12 September 2023
Following news today that the Government is working urgently with train manufacturer Alstom to secure the jobs of its staff and suppliers in its Derby factory, due to recent stop-start decisions on rolling stock orders, the Railway Industry Association and all train manufacturing and refurbishment members with ambitions in the UK are justifiably concerned about what the future holds.
The Department for Transport said today that, “Rail manufacturing plays an important role in growing the UK economy and delivering better services for passengers. The Government remains committed to supporting the entire sector”, and that it is seeking to help develop a sustainable future for the Derby site. Yet only six weeks ago RIA published a report on the UK rolling stock market highlighting the fact that the only significant order in the last three and a half years was the HS2 order announced in December 2021 and that previous orders would soon be completed and consequently factories and upgrade facilities across the country will be empty, putting at risk thousands of jobs unless action was taken soon.
RIA Chief Executive Darren Caplan said: “The potential job losses in Derby being urgently discussed by the DfT and Alstom are of course a real cause for concern for the company, rail manufacturers more widely, the Midlands, and the UK railway industry generally.
“We at the Railway Industry Association highlighted just six weeks ago that rail manufacturing jobs were in jeopardy, that skills and experience could be lost, and that there was a risk of factory closures unless urgent decisions were taken this year to upgrade or replace trains which are already or will soon be 35 years old. In July we said that government decisions were needed imminently to allow the procurement and private financing of rolling stock to be upgraded or replaced, not only to the benefit of the railway sector but also to improve passenger services, reduce carbon and improve air quality.
“In the long term, we urge the Government, working with the railway industry, to develop a strategy which creates a smoother order profile for upgrading older trains and building new trains, giving rail suppliers the confidence to invest in people, plant and processes for a sustainable train manufacturing capability in the UK. But in the meantime, the rail manufacturing industry – which employs over 30,000 people and contributes at least £1.8bn of GVA to the UK economy annually – needs decisions on the building and renewing of rolling stock to be taken immediately, otherwise events in Derby today will be repeated, and rail workers and factories throughout the rail supply chain will face a needlessly anxious future.”
Notes to Editors
A DfT spokesperson stated today: “Rail manufacturing plays an important role in growing the UK economy and delivering better services for passengers. The government remains committed to supporting the entire sector. We remain in contact with Alstom as it develops a sustainable future for its Derby site."
The Railway Industry Association report, published 23 July 2023, on, “The UK Rolling Stock Industry: Making 2023 the year of opportunity not crisis” – see
The UK Rolling Stock Industry Report 2023 - says:
1.
Decisions are needed now to avoid major job losses. In the last three and a half years, the only significant order for new or upgraded trains has been the HS2 order, announced in December 2021. Previous orders will soon be completed, and factories and upgrade facilities will be empty putting at risk thousands of jobs unless action is taken soon. RIA is calling for urgent decisions in 2023 to upgrade or replace trains which are already or will soon be 35 years old.
2.
There are serious consequences of indecision. Without these decisions major job losses are almost certain. This is an industry which employs over 30,000 people and is contributing at least £1.8Bn GVA to the economy annually. As damaging will be the loss of skills and experience which will be difficult to replace when they are inevitably needed again. This will result in increased costs in the long-run. It is also likely that the passenger experience will worsen as trains are kept running beyond their optimum life and the opportunity to reduce carbon and improve air quality will be lost.
3.
Decisions are needed right now. It is less than 12 months until some major factories run out of work. We will not be able to upgrade or renew trains cost effectively in the future if the factories and people are no longer there. Running major parts of the passenger network on 40 year-old trains is not sustainable. Running costs will be higher, reliability and passenger experience will be poorer and this will impact on revenue. The benefits of these decisions manifest now and we avoid higher costs in the longer term.
4.
These are easy and no-regrets decisions. RIA have identified a set of decisions which would upgrade or replace the oldest diesel trains on the network as well as other rolling stock which is already at or approaching 35 years old. These decisions do not need large upfront public investment. There is a well established private sector route to deliver upgraded or new rolling stock – costs are spread over time and repaid through TOC lease costs.
5.
Long term industry sustainability and cost efficiency. To prevent a recurrence of the current hiatus in orders, RIA propose that there is a cross-industry initiative to develop a long-term industry strategy which creates a smoother order profile for upgrade and new build whilst maintaining competition. This would give industry the confidence to invest in the people, plant and process which will drive further productivity improvement and reduce whole life cost.