The UK Rolling Stock Industry:  Making 2023 the year of opportunity not crisis

21 July 2023

A new report developed with Railway Industry Association (RIA) members finds that urgent decisions are needed this year to prevent a crisis and job losses in the rolling stock upgrade industry. Indecision will also lead to poorer passenger service and higher costs and will pass up the opportunity to reduce carbon and improve air quality.  

Key Messages 

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.  

Download the Report

Key Recommendations 

1.  Government clients to make decisions in 2023 to allow the procurement and private financing of rolling stock upgrade or replacement of c2600 vehicles by 2030 to improve passenger services, reduce carbon and improve air quality now, and avoid an imminent existential risk to the UK supply chain. For the same reasons, consideration should also be given to upgrading/renewing the c1650 DMUs which become 35 years old after 2030. 
2. Government clients to work with RIA to develop a long-term rolling stock and decarbonisation strategy, which has the ambition to consider equally passenger experience, carbon reductions, air quality improvement and sustainability of the supply chain. The strategy should aim to smooth out ‘boom and bust’ to create the conditions for increased productivity and reduced whole life cost.
3. Government clients and TOCs to collaborate on high level specifications for the different types of train (A to G) including any requirements for functional interoperability. These specifications should be consulted on with the supply chain to ensure they are deliverable affordably.
4.  The ambition to remove all diesel-only trains (passenger and freight) from the network by 2040 to be replaced by an ambition to maximise the cumulative reduction of carbon (and improvement of air quality) by the most appropriate means through both direct decarbonisation of rail and through modal shift. However no new diesel only trains should be bought.