Analysis

Future of rail rests on delivery - interview with rail minister Claire Perry

Claire Perry rail minister

Rail minister Claire Perry sets out the new government plan to meet the continued ambitions for growth across the UK rail network ahead of the Network Rail shake up announced on 25 June.

The 60% growth in passenger numbers and 9% increase in freight carried on the UK rail network over the last decade underlines clearly that the rail is a successful and hugely valuable national asset.

Yet given the vast amounts of public money that have been and continue to be pumped into the railway - £38bn in the five years to 2019 - Network Rail is now under acute pressure to demonstrate value for that spend in an era of public belt tightening.

In this respect the latest quarterly monitor from the Office of Rail and Road (ORR) will make difficult reading. A victim of success or a casualty of poor management?

ORR said that it was launching an investigation into why Network Rail had significantly underperformed against CP5 targets to date and delivered less renewal work than it planned, with track renewal 7% behind plan; signalling renewals are 63% behind schedule; and overhead line renewals are 77% behind target.

In a keynote delivery to the Railway Engineers Forum this month Perry ducked questions over future restructuring of Network Rail. But she emphasised that for the new Tory government, delivering its plans for upgrading the network infrastructure and boosting efficiency was central to its objectives over the new parliament.

“Most of our railway infrastructure dates back to the Victoria age yet demand for transport increases every year so parts of out network are full and in parts the reliability is a concern,” said Perry. “It is completely obvious that you cannot grow a local, regional or national economy without moving people and products effectively and efficiently.”

Interview by Antony Oliver

Is Network Rail’s current underperformance as reported by ORR a concern to you?

We have given NR the biggest challenge it has probably ever faced in terms of the investment programme. I can’t think of a time where it has been tasked with the level of investment now required. It is a challenge and I think that the company is rising to that challenge and working out what it needs to do. Because driving asset reliability as well as the renewable programmes is key. [Network Rail] faces challenges as does the whole industry - massive demand on engineering time and a massive demand for materials because we are building in the way we haven’t for decades. The Secretary of State, the department and myself are all absolutely focussed on this need to deliver. And we have to deliver to earn the credibility for the next stage of investment.

But surely you must be disappointed with the performance of Network Rail given the amount of public money being sunk into the railways?

We have to step back and say when we are putting projects forward for investment at what stage are we accessing them. You could argue that perhaps some projects were put into the hopper at perhaps too early a stage. We are learning a lot. On roads, for example, the cost of delivering smart motorway is falling as we get more experienced and I suspect the same will happen with rail electrification. 

Surely the ORR has sent out very big warning signals to you over the ability to deliver the enhancements that you require?

I think the challenge is all about delivery and this will be a parliament of delivery. We know that we can do it – we have delivered the Olympics and got better in this country at delivering major infrastructure – [for example] Crossrail’s tunnels were completed last week and on time so we can do it. But we have to all work to together to make sure that it is done. To me the most important thing we can do is to get the rail upgrades through in a cost effective fashion.

Rail freight is a success story – should you be doing more to grow this sector?

My question to the industry is, as a highly successful private industry, do you want or need government interference? Do you want to have the heavy hand of government to start to interfere with some of your contractual obligations – probably not. Do you want a government that is absolutely thinking about freight whenever and investment decision is made on the network – probably yes. And that is my invitation – what do we need to do. I want to know.

Do you want to see a re-structured or privatised Network Rail to better manage the assets?

I am going to allow the Secretary of State for Transport to make strategic decisions such as that. I want to see a highly efficient industry. So does anyone ever think we should renationalise British Airways? Or set up a government owned airline? Of course not, it would be absurd. I don’t want us to have that conversation about the rail network. I want us to recognise the benefits that have come from privatisation, the enormous increase in passenger services and passenger growth and the enormous increase in freight and work out what government needs to do better. Where does government need to intervene and where does government need to be a bit bolder and get off the back of industry. That is what I want. 

Can the government do more to help to smooth delivery of infrastructure projects across the rail sector?

I think that we are delivering certainty and the political will is being bolstered by the money. If you look at Britain’s investment in infrastructure we currently rank around 30th globally. If we are serious about getting people and goods moving and decarbonising then we have to keep investing in rail and that is fundamental.

Rail freight is something of a success story but it is still something of an afterthought compared to passenger services. How can you change this?

If you look at the long term economic growth for the country we must ask what do we need to do to power up the freight network. Do we need more resources in the department? Do we need a specific budget that goes into investment for freight? But I am very keen to raise the profile of freight and to ensure that government recognises the importance of it. If there are constraints out there them let’s hear about them. [I want] to give you more freedom to carry on developing this highly successful UK industry. 

What do you see holding back the growth in rail freight compared to passenger services? 

It comes back to joined up thinking. We have astonishing levels of peak passenger demand and there is investment going in to try to unblock that. But we have passenger trains running around under capacity for much of the day. So is there an opportunity to mix up some of the passenger and freight thinking?

Who should drive this new thinking?

It’s a mix – government investing where necessary but being guided by the private sector as what it needs – to me it’s a partnership

And removing bureaucracy?

Anywhere that I can cut unnecessary bureaucracy is on my radar.

Clearly the impact on passenger services always take priority over freight – is that limiting?

I don’t see it that way – I think there is an enormous appetite for more rail freight in this country. There are enormous peaks in passenger demand particularly around London but we have thousands of km of track that is lightly used the rest of the day so there must be opportunities. Perhaps the challenge is to future proof rail for freight paths going forwards so that we are actually thinking about freight during the planning of upgrades. 

Cleary freight does not impact voters in same way that passenger trains do

Economic growth is the fundamental reason for the investment. Nuclear power stations don’t have votes and upgrading London’s sewers has never been a vote catcher. Yes you can get voters quite rightly focusing, particularly in the south east, on reliability for passengers but if you believe in a longterm economic growth plan then you just have to get on and invest. 

Getting planning decision made quickly is critical - are we creating the right environment for investors?

I am interested in government specifying want it wants not how it wants to get there and that is a very good lesson for both passenger and freight rail. I want to know where projects are stalled so that I can sit down with the planning minister and say we have made a commitment and this is the detail that is stalling it.

HGV are subsidised and only really pay one third of the actual cost of this impact on society. Can this be redressed?

This is exactly why if you talk to the average person they like the idea of rail freight – they get it and understand, even without pricing in the externalities that having lots more HGVs on the road is a difficult thing and they are frustrated by the fact they can’t get more freight on the railways.

Perry on the success of the UK rail freight market..

Rail’s share of the freight market has doubled to 11% and productivity has increased with 70% more goods on 30% fewer train paths [since privatisation]. We know that rail freight has a clear appetite to increase its market. The benefits are clear. It reduces road congestion, it is significantly safer and less polluting than road haulage and it is very reliable. We now know the value of those benefits to the UK economy are some £1.6bn every year. [according to figures from the Rail Delivery Group]. Forecast rail freight growth over the next five years is even greater than passenger growth in percentage terms and the longer terms forecasts are equally strong.  

On encouraging growth to continue?

I would like to work cross party and across the industry to try to understand some of the barriers that might inhibit the growth in the this market. We will continue the work we have started with important projects such as the Reading flyover to separate passenger paths from freight paths. But at the same time we will look for new opportunities for carrying goods by rail. Carrying good on passenger trains is one option and we know that there is an opportunity – while there is huge demand during peak times they are often running around carrying fresh air during the rest of the day. Why can we not use that space?

On the major challenges ahead

Just as there are opportunities there are some significant challenges ahead. The world is rapidly changing and rail needs to evolve if it is going to retain the competitive advantage that it has enjoyed in the past. The automotive sector for example is evolving at tremendous speed – in the lifetime of one freight train we can expect four or five generations of HGV each delivering higher performance and greater efficiency. Electrification of the road network will challenge rail’s green credentials. Autonomous road vehicles and the platooning of lorries are being developed around the world. Rail needs to respond to these developments