Rail 454: Bowker is in a jam as he fails to outwit Whitehall warriors

Richard Bowker has shown his political inexperience by allowing himself to be outmanoeuvred by the politicians over the SRA cuts – but, as CHRISTIAN WOLMAR points out, it’s the very people he has kicked in the teeth who are the key to achieving his vision for 2013.

It’s not surprising that Richard Bowker and Tony Blair, who jammed together last summer at a mutual friend’s 50th birthday party in France, are chums. They both got to the top of their professions at a very early age, they look young and fresh, they appear more radical and more challenging to the establishment than they really are and they talk the talk in evangelical terms, asking for people’s trust without bothering too much to explain why they deserve it. Indeed, they both exhibit the same tones of exasperation when challenged at public meetings, a kind of pained expression of hurt that anyone should doubt their good faith.

There is, though, one big difference between the two men and that is their understanding of the real nasty world of politics and government. Blair, of course, is a master at the political game, which is why he is Prime Minister. Bowker, unfortunately, is still in his political short trousers and that has been demonstrated all too painfully in recent weeks when the Government announced the cut in the rail budget.

Now the consequences of that cut are coming home to roost and Bowker is applying the scythe through the rail industry. He has made two very fundamental mistakes borne of his lack of experience in playing the Whitehall game and the industry is paying the price. First, he should not have got himself into this situation and secondly he has tried to get out of it in a way which shows he has little understanding of the realpolitik of government.

The bulk of the £396 million cut over the next three years, a staggering £242m, will come out of the SRA’s budget in the forthcoming financial year starting on April 1, about 12% of its planned expenditure. That is an impossible target to achieve without lasting damage to the industry.

This means, effectively, that Bowker has been mugged in a dark Westminster corridor by his boss, Alistair Darling. This, remember, comes at a time of increasing Government expenditure and on an industry which has enormous public support. By allowing this increase to be foisted on the SRA, Bowker has caused lasting damage, as demonstrated by the host of e-mails I have received on the subject, both from people within the industry and from outsiders such as local authorities and freight companies who are seeking to make use of the railways.

Of course Bowker was in a difficult situation, created partly by the ever-soaring costs within the industry, but he should have been prepared to go to the wall in resisting the imposition of the cut by the Department.

Darling was clearly trying it on and got away with it. Ex-ministers have often explained the process to me. Ministers work out their budgets on the basis of what is immutable and then get to the cuts that they could make without getting too much flak. “Old Bowker’s a good chap,” some civil servant would suggest, “won’t make too much of a fuss when we put him up against the wall, haw haw.”

Bowker should have threatened to have gone public, arguing that the Government is undermining the case for the railways. Or even better, he should have told them: ‘If you do this, I will resign.” After all, there are plenty of other jobs out there and £250,000 a year is more than anyone needs anyway. In any case, this threat would have been enough. The cuts would have gone somewhere else or simply eaten into the contingency fund.

But he is not, as one insider put it, ‘a Whitehall warrior’. He may, of course, have been influenced by the poor relationship between his predecessor, Sir Alastair Morton, with Whitehall, but that was as much to do with personalities as politics.

Bowker’s second mistake compounds the first. Panicking about his budget, he has, like the Government, hit where it is easiest. So instead of having a thorough look at the big numbers and trying to weave and dodge with a few accountancy sleights of hand – as local authorities do every year – or, indeed, chopped a bit of the money going on the megaschemes (would anyone have noticed if some big project were kicked further into touch?) he has singled out the more obvious and public manifestations of what the SRA does, the grants for Rail Passenger Partnerships and Freight Facilities. Both are being cut in half from £40m to £20m each, which effectively rules out any new grants as contracts have already been signed for those amounts next year.

This is extraordinarily short-sighted and wrongheaded, especially given his past record in carelessly handing out extra lolly to the likes of South West Trains and Connex. These grants are not only the most visible activities of the SRA but they encompass the quick wins where a small amount of money goes very far.

In contrast, the direct spending of the SRA seems to continue unabated as staff numbers head for 500 and there is a consultant bonanza. Only on January 9, well after Darling had announced his rail cuts, the SRA advertised in The Daily Telegraph for six managers ranging from a compliance support assessor (£21,000 to £32,000) to an enforcement team manager (£43,000 to £60,000). And in a written answer to Don Foster, the Lib Dem transport spokesman, the Transport Minister David Jamieson revealed that more than 100 consultancy contracts worth at least £19m had been let by the SRA since last April.

What happened to Bowker’s pledge on taking the job that there would be fewer accountants, fewer lawyers and fewer consultants? And exactly what do each of these staff and all these consultants bring to the railway which make them more important than the efforts of those seeking to make use of the RPP and freight funds which yield direct benefits to the railway?

Indeed, the recent National Rail conference was characterised by the sharp contrast between the policymakers and the doers. In addition to Bowker, there was Rail Regulator Tom Winsor at his legalese worst, and Alistair Darling making sure that he was not committing himself to anything. What a pleasure, instead, to hear Graham Smith of EWS outlining the recent successes of the freight industry, the barriers to future improvements and what needs to be done by government and the SRA to overcome them. Short, punchy and to the point and right from the coalface.

And at a lower level, there is an army of people like Smith doing their best to boost rail use. They are the people working on Rail Partnership bids, those little schemes that can have such a big impact. What Bowker has to learn is that the railway will not get better through worthy speeches from the likes of him and Winsor. It will only improve through the efforts of thousands of people at the local level working on small but vital improvements coordinated by strong leadership from the top.

And they have had their case fatally undermined by Bowker pulling the rug from under them. Take John French of Transport Regeneration, a consultancy working on 25 bids around the country. He said: “These type of projects are about building confidence in rail, and a successful small project often leads to bigger schemes.” Most important, they attract considerable funding from bodies other than the SRA, both within and outside the industry: Network Rail, train operators, local authorities, the Countryside Agency, the Europe Commission and so on.

For example, David Hall, public transport manager of Kent County Council, explained to me that there was a bid to improve the transport interchange at Greenhithe station to enable it to better serve the Bluewater retail centre. Of course, in a rational world that would have happened years ago. It will require about £1m of RPP money and possibly could lever in three or four times that amount from other bodies. Now the plan is likely to be shelved, along with several other schemes being developed by an authority which is keen to improve its rail services and which has built up excellent links with Connex and the impressive RPP team at the SRA.

Indeed, across the country, much of this extra money might be lost because of the SRA’s short-term crisis and, more important, as French says: “The confidence will be lost and five year’s work will be down the drain.” The suddenness of the cut has caused anger across the country.

On the freight side, there is equal anger. Here is one freight operator: “The latest announcement will be perceived as ‘stop-go’ or more accurately ‘go-stop’ by potential railfreight customers.” It has taken time to build confidence in railfreight, especially post-Hatfield and many logistics managers or transport managers were beginning to look at railfreight for the first time ever, or the first time since privatisation. A hiatus now means it will take even longer to restore confidence in railfreight.

Now what makes this all the more galling is Bowker’s exposition, at the conference, of a vision for 2013 which he expresses as if it were a serious proposition. Sure, the vision is great and we would all sign up to it, but that type of vision will only be achieved by precisely the sort of people who have just been kicked in the teeth by these cuts.

Of course, ultimately this desperate situation is not Bowker’s fault but Darling’s. He has escaped lightly over the fact that he is cutting back rail expenditure, partly because the news is dominated by Iraq, but also because the railway lobby has failed to bat strongly enough for its corner. The SRA, of course, is not really part of that lobby but its role, like that of BR, must be to press the case for rail as strongly as possible within Whitehall. It is a creature of government, but it must also carve out a role as an industry advocate. A difficult job, but not an impossible one. Darling should have been held to account and asked exactly how he expects the railways to improve if he subjects them to shortterm cuts which are so reminiscent of the days of BR.

It just goes to show that Privatisation Mk 2 is, in many ways, the worst of both worlds – the industry is not free of the shackles of government but there is not even a strong organisation like BR to represent its interests in Westminster.

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