Off the Rails!

With so much coverage in the last 2 years around Brexit and the UK vs the rest of Europe we tabled the topic “Business in the North” at our most recent leaders lunch in Manchester.

It has been well documented that the recent introduction of the new Northern Rail timetable has verged on shambolic. Not surprising therefore, the topic for our 'Manchester Leaders Lunch' discussion focused on transport and its impact on the Northern Powerhouse concept. More specifically was the lack of transport connectivity commuters in the North are experiencing.

Across all business communities in the Northern regions, the message we consistently receive is, “unless central government seriously commits to investing in the transport infrastructure between the major cities in the region, the whole Northern Powerhouse concept will remain a pipedream”.
So we asked our guests who represented a wide cross section of organisations, “rather than platitudes from politicians, what tangible measures and actions could be implemented that would assist both your organisation and the wider business economy in the North?”

The spend per head on real infrastructure and services in London is three times more than what is spent in the North West

The CEO of a global logistics firm kicked off our discussion; the underlying issue is finance, pointing out that the spend per head on real infrastructure and services in London is three times more than what is spent in the North West. The reason often quoted is that London businesses are larger and contribute more in tax and so justify greater investment. This is no longer an acceptable excuse and a greater level of investment in infrastructure in the North will surely attract more businesses, which in turn will generate more tax in the region thus justifying the business case for greater investment.

There is an inherent conflict of interest between the major stakeholders

There is an unhealthy tension between government investing in infrastructure and privately owned train operating companies looking to make profit each quarter, the latter at the apparent expense of service to the commuter. 

An Executive from a large regional airport sees the airports being a major contributor to the success of the Northern Powerhouse. 

Greater connectivity between the East and West is probably more important than agreeing the best North to South connection

He referenced the importance of not only getting the HS2 agenda right but also to address the need for greatly improved transport links between the East and the West of the country (e.g. between Liverpool and Hull) which plays a critical part in UK infrastructure and airport access.

He went on to say that Manchester Airport is in the top 15 airports in the world for its number of destinations, so how can it not play a critical part in helping to deliver an integrated transportation strategy for the North?

The HR Director of a public body responsible for coordinating the transport strategy for Greater Manchester, agreed that HS2 and what happens beyond could have a significant impact for the airport and in turn really transform the centre of Manchester.

Picking up the east / west theme, an Executive from the aviation sector was keen to re-iterate the impact the phase beyond HS2 would have in truly linking for the first-time all the cities in the North.

He cited that the time to travel between Manchester and Leeds takes up to an hour. For two cities less than 40 miles apart this is unacceptable in today's dynamic business environment. This sentiment was echoed around the table with many in agreement that greater connectivity between the East and West was probably more important at present than agreeing the best North to South connection.

The Managing Director of a travel management company then commented that 'on time' services would be a key measurable difference that government should focus on, not least because it is the number one priority for customers and businesses who want their employees to get to work on time.

Government investment in infrastructure must be a priority

Public Performance Measures set-out by Network Rail to determine the punctuality and reliability of passenger trains across the country shows only a low percentage of trains operating in the North running on time which is put down to the capacity of the rail network being overloaded. The question therefore is how do we generate more capacity? Whilst technology can enable new signalling and track electrification, there is clearly also the need to build more infrastructure meaning forward investment by the government must be a key priority.

He then went on to comment that having recently travelled on the Bullet train in Japan, which travels on its own track with no interference from freight or local running trains, he saw this as a direct comparison with HS2. He observed that the train stations in Japan operate like airports with their own shopping centres, which presumably allow the investment to flow back into making the rail operating system more effective.
He suggested that a more innovative approach like the Japanese model should be adopted to fund greater investment.

Our Chair then invited others to contribute in terms of tangible measures Central Government could apply to help organisations and the wider economy in the North.

The CEO of a motorway hospitality chain responded that, whilst his business clearly has a vested interest in the UK rail network falling short there is a more serious congestion issue on the roads.  He made the observation that whilst the road networks in Greater Manchester are good, congestion at peak travel times is a problem, mainly because of the volume of HGV's operating on it. He went on to suggest an innovative solution could be to move these vehicles to night time operations only - that way freeing up the road networks during the day.

Does the UK government really have the appetite to generate a sustainable economy outside of and independent from London?

The CEO of Power Network Operator commented that he believed that philosophically this question is about motives and finance. Until the government really shows that actually what they want to do is generate an economy that's outside of and independent of London, he believes that the Northern Powerhouse aspiration will surely crumble. “Even if HS2 is built linking the North and the South it is essential that the politicians have cross-party consensus on the importance of a long-term investment strategy for the North.” 

An Executive from a Premiership football club added to the debate, “Why are the train operating companies not more flexible in providing later trains in and out of London from cities located in the North? In addition they went on to mention that the cost of travel, particularly on peak-time train services in and out of London are “eye-wateringly” expensive which in turn creates a cost burden for organisations and a level of inertia for business transactions taking place between the north and south of the country.     

The Northern Powerhouse aspiration will surely crumble

An executive from a Women's Leadership Development and Mentoring organisation gave an interesting alternative perspective based upon some research conducted on gender in transport. The research suggests that men often look at a journey in a very linear way e.g. to work and back or to a sporting event and back. Women however, have a lot more shorter journeys to make to a multitude of places whether it's the health centre, schools or local shopping etc.

The second area that the research highlighted was that women are also worried about evening travel, in particular the threat of violence or sexual harassment on trains. Therefore, they don't like to travel late at night or if they do, they want it to be well lit and well accessed.

The third interesting point from the research was that women tend to be more interested in sustainable transport, such as walking and cycling.

In recognising the significant performance improvements that result from having diverse teams there is a tremendous opportunity for the government to incorporate these factors i.e. work closer to home, access to well-lit and well-constructed, multi-dimensional transportation, when developing a strategy for the North.

Our final guest to comment was the CEO of a healthcare business who highlighted the importance of investment in local networks as well as National networks. He lives a 10 minute drive from his office in Skipton, yet it would take him an hour and a half using the rail network.

He raised the question of whether competition was healthy or whether greater control under one entity maybe the way forward thereby encouraging collaboration, communication and control.  The obvious parallel he drew was with the NHS and although he believes it is poorly managed, the philosophy of its existence to serve grass roots is absolutely right.

Conclusion
The importance of greater connectivity between the North and South and even more importantly between the East and West of the country cannot be underestimated. The emphasis of the discussion was mainly focussed on the rail sector, which was not surprising given the recent Northern Rail debacle. However, it is essential for businesses to thrive in the North; politicians in London across all parties need to commit to a long-term investment strategy in the whole transport infrastructure of the regions to ensure sustained growth and prosperity for the UK.