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End of boom and bust

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Darren Caplan, chief executive of the Railway Industry Association, believes greater certainty for the rail industry could alleviate the skills gap


It is no secret that the rail industry needs a considerable number of new entrants to deliver an ambitious level of investment over the coming years. In the next control period, £48 billion worth of infrastructure work will be delivered – significantly higher than in CP5. And, when combined with major projects like HS2, Crossrail, Northern Powerhouse Rail, Crossrail 2, East West Rail and the Transpennine Route Upgrade, it becomes clear that the industry will need a bigger workforce capable of delivering these schemes.

Darren Caplan.
Darren Caplan.

The skills challenge

The statistics reveal a worrying skills gap. In July, Women in Rail and the National Skills Academy for Rail produced a report showing that the rail industry has an older average age than industry in general. In engineering, the workforce is getting older and the proportion of young workers aged under 25 has been decreasing over the last 10 years. EngineeringUK say that some 265,000 skilled entrants are required annually into engineering to meet the UK’s demands through to 2024. In the rail and road sectors, 27,000 to 35,000 apprentices will be required by 2022.

It is vital that this gap is not exacerbated by Brexit. Nationally, around 20 per cent of the UK rail workforce comes from the wider EU; in respect to the rail supply chain’s workforce south of Derby, almost 50 per cent are from other EU member states. That is why the Railway Industry Association (RIA) has been calling for the government and industry to work together to ensure rail maintains the number of engineers, technicians and operational staff it needs to function successfully. This will not only require maintaining access to skilled overseas labour, but also training up new entrants ourselves, so that we also have the homegrown talent to deliver these projects.

Training up the Next Generation

Much good work has already been done to tackle this challenge. 2018 was the Year of Engineering, seeing a wide range of activities to get more young people into science, technology, engineering and maths. In 2017, we saw the National College for High Speed Rail campuses open in Doncaster and Birmingham. The industry has also committed to do even more, with the Rail Supply Group committing to creating 20,000 new rail apprenticeships by 2020.

At RIA, we worked with industry partners including Young Rail Professionals and the Civil Engineering Contractors Association to hold a ‘Plus 1’ Rail Reception, where attendees over 30 had to bring a ‘plus 1’ under 30, so that current rail leaders could meet with future ones.

Photo: iStock.
Photo: iStock.

Providing certainty for the industry

The government could also help support the industry in its efforts by providing a visible, consistent pipeline of activity rather than the ‘boom and bust’ rail funding the industry has experienced in every control period since the system was set up.

The issue is that companies experience heavy ramp ups in workloads, before seeing orders trail off. These peaks and troughs reduce investment and make it difficult for SMEs in the industry to survive. Crucially for the skills challenge, recruitment is frozen when orders stop, meaning the industry finds it harder to retain, train and develop new professionals. Along with issues around contracting practice and regulation, this can make it difficult for the industry to close the skills gap.

New polling conducted by ComRes for RIA shows the scale of the problem. ComRes polled more than 120 business leaders in rail and found that virtually all suppliers, 99 per cent of respondents, said there are peaks and troughs in rail funding to some degree, with two thirds saying the term ‘boom and bust’ best described the nature of government spending in rail. When it came to the impact on businesses, more than four in five respondents who saw peaks and troughs said that these had a negative impact on their organisations, with 61 per cent having frozen recruitment as a result and 50 per cent chose not to employ a staff member. The evidence is clear – many organisations would hire and retain staff if they had a steady state of work.

Looking forward

The positive news is that the government has agreed to work with RIA, the ORR, Network Rail and other industry organisations to resolve this issue. This follows an investigation by the Transport Select Committee into rail infrastructure investment, which agreed with RIA that the various industry groups should come together to find the best solution.

RIA has proposed developing a minimum ‘baseline’ of renewals work for each year of the control period, thereby reducing the sudden increases and decreases in workload. We are also examining the impact of the government’s new approach to enhancements, which has seen these projects moved out of the control period process and into a new pipeline. Whilst we fully understand the need for appropriate ‘checks and balances’ to be applied to government-funded projects, RIA is concerned that this new approach will delay enhancement schemes coming to the market in CP6.

The previously published Rail Network Enhancements Pipeline – which needs to be regularly updated – contained no obviously construction-ready schemes, which could result in a significant reduction in enhancements workload in the next few years.

This could also impact the industry’s ability to develop a skilled workforce, as different supply chain skillsets are required for renewals and enhancements. This is because whilst renewals are single discipline-specific (e.g. track, signalling, civils), major enhancement projects are multi-disciplinary and require different co-ordination, technical integration and project management skills.

Photo: iStock.
Photo: iStock.

Not insurmountable

The industry skills gap is a considerable challenge, but not an insurmountable one. With the right funding framework, the industry could do even more in retaining skilled talent, particularly by solving ‘boom and bust’ rail funding and developing a visible pipeline of enhancements.

As CP6 begins in April 2019, we look forward to working with the government to ensure we have a workforce ready for our rail network’s needs.

Read more: CP6 – A land of opportunity