The Control Period conundrum
Many industries experience business cycles. Farmers work to the rhythm of changing seasons. Tourism income is dominated by summer holidays.
The UK rail industry has become cyclical, working to the cycles of Network Rail’s Control Periods created by successive governments’ well-intentioned drive for clean, accurate accounting.
Control Periods, although helping to meet this need, have unintentional consequences. As the end of one nears, work on schemes for the next wanes, and investment dries up. Organisations that have been working successfully with Network Rail to deliver projects and renewals have to contend with their workload disappearing.
Railway signalling and control is particularly dependent upon specialist skills and long-term R&D investment. Major companies fight to secure R&D funding from their global parent organisations, with decisions driven by return on investment. Previous cycles have featured smaller companies shrinking or even disappearing, while larger companies struggle to retain competent, experienced workforces.
At the beginning of Control Period 5, signalling faced a lack of resource and a perception that the quantity and complexity of work required couldn’t be delivered.
The industry responded positively and successfully to this challenge. Global players invested heavily in UK-based organisations, recognising the country’s skills base and encouraging development of apprentices, graduates and other new industry entrants.
Our small and medium-sized businesses have developed a unique portfolio of capabilities, particularly in terms of railway digitalisation. Our universities are world leaders in railway technology. But maintaining these leading, UK-focused capabilities, with a workforce running to tens of thousands, becomes near-impossible in a cyclical world.
The creation of the ‘Digital Railway’ may reduce the impact of these cycles, with implementation of the technology unlocking capacity, reducing costs, improving our environmental credentials and improving passenger experience.
However, the companies that are investing heavily are the same ones that deliver upgrades to improve the railway. The skills the UK needs to deliver the Digital Railway are available today, but a significant downturn will lead to a permanent drain of this resource to lucrative jobs in Europe or beyond.
We are pleased to play our part in tackling these issues, through the use of new technologies and alternative delivery models that bring benefit to all stakeholders, including the travelling public. But without continuity of business, the UK railway will lose its momentum.
Business cycles are a fact of life. Artificial business cycles which force major peaks and troughs of demand, affecting the development of national infrastructure, need not be.
We are proud of our record of working with Network Rail to deliver improvements and reduce costs, building towards a worldclass railway. But the industry’s challenge to maintain investment in products, solutions, and a diverse, capable workforce during periods of uncertainty is increasing, and needs to be addressed.