ITC looks at the future for rail demand

What does the future hold for rail passenger demand in Britain?

The Occasion

What has driven the huge growth in rail passenger travel in Britain over the past two decades? To what extent are factors external to the rail industry responsible for this growth? And will rail demand continue to grow strongly in the future? Two new rail demand studies have provided important new insights into the drivers of rail passenger growth in Britain: the ITC’s report Wider factors affecting the long-term growth in rail travel (November 2018) and the RSSB/Arup/Futurethinking report exploring Drivers that impact rail travel behaviour (January 2019).

To explore the findings from these research studies a special joint Discussion Evening was convened on 13th February 2019. The findings from the reports were presented by ITC researchers Ian Williams and Dr Kaveh Jahanshasi (Cambridge University) and Arup researchers Adriana Moreno-Pelayo and Matt Dillon. Expert responses were given by Neil Micklethwaite (Commercial Director of Rail, Stagecoach) and Professor Tony Travers (Director, LSE London). The subsequent discussion was chaired by Professor Peter Jones OBE: an ITC Commissioner and Professor of Transport at University College London.


What does the future hold for rail passenger demand in Britain? Key issues raised by the speakers:

  • Ian Williams reported on the main findings from the ITC report. He explained that the ITC’s previous research had shown that rail growth in Britain had arisen from a greater percentage of people using rail rather than existing travellers going further. The research focused on demand factors external to the rail industry, including residential and workplace location patterns, the structure of employment, and home working. Changes to these factors had resulted in a significant increase in rail demand, as a result of employment shifting from manufacturing (where the propensity to travel by rail is low) to office jobs (where it is higher). More people were now living in cities and in locations with good rail access, while the research also showed that more jobs today were located in city centres than in the 1990s. The increase in home working, he noted, was also having an impact by reducing the average weekly number of commuting trips rail travellers were making.

    Ian Williams introduces the ITC research study

  • Adriana Moreno-Pelayo and Matt Dillon related the key discoveries from the Arup/RSSB report exploring the recent slowdown in rail demand. They explained that their focus had been on recent trends and why demand had slowed since 2016. The findings suggested that about half the fall in demand could be explained by factors intrinsic to the rail industry. Problems over this period included rail service disruptions arising from industrial action, engineering work and timetabling problems. Rail demand was now increasing again since these problems had receded. Other factors that had an impact on demand were increases in home working, more online activity which had displaced demand for leisure and shopping trips, and fears related to terrorism. They noted that rail commuting per person had been declining since 2010 and that this trend is expected to continue. Looking ahead, they presented three scenarios showing the interplay of technological, economic and political uncertainties that could possibly reshape rail demand, including the growth of a hyper-connected society, increased urban congestion, and an increase in a flexible and machine workforce.

    Adriana Moreno Pelayo explains the Arup/RSSB research

  • Neil Micklethwaite provided an operator’s perspective on changes in rail demand. He observed that a key challenge was that infrastructure planning and behavioural change took place over longer timeframes than rail operator franchises. However, he was confident that rail improvements and a better pricing structure had helped to grow rail demand in Britain since the mid-1990s. The recent slowdown since 2015 was due to a ‘perfect storm’ of problems and poor reliability had a major impact since this was the highest priority for rail user satisfaction. He noted that home working was having an impact, and was increasing due to improved broadband provision in recent years, as well as employers offering more flexibility and reducing office space. It was important, however, to recognise that growth had also been driven by increased leisure travel, especially from families and older people. In terms of rail investment, he suggested that travel time reductions would have to be significant to make a serious impact on modal switch to rail. Finally, he observed that policy makers would have to decide whether they wanted to support public transport usage rather than generating increased urban congestion which could arise from widespread adoption of autonomous vehicles.
  • Professor Tony Travers offered insights into the policy implications of the research findings. He observed that recent rail investment decisions had been based on continued growth in demand, and a future slowdown in rail travel could cause the Treasury to reassess the case for spending on rail. The ITC research had shown that some long-term trends, such as increased city living, were positive for rail demand, especially since urban residents tended to be younger people of working age. However, it was unclear whether population growth, particularly in London, would continue at the high level predicted just a few years ago. He also observed that the Government was purportedly focusing on ‘left behind’ Brexit voting strongholds in post-industrial towns and rural areas where car use was high and rail demand low, and this focus could well be a negative factor for future rail investment. There remained great uncertainty about future trends in employment and office working which made future rail demand hard to predict.

    Neil Micklethwaite responds to the research findings.

    Key themes raised in the discussion: the future of rail demand

    1. We need to understand better peak and off-peak travel demand: Some guests pointed out that rail investment was planned around supporting peak hour travel, and indeed this had held up better in the recent demand slowdown than off-peak travel, even though the latter had driven more of the rail growth over the past two decades. Benefits from agglomeration were mentioned as one reason for supporting peak hour demand. However, with working patterns changing there was a case for using new pricing mechanisms to spread demand over the course of the working day and week. Some also queried whether commuter traffic in the form of season tickets had previously been overstated due to modelled rather than actual journeys being used.
    2. Urban demographic trends will have an important role in shaping rail demand: A number of guests asked whether the success of rail demand growth in London and SE England could be replicated in other conurbations. It was pointed out that in Manchester rail growth was strong in spite of low investment and poor reliability, so better services could well stimulate more demand. Others noted that the demographics of cities were becoming younger, while older people were increasingly living in car-dependent rural areas. Younger people were also more active with new media, showing that the rail industry needs to keep pace with digital trends. However, internationally other major cities, such as Paris and NYC, were also seeing a slowdown in public transport usage.
    3. The impact of autonomous vehicles on rail demand is uncertain: There was disagreement about the likely evolution of autonomous vehicles and their effects on rail demand. Some guests suggested that these vehicles would become widespread and could positively influence rail demand by reducing car ownership. Others were sceptical about when autonomous vehicles would become viable and suggested that they could actually deter investment in public transport and active travel.
    4. Rail should be seen as part of a wider transport network: It was noted that humans travel on average for about an hour a day across civilisations and this demand was unlikely to decrease. A better understanding was needed of the many external variables that influence rail demand, including housing policy, digital lifestyles, and employment patterns. Some pointed out that rail travel was still dwarfed by travel on the roads. Given the existing uncertainties, it was likely that new ways would need to be found to justify rail investment. Some also expressed concern that the cost per mile of building rail infrastructure was higher in the UK than in other European countries.

      Professor Peter Jones OBE chairs the discussion