Creating more sustainable rail travel
Rail is an exciting yet challenging industry in the UK at present. In order to create more sustainable rail travel and bring Britain’s network up to date, electrification programmes are necessary. Electrification is claimed to be one of the cornerstones of modern rail travel, reducing the current reliance on diesel and delivering lower ownership costs that could, in turn, mean lower fares for regular travellers.
As with anything that requires innovation, this is not straightforward. Commitment, time and resources are required from many major players in the industry – and of course, budget, which is where R&D tax credits could prove extremely valuable.
Demands of electrification
Electrification schemes reached unprecedented scales and complexity during the National Electrification Programme, launched in 2014. The government increased the budget for rail improvements from £260m to £4bn for the period 2014-2019, with around £2bn to be spent on electrification.
That meant a new approach for contractors, with the projects requiring the alignment of an array of skillsets, from regulators and local authorities to designers and manufacturers of products and equipment. Early communication between parties has been key to avoiding lengthy periods of disruption and the need for costly redesign work.
A catalogue of setbacks
The Midlands, north of England and Scotland saw some of the first projects get underway, with excitement among the contractors at the chance to move Britain forward. But the programme as a whole has been littered with setbacks, not least Carillion’s astronomical fall from grace in early 2018, when the company went into liquidation.
Then, in March 2018, transport secretary Chris Grayling announced that there was no need to electrify every line on the network, with new bi-mode train technology offering a “seamless transfer from diesel power to electric that is undetectable to passengers”. In a statement, he remarked that significant improvements to journeys could be made without electrifying all lines.
A report by the National Audit Office subsequently found that the reasons for cancelling the improvements were ultimately financial, with costs escalating far beyond Network Rail’s capacity to borrow.
The proposed bi-mode trains in development are equipped with both electric propulsion and diesel engines, and the government claims these will reduce journey times and running costs whilst reducing spending on electrification.
Critics, however, argue that bi-mode trains will struggle to offer the performance of electric trains, and will be far less green in the long term due to the remaining reliance on diesel.
Electrification and tax relief
If your business has been involved in the rail network electrification process, or has invested in the development of bi-mode trains, you could be entitled to research and development tax credits. These reward the effort and investment of businesses rather than successful outcomes, meaning even if electrification is stalled for good, you can still benefit from R&D tax relief. Take a look at our R&D tax relief calculator for an estimate of what you could claim, or discover how likely you are to be successful from our R&D statistics.