HomeRail NewsSir Peter Hendy on the future of Britain's railways

Sir Peter Hendy on the future of Britain’s railways

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When I was Transport Commissioner for London, we used to talk about what transport did for London. Not about transport itself, but what it did, how it created growth, jobs, and housing.

But, in the industry it’s very, very easy to talk about how it works and not what it does. The railway makes a huge contribution to the national economy and it’s been growing for the past 15 or 20 years, delivering growth and jobs and houses. The Government is now investing more in real terms than anybody has ever invested. That’s not a political statement, it’s a matter of fact, if you count it in real terms.

The railway has been growing by three or four per cent for 20 years. That’s the fastest level of growth since the Victorian era and it’s quite fantastic.

And it is a significant change. When I first started in my transport management career, which incidentally was more about buses than trains, I spent most of my time making people redundant. We were all managing a very different, very difficult business, trying to make do with less money and to keep the thing going.

Now, we’re in a different position, and that’s one of the reasons that I’m so optimistic now about attracting and retaining people in this industry, because there’s something positive to do which is essential for the national economy.


As a result of the railway having retrenched so much since the 1950s, we’ve got the most congested railway in Western Europe. That’s not a problem, it’s a success. It’s good that we’ve got a congested railway, we’ve just got to fix it.

If I look out of my office window at Waterloo, I can see 100 million people a year using just that one station. Even the retail spaces in our stations are now fantastically valuable because they’re vibrant places, and that’s really good for the railway.

Why do so many people travel? They travel because they’re accessing work, and not just in London and the Southeast. The pressure in the Northern Powerhouse is tremendous because people know that the potential is there and they’d like to see more of it. In Scotland, Glasgow and Edinburgh they live off their railway systems for the same reason. There’s pressure in the Welsh Valleys, in the Midlands, and in Bristol – the railways are crowded.

To relieve all this pressure, routes such as Thameslink and at Crossrail, which are parts of the national railway network, are going to operate 24 trains an hour, which looks like the Tube. In fact, it’s higher frequency than much of the Tube was, certainly in the last 30 years, and actually, the trick of it is, it’s going to be run like the Tube.

PPM is the standard measurement of railways performance, but you don’t measure the Tube on PPM, you measure it on excess waiting time. So you should, because passengers don’t go for a particular train, they go because the service is frequent and they want a frequent and reliable service.

But the national railway network isn’t measured like that, and it doesn’t work like that yet, mainly because the signalling which has been used on the national railway network for nearly 200 years is really not suitable for the twenty-first century in which we’re living.

Digital implementation

The big railway has had a number of digital signalling projects, none of which have ever been completed. That has resulted in a patchwork quilt of everything from Victorian lever frames, through technology from the 60s, 70s and 80s, and 90s to the present decade, and none of them have ever quite been finished.

The Victorian stuff costs a lot to run, but it’s usually reliable and you only need a blacksmith and hammer to fix most of it. On the other hand, the equipment that’s 40 and 50 years old has to be replaced because the cables have been degrading. Obtaining parts for this old kit is difficult – we literally have to buy green screens and computer parts off Ebay. The signal engineers at Network Rail are doing their best to balance all of the replacement targets with the obsolescence that they’ve got and the life that’s left.

But actually, the real answer is not to replace them like for like at all. The real answer is to change the way in which we signal railways to allow more trains to run without improving large parts of the railway infrastructure.


That policy does have some other implications. One of the effects of it is that some of the costs of the railway go up because we’re using it more, we’re using it for longer, so it wears out quicker. We have to repair it in a shorter space of time, we can’t send a couple of people out to repair things on the track during the working day so we’ve got to do it at night. The more we use the railway, the more it costs to keep it running.

I have nothing but praise and admiration for Mark Carne. More has happened in terms of major change in his tenure since February 2014 than most people have in their working lifetimes, but he has been an evangelist for digital rail.

What he discovered when I turned up was that I’d already run a railway which had digital signalling. If the growth continues, we should be seeking to expand the railway to fit the number of people that want to travel on it. The way of doing that is to get more trains on it, and that’s really all we did with the Underground.

The Victoria line is a good example. They knew that they could get 34 trains an hour. They might get 36, they might even get 38 out of it, which if they do would be fantastic, because that would be four trains more capacity per hour in peak hours, and the peak hours now last longer and longer and longer, and that would be a fantastically good investment.

But it is also extraordinarily reliable if you do it properly. On the Jubilee line, putting it in was hell, but that wasn’t because of the signalling system, it was because the PPP didn’t allow the correct relationship to deliver the project. But passengers on the Northern Line barely noticed – it was really done quite elegantly.

I know it’s different on the big railway. It doesn’t have homogenous trains and they don’t all stop at every station. There are also freight trains, and their acceleration is different, they take longer to brake, they run longer trains, all that sort of stuff, but the principles are the same. All we need to do is adapt the technology that we’ve already seen to do a similar job.

That’s one of the reasons that I’m really excited that David Waboso, who managed the Capital Projects Department on the Tube, has decided to join us. So now David can begin to assemble a programme in the knowledge that he’s done it before, he knows how to do it, he knows who the suppliers are and it’s all down to leadership.

Already, he’s told me that it’s not just an infrastructure project, it’s a whole industry project. It’s got to embrace the entire industry.

It has to embrace us of course, because we’re the custodians of the infrastructure. It has to embrace the DfT, because they’ve got specified franchises that take advantage of it. It has to embrace all the operating companies, both freight and passenger, it has to the embrace the rolling stock companies and the manufacturers.

David knows what it does, because he’s done it on the Victoria, Jubilee and Northern lines. It changes the way that the railways work, and it’s a project that he will deliver, over as short a period as possible, to benefit the whole country.

Who will pay?

The plan rightly ought to be related to benefits, so we should do it first where we can create the most benefit – growth, jobs and houses. That’s not just in London and the Southeast, it’s in other regions as well.

We should also do it in order to get revenue up – more trains will produce more revenue in terms of track access charges – because that will help pay for it. However, there will have to be some adjustment because the railway revenue goes in through a different door of the Treasury to the one which Network Rail costs are paid out of, which is not a problem we had at TFL, so that needs to be resolved.

There’s also a question about who might pay for all the upgrades. Actually, it’s not entirely clear whether the public purse will pay for them. One of the advantages in keeping on talking about growth, jobs and houses is because there are many beneficiaries of good transport, such as businesses which expand as a consequence of better access, and developers which are able to build houses that otherwise wouldn’t be economical. I can’t see any reason why you can’t harness that economic improvement to pay for some of the developments, particularly since it’s new technology.

You don’t particularly want to take a risk on 190-year-old infrastructure. But the digital railway will be a new project, and it will be largely train-based. The stuff that’s fitted to the physical railway will be new, and I think that there’s a very good case to actually look for third-party funding for it. That includes the supply industry, for whom this is a fantastic opportunity to do this first in Britain, even if they’re not British companies, and then extend the concept to other congested railways in the rest of the world. I think that’s a very, very bright future.

There are some constraints. Money is obviously one of them. Getting access to the railways to do this as well as everything else could also be a constraint, but I think it could be overcome.

The breadth of the supply industry to cope with this is also potentially a constraint. We don’t want this to be a 50-year programme, because it produces economic benefit almost immediately as there will be more trains. So we need to look at it as a much shorter programme, for which there’ll have to be more suppliers.

Skilled workforce

As a result of CP5, and looking into CP6, we’ve got a huge project portfolio of work in Network Rail alone, and it affects the whole supply chain.

We’ve got digital railway, we’ve got other new technologies coming in, we’re developing the means to look at what’s happening to railway assets, the earthworks and so on, before they fail.

The railway operations part of Network Rail also needs to develop more skills because the railway is getting more crowded.

And we’re decentralising, which we are doing for a very good reason. Without it, our approach is unbalanced and we won’t look after our customers in the way that we should.

For example, we’ve now got route score cards, which are the way in which our customers in train operating companies can agree with us on what we should be delivering. We need to build up the management in those routes. They’ve got to be ready to run themselves through an individual regulatory settlement with the ORR, under the umbrella of Network Rail, so that’s quite a different sort of organisation.

They’ll need to build up the engineering teams. They will need commercial teams to deal with the Western England Partnership, Midlands Connect and Transport for the North and so on. They will clearly need more financial muscle than if they were just a cost centre, and they will need some decent operating people as well.

So, even within Network Rail, there are huge opportunities, some that we can build internally and some we can build externally. There is, in any event, a skills agenda, not merely in Network Rail, but also in the rest of the railway industry, as we are all short of skills. We are moving from people going round with hammers and doing heavy things, to roles where technical skills are far more valued – skills and techniques which are far from ordinary manual labour.

The consequence within Network Rail is that we’re increasing apprenticeships as much as we can. We will move to at least 300 advanced apprenticeships and the thirst in the market for these places is incredible – we get thousands of applicants.

The Government is committed to it as well. There’s a rule of thumb, which is one apprenticeship for every £3-5 million turnover, and quite right too. It’s absolutely necessary because it gives the winners of medium to long- term contracts an obligation to train people, so they’ve got enough people to actually deliver it.


Then there are university graduates. We’ve tripled our number in four years and we’re participating in the new concept of university technical colleges or UTCs. We supported one in TFL and there’s another one in Westminster that we’ve supported. And, it’s a massive, massive effort.

Positive message

We must have these people, and the rail industry has historically not been very attractive, because we haven’t explained what we do. The result is that we need to promote the diversity agenda by getting a much wider supply of people in than ever the railways have done before. We now have the Young Rail Professionals, who have a much more balanced agenda, come from a much wider range of ethnic backgrounds and can commit themselves to the job in the railway industry for a long time.

In the past, we haven’t explained ourselves quite in the way that we should. You don’t naturally open the papers and find that the railway is a growth industry, you open the papers and find there’s a strike on Southern. So we’ve got to work hard against that background, that miserable media coverage. But I think that, amongst the people who might join the railway, there’s a growing realisation that it’s a great place to go.

There are some great things happening in the press. In a recent Evening Standard, there was a fabulous picture of four women, three of whom I know, dressed up for Vogue. They’re dressed up because they’ve been working on Crossrail, and it was headlined ‘Hard Hats and High Heels’. These are not dull blokes in hard hats, these are members of a vibrant younger community who have chosen to work on a railway project because it’s exciting and because it teaches them new skills. That is exactly where we ought to be, so we’ve got to promote it.

For many of our people, this is not just a job, it’s a vocation. They talk about working on the railway because their employers have changed, but their commitment to the railway is absolutely total, and I think one of the things that young people and people at the start of their careers need to realise is that you not only need technical skill, but you need to understand the mind-set of people.

I can’t quite say that any particular employer in the rail industry will give you a job for life, because that’s too presumptive about organisational change, but what I can say is that, given the growth in the industry, if you want to work in the railway industry and if you’re prepared to change who you work for, where you work and what you do in the train industry, you have a job for life.

That’s extraordinary, because there aren’t many industries in Britain now where you can say that. This industry has a job for everybody if they’re prepared to change who they work for, what they do and where they do it, and I think that’s quite remarkable and I think that’s a cause for great optimism.

In an era of continuous change, it is that very change which nearly always frightens people in the industry. However, in my experience, change always creates more opportunities in the end, because you lose people on the way who don’t want to change. I can’t think of any change that I went through when there weren’t more management opportunities at the end than at the beginning.

So there’s a job for life in the industry for anybody who wants one if they’re prepared to change who they work for and where they work and what they do, and those changes actually produce opportunities at the end of it.

So I am optimistic about the future, and the opportunities it presents. But if you give me the choice of completely reorganising the railway over the next 10 years, or delivering a digital railway, I’d choose the digital railway because that will deliver more for paying customers.

Sir Peter Hendy was speaking to the Chartered Institute of Logistics and Transport and the Railway Engineers’ Forum.


  1. Who should pay for all this? The beneficiaries, of course. Who are they? Passengers, who pay through the fares. But then there are external beneficiaries. All the external benefits eventually end up in rents and land values. That is why the UK needs to introduce a land value tax, at the same time scrapping some of the destructive taxes which handicap the nation’s economy. Post-Brexit, we will need this more than ever if the country is to stay competitive and make the best use of its resources, of which the most important are the skills of its people.


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