic
Rail Authority's (SRA) short term priority is to stabilise the
industry and improve industry performance. The SRA's medium term
strategy is focused upon the delivery of the 10 Year Plan core
What assumptions should be modified or challenged?
The 10 Year Plan focuses upon the achievement
of an increase in passenger kilometres by 50 per cent from 2000
levels, an increase in rail freight tonne kilometres of 80 per
cent over the period, and a reduction in overcrowding. The SRA
expects that the measures set out in its Strategic Plan will achieve
these targets, including an increase in passenger kilometres of
between 40 and 50 per cent by 2010.
Measures will be taken to reduce overcrowding
on all 10 London commuter train operating companies (TOCs), and
this should result in improvements. While it is difficult to give
precise figures to 10 years hence, most London TOCs will be within
target and further measures will be considered for any that might
not meet the target.
Freight growth is planned to reach 80 per cent
once the investments set out in the SRA's Freight Strategy
Railway projects have long lead times, and the
current investment planning framework is not fit for purpose.
We need to secure the level of private sector involvement and
finance envisaged in the Strategic Plan; and the creation of a
suitable framework will be a priority during 2002.
How important are the assumptions to the outcome
of the plan? What remedial action is necessary if assumptions
or targets need to be changed?
There are elements of the SRA's Strategic Plan
which are wider than the 10 Year Plan core targets. In order to
deliver on the targets in the plan, it is necessary that there
should be a significant increase in confidence and stability in
the industry to encourage investors to commit the substantial
quantities of private capital which, together with public funding,
are essential to the delivery of this Plan.
The 10 Year Plan and Strategic Plan assumptions
included the continuation of existing policies on fares (ie increases
in regulated fares being limited to RPI-1) and on capacity utilisation
(eg Passenger Service Requirements) and overcrowding standards.
The SRA will consult later this year on a review of its policies
in these areas and its capacity allocation strategy on which these
policies collectively bear.
The SRA will monitor changes in the external
environment and rail industry performance to assess whether its
targets are likely to be met and what response is appropriate.
Are the skills and capacity available to deliver
the improvements suggested?
The rail industry needs more specialist and
managerial skills, and to make better use of those it has already.
Experience and skills have been lost as companies have downsized,
while recruitment and training in railway skills have often been
poorly organised. The private sector has brought in some new ideas
and approaches to the railway, but progress has not been consistent
throughout the system. A more professional and systematic approach
to management is needed, in particular for front line staff.
The SRA will spearhead a skills drive within
the rail industry, including the establishment of a "National
Rail Academy", making £500,000 available to develop
a number of training initiatives during 2002-03. The SRA will
take the lead on proposals for a National Rail Academy, to promote
the development of the key skills and competences to run a railway
on a safe and effective basis. As well as encouraging the industry
to give full support to the Rail Industry Training Council (RITC),
the SRA will become a member of the RITC. The joint action plan
by the SRA and the Department for Education and Skills (DfES),
Framework for Skills for the Rail Industry,
sets out a broad ranging strategy to help push skills up the agenda
for the rail industry, based around six strategic themes. Franchise
replacement will also be used to promote training wherever possiblefor
example, the Midland Mainline franchise extension deal includes
a commitment to establish a Customer Services Academy.
How will the current situation in the railway
industry affect the need for and provision of private and public
Resolution of the administration of Railtrack
and the determination of any related financial and structural
reforms are necessary to provide long term stability and confidence
for private investors to take a stake in the major infrastructure
improvements needed to upgrade the network. Skills shortages also
need to be tackled and the SRA's Strategic Plan outlines initiatives
being taken to this end. The SRA has re-launched the franchising
programme with the aim of achieving simplification both in number
of passenger rail operators (notably concentrating one operator
on each of the London terminii) and between train and track operations
by closer co-operation between the parties.
A new procurement framework for enhancement
projects is being developed with the Government, which includes
looking at all stages of enhancement from prioritisation and initiation
through development and implementation to operation and maintenance.
The new framework will introduce new risk-taking project partners
through Special Purpose Vehicles (SPVs). In essence this means
creating companies to undertake the design building and finance
of enhancement projects.
To persuade the capital markets to form a positive
judgement about the new framework, and to attract investment in
long term capacity and growth, the SRA and Government will provide
further clarity and confidence over future work load, work type
and its timing, building on the project priorities identified
in the Strategic Plan.
There is increasing evidence that the private
sector faces a number of difficulties in supporting the risks
involved in the early stages of the project development process.
The initial stages of engineering development, railway timetable
planning and implementation planning are very important in the
development of any project. They help de-risk the project by identifying
a buildable, deliverable programme of works that can be practicably
implemented whilst the railway remains operational. The Strategic
Plan assumes, therefore, that the public sector will need to support
much of the early stages of certain projects.
Is the balance and phasing of investment across
funding areas correct?
A significant investment programme is needed
and the SRA has the lead role in making it a reality.
Major investment must be directed where it is
likely to be most effective in addressing the core targets. In
terms of increasing passenger volumes, this means focusing investment
on the main routes serving London, both inter-urban and London
commuter. In terms of reducing overcrowding, meeting the target
will require longer trains, longer platforms, and increased track
capacity on London-area TOCs. The Freight Strategy will
be taken forward, with enhancements to the network to increase
reliability and capacity, targeted grants, revenue support and
funds for innovation.
Existing public financial support to regional
networks is concentrated on maintaining service levels rather
than developing new infrastructure.
Are more flexible financing arrangements required
to deliver major local schemes?
Major infrastructure projects help remove capacity
constraints on the network and improve quality. Inevitably, they
concentrate on investment on certain parts of the network where
the biggest improvements can be made. They can also take many
years to implement. It is essential that these projects should
be complemented by local improvements throughout the network focusing
on short term delivery. Several programmes have been put in place
to achieve this goal.
"Incremental Output Statements" were
designed by the SRA following detailed consultation with stakeholders
and the industry to specify track and signalling schemes at over
100 locations to provide improved capacity, journey times or reliability,
and the upgrading of 1,000 stations with improved facilities such
as waiting rooms, toilets, security and information systems. The
definition and funding of the schemes is well advanced, and discussions
are in hand with Railtrack and the Administrators to ensure they
are taken forward. The programme is designed to be fully completed
in 2007, at a capital cost of around £700 million.
The Rail Passenger Partnership (RPP) programme
provides funding to assist new or enhanced rail services and facilities
which contribute to the Government's wider objectives but which
typically are not able to earn commercial returns. The programme
is driven by proposals from local stakeholders and hence reflects
genuine local requirements. It has proved to be a particularly
effective way of stimulating improved integration with other forms
of public transport. Around £45 million has already been
approved for 41 schemes, with a further 35 schemes currently being
assessed. New stations, new passenger lines, new train services,
extended car parks, improved station facilities and cycle parking
and passenger information systems have been provided. The RPP
budget originally agreed by Government was £105 million for
three years only. The programme was recently re-launched with
funds increased to £430 million for the next 10 years.
A new Rail Performance Fund is being established
worth £400 million over 10 years to co-invest with rail companies
in short-term schemes to improve reliability for passengers. This
will enable SRA to fund up to 50 per cent of such schemes thus
facilitating a total expenditure of £800 million.
The SRA will make available additional funding
to ensure TOCs are resourced, where necessary, to implement the
requirements of the Disability Discrimination Act (DDA) on access
to stations. This funding will be available throughout the time
needed to implement the DDA, a process that will take a number
of years, given the age and condition of many of the existing
stations. In partnership with key stakeholders, criteria are being
produced to allocate funds and optimise the value of the outputs
flowing from them, and details of a funding mechanism are being
developed. A further announcement will be made later this year.
Small scale schemes designed to deliver early
benefits to freight will be funded through a £300 million
Freight Small Schemes Fund. These could include early work on
gauge enhancement, branch line re-openings, loop lengthening and
small network improvements to increase capacity, improve reliability
and promote efficiency. The initial focus will be on schemes which
can be delivered in a short (two to three year) time frame, those
which can be carried out at the same time as renewals which are
already planned and those which place least pressure on scarce
If additional public or private funds can be
made available to the railway and supply side shortages are resolved,
then more can be achievedparticularly in terms of the wider
goals of the 10 Year Plan. The SRA is therefore working on a greater
range of projects than can currently be implemented, so as to
have schemes available to bring forward as resources allow.
The process of prioritisation and consultation
will be a continuing one and the Strategic Plan will be revised
each year, partly to reflect that. In particular, it will need
to take account of changes in the industry, the outcomes of Multi-Modal
Studies, Regional Transport Strategies and the responses of stakeholders.
How do the emerging multi-modal studies affect
the 10 Year Plan?
Most of the projects that emerge from the studies
are initial ideas that will require a significant amount of additional
development work through further feasibility assessments, detailed
design, Transport and Works Act submissions, construction, &c.
It is thus unlikely that many of the large scale Multi-Modal Schemes
(MMS) projects could be delivered within 10 years. The 10 Year
Plan therefore, does not include a specific budget for MMS projects.
The rail-based outputs from the MMS are not included as separate
projects within the Strategic Plan. It should be stressed however
that many studies have assumed a level of development on rail
projects that includes many of the Strategic Plan projects.
Should the plan represent a better balance between
large and small schemes, and between infrastructure, management
The SRA recognises that some small schemes can
deliver significant benefits and improvements to the railway network,
and has established the Rail Passenger Partnership fund, the Rail
Performance Fund and the Incremental Outputs Statements scheme
to deliver relatively small scale improvements to the railway
network to complement the larger projects needed to remove bottlenecks
and deliver major upgrades of the network.
Are the targets and dates for their achievement
well designed (ie is reducing congestion the right objective?)
What other targets, if any, should be included?
The Strategic Plan accepts the targets for rail
and sets out priorities for action which, if implemented, should
achieve the core targets within the time-frame.
Should a more regional approach be adopted for
A particularly key role in the forward planning
of the railway is being played by the devolved authorities in
Scotland, Wales and London. They have been working with the SRA
and the rail industry to identify projects that contribute to
the delivery of regional, as well as national, priorities. Key
projects for Scotland are being considered and the Scottish Executive
will issue Directions and Guidance to the SRA; Wales now has its
own franchise; and the Mayor for London is about to issue Directions
and Guidance to the SRA. The SRA also has specific duties to work
with local and regional planning authorities to help integrate
spatial and transport planning.
How well does the plan balance social and environmental
policy with efficient investment?
A cost effective and efficient rail network
will be attractive to car users and therefore contribute to the
Government's environmental objectives by facilitating modal shift.
Socially necessary passenger rail services are
protected by the Passenger Service Requirement. These are part
of franchise agreements. The SRA's Strategic Plan makes no assumption
that the broad quantum of these services will change. The SRA,
however, is required to produce a strategy for capacity allocation
which will seek to balance all the objectives for passenger and
rail freight. The SRA will launch a consultation exercise later
this year as part of this process.
Rail requires less land than road to move equivalent
volumes and is more efficient in terms of energy consumption than
air or road. Half of all train kilometres run are by electric
trains, whose energy sources produce far fewer harmful greenhouse
emissions than other modes.
Does the plan set out a balanced approach to all
modes (eg walking)?
The SRA has a major role to play in delivering
the Government's targets, and the development of improved facilities
for passengers is at the centre of the SRA approach. A key element
of the SRA's approach is to improve access to the railway. Many
such schemes are delivered through replacement franchise agreements
and the Rail Passenger Partnership fund: expanding car parks,
park and ride schemes, integrating bus links (as well as development
of through ticketing opportunities, improving integrated access,
waiting facilities &c), improvements to taxi access, and access
to stations for those arriving by foot and bicycle.
Are there any conflicts between the Plan and the
policies in the White Paper"A New Deal for Transport"?
The priorities in the Government White Paper
promoting the use of the railway
within an integrated transport system;
ensuring that the railways are planned
and operated as a coherent network, not merely a collection of
ensuring that rail transport options
are assessed in a way which constitutes good value for money and
optimises social and environmental gains;
taking a view on the capacity of
the railway, assessing investment needs and identifying priorities
where operators' aspirations may conflict with one another; and
supporting integrated transport objectives
and provide for the first time a clear focus for the promotion
of rail freight.
These objectives are consistent with the 10
Year Plan, and the delivery of these objectives are central to
the Strategic Plan.
What impacts will policies in the European White
Paper on Transport have on the Plan?
The main thrust of the European White Paper
on Transport is for action to achieve modal shift from road to
rail and tackling transport bottlenecks, a new set of Trans-European
Networks (TENs) projects, and liberalisation of freight and passenger
The SRA welcomes the emphasis on rail in the
White Paper, and the investment to relieve rail bottlenecks, but,
in responding to the consultation on the EU White Paper, will
raise concern that, despite the drive to concentrate on completion
of the 1996 Essen List (which includes the West Coast Main Line
and designated freight links), there are no projects for the UK
in a project list for revision in 2004.
26 Strategic Rail Authority: Freight Strategy
(Strategic Rail Authority, London May 2001). Back
Framework for Skills for the Rail Industry, RITC, London April