More than two and a half years since Keith Williams started his government-commissioned review of rail, ministers have published their vision for the future of the industry.
With the transport secretary taking a joint byline, the 113-page Williams-Shapps Plan for Rail promises “the biggest change to the railways in 25 years”.
Network Rail plus some functions from the Rail Delivery Group and DfT will combine to become Great British Railways, while operating companies will continue to operate the services under a new style of contract. Revenue risk will predominantly sit with the new overarching body not the train operator, with some similarities to the way that Transport for London works with the private sector to run its overground and light rail services.
There have been many commentaries on the pros and cons of the new structure which we will leave to others, but what will it all mean for people working in the sector? Here are the five big people changes we think are coming:
1. TOC Commercial functions
Under the latest plans, responsibility for timetabling, setting fares, branding, marketing and other commercial development activities are expected to move from the train operating companies to Great British Railways. This will likely mean many commercial staff in TOCs needing to move from the private to the public sector to continue their roles.
How many will welcome that move, the extent to which others will seek employment elsewhere, remains to be seen.
2. Transport Group Bid teams
With the UK franchising bid programme on hold for the last two years most transport owner groups disbanded or massively downsized their rail bidding teams. Some have kept small teams engaged on international bids and direct awards.
Great British Railways will restart the bidding programme at some stage and the owning groups interested in the new form of contract will need to repopulate a bid team. However, the size of bid team required by groups for concessions will be smaller than those previously needed to compete for a franchise contract with full revenue risk. Expect experts in performance modelling and operations to be particularly in demand for the new look bid teams.
It is possible that some owner groups will exit the market, with the lesser upside on offer from concession contracts not meeting investor’s expectations. On the flip side, new entrants could be attracted to the lower-risk deals and the government says it expects “greater” competition.
The Williams-Shapps white paper says Network Rail’s people will “inevitably make up a substantial part of” Great British Railways. However, it adds that “many functions” from the Rail Delivery Group and the Department for Transport will be absorbed into the new public body. These seem very likely to include the Passenger Services team of DfT, which looks after procurement and management of non-freight operating contracts.
How many of this team moves across and how many roles become available will depend on a number of factors including how the transition process is set up and managed.
4. New talent
Although there will clearly be a lot of shuffling individuals from one desk to another as the new public rail body is set up, the government has been clear that it wants to see some fresh faces. “Great British Railways will need to include meaningful numbers of people in middle and senior management roles with substantial experience outside Network Rail, including in some cases from outside the rail and transport industry altogether; and more people with retail and customer relationship experience,” says the vision document.
It will be interesting to see to what extent the combined resources of Network Rail, DfT and Rail Delivery Group will be complimented by external talent. Expect to see a few curveball appointments.
5. Rolling Stock Manufacturers and Lessors
The rail franchising system encouraged operators to introduce new rolling stock to increase revenue, which has benefitted the train builders and ROSCOs, and the career opportunities available to their staff. It remains to be seen how the new structure will affect the investment in new rolling stock and the knock-on impact this will have on demand for rolling stock talent. Could the changes to the franchise model mean more direct public sector rolling stock procurement without the need for a ROSCO?
Major industry structural changes such as this are a paradise for business transformation and other management consultants.
With so much going on over the next few years in a mammoth and structurally complex industry, handling the transformation process is going to be of critical importance to all parties. The white paper promises efficiencies including “reductions in overlapping planning, support and administrative functions”. Consultants and employees with skills to help negotiate change will be in high demand.
There will also be a significant amount of policy work for rail advisory and transport consultants to advise on the finer details of how the new structure will work for all parties. This should create good opportunities for consultants with broad industry knowledge and a strategic skillset to make their name.
It’s an exciting time for people working in rail sector, with plenty of career progression opportunities. Meanwhile, for employers there will be an imperative to get recruitment right to ensure the new vision is realised.