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How Control Periods are best remembered is more often than not defined by outputs, and the delivery of flagship projects.
That has meant a strong field of contenders for CP5, including the multi billion-pound Thameslink and Crossrail programmes, and perhaps the introduction of a new generation of high-speed trains on the Great Western and East Coast Main Lines.
Where CP5 could well differ, however, is in how prominent Network Rail’s internal changes have been. Much of the backdrop for April 2014-March 2019 has been provided by the many twists and turns of NR’s devolutionary journey - it has certainly been one of the most frequently visited topics in RailReview, as a steady stream of structural reforms and behavioural shifts continue to reshape the organisation.
Decentralisation has been the order of the day for both Chairman Sir Peter Hendy and Chief Executive Mark Carne, as they continue to steer the NR ship towards achieving their stated ambition of leading a more efficient and customer-focused business.
Underpinning this process has been the transfer of significant operational and financial authority away from NR’s corporate centre to its eight increasingly autonomous geographical Route-based businesses (plus its virtual route for freight and national passenger operators).
We’ve therefore heard how, as a direct consequence, Route Managing Directors have been flexing their new decision-making powers to narrow the gap with their train operating customers, by using new alignment tools such as joint scorecards, Supervisory Boards and integrated operating teams.
At the opposite end of the scale, decentralisation has also begun to shrink the size of NR’s corporate centre, although it has not been dispossessed entirely of purpose or clout - it has retained a number of key system operator functions needed to support the Routes, such as timetabling and Infrastructure Projects (IP).
Led by Managing Director Dr Francis Paonessa, IP has remained a network-wide directorate, although it has been repositioned within NR’s hierarchy to form a matrix delivery organisation that is aligned to the Routes via its four regional teams.
IP also has additional specialist teams in track and signalling, and separate delivery teams for its two largest projects - Thameslink and the Great North Rail Project.
Within this structure, the Routes and project sponsors are IP’s internal customers and define the scope of what enhancements and renewals are needed, which are then funded from route-based settlements. IP costs the work and then takes it through NR’s eight-stage GRIP (Governance for Railway Projects) process all the way to project close-out.
“Some people have a historical view of IP that is no longer accurate, and we’ve done a lot to alter the way in which we interact with the rest of NR,” explains Paonessa.
“IP sits as its own project management and infrastructure delivery organisation, providing functional support to the Routes. We spend the Routes’ money and provide support to them as our customers. We don’t actually have control over scope, spec or access as those outputs now come from other parts of NR.
“We act as that intelligent client between what’s wanted and the supply chain delivering it. And we’ve come a long way in the business from saying ‘anything to do with budgets and delivery sits with IP’ to the Route MDs having this new set of accountabilities.”
With 4,300 employees, IP represents just 12% of NR’s total workforce but over two-thirds of its spending power, utilising a supply chain of more than 3,000 individual companies to deliver more than £25 billion worth of enhancements and renewals in CP5.
It has more than 15,000 live projects on its books at any one time, and in 2016 delivered almost £6bn worth of work - representing 22% of all UK infrastructure. Its annual activity equates to £120 million worth of construction each week - the equivalent of building an Olympic Stadium every month but in the challenging environment of an operational railway.
Recasting IP’s role into a support function for the Routes has undoubtedly made it a less top-down delivery organisation, but why keep an organisation of that size at all within NR’s devolutionary model?
This question was one of many scrutinised by the Shaw Report, when it was published in March 2016 to consider the future shape and financing of NR.
The report’s key recommendation was that NR should accelerate its drive for devolution, although it stopped short of calling for IP’s break up to Route level. While recognising the bureaucracy and lack of agility inherent in organisations as large as IP, it could not be ignored that there remains significant bulk purchasing power by retaining a nationwide portfolio of projects.
Shaw also agreed that IP is much better placed than the Routes to direct limited resources and expertise from the supply chain to where they are needed most, rather than operating on a first-come-first-served basis.
Fluctuations in demand and workload could also naturally be expected to be amplified at Route level, raising questions over the efficiency of confining potentially under-utilised resources away from parts of the country where they could be deployed to greater effect.
“I think we have the best of both worlds at the moment,” adds Paonessa.
“We have the Routes, which are more outward-facing and better placed to understand the needs of train operators and passengers. And then you have the size, scope and capability of an IP organisation to deliver that work effectively.
“Also, if you broke the teams up into eight geographic areas, it’s very hard to manage the peaks and troughs. We smooth those out on a national level and can talk to the supply chain on behalf of NR as a whole, instead of eight teams trying to engage with the same suppliers. It’s far easier to do on an aggregated level when you have a consolidated and co-ordinated business.”
There is acknowledgement from IP’s executive team that the relationship between IP and its internal customer base is still being refined, as NR’s devolved structure continues to gain maturity.
But while there is clearly room for improvement in the level of integration it has with the Routes, IP’s Finance Director Anit Chandarana echoes much of Paonessa’s feelings for the merits in keeping a network-wide perspective over project delivery.
“As part of our transformation journey we’re beginning to ask those questions , and we’re involving Route MDs and the supply chain in that because we still have a journey to go on to understand their needs much better.
“But for me, there’s a strong argument around the skills set you need to deliver major projects, and the fact that there isn’t geographic consistency in the size of that work bank. You could easily end up with a build-up of resources under a Route and then later find that there is a requirement for it somewhere else.
“Having a national organisation called IP allows us to manage that variability better, but it also enables us to take a view around professional development of our people in a way that’s consistent. We recognise that we need to be better at that, and having a national construct allows us to do that more effectively.”
The repositioning of IP within NR has also been accompanied by concerted efforts to get much better at what it does, following a bad start to CP5 dominated by the ugly fallout generated by well-publicised possession overruns at King’s Cross and Paddington during Christmas 2014.
