Boom & Bust Funding Briefing

The rail industry experiences 'boom and bust' work cycles that detrimentally impact the sector.

Summary

In every rail funding cycle control period since 2000, the rail supply industry has seen inconsistencies in funding, particularly around renewals.

Often there is a drop off in funding at the start of the control period, before a quick ramp up in work. There are a number of negative impacts on rail businesses:

  • Reduced confidence for businesses to invest in developing skills and new products;
  • Reduced staff levels;
  • Redeployment of resources to different sectors or abroad;
  • Threatening the survival of SMEs with specialist products and services.
  • Increase the cost of infrastructure work by up to 30%
  • Reduced ability for rail businesses to innovate in people, process and products.

RIA is calling for the Control Period system to be amended to ensure greater consistency in funding.  This does not mean going back to annualised budgeting as was the case under British Rail, as this led to high levels of uncertainty. 

RIA believe the key decision makers must come together to solve this issue once a for all, including the Department for Transport, HM Treasury, Network Rail, ORR and industry bodies like Rail Delivery Group and Rail Freight Group.

The Government have committed to working with RIA and the rail supply community to solving 'boom & bust' rail funding, in response to an inquiry by the Transport Select Committee in 2018.

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