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Transport Systems Catapult

Five-Year Delivery Plan to March 2018 (abridged)

Driving the UK’s global leadership in Intelligent Mobility, promoting sustained UK economic growth and wellbeing

Transport Systems Catapult Five-Year Delivery Plan to March 2018 (Abridged)

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Executive summary Over recent years, the global demand for transport has increased significantly faster than the investment required to meet it, leading to growing congestion across all transport modes. There is a significant global opportunity potentially worth £900 billion annually by 2025 for improved ‘intelligent’ transport systems that unlock latent capacity. Although the UK is well positioned to take advantage of this opportunity through its expertise in transport modelling, design, planning and testing, there is scope to do much more, through investment in a unifying entity that can provide the focus for innovation in mobility.

The vision of the TSC is to drive the UK’s global leadership in Intelligent Mobility, promoting sustained UK economic growth and wellbeing. We request a five-year core grant of £46.6 million from the TSB to make this happen. In return, we believe we can generate £712 million of linked economic value within the same period. This comprises £66 million of additional contributions from commercial and collaborative partners in TSC projects, £454 million of direct economic benefits as a result of TSC activities and £193 million of wider economic benefits as a result of TSC activities (all numbers rounded to nearest £ million). Within our first few years of operation, we will investigate further opportunities to invest and exploit the huge market in intelligent transport systems.

We will become the ‘go-to’ place for Intelligent Mobility, developing global leadership in Integrated Transport Systems. £76 million will be invested to develop a balanced portfolio from our existing pipeline of over 70 innovation projects to prove the commercial viability of new concepts, and to build advanced integrated modelling and test facilities that will promote the development of new multi-modal transport approaches. To support this, we will drive greater unification of the transport sector. Together, these projects and facilities will enable us to build a valuable set of capabilities, skills and assets that we will use to generate the £66 million of non-core-funded income.

We want to act as a ‘magnet’ for innovation activity in Intelligent Mobility, so we will invest £4.1 million capital in creating a 36,000 square foot Innovation Centre in Milton Keynes – a facility for innovators to collaborate and to demonstrate and discuss their products and services directly with UK and international businesses.

We have strong engagement with many major organisations in transport. These include Amey, Arup, Babcock Marine, BAE Systems, Crossrail, the DfT, First Group, Ford, GKN, the Highways Agency, IBM, Jaguar Land Rover, Mott McDonald, Network Rail, Thales, Siemens and the Stobart Group. We are working with many of the UK’s leading universities, supporting a number of Industrial Doctorate Centres. We also have an extensive programme of SME engagement and support, including the opportunity to meet potential investors, showcase their innovations to UK and international companies, meet other innovative companies and become integral parts of TSC project teams.

Our plan is ambitious but realistic. It has been widely reviewed by our stakeholders, with over 500 comments received to date. We want to change the face of UK transport to deliver a future where integrated transport is the norm and where goods and people can be moved seamlessly. We want to lead the world in Intelligent Mobility and, with your support, we can make a real difference.

Steve Yianni CEO Transport Systems Catapult, October 2013


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Contents Executive summary ........................................................................................................................................................................................................................ ii

1 Introduction ............................................................................................................................................................................................................................. 1

2 The challenge ......................................................................................................................................................................................................................... 1

3 Vision and strategy ................................................................................................................................................................................................................. 2

4 Delivering a portfolio of innovation projects ............................................................................................................................................................................ 3

5 Integrated innovation platforms and infrastructure .................................................................................................................................................................. 6

6 Leading thought in Intelligent Mobility ..................................................................................................................................................................................... 7

7 Creating and running an Innovation Centre ............................................................................................................................................................................ 8

8 Communications and engagement with our stakeholders ...................................................................................................................................................... 9

9 Building and managing the organisation ............................................................................................................................................................................... 10

10 Financials ............................................................................................................................................................................................................................ 12

11 Achieving success: the impact of the TSC, risk and metrics .............................................................................................................................................. 14


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1 Introduction This document is an abridged version of the Transport Systems Catapult (TSC) Delivery Plan to 31st March 2018. It includes a brief discussion of the challenges facing transport, the vision of the TSC, our two-part strategy for achieving this vision and the mechanisms we will implement (captured in the roundel on the right). It also highlights the key financial information, together with the metrics we will use to measure and drive success.

The full Delivery Plan, available separately, provides further detail.

2 The challenge Efficient transport systems are essential to the health and wealth of the UK, its businesses, its economy and its people. Without transport, we would run out of most foods within seven days and energy within a few weeks. Transport enables us to live where we want, work where we can and enjoy our leisure time, and use our travel time effectively.

Population and economic growth will continue to increase demand for transport, yet access to cost-effective transport is an increasing problem and it is often the most vulnerable who are affected when transport systems fail. If infrastructure and energy prices allow, a threefold increase in people and freight movements is predicted by 2050. Existing infrastructure does not match current demands, and funds for basic maintenance, let alone improvements, are limited. Traffic problems are well known in the UK but are even worse elsewhere – in São Paulo, for instance, 15-hour long traffic jams are not unusual.

Intelligent Mobility The key challenge is how to increase ‘mobility’: defined as the efficient and cost-effective movement of goods and people. Constraints on land and investment mean that the only way to overcome this challenge is to work intelligently – in a coordinated and collaborative way – to develop improved transport systems that unlock latent capacity.

Very few journeys are made using one mode of transport alone. Passengers view journeys from end to end and consider comfort, cost and time as they make choices before and during those journeys; the circumstances can change through a journey, so up-to-date information is vital – indeed its provision is already a growing market. Yet industry, government, authorities and operators all work in individual silos – even the new information systems tend to work on only one form of transport. Businesses know that to deliver the required commercial, technical and social solutions they must work across and between these silos. There is currently a market failure with little or no interface or interactions between businesses.

The current system is both fragile and prone to failure. Additionally, businesses are informing us that if the UK does not respond to this challenge then it will end up needing to purchase solutions from other countries. The Transport Systems Catapult responds to these urgent needs.


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3 Vision and strategy The vision and strategy of the Transport Systems Catapult (TSC) is a direct response to explicit demands from business, academia and government. It is underpinned by market analysis that shows the enormous potential of the emerging market for Intelligent Mobility.

The global market for innovative, integrated solutions for transport is estimated to be worth £900 billion annually by 2025. For the UK to exploit this market and generate substantial growth, a well-positioned, unifying entity is required that can provide a focus for innovation in mobility. The TSC is being established to work across business, academia and government. Through its core TSB funding, the TSC will be autonomous and ambitious. Because of its long-term strategic outlook, it is also justified in claiming independence and objectivity within transport and is, therefore, uniquely positioned to be this unifying entity and focal point.

Consultation across a very balanced cross-section of industry has prompted and informed our vision:

Our vision is to drive the UK’s global leadership in Intelligent Mobility, promoting sustained UK economic growth and wellbeing.

To achieve this vision, we have a two-part strategy (represented in the green layer of the roundel), based around Integrated Transport Systems and a Unified Transport Sector.

Definition What the TSC will do

Integrated Transport Systems refer to the integration of the infrastructure, vehicles, information and communication systems that enable movement of goods and people.

We will work with business, academia and government to take the myriad emerging ideas from around the world in this area and turn them into commercial reality. We will do this by running projects that develop concepts and prove their commercial viability and by building advanced integrated modelling and test facilities that will support the development of multi-modal transport approaches.

The Unified Transport Sector refers to the relationships between organisations that develop, deliver and use transport.

To support the first part of the strategy, we will embark upon a cultural change journey by developing thought leadership on the world stage in Intelligent Mobility and by working with the industry to reduce fragmentation. We will then promote the capabilities of the unified sector around the world. The UK can lead the world by creating a community of organisations – large and small, public and private, research-based and operational – interacting with each other and within their wider business and societal environment, and focused on delivering Intelligent Mobility.


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To deliver this strategy, we will pursue four mechanisms (represented in the blue layer of the roundel):

• delivering a portfolio of innovation projects (section 4) – we will develop a wide range of projects that will speed the development of new ideas that are key parts of delivering Integrated Transport Systems

• connecting platforms and infrastructure (section 5) – we will build and run large-scale technology-based modelling facilities and collaborate with test facilities to support the rapid development of innovative ideas. The first of these strategic platforms is the National Transport Systems Modelling facility. This and the Integrated Testing Environment are both direct responses to industry need and examples of where the TSC is uniquely positioned to bring together facilities with and on behalf of industry

• leading thought in Intelligent Mobility (section 6) – we will become the ‘go-to’ place on the role of Intelligent Mobility in the future of transport • creating and running an Innovation Centre (section 7) – we will provide a truly world-class hub for people, systems and ideas, where UK growth

in Intelligent Mobility is stimulated through ideas generation, development and demonstrations.

Underpinning these are the two foundations of the business (the purple layer of the roundel):

• communicating and engaging with our stakeholders (section 8) – active engagement, networking, communications and marketing of the TSC’s vision, role, purpose and offerings, all reinforcing the objectivity and neutrality of the TSC

• building and managing the organisation (section 9) – an agile organisation with significant depth of expertise.

Furthermore, we will manage the business as described in the following sections:

• financial summary (section 10) – full cost breakdown of income and expenditure of the TSC • economic impact of the TSC, summary risk and metrics (section 11) – analysis of the economic impact of our activities over the next five years,

register of the key risks the TSC is mitigating against and measures of success to track and assess the TSC’s performance.

4 Delivering a portfolio of innovation projects Initial TSC Innovation Projects The TSC already has over 70 project opportunities in its pipeline, ranging from embryonic ideas to more fully scoped projects ready to become part of our live portfolio. The pipeline currently has a probability-weighted value of £21 million across all funding types, 30% of the whole five-year estimated project spend. New opportunities are qualified using a two-stage project selection process, the first examining alignment with our vision and the potential to have a major positive impact on transport and enhance our capability and skills, and the second performing a more rigorous analysis, using a larger number of criteria.

Project opportunities that have been through this process and that we have committed to deliver include the following.


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Demonstrator – Low-Carbon Urban Transport Zone (LUTZ): Demonstrating on a large scale the potential of autonomous vehicles, cloud-enabled mobility and transport on-demand services, the £50 million LUTZ programme exploits the significant potential of Milton Keynes as a test-bed for innovative transport systems. The project will work across many of the traditional silos and jointly deliver commercial, technical and social solutions. Although the concept existed before the TSC, we are working to build the commitment of the project partners. We then plan to run the programme management office via a contribution of £5 million. Within this contribution, we will also deliver key projects within the programme and play a major role in the development and implementation of standards and protocols for autonomous vehicles. We intend to find a further £5 million for LUTZ through EU sources.

Interface challenge – Airport Integration: Initiated by the Future Airspace Strategy Industry Implementation Group (a consortium of airlines, airports, air traffic controllers, the CAA, the DfT and the MoD), this project will integrate real-time data from UK airports into the Air Traffic Management System, improving the efficiency and resilience of the UK and European Air Transport Network, and the transition between transport modes and the efficiency of end-to-end journeys. We are contributing £750,000 to build a team that will identify and model improvements in system performance and realise their commercial benefits in deployment across eight UK airports. We will also ensure that the impact and role of transport modes outside of aviation are fully realised.

Modelling and system intelligence – Instant Weather (‘Now-Casting’): We are collaborating with the Connected Digital Economy Catapult (CDEC) and the Met Office to develop applications and services using real-time transport and environmental data. We will bring transport sector expertise and access to our networks and use our extensive modelling capability to explore the potential benefits of using these data sources in new ways.

Business environments – DfT Innovation in Contracts and Operations: We are working, initially with the DfT, to drive changes in transport organisations’ approaches to procurement and commercial contract management. For instance, for the new DfT Rail Franchise Programme we are working with the franchisee, passenger groups, freight associations, the DfT and others to promote, sponsor and enable innovation across the DfT’s wider transport portfolio and throughout the transport industry supply chain. The neutral positioning of the TSC is critical to being accepted by all parties.

Shared knowledge base – Autonomous Vehicle Systems Review: In response to a need identified with the Marine Industries Leadership Council, we are investigating the state of the art in autonomous vehicle systems (implemented systems and research). We are working with the Transport KTN and the University of Oxford to define standards for autonomous vehicle systems and degrees of autonomy (from remote control on guided tracks to autonomous vehicles learning for themselves and adaptable to operate in any range of environments). This will allow more cross-sector knowledge transfer and sign-posting for supply chains.

Disruptive idea – Sentiment Mapping for Transport Systems: We are working with OpenCityLabs (an SME) on its CommonPlace project, which is using new data streams (e.g. from social media) to carry out ‘sentiment analysis’ to optimise the design and operation of transport systems. Innovative techniques such as sentiment analysis give all citizens a genuine opportunity to participate in the design of their city, town or neighbourhood. We are spending £60,000 to develop methods that will establish the near-real-time needs of travellers around the UK and allow transport providers to respond accordingly. The ultimate aim of this disruptive project is to create dynamic timetabling.


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We have an ongoing dialogue and working relationship with all the other Catapults and will continue to share knowledge and maximise the opportunities of a joined-up approach with them. Particular project areas that we are investigating include:

• Connected Digital Economy: Technical focus on data-to-intelligence. Initial project (Instant Weather) with the Met Office and SMEs from Sunderland Software City.

• Future Cities: Working on urban mobility challenges and city demonstrators, such as those within the MK:SMART programme. Also identifying synergies and opportunities between the NTSM facility and the Future Cities Observatory for capturing and visualising data on city systems.

• Satellite Applications: Examples for collaboration include remote asset management and control of vehicle platooning (a possible DfT project).

Skills, capabilities and assets These initial projects and the integrated platforms and infrastructure that are discussed in the next section will enable the TSC to build a unique set of valuable capabilities – including Integrated Transport Systems modelling, and design and testing (not only technical, but also human, economic, environmental and social specialisms), network building, expertise on the future of transport, programme management and SME support. These will form the basis of our commercial income generation and our collaborative R&D bids. Furthermore, they will ensure that the TSC quickly becomes the ‘go-to’ place for developing transport system technology, and for leading-edge thinking in Intelligent Mobility and Integrated Transport Systems innovation, and is established as the focal point for activity to unify the transport sector.

Funding the portfolio The main source of TSC income will arise from the delivery of projects. These can be funded either using our core funding from the TSB and the DfT, or through collaborative R&D grants or commercial contracts.

We have secured an additional grant from the DfT of £16.9 million over the first five years. This is heavily weighted to the earlier years and, as such, will be used to enhance our core TSB funding in the development of key capabilities, including the National Transport Systems Modelling (NTSM) facility and the Integrated Testing Environment (ITE). One of the benefits of this funding is that we have the flexibility to deploy it for either capital or operational purposes.

The TSC’s business development team will identify and develop opportunities for:

• Collaborative R&D: As our reputation and capabilities develop, we will win funding from various public funding sources such as Horizon 2020, the TSB (Advanced Manufacturing Supply Chain Initiative (AMSCI 4), transport and others), the DfT, HEFCE, the Highways Agency, and other UK Government sources including SBRI and infrastructure funding. The strategy and direction of these bodies overlaps significantly with our own, representing some major opportunities. By Year 5, we expect revenue through collaborative R&D funded projects to be £10.4 million p.a.

• Commercial income: A proportion of our projects will be funded through direct contracts or through payments in kind such as the secondment of staff into the TSC for a period of time. A range of transport operators is keen to invest in the TSC to help them increase their level of integration and improve the efficiency and effectiveness of their services. These include network operators such as the Highways Agency, public transport


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operators such as FirstGroup and logistics companies such as the Stobart Group. Several organisations that consider Intelligent Mobility and Integrated Transport Systems as priorities for investment (including Amey, Arup, GKN and the Transport Research Laboratory (TRL)) have committed secondment resource. By Year 5, we expect revenue through commercially funded projects to be £10.8 million p.a.

5 Integrated innovation platforms and infrastructure The National Transport Systems Modelling (NTSM) facility and the Integrated Testing Environment (ITE) are the TSC’s first two strategic innovation platforms.

National Transport Systems Modelling facility The TSC is planning to invest £4.5 million over five years in building the National Transport Systems Modelling (NTSM) facility. An ambitious project that is a world first, it will create an open access facility of the UK’s transport network, linking together existing models from, in the first instance, the Highways Agency, Network Rail and London Underground and over time local models from around the UK. The facility will draw on data from the UK’s world-class test facilities, allowing comprehensive exploration of transport issues and enabling users to develop and test their own integrated solutions to the issues that face transport systems. Over time, the facility will become both an invaluable asset to UK transport policy-makers, operators, planners and designers and internationally recognised and used.

We will support SMEs by providing a test-bed where they can develop new ideas without the usual barriers to entry in large-scale systems modelling. For example, innovators have suggested such a facility would enable them to develop new services that will allow a global freight distributor to optimise its transportation of freight through major new transport nodes such as the Liverpool SuperPort.

A project team – including stakeholders from BIS, the DfT, TfL, the Highways Agency and Network Rail, representatives from a number of academic departments with expertise in modelling, including Bristol University, Imperial College London and Newcastle University, and consultancy firms such as Mott MacDonald – is currently developing the foundations, scope and preliminary design for the facility together with a programme of pilots to run in 2014.

Integrated Testing Environment The TSC investment of £3 million in the Integrated Testing Environment (ITE) will complement the NTSM by generating real-world and real-time test data that can be fed into its models. In doing so, it will bring together and make use of the UK’s world-class testing facilities and capabilities (including testing and proving grounds in marine, rail and road, academic test facilities, TSB demonstrators, real-world test sites around the UK and other Catapult data platforms and simulators). As well as allowing more realistic testing of multi-modal transport innovations without needing to invest in substantial new testing facilities, the ITE will also create a new market for multi-modal testing, which will enable the test centres to increase their utilisation.


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6 Leading thought in Intelligent Mobility The TSC will run a programme of activities that champion and implement new ways of thinking about and applying Intelligent Mobility. In particular, we will help focus thought on:

• how people and organisations contribute to transport, and how they can best concentrate their efforts to play their part in delivering Intelligent Mobility

• how products, services and solutions contribute to the development and delivery of Integrated Transport Systems, how these can be adapted to better support Intelligent Mobility, and what innovations can be developed that will meet global demand.

As a result of our work, we will build credibility as the ‘go-to’ place for knowledge and expertise on Integrated Transport Systems. We have already created, are leading or are part of a number of working and advisory groups, such as a Transport Industry Advisory Group; a strategy group with the DfT; a number of modal working groups including the Automotive Council Intelligent Mobility Working Group, the Marine Industry Leadership Council and the rail industry’s Technical Strategy Leadership Group; and a new European integrated transport team – chaired by the TSC CEO, with the heads of the four EU Transport Research Advisory Councils (Rail, Road Transport, Aviation and Marine).

We will run a rolling programme of workshops with diverse groups of stakeholders addressing the future for Intelligent Mobility. These will be run in the Innovation Centre and around the UK to embrace the greatest possible number of SMEs and will feature experts from within the TSC as well as fellows drawn from industry and academia who will work with us on an in-residence basis. We intend to run our own Intelligent Mobility Summit in Q3 2014, attracting international delegates.

We will work closely with the Transport Knowledge Transfer Network and other KTNs to build on their important work within the industry and build on the findings of recent TSB programmes such as the Low Carbon Vehicle Programme and the Internet of Things.

Finally, we will create and maintain a world-class online knowledge base, which draws upon worldwide research and capability in Intelligent Mobility. This will include a global benchmarking service that brings together best practice in transport system thinking.

We anticipate that through these activities we will, over time, start to change the way in which different communities within transport think about their role in delivering a seamless end-user experience. Over the longer term, we will assess the degree to which key stakeholders are building Intelligent Mobility into their own businesses and activities.


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7 Creating and running an Innovation Centre The TSC Innovation Centre will be located in Milton Keynes – central within the UK, with short travel times from large cities and close proximity to high-calibre universities, relevant industries and existing transport research and testing facilities. The city is well suited to act as a test-bed for innovations in multi-modal transport because of its structured layout and flexible infrastructure. The TSC benefits from significant local authority support for its vision and plans – a key factor in attracting collaborative partners to work on ambitious large-scale demonstrator projects.

The Innovation Centre is the heart of the TSC, acting as the focal point from which it will conduct business. It will:

• be a ‘neutral’ meeting environment where different players from transport can come together. The space will be dynamic and stimulating to encourage innovation

• act as the hub for the delivery of the portfolio of Innovation Projects, containing highly configurable project spaces and world-class IT infrastructure

• act as the primary access point for the major NTSM and ITE facilities, housing the teams that will build, maintain and use them • host many of the TSC thought leadership activities • be a showcase for UK expertise in transportation. For instance, during the first six months we will link to the MIRA Advance Telematics Test

Facility and host an exhibition of TfL’s success in multi-modal transport. We will also host leading examples of SME innovations from around the UK

• be highly connected to the facilities and capabilities in other key locations both in the UK, including the Future Cities Catapult, Southampton Marine and Maritime Institute (SMMI), National Air Traffic Services (NATS) and TRL, and abroad, such as SMMI’s Singapore test tanks

• have connections to other UK centres of excellence, allowing widespread access to academics, SMEs and other large companies. We are talking to CDEC about using the National Virtual Incubator network to support this

• house the core administrative functions of the TSC.

An impressive modern office space (the Pinnacle) that extends to over 36,000 square feet has been chosen. It is only 5 minutes’ walk from Milton Keynes Central Station, which itself is 30 minutes by train from either London Euston or Birmingham International. The building will be fitted out in two phases, costing £1.3 million during Year 1 and £1.5 million during Year 2. Fixtures and fittings excluding IT equipment will cost £1.3 million. Lease costs will amount to £ 4.3 million over the first five years.


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8 Communications and engagement with our stakeholders The communications and engagement programme is designed to underpin key parts of our strategy. It will encourage greater unification through collaboration, promote our thought leadership activities, build communities of users and attract senior leaders to our platforms and infrastructure. Effective engagement will generate a strong pipeline of innovation projects, and drive high utilisation of our Innovation Centre. All these activities will build our brand to support our recruitment and extend our reach to international collaborators and customers.

We have identified a wide range of stakeholders, including policy makers, potential customers and suppliers, industry interest groups, academics, potential funders, the owners of test facilities and a wide variety of networks and channels. These can tend to be focused on individual transport modes so we will take care to ensure that whilst our communications activity is understandable to each community, it also highlights the importance and benefits of collaboration and integrated solutions, as well as the vision of Intelligent Mobility in a modally agnostic way. Highlights of our plan include:

• the official Innovation Centre launch during Q1 2014, which will include a ministerial visit and a wide range of demonstrators and workshop events

• the Intelligent Mobility Summit in Q3 2014, which will demonstrate our thought leadership and UK innovation capability • the SME Roadshow, which will start during Q2 2014, taking the highlights of the Innovation Centre around the UK • launch of the LUTZ programme and the NTSM and ITE facilities during 2014.

We have taken particular care to develop detailed plans to engage academia and SMEs. We have already engaged with the Universities Transport Studies Group and individual centres of excellence (including Birmingham, Bristol, Cambridge, Coventry, Imperial, Newcastle, Nottingham, Oxford, Oxford Brookes and UCL). We plan to maintain deep relationships with these universities during our first five years. We have provided formal letters of support to three universities (Bristol, Newcastle, UCL) for Industrial Doctorate Centre engagements, which will provide opportunities for the TSC to benefit from the placement of students, in some cases for two to three years.

The TSC will act as a focal point for SME innovation and commercialisation activity in Intelligent Mobility around the UK. We will do this via a number of methods, including working with the Transport and other KTNs to raise awareness of UK activity in Intelligent Mobility, offering opportunities to demonstrate their products and services to potential customers, collaborators and venture capitalists in our Innovation Centre (including access to the major transport players, which can be difficult for many SMEs), providing dedicated support to scale their innovative products, running competitions to attract new ideas and facilitating UK-wide ‘outreach’ activities to support SMEs who cannot easily access Milton Keynes.

We recognise that SMEs are highly focused on their own businesses, but where we can we will also invite them to influence our project activities, for example acting as advisors on project boards.


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9 Building and managing the organisation The TSC will be set up so that its people, management, functions and interactions with stakeholders are effective and efficient. We will create an organisation with a highly ‘porous’ boundary that will facilitate collaboration with external partners and stakeholders. Furthermore, we will work hard to ensure that silos do not form and that the organisation remains as flat and as highly connected as possible. We plan to employ a substantial number of non-permanent staff, but with the majority being permanent to ensure we retain key skills in house while still maintaining a degree of flexibility and maximising both knowledge transfer into and out of the TSC and engagement with industry.

Directorates The organisation will comprise six core directorates:

• Strategy (led by the Director of Strategy): Reviews current activity across work streams to maintain alignment with the TSC vision and strategy. Responsible for wide-ranging horizon scanning, and also covers market positioning for the TSC and works closely with Business Development in this area to ensure a joined-up approach.

• Technology (led by the Chief Technical Officer): Focuses on technology and thought leadership, both internally and externally. Performs technological horizon scanning across all sectors. Engages with those parts of the stakeholder community that are rich sources of innovation and expertise, such as universities. Plays a key role in identifying talented individuals to work with the organisation. Manages the TSC’s knowledge assets.

• Innovation (led by the Director of Innovation): Works with stakeholders and other directorates to develop embryonic ideas, converting them into future project opportunities. Responsible for assessing the ‘hopper’ of opportunities.

• Business Development (led by the Director of Business Development): Responsible for identifying new opportunities through its wide-ranging engagement activity with the market. Responsible for securing the TSC’s collaborative R&D and commercial income. Responsible for Intellectual Property development and ownership. The TSC’s communications and engagement activity sits within this highly market-facing group.

• Operations and Projects (led by the Chief Operating Officer): Responsible for delivery of the innovation portfolio as well as development, delivery and maintenance of the innovation platforms. Responsible for management of the content of the Innovation Centre.

• Finance (led by the Chief Financial Officer): Comprises the key functions of finance, ICT, HR, legal and management of the building and facilities. Also covers the set-up and management of knowledge assets. (In the short term, the HR function will report directly to the CEO due to the high priority of recruitment and the development of policies and procedures.)

It is recognised that in creating directorates we risk creating silos. To avoid this happening, we have identified the importance of hiring people into the organisation who are natural collaborators and connectors.


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IP, compliance and governance The general principles of IP management are very simple, although they will inevitably become more complex as the variety of capabilities, collaborative projects and partnering agreements expands. The principles that we will follow are defined by the TSB and expanded in an operating guide for all the Catapults. Regarding State Aid, the Chief Financial Officer will have final sign-off on the business models associated with delivering access to all assets created from TSB grants and will ensure that the TSC can evidence its sources of match funding to ensure that none of the contractual income streams could be deemed to represent breaches of State Aid regulations. In addition to the Main Board, which is now in place (comprising the Chairman, CEO and four non-executive directors), there will be regular meetings of three main governance forums: the Executive Management Team, Functional Review Groups and operational coordination forums (quarterly meetings attended by all staff).

Resourcing and recruitment For the recruitment of permanent staff, we will rely primarily on social routes such as LinkedIn (this has already been used very successfully in the building of the executive management team).

For non-permanent staff, we will identify teams through competitions and tenders. For example, we anticipate running competitions around the NTSM facility – the winners will second a project team into the TSC, maximising opportunities for knowledge exchange. We will also invite SMEs to co-locate for short periods of time within the Innovation Centre to carry on their own businesses. This will lead to enhanced awareness on their part of what we are doing and allow the TSC to identify and meet potential new resource.

To find the talented individuals our business will need, we will use a variety of approaches, including fellowships from industry and academia; secondees from our key stakeholders across all sectors; short-term placements drawn from representatives of SMEs and a diverse range of transport and non-transport businesses (for instance, we are already approaching companies in and around Milton Keynes including John Lewis, Marsh Insurance Brokers, Network Rail, Red Bull, Santander and Scania); specialist contractors providing expertise and skills required for projects; apprenticeships (we are participating in establishment of the Smart Business Academy, a national collaborative skills pilot to develop entry routes and career progression in transport); doctoral trainees (we have supported bids for Industrial Doctorate Centres by a number of leading universities (Bristol, Newcastle, UCL) that will incorporate periods of secondment of their doctoral training cohort to the Innovation Centre).

Total TSC resource levels of permanent and non-permanent staff reach 88 by the end of Year 1 (2013–14), and rise to 271 by Year 5 (2017–18).

In Year 5, the ratio of project staff to central staff (management, administrative and support) is forecast to be 3.3:1 (77% project staff). This is designed to ensure that the TSC maximises the money it spends on projects and platforms.

In keeping with our intention to ensure we build and retain valuable capability, the permanent to non-permanent staff ratio overall will be 1.4:1 (58% permanent staff) in Year 5.


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10 Financials This Financial Plan describes the TSC’s financial arrangements from Year 1 (to March 2014) to Year 5 (to March 2018). The following table gives an overview of the financial five-year plan in the requested TSB format, followed by detail on the key line totals.

Core grant request • We are requesting a £46.6 million core grant covering the initial set-up year (Year 1) and the subsequent four full years to 31st March 2018:

£7.5 million for Year 1 with a peak of £11.2 million in Year 4. • The core grant will be used to fund capital expenditure of £5.5 million and business management expenditure of £30.5 million over the period, in

addition to enabling core project expenditure.

Non-core grant income build-up • Collaborative R&D: This represents projects undertaken collaboratively with partners from business, academia and government or others in

response to grant or public funding bids from the UK or the EU. The total revenue for these activities is forecast to be £25.4 million cumulatively over five years.

• Commercial income including public sector procurement: This represents income generated from the TSC’s own activities and capabilities, and is planned to be £23.2 million over five years.

• DfT income: This represents income for direct commissions from the DfT. Initial grant: £16.9 million phased over five years, peaking in Year 2. • Aggregated earned income from all sources excluding the core grant but including commercial projects, collaborative projects and DfT grants

will grow from £1.3 million in Year 1 to £22.2 million in Year 5, with a cumulative income over five years of £65.5 million.

Balance of expenditure • Over the five years, 68% of expenditure will be on project-related costs, 27% on non-project related costs and 5% on capital expenditure.

Staff • We expect the TSC to have approximately 60 permanent staff at the end of Year 1 (March 2014) plus around 28 non-permanent project staff

focused on supporting the delivery of the NTSM, ITE and other project activities. By Year 5, we expect permanent staff to number approximately 158 with around 113 non-permanent staff.


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Overview financial plan (£ thousands)

Year 1 to 31/03/2014

Year 2 to 31/03/15

Year 3 to 31/03/16

Year 4 to 31/03/17

Year 5 to 31/03/18

Cumulative

INCOME ! ! ! ! ! !Core 7,537 7,499 10,157 11,234 10,161 46,587 Commercial 0 1,745 4,375 6,314 10,806 23,239 Collaborative R&D 0 2,062 5,102 7,795 10,419 25,378 DfT 1,250 7,936 4,650 2,108 956 16,900 Total income 8,787 19,242 24,284 27,450 32,342 112,104 EXPENDITURE Project related:

Staff 2,683 10,311 15,974 18,355 22,642 69,965 Other overheads 236 288 410 536 701 2,171 Project capex 0 1,000 1,000 1,000 1,000 4,000

Total project-related costs1 2,919 11,599 17,384 19,891 24,343 76,136 Business related:

Staff 2,283 4,674 5,048 5,478 5,827 23,310 Facilities 729 803 1,014 1,244 1,293 5,082 Other overheads 281 430 446 458 471 2,087

Total business management costs2 3,293 5,908 6,508 7,180 7,591 30,479 Capital expenditure3 2,575 1,736 392 379 408 5,489 Total TSC expenditure 8,787 19,242 24,284 27,450 32,342 112,104 Surplus / (Deficit) 0 0 0 0 0 0

1 Project-related costs relate to direct costs associated with our engagement in core-funded projects, collaborative R&D and commercial income. 2 Business management costs relate to all executive, management, finance and operations, human resources, marketing, governance and other associated costs. 3 Capital expenditure relates to the capital costs of fit-out for the Innovation Centre of £4.1 million over the first two years and other capital expenditures of £1.4 million relating to

other fixtures and fittings plus computer equipment. It does not include capex that is directly associated with projects.


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11 Achieving success: the impact of the TSC, risk and metrics Economic impact analysis An ex-ante economic impact analysis of the first five years of operations (summarised below) highlights three main economic and socio-economic impacts of the TSC’s project portfolio.

Net additional economic and socio-economic impact

Cumulative Year 1–5 Notes

Additional contributions from collaborative and commercial partners in TSC projects

£65.5 million* Core grant from TSB of £46.6 million over the five years to 2017/18 This additional amount based on TSC forecasts of £23.2 million from commercial partners, £25.4 million from collaborative R&D projects, and £16.9 million from DfT-funded projects over the period

Direct economic benefits as a result of TSC activities

£453.7 million 2011 study by independent consultant PACEC (Public and Corporate Economic Consultants) estimates programmes in the transport market (including aerospace, low carbon vehicles and intelligent transport systems) have a GVA impact of over 13:1 in the long term. We have assumed 50% of the benefits will be realised over the period of the plan

Wider economic benefits as a result of TSC activities

£193 million Arising from a 1% reduction in congestion and road traffic accidents

Total cumulative benefits £712.2 million * As noted previously, the overall market for Intelligent Mobility will potentially be £900 billion by 2025. As we ramp up our engagement and project activities, we anticipate that we

will identify many further opportunities to generate economic value which additional funding would allow us to unlock.

Risk The table below highlights the highest risks to the successful growth of the TSC and the mitigation approach adopted.

Risk Impact Likeli-hood

Mitigating action

Resource capacity is inadequate to deliver successful projects.

H H Institute an aggressive recruitment plan using the substantial networks that already reside within the team Ensure success is communicated widely to build reputation and credibility to attract high-quality applicants Define and deliver a flexible approach to resourcing that achieves commercial and operational resilience Align project pipeline with specialist resource recruitment


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Risk Impact Likeli-hood

Mitigating action

Lack of understanding of the TSC purpose and role amongst external stakeholders and key audiences leads to lack of support/ engagement.

H H Create the Transport Industry Advisory Group to help to build understanding and disseminate the message

Ensure the Innovation Centre plays a key role in demonstrating our value add

Provide consistent and clear messaging through comprehensive awareness and engagement plans

There is a delay in moving into the new Milton Keynes Innovation Centre.

H H Ensure rapid progress of grant funding approval

Ensure decisions on design are made quickly

Ensure efficient procurement of main contractor once designs are agreed

A plan to use large (although not fully fitted out) serviced offices to enable Innovation Centre activities to begin is in place

The TSC fails to generate forecast income. H M Build a balanced projects pipeline through rigorous project selection process to ensure adequate commercial investment

Engage with government on an ongoing basis to promote successful delivery of the benefits and strong reputation across industry

Develop plans to reduce dependency on state funding for economic viability

As the TSC develops commercial offerings, other players start to offer something similar, affecting the commercial income streams.

M L Undertake a comprehensive analysis of the market

Ensure ongoing horizon-scanning and trend-spotting

Regularly engage with industry to understand customer problems and needs

TSC GVA is difficult to attribute solely to the TSC.

M M Work with BIS and the TSB to develop a series of metrics to demonstrate TSC benefits and return on investment

The use of outsourcing and open IP leads to a loss of retained critical knowledge within the TSC.

M M Ensure that ratio of permanent to non-permanent staff remains above 1:1

Develop and implement robust information and management systems

Metrics The TSB has, within its guidance to Catapults, identified the following metrics as being key to its monitoring of the Catapult’s performance. Metrics and impact measures are recognised as an integral part of the Catapult programme to enable the TSB to monitor progress and demonstrate the impacts of its investment both at the individual centre level and across the network.


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Metrics from the following list will be collected and used to manage the business and to report to the Catapult’s Board. Note that we will review these at the first executive management team meeting and agree targets for each. These targets will be shared with the TSB.

Activity measures – to be measured as part of regular monitoring of Catapult activity: • development of opportunity pipeline and weighted value of

project portfolio • volume and progress of innovation project work completed in

period • development, installation and utilisation of innovation

platforms • capacity utilisation of the Innovation Centre (visitors, footfall,

number of demonstrations, project space) • number of business clients working with the Innovation

Centre (with separate figures for SMEs)

• achievement of Innovation Centre milestones for build, fit-out and occupation

• number of thought leadership activities (conferences, workshops, papers, strategic forums, direct approaches by media channels and policy-makers, citations)

• new tools for collaboration to support unification of the sector

• volume and nature of other collaborations (e.g. with universities, internationally)

• number of permanent and non-permanent staff • expenditure against plan.

Intermediate outcomes – to be collected from customers and stakeholders at the end of projects and on a regular basis:

• deliver and resource projects against plan • expected number of new products and services etc. to be

brought to market • achievement of bid income targets (collaborative R&D and

commercial) • perception of the TSC as the go-to place for thought and

expertise in Intelligent Mobility

• IP created, registered and licensed • SMEs engaged with, involved in projects, demonstrating at

the Innovation Centre and supported • finance raised by customer businesses • social and environmental impact of projects • growth of the market in cross-modal testing • appeal as an attractive place to work.

Final outcomes – to be collected through formal evaluation studies every three years:

• the TSC’s position as a UK centre of excellence in Intelligent Mobility

• the UK’s position as a global leader in Intelligent Mobility • level of UK cross-modal collaboration

• adoption at scale of new cross-modal technologies and solutions

• efficiency improvement in UK transport • international customer use of UK testing facilities • GVA (actual), productivity employment and profitability growth.

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