Leading the railway into the future
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Government sets direction and delivers funding, but it’s the railway itself that will drive future change.
Good afternoon everyone.
And thank you for that introduction.
It’s a real pleasure to join you today (3 February 2015).
And I welcome this opportunity, with just three months to go before the general election, to talk about the progress we’ve made in rail.
And to look ahead at the prospects for the future.
At the start of the new parliament in 2010, we made a number of commitments to the British people.
First, to turn recession into recovery.
To make our country stronger and more prosperous, and a better place to live.
Second, to bear down on our debts.
Rooting out waste and costs that the country could ill afford.
But we also made another promise.
To make transport, and rail in particular, part of our blueprint for a more competitive, affluent Britain.
Nearly five years on, I’m proud of what we’ve achieved.
We’ve delivered on our economic promises.
But I’m also proud this government has been a very good one for rail.
Not just massive investment in this parliament.
But £38 billion over the 5 years up to 2019, to transform our railway.
Start construction on HS2.
And deliver the new IEP fleet.
Our investment in rail will help build a Northern Powerhouse.
And support thousands of manufacturing jobs at companies like Bombardier and Hitachi.
And throughout the supply chain.
But investment on its own can only achieve so much.
To get the most out of the money we’re spending, we also need reform.
To continue the transformation of the industry which began with privatisation.
To build a truly accountable, efficient and customer-focused railway.
And that’s something which requires leadership - industry leadership.
With long-term funding in place, it’s vital that the railway itself drives the next stage of its renaissance.
That’s why the Rail Delivery Group was created.
To bring together the different players in this fantastic industry, and set a strategic course for the future.
In fact, we already know a lot about the forces that will shape that future.
We know that demand will keep on growing.
We know that we’ll have to keep on investing in the network, improving performance and making best use of new technology.
And we know that the railway will have to get better at controlling costs.
These are issues the RDG is already grappling with through its workstreams.
Particularly how to invest effectively and get better value.
Under the asset, programme and supply chain workstream under Tim O’Toole.
The challenge is clear.
While Network Rail has cut costs by about 40% over the past decade, there’s still a long way to go to meet the targets set by Roy McNulty, and to reduce the cost of rail for both the taxpayer and the farepayer.
Despite significant increases in passenger numbers since privatisation, unit costs haven’t fallen in line with revenue.
This remains a big concern, and a key objective for the industry.
I welcome the Rail Delivery Group’s report last June, which showed how cost savings of 20% by 2019 are achievable, through better planning of maintenance and renewal projects, and more collaborative working.
Now we have to implement these changes.
And set the railway on course for a more efficient future.
With investment come expectations of improved performance.
This is something we are working with the industry to deliver.
The creation of the Passenger Services team at the department is evidence of that.
It’s an important factor in assessing franchise bids.
And in plans for rolling stock.
With over 3,700 new carriages due to be in service by 2019.
But sometimes the public perception of performance is damaged by poor decision-making.
Leading to disruptions like that around London at Christmas, which was completely unacceptable, and largely avoidable.
The problems didn’t just stem from over-running engineering work, they were also due to poor planning, putting far too much pressure on Finsbury Park Station.
And a failure to communicate with passengers.
I accept that on a wider scale, with such an ambitious programme to upgrade and expand the network, not every project will run completely smoothly.
The logistics are often very complex – especially around holiday maintenance work.
But the railway has to get better at handling problems when they arise.
Having contingency plans in place.
Working with passengers so they’re aware of what’s happening, and so they feel that the railway is on their side.
This will be even more important in years to come, as we roll out our investment programme.
The overriding industry goal is to ensure that 92.5% of trains for each franchise arrive on time by 2019.
But it’s also to put systems in place that ensure the events of Finsbury Park are never repeated.
Another important challenge for the RDG will be making best use of technology.
But to implement the changes, we need more emphasis on innovation.
Throughout the railway.
From train to track, and from manufacturers to suppliers.
DfT is supporting this vision through the FutureRailway programme.
One of the most interesting aspects of the programme is looking to other industry sectors for ideas and inspiration.
One example is Britain’s first battery powered train, currently being put through its paces on a trial basis.
Which shows how technology from the automotive sector can be successfully applied in rail.
I want to see lots more initiatives like this.
So it’s encouraging that the Rail Delivery Group is working closely with the Rail Supply Group.
But new technology not only offers solutions to engineering challenges.
It’s also about making things better for passengers.
One of the most effective ways to do that will be modernising ticketing for the digital age.
There’s no reason why, by the end of the next parliament, most rail tickets can’t be digital.
This would be transformational for many commuters.
Allowing things like more flexible tickets for part time workers.
Again - the railway can learn here from other sectors.
Everything you do should be to help customers get on and get around.
And that doesn’t just mean season ticket holders.
It means leisure travellers.
Or visitors from abroad using the network for the first time.
It’s imperative that we simplify ticketing.
And make the railway more accessible.
Which is why, following last year’s story about ticket machines overcharging passengers, we arranged a meeting with industry representatives, at which operators agreed to sign up to a code of practice overseen by the ORR to end inconsistencies between ticket prices – depending on where you buy them.
So, to sum up.
We are making good progress.
And it’s clear from the RDG’s 13 workstreams that you are focused on the right areas.
Modernising the railway.
Investing to meet demand.
Getting better value for money.
And making best use of new technology.
Now the challenge is to turn these workstreams into actions.
Joining up ideas and innovations from many different parts of the industry.
Being outward facing and transparent.
And showing leadership.
Leadership is often about making difficult decisions.
But it’s also about making correct decisions.
Understanding that what’s best for the customer is best for the long term benefit of the railway too.
It’s a big job.
But it’s one we will accomplish.
With the support of a pro-rail government.
And with the Rail Delivery Group leading the industry.