10-year Infrastructure Strategy 2025 representation to HM Treasury from the Railway Industry Association
March 2025
1. INTRODUCTION
1.1. This paper provides the Railway Industry Association’s (RIA’s) thoughts on the questions raised in the Government’s 10-year infrastructure strategy working paper.
1.2. For further information please contact RIA Policy Director Robert Cook at Robert.cook@riagb.org.uk or 07951 776 874.
2. ABOUT RIA
2.1. The Railway Industry Association (RIA) champions a dynamic UK rail supply sector. We help to grow a sustainable, and high-performing railway as well as promoting UK rail expertise and products to international markets. RIA has over 360 companies in membership, which is active across the whole of railway supply, covering a diverse range of products and services and including both multi-national companies and SMEs (60% by number). The rail industry is a foundation sector for the UK’s economy which supports sustainable investment and jobs in towns and communities across the UK.
2.2. The rail network remains one of the UK’s most valuable assets, with potential to support clean growth and wider social benefits for communities right across the UK. A 2021 report produced by Oxford Economics shows that the rail industry supports:
• £43 billion GVA in economic growth
• 710,000 jobs
• £14 billion in tax revenue each year
• For every £1 spent in rail, £2.50 of income is generated in the wider economy.1
3. ARE THE PRINCIPLES AND FOCUS AREAS FOR THE STRATEGY THE RIGHT ONES TO PRIORITISE?
3.1. The objectives of the Strategy are appropriate and should provide clear focus. The relationship between economic growth, transport connections, housing, labour force mobility, and skills is particularly important.
3.2. The principles are appropriate at a broad level, but need to be clarified. The objective “accelerating to net zero by 2050” needs to take into account:
• The importance of the railway having a clear and implementable plan to decarbonise the railway by 2050. This will require joined-up thinking, and an understanding of the relation between infrastructure and rolling-stock, which must be decarbonised in tandem, through clear and committed planning. This can be enabled through Great British Railways’ move to ‘track and train’ thinking, leveraging its position as a directing mind with a centralised strategy. Plans should also consider the importance of managing rail energy as part of the wider energy system, recognising the potential for improved energy management as battery technology is used more widely and integration with smart local energy systems.
• The potential of rail to assist more rapid decarbonisation by growing rail freight, removing HGVs from roads. The Rail Freight Growth Target, set in 2023, aims for a 75% increase in freight by 2050, and this target is particularly important for decarbonisation. One freight train removes up to 129 HGVs from the roads, which not only reduces HGV emissions, but also reduces congestion, and its associated emissions.
3.3. A particularly important overarching principle for long-term infrastructure is that the strategy must establish the steadylong-termrunrateofinvestmentsrequired(for differentassets)to:
• Meet future infrastructure capacity requirements. For example, passenger rail demand is set to grow between 37% and 97% by 2050, compared to the prepandemic peak, depending on Government policies. There needs to be a conscious decision on what level of demand growth to plan for and attract.
• Keep existing assets in a sustainable condition so they are fit for purpose in future. For example, for rail, asset condition deterioration rate increases when it falls under 40% of the Percentage Asset Life Remaining, a Network Rail metric used to understand how much of an asset's useful life remains
• Maintain skills and teams, leading to lower costs through minimising need to reskill, and maximising skill to reduce likelihood of failure, because projects with higher levels of expertise are more likely to succeed. The history of the Great Western Electrification Programme shows that ‘lumpy’ investment is much more inefficient than continuous steady investment, in part due to the lack of skilled workers and teams, retained from project to project.
3.4. To plan the rail network effectively, the UK needs to establish the investment levels needed between now and 2050 across all main asset types: rolling stock, electrification, battery technology, infrastructure renewals, signalling and stations. These assets are all interconnected. Investment decisions to commission rolling stock can only be taken if there are clear decisions on the type of energy source and signalling. They must be considered together - joined-up planning will reduce costs of maintenance (through disruption, time needed, possession costs). See example below. These assets have long lives, measured in decades, and their renewal and expiry dates can be predicted and planned for in advance. Existing shortfalls in renewals and asset condition need to be reflected in plans.
Example: Planning long-run rail investments
RIA has assessed the expiry rate of current fleet of trains, and what is needed to replace these and decarbonise. 515 vehicle coaches needing to be replaced each year to 2050 in order to decarbonise.
Alongside this, RIA research has estimated that, should we exploit the capabilities of battery-electric bi-mode trains, the minimum additional electrification required by 2050 to be around 8,600 single-track kilometres (stk), above the current electrified distance of 14,360stk. To meet this, an annual average increase of around 350stk is required, a not unachievable amount, providing that we continue with the current rate of electrification, so that we have the capability to increase this in the future. The volume of electrification in existing plans at the time of the General Election in July 2024 was broadly in line with these levels, and must be maintained, otherwise the industry will struggle to retain and grow skills, costs will increase, and rail will not be decarbonised.
3.5. Transparency over the steady rate of investment is required to:
• Provide clarity on the future required state of the infrastructure, and funding gaps. For example, in CP6, Network Rail has under-delivered on renewals in critical asset groups such as track and structures, leading to increased pressure on maintenance and core-renewal activities, continuing into CP7.
• Support a smooth investment profile, which is crucial to efficiency and skills retention and development. A rail workforce survey by the National Skills Academy for Rail (NSAR) published in autumn 2024 found that 9.4% of the workforce (the majority in the supply chain) had left the industry in the previous 12 months. The UK is at risk of losing critical capability, such as specialist engineering skills, which we know is necessary to maintain, renew and develop the railway efficiently in the future.
• Provide a reference point to test decisions against, and understand consequences, which can help mitigate decisions that may provide short-term cost savings but increase long-term costs. Effective benefit analysis will learn from successes in prior railway infrastructure analysis, and will be able to consider investment in a holistic way as a result. For example, the Jubilee Line Extension resulted in job growth in catchment areas that outpaced Greater London by 6%, and land value along the route increased by 50%.
4. WHICH FUNCTIONS OF A SPATIAL STRATEGY ARE MOST IMPORTANT FOR YOU?
4.1. A spatial strategy needs to allow for, and facilitate, complementary national and regional investments in infrastructure reflecting increasing devolution in a number of areas including rail. Coordination is needed to ensure coherence between industrial strategy (including location of new industrial hubs), regional growth plans, future housing plans and the identification of the transport investments required to facilitate these, as well as address existing bottlenecks. Infrastructure strategy should be underpinned by a geographical mapping that takes into account transport needs both today, and plans for the future. This will help maximise the benefits of transport investment.
4.2. Given the tight fiscal situation, it is important that regional authorities are enabled to generate investment required to maintain and upgrade transport networks, including rail links, which support regional productivity. We would like to see the long-term infrastructure strategy explicitly support devolved transport authorities across England in terms of harnessing a range of different funding and financing streams. This could include private investment models, as well as powers to establish local funding streams.
5. OF THE TYPES OF PIPELINE – WHICH ARE THE MOST IMPORTANT FEATURES TO INDUSTRY?
5.1. A clear future pipeline helps companies understand the opportunities for investment and prepare their teams so that there is a skilled labour force and innovative ideas to drive efficiencies. There is value in providing pipeline information at a number of different levels, simultaneously, such as:
• A long-term strategy (30 years) which incorporates capacity growth, sustainability, connectivity, drawing on Infrastructure Progress Reviews.
• A long-term investment pipeline (10-15 years) to demonstrate the translation of strategy to key outputs and projects.
• A commercial pipeline (5 years) of approved, funded and procurement-ready projects and programmes.
5.2. Ideally, information on national and regional investment plans would be folded into a single and transparent high-level pipeline.
6. HOW BEST CAN THE GOVERNMENT PROVIDE GREATER CERTAINTY FOR INDUSTRY? INCLUDING THE ROLE OF THE STRATEGY, A PIPELINE, AND DEPARTMENTS?
6.1. There is a direct relationship between maintaining a stable rail investment pipeline and i) reducing costs and ii) attracting business investment in high skilled jobs and innovation.
6.2. The rail industry has seen years of fluctuating investment, and a recent period of exceptional uncertainty. The railway industry now faces a systemic risk of losing critical workforce capability. If unaddressed this will see further job losses, increased future costs and reduced UK capability to deliver critical infrastructure upgrades.2
6.3. The two major causes of ‘boom and bust’ investment in rail are:
• A lack of long-term planning; and
• An inability to turn plans into lasting financial commitments
6.4. Addressing these will require strong institutional reforms which require Government to set out long-term plans, and commensurate funding commitments.
6.5. Private investment models present an important opportunity, as they can:
• Provide much longer-term funding commitments than Government budgeting rules usually allow, supporting long-term investment certainty.
• Be used as a benchmark against public sector delivery, improve efficiency and productivity, and facilitate more significant transfer of delivery and cost risks to the private sector.
• Help leverage third party funding contributions, such as on the Battersea Northern Line Extension.
6.6. The long-term infrastructure strategy therefore needs to set out the Government’s overall approach to private investment and provide investors with greater clarity on the Government’s approach. As part of this, the strategy needs consider the specific models which could unlock private investment in rail.
7. DO YOU HAVE VIEWS ON THE EARLY PRIORITIES FOR NISTA TO SUPPORT THE DELIVERY OF THE
STRATEGY?
7.1. The strategy is unlikely to succeed without constant external pressure for transparency over investment targets and progress in meeting this. In particular, NISTA will support delivery of the strategy if it can swiftly publish an independent view of:
• What is the required long-term run rate of investment in different infrastructure assets.
• Whether the UK is meeting the required levels, and the implications for:
o Meeting future capacity needs
o Future asset sustainability
• The most effective delivery models to provide greater long-term certainty and drive productivity, including private investment models.
7.2. To do this effectively, and secure confidence from industry, NISTA will need to demonstrate a high degree of independence from day-to-day Government business. It will need a clear framework of Parliamentary accountability, which requires transparent and regular reports on these matters.
1 Oxford Economics 2021. The Economic Contribution of UK Rail. https://www.riagb.org.uk/RIA/Newsroom/Publications%20Folder/OE_2021.aspx
2 See RIA submission to Transport Select Committee Inquiry on Rail Investment Pipelines: Ending Boom and Bust