May 3rd 2012The Rt Hon Theresa Villiers MP, Minister of State for Transport, presented the Government's plans for rail in the next few years at Infrarail on Tuesday 30th April 2012.
The rail engineer's Technical Seminar theatre was full to the brim with visitors listening to Theresa Villier's speech:
‘It's a pleasure to be here for the first day of Infrarail 2012.
‘There's a real buzz in the main hall, which I hope reflects a wider mood of optimism in the railway industry.
‘From engineering and technology companies to suppliers and service providers, and from passenger and freight operators to infrastructure specialists - all stand to benefit from the rail modernisation programme the Government is taking forward.
‘This ambitious set of projects is bigger in scale than anything attempted in Britain for over a hundred years.
‘The Government is pressing ahead despite the deficit because we believe that improving our railway is a crucial way to boost growth and strengthen our competitiveness.
‘We've broken the typical pattern, where rail has often seemed to be among the first casualties when Government spending has to be reined in to restore the public finances to health.
‘Thanks to some very difficult decisions on issues such as VAT and welfare reform, we've been able to commit £18 billion to rail in the current spending review period.
‘So as well as our plans for high speed rail we're delivering:
the Thameslink programme
electrification of key routes in the north of England and on the Great Western line
massive redevelopment of stations like Birmingham New Street and Reading
real progress on the Strategic Freight Network
the first elements of the Northern Hub project
around 2700 new carriages, including the IEP
significant improvements to the light rail networks in Birmingham, Manchester, Nottingham and Newcastle
and the long awaited upgrade of the London Underground.
‘What's more, nearly a quarter of a century after it was first mooted, Crossrail construction is now well underway.
‘Crossrail is the biggest construction project in Europe and very soon its two massive tunnel boring machines will start their journey under central London providing a vitally needed uplift to the capital's public transport system and a crucial new link to our nation's busiest airport.
‘As well as improving life for passengers, all of this adds up to a period of historic opportunity for the rail industry and those who supply it.
‘But investment alone cannot prepare our railway for the future.
‘We learnt from the last government that simply spending more and more on public services is no guarantee of success.
‘Investment must be accompanied by change and reform, with a clear focus on improving the passenger experience and reducing costs.
‘It is only through real reform that we can respond to passenger concerns on fares.'
The cost challenge
‘Put simply, it is essential that the rail industry addresses the railway's chronic cost problems.
‘In his Rail Value for Money Study, Sir Roy McNulty concluded that our railways are among the most expensive to operate in Europe, in spite of the strong growth in the number of passengers using them in the years since privatisation.
‘The report identified inefficiencies worth between £2.5 and £3.5 billion-a-year and the people picking up the tab for this costly efficiency gap are farepayers and taxpayers.
‘If the rail industry is to earn the ‘right to grow' highlighted in Sir Roy's report, costs have to come down.
‘There's already some progress.
‘Network Rail is due to deliver £1.2 billion of efficiency savings by 2014 with at least a further £600 million expected by 2019.
‘But we need to go further.
‘By 2019, we want the industry to close the full £3.5 billion efficiency gap identified in the McNulty report.
‘But it's clear that none of us can deliver the change we need in isolation.
‘All too often in the past, governments have either imposed their own plans for reform on the railway, or simply set targets for the industry to achieve without giving them the means to do so.
‘In contrast, we have sought to build a consensus for change using a collaborative approach. Because we believe that working effectively together is essential if we are to achieve the modern, affordable, efficiently-run rail network that our country needs.'
Reform of franchises, fares and ticketing
‘The time is right for reform.
‘The HLOS2 programme of work that will decide rail outcomes and funding for the five-year period from 2014 is now well underway and we've started on the biggest round of re-franchising since privatisation.
‘By making franchises longer and less prescriptive, we'll give the industry more freedom to innovate and run their businesses in a commercial way, within a framework set by the franchise which protects key outcomes for passengers, taxpayers and the wider economy.
‘We're also developing a more transparent, modern and flexible approach to fares and ticketing.
‘We're consulting on a range of possible changes in our fares and ticketing review and we're working with the rail industry to expand smart ticketing across the network.
‘We want passengers around the country to receive the same kind of convenience and benefits that travellers in the capital already enjoy thanks the Mayor's Oyster system.
‘We also want to harness new technology to modernise the season ticket so it better matches modern working patterns and also aids our efforts to use trains more efficiently across the day.
‘So we're putting smart ticketing obligations into all new franchises.
‘Backed by £45 million of Government funding, work is underway to extend ITSO-compliant smart ticketing across London and the South East.
‘What's more, a number of PTEs including Centro right here in the West Midlands are carrying forward great work on smart ticketing on public transport.'
‘We also want to increase opportunities for the rail industry's workforce, and widen the pool of talent from which the sector recruits.
‘One way to do that would be to persuade more women to consider a career in rail.
‘Even today, over 80 per cent of people working in public transport are men and less than 14 per cent of Network Rail's workforce is female.
‘We're keen to work with the industry to explore the reasons for this imbalance, and consider how we might break down the barriers to greater diversity.
‘Modernising training will help, so it can be delivered more flexibly and more quickly to suit the working patterns of modern life.
‘We would like to see new providers enter the market for training so the next generation of staff have wider and more convenient opportunities to develop the skills needed to progress their careers. And on a broader level, working practices need to become more efficient.
‘Successive substantial increases in pay have inevitably been one of the pressures behind the escalating costs of the railways in recent years.
‘Addressing this requires a more responsible approach to salaries and bonuses, right from the board room to the platform.'
Reform and the rail industry
‘If we duck the reform challenge, it won't just be rail users and taxpayers who pay the price.
‘Ultimately, the rail industry and its workforce will lose out if we don't seize this opportunity to put the economics of the railway on a much more sustainable footing.
‘So it's vital that everyone working in rail, be it management or front-line, help make these reforms work.
‘Reform will generate the growth, profits and jobs of the future.
‘A key element of our reform strategy is closer collaboration between different parts of the industry.
‘Progress is already being made towards better alignment between track and train with industry led projects making real progress - for example on the Wessex line and in Scotland.
‘And the Office of Rail Regulation is revising the way track access charges work to give train operators a financial incentive to reduce Network Rail costs.
‘Devolving powers away from central government and giving communities more control over local services is also something we're looking at very seriously.
‘In all these ways, the Command Paper we published in March sets a new direction for rail reform.
‘The way the industry responds is crucial.
‘The Rail Delivery Group established last year is already playing an important role in showing leadership, bringing different parts of the railway together to drive efficiencies and to improve the way that assets, supply chains and programmes are managed.
‘Such leadership across the industry will be essential if we are to succeed where other governments have failed in the past and see rail industry costs come down and I thank all those of you here who represent organisations taking part in the RDG.'
Supply chain and UK jobs
‘But if we're to meet the challenges and take advantage of the opportunities I've discussed today, we also need a stronger partnership between Government and the industry.
‘Take HS2, for example. Even schemes like the West Coast upgrade and Crossrail will be dwarfed by our high speed rail plans.
‘Part of our strategy for successful delivery of this massive project involves developing the expertise of British and UK-based firms to compete for HS2 contracts.
‘The Government's National Infrastructure Plan makes clear the importance of a predictable and transparent pipeline of infrastructure projects that will help the private sector invest and plan for the future.
‘HS2 will form a key element of that long-term pipeline, providing visibility on future contracting opportunities.
‘To ensure that the UK-based supply chain is in a position to benefit as far as possible from this project, the Government will engage in a dialogue with potential suppliers to ensure they are well-placed to bid competitively.
‘As part of that process, the Secretaries of State for Transport and Business will shortly be meeting rail suppliers for a round table session.
‘We want to put our best minds to work on high speed rail, and to find uniquely British solutions to the challenges we face.
‘We also want Britain to become a centre of excellence for high speed technologies and services, with a world-class R&D capability.
‘From the very start our priority must be to develop the home-grown skills that will not only help build HS2, but that will also aid UK based companies in competing for contracts abroad in the countries expanding their high speed rail networks.
‘The National Skills Academy Railway Engineering is doing excellent work with employers and training providers to ensure that the industry has the right people in place to meet the challenges of the future. The Crossrail Tunnelling and Underground Academy took its first students in autumn last year.
‘And the Government is funding special ‘Catapult Centres' that will help drive forward innovation and help British based firms compete in the global market for transport technology.
‘We estimate that the market for novel transport systems could be worth as much as £890 billion worldwide. So transport is one of seven key areas of business covered by the Catapult Centres which are due to open next year.
‘The Transport Catapult centre will be cross modal, covering key issues for both the road and rail sector.
‘The UK has world leading business and academic expertise with particular strength on intelligent transport technology and telematics; road traffic management systems; infrastructure design; and in-vehicle communications.
‘Some early projects are likely to focus on end-to-end journey systems and remote asset management and monitoring.
‘By promoting collaboration and sharing knowledge, this new research centre should help businesses build the kind of partnerships which can reduce risks and open up greater opportunities to compete in global markets.
‘We hope it will also help smaller companies work with multinationals and with the academic world to access significant R&D resources.'
‘So in conclusion, ladies and gentlemen, in many ways the outlook for the UK rail network looks bright.
‘Our railways were once viewed as a transport system of the past, condemned to inevitable decline.
‘That trend has been comprehensively reversed by the massive growth in passenger numbers we've seen since privatisation.
‘Even the economic traumas of the last four years have scarcely dented the ever rising popularity of rail travel.
‘But it is essential that we all rise to the challenges I have outlined today.
‘Costs have to come down so we can achieve our goal of ending the above inflation fare increases that have started to cause so much concern - particularly to hard-pressed commuters in the South East.
‘Our blueprint for the future of rail is clear:
sustained investment in the rail infrastructure, and a sustained attack on waste and inefficiency; and
better services for passengers and a better deal for both the farepayer and taxpayer.
‘With your help, I believe we can deliver that ambition and secure a successful future for our railways in the years to come.'