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Grayling blames rail industry for ‘boom and bust’ funding cycle

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Transport secretary Chris Grayling has told rail industry officials that it is up to them to find a solution to the current “boom and bust” funding cycle.

Speaking at the Rail Industry Association (RIA) annual conference, Grayling said that it is “unrealistic” to think the government alone can create a more steady work stream for the industry.

Instead Grayling said that the rail industry should “showcase your talent” in order to win more contracts abroad to “fill in the gaps” in government funding.

It comes after the rail industry unanimously called on the government to end the current climate of ‘‘boom and bust’’ funding.

Of 120 rail bosses surveyed by independent polling company ComRes, 99% identified “peaks and troughs in rail funding” with two-thirds saying that the term “boom and bust” accurately describes the current government funding model.

While four out of five respondents said this funding model has a negative impact on their business, 96% said the government “must do more to smooth out peaks and troughs in rail spending in future”.

However, Grayling hit back saying that the industry should have “bigger and broader ambitions” than relying on government support.

“I don’t want unnecessary fluctuations to have a negative impact on the rail industry. However, you cannot expect the UK government to provide a stable business flow all of the time, and you shouldn’t expect it,” Grayling said. “You should have bigger and broader ambitions than relying on the UK government for work.”

He added: “This industry has to be a global industry and it has to be winning contracts across the whole world.

“There isn’t an absence of work or funding from the government around the industry. However government cannot manage every piece of work to happen at an exact level.

“It is about doing what we can do on a busy network while keeping it going. To get rid of an unequal workflow it has to be about international business filling in the gaps.”

The Rail Industry Association (RIA) has previously urged the government to end the “boom and bust” cycle of rail funding ahead of the Autumn Budget, due next week.

Speaking at the RIA annual conference, RIA chief executive Darren Caplan said: “It is clear from this new poll that the ‘boom and bust’ rail business leaders are facing in rail funding stops them from investing or hiring new staff and, in the case of SMEs, jeopardises their ability to survive.

“It also adds up to 30% to the cost of rail infrastructure work, making the railway more expensive for passengers, taxpayers, and the Treasury alike.”

He added: “This new polling is further evidence, as if it were needed, that all parties need to redouble their efforts to end ‘boom and bust’ in rail funding once and for all.”

ComRes Associate Director of Transport James Rentoul added: “These results clearly demonstrate the reality of peaks and troughs in UK rail sector spending for the supply chain.

“They illustrate the negative impact this has on these businesses, particularly on the people who work for them.

“Those who see large peaks and troughs are more likely than others to report a negative impact on their business, and more likely to say they have had to freeze recruitment or make redundancies.”

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Readers' comments (4)

  • Philip Alexander

    These comments by Grayling show just how out of touch the politicians are with the real commercial world. Like it or not, Government is responsible for commissioning a huge amount of civils infrastructure, the delivery of which Grayling clearly thinks is on a par with running a sweet shop where the sales can be fairly stable over long periods of time.
    Large scale civils infrastructure has the effect of giving everyone a "lumpy" revenue and therefore an equally "lumpy" workforce requirement, but at least the politicians should show some understanding of the issues. Instead, he (Grayling) merely confirms that most politicians, even senior ministers, couldn't actually run said sweet shop without going bust fairly quickly. They are hopeless.

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  • Grayling conveniently overlooks events such as DfT a few years ago pressing to go ahead with Great Western, Midland Main Line, Electric Spine and Northern Electrification - all announced over a short period which followed a prolonged absence of electrification schemes, then 'pausing' several of these schemes, before 'unpausing' some just in time for the Party Conference season (doubtless a coincidence), before than cancelling big chunks of MML and GW.
    And it's not just civils work - the IEP new train procurement for the East Coast and GW lines - has been micro-managed by DfT throughout, with endless changes of plan.
    If Grayling wants to invest in discovering where problems lie in railway projects, a good start would to be get a mirror from Home Bargains / Poundland etc. By the way, buy it with cash and not via DfT procurement

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  • No mention here of all the Network Rail projects that have overrun, had to be redone, etc, etc. I suspect the rail industry is so loaded up with red tape that it can't breathe. Still waiting in Cheshire for trains that are still being used elsewhere due to overrunning and badly managed projects. You can't blame Government for everything, that's too simple. Why not criticise the Civil Service who are supposed to deliver Government policies for their incompetence? Never see them getting a broadside from anyone!

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  • Michael Thorn

    Grayling needs to reflect that his international solution to filling the gaps between "boom and bust" also works in reverse. If you "bust" domestic capacity and capability by starving it of work, then the times of "boom" are filled by the industries of other nations moving in to fill the peak. That's how world-leading British companies building locomotives and trains came be to distant subsidiaries of overseas owners.

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