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How are new rail networks boosting the economy?

Alongside providing better transport connections, railway lines contribute to employment, economic prosperity, and sustainability goals.

Rail infrastructure projects have the potential to transform the cities and towns they serve. Alongside bringing greater transport connectivity to their routes, they also bring huge economic, employment and societal benefits.

Large-scale rail projects can have big price tags, but research shows that the investment pays off. According to a report by the economic forecasting company Oxford Economics commissioned by the Railway Industry Association (RIA), rail created £43bn gross value added (GVA) in 2019 and created 710,000 jobs. For every £1 spent on rail, £2.50 is generated for the wider economy.

“The benefits rail provides as an individual industry, as well as to the wider economy [are] quite strong,” says Darren Caplan, chief executive of the RIA. “The future of rail is one of growth, not managed decline.”

While the pandemic negatively impacted passenger numbers and freight transport, usage has bounced back significantly, he says. Rail use is currently at least at 85 per cent of pre-Covid levels of activity, while Unife, the European Rail Supply Industry Association, suggests that the global rail market will experience average annual growth of 3 per cent by 2027.

A recent example of a rail project that has boosted productivity is Crossrail, otherwise known as the Elizabeth Line. The extension to London’s transport system, which stretches from Reading and Heathrow in the west to Shenfield and Abbey Wood in the east, now carries 600,000 passengers every day. Alongside helping commuters, businesses have attributed increased footfall and revenue to the line, and it is estimated that it will add up to £42bn to the economy.

East West Rail (EWR) is another project that is set to deliver better transport connections and economic benefits for the towns and communities it serves. The new line will travel between Oxford and Cambridge, linking multiple towns in between, such as Bedford and Milton Keynes. The line is being built in stages; upgrades to the line from Oxford to Bicester were completed in 2016, with a full service of two trains per hour in each direction, while the route to Milton Keynes is nearing completion. EWR’s final phase towards Bedford and on to Cambridge will follow once a development consent order has been obtained.

Together, the cities and towns on the EWR contribute around £111bn a year to the national economy. If housing and transport needs are met, the “arc” of Oxford, Cambridge and Milton Keynes could support more than 1.1 million new jobs and increase economic output by £163bn a year by 2050, according to a National Infrastructure Commission report.

“We really view [EWR] as an economic project, not solely a rail infrastructure project,” says Beth West, the chief executive of the East West Rail Company. The project’s overarching target, she says, is to “connect people across the region”, “so that they can have greater opportunities to get to [their] jobs, schools, see family and allow for the… unlocking of potential that exists across the region.”

One of the ways EWR is doing this is through its new route between Milton Keynes and Bedford. Until now, there have been no direct passenger train services between the two places. “For people who live in Bedford and Milton Keynes, they’re pretty close together [geographically], but the only way you can really get between them is to drive,” says West. Better public transport will provide residents with greater work and educational opportunities, she says, and will lead to societal benefits, such as improved healthcare provision. For example, clinicians working at Cambridge University Hospitals will now easily be able to commute to Bedford Hospital, so the two sites can share valuable expertise.

Similar examples of the economic and social benefits of rail infrastructure projects can be found across the UK. Greater Manchester’s Metrolink tram network, which opened in 1992, “has played a pivotal role in transforming the city region’s economic fortunes over the past three decades”, according to research on behalf of the Northern Powerhouse Partnership. The only boroughs which didn’t feel the same level of productivity and income growth were those not connected to the tram network such as Wigan and Leigh.

“The legacy effect of these pieces of infrastructure is huge,” adds Dan Bishop, deputy head of rail at WSP, the multi-disciplinary engineering and environmental consultancy that has been jointly appointed as EWR’s technical partner alongside Mott MacDonald. He believes rail projects can reduce inequality gaps by increasing access to jobs, healthcare, education and culture, while boosting local business.

Materials are being sourced locally for EWR to reduce the supply chain’s carbon footprint, offering an opportunity for “local, small [and] medium enterprises to sprout up to service the industry”, Bishop says. Rail projects also develop the skills of thousands of people directly through training and apprenticeship schemes in roles across engineering, construction and operations.

But ensuring rail projects are delivered in collaboration with communities is key. “This is an issue all big infrastructure projects have to contend with,” says West. “We don’t want to [have] infrastructure that’s just plonked down, and everybody’s left to deal with it. We want to design [it] in a way that enhances local communities.” EWR has been working with local authorities to do this.

The collaboration between WSP, Network Rail and the Highland Spring Group, one of the UK’s leading producers of natural source water, in establishing a new rail freight facility at its headquarters in Blackford, Perthshire, is an example of how to plan major infrastructure projects with the local community in mind.

A new freight facility will remove 8,000 lorry movements from nearby roads and reduce 3,200 tonnes of carbon emissions every year. Landscaping work on the project included planting around 2,000 trees, a wildflower meadow and a new fruit orchard. The economic and environmental benefits of the project are “huge”, says Bishop. “It’s a comparatively modest piece of infrastructure… But it’s a really impressive project.”

Sustainability and community consultation is also a key facet of the EWR project. It will have a 10 per cent biodiversity net gain across the areas it serves. Twenty ecological compensation sites have been created along the Bicester and Bletchley section which have turned plots of land into havens for wildlife, incorporating ponds, badger setts, bat boxes and tree planting to benefit different species.

“People having the ability to get where they want to get to – for work, educational and leisure purposes, among others – is a really important driver of [a region’s] economic outcomes,” says West. “If all of these things go together, there’s potential for huge uplift in the national economy.”

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