The Rail Supply Group (RSG) is pushing Government to commit to the specific needs of the sector through the rail sector deal
Having previously explained the role of the Rail Supply Group (RSG) and why it exists as the voice of the UK rail supply chain, this time I want to take the opportunity to focus on the Rail Sector Deal and present the facts and information as it stands.
A few weeks ago I attended the Department for Transport’s ‘Rail Industry Day’ where we heard from key players in the DfT’s Rail Group and the wider rail industry including former Rail Minister Jo Johnson, the newly appointed CEO of Network Rail Andrew Haines and the Chair of the Rail Review Keith Williams. We also heard from Shamit Gaiger (Rail Industry Competitiveness, DfT) and Anna Delvecchio (Commercial Account Director, Amey) who presented on the Rail sector Deal.
What is a Sector Deal?
There is an explanation on the RSG website which succinctly outlines the Sector Deal: ‘As part of the Industrial Strategy, the Government is working with industries in a number of sectors to reach agreements with business on ‘sector deals’.
These deals will be many and varied in form but are intended to be agreements that help each sector meet its key challenges and allow business to invest and grow accordingly.
‘This is an important opportunity for the rail sector to champion the substantial contribution we make to the UK economy, and to push for the necessary support to drive forward the UK rail supply chain.
‘The Rail Supply Group (RSG), in partnership with the Rail Delivery Group (RDG) has been working with Government to develop an industry leading and transformative Rail Sector Deal proposal. The Sector Deal for rail can enable new businesses, collaborating with other complementary industrial sectors, to sell innovative products and services to rail in both the UK and export markets. It is an opportunity to transform our railway and enable the UK’s supply chain to become truly world-leading.
‘A successful proposal for the sector can be game-changing and transformative for Britain’s rail network, the markets, communities and customers it serves. The RSG hopes that its offer will persuade the Government to prioritise the sector and help unlock its future potential.’
As Anna explained in her presentation, work on the Sector Deal to get it to where it is today has been the result of an intense 17-month programme coordinated via the RSG and RDG and has required crossindustry commitment and support, extensive stakeholder consultation and engagement with HS2, Network Rail, RSG/ RDG, trade associations and a wide range of supply chain organisations and businesses.
The outcome it seems has been a positive engagement across the sectors working collaboratively to support the deal – but it is not a done deal yet! However, it is getting closer to the end goal and all that is left is for BEIS and the DfT to approve and from there it would be up to the wider Government to make its final decision – the timescale for this to happen is unknown and could still be several months away.
Roots of the Sector Deal
As with many things, to fully appreciate what exists today we need to go back in time and look at the path and events that have paved the way to what we now understand as the Rail Sector Deal. In 2013 a Supply Chain Capability Route Mapping study was commissioned by the Enabling Innovation Team (EIT – subsequently known as the FutureRailway) to route map the development of UK rail supply chain capabilities including heavy and light rail, tramandmetro.
The project required the development of detailed route maps and an assessment of the capability and capacity of UK suppliers to deliver innovation in these areas. Route mapping is the development of the railway and associated capability to achieve the strategy and plans for the railway and to better serve international markets, in particular understanding:
- Where UK rail supply chain capability is already world-class and where there is potential to offer similar capability
- Domestic and international market opportunities
- Responding to the RTS, CP5 plans and Shift2Rail.
Desired outcomes of the study included a measurable increase in the safety, reliability, cost efficiency and carbon performance of the GB railway system. International uptake of UK rail products and services in the capability was also identified in the study.
The scope of the study included:
- Capabilities in business, process or operations as well as technology
- Supporting skills and relevant science base
- Both domestic and international market opportunities
- Sectors beyond rail which could have relevant capabilities
- Both heavy rail and metro/light rail/tram.
This fed into a further programme of work and led to the launch of the RSG’s ‘Fast Track to the Future’ strategy in February 2016 and the subsequent Transport Skills Assessment or the transportation and storage sector in 2017 – which aimed to provide labour market intelligence to inform the development of skills policy across the UK.
The outputs of all of this work provided a spring board for the creation of an Industrial Strategy for the GB rail sector.
What has the Industrial Strategy got to do with the Rail Sector Deal?
A white paper setting out a long-term plan to boost the productivity and earning power of people throughout the UK was published by BEIS (Business Energy and Industrial Strategy) in November 2017 – this was the UK’s Industrial Strategy: building a Britain fit for the future.
Its purpose was to boost productivity by backing businesses to create good jobs and increase the earning power of people throughout the UK with investment in skills, industries and infrastructure to strengthen the foundations of productivity.
The paper identified five fundamentals to support a skilled, innovative, geographicallybalanced economy:
- Ideas – encouraging the UK to be the world’s most innovative economy
- People – ensuring good jobs and greater earning power for all
- Infrastructure – driving a major upgrade to the UK’s infrastructure
- Business environment – guaranteeing the best place to start and grow a business
- Places – creating prosperous communities across the UK.
Another key element of the industrial strategy is to take on the ‘Grand Challenges’ – defined as the society-changing opportunities and industries of the future, where the UK can build on emerging and established strengths to become a world leader. The first four Grand Challenges are focused on global trends to transform the future:
- AI and data – putting the UK at the forefront of the AI and data revolution
- Ageing society – harnessing the power of innovation to meet the needs of an ageing society
- Clean growth – maximising the advantages for UK industry from the global shift to clean growth
- Future of mobility – becoming a world leader in shaping the future of mobility.
So, what does this have to do with the rail sector? Well, it is all of these things with digital, technology and data at the heart of it all.
One railway digitally connecting the nation
The overriding objective of the Rail Sector Deal is to position the UK as a world leader in digital railway which would provide the rich and fertile environment to enable a better railway, more exports and increased economic prosperity in the form of the following:
- Increased supply chain productivity and efficient delivery projects (skills legacy and innovation culture)
- Increased content in domestic contracts
- Better UK penetration into international contracts and markets
- Encourage new entrants to the rail market
- Rebalancing the economy via investment from supply chain.
As a result of the research undertaken by the RSG while putting together the sector deal, it clearly identified that the UK has specific digital world-class skills which would deliver sustained growth in demand for digital railway systems, vastly improved customer experience from real-time passenger information and a sustainable supply of labour.
The digital railway has been pinpointed as the overarching theme for the entire rail sector deal and seen as pivotal as an enabler to meet the targets identified in the UK industrial strategy.
Is the rail sector deal important?
This is all big picture stuff and absolutely needs to be viewed this way. It is probably best to describe the Rail Sector Deal as the glue which binds the Industrial Strategy to the Railway – it is a high level strategic vision.
It may at first glance appear not to be relevant to the supply chain unless you are one of the top tiers directly involved in delivering the digital railway – however, if the bigger picture is understood and embraced by the entire supply chain this will allow industry to flow as one and in the same direction with the five strategic pillars (ideas, people, infrastructure, business environment and places) at the centre of business operations.
One vision, one railway, one nation
If industry and business work together to create the solid foundation on which to pave the way to stability and growth on a global platform, this could be the answer to positioning the UK firmly as a leader in railway innovation and systems – which would ultimately bolster the UK’s industrial strategy with knock-on benefits for the entire UK economy, prosperity and development.
The Sector Deal is needed to encourage stability and confidence so that industry investment is made in digital and technology. What the sector deal needs now is commitment from Government which will then allow industry to do their bit.
Chart below taken from Shamit and Anna’s presentation at the Railway Industry Day – 25.10.18
So, as a final comment, I would say it is business as usual but armed with the knowledge and understanding of what the strategic vision is that underpins UK industry and all the benefits that come with this.
The rail sector is central to all industrial advancement and continues to push the boundaries of digitalisation and technology and in turn provides a wealth of business opportunity that is there to be leveraged.
It is now time for business and industry to draw its own conclusions on what the sector deal means to them. If you would like to know more or have your say, please contact Anna Delvecchio email: firstname.lastname@example.org.
The Rail Alliance
The Rail Alliance is one of the supporting organisations and also one of the founding members of the Rail Supply Group.
As a trade association with a membership base that spans the entire rail supply chain it is a responsibility that we place on ourselves to have our finger firmly on the pulse on what’s happening in the sector that either directly affects the supply chain or potentially impacts the future of the organisations supplying in the rail sector.
The Rail Alliance is certainly not politically biased and does not involve itself in steering Government policy or undertaking lobbyist activity – we recognise that there are other associations far better placed for this activity than us.
What we do provide however is a solid foundation on which we help businesses ‘do business in rail’, whether that is for new entrants coming into the rail sector or for established businesses who are looking for more opportunities to grow.
Our adage ‘Network, Innovate, Collaborate and Thrive’ is as relevant today as it was eleven years ago when the Rail Alliance first started.
Eli Rees-King is Marketing Communications Director at the Rail Alliance
For more information on:
Rail Alliance: www.railalliance.co.uk
Rail Supply Group go to www.railsupplygroup.org