Getting British Rail Back On Track

As we head into another 6 months of disruption to our lives, our businesses and the economy, it seems hard to envisage what a return to normal will look like. Today, with the end of rail franchising and the shift to a model that reflects marginal returns effectively eliminating any risk associated with passenger traffic, it’s appropriate to start wondering what will incentivise train companies to get the public travelling again.

That seems a long way away as the R number continues to creep up, but it’s going to prove to be a necessity if we’re to have a railway that in any way approaches long term viability. Initial forecasts of a best case recovery of 80% of previous traffic will prove disastrous for the finances of the railway and is something that we as taxpayers can scarcely afford in light of the ever increasing national debt.

We need to get people travelling again safely as we learn to live alongside this virus.

Only yesterday Boris Johnson indicated that we are facing another 6 months of working from home. It’s time to use this period to work out how we change the operation and performance of the railway to become an engine for recovery and to support the levelling up of the UK economy at a time when – purely down to the north/south wealth disparity – we risk ever greater division forming in our society. The UK is not being hit equally by Covid-19; while the treatment in terms of furlough may be similar, greater household wealth reserves in London and the South provide a buffer that many in the north do not have.

Passenger numbers are unlikely to come back fully; people have rapidly adapted to remote working, while spacing on trains will need to continue to be maintained for an indeterminate period, leaving a revenue gap of over ￡2bn per year and an unsustainable basis for operation.

What needs to be done is to change the incentive for travel, to recognize that people may still accept travel outside of peak periods, but that that travel will increasingly be seen as an unproductive overhead. It’s one thing accepting that our passengers will be unproductive in their own time before a 9am start in the office, but quite another to think that they or the companies they work for will be accepting of 3 hours of non-productive travel while they undertake a stressful journey into our major cities.

That Zoom call increasingly looks like a no-brainer unless we start to take connectivity on the rail corridor seriously.

Notwithstanding this, from a telecoms perspective, working from home has proven to be a mixed bag and this needs to be addressed too. EY has found that 26% of respondents have had their ability to work from home impacted by inconsistent broadband – a far more telling figure than Ofcom’s Home Broadband Performance report that download speeds only fell by 2 during the initial lockdown. With an extended lockdown or a more permanent shift to home working and rising demand, as things stand, UK connectivity is likely to suffer. For a number of years now the established fibre providers in the market have focused on sweating their assets rather than new build and despite great efforts from BDUK and pressure from Ofcom, in the current climate, there is little incentive for them to come market – very few companies are genuinely positioned for growth or interested in undertaking what remains a relatively high risk capital intensive process.

This can in no way be good for consumer or country and we need the Government to start taking seriously how they can stimulate new fibre build that will flow down into better connectivity for all and in a manner far faster than that being delivered by the current incentive schemes.

There is however a small silver lining to the current crisis and that revolves around the role which the railway can take in both economic recovery and helping business adapt to a new working environment.

While the rail industry has been changed forever with the move to management contracts and the end of franchising, it brings with it a harmonization which has not existed in the industry since the days of British Rail and removing a significant commercial block to the introduction of high performance mobile connectivity on the rail corridor. Since 2013, the UK Government has been trying to unlock the value in the UK’s telecoms network, both in the fibre and in mobile communications. The impediment now will be one of vision, rather than one of franchise driven constraints, motivations and economics.

Commercialising the telecoms assets on the UK railway now, whether through the provision of new fibre or the provision of 4G or better coverage onto our trains is now essential in a world where we must exist alongside Covid.

By permitting those companies eager to grow their networks by giving them access to the rail corridor will at last effectively address our regional and rural connectivity challenges and with the potential investment reaching ￡2bn and creating up to 5000 jobs, the story is not just one of improved connectivity for those working at home, but also one of economic recovery. Network Rail, DfT and HMT all need to align to make this happen sooner rather than later – it has to be after all, one of the few ‘shovel ready’ projects available where there is true market need.

As for those still commuting into the cities, we can already see how the travel patterns are shifting – the morning peak has softened and there has been a modest shift through the day. People are making the effort to come in for specific meetings and then heading home again. To keep the railway relevant, to make those journeys valuable, will require the provision of high quality connectivity – something the UK continues to lack. Without connectivity, travel on the railway will just become an increasing drain on UK productivity.

Building confidence to use the railway again and making travel safe again cannot just be about spacing on trains, but about using the true capacity of the network throughout the day. That has to require shifting more people from their traditional early morning and evening commuting patterns; making a trip on the railway a productive part of their day with a connected experience similar to that found at home.

It’s only by doing this that we’re going to get revenue starting to flow back into the railway, protect the travelling public and continue our relevance in a radically changed working environment – and so Government needs to push the delivery of telecoms connectivity on the rail corridors. The UK needs more than ever ubiquitous coverage rather than the half hearted patching of not-spots that we have seen in recent years. It’s 181 years since the railway permitted the general public to use its telecommunications infrastructure to stay in touch (Great Western Railways holding that honour) and it surely has to be time for us to restart that tradition and give the travelling public what they need.

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