This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
| 2 minutes read

Dear Secretary of State (October edit)

In early September I wrote on these pages my thoughts on some of the challenges and issues that then new Secretary of State would likely be being briefed on and need to address.  Here we are some seven weeks later and the opportunity to update that list presents itself again.  You can read the original list here (Dear Secretary of State..., Mike Goggin (steergroup.com)) and maybe like me you can see little need to change the list.  The challenges for setting Government policy, sustainably financing transport and addressing its contributions to the environment, social and economic value remain starker than ever.

However, as we await the Autumn Statement on 17 November it seems increasingly likely that the Department will face some tough challenges as to where and on what it spends its money.  Some of their choices maybe influenced by wider Government policy on stimulating economic growth, levelling up and decarbonisation.  A significant challenge exists here to bring forward coherent approaches across multiple Government Departments when so much change is occurring.  

I also see a bigger need to provide rapid clarity for those developing policy and creating strategies. A clearer 'philosophical direction' needs to rapidly emerge on just how interventionist in our economic, housing and mobility ecosystems does this Government wish to be?  There is clearly the opportunity to create Great British Railway (unlikely to see change to the deferment already announced I suspect) but will the Department seek to intervene with capital, policy direction and incentive in the wider economic and mobility sectors or will it be largely left to market forces and tactical local support?

The other challenge facing the new Secretary of State is how to fund our public transport systems in the context of an estimated £40bn gap in public finances.  Recovery in commuter patronage from the pandemic is arguably now flatlining and significant more demand (and revenue) is unlikely to suddenly reappear to soothe the Treasury's pain at funding transport so much more than it did in 2019. Bus, tram and rail will be left with a material affordability challenge in the short to medium term and it seems unlikely in my opinion that the Department can expect to receive the same sort of support it has been from the Treasury.

An 'ordinary business' faced with such a challenge would develop a deliberate and structured set of interventions that could confidently contribute to that challenge.  It would do so recognising the short-term pain and cost involved and the potential loss of opportunity and stimulus of competition in the medium-term that might be created as it retreated.  But it would act knowing that it was doing so to protect the long-term interests of business and its owners.  

However, our transport systems are no ordinary businesses and their owners are not shareholders but Government, taxpayers and voters.  Within the multitude of services are vital connections of people to education, health, work, arts and families and friends.  They connect places of manufacture with places of consumption.  The services are part of our economic and social infrastructure and therefore contribute to UK PLC's financial wellbeing.

What is the way forward then? Westminster politicians are super-sensitive to the ballot box impacts of service reductions in the railway, perhaps less so for bus or tram where they can better push attention to local politicians and private sector operators.  It seems unlikely that we will have a bold interventionist and carefully constructed plan of network and service reduction. The transport modes will best be served responding with their own plans to meet the affordability challenge.  It will take ingenuity, the sacrifice of some longstanding constraints and to bring to decision makers carefully constructed choices and their impacts.  Dogged determination is going to be required to navigate the challenges ahead otherwise those important services and the assets that support them face a slippery slope of poorly managed decline.

Tags

strategy & policy, rail, business consulting, financial advisory, policy strategy & regulation

Latest Insights