The Williams-Shapps Plan for Rail is a welcome step forward for a UK industry both badly impacted by COVID-19 and clearly requiring long-term reform.
The announced plans, including the formation of Great British Railways (GBR), are the inevitable consequence of an unsustainable system. In our earlier report, Changing track: the future of rail, we predicted greater government intervention to fix fragmentation, provide better value and improve customer experience. Since then, exacerbated by COVID-19, rail has seen declines in passenger numbers and public confidence; inflated costs; confusion and dismay over ticketing; and timetable chaos – with the Treasury stepping in to subsidise the sector.
From PA's experience working with organisations across the rail industry, it’s evident the hard work for true, sustainable transformation starts here. Rail can be at the heart of the UK’s recovery. It’s an industry that has changed and shaped lives. Because of rail, new markets and customers were forged, communities and families linked, and time standardised. It forged a legacy of ingenuity – and must do so again in a world of demanding customers, new technologies and accelerated change.
As we recover from the pandemic, it’s a moment to reimagine the approach to rail strategy planning, programme delivery, innovation, and even the purpose of the sector itself. But welcome news brings unwelcome questions. These are the five questions rail leaders should be asking to ensure the Williams-Shapps reforms deliver an ingenious future:
1. How can rail accelerate digital retail and ticketing?
Currently, over 55 million different types of train fares exist. During the franchises, Train Operating Companies (TOCs) were incentivised to develop digital ticket sales and new products to encourage more people to take the train. While private innovation led to improved websites and mobile offerings, including various approaches to digital ticketing, it’s too complex to buy a ticket from A to B or get a refund. GBR will simplify this and introduce flexible season tickets, Pay-As-You-Go fares, and contactless and digital ticketing. A single compensation website will handle refunds.
This is a significant step forward, but leaders must look ahead to meet the expectations of customers used to seamless, friction-free experiences in other areas of their lives. Could rail introduce fare structures and timetabling that flex according to demand? How can rail ticketing integrate with other modes? How is data best shared between different TOCs to make decisions that best serve customers? What will happen to the UK’s innovative digital rail sector, including leading startups? Most importantly of all, how do we ensure ticketing is simple and easy to understand?
2. How do we unlock benefits from innovation and R&D?
Tens of billions of pounds has been committed to growing the network. But new infrastructure typically takes decades to approve and build. Rail leaders need to explore ideas and technologies that can get more from existing assets, increase agility and drive efficiencies. This is particularly pressing given the need for cost reductions in the wake of Government subsidies and falling ridership.
For new ideas, an agile approach is needed to enable innovation while keeping the network moving. We’ve worked with Network Rail’s Accelerated Innovation Programme to form sprint teams that rapidly build concepts to test. This £245 million R&D portfolio is already showing results. We’re moving from idea to trial 75 per cent faster than with traditional methods; it’s 60 per more cost efficient to assess value throughout projects; and decision-making comes 83 per cent quicker.
As well as exploring how they can amplify this approach across the wider network, rail leaders need a laser focus on the benefits of innovation programmes. Now is not the time to stumble into the future. Leaders must consciously undertake a systems-level approach that brings together disparate parts and focuses on the end user. They need the courage to quickly kill programmes that won’t deliver the desired benefits, considering success factors that include social value and sustainability.
3. How can we integrate rail with other transport modes to deliver better passenger experiences?
Integration is at the heart of the Williams-Shapps plan, but this doesn’t extend beyond the railway. Consider, though, the view of a passenger. While integration for one part of their journey is welcome, what happens for the first, last or middle mile of their journey?
What’s needed is a newly created single passenger executive across all major transport modes. This would, for example, align rail’s goals with the recent bus strategy. Most of all, it will embed the ‘one passenger’ ethos, with a single-minded focus on enabling an end-to-end trip rather than just one part.
Major global cities such as Helsinki and Los Angeles are already embracing Mobility-as-a-Service. This integrated approach provides users with services that better meet their end-to-end needs, make travel more accessible, reduce congestion and make better use of land and transport options. How can UK rail leaders follow suit and open the doors to new players in this area?
4. What is the best way to balance cost optimisation with innovation?
The new Passenger Service Contracts will include strong incentives for operators to run safe, high-quality, punctual services; manage costs; attract more passengers; and innovate. But our research shows that transport is a laggard sector when it comes to cost optimisation. Too often, cost programmes have led to short-term tactical effects rather than fundamental change.
Cutting costs and innovating can seem mutually exclusive. But we believe a long-term focus on cost, embedded in the mindset of your people, can create opportunities to find ingenious, differentiated approaches to cost optimisation, ultimately driving competitive advantage. For instance, we introduced innovative procurement techniques to the UK Ministry of Defence to deliver an explosive device detection system to protect soldiers in Afghanistan. Analysing a range of options, it took just 11 months to move from investment decision to operational use, with estimated savings of £17 million.
5. How do we empower the ingenuity of people in rail?
Ambitious plans are one thing – but these will fail if rail isn’t resourced with the required skills and diversity of mindset and background to deliver. If the same people continue to operate in the same way, transformation will run aground.
Training is another area of scrutiny. Rail, like other asset-heavy industries, has stuck with traditional approaches here, allocating training according to roles, grades and historical requirements. Often, the situation on the ground has changed by the time the training has been delivered – with no clear link between training, performance and safety.
Leaders need to explore how training becomes an investment, not an overhead; how data can be used to uncover fresh insight into needs and outcomes; and how training can be delivered using new digital delivery modes.
Together, these questions challenge leaders to play an active part in the Willams-Shapp Plan for Rail. Rail leaders need to be figureheads of change, shaping an ingenious future that delivers for passengers. Timidity isn’t an option. Now is the moment for rail leaders to put the sector at the heart of the UK’s recovery, deliver for customers and secure the sector’s future.