Comment

‘A fantastic showcase for what’s best in the industry’ – Richard Parry-Jones at UKRIA 2014

Network Rail’s chairman gave a well-received speech at the Awards focusing on investment, innovation, and skills for the future. The speech is below.

Thank you Josh, and good evening railway people! I don’t know about you, but that video really made me feel proud of this industry, and also reminded me – what a great time to be part of this industry. A fabulous time, when so much is going on that’s all positive.
It’s a really great pleasure for me to be asked to give this address at the inaugural UK Rail Industry Awards.

I think it says something about the appetite for an event like this, not just to see so many distinguished guests here supporting the event, but also to see the quite exceptional level of entries, 239 across the 18 categories. It’s fantastic to see so many people here supporting the nominees.

But the whole industry can be proud of the people and the work we’ll hear about this evening. I’d also like to thank the sponsors of tonight’s event, and all of the judges, who have given their time to make what I’m sure must have been some really tough decisions about who the winners are. Without them, this evening would not have happened.

I’d also like to welcome the launch of the UK Rail Industry Training Trust. I very much hope it succeeds in its ambitions and continues to build the understanding of young people as to what a career in the industry could mean for them.

UKRIA as a great symbol for industry collaboration

In many respects, it’s clear this industry’s in rude good health. Undented by the impact of recent extreme weather on our performance, there is confidence across the political spectrum not just that investment in rail is essential to support a thriving low-carbon economy but also that the industry can now be trusted to deliver this investment efficiently and effectively. I’d like to think that Network Rail played a little bit of a part in that, but the truth is this is an industry that relies completely on collaboration, on teamwork, and on the integration of an extended supply chain – and that’s why us all coming together this evening is really symbolic of how the industry needs to operate and does operate.

In the recent few weeks, Network Rail has concluded its agreement with the ORR on the next five-year plan, which consists of a £38bn settlement to deliver projects across the UK. It includes, of course, improving safety – for our passengers, for the public, especially on level crossings, and for the workforce. We’ll see further significant increases in capacity to meet the demand for our successful railway and provide more seats for those people clamouring to use our services. This settlement will deliver the biggest electrification programme for several decades.

It will transform the traction power systems we use in the UK, and will change signalling technology for the first time in a century. We also have a settlement that includes significant investment in sustainable assets, and a catch-up on the backlog – particularly in civils, structures and earthworks – where in previous decades there’s been under-investment. Now we have the go-ahead to catch up on some of that backlog.

Weather and climate resilience

I mentioned the weather. It also includes money for improving the resilience of our assets – resilience to weather, and resilience to changing climate. That money may not be enough – and looking at the events of last few weeks, we are responding to calls by government to re-study whether even the plans we have in the control period plan are sufficient to ensure the resilience we need to deliver a sustainable service in the light of the potential change in weather patterns driven by climate change.

By the time CP5 ends, construction will have begun on HS2. The first phase will be completed in 2026 – although David Higgins has been asked to pull it forward – and the second in 2032. Here in London, Crossrail and Thameslink will transform the way people cross the city, and discussion is already well-advanced on Crossrail 2.

We’re talking about two to three decades of sustained, huge investment – unparalleled in the last century of the industry’s history. By 2040 our railway will look very different, physically and technically. The services we offer to the travelling public will also be transformed. To make all that happen, we need a constant flow of skilled, highly-motivated people coming into our industry here in the UK. This promise of the future helps us to attract new blood into the industry, which will be so essential to our future success.

Encouraging young people into the industry

In other words, if the investment we expect over that timeframe is all to be delivered, we absolutely need to expand the skills base, and to encourage more young people to join the excitement of this industry. I’m pleased to say that the evidence is here this evening that the industry really recognises this and is investing in solving that problem.

Just at our own company, in Network Rail, we’ve trained about 1,000 people on our Advanced Apprenticeship Scheme, and brought a further 500 graduates onto the scheme in the last five years.

How can those of us in the industry attract those young people who’ll make up the industry tomorrow? The Awards tonight provide a fantastic showcase for what’s best in the industry, and should serve as inspiration to any graduate considering their future career, or railways as a prospective option.

High-calibre graduates these days are in great demand, and are also pretty demanding themselves. What are they looking for when they make those choices? And how does the railway measure up in that context? Well, graduates want to know, will there be opportunities for development, for progression? Will the work they do be varied and interesting? Will it matter? One thing we do know about the railways is that they really do matter to society and to the UK.

They want to believe in the culture and the values of the industry they choose, and that it will allow them to flourish and allow them to make the best use of their skills. And that they will be helped to develop new skills.

‘A great story to tell’

So looked at in that context, these Awards tonight demonstrate that in many respects, we have a great story to tell to those graduates considering the rail industry for their career. What could matter more than the safety of passengers and those working on the railway? What could be more rewarding than working to deliver projects as varied as the ones we see [shortlisted] this evening? When it comes to the culture of our industry, what about our commitment to collaborative working, sustainability, the environment, CSR? And for those young graduates, male or female, the incredible example set by the six contenders for the two young rail professionals of the year. These examples are inspiring, and if they wanted to know whether the rail industry could provide a long-term option for them, they only need to look at Graham, Alan and Vincent, the contenders for the Lifetime Achievement Award tonight. I pay tribute to all of you, and all you’ve achieved.

We know the real challenges lie ahead, and we must show we’re equipped to meet them. For example, as demand continues to rise as a result of the successful service we offer, we know we’re pushing the limits of current technical approaches in many areas. Although there’s a tremendous amount of innovation going on in this industry, this will require us to accelerate our ability to exploit that rich seam of innovation.

Radical change

It will be essential to embed radical change in the way we operate, manage and upgrade the railway to meet these demands efficiently in the future. We need to build on accelerating innovation, developing new technology to make the railway safer, more punctual and reliable, to improve the passenger experience, to increase capacity to meet that demand, to reduce cost. To keep the fares within affordable levels, and to reduce the burden on the taxpayer through subsidy. And to improve the long-term sustainability of the industry.

But of course the opportunities are not just in developing new technology. It’s also about adapting technology that’s already being used in other sectors and applying it to these railways. I’d argue there are probably bigger near-term opportunities to do that than in developing unique-to-rail technologies. Much of this is happening; the digitisation of many of our work processes is rapidly being adopted by the industry, which is having tremendous early success and impact on the way people work and the effectiveness they operate with.

Need for more R&D spending

The one thing I would say to you, coming from the automotive sector into the rail industry, which by the way has been an absolutely fascinating and enjoyable journey – I’m not on a vertical learning curve any more, but it’s still quite steep! – the thing I noticed early on is that although there’s a tremendous amount of innovation going on, we only spend less than 1% of revenue on R&D in this industry. The benchmark level for an average manufacturing industry is more like 2.8% or 2.9%. I would argue that for a technically complex, technologically intensive industry with as much opportunity to exploit R&D as we have in the UK, I reckon it should be higher than average.

We’ve started to campaign for an increase in the allocation of resources for R&D, and actually in the CP5 settlement, we did manage to achieve a £50m increase – a doubling of the R&D investment that Network Rail’s making. This is not just for Network Rail, this is for the industry, for accelerating and developing R&D projects amongst collaborative partners, to make a difference to the effectiveness and efficiency of our outputs.

I don’t know exactly why this lack of investment in R&D has been a feature of this industry in the past. It might be that there isn’t enough competitive pressure to innovate. It might be that some of the people making the decisions about R&D – I won’t name where they might be – don’t understand sufficiently its potential. I’d argue that’s probably partly our fault for not explaining it clearly enough, but we’re starting to make a difference with those arguments.

Probably also perhaps, the industry bears the scars of some of the failures to introduce new technology. I’d argue that failures in introduction are not a reason for us to fear innovation and technology – they’re a reason for us to perfect the technology implementation process. Of course, we work in a very complex environment, so effective executive is difficult but essential, no matter how innovative or potentially transformational that new technology might be.

Be ambitious

My message to ambitious young people considering a career in the rail industry would be: join us, we need your ambition.

Being ambitious means taking more risks, but also managing those risks intelligently, so we always protect our end-users. It means going after those innovations that push the frontier dramatically, as well as those that deliver incremental change. Once an idea has been taken forward to the prototype stage, we must develop the capability to model and analytically test it away from the operational railway as much as possible – spotting all the failure modes, and making sure we have simulated the effectiveness of our counter-measures to each of those failure modes.

It’s about managing risk better together, and not allowing ourselves to become risk-shy. That collaboration is what will underpin our ability to be more ambitious, which will in turn underpin our ability be more successful. Strengthening collaboration at all levels must also be across disciplines, within Network Rail and between us and the wider industry, whether that’s TOCs, FOCs, or indeed the supply chain and ROSCOs. Collaboration can be driven by the work of the Rail Delivery Group and I am very excited by the new BIS/DfT sponsored Rail Supply Group that’s getting kicked off. We’re committed to making those collaborative initiatives work, and we’ll support them.

Helping local suppliers win contracts

It’s also very important that the UK gets a good share of the value chain that’s being created by this huge expenditure. Obviously we don’t want to compromise the competitiveness and cost-effectiveness of what we do by favouring local suppliers, but goodness, we should help those local suppliers to be in the best position possible to win those contracts and deliver world-class competitiveness for the good of the whole railway system. So I’m excited by and optimistic about the ability of the UK rail sector as a whole to benefit from all this investment that’s going on in our industry, rather than us buying in everything from abroad.

We must also not be blind to the fact that no company and no country nowadays is self-sufficient in technology know-how, so we must be open to importing and partnering with the best in the world to make sure what we deliver is the best in the world.

These challenges ahead will require ambition and dedication – the sort shown by all those who are up for Awards here tonight. We need that ambition for the railway as a whole, and we need that dedication to being willing and able to work differently to achieve the results we need.

Working better together; being ambitious; being as incredibly dedicated as railway people are; harnessing technology and innovation to transform outcomes; the consensus for investment; an industry that matters so much to the very fabric of the nation. This is the story we need to tell to the best graduates – join us. We will help you fulfil your ambitions, and you can help us fulfil ours. This used to be seen as an industry in decline. If confirmation was needed that this is an outmoded point of view, tonight surely provides it.

You can see the speech, and the RTM video Parry-Jones makes reference to here, at www.railtechnologymagazine.tv