South Shields, Metro Training and Maintenance Skills Centre - Major Schemes Full Business Case
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Major Schemes Full Business Case
South Shields, Metro Training and Maintenance
Skills Centre
1
Contents Page
1 Executive Summary 4
2 The Strategic Case 11
2.1 Introduction 11
2.2 Problems and Opportunities Identified 11
2.3 How the Proposed Measure Addresses the Problem Identified 14
2.4 Scheme Objectives 17
2.5 Background to Nexus and the Tyne and Wear Metro 18
2.6 Policy Context 19
2.7 Key National and Regional Policies 21
2.8 Drivers of Change 24
2.9 Rail Industry Training Case Studies 28
2.10 Options for Development 32
2.11 Scheme Details 35
2.12 Maintenance, Training and Skills Activities 40
2.13 Job Creation 42
2.14 Summary of Benefits 42
3 The Management Case 43
3.1 Introduction 43
3.2 Programme Management 43
3.3 Project Governance 44
3.4 Project Planning 45
3.5 Scheme Programme 47
3.6 Evidence of Similar Projects Undertaken 48
3.7 Risk Management 48
3.8 Communications and Stakeholder Management 49
3.9 Benefits Realisation 51
3.10 Monitoring and Evaluation 51
3.11 Programme and Project Dependencies and Constraints 52
4 The Commercial Case 54
4.1 Introduction 54
4.2 Procurement Strategy 54
4.3 Project Management, Cost Management and Planning 54
4.4 Design Services 54
4.5 Main Contract 55
4.6 Contract Management Strategy 55
2
4.7 Payment Mechanisms 58
4.8 HR Issues 58
5 The Financial Case 59
5.1 Introduction 59
5.2 Project Cost Profile 59
5.3 Contingency Plan 60
5.4 Revenue Implications 61
6 The Economic Case 62
6.1 Introduction 62
6.2 Rationale for Intervention 63
6.3 Options Analysis 64
6.4 Economic Analysis of Options 65
6.5 Approach to Cost Benefit Analysis 65
6.6 Costs 65
6.7 Transport Benefits 66
6.8 Regeneration Benefits 72
6.9 Results of Cost Benefit Analysis 75
6.10 Summary of Net Present Value and Benefit to Cost Ratio 82
6.11 Sensitivity Tests 83
6.12 Summary 87
Appendices
Appendix A Risk Register and Designer’s Risk Assessment
Appendix B Nexus Project Controls Manual
Appendix C Nexus Stage Gate Checklist
Appendix D Appraisal Summary Table
Appendix E Benefits Realisation Plan
Appendix F Monitoring and Evaluation Plan
Appendix G State Aid Statement
Appendix H Output-based Specification
Appendix I Scheme Programme
Appendix J Value for Money Statement
3
1 Executive Summary
The Strategic Case
1.1 Rail transport plays an important part in delivering economic growth, and at a
regional and local level the Tyne and Wear Metro is a vital part of this process. In
the future, Metro will continue to play a major role in the economic strength of the
North East region by providing sustainable, affordable transport for residents and
visitors to the area.
1.2 A strategic opportunity has arisen to create a new Metro Training and Maintenance
Skills Centre iin South Shields, Tyne and Wear. The facility will fulfil three key aims:
• Improved maintenance facilities for the existing Metro fleet, and the new
train fleet which is currently at the planning stage.
• A better Metro service for South Tyneside, resulting from the ability to start
services earlier and finish later by housing trains at the centre overnight.
• More comprehensive training, apprenticeships and skills opportunities for all
Nexus and Metro staff within a dedicated environment, with everything
located on a single accessible site.
1.3 The key aim of the scheme is:
“To establish a high quality facility providing additional Metro maintenance and
rail engineering, skills and training capacity, ensuring the long-term future of the
Tyne and Wear Metro, and enabling lifelong, transferable skills for careers in the
rail industry.”
1.4 This leads to the definition of the key objectives of the scheme, which are:
• To improve Metro reliability and performance across South Tyneside and
beyond through the provision of a new stabling and light maintenance facility
located separately from the main fleet depot at Gosforth.
• To create local jobs and apprenticeships by increasing the range and scope of
training undertaken in-house by Nexus.
• To support the training of people already working in the rail industry, and
those seeking to develop a career within it.
• To increase the economic vitality of South Shields town centre and support
the regeneration objectives of the South Shields 365 masterplan.
1.5 Through the establishment of the South Shields Metro Training and Maintenance
Skills Centre (MTMSC), Nexus and Metro will benefit from an expanding portfolio of
training and operational activities across a range of specialisms including train and
track maintenance, engineering, rail safety, management and other industry
4
activities. The centre will become the hub for all Nexus training competencies:
management, safety, operational and technical.
1.6 The location in the heart of South Shields town centre offers exciting possibilities
for South Tyneside Council and Nexus, as Metro enters a dynamic new chapter with
plans for new trains and potentially additional routes in the coming years.
1.7 The facility will be a training centre of excellence for light rail, offering high
standards of training qualifications and apprenticeships to Nexus staff with
opportunities for new industry entrants to gain qualifications likely to lead to
permanent jobs in an industry beset by skill-set shortages, as the age profile of
existing employees rises. The need for highly trained specialists becomes more
apparent as the industry becomes increasingly technologically advanced, evolving
from an era of camshaft control to wireless technology.
1.8 The training offered at South Shields will be fully aligned to all UK and international
best practice, delivered locally to meet the needs of all staff engaged in the delivery
of Metro services. It will also contribute towards the wider town centre
regeneration agenda set out in South Tyneside Council’s South Shields 365
masterplan, where the principle of a strong local economy investing in jobs and
training for the future is a key element of the proposals.
1.9 A more reliable and flexible Metro service for the South Shields area is also an
important element of the scheme. The centre will be able to stable trains overnight
as a satellite facility to the main network depot at Gosforth, allowing a longer
operating day, better service recovery and more reliable services resulting from the
additional maintenance facilities incorporated within the MTMSC. It will also
facilitate an improved Metro service for the iconic annual Great North Run, when
over 50,000 runners and their supporters arrive at the South Shields finishing line.
1.10 In the longer term Nexus has ambitious plans, subject to available resources, to
invest further in the South Shields Metro corridor, by converting the existing single-
track sections between Pelaw and Bede to double track. This would facilitate more
frequent services, additional stations and a more reliable Metro. Together with the
new bus and Metro interchange to be built on a neighbouring town centre site, the
MTMSC will transform future Metro operations to and from South Shields,
delivering the standard of sustainable access essential to the success of the area.
The preferred option identified within this business case fits best within this
framework by providing a more resilient and reliable Metro service, alongside
improved maintenance and training facilities.
Key Scheme Elements
5
1.11 An integrated Metro training and maintenance centre located north of the existing
South Shields Metro station will offer classroom tuition and practical indoor and
outdoor training in a range of electrical, mechanical, structural, safety,
management training and personal development subjects. These activities will be
delivered at a new building and associated permanent way sidings north of the
existing South Shields Metro station. The site grid reference is NZ 36207 67461. The
location in central South Shields has been identified as being highly suitable for the
new MTMSC. It offers a combination of strategic advantages, including excellent
communication links by Metro and road, a town centre location and the ability to
be both connected to and separated from the rest of the Metro network as
required, to enable the full range of operational, training and maintenance
activities to be undertaken.
1.12 Rail sidings within the site will allow for Metro fleet cleaning, light maintenance and
overnight stabling, as well as outdoor training activities. On-site train storage
facilities will allow for Metro services to run over a longer operating day, and
provide increased operational resilience for special events such as the Great North
Run, and when the Metro network south of the river is severed from the main
depot location because of essential engineering works.
1.13 Site activities have been designed to operate flexibly and creatively, delivering
economies of scale across the organisation. There will be controlled overlap
between Metro-specific operational activities and wider training and maintenance
delivery. These will be co-ordinated by an on-site Nexus management presence,
ensuring that the operational requirements of Metro are met at all times, whilst
maximising the potential for training activities and staff development.
1.14 Nexus will own the facility and be responsible for overall site management. Nexus
owns Metro rolling stock and infrastructure, and operates Metro services on behalf
of the North East Combined Authority (NECA). It is planned that the introduction of
a new train fleet will result in fleet maintenance being outsourced as part of new
operating arrangements; Nexus will set the terms of such operations, including a
requirement for future maintenance and training to be undertaken at the South
Shields training centre as set out in this business case.
1.15 Centralisation of all Metro training activities at a single site will also deliver
qualitative benefits such as improved staff communications across different
delivery areas. The fact that the site is already owned or controlled by Nexus also
increases the affordability and deliverability of the scheme. Further details
explaining the shortcomings of existing training arrangements for Nexus and Metro
staff are set out in section 2.2.
The Management Case
6
1.16 The Management Case explains how the problem identified in the strategic case
can be resolved through the proposed solution and that objectives can be realised.
It provides details of project planning, governance structure, risk management,
communications and stakeholder management, benefits realisation and assurance.
1.17 The scheme will be project-managed by Nexus which has extensive experience of
the delivery of similar schemes through the implementation of the Metro Asset
Renewal programme. Construction will take place using a design and build
contractor with Nexus project management oversight.
The Commercial Case
1.18 The Commercial Case provides evidence as to the commercial viability of the South
Shields Metro Training and Maintenance Skills Centre scheme and the procurement
strategy that will be used to engage the market. It outlines project management,
cost management and planning methodologies and summarises the proposed
contract management strategy.
The Financial Case
1.19 The Financial Case sets out affordability issues, risk and contingency, revenue costs
and provides a full project costs profile.
The Economic Case
1.20 The Economic Case confirms that the scheme offers high value for money, with a
Benefit to Cost ratio of 2.51 under the preferred option.
7
Figure 1: Map of South Shields town centre
8
Figure 2: Site Plan
9
Figure 3: Site Layout
102 The Strategic Case
2.1 Introduction
2.1.1 The strategic case provides answers to two fundamental questions that must
underpin any business case:
• What are the identified problems and opportunities?
• How will the proposed scheme address these problems and deliver
improvements?
2.1.2 The strategic case demonstrates the case for the facility with a clear rationale for
investment, confirms the strategic fit with national, regional and local government
objectives, and describes how the scheme will further the aims and objectives of
the NECA, the North East Local Enterprise Partnership, South Tyneside Council and
Nexus. It specifies the business need, describes the issues that the scheme will
address, and identifies a series of aims aligned to organisational and wider
Government objectives.
2.2 Problems and Opportunities Identified
2.2.1 Nexus has identified three key issues that the MTMSC proposal will address.
• The need for better training facilities for Nexus staff
• Expanded maintenance facilities to improve service reliability
• The need to stimulate the local economy of the South Shields area
Better Training Facilities
2.2.2 Improved training facilities have been identified as key to delivering a better Metro
service for the local area. The ‘Eden Centre’ premises located at Gosforth Industrial
Estate in Newcastle upon Tyne are basic portable buildings of limited size and
scope, and lack potential for expansion or enhancement to meet future training
needs. This rules out additional training activities that require more space, such as
training linked to the introduction of a new Metro fleet including a training
simulator for driver training – the South Shields site is ideally suited to this purpose.
The MTMSC would allow the range and scope of staff training to be increased with
greater emphasis upon on-the-job learning, and more opportunities for all Nexus
staff regardless of their specialisms to share facilities and ideas to mutual benefit.
The centre will also provide facilities to deliver essential Health and Safety training
more effectively. In summary - the current Nexus training facilities limit the depth
and variety of courses that can be delivered and offer little opportunity for the
various areas of the workforce to train and up-skill in a more collaborative and
cross-functional way, to the benefit of Metro users.
112.2.3 The Tyne and Wear Metro system is on the cusp of change. The trains running
today are unreliable and are close to the end of their working life. The Government
has accepted the principle of the requirement for a new fleet and Nexus has
developed an outline business case making a strong case for funding. In addition,
following a period during which the operation of Metro trains and stations was
operated as a concession, all operations have now returned in-house to Nexus until
further notice. These circumstances offer unique opportunities to upgrade training
provision across the organisation and to install improved maintenance facilities that
will help to make the old trains more reliable and smooth the transition towards
the introduction of a new fleet. It will be difficult to accommodate these growing
requirements within the existing limited infrastructure, hence the need for a new
integrated training and maintenance facility that will bridge this period of change
and provide a solid foundation for future Metro operations.
2.2.4 The rapidly changing landscape of skills training has implications for Nexus as a light
rail operator, and for the success of the wider region. Nexus must play its part in
training and developing appropriately skilled workers to meet the growing skills
shortage within the rail industry. The average age of the Metro workforce
continues to increase as those who joined the network when it opened in the
1980s reach retirement age, and the taking back of work in-house formerly
outsourced has already demonstrated clear financial and delivery benefits in
retaining and developing a multi-skilled and well-qualified workforce. The delivery
of training courses and apprenticeships within a ‘live’ railway environment is a
specific benefit that the national rail industry sees as central to the thinking behind
the ‘hub and spoke’ delivery model of rail training, exemplified by the National
Training Academy for Rail (NTAR). As Nexus seeks to expand the scope of its project
delivery capabilities beyond its existing assets on behalf of the NECA with the
delivery of the Metro Futures programme of Metro and local rail enhancements
through the NECA Metro and Local Rail Strategy, this aspect will assume increasing
importance in the future.
Expanded maintenance facilities to improve service reliability
2.2.5 The reliability and resilience of Metro maintenance and operations will be
enhanced by setting up a subsidiary facility to the Gosforth depot headquarters to
deliver increased operational flexibility, including the ability to run earlier and later
services to and from South Shields, and to respond to engineering challenges
robustly, such as the quicker recovery of failed trains occurring south of the Tyne.
Metro is especially important to the South Shields area due to the town’s
geographical location and the direct link it provides to the national rail network at
Central Station. The Metro network requires continual maintenance to ensure it
can deliver a safe and reliable service. Its fixed assets and fleet need sustained
12investment to ensure that the network delivers the standards of service its
customers rightly expect. There are currently limited opportunities to broaden the
extent and scope of in-house maintenance activities owing to space constraints.
This results in the increased use of external facilities at greater cost to the public
purse, and can result in a focus upon mandatory and business-critical training
activities.
2.2.6 Current Metro reliability levels are poor due to the age of the rolling stock. A few
high-profile incidents can result in system-wide delays. This can particularly affect
the single-track sections of the South Shields branch, where a breakdown
immediately halts the service in both directions. One of the main issues
surrounding Metro service recovery is the ability of rapid response teams to attend
on site from their Gosforth base; this takes place by road because of equipment
required. At peak traffic times it can take up to one hour to attend due to road
congestion; a response team located at the training and maintenance facility
should be able to reach all Metro locations east of Pelaw within 20 minutes. This is
a clear benefit of establishing a second engineering presence in the South Shields
area.
2.2.7 Rolling stock renewal and network enhancements are likely to change the way in
which Metro services are delivered. Increased demand could generate more
frequent services in the future, and capacity improvements to the South Shields
corridor would bring new operating challenges and opportunities. The increased
capacity and additional facilities provided by the MTMSC will remain important
factors throughout and beyond this period of change.
2.2.8 The training, maintenance and operations issues outlined above are all inter-
related. There are clear overlaps in terms of the necessary infrastructure required
for these purposes, and at South Shields all can be met through the construction of
a single diversified facility that delivers more than the sum of its parts by combining
these activities within a multi-functional, inter-disciplinary environment providing
new opportunities for engineering, educational and personal development.
The need to stimulate the local economy of the South Shields area
2.2.9 The third issue identified is the need to increase the economic vitality of South
Shields town centre. This can be achieved through this scheme in two ways; by
supporting town centre regeneration by greater levels of economic activity, and by
providing additional Metro services at the beginning and end of the day, as well as
a more reliable service overall.
132.2.10 South Tyneside Council is amongst the 10% most deprived council areas in England
– across the 7 ‘domains of deprivation’, South Tyneside had the following rankings
in 2015 (higher rankings indicate more deprivation and are out of 326 authorities):
• Income: 15
• Employment: 7
• Education: 98
• Health: 15
• Crime: 186
• Barriers163
• Living: 313
2.2.11 The Beacon and Bents ward of South Tyneside within which the training centre site
and the town centre are located is within the 6% most deprived wards in England
(1893 out of 32844 according to IMD 2015.) The town centre in recent years has
suffered from changes in retail habits familiar to many places. Retailers such as
Marks and Spencer and House of Fraser have moved on, and footfall and economic
activity have suffered as a result.
2.2.12 To help counteract these trends South Tyneside Council has produced a
comprehensive regeneration plan, South Shields 365, referred to elsewhere in the
business case. The emphasis is upon stimulating the local economy through
investment in town centre infrastructure such as a new multi-media centre,
transport interchange and public realm improvements. Whilst the training and
maintenance centre is not part of this programme, the increased activity and retail
spend that it will generate will boost the local economy.
2.3 How the proposed measures address the problem identified
2.3.1 The South Shields MTMSC is an opportunity to achieve the strategic objectives of
Nexus, whilst also addressing a specific local issue. This will be achieved by
centralising training, light maintenance and Metro out-stabling facilities at a town
centre, rail-connected site within an area of high unemployment. Training provision
will be both relevant to the operational needs of the business and to local people
seeking apprenticeships or work within the rail industry.
2.3.2 The end result will be a facility which strengthens Nexus’ role in providing training
for its own staff and potentially for the wider rail industry, and provides scope to
increase operational flexibility and expand the level of in-house works carried out
in relation to the safe and reliable operation of Metro in ways which current
14facilities do not permit. The preferred approach meets all requirements for skills,
training and Metro operations including:
• A secure, self-contained location which is on the Metro network but can also
be physically separated for training and security purposes.
• A site large enough to centralise all Nexus training activities.
• Integration of practical and theoretical maintenance and skills training, with
customer and employee benefits.
• Excellent town centre facilities close at hand providing benefits to Nexus staff
and helping to generate employee spend within the local area.
2.3.3 This confirms the location in central South Shields as being highly suitable for the
proposal. It offers a combination of strategic advantages:
• The site is already owned by Nexus and is at the terminus of a Metro route.
• It is physically linked to the rest of the Metro network, but will be capable of
being electrically and operationally isolated as required to allow training and
maintenance activities to be safely undertaken.
• There is space within the site to accommodate both theoretical and practical
training and workplace activities.
• It has excellent Metro and bus links, minimising the need to travel there by
car.
• It is located close to shops and other services within an area of high
unemployment and will thus help to bring extra spending into a deprived
local area.
2.3.4 In addition to training and maintenance considerations there are sound operational
and economic reasons to locate this facility at South Shields:
• Two Metro trains of the current length could be securely stabled there
overnight, allowing for an earlier start of service from South Shields, possibly
with through services to Newcastle International Airport, and later evening
services from Newcastle city centre. Based on the existing start and finish of
services at South Shields – from 0542 to 2356 on weekdays, additional earlier
trains could be timetabled to depart as early at network start-up of 0500 and
arrive as late as system shutdown at 0030.
• Earlier and later services would not only improve Metro accessibility in the
South Shields area but also within the catchment areas surrounding the 18
stations between South Shields and South Gosforth, where the earliest trains
to Airport station currently begin and end their journeys to and from
Gosforth depot.
• Better accessibility to Newcastle International Airport matters not only in
terms of economics; it is also a major regional employer and offering a wide
15range of jobs to which better accessibility by public transport is a positive
development for the South Tyneside area. At present, the earliest arrival time
possible at Newcastle Airport from stations in the South Shields area is 0645
on weekdays, including one change of train. The economic benefits of earlier
and later Metro services are explained in the Economic Case in section 6.
• Special events, particularly the Great North Run, would be more easily
catered for as up to five trains could be strategically positioned on standby
within the MTMSC to augment the regular service as required. In 2016
queues for Metro peaked at 1250 people at South Shields station after the
race 1 as shown in Figure 4, and any increase in service frequencies during the
period of greatest demand will help to improve service delivery and wider
perceptions of the region.
Figure 4: Post-Great North Run Queue, South Shields Metro 11 September 2016
1
Metro Passenger Surveys, 11 September 2016.
16• If there are operational problems in the local area it may be easier to achieve
service recovery more quickly if there are trains and/or staff on stand-by at
the new facility. For example, South Shields Metro station is 20 km away by
road from the central Nexus engineering facility in Gosforth, Newcastle. Any
incident there would require attendance by engineers by road which is
subject to peak-time delays caused by congestion.
• A wider variety of engineering facilities within an additional site would allow
for extra cleaning and light maintenance to be carried out, and for greater
operational resilience during future line closures when the route to and from
Gosforth depot may be unavailable.
2.4 Scheme Objectives
2.4.1 The problems and opportunities described above lead to the definition of the
following principal scheme objectives as follows:
• To improve Metro reliability and performance across South Tyneside and
beyond through the provision of a new stabling and light maintenance facility
located separately from the main fleet depot at Gosforth.
• To create local jobs and apprenticeships by increasing the range and scope of
training undertaken in-house by Nexus.
• To support the training of people already working in the rail industry, and
those seeking to develop a career within it.
• To improve the economic vitality of South Shields town centre and support
the regeneration objectives of the South Shields 365 masterplan.
2.4.2 These objectives help to define the key aim of the scheme which is:
“To establish a high quality facility providing additional train maintenance
and rail engineering, skills and training capacity, ensuring the long-term
future of the Tyne and Wear Metro, and enabling lifelong, transferable skills
for careers in the rail industry.”
2.4.3 The following indicators are proposed to measure the achievement of the
objectives.
2016/17 baseline for competency-based training
Training days per year delivered to Nexus staff 1500
Training days per year delivered to Metro staff 3000
External training days facilitated by Nexus 313
External training days facilitated by Metro 85
17Training days delivered to contractors 832
Contractors attending training courses at Nexus 473
Total events (Nexus and Metro staff combined) 4000
2.4.4 From April 2017 the day-to-day operation of Metro services reverted to Nexus. This
has resulted in training formerly undertaken externally being delivered by Nexus
from that date. In 2019, the anticipated opening year for the MTMSC, Nexus will be
delivering all training requirements across the business and it will be a condition of
future Metro operating arrangements that all training will be delivered on MTMSC
premises wherever practicable. This will result in a doubling of the existing level of
training activities currently delivered at the exiting Nexus Eden Centre in Gosforth,
Newcastle. These circumstances give rise to an urgent and permanent requirement
for additional training facilities to meet the changing circumstances of Metro
operation which will remain constant through changing delivery structures.
2.4.5 These give rise to the following proposed targets and indicators for MTMSC once in
operation:
Increase in training days per year over current Nexus activity 11%
Increases in number of apprenticeships per year 33%
Number of new training courses delivered per year 5%
Increase in the number of new jobs created in South Shields 10
Increase in Metro service quantum at South Shields 2.5%
Improve charter punctuality by 1.6 percentage points by 2023 by enhanced
maintenance procedures and faster incident recovery times Base-line 80.6%
Number of new training courses by type introduced as a result of additional and
improved training facilities at South Shields Base-line nil
2.5 Background to Nexus and the Tyne and Wear Metro
2.5.1 Nexus is the operating name of the Tyne and Wear Passenger Transport Executive.
Nexus is responsible for delivering transport policies set out by the North East
Combined Authority (NECA) for Durham, Gateshead, Newcastle upon Tyne, North
Tyneside, Northumberland, South Tyneside and Sunderland, in relation to public
18transport provision across the Tyne and Wear sub-region. Nexus provides light rail
services to the area via the Metro network.
2.5.2 The strategic aim of Nexus is to create the conditions where people will increasingly
choose to use public transport. Nexus provides, plans and promotes public
transport to improve the economic prosperity of Tyne and Wear and the daily lives
of its people. Nexus also looks to the future, creating travel networks people will
want to use in decades to come. It currently employs over 1000 staff and had a
£190 million turnover during 2015/16. Nexus owns and operates the Metro system
to service standards set by the NECA. Nexus also owns and operates the nearby
Shields Ferry, pays for non-profitable but socially necessary bus services, and runs a
number of key public transport interchanges.
2.5.3 The key themes of Nexus activity are:
• Leading the delivery of better public transport
• Prepare Metro for the future
• Deliver the Bus Strategy
• Continuous Organisational Improvement
2.5.4 Nexus has already secured over £350 million in government grants to refurbish and
revitalise all aspects of Metro including stations, trains, engineering and customer
facilities. This programme is running to time and budget and demonstrates the
ability of Nexus to deliver complex construction schemes through from concept to
operation. Nexus has also prepared business cases for a new fleet of trains to
replace the current unreliable fleet, and for further essential infrastructure
renewals investment.
2.5.5 Metro is the UK’s busiest light rail system outside of London. Nexus has exciting
plans for the future of Metro which include the introduction of a new train fleet
and potential network extensions, as set out in the NECA Metro and Local Rail
Strategy 2. These activities will inevitably require additional depot maintenance and
stabling facilities, hence the need to progress with the South Shields proposal from
an operational perspective.
2.5.6 Nexus works closely with NECA and the North East Local Enterprise Partnership to
deliver high quality public transport that creates and supports the regional
economy by delivering sustainable accessibility across the region.
2.6 Policy Context
2
NECA Metro and Local Rail Strategy. NECA 2016.
192.6.1 The South Tyneside area continues to experience higher than average levels of
unemployment. In late-2016 the Jobseeker’s Allowance (JSA) claimant proportion
for the South Shields parliamentary constituency stood at 3.4%, the highest
recorded in the NECA area and well above the average for that area of 2.1%. At the
time only six English constituencies had a higher rate of JSA claimants3. This
highlights the need for jobs and training opportunities that are accessible across
the region and beyond, and particularly within an urban area where the resident
population can struggle to find work.
2.6.2 Nexus is keen to contribute towards reducing local unemployment particularly
through re-skilling and up-skilling people to work in the rail industry, to ensure that
Nexus can continue to employ a skilled workforce to maintain and improve Metro
during the decades to come.
2.6.3 Passenger demand for Metro services is projected to increase by up to 50% by
2030, according to the outputs of an independent demand forecast 4. This may
result in a larger fleet of trains being required to meet demand across the existing
network and on any future network extensions, with a resulting requirement for
additional stabling and maintenance facilities to those currently available at
Gosforth fleet depot. In any event, the testing and commissioning of a new fleet
alongside the operation of the old fleet would create a need for additional
workshop, testing and storage facilities. Whilst the above considerations are a little
way into the future, they highlight the strategic importance of the MTMSC proposal
to the longer-term operation of Metro, in addition to its more immediate
objectives of providing infrastructure maintenance and training to stimulate job
creation and equip people with marketable and transferable skills.
Key Stakeholders
2.6.4 The key stakeholders with an interest in the delivery of the scheme are listed
below. Stakeholder engagement is covered in section 3.8.
• The North East Local Enterprise Partnership, as the scheme helps to create
and sustain economic activity and employment both directly and in terms of
ensuring a robust and reliable Metro service.
• The North East Combined Authority has strategic objectives relating to
growing the economy of the area and the provision of high-quality
sustainable transport links.
3
Regional Labour Market September 2016. Office for National Statistics.
4
Metro Demand Study. MVA 2012.
20• South Tyneside Council, the local authority within which the centre will be
located, seeks to maximise employment and economic development
throughout the borough and in particular in South Shields town centre.
• Nexus and its employees will benefit corporately and personally from a
better-trained workforce and improved train maintenance facilities.
Employees who currently work at the old training centre will transfer across
to the South Shields operation under the Transfer of Undertakings (Protection
of Employment) Regulations 2006.
• Local residents will be able to apply for a number of new posts at the centre
and benefit from the resulting increased economic activity across the local
area.
2.7 Key National and Regional Policies
2.7.1 The proposal demonstrates conformity with national and regional organisations
and policies as follows:
2.7.2 North East Local Enterprise Partnership – the LEP is strongly committed to
ambitious economic targets for the area and encourages the development of
vocational skills and training. Section F of the Strategic Economic Plan 5 is devoted
to Skills. The Plan’s 2024 vision in relation to skills and training is as follows:
“Providers and education establishments provide a mix of world class
academic, technical and professional education, apprenticeships and higher
level apprenticeships in all of the growing areas of our economy, ensuring that
those entering the labour market have the right skills to thrive
That skills supply underpins business growth and talent is retained in the
region.
Every young person can identify routes into work, supported through
experience and exposure to the world of work and inspiration. We want them
to understand that life and work experiences, alongside career and formal
qualifications, are incredibly valuable.
A reduction in inactivity levels in our 50+ workforce,
as skills investment enables older workers to remain
in work”.
5
More and Better Jobs- The North East Strategic Economic Plan. North East Local Enterprise Partnership 2017.
212.7.3 The Plan also emphasises the importance of local transport networks providing
connectivity to enable the region to work better in economic, environmental and
social terms. It states:
“Connectivity and accessibility, and the underpinning critical infrastructure
including the ‘ecosystem services’ provided by the natural assets of the region
are key to supporting economic growth”.
“We want our transport system to:
Support the creation of more and better jobs
Help people access education, training, employment, leisure and other
services
Assist in the safe, rapid and cost-effective movement of goods in the
region and to national and international markets
Underpin our tourist economy by encouraging people to visit our area
Be one integrated transport system for the area, which enables people
to use innovations in integrated ticketing and digital technologies to
catch, pay for and use transport”.
2.7.4 The Metro Training and Maintenance Skills Centre scheme demonstrably
contributes towards the visions outlined within the 2017 Strategic Economic Plan.
2.7.5 North East Combined Authority – the NECA works closely with the North East LEP
to help create the conditions for regional economic growth. Its role in transport and
skills is critical in supporting a growing economy and workforce and the co-
ordination of investment in economic infrastructure helps to ensure that the area
can attract new investment and people. In the case of the MTMSC proposal at
South Shields, both the transport and skills portfolio responsibilities are directly
relevant to the expected outcomes of the scheme.
2.7.6 NECA is currently preparing a Transport Plan to guide the future direction of
regional transport strategy and policy. The Plan will be informed by the NECA
Transport Manifesto 6, which aims to facilitate a transport system that is:
• Easy to use. It should be easy to plan safe journeys, find out the best way to
travel, pay for tickets and get all the essential information for your journey.
• Reliable. The transport network should be one that we can rely on to work,
with buses and trains running on time and congestion kept to a minimum.
6
Our Journey – a Transport Manifesto for the NECA area. NECA 2016.
22• Affordable. The cost of travelling will not be a barrier to commuting, learning
or exploring.
• Accessible. Transport should run as closely as possible to where people live
and be easy for all to use.
2.7.7 In terms of helping to maintain a more resilient and flexible Metro service, the
scheme aligns strongly with these aims. Other relevant guiding principles of the
Manifesto include:
• Drive economic growth – more and better jobs.
• Create prosperous cities which act as a focus for growth, together with
attractive and accessible smaller towns and rural areas with good local
services.
• Enhance access to local workplaces, services, shops and leisure in all our
communities.
2.7.8 Tyne and Wear Local Transport Plan 2011-21 - the existing adopted transport
policy is the Tyne and Wear LTP which currently carries statutory weight until
supplanted by the NECA Transport Plan. The LTP supports the future of public
transport in general, including Metro, as set out in the overall LTP vision:
“Tyne and Wear will have a fully integrated and sustainable transport network,
allowing everyone the opportunity to achieve their full potential and have a high
quality of life. Our strategic networks will support the efficient movement of people
and goods within and beyond Tyne and Wear, and a comprehensive network of
pedestrian, cycle and passenger transport links will ensure that everyone has access
to employment, training, community services and facilities”.
2.7.9 The proposed MTMSC accords with the ambitions of the UK government to deliver
an increase in the number of apprenticeships resulting in a workforce that is skilled,
flexible and adaptable and equipped to deal with future workplace challenges.
There is also a specific commitment towards the transport industry. In August 2015
the then Secretary of State for Transport announced plans to create 30,000
apprenticeships in road and rail industry by 2020, to combat emerging skills
shortages. To help deliver this ambition a Transport and Infrastructure Skills
Strategy was under the leadership of the Crossrail Chair Terry Morgan CBE, to
ensure that the transport industry can rely upon a continuous supply of skilled
23workers. The strategy 7 suggests a number of initiatives designed to improve the
level of industry skills, including a Strategic Transport Apprenticeship Taskforce, the
establishment of transport centres of excellence, making best use of the
apprenticeship levy across the transport sector, maximising local opportunities, and
the use of procurement levers to influence the training practices of the transport
industry.
2.7.10 The principles behind the Metro Training and Maintenance Skills Centre are very
much in line with the aims of the Skills Strategy as over the next ten years, the
National Skills Academy for Rail (NSAR) has forecast a skills shortage of over 8,000
jobs specifically in rail traction and rolling stock disciplines. In addition to the
industry’s ageing workforce referred to earlier, a key problem is a lack of diversity,
with females comprising 4.4% of the rail engineering industry workforce in 2014 8.
The government is keen to redress these balances, and the proposed scheme will
help to deliver these objectives at a local level by offering a better, more
professional training environment which helps deliver up-skilling for all, to reduce
sector inequality.
2.8 Drivers of Change
2.8.1 The concept of a new Metro Training and Maintenance Skills Centre has been
influenced by a number of factors in a rapidly changing environment for local skills
training.
Ability to provide vocational training
“Rail is vital to the UK’s economic prosperity. If rail services are inefficient and do
not meet people’s needs for routing or frequency, business and jobs suffer.” 9
2.8.2 There is good evidence that demand for engineering skills at all levels currently
outstrips supply 10. As the government attempts to create a more balanced
economy as well as deliver its commitments on the railway network, engineering
skills are likely to be at the forefront, driving economic growth by adding value to
products and services. Railway engineering has been synonymous with the North
East for over 200 years and is seeing resurgence in train assembly with the
construction of the £82 million Hitachi factory in Newton Aycliffe, where the new
7
Transport Infrastructure Skills Strategy: building sustainable skills. DfT 2016.
8
Alison Munro, then HS2 Chief Executive, quoted in The Guardian 23 June 2014.
9
https://www.gov.uk/government/policies/expanding-and-improving-the-rail-network
10
Royal Academy of Engineering, Jobs and Growth: the importance of engineering skills to the UK economy
Sept 2012
24Intercity Express Passenger fleet is being assembled, and the global headquarters of
Hitachi Rail has been established.
2.8.3 Aside from the wider regional context, Nexus is currently undertaking a significant
investment in Metro infrastructure, this requires a range of skills and experience
across a range of railway engineering disciplines. As part of this process, work has
been undertaken by in-house Capital Delivery teams, as well as being outsourced
via competitive tender. Recently both Nexus and sub-contractors have struggled to
attract sufficient local employees with the relevant skills, qualifications and
experience. This has led to contractors bringing in staff from elsewhere in the
country to fill key roles on projects in the North East. With persistently high rates of
unemployment in the local area as detailed above alongside substantial ‘under-
employment’ this is an unsatisfactory state of affairs and it is within the gift of
Nexus and its strategic partners to do something to alleviate this skills problem. The
new training centre helps to address this in the long term by reducing industry
costs and helping to rebuild a local skills base.
2.8.4 Nexus has recently created around 65 in-house posts specifically to deliver capital
projects. This process highlighted a shortage of candidates from the region with
higher level skills in Signalling and Electrical Inspection and Testing. Also, NSAR
research suggests a significant gap in traction and rolling stock experience at a
national level. Skills in this area will become critically important to Nexus, as the
fleet of Metro cars is replaced as they approach life-expiry. 11
2.8.5 The centre will enable Nexus to develop bespoke training provision to increase the
skills and knowledge of its own workforce, from Health and Safety accreditation to
track-work safety competencies (often a basic requirement of employers to apply
for rail industry positions), through to higher level technical and managerial
qualifications.
Existing restrictions on Nexus and Metro in-house training
2.8.6 Nexus delivers in-house training for its staff across a wide range of disciplines
including Permanent Way; Signalling; Overhead Line; Track Safety; Health and
Safety training; Lifting; Operations; Working at Height; Portable Transportable
Mobile Plant; Customer Services, and Conflict Management. The focus of training
to date has been on delivering routine maintenance work on Nexus infrastructure.
Development of the South Shields centre would allow the range of skills training
which Nexus offers to its own staff, including renewals work, to be expanded to
areas where external specialist contractors may currently have to be drafted in,
partly because the facilities do not exist to train Nexus staff. As demonstrated by
11
https://www.railnews.co.uk/news/2013/01/20-skills-shortage-threat-to-25bn.html
25the establishment of an in-house Capital Delivery team, this will offer greater value
for money on Asset Renewal Programme works through undertaking renewal
activities in-house, rather than outsourcing them.
2.8.7 In addition Nexus has an established apprenticeship scheme accredited by a local
further education partner. Currently there is an average intake of 10 apprentices
each year. Places on this course could be offered more widely to train a pool of
future engineers.
Changes to Metro
2.8.8 Since it began operating in 1980, Metro has been a very stable and consistent
product and these attributes are valued highly by its customers. Positive change is
in prospect as the existing train fleet enters its fifth decade of service. The
government has accepted 12 the principle of a business case for fleet replacement,
and there is every prospect that a robust funding bid will be financially supported
during the coming years.
2.8.9 New trains will bring new technologies, better performance and reliability and
potentially new routes and service patterns. They will deliver clear economic,
environmental and social benefits alongside new training and maintenance
challenges. The South Shields site will also offer the opportunity for the delivery
and commissioning of new trains at a site away from everyday service operations
as they are delivered individually from the manufacturer.
Economic regeneration imperatives
2.8.10 The proposals for the South Shields centre would address some of the
recommendations of the 2013 Adonis Independent Economic Review, which set
out evidence that the North East has a shortage of jobs, the skills levels in the
region are not good enough to support a modern and diverse economy, and local
connectivity must be improved to strengthen the economy. Establishment of a
Training and Maintenance Skills Centre would improve the area’s reputation as a
place where engineering skills are valued and are as much a part of the region’s
future as its past. The centre is complementary to the recently-opened Newcastle
College rail engineering academy in Gateshead, and will help to nurture a cluster of
rail training expertise in the area alongside the Sunderland University collaboration
with Hitachi developments at Newton Aycliffe, resulting in the creation of the
South Durham University Technical College. There are clear longer-term
agglomeration benefits to be gained from these related activities.
12
http://www.nexus.org.uk/news/item/metro-bosses-welcome-chancellor%E2%80%99s-support-new-trains
26Predicted increased demand for Metro services
2.8.11 Metro patronage has generally increased in recent years. Since a low point of 36
million passenger trips in 2013, an additional two to four million trips per year have
been recorded in the last three years so that there are now around 38-40 million
trips made per year. The outcomes of an independent demand study suggest that
this trend has further to go.
2.8.12 Demand forecasts 13 of Metro patronage have been prepared as part of the long-
term forward planning process for the Metro network. These forecasts are based
on known land-use planning proposals, demographic projections, and energy cost
and Gross Value Added (GVA) assumptions. Even the low growth scenarios predict
an increase of more than one third in the number of Metro passengers by the year
2030. These forecasts are not specific to South Shields, but are available at two
levels; system-wide, and by existing network corridor – in this case ‘Newcastle –
South Shields’. The overall growth forecast is shown below.
Figure 5: Forecast Demand Increase for Metro to 2030 (whole network)
13
Tyne and Wear Metro Demand Forecasting Study. MVA 2012.
272.8.13 The forecasts are of projected network demand over ‘low’, ‘high’ and ‘core’
scenarios. They indicate a 13% increase over current demand by 2018, and total
increases of between 29% and 73% by 2030, with a central forecast of 50%. The
South Shields branch is projected to have the highest rate of increase of all sectors
of the existing network, between 37% and 103% as shown below:
Newcastle to South Shields Metro corridor (journey numbers)
Scenario 2011 2020 2030
Low 9.649m 11.646m 13.205m
Core 9.649m 13.150m 16.896m
High 9.649m 14.509m 19.679m
2.8.14 These figures relate to existing service patterns and take no account of increases in
demand that would arise from the additional early and late services which the
MTMSC would facilitate. This level of predicted demand lends weight to the
principle that Metro infrastructure improvements will be required to provide
additional capacity across all areas of the network.
Improvement in the overall quality of journeys
2.8.15 The proposal will help to reinforce the reliability of the Metro service across the
conurbation and consequently increase its attractiveness as a mode of sustainable
transport, contributing indirectly to reduced road congestion along strategic
corridors. The proposal will deliver particular service benefits to the South Shields
area by providing the opportunity for a longer service day and better service
recovery from disruption as described above, as well as network-wide benefits
arising from a reliable, well-maintained fleet benefitting from the additional
facilities proposed at the MTMSC.
2.9 Rail Industry Training Case Studies
National Training Academy for Rail (NTAR), Northampton
2.9.1 The MTMSC facility is based around some of the key principles upon which the
National Training Academy for Rail was established. NTAR, with its multi-million
pound state-of-the-art facility based in Northampton, acts both as a UK flagship
and an international Centre of Excellence for skills development and collaborative
working in traction and rolling stock, addressing a skills gap that would otherwise
become a barrier to both maintaining and growing the workforce. One of its key
attributes is the co-location of practical and theoretical training facilities on a single
28site so that students can transfer from workshop to classroom in minutes. It
specialises in the delivery of courses that originate from the proposition of what
the industry requires in terms of skills, qualifications and personal attributes, and
then considers how these can best be delivered through activities on site. The then
Transport Minister Baroness Kramer summed up this ethos at the NTAR opening
ceremony in 2014:
“Generations of young people will benefit from the apprenticeships and training
provided here to find new jobs and get on in life... this academy is well on its way to
becoming a much-needed facility to support our railways.”
2.9.2 NTAR is a joint project between the National Skills Academy for Rail (NSAR), the
Department for Business, Innovation & Skills (BIS) and the Department for
Transport (DfT) who provided half the funds required, with industry partner
Siemens contributing the remainder. The academy will play a leading role in the
new railway skills development programme being driven by NSAR – working with
the market to make sure that industry priorities are met. NTAR specialises in
traction and rolling stock training, with the Northampton centre acting as a hub to
support and deliver services to customers across the country. Satellite NTAR
training facilities are located at Southampton (Northam); Manchester (Ardwick);
Hornsey (North London) and Crawley (Three Bridges). These basic principles
underpin the thinking behind the establishment of a training and maintenance
facility in South Shields along similar lines; basing the MTMSC on the NTAR model
will help to achieve conformity with rail training standards being applied across the
UK, ensuring that what is delivered on-site is both appropriate to the needs of the
Metro business, and compatible with the wider industry. This will ensure that the
centre remains outward-looking and uses evolving best practice.
Figure 6: Technical Training Hall, NTAR Northampton
29Figure 7: Virtual Reality Suite, NTAR Northampton
Figure 8: Relationship of Training Hall with Classroom Area, NTAR Northampton
30AMRC Training Centre, Rotherham
2.9.3 Not part of the NSAR network, but with strong similarities in terms of its training
ethos and vocational engineering specialisms, the AMRC (Advanced Manufacturing
Research Centre) in South Yorkshire is a partnership with the University of
Sheffield. It is recognised as a ‘Centre of Excellence’ for apprenticeship and CPD
delivery within the Yorkshire and Humber region. The recently-opened centre
offers both practical and academic training. Working with employers, the AMRC
identifies and provides the skills required that manufacturing companies need to
compete globally, from apprenticeship through to doctorate and MBA level.
2.9.4 The centre is led by a team of respected specialists who have experienced the
challenges of developing world-class talent, and learning specialists who
understand the requirements of the manufacturing sector. These result in a flexible
approach to learning and development tailored to business needs. The 5500m²
facilities include classrooms, lecture theatres and shop-floor areas specialising in
machining, welding and fabrication to give apprentices and students the mix of
theoretical training and practical instruction that gives individuals the in-demand
skills to further their engineering careers.
Figure 9 AMRC, South Yorkshire
2.9.5 The AMRC is another example of the fusion of on-the-job training adjacent to
theoretical tuition which is gaining traction across a variety of disciplines, and
demonstrating proven success.
312.10 Options for Development
2.10.1 Taking account of the national, regional and local policy evidence outlined in the
preceding sections, four potential options were considered for the Metro Training
and Maintenance Skills Centre at the options feasibility stage:
i. Do nothing – do not build a facility at South Shields, and continue
maintenance and restricted training as currently practised at locations in
the Newcastle area, or rent additional space short-term in locations away
from the Metro network.
ii. Do minimum - development of additional training facilities either at the
South Shields site or elsewhere, with no scope for an associated additional
maintenance facility.
iii. Full development – achieved with Local Growth Fund investment and
additional Nexus funding, providing a centralised high quality training centre
and maintenance facility combined on a single site at South Shields.
iv. The full scheme, as described above, at an alternative location to South
Shields.
Do nothing
2.10.2 To do nothing will fail to address the problems identified in this business case, nor
will it achieve the key aim of a step change in levels of rail-related vocational and
theoretical training in the NECA area. Nexus would continue to operate within
cramped facilities in the Gosforth area with restricted space and no scope for
expansion and training on new technology, assets and processes.
2.10.3 This option has the following disadvantages:
• No scope for Nexus to offer additional training and careers opportunities
related to rail maintenance and operations, due to existing space constraints.
• No opportunity to provide a new rail training facility more closely aligned to
the NTAR ‘hub-and-spoke’ model.
• No opportunity to introduce a Ticketing and Gating test facility.
• Training activities will continue to be geographically fragmented, restricting
opportunities for staff from different disciplines to work collaboratively.
• Reduced opportunities to develop the long-term future of Metro in terms of
servicing a larger network and/or commissioning a new fleet of trains.
• No scope to relocate new jobs and training activities away from the existing
north Newcastle focus to an area with a higher rate of unemployment.
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