KEY POINTS:
- Long-term planning
- Spending commitments
- Environmental targets
- Integrated strategies
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To Patrick McLoughlin, the Secretary of State for Transport, and to Sir Peter Hendy, chairman of Network Rail:
My letter to you concerns strategic infrastructure development.
I’ll start by defining what I mean, before describing the outcomes I expect to emerge from an effective strategic infrastructure development plan, and some of its key ingredients.
By strategic infrastructure development I mean the following:
- It (obviously) has to be strategic. This is not simply a list of schemes that are ‘shovel ready’, rather it is a long-term view of rail’s place in the UK economy and environment (about which there is common ground), and a clear plan of how to get there.
- I’ll focus on infrastructure (tracks, trains, structures), but without losing sight of either the importance of technology (which may mean less ‘infrastructure’ spend) or the supporting ‘resource’ spend that Treasury is so fond of cutting.
- Development does not always mean more infrastructure. Development goes hand in hand with the strategy, but I am focusing on the long term, consistent with the long-term nature of the rail assets.
Of course, rail is currently embarking on its own planning process, with the Initial Industry Plan for the period 2018-2023 under development. That the process exists - and indeed is required by legislation - is a welcome opportunity for the industry to consider the short to medium term. It is only recently that strategic roads in England have started to benefit from a five-year planning and funding process, while other major infrastructure providers still have to cope with much shorter horizons.
Importantly, the UK rail industry and the wider economy benefits from the five-year planning and funding arrangements. This process, together with relatively long-term contracts for passenger services, constitute the key drivers of the benefits of the 1990s change in industry model that Oxera described and quantified for the Rail Delivery Group in 2014 (What is the Contribution of Rail to the UK Economy? July 2014).
As such, despite what is looking like a tight Spending Review for the Department for Transport (at least for resource spend), I would urge the preservation of the 2013 Periodic Review spending commitments (notwithstanding current uncertainty about the outputs that this spend can deliver).
I would also urge the continuation of the five-year spending commitment at future Periodic Reviews - even if (as regulators across infrastructure sectors are seeing) the precise nature of projects consistent with that spending is uncertain.
However, the Commons Transport Committee recently noted: “Witnesses representing key stakeholders for the rail industry feel that there is no clear long-term plan for the railway.”
It called on Network Rail to publish a vision up to 2043, with provisional plans for each five-year period beyond the current one, and up to this date. This view is consistent with long-term vision documents (increasingly required by regulators) in other sectors - for example, water companies’ Water Resources Management Plans, which look ahead 25 years, and which have to be updated every five years.
In the Government’s response to the committee’s recommendation, it agrees that planning for the longer term is important, and describes the cross-industry Long-Term Planning Process (LTPP). This is a programme of studies being taken forward to consider routes and network-wide issues (such as technological change), with a view to informing project development and franchise specifications.
Readers will have their own view on whether this is consistent with the committee’s recommendation, regarding a long-term vision towards which the industry and its stakeholders are working. Nevertheless, I now turn to what the outcomes of a long-term strategic infrastructure development plan should deliver.
First, I would expect a long-term rail infrastructure development strategy to recognise that rail does not exist in a vacuum.
Success for me in this area would entail the industry understanding a diverse set of developments elsewhere in the transport sector, and in other parts of the economy that feed into rail (energy and construction, for example).
