Network Rail (NR) recently hosted a webinar for suppliers, following concerns raised by a number of trade associations, including CECA, that many rail suppliers are reporting a serious hiatus in expected rail work at the start of Control Period 7 (CP7).
Senior representatives from NR provided an update on a number of factors affecting their spending through the supply chain with data provided on spend profiles and reasons given for variations. However, they also explained that many CP7 contracts have been let, as planned, and that Tier 1 contractors on frameworks have visibility and budgets to spend. Nevertheless, there was recognition that supplier spend does vary by asset and region and that budgets have not necessarily flowed to suppliers at Tier 2 and 3 yet. This is clearly an area of concern for many in the supply chain. NR also explained that budgets for enhancement works were not included in CP7 budgets (which cover renewals and maintenance works) as this comes through separate government approval processes requiring Treasury approval. The UK government has yet to decide on many rail enhancement projects, with some important decisions moved back to the 2025 Comprehensive Spending Review, so this area remains uncertain for suppliers. In Wales, although rail infrastructure funding isn’t devolved (apart from the Core Valley Lines), we are anticipating some specific announcement relating to spend in Wales and we will be monitoring these at CECA Wales as they could be significant.
Overall there was an acknowledgement by NR that the last 12+ months have been “changeable” for the supply chain because of significant overplanning and changes at late notice, as well as communication with the supply chain being inconsistent. They also recognised the difficult position many suppliers were in and are committed to improving ways of working with them, balancing this with delivering what the railway needs. They also thanked our associations and their members for raising their concerns. Against this background NR recognised that communication with suppliers has not always been good, and that there needs to be improvements to the quality of pipeline information. They specifically committed to:
- Improved quarterly pipeline information, in a harmonised format across all regions from Spring 2025. NR are actively working on improvements to the pipeline document to improve the data and make it easier for suppliers to navigate.
- Sharing plans around pipelines with Trade Associations to improve how they are communicated.
- Working more closely with the CP7 Tier 1 suppliers to understand the blockers to getting work started and ensure pipelines are widely shared.
- Providing timely, centralised information on all supply chain engagement events.
- More regular touchpoints with the supply chain.
In terms of CECA and other trade associations, we intend to work collaboratively with NR, whilst also holding them to account towards the commitments made above. In particular, we will ask for:
- visibility of a shared transparent pipeline of its renewals and maintenance work, in a common, easy to use format, including visibility of their own plans (even if these are not fully finalised). On enhancements, we will ask the UK and Welsh Governments to provide (or allow NR to publish) a transparent forward pipeline of projects.
- stronger UK and Wales level oversight within NR, which they have agreed to explore and/or bolster, including:
- Active oversight of the health of the supply chain,
- Integration of pipeline across the business to help suppliers understand the work opportunities across the whole business.
- Understanding how work pipelines and budgets are flowing to SMEs and suppliers who do not contract directly with NR
- An open and collaborative culture between NR and suppliers to support a healthy and competitive supply chain, including:
- Named individuals to speak to in each region for suppliers facing challenges
- Agreement to publishing a good practice principles document for engaging with suppliers, and vice versa – that is shared right across NR’s business and our members
- Continuous feedback – in both directions
You can view slides from the event here :NR supplier event summary slides 041124_
And you can view NR’s latest pipeline details here : Procurement – Network Rail
Whilst, overall, there was recognition that NR and the supply chain need to work together – all the way down the supply chain – it is undoubtedly disappointing and frustrating for long standing suppliers who have been raising these concerns for a long time. We will continue to monitor the situation with NR and, hopefully, we will start to see the expected improvements coming through soon.
Ed Evans
Director CECA Wales