Rail and urban transport review: "grasping the moment" and creating "a major paradigm shift"

The Review clearly endorses Labour's wider policy approach to establishing Great British Railways, with a proposed robust governance structure and accountability to the public and national/devolved Parliaments. It advocates the benefits of long-term decision making to increase use of transport networks by passengers, whilst delivering better quality outcomes.

The Review was chaired by Juergen Maier CBE – who we hosted at a recent top table lunch. You can find our top 10 takeaways from the lunch here where ambition, private sector investment and accelerating the pace of change were all key themes for debate: themes, perhaps unsurprisingly, featuring front and centre in the Review. Having spoken with hundreds of representatives from across the UK's transport sector, the key messages heard by the Review from the industry were:

• The opportunities presented by public transport for economic growth and decarbonisation are underestimated.
• There is no long term plan and the political cycle has led to uncertainty: holding back investment. This undermines confidence, competitiveness and long-term thinking.
• There is a strong appetite to do better, including getting the basics right and putting the customer first.

The purposes of the Review include assessing the current position and then making recommendations. Its conclusions on the current position are – perhaps reassuringly – nothing we haven't been hearing for many years from clients and contacts across the industry. The Review doesn't have any new revelations to make about the current state of the industry or any quick fixes. Whilst no doubt disappointing to some, we take confidence in the dullness of the current state of play reported in the Review.

Of more interest is the recommendations about what to do next. If the issues have been around for some time, what needs to be done to make sure this Review isn't just added to the pile of other transport reviews undertaken over the decades? What is different about the Review that might lead to real and lasting change? And will the new government take on board the recommendations?

Five key themes

The Review articulates five key themes:

1. Having a bold long-term vision and ambition for transport infrastructure with an associated pipeline of activity, giving visibility to the supply chain.
2. Accelerating the pace of delivery of transport infrastructure.
3. Harnessing the benefits of public private partnerships.
4. Putting in place structures for optimum delivery – both today and going forward.
5. Ensuring the voice of the transport user is reflected at the heart of transport plans.

But what does this mean in practice? And what recommendations are there to achieve the stated themes?

1. Vision and ambition

The overarching recommendation is for an ambitious goal to be set for journeys made by public transport, walking and cycling by 2035, against which progress is regularly monitored. Challenges identified include a gap in strategic thinking at both the national and multi-modal levels and a lack of clarity in delivery roles across central government, leading to inefficient and disjointed strategies.

Reducing congestion and – importantly – accelerating decarbonisation and the move to net zero forms a core part of the recommendations. For example, the Review highlights that 60% of all trips in 2022 relied on private transport and notes that heavy good vehicles emit 60% more carbon than diesel trains (and almost 100% more compared with electric trains powered by renewable or nuclear energy). Moving people and goods onto public transport networks needs to be key: the recent move by Royal Mail to move away from rail and towards HGVs given the economies involved is disappointing. Indeed, the Review states that to achieve decarbonisation goals, rail's mode share needs to be doubled. Acknowledged as "audacious", it notes that this has been done before. But to achieve this, significant investment is needed and the Review highlights the importance of pricing – set by Government even under the current system – in achieving these goals.

An urgent call is made for a national vision for transport, with an integrated Transport Strategy for England (TSE) to follow, together with a framework for cross-border links to the devolved national governments. However, the Review highlights that this must not be seen in isolation. The TSE needs to align with a long-term UK Industrial Strategy and cross-governmental strategies for the delivery of homes and other national priorities and would form part of a ten-year infrastructure plan. Sub-national strategies would then be established by regional bodies – aligned with the TSE. The approach adopted is London is seen as a model for elsewhere within the country: where the Mayor's Transport Strategy is an enabler to the wider London Plan. The importance of linking strategies together and their contribution to a wider goal is seen as vital to achieving strategic objectives, rather than looking in isolation at the merits of a particular scheme.

Recognising the uncertainty that the past five years has seen in the rail industry, the Review recommends that the Minister of State for Rail is given explicit responsibility for developing rail supply chains, supporting investment in innovation and skills and making the rail industry a place where people want to work.

Underpinning all of this are, we think, two key criticisms. The first relates to a silo approach sometimes seen in government, with no coordinated approach to policy development and delivery. Transport should be seen a facilitator of wider policy and alignment between the two is essential. The second criticism is that there has been no rail pipeline visibility and stagnation within the industry, resulting in supply chain anxiety and an unwillingness to invest in people and skills. In turn, this has seen an exodus of talent from the industry. We don't think this is about a lack of transparency: it is simply that there is nothing to be transparent about. This is as a result of indecision or changing decision and therefore an inability to tell the supply chain about what is coming up. The TSE should hopefully take steps to tackle this, but is something that needs to be prioritised.

2. Accelerating delivery

"Greener, Faster, Cheaper" is the tagline for this theme. Strengthened governance and greater devolution are seen as enablers for success, to speed up infrastructure project delivery, reduce costs and enhance environmental outcomes. These are all well intentioned, but history suggests that more governance tends to have the opposite effect: so it really must be about strengthening and streamlining governance processes.

Devolution is a real positive. The Review proposes building on existing successes by delivering multi-year funding settlements with sufficient flexibility and revenue funds with the capacity to deliver against local plans – and London is specifically named. With decisions being made closer to users of the network – linking into theme five – devolution has been shown to deliver and building on this can only be a good thing. Giving devolved bodies greater certainty over funding – and exploring financing mechanisms – whilst ensuring collaboration takes place across regions should in principle deliver better outcomes.

The Review also recommends reform of sub-national transport bodies to create a pan-regional level focus and to deliver on growth plans developed by Mayors and Combined Authorities. Again, this is about ensuring a consistent approach is adopted so that transport facilitates wider policy, and focuses on where available funding can deliver maximum benefits.

Ensuring transport infrastructure is delivered efficiently and to (or even under) budget must be a priority for the industry going forward and any initiative to achieve this must be welcomed. When budgets start being exceeded, political pressure increases to change or cancel projects, leading to uncertainty in the industry and less willingness to invest: an unfortunate vicious circle.

3. Public private partnerships

Given Labour's policy on public private partnerships relating to the delivery of passenger railway services – and the move towards nationalisation, it is reassuring to see the Review highlighting the importance of these partnerships in delivering positive benefits in the context of transport networks. The core recommendation is to provide certainty to the private sector – as that certainty drives investment, both in transport infrastructure and the associated skills and jobs.

The fact is that public funding is and will be tight for many years to come. Creating the conditions where private investment can happen is vital to the future. We have heard for a while now about the appetite of the private sector to invest, and also the public sector wanting that investment. But the reality is that this has rarely happened, for a multitude of reasons. We now need to do something different and the Review calls for the public sector to proactively drive stability and confidence in private sector investment. In particular, the Review highlights "Disproportionate barriers and delays due to government decisions on funding are seen as common. The control asserted from the centre of government and the desire to hold on to the sponsorship of projects is indicative of central government not trusting local delivery organisations, nor wanting to cede control or oversight." This is something which should be within the control of a new government to change relatively easily.

The Review recommends that HM Treasury adopts a new openness towards partnering with the private sector to deliver economic and productivity benefits and unlock investment. An infrastructure investment playbook is recommended, with available approaches, right arrangements and roles each party plays being clearly set out. The British Infrastructure Council is recommended to bring together key players from the public and private sectors to develop a new approach to private finance (and its impact on public sector net debt).

4. Structures for optimum delivery

The Review recommends continuing with reforms to the Nationally Significant Infrastructure Projects and Environmental Impact Assessment regimes to enable faster and more effective delivery. Fast-track routes to approvals and reforms to existing planning and consent regimes are proposed. The Review also suggests that the proposed National Infrastructure and Service Transformation Authority has a role in supporting national and regional partners in delivering transport infrastructure more effectively. It also recommends expanding the proposed Industrial Strategy Council to include representatives from supply chains and workforces.

5. Voice of the transport user

The importance of high quality and affordable transport for unlocking higher productivity and driving economic growth is highlighted in a number of places throughout the Review. Interestingly, the share of the UK population that can access the city centre within 30 minutes is below the European average for similar places.

We have heard for many years about the user being "placed at the heart of the industry" and often only lip service is paid to it. In the Review, we see this phrase again being rolled out, but this time there appears to be a degree of substance underpinning it. Recommendations include moving the customer-focussed elements of the Office of Rail and Road's work, together with the Rail Ombudsman, Bus Users and Transport Focus into one organisation so that everything relating to customer experience sits in one place. The Review calls for a more equitable approach to ticketing to incentivise greater use of the network – although provides little detail on what that means as fares and ticketing are outside of the Review's scope. It also recognises the importance of workforce views being represented when changes to the transport network are introduced and the need for constructive industrial relations in the success of the transport system.

In other customer-facing measures, a transport citizens panel is recommended to ensure transport infrastructure is designed inclusively and strengthening the role of the Disabled Persons Transport Advisory Committee. Governance and stakeholder strategy are viewed as being core to its success. By placing the actual voice of the user front and centre in the industry, we hope that well-publicised instances of disabled users being let down are eliminated.

What's next?

What really stands out in the Review is the "call to arms": advocating the benefits of the rail and urban transport system and its links to economic growth, skills and jobs. The language used when advocating for change is both emotive and encouraging: seeking to reinvigorate the sector. Whilst many of the findings are not surprising, and some of the themes not original, what makes the Review different is the identification of solutions and practical steps proposed to address the points identified.

Commissioned whilst in opposition, now the Labour party is in government it needs to respond to the Review's findings quickly and decisively. For too long now, the rail and urban transport industry has been stagnating. Now is the time to get it moving again.