North Cotswold Line Transformation

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STRATEGIC OUTLINE BUSINESS CASE Final Issue December 2019

CONNECTING GROWING ECONOMIES

HEREFORDSHIRE WORCESTERSHIRE GLOUCESTERSHIRE WARWICKSHIRE OXFORDSHIRE

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Contents

Foreword Lord Faulkner 4 Scheme Summary 5 “This is an output driven scheme, Executive summary 8 seeking to radically transform and Context setting 12 extend the role the North Cotswold Strategic case 24 Line plays in meeting and stimulating Economic case 54 sustainable population and economic Financial case 68 growth across five counties stretching from the borders of Wales and the Commercial case 74 south Midlands to the western end of Management case 81 the Oxford to Cambridge Arc.” Summary and next steps 95

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Foreword from Lord Faulkner of Worcester Chair, North Cotswold Line Task Force

The North Cotswold railway line between Hereford, Worcester, and Oxford plays a vital role in supporting the economies and connectivity of Herefordshire, Worcestershire, Gloucestershire, Warwickshire and Oxfordshire. As we face the increasing challenges of climate change it provides sustainable public transport helping to protect beautiful, precious and internationally important rural environments stretching from the Marches and the Malverns and the Cotswolds, the cathedral cities of Hereford and Worcester, the university city of Oxford, the Blenheim Palace World Heritage Site, and a host of attractive market towns such as Pershore, Evesham, Moreton-in-Marsh, Chipping Norton, Charlbury and Woodstock. The five counties it serves generate a combined £73 billion (2016) in Gross Value Added (GVA) to the UK economy, larger than the Greater Manchester Combined Authority area or the metropolitan authorities of the West Midlands Combined Authority. Their 2.6 million population is set to grow by 21% by the 2030s, some 558,000 people, equivalent to more than five cities the size of Worcester or three times the size of Oxford. Such a scale of change is dramatic, and will be powerfully challenging to the infrastructure supporting movement – people getting to work and education, businesses working with each other, residents accessing retail and leisure facilities, as well as the 90 million UK and internationally-based tourists trips already made across the region each year. The North Cotswold Line will need to make a yet greater contribution. Established in 2017, the North Cotswold Line Task Force is determined to drive the change needed to enable the railway to make that transformative contribution. The Task Force brings together the five county local authorities, five Local Enterprise Partnerships, the Great Western Railway, Network Rail and the Cotswold Line Promotion Group, and has had the benefit of supportive general advice from the Department for Transport and the West Midlands Rail Executive. I am grateful for their combined contributions of financial support and expertise that have enabled us to complete this Strategic Outline Business Case setting out the compelling case for change. Prepared within the guidelines of the Department for Transport’s ‘Rail Network Enhancements Pipeline’ this document forms a key step in garnering the widest support for our proposals, assembling funding for the detailed development work now required, and setting an investment and delivery programme to make change happen.

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The North Cotswold Line Transformation

2 TRAINS PER HOUR BUSINESS CASE Worcestershire Cotswolds Capital Cost—£199m Oxford London New passengers—400,000 p.a. Benefit Cost Ratio—4.46 MORE REGULAR SERVICES ‘Very High Value for Money’ Great Malvern—London hourly Kidderminster—London hourly Direct & connecting from Hereford ECONOMIC BENEFITS £33m Gross Value Added p.a. Supporting over 64,000 new homes TRACK DOUBLING from 2020 to 2041 Wolvercot—Hanborough—4 miles Evesham—Pershore—5 miles FASTER JOURNEYS Hanborough—London  1 hour OXFORD METRO SERVICES Worcester — London < 2 hours Up to 4 trains per hour Hereford—London < 3 hours Hanborough—Oxford

NEXT STEPS STATION WORK SOBC to Government —Oct 2019 Hanborough—2nd Platform ‘Develop’ OBC —2020/21 Pershore—2nd Platform Third Party Delivery

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The North Cotswold Line

The arched bridge over the expanded A4440 Worcester Southern Link Road was installed by Worcestershire County Council in July 2019 and illustrates the range of integrated transport scheme being completed across the Task Force area, with the jointly-funded County Council/Worcestershire LEP A4440 scheme enhancing access to the new Worcestershire Parkway station due to open in early 2020.

Great Western Railway Intercity Express (IET) operating the 15.22 Worcester Shrub Hill to London Paddington with Worcester Cathedral in the back-drop. Introduced in 2017 the IETs form the basis of the North Cotswold Line service, offering modern passenger facilities and capacity to accommodate the major growth in patronage forecast by the rail industry and within this SOBC.

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The North Cotswold Line

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Executive Summary

The North Cotswold Line Task Force 1. Sustainable Economic Growth — The purpose of North Cotswold Line Taskforce (NCLTF) is to radically transform and extend the role the North Cotswold Line plays in meeting and stimulating sustainable economic growth, new populations and employment and enhanced productivity across five counties stretching from the borders of Wales and the south Midlands to the western end of theOxford to Cambridge Arc, and its contribution to addressing the developing challenges of climate change. 2. Who We Are — Chaired by Lord Faulkner of Worcester, the NCLTF is a partnership of five local authorities/transport authorities, five Local Enterprise Partnerships and the Cotswold Line Promotion Group. It is supported by attendance from the Department for Transport (DfT), West Midlands Rail Executive, Network Rail and the Great Western Railway. District Councils are engaged via sub-groups across the geography of the 5 counties. Formal Terms of Reference were agreed in July 2017. The Need 3. A Fast Growing Region — The five counties - Herefordshire, Worcestershire, Gloucestershire, Warwickshire and Oxfordshire - are set to grow on current forecasts by 368,000 people by 2030, and yet there is poor connectivity through the centre of this area by all modes of travel. 4. Poor Transport Connectivity — The core west-east road network is characterised by slow and congested single carriageway roads such as the A44 and A40. The North Cotswold Line offers only an hourly off-peak service, with some enhanced peak frequencies, and journey times are slow. Worcester to London, for example, has an end-to-end journey speed of 57 mph, and Hereford of 47 mph. This compares to the journey to London from places on the periphery: Leamington Spa 76 mph, Bath 77 mph, Swindon 84 mph, and Rugby at 99 mph. 5. Constraints on Growth—This connectivity deficit limits the economic development in Herefordshire and Worcestershire, as well as the competitive potential of the rural population in the Cotswolds. For Oxford and its world-leading University it limits the ability to attract workers and academic staff who cannot afford to live in the City itself.

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Executive Summary

The Case for Change 6. Assessing the Options — An enhanced service of two trains per hour on the route, with faster journeys would generate at least £33m in additional Gross Value Added each year to the UK economy, in addition to the potential for better commuter services supporting Oxford’s economic and environmental sustainability. At this stage in the scheme’s maturity options have been identified and appraised which have the potential to deliver Value for Money in the “Very High” category.

7. The Preferred Train Service — The NCLTF’s preferred option involves the provision of 2 trains per hour (TPH) between Worcester, Oxford and London Paddington (extensions of Oxford-London services) operating on a skip-stop pattern so that the optimum balance of journey time and frequency improvement can be delivered across the route. One of these services is extended to/from Great Malvern (and Hereford in some hours), and the other to/from Kidderminster.

8. Enhanced Infrastructure — To enable reliable delivery of this solution, infrastructure options have been identified that involve the reinstatement of 4 miles of double track between Wolvercot Junction (Oxford) and Hanborough Station, 5 miles between Evesham and Pershore, and second platforms at Hanborough and Pershore stations. The capital cost estimate with optimism bias applied is £199m. 9. A Compelling Business Case — More frequent, faster services will generate nearly 400,000 new passenger trips each year. The scheme will deliver a Benefit Cost Ratio of 4.46, representing ‘Very High’ value for money for the £199m investment, and £33m of new Gross Value Added (GVA) per annum to the UK economy together with 750 new jobs. 10. Supporting the Future — These infrastructure options also facilitate provision of an additional 2TPH shuttle between Hanborough and Oxford/Didcot Parkway, offering the potential for an overall 4TPH ‘metro’ style service supporting Oxford’s economic and environmental sustainability. Development of the case for this forms the key task of the NCLTF ‘Hanborough Sub-Group’, established in summer 2019.

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Executive Summary

Next Steps and Delivery 11. Determining the NCLTF Scheme — This Strategic Outline Business Case (SOBC) summarises the NCLTF’s work to complete the ‘Determine’ stage of the Rail Network Enhancements Pipeline (RNEP) process, announced by the DfT in March 2018. 12. Moving to Scheme Development — Having proactively adopted the RNEP process and received DfT encouragement to continue the scheme’s development in response to its July 2018 Market-Led Proposal (see Appendix C), the NCLTF is now seeking to move the project forward into the ‘Develop’ stage, leading towards an Outline Business Case, Single Option Report and ‘Decision to Design’ with DfT by March 2022. 13. Funding the Next Step — The NCLTF partners have identified a budget of £3m for the ‘Develop’ stage, and by way of this SOBC is asking the DfT both to accept the proposed scheme onto the Pipeline and allocate 50% of the £3m cost, with £1.5m being provided by the NCLTF’s local authority and LEP partners. 14. Third Party Development and Delivery — The NCLTF proposes that the North Cotswold Line Transformation scheme is developed and delivered on a Third Party basis using a mix of funding sources, including national, local and private sector funding, recognising its value as a transport scheme focused on delivering local and regional economic value. Constituent authorities within the Task Force have considerable experience of Third Party station development and innovation in investment, financial models as well as delivery. 15. The Decision to ‘Develop’ — At this SOBC stage, the Task Force will welcome further engagement with and advice from the DfT in seeking to agree a ‘Decision to Develop’ at or around March 2020.

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Executive Summary—Long term strategy

The options tested in this SOBC are for the first stage in a multi-faceted longer term strategy, which includes:

• A four trains per hour service between Oxford and Hanborough

• New connectivity to Stratford-upon-Avon

• Direct connectivity between the North Cotswold Line and Birmingham (which could be via Kidderminster as illustrated, and/ or via Stratford-upon-Avon and Solihull in a ‘Snow Hill Lines Circular service, or via Bromsgrove) The NCLTF would seek to consider the case for these further developments together with key partners as and when the core scheme proposed in this SOBC is committed. .

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CONTEXT SETTING

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North Cotswold Line Taskforce overview

North Cotswold Line Task Force Board Member Organisations Chair – Lord Faulkner of Worcester Worcestershire County Council (Lead Authority) Oxfordshire County Council Gloucestershire County Council Warwickshire County Council Herefordshire Council Worcestershire Local Enterprise Partnership GFirst LEP – Gloucestershire Local Enterprise Partnership The Marches LEP – Herefordshire, Shropshire, Telford & Wrekin OXLEP – Oxfordshire Local Enterprise Partnership Coventry and Warwickshire LEP West Midlands Rail Executive Cotswold Line Promotion Group

Rail Industry attendees Department for Transport West Midlands Rail Executive Network Rail Great Western Railway

Technical advisers SLC Rail SYSTRA The NCLTF Terms of Reference, adopted in 24th TRACSIS July 2017, are attached at Appendix A

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North Cotswold Line Taskforce overview

Progress so far The NCLTF was established formally in July 2017 to develop a compelling case, delivery mechanism and funding/financing structure for a transformation of connectivity for the growing economies and populations served by the North Cotswold Line. The Task Force is a partnership of five local authorities/transport authorities, five Local Enterprise Partnerships and theCotswold Line Promotion Group, and is supported by attendance from the DfT, West Midlands Rail Executive, Network Rail and the Great Western Railway. At its inception the Task Force established a series of objectives and Conditional Outputs to deliver them, and over the last two years has undertaken significant optioneering and development work to bring forward a project which is capable of meetings those objectives. Following publication of the DfT’s Rail Network Enhancements Pipeline (RNEP) process in March 2018, the NCLTF submitted a Market-Led Proposal to the DfT in July 2018, forming an initial test of its strategic concept within the new structures of RNEP. Having received encouragement from the DfT to continue to develop the case for the scheme (Appendix C), the NCLTF has proactively adopted the RNEP approach. This Strategic Outline Business Case (SOBC) summarises the NCLTF’s ‘Determine’ stage work within the Rail Network Enhancements Pipeline (RNEP) process in advance of as aspirational ‘Decision to Develop’ in March 2020. This process and its status as at August 2019 is shown on the table on page 15.

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North Cotswold Line Taskforce overview

Status @ October 2019

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Study area—scope The North Cotswold Line The North Cotswold Line is the 86-mile line between Hereford, Worcester and Oxford with onward services to Reading and London Paddington. The line was fully double tracked (with the exception of the single width Colwall and Ledbury tunnels) until aseries of rationalisations in the 1960s, 1970s and 1980s. At present the line is single track in the following locations and double track elsewhere, as illustrated below:

• Between Wolvercot Junction and Charlbury (10 miles 3 chains) • Between Evesham and Norton Junction (9 miles 54 chains) • From Worcester Shrub Hill through Worcester Foregate Street to Henwick (1 mile 26 chains) • Between Malvern Wells and Ledbury (5 miles 58 chains) • Between Ledbury and Shelwick Junction (11 miles 61 chains) Current services within the May 2019—December 2019 timetable are provided by the Great Western Railway (GWR) with an hourly off-peak service between Worcester, Oxford and London Paddington, 2 trains per hour in the peak, extensions to Great Malvern c. every 2 hours, 5/6 extensions to Hereford per day, and a Great Malvern-Bristol service each 2 hours. West Midlands Trains (WMT) operates an hourly service between Birmingham New Street and Hereford via Bromsgrove and c. 7 services between Birmingham Snow Hill and Great Malvern via Kidderminster per day. Shelwick Junction to Worcester Shrub Hill is 27 miles 49 chains Worcester Shrub Hill to Wolvercot Junction is 54 miles 10 chains

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Study area—previous developments

Train Service Development—In the 1980s there were only two trains per day each way between London Paddington, Worcester and Hereford, and gaps in the DMU-operated frequency between Oxford and Worcester of over three hours in the middle of the day. By the mid- 1990s the advent of Network Southeast’s turbo trains and growing ridership had resulted in a frequency between London, Worcester and Great Malvern of around a train every two hours. By the mid-2000s this service had been regularised and improved on a largely repeating pattern, and this situation pertained until investment in doubling two sections of single line between 2008 and 2011. This was delivered by Network Rail in order to reduce delays, improve journey times and allow the operation of more regular services, with some periods of an hourly frequency and higher frequencies in the peak. A broad hourly pattern was not achieved until 2015, and in 2019 there remain significant frequency gaps for stations such as Great Malvern Malvern Link, Pershore and Honeybourne. The introduction of GWR’s new Intercity Express Trains during 2018 and 2019 and the recasting of the GWR-wide timetable in December 2019 provides enhanced hourly frequencies and some faster journey times, and will form the base timetable for the route until the enhancements proposed by the NCLTF are delivered. Worcestershire Parkway—Worcestershire County Council is investing in partnership with the industry in a new station - Worcestershire Parkway - where the Birmingham-Bristol and North Cotswold Lines cross. The station is expected to open in early 2020, coinciding with the new GWR December 2019 timetable, which accommodates calls there. Parkway will also offer interchange to Cross Country hourly Cardiff- Nottingham services. Kidderminster Station Regeneration—Worcestershire County Council is also completing a major regeneration at Kidderminster, with a new much larger station building, revised forecourt and bus interchange facilities and pedestrian links to the tourist Severn Valley Railway. Also due for completion in early 2020 and funded by Worcestershire LEP, Greater Birmingham and Solihull LEP, Wyre Forest District Council and the County Council the new station will offer capacity and modern facilities capable of supporting the NCLTF’s proposed direct Kidderminster- Droitwich Spa-Worcester-London Paddington service.

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Study area—previous developments

Network Rail’s Western Route Study—published in 2015 anticipated either train lengthening or a frequency increase to two an hour as longer term options to cope with demand: “Should growth in rail passenger demand exceed that forecast then interventions may be required on the North Cotswolds line between Oxford and Worcester. These could be achieved by train lengthening or through the addition of further peak services. Thereis also the potential for additional services to Hanborough/Charlbury to serve rail passenger demand more efficiently on this line of route, noting that this may drive requirements for infrastructure interventions including platform lengthening at Hanborough Station.. The Route Study has considered the costs of further redoubling of the North Cotswold line between Oxford and Worcester. The long-term service specification could require further areas of double-tracking to allow a robust two trains per hour service frequency. In the short term, increased service frequency at the Oxford end of the route may provide an efficient means of serving demand growth compared with running longer, 10-car bi- mode trains over the full length of the line. If this option were to be achieved by the extension of services from London Paddington terminating at Oxford onto the Cotswold line, then the possible rolling stock options need to be considered. Abbotswood Junction*, south east of Worcester, is also due for renewal in CP6.” *Abbotswood Junction is where the route to Worcester Shrub Hill leaves the Bristol to Birmingham Line. The Route Study also notes potential for renewal of Worcester Area infrastructure but makes no specific commitment to this: There are currently a number of potential renewals due in CP6 and CP7 which present the opportunity to efficiently align incremental enhancement requirements with the planned renewals, to support the delivery of the Conditional Outputs in an optimised way. These include the re-signalling of the Worcester area and possible remodelling of the track layout at Norton Junction. The Route Study notes that renewal of Wolvercot Junction is planned for 2040.

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Study area—other schemes & interdependencies

The NCLTF proposition for the North Cotswold Line (NCL) does not stand alone, but supports and enhances the value of many other strategic schemes across the west and south Midlands, and vice versa. This NCLTF SOBC is thus timely. On the NCL’s west-east axis toward Oxford, eastern England and London, and the 2 north-south axes at Oxford and Worcester these include: High Speed 2 (HS2) and East-West Rail – HS2 Phases 1 and 2 will radically alter the capability of the East Coast, Midland and West Coast Main Lines to enhanced connectivity for key regional development locations across and adjacent to the Oxford-Cambridge Arc (such as Coventry, Northampton, Milton Keynes, Leicester, Bedford, Luton, Peterborough, Huntingdon, Stevenage) as long-distance train services between London, the north of England and Scotland are focused on its new routes. This will support the ongoing growth of the economy and population of the Arc whilst challenging its ability to accommodate this, and to do so affordably in terms, for example, of house prices. The government’s Oakervee review of the HS2 project, announced on 21st August 2019, together with the revised delivery programme set out in the ‘HS2 Chairman’s Stocktake’, also August 2019 (the Cook Report) may impact on the NCLTF scheme as upon other industry schemes. Later delivery of HS2 may, for example, enhance the case for early delivery of the NCLTF proposal to support ongoing West Midlands-London demand growth. The NCLTF will be considering any such impacts as and when the Oakervee review is complete, and will integrate these into its thinking before its aspirational ‘Decision to Develop’ milestone at end-March 2020 East West Rail—In parallel with HS2, completion of East-West Rail will offer wholly new connectivity across each of those existing north- south axes, with Oxford forming a key interchange at the western side of the Arc. The enhanced connectivity offered by the North Cotswold Line under the NCLTF proposals both offers potential room for the extension of the Arc’s activity to the NCLTF region, and more affordable housing than is possible, for example, in Oxford. Western Rail Link to Heathrow – The DfT/Network Rail proposed direct rail link from Reading to Heathrow will benefit from and contribute to the case for the North Cotswold Line proposition, with a 2TPH service to and from Reading facilitating much close public transport access to Heathrow for the 2.59 million population of the 5 counties which make up the NCLTF partnership, and greater international connectivity to and from businesses across the NCLTF region.

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Study area—other schemes & interdependencies

Crossrail/Elizabeth Line – Similarly the Reading-London-Shenfield-Abbey Wood route will radically transform the connectivity of Great Western Main Line cities and towns to the City of London and eastern London. The NCLTF’s 2TPH service would again support much closer business-to-business connectivity to and from the NCLTF region’s economies. Oxfordshire Rail Corridor Study (OCS) – In 2018 the Oxfordshire Growth Board, made up of local authorities, the NHS, universities and OxLEP, commissioned Network Rail to explore rail growth in the Oxfordshire Rail Corridor, and look at options for potential new services, stations and routes. The project is funded by the DfT and the partners and as at summer 2019 is concluding a set of Conditional Outputs for rail routes in the county, including services on the North Cotswold Line. The DfT has advised both the OCS and the NCLTF to integrate their thinking in respect of the North Cotswold Line and this SOBC will be submitted to the Corridor Study team as advanced RNEP ‘Determine’ stage work on its Conditional Outputs relevant to the route. Interdependencies - None of these projects are specifically required to facilitate the NCLTF’s proposals, although clearly any changes that result from them at locations such as Oxford or Worcester may have some impact. Worcestershire County Council’s delivery projects (Worcestershire Parkway and Kidderminster) proposals already take direct account of the NCLTF scheme (and vica versa), and the NCLTF is in ongoing discussions with Midlands Connect, Network Rail and the Oxfordshire Rail Corridor Study in respect of their development work. Active programme integration between the NCLTF scheme and these inter-dependent projects forms a core component of key work-streams within the Develop stage (Programme page 85 items 13.7, 13.14 and 13.17). Midlands Connect and West Midlands Rail Executive rail and highway schemes – Midlands Connect, as the Sub-National Transport Body for the West and East Midlands, supported by WMRE which co-manages the West Midlands Railway franchise with the DfT, is promoting 4 key schemes relevant to the NCLTF’s proposition as summarised below: - (i) Birmingham-Worcester-Hereford – Expansion from a 1TPH to 2TPH faster service, with potential associated upgrades in the capability and capacity of the restricted Worcester area layout and signalling, offering both enhanced connectivity for Herefordshire to NCL London services, and capability for expansion of the role of Worcester Shrub Hill at the centre of a major regeneration Quarter in the City of Worcester.

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Study area—other schemes & interdependencies (ii) Birmingham-Oxford – Additional regional rail services via Solihull after the proposed diversion of the Reading-Newcastle Cross Country service via Coventry (facilitated by the Midlands Rail Hub proposal for doubling the Coventry to Leamington Spa line), offering a 4TPH service from Oxford which, together with a 2TPH NCL service would effectively double train frequencies between the eastern extent of the route to the West Midlands and north-west/north-east England. (iii) Birmingham-Bristol – Additional regional rail services between Birmingham-Worcestershire Parkway and Bristol, offering a 4TPH service at Parkway if aspirations held by Worcestershire County Council for calls in Plymouth-Edinburgh and Bristol-Manchester services are achieved. Again this would offer transformative connectivity via Parkway for the fast-growing populations and economies of the Herefordshire, Worcestershire, Gloucestershire and Warwickshire catchments at the centre and western ends of the NCL. (iv) A46 ‘Trans-Midlands Trade Corridor’- development of the East Midlands-South West A46 corridor, which crosses the NCL corridor in south Warwickshire and east/south Worcestershire between Worcester and Moreton-in-Marsh, forming a yet-further growing economy which will require sustainable public transport connectivity. Bristol-Birmingham Route Development – West Midlands Rail Executive and Worcestershire County Council have both prepared economically-evidenced Rail Investment Strategies demonstrating significant value of enhanced regional rail services between Birmingham, Kidderminster, Bromsgrove, Worcester, Cheltenham Spa, Gloucester and Bristol/Cardiff. Gloucestershire County Council is undertaking a similar strategy in autumn 2019. All 3 bodies are keen to develop a set of shared aspirations for the route with Greater Bristol authorities (possibly via ‘Task Force’ or partnership similar to the NCLTF), ensuring that the ‘end-to-end’ opportunities proposed by Midlands Connect are matched by services meeting the needs of the intermediate areas of Worcestershire and Gloucestershire and maximising the connectivity to NCL services afforded at Worcestershire Parkway and Worcester Shrub Hill/Foregate Street. Oxford and Worcester Shrub Hill Station Masterplans – DfT, Network Rail, Oxfordshire County Council, Oxford City Council and East-West Rail are considering both infrastructure and station regeneration at Oxford, building on Oxford Station Phase 1 works completed in 2018. Worcestershire County Council and Worcester City Council are preparing a Worcester Shrub Hill Masterplan, supporting major economic regeneration of a ‘Shrub Hill Quarter’, aligning this with Midlands Connect work on the Hereford corridor and Worcester Area infrastructure as well as the NCLTF’s proposition. Both station schemes would support and be supported by this proposition.

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Study area—other schemes & interdependencies

The diagram below illustrates regional transport bodies and major transport corridors that interface with the North Cotswold Line.

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Study area—other schemes & interdependencies

Kidderminster Station Regeneration

Oxford Station Redevelopment

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STRATEGIC CASE

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Objectives and conditional outputs

The objectives of the North Cotswold Line Transformation project were set out in the NCLTF Terms of Reference in July 2017. These objectives have provided the focus for the work of the Taskforce and are shown in the box below.

OBJECTIVES

1) Improved connectivity between London, including Crossrail destinations, the Thames Valley and Heathrow Airport, Oxford, Worcester and Hereford 2) Wholly new connectivity for Worcestershire and Gloucestershire to Milton Keynes and Cambridge via Oxford when East West Rail is delivered 3) Improved connectivity between mid-Cotswold areas (Pershore to Hanborough inclusive) to the West Midlands, Gloucestershire and Bristol conurbations by direct and connecting rail services 4) Creating increase in GVA to the economies of the Worcestershire, Gloucestershire (GFirst), Coventry & Warwickshire LEP, Oxfordshire/England’s Economic Heartlands, Thames Valley and Marches Local Enterprise Partnership areas 5) Access to jobs resulting in improved recruitment and retention 6) Job creation through increased economic activity 7) Supporting the tourist economy in Herefordshire, Worcestershire, Gloucestershire, Warwickshire and Oxfordshire 8) Reduced congestion in Oxford and Worcester and on the Strategic Highway Network 9) Enabling and stimulating housing development through economic growth 10) Promoting social inclusion through improved accessibility to wider rail connectivity

11) Bringing national and international markets closer resulting in further economic growth

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Strategic option assessment

At a strategic level it is important to consider all reasonable options for addressing the objectives set out by the Task Force. These options are considered in the table on this page. On the basis of this analysis it is considered that the approach the achieves most of the objectives is to enhance the rail service on the North Cotswold Line. Following this assessment a set of rail-based Conditional Outputs were developed as shown on page 27.

Key: Not achieved Not yet known Achieved

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Objectives and conditional outputs

These objectives led to the identification of a set of“Conditional Outputs” - i.e. changes to the services provided by the railway in order to meet the objectives. It was recognised that not all of these Conditional Outputs could be developed, funded and delivered at once, and the focus of this SOBC is on the five highlighted—CO1, CO3, CO4, CO6 and CO7. Further work is being undertaken on the Hanborough Conditional Outputs (CO2 and CO5) and on quick wins—particularly on car parking—in support of CO8. CO9 remains a long term aspiration of the Stratford-upon-Avon Council and user groups, including the Cotswold Line Promotion Group.

CONDITIONAL OUTPUTS

CO1—Two trains per hour between Worcester and London CO2—Four trains per hour between Hanborough and Oxford, with direct or good connections to/from Didcot Parkway CO3—Service extensions beyond Worcester to Great Malvern, Hereford and Kidderminster CO4—Worcester to London in less than two hours CO5—Hanborough to London in less than one hour CO6—Faster services to and from Great Malvern and Herefordshire CO7—Improved performance and reliability CO8—Sufficient station facilities, car parking and access to support economic growth within Herefordshire, Worcestershire, Gloucester- shire, Warwickshire and Oxfordshire CO9—New services from Stratford-upon-Avon to Oxford and Worcester

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Problem identification

The economies of the North Cotswold Line The counties served by the North Cotswold Line are set to grow significantly in population and economy (Gross Value Added [GVA] for 2016*) in the current planning periods to 2030: - Worcestershire GVA £12.8bn p.a. – Population growth 16% 566,000 to 656,000 Gloucestershire GVA £16.2bn p.a. – Population growth 17% 611,000 to 714,000 Warwickshire GVA £16.8bn p.a. – Population growth 22% 548,000 to 700,000 Oxfordshire GVA £22.7bn p.a. – Population growth 22% 678,000 to 867,000 Herefordshire GVA £3.9bn p.a. – Population growth 11% 189,000 to 213,000 All five counties taken together represent a population of 2.592 million, forecast to grow by 558,000 people – c. 21% - in the next 15 years or so, equivalent to more than 5 cities the size of Worcester or 3 cities the size of Oxford. Although the catchment of the North Cotswold Line does not cover the full extent of each county’s geography their combined economic value, of some £78bn p.a., is higher than that of the 7 metropolitan council areas of the West Midlands Combined Authority (£61bn) or the 10 council areas of the Greater Manchester Combined Authority (£67bn) and provides a compelling starting-point for the case for significantly enhancing their rail connectivity.

A competitive train service challenge Current service levels and journey times compare very badly to the neighbouring Chiltern and West Coast Main Lines, as illustrated on page 29, and cause many Herefordshire and Worcestershire residents to travel long distances on the West Midlands highway and motorway network to access Warwick Parkway and Birmingham International rather than using the North Cotswold Line. Since 2016, Gloucestershire and Oxfordshire residents have similarly begun to use Oxford Parkway on the Chiltern Oxford-London Marylebone route with its 2 trains per hour service and extensive car park capacity.

*https://www.ons.gov.uk/economy/grossvalueaddedgva/datasets/regionalgvaibylocalauthorityintheuk

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Problem identification

Growth—strong but limited by the train service Notwithstanding service limitations such as these, passenger volumes on the route have grown strongly in the past 20 years since Office of Rail and Road statistics have been kept. Overall passenger numbers, including Hereford and Worcester stations, but excluding Oxford station have grown from 4.53m p.a. in 2006/07 to 6.74m in 2016/17, some 49% (noting that ORR overall figures do not distinguish flows such as those from Hereford along the Marches Line or from Hereford and Worcester to Birmingham). More local demands, such as from stations serving east Worcestershire, north Gloucestershire, south Warwickshire and west Oxfordshire between Worcester and Oxford have grown similarly, from 0.96m p.a. in 2006/07 to 1.41m in 2016/17, a 47% growth rate. However this lags behind national growth, at 53%, or the more dramatic 87% growth for example at Warwick Parkway and Leamington Spa, indicative of both the limits of journey time and frequency on the North Cotswold Line, as well as car park capacity, and the benefits of the incremental investment in these on the neighbouring Chiltern Line.

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The case for change

Key economic benefits to be realised by better North Cotswold Line connectivity

Work undertaken by Worcestershire County Worcestershire County Council (such as a regional Birmingham-Bristol service or additional Council within its 2017 Rail Investment calls in Cross Country services within the county), and illustrates why the Council has provided Strategy*, made available to the Task Force, strong support to the Task Force in addition to its Worcestershire Parkway station scheme, due indicates that a significant transformation of to open in 2019, which will substantially widen access to North Cotswold Line services.

train service frequency and journey times *http://www.worcestershire.gov.uk/downloads/download/1200/worcestershire_rail_investment_strategy along the North Cotswold Line would generate

strong economic benefits via enhanced connectivity to and from London (Paddington and Crossrail), the Thames Valley, Heathrow Airport via the proposed Western Access, and East-West Rail via future interchange at Oxford. Reduction in journey times between Worcester and London Paddington from 2 hours 15 minutes to 1 hour 50 minutes and provision of a 2 trains per hour service would generate £19m additional GVA per annum. Extension of 1 train per hour to Kidderminster would generate a further £14m GVA, to a total of £33m GVA p.a. The graph opposite shows the relative value of enhanced North Cotswold Line services against others assessed by

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The case for change Key strategic benefits to be facilitated by transformed North Cotswold Line services

The geography of the North Cotswold Line, from the Thames Parkway in early 2020 there are only 437 spaces from Great Malvern to Valley to the borders of Wales, means that its role is wide and Honeybourne inclusive). Ease of access to the railway, provision of varied. Achieving a step-change in its capability (as its authorities station parking and train service enhancement all work together to have observed following sustained investment in the neighbouring support economic development through the connectivity the railway can Chiltern Line’s strategic role) can thus generate multiple benefits. bring. Worcestershire Parkway (illustrated overleaf) is one important Examples include those summarised below, which are by no component of that. The graphic below shows just how important car means exhaustive at this stage of the Task Force’s development: - parking is as part of the picture—Chiltern Railways has increased train South Worcestershire Development Plan (SWDP) services and car parking through Warwickshire in tandem, and the combined effect has been very substantial growth (the graphic shows the The three councils of Wychavon, to the east of Worcester, City of ratio of station parking spaces to population). Worcester, and Malvern Hills, to the west of Worcester, have a combined development plan seeing delivery of c. 42,298 houses up to 2040 – an expanding market of a further 100,000 people who would use the North Cotswold Line stations from Great Malvern and Worcester through to Worcestershire Parkway, Pershore, Evesham and Honeybourne. In October 2019, just prior to the completion of this SOBC, an updated SWDP proposed that 10,000 of these homes be placed around the new station at Worcestershire Parkway. This scale of growth generates challenges for the facilities at current stations, sustainable master- planning of major stations such as Worcester Shrub Hill, possible new stations such as Rushwick to the west of the City of Worcester, all driven by the means of making ’first and last mile’ access to railway services as easy as possible (noting that in advance of the opening of 500 car park spaces at Worcestershire

Page 31

The case for change

Worcestershire Parkway Station Developed, funded and delivered by Worcestershire County Council. The station is due to open in early 2020.

Page 32

The case for change Mid–Cotswolds Warwickshire, Gloucestershire and Worcestershire are all set to see continuing housing developments and growth in the tourist economy of the Cotswolds which will depend for their sustainability on alternatives to road-based traffic. Long Marston Garden Village, in Warwickshire south of Stratford-upon-Avon will deliver c. 3,500 homes, with a population of around 8,000 people, supporting the case for enhanced access to the North Cotswold Line at Honeybourne Station (in Worcestershire) and/or a future re-instatement of the Honeybourne-Stratford railway. Moreton-in-Marsh and Kingham stations, respectively in Gloucestershire and Oxfordshire, both serve north Gloucestershire and south Warwickshire as well as their immediate catchments. The North Cotswold area of Cotswold District Council, covering the direct Gloucestershire catchment for Moreton-in-Marsh will deliver 266 new homes Herefordshire Herefordshire’s 184,000 population is set to grow by 24,000 people by 2031, with a potential requirement to accommodate a further 20,000 people beyond that. The Hereford and Ledbury areas directly served by the North Cotswold Line will deliver 5,354 new dwellings by 2031. The county’s rural nature, geographical extent, low population density and pockets of ‘masked deprivation’ mean its direct railway connectivity to London, Birmingham, Manchester and South Wales will be important in managing growth and development in a sustainable manner. London connectivity is available both via the Marches route to Newport (South Wales) and thence to Paddington viaBristol Parkway, and along the North Cotswold Line, the latter providing the county’s only direct services to London. Midlands Connect’s aspirations for a 2 TPH service between Hereford and Birmingham taken together the NCLTF’s plan for faster 1 TPH services between Great Malvern and London offer much enhanced connectivity between Herefordshire and Oxford, Cambridge via East West Rail, the Thames Valley, Heathrow and London, building on today’s 5 direct Hereford-NCL-London services. ‘Oxford Metro’ Oxfordshire County Council’s objectives for the North Cotswold Line seek to address current accessibility and highway capacity challenges, such as the scale of regular peak and off-peak congestion on the A40 to and from West Oxfordshire and the Cotswolds, and major anticipated growth on the corridor. In West Oxfordshire a total of 13,402 homes will be delivered by 2031, including the Eynsham Garden Village which will deliver c. 2,200 new homes and a corresponding new population of over 5,000 people c. 3 miles from Hanborough Station.

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The case for change

‘Oxford Metro’ - continued from overleaf Taken together with overall housing growth requirements that cannot be accommodated within the City of Oxford itself, the County Council is thus keen to see stations such as Hanborough transform their function to accommodate wider markets and demand, and to this end aspire for a 4 trains per hour service at the eastern end of the North Cotswold Line, possibly extending to Charlbury or Moreton-in-Marsh (Gloucestershire) if at all possible. This also relates to the re-development of Oxford Station and its infrastructure, building upon Network Rail work completed in July 2018. Total housing allocation The below table provides a summary of the housing allocations for the core catchments along the North Cotswold Line that are projected to deliver a total of 64,460 units between 2020 and 2041, a significant volume which the proposed enhanced rail connectivity can both facilitate and sustain. Catchment Area No. of Units Delivery Timeframe 1 Hereford/Ledbury 5,354 2020 – 2031 2 South Worcestershire Development Plan 42,298 2020 – 2041 3 North Cotswold (Cotswold DC) 266 2020 – 2031 4 Long Marston (Stratford DC) 3,500 2020 – 2031 5 West Oxfordshire DC 13,042 2020 – 2031

Total 64,460

Data sources: 1https://www.herefordshire.gov.uk/download/downloads/id/18615/amr_2019_appendix_b_5_year_housing_supply_document_april_2019.pdf

2https://www.swdevelopmentplan.org/?p-14376

3https://www.cotswold.gov.uk/media/1521445/717 north Cotswold principal settlements.pdf

4https://www.stratford.gov.uk/planning building/long marston airfield spd.cfm

5OXH Housing Summary 002—Oxfordshire County Council 24 Oct 2019

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The case for change

Links to Birmingham, London and the South West/South Wales The nature and balance of train service connectivity to both London, Birmingham, South-West England and South Wales is of key relevance to both Worcestershire and Herefordshire. The 2 Worcester stations – Foregate Street and Shrub Hill – and the route between Hereford and Worcester support services on all 4 axes. The pan-East and West Midlands transport body, Midlands Connect, is currently examining the case for a faster, 2 trains per hour service between Hereford, Worcester and Birmingham. Worcestershire County Council is keen to make a collective case with Bristol-Birmingham line authorities for new regional services on that axis, serving station such as Bromsgrove, Worcester Shrub Hill or Worcestershire Parkway and Ashchurch for Tewkesbury (Gloucestershire). The Task Force is working with Midlands Connect to understand the shared implications for investment in and around Worcester as it relates to all 4 axes. Tourism The 5 counties each have exceptional tourism destinations highly attractive to both domestic and international markets,including the cathedral cities of Hereford and Worcester, the Malverns, the heart of the Cotswolds, Blenheim Palace World Heritage Siteand the University of Oxford. Over 90 million visitor trips are made across the NCLTF’s counties each year, or more than 250,000 every day, with much higher daily volumes during peak seasons. Approximately 1 in 20 tourism trips across England as a whole were made in and to the NCLTF area. Whilst NCL services already play a role in supporting sustainable tourism, the NCLTF’s proposals, taken together with the additional capacity now provided by GWR Intercity Express trains, offer a step-change in the contribution the railway can make to this core part of the economies served by the route and the numbers of tourism trips that can be made by rail rather than road.

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The case for change

Local Enterprise Partnerships Each of the 5 LEPs has a clear commitment in their Strategic Economic Plans (SEP) to the key role of rail connectivity in their area’s economic development, including that on the North Cotswold Line. Three of the LEPs have been partners with their respective local authorities in preparation of economically-evidenced Rail Investment Strategies (RIS) , one is a leading partner in the Oxford Corridor Study, and all are active supporters of the NCLTF. Each has been developing its Local Industrial Strategy during 2019. The NCLTF is keen that this SOBC can both contribute to the Local Industrial Strategies and be supported by these. OxLEP (Oxfordshire) LEP – OxLEP’s SEP (2016 revision) recognises the North Cotswold Line as a key economic asset. OxLEP’s leading role together with the rail industry in the Oxford Corridor Study directly supports the prospective enhancements in the role of the North Cotswold Line in West Oxfordshire consistent with the NCLTF proposals within this SOBC. Coventry and Warwickshire LEP – CWLEP’s SEP (2016 revision) places particular emphasis on rail as a means of supporting sustainable economic growth, actively supports Midlands Connect’s Midlands Rail Hub, and notes the visible benefits of investment in the Nuneaton– Coventry Line (2016) and the then-prospective Kenilworth Station (2018). Whilst the North Cotswold Line is outside of the Warwickshire boundary the CWLEP has consistently included it in its thinking, with its inclusion within the CWLEP/WCC Rail Investment Strategy (2013). The development to the south of Warwickshire at Long Marston and enhanced connectivity for the Stratford upon Avon area form the key rationale for CWLEP’s commitment to enhancement of North Cotswold Line services at Honeybourne and Moreton in Marsh. GFirst (Gloucestershire) LEP – The GFirst SEP (2014) recognises the benefits rail improvements can deliver for businesses in Gloucestershire. GFirst is a partner with Gloucestershire County Council in preparation of a Rail Investment Strategy due for completion in December 2019. This NCLTF SOBC is an assumed part of that RIS. Worcestershire LEP – The WLEP SEP (2014) specifically seeks a faster, 2 trains per hour service between Worcestershire and London, together with infrastructure enhancements in the Worcester Area to facilitate wider rail connective. WLEP is a partner with Worcestershire County Council in the Worcestershire RIS (2017) and the Worcestershire Parkway, Kidderminster and NCLTF schemes under delivery and development. Marches LEP (covering Herefordshire) – The Marches LEP SEP (2019) recognises the need for faster, more frequent connectivity between Herefordshire and London.

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The case for change

Strengthening the Midlands Engine

As the Sub-National Transport Body for the West and East Midlands, Midland Connect published its strategy in March 2017, and since then has been developing, in partnership with its Local Authority constituents, Network Rail and DfT, a series of SOBCs to enhance rail services on key corridors throughout the Midlands. One of these is the corridor between Birmingham and the South West, including Worcestershire, Herefordshire and Gloucestershire as part of the Midlands Rail Hub project, helping to support the economic development of these areas, and their connectivity with the West Midlands. As can be seen from Midlands Connect’s priority corridor map opposite, the North Cotswold Line (NCL) shown by the red dotted arrow, skirts the southern side of the area and has hitherto been excluded from its direct considerations. Given the relationship of the NCL to the economic development of Worcestershire, together with Midlands Connect’s promotion of the A46 Trans-Midlands Trade Corridor crossing the NCL, Worcestershire County Council (as a member of Midlands Connect and the lead authority for the NCLTF) has worked closely with Midlands Connect to argue the case for Midlands Connect to support the NCLTF case for change on the route.

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The case for change

The Midlands Rail Hub

Midlands Connect supports the role of Worcestershire Parkway on the Bristol-Birmingham corridor, as illustrated in its June 2019 Midlands Rail Hub map opposite, and has voiced its willingness to recognise the NCL as a relevant growth corridor, but with development work undertaken by the NCLTF rather than Midlands Connect itself.

Page 38

The case for change

Strengthening the Oxford-Cambridge Arc Joint Declaration between Government and Local Partners March 2019

The development of the Oxford-Cambridge Arc is a key element “We recognise that the Arc is first and foremost an area of significant economic strength and opportunity, which can further benefit its existing and future communities of the UK’s national economic strategy. It is vital, therefore, that and businesses by realising its potential. It has a population of over 3 million and a links within it are strengthened as well as links within it. Gross Value Added over £100 billion per year. Building upon strengths in individual Completion of East-West Rail will lead to Oxford forming a direct parts of the Arc, especially in science, technology and high-value manufacturing, there interchange with the North Cotswold Line (NCL) at the western is the long-term potential to transform the Arc as a whole into a world-leading side of the Arc. The enhanced connectivity provided by the NCL economic area, acting as a testbed for innovation. Because of this potential, the Government has already designated the Arc a key economic priority. We jointly set out under the NCLTF proposals offers potential room for the to meet its full economic potential, building on forthcoming Local Industrial Strategies, extension of the Arc’s economic activity to the NCLTF region, for the benefit of existing and future local communities and businesses, and in the closer business-to-business connectivity and access to more national interest.” affordable housing than is possible, for example, in Oxford where an equivalent terraced property to those less than 60 miles away in Worcester may be c. 3 times the cost. For residents of the NCLTF area there will be a need for easy access to jobs and business meetings within the Arc. For new and existing residents of the Arc there will be a need to access leisure opportunities in the Cotswolds. The North Cotswold Line Transformation strongly complements the development of the Arc, and specifically the development of East West Rail, which is being built in phases to Milton Keynes and Bedford in 2024 and to Cambridge by c. 2028.

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The case for change

Through the provision of a more frequent and faster train service on the North Cotswold Line, easy interchange will be facilitated at Oxford to destinations within the Arc, meeting one of the objectives of the Task Force. This is illustrated graphically to the right. It shows the opportunity for the North Cotswold Line to contribute to the key railway projects now being taken forward in support of economic development, bringing significantly enhanced connectivity between the south-west Midlands, the Cotswolds and the Oxford-Cambridge Arc.

Page 40

Impact of not changing the railway today

Without improvements in rail connectivity and service levels on the North Cotswold Line, there will be a constraint on productivity growth in the economies across the Herefordshire-Oxfordshire corridor. Capped business connectivity and agglomeration potential, and constrained access for people and businesses to economic opportunities (employment, skilled labour, services, markets, supply chains) leads to loss of productivity and constrains future economic growth. Poor connections between economic centres particularly between east and west due to both slow speeds and insufficient frequency of services is constraining access to highly skilled labour markets and hampering productivity growth, particular between Worcestershire and the Thames Valley and for employment access to Oxford. Housing targets, for example around the south-east side of Worcester and along the A46 corridor, will be harder to meet. At the same time we have a railway which is heavily constrained by Victorian equipment and the consequences of rationalisation in the 1970s. Significant parts of the route were doubling in the 2011-12 period, and a new improved timetable is being introduced in December 2019 reflecting full introduction of the Intercity Express Trains. Nevertheless, it is not realistic to operate morethanthe current approximately hourly service over the route, services are slow because there are a minimum number of stations calls that have to be made, and many are timed to wait upon the arrival of a train in the opposite direction traversing a section of single line. It is fair to say that beyond the proposed December 2019 timetable there is little further than can be done to improve connectivity along the route without further investment.

Page 41

Impact of not changing the railway today

The route has many examples of single lines and Victorian technology—here are Worcester Shrub Hill (left), Norton Junction, Worcester (top right) and Wolvercot Junction, Oxford (bottom right).

Page 42

Constraints

Type of Constraint Constraint Consequence on Strategy

Connectivity Single line sections limit number of trains that can be Examine options for reducing length or number of single line operated sections to enable a two train per hour service

Connectivity Number of stations to be called at with a one train per As above, enable an optimum balance between speed and hour service constrains end to end journey times frequency at each station

Financial The financial demands on the public purse and on DfT’s Develop funding concept that maximises the variety of sources budget available for rail enhancements is limited of value and funds available to support the investment, including local, regional, national and private sector sources

Contractual DfT specify the train service on the North Cotswold Line Need to obtain rail industry support for the business case, and elsewhere through Franchise Agreements including from the DfT Contractual Train service enhancements on the Cotswold Line will Business case includes the cost of leasing additional trains. require additional train sets which may not be available There are no signs that the rolling stock market will not be able to provide additional sets

Page 43

Related Schemes

There are key related schemes which the North Cotswold Line Transformation Project must work with offering opportunities toboth contribute to and benefit from the value these investments will generate. These include:

• Worcestershire Parkway

• Kidderminster Station Regeneration

• Network Rail Western Route Study 2015

• High Speed 2 and East West Rail

• Western Rail Link to Heathrow

• Crossrail/Elizabeth Line

• Oxfordshire Rail Corridor Study

• Midlands Connect and West Midlands Rail Executive and Midlands Rail Hub and highways aspirations:-

 Birmingham-Worcester-Hereford 2TPH

 Birmingham-Oxford 4TPH (facilitated by Coventry—Leamington Spa doubling)

 Birmingham-Bristol – additional 2 TPH express services

 A46 ‘Trans-Midland Trade Corridor’

• Bristol-Birmingham Route Development

• Oxford and Worcester Shrub Hill Station Masterplans

The above transport interfaces are more fully described on pages 19 to 23 of this SOBC document.

Page 44

Option assessment

The establishment of objectives was then followed by identification of a set of Conditional Outputs for railway improvements on the North Cotswold Line most likely to achieve these objectives. The process was then to undertake sufficient optioneering that a plausible set of train service options and associated infrastructure interventions could be developed in order to undertake comparative analysis of their performance in economic and financial terms (i.e. business case) and against the extent that they achieved the relevant Conditional Outputs (i.e. CO1, CO3, CO4, CO6 and CO7 below). The five identified options are shown on page 46. Options 1-4 referred to formed the core assessments within the first phase of the Task Force’s timetable and infrastructure assessments under the umbrella description ‘NCLTF SOBC Option A’ described in SOBC Appendices F, G1 and G2. As the preferred option within this SOBC Option 5 is identical to the umbrella description ‘NCLTF SOBC Option B’ within SOBC Appendices F, G1 and G3.1

CONDITIONAL OUTPUTS

CO1—Two trains per hour between Worcester and London CO2—Four trains per hour between Hanborough and Oxford, with direct or good connections to/from Didcot Parkway CO3—Service extensions beyond Worcester to Great Malvern, Hereford and Kidderminster CO4—Worcester to London in less than two hours CO5—Hanborough to London in less than one hour CO6—Faster services to and from Great Malvern and Herefordshire CO7—Improved performance and reliability CO8—Sufficient station facilities, car parking and access to support economic growth within Herefordshire, Worcestershire, Glouces- tershire, Warwickshire and Oxfordshire CO9—New services from Stratford-upon-Avon to Oxford and Worcester

Page 45

Option assessment

Base Option 1 Option 2 Option 3 Option 4 Option 5 Hereford Ledbury Colwall Great Malvern Malvern Link Worcester Foregate St v v v v v v Kidderminster v v Droitwich Spa v v Worcester Shrub Hill v v v v v v Worcestershire Parkway v v v v v v Pershore v v v v v v v Evesham v v v v v v v v Honeybourne v v v v v v v Moreton-in-Marsh v v v v v v Kingham v v v v v v Charlbury v v v v v v Hanborough v v v v v v Oxford v v v v v v v v v v v v Reading v v v v v v v v v v v v Slough v v v v v v v v v v v v Paddington v v v v v v v v v v v v

Less than hourly Hourly service v NCLTF SOBC Option A NCLTF SOBC Option B

Page 46

Assessment—options 1 to 4 (NCLTF SOBC OPTION A)

Work undertaken by SLC Rail and by Tracsis identified that the infrastructure interventions shown on this page were required to deliver options 1 to 4.

Summary of scope: Redoubling/signalling for: - Norton Junction – Worcestershire Parkway (1 mile) - Hanborough – Wolvercot Junction (4 miles) - Pershore-Evesham (Intermediate Block Section) New Platforms at: - Worcestershire Parkway (1 new platform) - Hanborough (1 new platform)

Page 47

Assessment—option 5 (NCLTF SOBC OPTION B)

It was found that a different solution was required to deliver option 5, as shown below.

Summary of scope: Redoubling/signalling for: - Pershore—Evesham (5 miles track redoubling) - Pershore—Evesham (Signalling plus intermediate block section) - Hanborough—Wolvercot Junction (4 miles) New Platforms at: - Pershore (1 new platform) - Hanborough (1 new platform)

Page 48

Option assessment—service benefits

Options 1, 2 and 4 included an hourly fast service and an hourly stopping service. Whilst journey times between Worcester and Oxford are key to achieving CO4 (Worcester to London in less than two hours), it was found the benefits of this service pattern were depressed by the closeness of departure and arrival times at Worcester, as illustrated by the train graph below. This is a consequence of trains needing to be 30 minutes apart at Oxford, given the fixed structure of the Oxford-Paddington service. Option 3 (both trains calling all stations between Worcester and Oxford) also performed less well and did not deliver the journey time benefits required.

Page 49

Option assessment

The appraisal in the Economic Case (opposite) shows that Option 5 (NCLTF SOBC Option B) performed best, both in business case terms, and in terms of achieving the Conditional Outputs. The timetable extract (below left) shows the proposed service pattern on Weekdays.

Page 50

Option assessment

The train service benefits of Option 5 (NCLTF Option B) by area and route segment are described below. Hereford – Colwall < 3 hours Hereford-London via connection to faster, hourly Great Malvern-London service) Great Malvern Faster, hourly service to Oxford and London Kidderminster and Droitwich Spa New direct hourly service to Oxford and London Worcester Foregate St Faster, hourly service to Oxford and London Worcester Shrub Hill < 2 hours Worcester-London via connection to faster 2 trains per hour service to Oxford and London and supports station Masterplan Worcestershire Parkway Faster, 2 trains per hour service to Oxford and London Pershore and Honeybourne Faster, fully hourly service to Worcester, Oxford and London; more capacity Evesham Faster, hourly service to Oxford and London; more capacity Moreton-in-Marsh < 1.5 hours Moreton-London via faster 2 trains per hour service between Worcester, Oxford and London Kingham and Charlbury Hourly service to Worcester, Oxford and London; more capacity Hanborough 1 hour London journey time, 2 trains per hour service to Worcester, Oxford and London Oxford Enhanced frequencies and journey times to North Cotswold destinations Reading Enhanced frequencies and journey times to North Cotswold destinations London Paddington Enhanced frequencies and journey times to North Cotswold destinations

The timetable proposal also delivers enhanced connectivity at:

• Worcester Shrub Hill with West Midlands Trains services

• Worcestershire Parkway with Cross Country Trains services

• Oxford with Cross Country, Great Western, Chiltern Railways and East West Rail services

• Reading with the proposed Heathrow Western Access

• Paddington with Crossrail and the wider London transport network

Page 51

Meeting DfT objectives for rail

The Task Force was also keen to assess how the potential scheme met the DfT’s objectives for rail set out in the Rail Network Enhancements Pipeline Guidance. Priority 1—Keeping people moving safely and smoothly

• During Construction— Minimising the impact of delivery on existing rail users in at the heart of the Task Force’s philosophy, as well as its authorities’ Third Party experience

• Impact on the existing network— Enhancing the long-term operability, performance and commercial robustness of the North Cotswold Line is a key scheme deliverable. Our approach to train service timetable development (which will involve detailed performance assessment in the ‘Develop’ stage) illustrates our understanding of the vital relationship between scheme proposals and their long-term operation Priority 2—Delivering the benefits from programmes and projects already committed to The Task Force intends to draw upon, and contribute value to, the benefits of schemes completed or approaching completion, including Great Western electrification, GWR Intercity Express Trains (Class 800 IET), Oxford Area upgrade, North Cotswold Line platform extensions commissioned in 2019, Worcestershire Parkway opening in early 2020, the potential Direct Award extension of the current Great Western franchise, the drive for change on the Worcester-Hereford Corridor of Midlands Connect, the West Midlands Rail Executive and the 2017-25 West Midlands Trains franchise. The Task Force is also keen to build on the local authority-led ambitions for both Oxford and Worcester Shrub Hill Masterplans, again as these will both support and be supported by the train service enhancements our scheme would offer. The Kidderminster service option would also benefit and contribute to Worcestershire County Council’s Kidderminster Station re-building scheme (opening 2019).

Page 52

Meeting DfT objectives for rail

Priority 3—new and better journeys and opportunities for the future As set out in this document the core premise of the Task Force’s proposition is enhanced connectivity between the economies served by the North Cotswold Line and London, the Thames Valley, Heathrow, the East-West Rail corridor, within the route itself, for access to the tourist and leisure economies of all five counties, and as connectivity to other north-south direction services at Oxford, Worcestershire Parkway, Worcester Shrub Hill and Foregate Street and Hereford. The Task Force sees the North Cotswold Line’s train service transformation as both cause and effect of other scheme developments, notably Oxford and Worcester Shrub Hill station Masterplans, Worcester Area Capacity Upgrade and re-signalling—now needed as the rail network in the area has limited capacity and Victorian signalling—Birmingham-Worcester-Hereford service developments and Bristol-Birmingham service and infrastructure upgrades. Priority 4—changing the way the rail sector works for the better The extensive experience of two of the NCLTF’s constituent authorities, Warwickshire County Council and Worcestershire County Council, in delivering new stations and rail infrastructure as Third Parties places the Task Force potentially at the forefront of innovation in the ‘whole- life’ process of concept, business case, funding and financial models, specification and design, procurement, delivery, commissioning and operation of rail schemes. This is highly consistent with the philosophy and approaches of the Hansford Review (2017),the DfT’s ‘Rail Network Enhancements Pipeline’ (RNEP) and ‘Market-Led Proposals’ (MLP) processes (March 2018). This experience includes the bespoke Third Party funding models developed and applied by Warwickshire County Council with different partners (noted in brackets) including Warwick Parkway (2000 – Chiltern Railways), Coleshill Parkway (2007 John Laing plc), Stratford-upon- Avon Parkway (2011), Bermuda Park/Nuneaton (2016) and Kenilworth (2017), and Worcestershire County Council at Worcestershire Parkway and Kidderminster (both 2019/20). In seeking to deliver the North Cotswold Line Transformation as a Third-Party scheme the Task Force would aim to offer a cutting-edge approach to gaining Third Party and private sector investment in the UK rail network and reaching partnership agreements with DfT, Network Rail and Train Operating Companies, contributing to wider progress in generating confidence in the RNEP process.

Page 53

ECONOMIC CASE

Page 54

Appraisal approach and assumptions – demand forecasting

Within the economic case the impact on demand and revenue on the route of the proposed service enhancements has been considered along with the operating costs of providing those services and the capital costs of the infrastructure required to deliver the scheme. The demand, revenue and costs, along with an assessment of the quantified user benefits, have been brought together into a scheme appraisal to understand if the scheme options represent value for money. We have also conducted a number of further sensitivity tests to understand the strength of the value for money case of the scheme and also to examine a number of further areas of benefit that might exist which can be found in Appendix D. Demand & Revenue Modelling To understand the demand and revenue impacts, which are central to the assessment of the options, the MOIRA programme was used to model different timetable options. MOIRA is a software programme used by the rail industry to understand the impact of timetable changes on demand and revenue. The programme operationalises guidance on demand forecasting, including demand elasticity values contained within the Rail Delivery Group (RDG) Passenger Demand Forecasting Handbook (PDFH), the rail industry’s standard guidance on demand forecasting. A copy of the MOIRA programme covering the North Cotswolds Line was provided for this project by the Great Western Railway (GWR), and contained in the May 2018 timetable as its base. GWR also provided a copy of the draft December 2019 timetable which incorporates a number of improvements to the North Cotswolds Line service. The test results were compared against this draft 2019 timetable. Data on sectional running times was taken from the 2019 timetable and the information contained in the Tracsis Timetable Option Assessment Report: Phase 4 Stage 3 report for the North Cotswold Line Service Enhancements Project. The exception to this was option 5 where a separate timetable was developed.

Page 55

Appraisal approach and assumptions – demand forecasting

After each option had been modelled in MOIRA the following data was extracted:

• Base passengers for each Origin—Destination (“O-D”) pair and ticket type

• Additional passengers for each O-D pair and ticket type

• Change in generalised journey time for each O-D pair and ticket type

• Mileage for each O-D pair Background growth Building on the results of the MOIRA, the impact of future levels of background growth on the results were also considered. Background growth was applied to the base and additional passengers following the simplified framework set out in the Passenger Demand Forecasting Handbook. The majority of the forecast growth in employment and housing was acquired from TEMPro, the DfT’s common growth database. For Worcestershire and Oxfordshire the following were used for housing growth calculations:

• South Worcestershire Development Plan – An allocations map was used to identify the location of sites, the forecast total housing growth was then spread proportionally across the allocations identified

• Oxfordshire Infrastructure Strategy 2018 – a spreadsheet was provided covering details of housing sites (including coordinates and number of dwellings) A background growth rate was calculated for each flow with an origin on the North Cotswolds Line (Charlbury, Evesham, Hanborough, Honeybourne, Kingham, Moreton-in-Marsh, Oxford, Pershore, Worcester BR) to destinations stations divided into three groups, North Cotswolds Line, to London, and to other government office regions. A similar growth rate was calculated for trips with origins elsewhere to destinations on the North Cotswold Line.

Page 56

Calculating the benefits

Opening year It has been assumed that the scheme’s proposed new services would commence in 2025. Sources of Benefit

• Revenue — Revenue data was extracted from MOIRA. Inflation was applied to these figures using values from WebTAG Table A5.3.1 to understand future year revenues. These values were then rebased to 2010 using the GDP deflator values from the WebTAG databook. These values were then discounted using the discount rates given in WebTAG Table A1.1.1.

• Value of Time — Generalised journey time savings between the base 2019 timetable and each option for each O-D pair and ticket type were extracted from MOIRA. These were then multiplied by the forecast number of base and additional passengers to calculate the total time saving for each -O D pair and ticket type combination. WebTAG table A.5.3.2 Journey Purpose / Ticket Type Splits by Flow Category was then used to acquire a journey purpose split for each O-D pair and ticket type combination using mileage and origin / destination location information. For example, a tripbetween Kidderminster and London was categorised as ‘outside South East 100+ miles’. These purpose splits were then applied to total time savings. Forecast values of time for each journey purpose were then acquired from WebTAG table A1.3.2 and applied to the time savings by purpose. Existing passengers were assumed to receive the full benefit and new passengers were assumed to receive half of the benefit in line with WebTAG guidance.

Page 57

Calculating the benefits

Marginal external costs A road distance was acquired for the top 5 destinations for each station on the North Cotswolds Line. For all other destinations, the rail distances produced in the MOIRA outputs were used as a basis for calculating marginal external cost. Table A5.4.5 Car Diversion Factors by Flow Category from the WebTAG databook was then used to acquire a diversion factor for each OD pair. For example a Kidderminster – London trip was categorised as ‘rest of country to / from London 100 – 200 miles’, with a diversion factor of 26%. Marginal external congestion cost values were acquired from WebTAG databook table A5.4.4 Marginal External Costs by region and time of day. A separate marginal external cost was calculated for each O-D pair by calculating an average of the origin region values and destination region values. The diversion factors, distances, number of additional passengers and marginal external cost values were then multiplied to produce a total benefit in terms of marginal external cost. Worcestershire Parkway Worcestershire Parkway does not exist in the current version of MOIRA used to assess the service options as the station will open in early 2020. However, the timetables modelled make provision for stops at Worcestershire Parkway therefore increasing journey times for O-D pairs passing this station and potentially impacting demand. Within the model we have included the level of demand assumedin the business case for the new station and made adjustments to this figure to account for service improvements (as a benefit). The business case indicates significant positive abstraction from stations such as Birmingham International and Warwick Parkway, with a resultant reduction of c. 8 million kilometres of highway traffic per annum on routes including the M5, M42 and M40. Oxford Parkway When a new station was opened at Oxford Parkway in 2015 a substantial part of the Hanborough—London market transferred to the new station, reflecting in part the poor service from Hanborough at the time. Were increased parking capacity and an improved service provided at Hanborough it is likely that that much of this market would move back to Hanborough. For existing passengers reverting this would be positive abstraction as it would reduce congestion on the A34 highway network accessing Oxford Parkway - A40, A34, A44, A4260.

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Operating costs

Using data kindly provided by the Great Western Railway it has been possible to develop a series of operating costs for the service options under consideration. The approach to achieving this was to develop a series of rolling stock workings for each timetable from which fixed costs and distance and time based costs could be derived. Given the level of enhancement in services the additional resource requirements in terms of rolling stock were relatively limited. This was driven by the number of trains used in peak periods that were not required in the off peak, linked to the length of turnaround times of services that terminate at Oxford, which wait for around an hour before returning to London. Of the five options was Option 5 (NCLTF SOBC Option B) which offered the most efficient rollingstock utilisation. The table below presents the estimated operating costs for the first full year of operation along with the deflated and discounted operating costs over60 years used in the scheme appraisal. In developing the operating costs an issue has emerged relating to the treatment of Fixed Track Access Charges (FTAC) introduced in Control Period 6 (2019-24). The new approach requires FTAC to be lifted in proportion with train miles where new services are introduced within the Control Period. However it is not clear at the current time what the base train miles for each franchise are against which FTAC should be increased. For this scheme we have generated an estimate which we have included as a sensitivity test .

ITEM, £M OPTION 1 OPTION 2 OPTION 3 OPTION 4 OPTION 5

Opening Year Operating Cost Estimate £6.55m £6.55m £6.70m £9.24m £5.99m NO FTAC 60 Year Costs Deflated to 2010 Prices £214.05m £214.05m £220.46m £302.25m £201.74m Discounted £62.96m £62.96m £64.66m £88.93m £58.64m Opening Year Operating Cost Estimate £8.29m £8.29m £8.44m £10.98m £7.73m FTAC 60 Year Costs Deflated to 2010 Prices £272.79m £272.79m £279.20m £360.99m £260.4m Discounted £80.44m £80.44m £82.14m £106.41m £76.12m

NCLTF SOBC Option A NCLTF SOBC Option B

Page 59

Capital costs

The capital costs of the scheme have been estimated by SLC Rail and have updated costs developed by Network Rail for the DfT in 2014, and kindly provided to the Task Force by the DfT. To deliver the proposed service enhancements track doubling is required in two locations. In all options track doubling is required between Wolvercote Jn and Hanborough. Appendices E and F provide a description of theproposed engineering scope which has formed the basis of the capital cost estimate. For Options 1 to 4 track doubling is also required between Norton Jn and Worcestershire Parkway whereas in Option 5 it is required between Evesham and Pershore stations. In the case of the latter a high and low cost option were considered due to the condition ofa number of bridge structures. Optimism Bias has been applied in line with DfT guidance within TAG Unit A5.3. For the purposes of the BCR appraisal we have also deflated the costs to 2010 values and discounted them, in line with TAG Unit A1.2 Scheme Costs. The discounted values are taken forward to the scheme appraisal. The table below presents the development of scheme costs, for Option 1 to 4 (NCLTF SOBC Option A) and thetwo estimates for Option 5 (NCLTF SOBC Option B).

ITEM, £M OPTION 1 TO 4 OPTION 5 OPTION 5 (LOW COST) (HIGH COST) (PREFERRED OPTION) Capital Cost Estimate £120.43m £103.81m £122.58m Optimism Bias £74.88m £64.60m £76.8m TOTAL £195.31m £168.41m £199.38m Deflated to 2010 Prices £179.68m £154.93m £183.54m Discounted £112.24m £96.70m £114.58m

NCLTF SOBC Option A NCLTF SOBC Option B

Page 60

Options tested

Less than hourly Hourly service v NCLTF SOBC Option A NCLTF SOBC Option B

Page 61

Results—revenue and demand

The graphs on this page show the forecast additional revenue and demand of each option in 2035. Some key points are worth noting:

• In all options a high proportion of the revenue and demand benefits derive from travel to London.

• In option 1, the differential speed between the two services per hour means that their spacing at Worcester is 10/50, and this means that the benefits of the increased service frequency are not optimised.

• Options 4 and 5 both include a full hourly Great Malvern service and extension of the second hourly service to and from Kidderminster and Droitwich Spa. In option 4, for example, there are forecast to be 45,000 additional Kidderminster-London trips in the first year of operation. This reflects the inconvenience of this journey in the base—either changing at Worcester, or at Birmingham Snow Hill and Moor Street/New Street.

• Option 5 (NCLTF SOBC Option B) performs best in revenue terms because the spacing between the Great Malvern and Kidderminster trains at Worcester is optimised, both trains have better journey times than in the base, and, as with Option 4, Kidderminster and Droitwich Spa services make a key contribution to the overall case .

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Results—appraisal

NCLTF SOBC Option A NCLTF SOBC Option B

OPTION 5 ITEM, £M OPTION 1 OPTION 2 OPTION 3 OPTION 4 (PREFERRED

Present value of benefits £110.67 £143.69 £136.77 £198.82 £267.19 Present value of costs £106.50 £95.28 £81.70 £101.53 £59.90 Net present value £4.17 £48.40 £55.07 £97.29 £207.29 BCR 1.04 1.51 1.67 1.96 4.46 Value for Money

Covers operating costs from year 1 CO1 —2 tph Worcester-London CO3 —Service extensions CO4 —Worcester-London in <2 hours CO6 – Faster to Great Malvern/Hereford C07 —Improved performance CO Key: Not achieved Not yet known Achieved The table above summarises the results of the appraisal and the performance of the options against the Conditional Outputs relevant to the proposal. Option 5 is the best performing option, even under the high cost scenario, with a BCR representing very high value for money, and achievement of all Conditional Outputs (CO7 is shown as orange as there is further work to do to assess the performance of all options).

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Revenue and costs

Another key consideration in appraising the business case is whether the fares revenue will cover the additional operating costs (including train leasing costs)—in other words whether an ongoing subsidy would be required. The table below shows the year in which revenue starts to cover the operating costs, with green showing an operating surplus and red an operating deficit. Options 4 and 5 both cover their operating costs from the first year of operations.

Year: 1 2 3 4 5 6 7 8 9 10 11 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Option 1

Option 2

Option 3

Option 4

Option 5

Page 64

Sensitivities

To understand the strength of the economic case we have conducted three sensitivity tests as follows:

• 20% increase in capital costs

• 40% increase in operating costs

• 20% reduction in forecast demand The table below presents the Benefit Cost Ratios of the sensitivity tests for Option 5, along with the central case result. It can be seen that the scheme still represents high value for money with a 20% increase in capital costs and a 40% increase in operating costs. A 20% reduction in the level of forecasts demand for the service has a more severe impact with the BCR falling to medium value for money.

20% INCREASE IN 40% INCREASE IN 20% REDUCTION IN ITEM, £M CENTRAL CASE CAPITAL COSTS OPERATING COSTS DEMAND

Present value of benefits £267.19 £267.19 £267.19 £171.0 Present value of costs £59.90 £82.81 £83.36 £100.70 Net present value £207.29 £184.37 £183.83 £70.30 BCR 4.46 3.23 3.21 1.70

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Value for money opportunities

The North Cotswold Line Taskforce commissioned work to establish where further opportunities to improve the business case might lie. These are described below and shown in the table. The Option 5 timetable was used as the base for this assessment. Dwell Times—Consideration was given to reducing dwell times following the introduction of Class 800 IET trains. However, a review of the 2019 timetable found that dwell times had already been reduced relative to current timings and therefore the options were not pursued further. Line Speed Improvements—Examination of opportunities to raise line speeds to 100 mph on certain sections of the route where geometry allowed. An indicative overall journey time reduction of 3 minutes was applied. Performance Improvement—There are two single line sections on the NCL. The reduction in the length of these sections could reduce the amount of reactionary delay caused on the line itself , but also reactionary delay on the Great Western as a whole, including crucially into Paddington, as well as on the Didcot-Chester Line and further afield. The analysis used Delay Attribution data from 2017-18 and benchmarked train performance on the line against the South Cotswold Line between Gloucester and Swindon. This line was made into double track along its whole route in 2013-14. At this stage of development it was not clear if these additional benefits could be delivered within the scope of the infrastructure investment required for the proposed service enhancements. As such an indicative budget has been identified based on forecast benefits that retains the central case BCR at 4.46. The results show that performance improvements in particular justify significant investment.

Option 5 BCR Indicative Budget Further Work at Item Before Available if BCR Comment OBC Stage? Opportunity Held at 4.46 Line Speed 4.46 £19.58m To be examined further to identify potential as part of the OBC stage. Yes Improvements Performance 4.46 £56.76m More analysis will be required to identify the potential positive impact Yes Improvement of additional infrastructure, and the negative impact of a higher frequency train service. However, performance improvement has the potential to significantly improve the business case both directly on the NCL, and on the wider Great Western route, the Didcot-Chester Line and the Bristol-Birmingham route

Page 66

Summary

Option 5 The Economic Case shows that there is the potential for a scheme delivering Very High Hereford Value for Money, which should be taken forward into the “Develop” stage of the Rail Network Enhancement Pipeline process. Ledbury Colwall Option 5 performs best of those evaluated. This option spreads stops between the two proposed services per hour to optimise journey time and frequency improvements for Great Malvern all stations. It also extends 1 of the 2 trains per hour to Droitwich Spa and Malvern Link Kidderminster. Worcester Foregate St v Kidderminster The infrastructure assumption for this option includes redoubling between Wolvercot v Droitwich Spa Junction and Hanborough, and between Evesham and Pershore. The capital costs for v this are currently estimated at £199.38m. Worcester Shrub Hill v Worcestershire Parkway Option 5 is forecast to cover its operating costs from the first year of operation. v Pershore The sensitivity tests show that the scheme can sustain an increase in capital costs and v Evesham operating costs whilst retaining at least high value for money. In addition other areas of v benefit around line speed improvements and performance impacts have the potential Honeybourne v to further enhance the business case and further work on performance modelling will Moreton-in-Marsh v enable an optimised position to be reached to enable improved train performance to be Kingham counted as a quantified benefit in the business case. Charlbury Hanborough v Oxford v v Reading v v Slough v v Paddington v v

Page 67

FINANCIAL CASE

Page 68

Financial Case

Introduction The Financial Case concentrates on the affordability of the North Cotswold Line Transformation scheme. At this stage the focus is on the emerging costs for the scheme, based on the engineering feasibility study undertaken to date. Its broad financial viability comparing revenue and operating costs, is presented alongside a discussion around the emerging funding proposals. At SOBC stage the minimum requirements for the Financial Case are to outline:

• Approach taken to assess affordability

• Approach and analysis associated with the potential funding for the scheme Scheme Costs Whilst there are no formal requirements at SOBC stage to set out the costs for the scheme, in this case we are in the position of being able to present a set of capital costs based on high level engineering feasibility studies undertaken by SLC Rail, which built upon previous work undertaken by Network Rail, through the LTPP Western Route Study. SLC Rail undertook two high level engineering feasibility studies, the first in October 2018 followed by further work in May 2019 to explore additional layout options, which then allowed a high level cost estimate to be produced. A desktop exercise was undertaken using available track schematic drawings and satellite imagery to establish an understanding of the existing permanent way arrangement, including the location of signals, crossovers and key civils structures. The desktop information was used as a basis to produce a number of conceptual engineering options that were then priced. The high-level capital cost estimate developed by SLC Rail and included in this SOBC and summarised on 70 are commensurate with the concept level of design work undertaken to date. The estimate has been prepared to a Q2 2019 price base and is derived from dimensions referenced from the engineering feasibility work and rates taken from industry sources to provide the measured direct costs. Following this process, allowances were added for various on-cost items such as design, planning, legal and other enabling work.

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Scheme Costs (cont.) The table below provides a summary of the high-level components of the capital cost estimate for each Service option 1 to 5. The engineering works required to satisfy each Service Option are separated into three distinct work scope packages comprising; Wolvercote Junction to Hanborough, Evesham to Pershore and Worcestershire Parkway to Norton Junction. Note the proposed Wolvercot Junction work area is an underlying requirement to satisfy all of the Service Options 1 to 5.

Application of Optimism Bias Uplifts The estimate includes optimism bias uplifts that have been applied to the single point cost estimate based upon WebTAGguidance produced by DfT. The project scope is considered a “complex” scheme, comprising a mixture of renewals, enhancements and station elements. Optimism Bias uplift values have therefore been applied corresponding to the nature of the proposed works as follows; 62% for enhancements, 65% for renewals and 51% for station elements.

Page 70

Operating Costs The Financial Case concentrates on the affordability of the North Cotswold Line Transformation scheme. At this stage the focus is on the emerging costs. There will be O&M Item Cost (per annum) ongoing operating and maintenance (O&M) costs attached to the proposed works, which at this early feasibility stage are anticipated to be primarily related to four Rolling Stock Costs £300,000 types of O&M costs as shown in the table opposite, in 2025 pricing (including Train Crew £1,700,000 inflation) to correspond with the forecast first year of operations. Fuel Costs £2,800,000 For the purposes of the SOBC and undertaking an initial economic and financial Access Charges £2,950,000 appraisal, operating costs have been estimated based on details provided by the current rail operator GWT for existing operating costs covering rolling stock, train TOTAL £7,750,000 crew and access charges. Rolling stock costs are lower than what may be expected to satisfy the service specification due to a combination of improved utilisation of the existing fleet and a redistribution between five, nine and ten car trains to match supply with demand.

Cashflow and Funding Profile The cash flow profile has been estimated from the indicative project development programme and scheme cost estimates. The table below provides a forecast of the anticipated expenditure required to develop the scheme through each the DfT Rail Network Enhancements Pipeline (RNEP) stages. The costs for the next Develop stage have been estimated based on benchmarks of similar schemes, with work comprising of strategic and engineering functional workstreams to progress the scheme to a single option preferred solution and facilitate the development of an outline commercial and funding strategy that will be set out in the Outline Business Case.

Page 71

Funding and Finance Sources As described in the Economic case, the BCR of 4+ for Service Option 5 presents ‘very high value for money’ based upon the DfT value for money criteria, which provides a strong case for the NCLTF to source external funding through central government grants. It is fully anticipated central government funding will be required to support a proportion of capital costs particularly in the Delivery stage. Due to high demand and lengthy timescales to secure government funding, separate independent sources will be explored by the NCLTF.

Subsequently, it is anticipated the capital costs to progress the scheme through the Develop and Design stages will be funded through a combination of Local Authority, NCLTF members and Local Enterprise Partnership grants, with parties assembled and engaged to process internal applications during Q3/4 2019 in readiness to secure in Q1 2020. Securing such grants will allow work to be undertaken in Q2 2020 after achieving Decision to Develop to de-risk the design and provide increased confidence in the scheme costs, whilst in parallel exploring the optimal commercial and funding solutions.

Within the Develop stage prospective funding and delivery vehicles will be identified, assessed and agreed between the partners and with the DfT. It is anticipated one local authority (to be determined) within the NCLTF will become the commissioning body on behalf of all partners. Once the scheme has progressed to the point of successfully passing the Decision to Design stage and depending upon the preferred commercial solution, it is anticipated the capital costs for the Deliver and Deploy stages will be funded througha combination of:- • Public grants (central government, LEP’s and local authorities) • Project finance secured against future revenues including:- • Franchise value uplift • Car park (multiple sites) • Retail • Land value capture

Furthermore, there is potential to obtain funding through the planning process and the application of the Community Infrastructure Levy mechanism, which has particular strength given the multiple local authority scheme buy in, across a wide regional jurisdiction. In parallel, other land value capture methods will be explored and tested for applicability for funding a proportion of capital costs including direct negotiation and partnering opportunities with neighbouring landowners and developers located within a c.1km “value uplift” perimeter around the affected stations benefitting from a step change in service and reliability provided by the scheme.

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Generated Commercial Returns The scheme once deployed, will generate multiple operational income streams that can be utilised to repay either public or privately sourced finance for a proportion of the capital costs. The highest proportion of revenue will be generated through franchise revenue uplift and car park revenue, with potential for supplementary revenue to be captured from performance improvements for which Network Rail will be a direct beneficiary. To a lesser degree, revenue may also be generated by new station trading income, should retail premises be incorporated into the station design solution. However, until the commercial strategy for the station is agreed during OBC stage it is not possible to determine who will be absorb ongoing costs and revenues from the station, and hence how these will be funded. Summary Funding and Finance Table The table below provides a summary of the funding sources and anticipated amounts to be secured over the next six years covering project stages Develop through to Deploy. It has been assumed for the development of the project up until ‘Decision to Deliver’ the scheme is equally funded by the NCLTF LA’s/LEPs providing 50%, and the DfT providing funding for the remaining 50%. It is anticipated the Delivery and Deploy stages will be sourced through a combination of public funding (central government, local authority, LEP grants) and finance (public or private loan, secured against project revenues). The approach during the Develop stage will be to focus on strategies to maximise the financeable elements and reduce public funding, in parallel with increasing confidence in magnitude of delivery costs.

Based on early financial appraisal it is anticipated the scheme with generate a commercial return to the NCLTF and/or third-party investor to support a significant proportion of the capital costs of the scheme (anticipated to be greater than 50% of capital cost).The proportion of funding and commercial level support will be explored in greater detail at the Develop stage whereby increased design and cost certainty and stakeholder engagement will assist in formulating a robust funding and finance plan.

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COMMERCIAL CASE

Page 74

Commercial Case Introduction SLC Rail was engaged by the NCLTF to produce a SOBC, and subject to the outputs of the appraisal, progress the scheme to achieve ‘Decision to Develop’ thus completing the initial RNEP ‘Determine’ stage. As explained on pages 69—71 of the Finance Case; capital and operational costs for the NCL scheme have been derived from measurable outputs of the engineering feasibility design and information from the existing rail operator GWT to understand current costs, then extrapolated for the service options. This approach provides a good level of confidence in the estimates that form the basis of this strategic stage appraisal. The Economic Case indicates service options are capable of delivering BCR’s that achieve high or very high value for money, and also aligns with several Conditional Outputs set by the NCLTF at the outset of the project. The purpose of this Commercial Case is establish whether the NCL scheme, drawing upon outputs of the Strategic, Economic and Financial Cases, and within the context of relevant and applicable delivery and procurement models, is commercially viable and can be delivered on viable terms for all parties and makes commercial sense.

OPTIONS FOR PROMOTING THE SCHEME OPTIONS FOR PROCUREMENT AND DELIVERY

“Traditional” A Network Rail scheme, funded externally (e.g. by “Third Party” Scheme delivered by third party (i.e. not Network Growth Deal grant) Rail)

“Market-led” A third party scheme, development finance “Delivery Agent” Network Rail delivers scheme on behalf of the client provided by the private sector “Collaborative” A scheme with joint promoters managed through “Network Rail” Network Rail acts as client and delivers scheme, but a Programme Board, with a mix of funding with external funding depending on where the benefits lie “Combination” A mixture of the above options, i.e. part delivered by “Public Sector A scheme led promoted, and funded by the public Network Rail and part by third party. Sponsor” sector authorities

The NCLTF has thus far developed the scheme as a “public Sector The NCLTF is neutral as to the ultimate procurement and delivery Sponsor” in the Determine stage, however are seeking to transition method. The optimal strategy will emerge from analysis conducted to a collaborative model. This will draw upon all industry parties and by all the partners based on factors such as level of risk, risk the partner public sector bodies for the Develop stage as confidence appetite, funding and scale of intervention. is be built in the business case and commitment of all parties.

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Output Based Specification

The NCL project concerns the undertaking of renewal and enhancement work on and adjacent to the existing railway corridor accompanied with localised improvements to several existing railway stations. The outcome is the creation of an improved rail infrastructure network that will provide increased service capacity, flexibility and reliability.

The NCL project will perform a number of key roles, including but not limited to: - • Improve rail connectivity and reduce journey times for towns and cities along the NCL to better align with other similarly distanced regions from London such as Warwickshire and Oxfordshire on the Chiltern and Great Western routes respectively, and to other UK- wide economies on the CrossCountry network. • Stimulate sustainable economic growth across the 5 counties within the NCL corridor and catchment area, which are set to grow by 380,000 people on current forecasts by 2030. • Support the regions response to climate challenges by environmentally friendly travel alternatives that promote a modal shift from car to rail thereby reducing local highway pressures, CO2 emissions and human exposure to harmful air pollution particulate matter. • Support and enhance the value of several ongoing strategic schemes across the west and south Midlands, including the NCL’s west- east axis toward Oxford, eastern England and London, and the north-south axes at Oxford and Worcester.

To be included in the RNEP, Enhancement schemes must provide outcomes that meet one of more of the DfT set of priorities. Page 52 and 53 of the SOBC document describes in greater detail how the NCL scheme is considered to align with each of the four key priority DfT themes headlined below: - • Keeping people and goods moving smoothly and safely • Delivering the benefits from committed programmes and project already underway • Offering mode: new and better journeys and opportunities • Changing the way rail sector works for the better

Noting the project aligns with each of the DfT RNEP priorities in conjunction with a strong benefit cost ratio that achieves ’high’ or ‘very high’ value for money depending upon the selected Service Option, provides NCLTF members with confidence at this early strategic stage that the scheme will be appropriately considered for central government intervention and/or funding in due course.

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Outputs Based Specification

The table below summarises key outcomes derived from the NCL scheme and rationale for how the outcome will be achieved based upon information available at this early strategic stage.

Outcome How

Contribute to sustainable economic growth targets The proposed additional and more frequent services calling at existing, and new through improved rail connectivity and access to stations on the NCL will offer rail-based travel opportunities for regions that are in jobs across the West Midlands. the process of, or plan to deliver new homes and infrastructure by 2030. This will match trip origins within the catchment areas with regional and wider employment, leisure and retail destinations. To support the continued vision of the five NCLTF Without the proposed project works, existing and future residents located within Local Authorities, and maximise sustainable public the catchment areas of existing NCL stations will not have attractive rail services to transport mode share of the combined catchment compete with other transport modes, particularly road to make work, leisure and areas and therein reduce reliance upon the core retail trips. west-east road network. Optimise and enhance the benefits of other ongoing The project works will contribute value and allow better utilisation of capacity and or recently completed rail schemes within the West reliability improvements from independent schemes completed or approaching Midlands, and wider national rail network. completion, including Great Western electrification, GWR Intercity Express Trains (Class 800 IET), Oxford Area upgrade, North Cotswold Line platform extensions commissioned in 2019, Worcestershire Parkway opening in 2019.

Where practicable, improve operational The proposed project works, particularly at Wolvercot Jn will improve reliability performance of the wider rail network that and performance of services on the wider Great Western Railway network, interfaces with the NCL route, to build better thereby reducing operator charges through Schedule 8 mechanism, and shift of connectivity and services to/ from the NCL local Network Rail resources from compensation to core infrastructure. regions.

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Procurement Strategy

The current working assumption is the NCLTF will transition the promotion of the scheme in collaborative model, supported by a governance structure that includes DfT and Network Rail in order to progress the scheme through to a positive ‘Decision to Deliver’. The NCLTF understand its role as lead promoter may change during ‘Design’ and ‘Delivery’ stages once confidence has been built in the business case and a detailed funding and procurement strategy has been agreed between key parties that aligns with delivery and ongoing asset ownership and management responsibilities.

In advance of its aspirational March 2020 date for ‘Decision to Develop’ the NCLTF is preparing its procurement strategy for the ‘Develop’ stage itself, with formal procurement taking place between April and June 2020 (Programme page 85 - item 12). It is assumed that the train service will be procured via the Great Western Railway franchise holder, including considerations of rolling stock requirements, in liaison with the DfT, with the detailed specification defined in the Develop stage (Programme page 85) and subsequently in the Design stage via the normal industry timetable planning processes. Land assembly is assumed at this stage to be confined to any station requirements at Hanbor- ough and Pershore, with track and signalling infrastructure changes taking place within existing Network Rail land boundaries (given the North Cotswold Line’s double track formation throughout).

Project Phasing During the ‘Develop’ stage various procurement strategies will be explored in parallel with balancing the benefits, costs and risk for implementing the physical engineering works in two or more phases. The NCLTF team of specialist rail advisors has historic experience of developing and overseeing the funding, delivery, commissioning and handover of similar route enhancement projects on behalf of Chiltern Railways whilst working closely with Network Rail with notable similarities to the Evergreen phase I and II projects. Potential drivers for implementing the NCL in phases, and to be further explored further in the Develop stage, will be:-

Speed of delivery • Elements of work that have limited land and property constraints can reduce long lead times for third party negotiation land acquisition, or alternatively compulsory purchase routes. • Elements of physical infrastructure, particularly double track enhancements that have a reduced interface with the operational railway can potentially be sequenced or packaged separately to the renewals elements. • Elements of work with significant signalling and track work which will add to the design and construction timescales can potentially be separated

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Procurement Strategy

Opportunity for Private Investment & Funding • Elements of the scheme may potentially be more attractive for private investment, should they be shown to attract a higher proportion of monetisable revenue that can be efficiently captured and built into a usage or availability (or combination of both) basedpayment mechanism. The objective will during he Develop stage will be to develop an efficient funding and finance solution that aligns the nature of benefits with physical scope and delivery risk, and funding sources that then can be linked to a phased delivery programme. • During further development of the scheme the NCLTF will have continued dialogue with DfT and central government to explore funding timing, value and criteria and seek to link this to specific elements of the scheme that may be phased accordingly to align with availability.

Risks and Incentives The overarching principle in the development of the scheme is that the NCLTF is seeking to provide a more frequent and reliable, high quality service that meets the Conditional Outputs shown on page 27, at the lowest cost to the public purse, with risk being retained by parties who are best placed to efficiently manage it. Early consideration of the risk and mitigation is summarised as follows, and furthermore a high level project risk schedule is shown on page 91.

Development, Design and Construction Risk The contractual structure is the key means of allocating risk and providing an incentive mechanism to manage the risk. Careful consideration will be given to establish which party is best placed to manage each risk and the implications for price of transferring risk at each stage of the project. NCLTF is the promoter of the project that will lead the management and oversight of the development work activities with support from a team of specialist rail advisors. As noted in the Financial Case, the working assumption at present is the NCLTF and LEPs in collaboration will share an equal proportion of funding risk with the DfT during the Develop and Design stages, up until achieving a ‘Decision to Deliver’. De- pending upon the NCLTF procurement route selected, the development and delivery risk may either be shared or wholly transferred at an appropriate point during the design process when confidence in engineering risk and deliverability is understood.

Future ownership and operating models will be evaluated with input from key stakeholders during the Develop stage in parallel with the Deliv- ery stage procurement strategy to agree the optimal integrated solution to deliver the scheme Conditional Outputs. This will include a review of “third party”, “delivery agent” and “Network Rail sponsored” procurement methods, and their interaction with ownership structures including the standard Network Rail/TOC model, and other forms of vertically integrated (DBFM, concession type) solutions.

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Conclusion

The NCL is a major scheme that has the ability to provide a step change in rail services for an expansive region of the West Midlands and central southern England positively impacting the economy and environment. The NCLTF has purposely remained neutral at this SOBC stage in terms of selecting a preferred procurement strategy and ownership structure for the scheme.

The Service Options explored in the SOBC present in Economic terms either “High” or “Very High” value for money based upon DfT business case appraisal criteria, however as explained in the Finance Case the revenue income generated alone from the scheme is not sufficient to wholly finance the scheme and therefore a combined funding and finance solution will be required.

The NCLTF has drawn upon expertise from SLC Rail in particular during the SOBC stage who have extensive experience of procuring contracts for new railway infrastructure enhancement schemes, under third party and private developer models. Noting SLC Rail team experience, particularly with Chiltern Railways Evergreen I and II schemes that involved route renewal and enhancement works of a similar size and com- plexity to the NCL scheme, there is confidence a robust contracting and procurement strategy can be agreed either with Network Rail in a Delivery Agent role or alternatively utilising the private sector, however the matter to be determined during the Develop stage will be which option provides an appropriate level of risk transfer to the Sponsor group and best value for money.

This scheme therefore presents a significant opportunity for the NCLTF to collaborate with the DfT and Network Rail by utilising the recently adopted RNEP and Open for Business respective frameworks to comprehensively test multiple procurement, ownership and funding options within a culture of openness and transparency to deliver a major railway infrastructure scheme for the best value for money and risk profile to the public purse.

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MANAGEMENT CASE

Page 81

Governance process

As stated in the Commercial Case, the NCLTF is in a position to continue to promote the scheme and hold within itself the key governance arrangements. All development work up to the completion of this SOBC has been led by SLC Rail as specialist rail advisor to Worcestershire County Council. This contract expires in August 2019 and is subject to retendering at time of writing. It is anticipated that Worcestershire County Council will make a further such appointment on behalf of the Task Force following due procurement process to provide project management and scheme development expertise, working with all partners.

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Task Force sub-groups

Given the extended 86-mile geography of the North Cotswold Line, the NCLTF’s authorities have agreed to establish a number of sub-groups which will address local developments both supporting and being supported by the strategic train service proposition set out in this SOBC, as well as ‘Quick-Wins’ capable of being delivered in advance of the overall NCLTF proposition. The business cases for these will be prepared by the relevant local authorities under the ‘umbrella’ of the NCLTF but do not form part of this SOBC, although it is possible as they are developed in parallel that they may make a contribution at RNEP ‘Develop-Outline Business Case’ or ‘Design-Full Business Case’ stages. The NCLTF is keen to develop innovation in the way it leads and encourages both strategic and local enhancements. As at August 2019 the status of these sub-groups is as follows: Worcestershire Sub-Group – led by Worcestershire CC, which is delivering Worcestershire Parkway and Kidderminster Station Regeneration in 2019, the sub-group’s project under development with rail industry partners include Worcester Shrub Hill Station/Shrub Hill Quarter Mas- terplan and car park expansion schemes at Pershore and Honeybourne. The sub-group is working with GWR to ascertain whether Worcester -Paddington services which commence or terminate at Worcester Shrub Hill as from the December 2019 timetable can be extended from/to Kidderminster; representations to this effect have been made to DfT and First Group as part of the GWR Direct Award negotiations. The sub-group has also asked the DfT to consider extension of the GWR franchise geography to include Kidderminster and Stourbridge Junction. Gloucestershire Sub-Group – this sub-group is at inception stage with its first objectives being to consider Moreton-in-Marsh station car park capacity and access, both to accommodate current growth and to make provision for the station to function as a key NCL hub under the Option 5 train service proposals within this SOBC. Hanborough Sub-Group – Terms of Reference have been agreed between the NCLTF, Oxfordshire County Council (OCC), West Oxfordshire District Council (WODC), GWR and Network Rail for the sub-group, which is to be chaired by the Leader of OCC, Cllr. Ian Hudspeth. The sub- group is to work with WODC on preparation of a Supplementary Planning Document for Hanborough Station, ensuring the station footprint, development and highways access is consistent with the significant population growth at Woodstock and the Eynsham Garden Village, and prepare a masterplan for the station itself, both integral to the increased role of the station under NCLTF’s proposition. The sub-group is expected to commence its work in September 2019. The NCLTF wishes to extend this sub-group approach to Herefordshire if this meets Herefordshire Council’s aspirations, pending the outputs of Midlands Connect’s Birmingham-Worcester-Hereford 2TPH study due by the end of the 2019.

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Develop stage workstreams

The ‘Develop’ stage programme will commence in July 2020 following a 3 month period for engagement of ‘Develop’ engineering resources, with a projected duration of 18 months to completion at December 2021. A further 3 months is allowed for preparation for a ‘Decision to Design’ agreement with the DfT and rail industry by March 2022. The DfT’s RNEP guidance summarizes the ‘Develop’ stage as follows: “The Develop stage considers the feasibility of the investment. The Enhancements within this stage have a SOBC that has been endorsed by government and have a plan to develop the approaches it identified further. Enhancements in this stage are part of the government’s Enhancements portfolio and are subject to formal governance and change control.” This makes plain the key importance of completion of the ‘Determine’ stage, and achieving the ‘Decision to Develop’, in terms of the entry of the NCLTF Vision onto the government’s Enhancements portfolio, prospective government funding contributions to the scheme’s development and capital costs, and its progressing level of certainty of delivery, subject to the work to be undertaken in the ‘Develop’ stage. The guidance defines the ‘focus of activity’ in the ‘Develop’ stage to include 6 key outputs: -

• Benefit Realisation— How to realise the benefits identified in the ‘Determine’ SOBC.

• Option Assessment — Further definition of the benefits against key infrastructure and operational options for their delivery (which have been extensively considered within the NCLTF ‘Determine’ stage).

• Engineering and Design — development to support the option assessment.

• Benefit Cost Ratio — revisions on the BCR via the Option Selection process.

• Programme — the most effective incremental sequencing of benefit realisation.

• A Credible Case — economic and financial cases generating confidence in the scheme in the form of an Outline Business Case (OBC). The high level Gantt chart on page 85 sets out the proposed programme for the develop stage.

Page 84

Programme to “Decision to Design”

A detailed programme is included at Appendix E.

Page 85

Programme to “Decision to Design”

The programme for the ‘Develop’ stage comprises [with stage completion dates]:- A) RNEP Project Board Develop Inception — This will have been formed during the ‘Determine’ stage, with NCLTF and rail industry membership, reporting to the existing NCLTF Board (which will continue to provide the principal political leadership for the NCLTF) under the chairing of Lord Faulkner of Worcester. [April 2020 and thence monthly] B) Ongoing Political Engagement — Given the key importance of unity of purpose of the political leadership of the 5 local authorities and 5 LEPs making up the NCLTF, and associated stakeholders such as Midlands Connect and the West Midlands Rail Executive, specific ‘Inception’ and ‘Pre-Decision to Design’ briefing sessions will be held with relevant politicians. [Throughout] C) Project Management, Stakeholder Management, Communication and Marketing Plans — These will set the core agenda for the ‘Develop’ stage, respectively covering all the technical work-streams, management of the politics of the NCLTF, and the means of successfully communicating progress to other stakeholders and the wider public. [June 2020] D) Client Requirements Workshop and Documentation — These will build on the early work of the ‘Determine’ stage, seeking firm commitment from the rail industry and NCLTF partners on the core service and infrastructure capability outputs required of the scheme. [July 2020] E) Train Service Concept Agreement, Definition and Performance Modelling — The NCLTF has undertaken extensive and comprehensive testing of multiple train service options within the ‘Determine’ stage, together with the infrastructure required to support them, and agreed a preferred ‘Base Case’ timetable option. The ‘Develop’ stage develop this train service specification against the operational and performance profile of the new overall GWR timetable structure commencing in December 2019 (and the new West Midlands Trains timetable structure introduced in May 2019). Performance modelling, not required at ‘Determine’ stage, will be undertaken to confirm the operational impact of both the new NCLTF service and the scheme’s proposed infrastructure (pages 47 and 48). [March 2021] F) Operational Cost, Demand Forecasting and Economic Benefits Review —These are all driven by the adopted train service options; performance analysis will also be relevant as it affects each of these 3 outputs. Taken together with these will form the basis for agreement with the rail industry for the train service timetable to be taken into the Network Change process in the RNEP ‘Design’ stage. [July 2021]

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Programme to “Decision to Design”

G) Engineering, Architectural, Land Strategies—The ‘Determine’ SOBC has relied thus far on the NCLTF’s commentary and revisions to engineering and land-take options, and their capital costs (with Optimism Bias included) prepared by Network Rail for the DfT in 2014. The current preferred option for re-doubling Wolvercot Junction to Hanborough and Evesham to Pershore, with second platforms at both stations (page 43), derives from the outputs of ‘Determine’ timetable analysis. The ‘Develop’ stage requires much greater development of these infrastructure options, with more detailed engineering, land-take and signalling analysis, requiring engagement of suitable engineering resources to achieve this. Architectural support may be required for development of Hanborough and Pershore stations, with the former supported by the Sub- Group of the NCLTF being established with Oxfordshire County Council, West Oxfordshire District Council, Network Rail and GWR at the time of this SOBC, which may include preparation of a Supplementary Planning Statement and Masterplan as explained on page 78. This process will include the following components:- (1) BAPA — Early ‘Basic Asset Protection Agreement’ (BAPA) with Network Rail facilitating access to the railway and its engineering data for survey purposes throughout the ‘Develop’ stage. [July 2020] (2) Desktop Engineering/Land Study — Desktop analysis of the engineering context and challenges and land constraints and availability; although the NCL was built to a double-track formation modern standards may require additional land at locations such as Wolvercot Junction (Oxford). [September 2020] (3) Option Development Workshop —To define the key options to be assessed, and drive the surveying programme (which may be key to the ‘Develop’ programme given surveys are driven by multiple seasonal factors). [October 2020] (4) Surveys—Of NCL infrastructure, any land required, plus the stations at Hanborough and Pershore. [March 2021] (5) Drawings — Preparation of engineering drawings and any 3D visual images that will be useful to the NCLTF is making its case for the scheme. [March 2021] (6) Land Acquisition and Consents Strategy — Identification of land ownerships through land referencing, carrying out environmental surveys to support discussions with planners. [December 2020]

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Programme to “Decision to Design”

(7) Planning Strategy — Developing a planning strategy for either local planning, Development Consent Order (DCO) or Transport and Works Act Order (TWAO) consents process, covering the potential requirements across two planning authorities (West Oxfordshire and Wychavon district councils). This is a mandatory RNEP document. [March 2021] (8) Stakeholder Evaluation Workshop —When these work-streams have been completed to enable an integrated analysis of the options, and selection of preferred options for the two principal enhancements required. [April 2021] Completion of this process is anticipated in April 2021. H) Commercial, Funding and Financial Strategy — Central to successful delivery of the NCLTF Vision will be innovative development of the means of funding the scheme. The NCLTF’s approach is to consider a multiple-value investment matrix, bringing together value streams such as passenger and station car park revenue, land value capture, Section 106 monies and benefits to railway operational performance on the NCL itself and across the wider GWR and Cross Country networks given the NCL’s inter-relationship with them. It aims to maximise the conversion of such value streams into capital availability and thus to minimise call upon capital fund bids within LAs and LEPs and to central government. In calculating the proportion of value-led contribution it will enable the NCLTF to consider which capital funding pots it may wish to bid to and the political approach required to successfully access them. Within this ‘Develop’ stage the NCLTF will develop the available options, building on its technical support team’s 20-year experience of such innovation since the development of the Warwick Parkway model at Chiltern Railways (opened 2000) and in the only other major Third Party route regeneration schemes in the UK – the three ‘Evergreen’ schemes which made up the Chiltern transformation between 1998 and 2016. Negotiation of a model that the DfT and rail industry will accept at the ‘Decision to Design’ stage will form a vital part of this task, and, again, support prospective development funding and capital contributions from government. [October 2021].

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Programme to “Decision to Design”

I) Delivery Strategy — Inter-related to the financial and funding strategy will be development of a preferred delivery strategy. This can broadly take one of 3 approaches – full Third Party delivery by the NCLTF as a constituted body, Third Party delivery by one of the NCLTF partners as the ‘lead authority’ or delivery by Network Rail. Each will have a different financial and risk-allocation profile. Achievement of agreement upon the preferred model is a core task within the ‘Develop’ stage. [October 2021] J) Option Selection Report (OSR) - The OSR will be completed subsequent to the work-streams noted above, to include Common Safety Management (CSM) analysis and documentation, together with the scheme’s Qualitative (QRA) and Quantitative (QCRA) Risk Registers. This is broadly similar under RNEP to Stage 3 of the Governance of Railway Investment Projects process (GRIP 3). This will include the recommendation for the single option to be taken forward into the RNEP ‘Design’ stage. [October 2021] K) Delivery Programme —Railway projects of their very nature require careful and complex programming. This scheme is likely to encompass 5 related but discrete projects – redoubling between Wolvercot Junction and Hanborough, revising Wolvercot Junction itself, re-doubling between Evesham and Pershore, and delivering new platforms and station facilities at Hanborough and Pershore. This work- stream will consider the respective benefits of the order in which the two re-doublings are undertaken in terms of train service development, benefits realisation and minimizing disruptive impacts upon passengers and the existing train services duringdelivery. [October 2021] L) ‘Design’ Stage Strategy — A list of key outcomes and activities for the ‘Design’ stage, the project team will be identified and costs and programme to complete the stage established to demonstrate deliverability of the next stage to funding bodies. [December 2021] M) Single Option Development up to ‘Decision to Design’ - This will generate the following 4 mandatory RNEP documents:- (1) Single Option Capital Cost estimate [July 2021] (2) Commercial and Delivery Strategy [October 2021] (3) Programme for Delivery [October 2021] (4) Design Stage Strategy [December 2021]

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Programme to “Decision to Design”

N) Preparation for ‘Decision to Develop’ with DfT and Others—Ongoing political engagement within the NCLTF’s LA/LEP members is an essential task to sustain the NCLTF’s own drive and confidence. It will be equally important to prepare the ground with the DfT in advance of the ‘Decision to Develop’ on all aspects of the scheme. [March 2022] O) Decision to Design —In addition to the technical officers’ meeting to reach a ‘Decision to Design’ the Chair of the NCLTF, Lord Faulkner of Worcester, key NCLTF politicians and senior officers and relevant MPs will seek to engage with the DfT, GWR and Network Rail to mark, communicate and market what would be transformative decision for the future purpose of the North Cotswold Line. [March 2022]

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Risks

At this early strategic stage, based on experience of similar schemes it is anticipated the project will be subject to the following main risks.

RISK MITIGATION

NCLTF quality of evidence; gaining rail industry support from outset; early engagement with DfT including RNEP DfT – Government is not convinced of NCLTF 1 Market-led Proposal (2018) and DfT encouraging feedback ; Use of Third Party funding model to minimise DfT case. capital funding required. NCLTF’s rail advisor’s extensive experience of franchise bidding, franchise operation, Third Party investment and 2 Industry change (e.g. Williams Review). delivery over multiple industry structure changes 1996-current (SLC Rail) Programme change due to rail industry or Early warning via SLC’s close rail industry engagement at senior level enabling early assessment of programme 3 other external political changes e.g. cancella- implications and opportunities (e.g. HS2 cancellation would raise priority for NCLTF scheme) tion of HS2; delay in other schemes. One or more NCLTF partners not convinced Role of NCLTF Chair Lord Faulkner, and WCC Leader in seeking resolution with other NCLTF partners’ political of NCLTF case or withdraw, or political leadership. Existing cross-party, cross-NCL route support from NCL MPs and role in sustaining unity of purpose. 4 change, weakening capability to deliver Maintaining and further developing support of Sub-National Transport Bodies – Midlands Connect; England’s Eco- NCLTF benefits. nomic Heartland; Western Gateway NCLTF rail advisor’s Third Party model and assessment of range of value sources calculates maximum capital val- 5 NCLTF capital costs rise ue the scheme can generate (as per the Worcestershire Parkway model) SOBC to be signed off by NCLTF Board September 2019 with aspirational ‘Decision to Develop’ at end-March 2020 6 ‘Determine’ stage completion delayed. – allows 6 months for continuing engagement with DfT, NR and TOCs on case, Third Party funding model Procurement of ‘Develop’ engineering re- Resources can be procured either via WCC, or as part of Specialist Rail Expertise Contract when 2nd contract 7 sources delayed. awarded by WCC Aug-19. WCC’s existing lead-authority role facilitates efficient early procurement. GWR Direct Award not made for 2020 and NCLTF in close engagement with GWR since commencement of NCLTF supports early warning of such a circum- 8 GWR-support limited at crucial programme stance. point. Funding unavailable for major costs of NCLTF/WCC/SLC Rail have clear work programme under ‘Determine’ stage in Autumn 2019 to seek partners con- 9 ‘Develop’ stage. tributions, and, as part of ‘Decision to Deliver’ to seek DfT RNEP funding contribution Political change in Worcestershire at 2021 10 full council elections restricts lead-authority WCC existing cross-party support for NCLTF and lead-authority role.. role (within ‘Develop’ stage)

Page 91

Stakeholder plan

Bringing most principal stakeholders in the North Cotswold Line together as members of the NCLTF of itself forms a core constituent of the Stakeholder Plan for the route’s transformation scheme. As noted at page 12, the NCLTF’s membership includes all 4 of the route’s County Councils and its one unitary authority, Herefordshire Council, each also being the transport authorities for their areas. Each of the 5 Local Enterprise Partnerships are also members, as is the route’s principal rail user, the Cotswold Line Promotion Group. West Midlands Rail Executive, of which Worcestershire, Warwickshire and Herefordshire Councils are members, is also a supporting member. The 6 district councils through which the route passes, together with 3 to which its services are directly relevant, are engaged in 2 ways, either via annual briefing sessions (at a minimum) or within the sub-groups described at page 83. Their planning roles (also that of Herefordshire Council) are clearly important both in terms of scheme delivery and the overall strategic development and growth of their areas. The relevant councils are: Oxford City Council West Oxfordshire District Council Stratford-upon-Avon District Council Cotswold District Council Tewkesbury Borough Council Wychavon District Council Worcester City Council Malvern Hills District Council Wyre Forest District Council

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Stakeholder plan

The rail industry’s engagement is central to the progress of the NCLTF. The DfT, Network Rail and the Great Western Railway each provide commentary and advice to the NCLTF, without being formal members, supporting the technical work of the NCLTF officers. Political engagement has been extensive since the NCLTF’s establishment in 2017, led by Lord Faulkner of Worcester as the NCLTF Chair, with senior representation from local authority leaders and cabinet members on the NCLTF Board. All route MPs were briefed on the progress of the NCLTF’s work at a session in the House of Lords in February 2019. The NCLTF’s Stakeholder Plan looks forward in 2 phases: Phase 1—SOBC Publication through to ‘Decision to Develop’ – September 2019-March 2020 The Stakeholder plan for the remaining period of the ‘Determine’ stage is focused upon gaining confidence in the rationale for the scheme, as contained in this SOBC, with the DfT, Network Rail and GWR such that they will support a ‘Decision to Develop’ in March 2020. This period and process will also be key in seeking contributions to the ‘Develop’ stage costs from the 10 key local authority and Local Enterprise Partner- ship members of the NCLTF within their budget rounds for 2020-2021 and, prospectively, from the DfT if the scheme is accepted onto the Rail Network Enhancements Pipeline. Following adoption of this SOBC by the NCLTF Board in September 2019 and subsequent engagement with the DfT and rail industry the NCLTF intends to launch a summary of the SOBC and a new NCLTF web site, placing the conceptual scheme in the public domain, together with an update briefing for the route’s MPs. Phase 2- Within the ‘Develop’ stage The ‘Develop’ process, as illustrated on page 84 contains 3 key stakeholder engagement processes at the outset: Communications and Marketing Plan – setting out how the project will communicate with stakeholders and the public Stakeholder Management Plan – a detailed plan for engagement; given principal stakeholders are already engaged through the NCLTF this will continuing from the Determine stage, but consider wider stakeholders, whether departments within NCLTF members (e.g. highways or planning), third tier authorities such as parish councils, specific-issue bodies (e.g. heritage and environmental) and the wider public. Client Requirements Document – ensuring clarity of requirements between and within the rail industry and the NCLTF, particularly Network Rail as the owner of the infrastructure.

Page 93

Stakeholder plan

The RNEP process requires a mandatory Planning Strategy. Given the NCLTF plan may impact upon at least 5 District Council areas the NCLT- F’s established engagement with these authorities will form the basis of early engagement with these planning authorities. A Stakeholder Evaluation Workshop (or series of these dependent on the nature of the stakeholder audiences across the route) will be held as the key option for the RNEP ‘Design’ stage emerges, building on the de facto role of the NCLTF as a stakeholder forum for maintaining clear unity of purpose amongst the scheme’s promoters.

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SUMMARY AND NEXT STEPS

Page 95

Summary and next steps

The NCLTF has undertaken an extensive optioneering process over the last two years, building on the improvements being planned by GWR as part of the role out programme of the Intercity Express Trains. This included identifying a set of objectives and “Conditional Outputs” for the improvements in the rail service required to achieve them. At this stage in the scheme’s maturity options have been identified and appraised which have the potential to deliver Value for Money in the “Very High” category. A summary of the analysis is shown on pages 8 to 10 of this SOBC. The best performing one—Option 5— involves the provision of two trains per hour between Worcester, Oxford and London (extensions of Oxford-London services) operating on a skip stop pattern so that the optimum balance of journey time and frequency improvement can be delivered across the route. One of these services is extended to/from Great Malvern (and Hereford in some hours), and the other to/from Kidderminster. In order to enable reliable delivery of this option, infrastructure options have been identified that involve the reinstatement of c. nine miles of double track. The capital cost estimate (pre-GRIP) with optimism bias is £199m. On this basis the project has a Benefit Cost Ratio of 4.46. This SOBC summarises the NCLTF’s work to complete the ‘Determine’ stage of the Rail Network Enhancements Pipeline (RNEP) process, announced by the DfT in March 2018. Having proactively adopted the RNEP process and received DfT encouragement to continue the scheme’s development in response to its July 2018 Market-Led Proposal, the NCLTF is now seeking to move the project forward into the ‘Develop’ stage, leading towards an Outline Business Case and Single Option Report by March 2022. To that end, the NCLTF partners have identified a budget of £3m for the ‘Develop’ stage, and by way of this SOBC is asking the DfT both to accept the proposed scheme onto the Pipeline and to allocated 50% of the £3m cost, with £1.5m being provided by the NCLTF’s local authority and LEP partners. The NCLTF proposes that the North Cotswold Line Transformation scheme is developed and delivered using a mix of funding sources, including national, local and private sector funding, recognising its value as a transport scheme focused on delivering local and regional economic value. Constituent authorities within the Task Force have considerable experience of Third Party station development and innovation in investment, financial models as well as delivery. At this SOBC stage, the Task Force will welcome further engagement with and advice from the DfT in seeking to agree a ‘Decision to Develop’ at or around March 2020.

Page 96

Acknowledgements

Photographic attributions

Front cover © Steve Widdowson Page 3 and subsequent section headings—(IEP at Moreton-in-Marsh) © James Jackson Page 3 (IEP at Worcester Shrub Hill) By Geoff Sheppard - Own work, CC BY-SA 4.0 Page 6 © Adrian Hart/ Platform Art Page 42 (Wolvercot Junction) By Steve Daniels, CC BY-SA 2.0 Page 42 (Norton Junction) Btline [Public domain]

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Appendices

Appendix A North Cotswold Line Task Force Terms of Reference

Appendix B North Cotswold Line Task Force Market-Led Proposal— July 2018

Appendix C DfT Response to NCLTF Market-Led Proposal— December 2018

Appendix D Economic Case Technical Report — August 2019

Appendix E Detailed Project Programme for Develop Stage—August 2019

Appendix F Infrastructure Report—October 2018 / May 2019 Combined Report

Appendix G1, G2, G3.1 & G3.2 Tracsis Timetable reports —November 2018, August 2019, December 2019

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Final Issue December 2019