The immediate problem facing the railways is that they are in a financial hole which has been growing since 2016. Railfuture believes this can only be resolved through growth and improved productivity, but the railways are in limbo until political decisions are made and implemented.

We propose the following 10 actions to put the railways on a sustainable footing. The first two action points should be completed (if not published) before the election so that visible progress can be made quickly afterwards. The remaining 8 action points are strategic objectives for the railways which the government should set and support, in order of decreasing government involvement.
  1. Decide the strategic objectives, in answer to the question 'what is rail for?', which the government should set the rail industry. The current Transport Secretary has stated that rail is for connectivity to support economic growth, decarbonisation and social inclusion, but the current government has yet to follow through with policies which support achieving them or targets against which they can be measured.
  2. Decide the organisation in terms of structure and ownership.
    • The structure defines the split between political ‘direction’ and ‘oversight’; infrastructure management; and train operation.
    • Recognise that the best place for decisions to be made varies depending on the context, for example whether an inter-city, metro or freight service; it is not one size fits all. Some matters are best addressed nationally, for example allocation of scarce resources, but we think much is best resolved as close to the passenger / customer as possible, by those who can take action - often the train operator in conjunction with other local stakeholders.
    • Ownership is not just state or private sector, it is also which bit of the state: national, devolved, local, state owned companies or direct ownership. In the longer term the structure should enable devolution in major cities to provide integrated travel between modes, but without losing the benefits of a national rail network.
    • When the organisation is decided, the strategic objectives must be aligned across it.
  3. Empower expert leaders to define a strategy to meet those objectives. There must be effective financial and operational management through bottom line accountability (revenue as well as cost control), aligned incentives (a 'common scorecard') and authority over resource and service levels, so that the right trade-offs are made between revenue, cost, risk and improving service to passengers.
  4. Set the trajectory for revenue support based on resolution of the industrial dispute and improved productivity. For example, the fiasco of the ticket office proposals showed the value passengers place on a properly staffed station, complete with the right facilities for those staff to meet passenger needs.
  5. Set a target of at least doubling rail freight by 2050 and fund necessary investment to achieve it. Modal shift of freight to rail can make a major contribution to overall transport decarbonisation. The current government's freight growth target of 75% by 2050 is no more than keeping pace with expected economic growth - so is effectively a minimum cost zero-modal-share-growth target. The target should be to at least double rail freight by 2050, removing up to12 million HGV journeys annually from the roads, using fiscal levers to equalise externality costs between road and rail.
  6. Agree the strategy to achieve decarbonisation target and fund a rolling electrification programme to achieve it, starting with the 800 miles identified by CILT, including East West Rail. This would enable 95% of rail freight to be electrically hauled, which would reduce carbon emissions by around 400,000 tonnes annually at current volumes of rail freight and 2 million tonnes annually if rail freight is doubled.
  7. Define a plan for HS2, either proceeding with Phase 2 or mitigating the effects of its cancellation. If the decision not to proceed with HS2 Phase 2 now is upheld, it is essential that options for the future are not closed for good so safeguarding must not be lifted. As an absolute minimum the Euston terminus and the delta junction east of Birmingham must go ahead. The schemes identified for Network North may not be the best use of the money available, which should be directed to resolve the network pinch points exposed by the cancellation.
  8. Publish an investment pipeline for infrastructure enhancement and rolling stock replacement, which will reduce through-life costs of both.
  9. Reform fares and ticketing to deliver value, inspire confidence, attract more passengers and grow revenue. Ticketing changes must be tackled as a coherent whole. Simplification will inevitably lead to winners and losers on price, and it is essential that related benefits are provided simultaneously.
  10. Focus on the day job, ie train service delivery for the customer. This will improve reliability, reduce process, encourage individual decision making, improve productivity, motivate staff and satisfy customers.
Achieving these objectives will deliver benefits for customers and staff, attracting more traffic so that rail is seen as part of the solution not part of the problem. People want to travel – leisure travel is higher than pre-pandemic and even Monday commuting is recovering – and need purchases to be delivered. Rail managers need the freedom to spend a little to drive revenue, for example by increasing off-peak frequency. There also needs to be a proper recognition that it is about door to door journeys, so walking, cycling, buses, taxis and parking are all relevant – and that the market for rail services varies; for instance in cities they are more a utility, but long distance services are in a competitive market. Trust must be rebuilt so that passengers see rail travel as stress-free and to create a common understanding across the industry that continual change is essential to provide job satisfaction, develop the industry, grow the market and secure jobs.

Additional information

Freight growth target

HS2 – keep options open and mitigate constraints

The future of stations

Road user charging

Journey reliability

Leadership, Customer focused train service delivery and Fares were briefed in our earlier letter to the Rail Minister Huw Merriman

Reducing infrastructure costs - Railfuture response to Urban Transport Group Call for Evidence for Rail & Urban Transport Review