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East Coast Digital Programme: accounting officer assessment (July 2020)

Updated 27 November 2023

Background

An accounting officer assessment was completed for the East Coast Digital Programme outline business case (OBC) by DfT’s accounting officer Bernadette Kelly in July 2020.

Overview

The East Coast Digital Programme is the flagship digital signalling deployment in Control Period 6 (CP6), and will facilitate the rollout of European train control systems across the rail network.

Signalling assets on the southern section of the East Coast Main Line are life-expired and digital signalling offers the only viable alternative to replace and improve asset reliability without significant disruption to passengers. The programme will also capitalise on significant government investment to date, as 80% of the passenger rolling stock is already fitted with digital signalling technology or funded for fitment.

Objectives:

• renew signalling assets using a lowest whole life cost approach, to reduce long-term industry wide costs.
• provide capacity for demand growth without a subsequent performance risk
• improve performance across the East Coast Main Line route through a reduction in both initial and reactionary delay
• preserve and enhance safety for passengers and workers
• unlock wider socio-economic benefits and support the government’s Industrial Strategy.

The OBC for the East Coast Digital Programme was approved by the Investment, Portfolio and Delivery Committee (IPDC) in November 2019.

At this stage, approval was given for £338 million to fund:

• remaining freight and passenger rolling stock fitment
• driver training and business change costs;
• the design phase and integrated industry programme
• development to full business case

This added to the already approved £12 million repurposed Eastern region funding to total £350 million.

The East Coast Digital Programme was subsequently added to the GMPP in April and this accounting officer assessment has been prepared in recognition of that. A new accounting officer assessment will be completed alongside submission of a full business case to IPDC.

Regularity

The DfT and Network Rail have legal authority to spend the approved funding on the East Coast Digital Programme. Clear governance processes have been established between Network Rail and the DfT and these will be used for monitoring the programme management and funding.

The approved £350 million for the programme is fully funded from the National Productivity Investment Fund, Network Rail CP6 funding and the DfT’s Rail Network Enhancements Portfolio.

The implementation of digital train control on the East Coast Main Line will require changes to rolling stock and business operation, as well as infrastructure. The Network Code provides legal and well established commercial and financial reimbursement mechanisms for these changes. There is strong precedent in the railway industry for using these mechanisms to introduce industry-wide changes – for example, with the implementation of GSM-R radio communications.

Propriety

The Digital Railway Strategy published in 2018, and the digital pillar of the Rail Sector Deal sets out the government and Network Rail’s intention to roll-out digital signalling across the rail network.

The East Coast Digital Programme initiates this process and will provide benefits for subsequent digital schemes. It is therefore in line with government policy.

Value for money

The East Coast Digital Programme represents high value for money with a benefit: cost ratio of 2.3. The value for money increases to ‘very high’ value for money when the freight fitment costs are apportioned per track kilometre of East Coast Main Line South.

This sensitivity test takes into account that the scheme carries a high proportion of initial fitment costs for subsequent digital signalling programmes.

Feasibility

The East Coast Digital Programme is the first mainline route to introduce European train control systems in the UK; however, the technology is proven to work in other countries and similar digital signalling systems are already used within the Thameslink core and on the Cambrian line.

Lessons learned from these digital signalling deployments have been incorporated into the design and delivery plan of this programme.

The programme has been assessed in two Infrastructure and Projects Authority (IPA) gateway reviews. The most recent of these took place in August 2019 and the programme received an amber rating. All critical recommendations were addressed by the programme before the OBC was approved. A third IPA gateway review will be conducted next spring, ahead of submission of the full business case to IPDC.

The East Coast Digital Programme is therefore believed to be feasible.

Conclusion

As the accounting officer for the DfT, I considered this assessment of the East Coast Digital Programme and approved it on 16 July 2020.

I have prepared this accounting officer assessment to summarise the key points that informed my decision. If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised accounting officer assessment.

Bernadette Kelly. Permanent Secretary, DfT

16 July 2020