With the railway facing a period of almost unprecedented uncertainty as it enters 2003, CHRISTIAN WOLMAR calls on the industry and the Government to display some real courage and imagination in tackling its deep-seated problems head-on.
It is tough to have to start the New Year on a gloomy note but it is no exaggeration to say that the railway industry is in a state of crisis, probably worse than at any time since the buzzards were circling at the time of the Serpell report in the early 1980s.
The catalyst, of course, was Hatfield and the speed limits imposed in its aftermath, but the failure of the industry to recover in the two years since that débâcle demonstrates the deep-seated nature of the problems. In no particular order, here are the worst challenges facing the industry in the New Year, which as you can see are all interlinked.
Performance
The norm in the industry seems to have gone from one train in ten being late under the Passenger Charter measures to one in five.
This is a real Rubicon because the expectation of passengers changes completely. No longer are late trains an occasional hazard, but, instead, they have to be factored in to people’s timetables and therefore the train becomes a much less desirable form of transport. It is hardly surprising that the growth spurt has spluttered out.
There has been a 1.5% rise in passenger numbers in the past two years and anecdotal evidence suggests that there is currently no growth at all. Performance is the key focus of much of ministerial interest in the railways and a failure to deliver any improvement could fatally undermine the industry’s attempts to get more money from the Government. This will put pressure on the issue of…
Fares
A real humdinger of a quandary for the industry and ministers. The fares review by the SRA is due to be published quite soon and could be dynamite. On the one hand, it would seem sensible to allow an industry suffering from overcrowding and a lack of cash to put up fares above the rate of inflation.
Politically, though, that is untenable for a Government which is intent on increasing rail use by 50% over a decade and which says that the railways are environmentally more friendly than car use. There is, too, a genuine question over whether the industry and the state should be subsidising commuters who choose to live a long way from London and other major cities.
Of the issues listed in this article, the question of setting the right fares and of simplifying the Byzantine structure is probably the hardest, and ultimately the decision rests with…
Alistair Darling
He is the Transport Secretary least favourable to rail since Labour took power in 1997 with the possible exception of Lord Macdonald. Although he is clearly a bright and ambitious minister, his brief has been to keep a lid on the transport issue and not to rock the boat.
His mantra is that as the economy grows, there will be increased demand for road transport and therefore that is where the money has to be channelled. That is 1960s ‘predict and provide’ thinking that has been discredited and ignores the much more sophisticated approach which is being developed in other countries based on demand management as well as improving facilities.
He has also ruled out any attempt to look at the structure of the rail industry which is the root of many of its problems and seems unlikely to back any major bid for extra funding in the 2004 spending review which is the core of Richard Bowker’s strategy and which is dependent on…
The economy
Gordon Brown’s luck was bound to run out one day and 2003 seems a likely time. The fall in share value of the past two years looks set to be matched by a drop in house prices which would trigger an end to the current boom as it is based on borrowing against property.
In such a situation, passenger numbers will inevitably fall as the state of the economy is the greatest determinant of rail use. That will cause a financial crisis which brings us neatly to…
Refranchising
Or should we just call it ‘bail-outs’? The Strategic Rail Authority has managed to sign just one major franchise deal (apart from extensions and rescues) in its three years of existence.
The amount of money at its disposal according to the ten-year plan is hovering just above the billion mark for the next few years and yet almost every week we hear of franchisees coming back for more money as Connex did when it received a pre-Christmas present of £58m. Presumably, since we live under a joined-up Government, the franchises will be based on the expectation that there will be a 50% increase in passengers, in line with the target under the ten-year transport plan.
So can we expect sharply declining franchise curves, as happened in 1996/97 which in practice no one will meet? Or otherwise where is the extra money going to come from? I would not like to be in shoes of the SRA’s chief operating officer, Nick Newton, when tries to square that particular circle which leads us to the issue of…
Costs and money
On the face of it, the industry is swilling with money in a way that is unprecedented since the Modernisation Plan of 1955. In fact, there is not enough money to make a difference, as Richard Bowker warned recently, and, worse, what is available is largely being wasted.
The problem, of course, is the soaring costs of carrying out any work on the railway, added to the inability of the franchisees to stick to their budgets. Although the Strategic Rail Authority has begun to address the issue and is in a better position to tackle it now that it will determine the investment priorities for Network Rail, the issue of ever-rising costs remains the industry’s Achilles’ heel.
It means that all the available cash is being absorbed in short-term maintenance and renewal, and that any major projects, even those quite well advanced like Thameslink 2000, are likely to remain on the drawing board. It is impossible to solve this problem without a proper look at…
Safety
This has two almost contradictory aspects. The first is the overemphasis on safety, often on trivialities which seems to have very little bearing on real risk but which cause delays and inconvenience to passengers, such as the ridiculous notion that passengers should not be allowed to sit in carriages where the PA system is not working.
But on the other hand, there is the danger of a major accident caused by the fragmentation of the railway. The industry was terribly lucky that the recent incidents at Aldwarke Junction and Ealing did not result in a disaster; both derailments could have had very serious consequences.
To sum up, all these issues demonstrate that the industry is facing a period of almost unprecedented uncertainty. The new model of privatisation, with not-for-dividend Network Rail at the heart of the railway and much tighter regulation of franchises, will take a couple of years to bed down.
Indeed, it may not be workable. Will anyone want franchises under this arrangement, or, to put it in another way, will the bids reflect the amount of money available? The SRA’s refusal to foreclose on a train operator, and, instead, always pay out more money when requested is likely to haunt it during the coming negotiations.
There is one enormous scandal which has not really received the coverage it deserves in the media, the electrification débâcle on the Southern which could result in hundreds of new trains sitting in sidings for up to four years while commuters suffer the indignity of journeys in 40-year-old carriages. Surely that will be the emblematic of the failure of privatisation and of the Labour Government to remedy it.
The most depressing point about the prospects for 2003, though, is the lack of imagination of those responsible for the railways. Where is the vision for a railway fit for the 21st century? What has happened to the aspiration that one day there might be a new highspeed line between the London and the North? Or a couple of new Crossrail links across London?
Or, my particular bugbear, a railcard allowing major discounts for regular rail users, as there is in Switzerland. In other words, where is the hope? Buried, I’m afraid, in the treacle of the Byzantine structure of the industry and the cowardice of those who know that this situation is untenable but who lack the courage to confront the issue head-on.
This is not a very happy agenda for 2003 and what makes it worse is that it is highly likely that I could write this article again setting out the same problems for the first issue of 2004. Those of you who work in the rail industry, please try to prove me wrong.