Industry urged to be more innovative on rail funding
“WE need to avoid going cap in hand to government all the time to get the capital projects and rail improvements that we all want.”
That’s the message from SLC Rail Strategy Director Ian Baxter, who has instead called on industry stakeholders, local authorities and other scheme sponsors to be more “financially innovative” in response to economic belt-tightening in Whitehall departments.
The former Chiltern Railways Customer Services Director pointed to what was achieved by using private finance during his time with the operator. He also cited some more contemporary examples including Worcestershire Parkway station, which was opened in February 2020 and largely funded by a Local Enterprise Partnership.
“We can’t wait for the economic climate to improve,” said Baxter, who was speaking at RAIL’s Placemaking: rail’s role as a social and economic driver webinar on November 15.
“If we can invest to attract more passengers, then that will help these schemes to pay for themselves.
“At Chiltern, we very much applied the principles of ‘let’s get on with it’ with local authorities and other third-party funders. We grew the market over 20 years, opening new stations and routes to make the railway easier to access and to coincide with new housing - at Aylesbury Parkway, for example.
“At SLC, we work with local authorities and others on a bottom-up approach to complement the top-down decisions made by government. We helped make the business case for Worcestershire Parkway [opened as a split-level station at a rural location on the Cotswolds and Birmingham-Cheltenham lines], where there will be 20,000 new houses built in the next ten years.”
Baxter praised the new land value capture model that has been pioneered by E-Rail, and which contributed up to £40 million towards the cost of reopening the Northumberland Line.
Using an innovative new methodology, under which contribution agreements are secured with local landowners rather than developers, it has the potential to improve the prospects of delivering similar projects elsewhere (see feature, pages 50-53).
“This is a really exciting new tool for the toolkit, and we are excited to be getting on with it,” said George Hazel, director at E-Rail.
“We deal with landowners and say: ‘if you want this railway to happen, we want 50% of the uplift in the value of your land.’ On the Northumberland Line we have secured 25% of the cost of a £160m project, and we are now working on at least eight other live projects.
“It’s a real win-win for everyone and I love the equity of it. But getting local and regional authorities onboard will be absolutely key to it being used more and more.”
Seeking alternative funding sources is also being advocated by the Great British Railways Transition Team, which has been tasked with setting up the new GBR public body while also developing a long-term strategy for the industry.
GBRTT Director of Strategy and Planning Elaine Seagriff said: “Placemaking and recognising the economic and social benefits that rail brings to an area is a key component of the work we are doing to shape the strategy. I think the sector can be so focused on the task in front of us that we sometimes lose sight of that bigger picture and the wider remit, beyond the station gates.
“That bigger picture goes back 200 years, and the story of our railway has been one of huge technological and social revolution. We are working hard to establish the new guiding mind, and the job of me and my team is to see that bigger picture.”
Seagriff added: “That includes making end-to-end journeys simpler, having greater pride in ‘place’, and increasing the catchment area of stations.