Rail 474: Why pretend maintenance shake up is a cunning plan?

The decision to strip companies of all maintenance on the railways is good for the industry, the passengers, the taxpayer – and public perception. But why, asks Christian Wolmar, won’t the spin merchants just be honest about why it was done?

Just occasionally, maybe once a year, I allow myself a gloat. So, sorry, dear reader, just bear with me for a couple of paragraphs while I give myself a pat on the back.

Nine months ago, in Rail 453, my column covered the decision of Network Rail to take back three of its maintenance contracts in-house and I wrote: ‘We have reached yet another seminal moment in the history of the rail industry. Network Rail and the Government may wish to play down the decision to take the Reading area contract back in house from Amey but it represents a further momentous step in the untangling of the privatised railway.’

I went onto argue that ‘the inescapable logic is more and more contracts will be taken back’. Well, that was one prediction of which Mystic Wolmar would have been proud. Yet, at the time, I was told by Network Rail that nothing significant should be read into the decision.

OK, enough bragging. There is no doubt that the move to take back all the maintenance contracts in-house will have long term repercussions both within and beyond the rail industry. It will improve public confidence in the railways, hopefully reduce costs and raises wider questions about how far privatisation and outsourcing can go.

And of course, it is all part of a big cunning plan for the future of the railways. Or at least, that’s what the Strategic Rail Authority says. The spinner who wrote its press release had Richard Bowker saying: ‘The private sector’s continuing involvement at the heart of the railways is important to passengers, important to taxpayers and important to the rail industry. This is the final piece in the jigsaw of reshaping the privatised industry.’ So Baldrick’s cunning plans were all well worked out strategies? This is simply rewriting history on the hoof. If taking back maintenance had been part of a long term strategy, how come we had no discussion about it and even denials about the significance of taking back the first three contracts. Methinks there are a few jigsaw pieces left on the floor, too.

It made me think what sort of press release the SRA might have put out when the blockade around Stoke ran a week late. Something like: ‘Stoke residents enjoy an extra week of quiet thanks to a extended engineering work on the railway…’ or maybe ‘Railway reopens earlier than if there had been a two week delay…’ Readers may have better suggestions.

And then came another statement from the Ministry of Truth, this time Alistair Darling, the transport secretary trying to persuade us that taking back the maintenance was not a renationalisation. He told the Today programme this and then went into a long witter about how wrong it would be to recreate British Rail, not a question John Humphrys had asked. As Richard Wachman in The Observer business section (October 26, 2003) put it, ‘the decision by Network Rail to take all maintenance work in-house has shattered any illusion that the company is anything but an arm of Government. No matter how many times ministers may say the opposite, the railway system in this country is being renationalised by stealth. And more people are heartily relieved.’

In one of those bits of timing that almost makes me believe in a higher authority that befits my first name, the Tube promptly suffered two derailments within three days of the maintenance announcement, a quite extraordinary juxtaposition of events. That left ministers trying to explain why they had privatised maintenance on the Tube but were now taking it back in-house on the main railway for safety and cost reasons. An impossible task.

Why does there always have to be smoke and mirrors in the rail industry, rather than clarity and simplicity? NR has taken direct responsibility for a major area of work which proved impossible to privatise effectively. Let’s be open and honest about that. Indeed, the chairman of Network Rail, Ian McAllister, used to work for Ford where they know what needs to be outsourced or done in-house. Contracting out rail maintenance was an inherently bad idea that should have been reversed much sooner.

As a paper prepared jointly by the various engineering organisations points out, the maintenance decision makes sense. First, it ensures there is a clear chain of command from management right down to the Orange Jackets on the track. Contracting out made that relationship fuzzy and introduced unnecessary risk, as well as inefficiency. Second, with a labour force at its control, Network Rail will no longer have to fit in with arbitrary boundaries between contractors and be able to move its workforce around in order to cope with unexpected events, rather than have to deal with contractual issues as now.

Other advantages include better coordination between different engineering disciplines, a clear career structure for those coming into Network Rail and, possibly most important, the simplified structure will mean fewer interfaces and therefore less risk of incidents through failures of communication like the derailments at Aldwarke and King’s Cross.

One further benefit – and I use that word advisedly – not mentioned by anyone else is that a whole section of the performance regime will go out of the window, because NR can hardly impose penalties on itself. The performance regime is a poor substitute for good management. The managers should want to get the job done because that is their job and they should seek to do it well, rather than because their company risks being fined or rewarded through some arbitrary system. The fact that twice as many trains are late now as 10 years ago is surely testimony to the failure of the whole complicated performance monitoring system.

There are, of course, still many problems ahead for Network Rail. Assimilating £1.2bn worth of work annually and 18,500 staff into Network Rail will be tough. As well as the sheer logistics, there is the question of how to deal with the unions. Already, demands to level up pay have been mooted and NR will have to develop strong negotiating skills to ensure that the unions do not run rings round them but also be fair and reasonable, not just taking an arbitrary hard line. Moreover, ensuring that costs are kept down, despite not putting the work out to tender, will require much better management than Railtrack ever demonstrated.

Another issue is over renewals. About two thirds of the work will remain with the renewal companies and therefore privatised. However, the distinction between renewal and maintenance is arbitrary and was not really made under British Rail. This was a source of cost rises under Railtrack since work that might have been maintenance – and therefore included in the overall contract – was then handed over to renewal companies which charged extra. At one time, any job costing more than £25,000 was reckoned to be a renewal but John Armitt, the chief executive of Network Rail, now says that there is no such set definition.

The other unknown is what will happen if there is an accident when maintenance is under direct control. Public confidence in the railways was understandably jolted by what happened at Hatfield and Potters Bar, as well as minor incidents such as the recent King’s Cross derailment. Having the maintenance under what is universally perceived as state control should restore much of that faith. First, safety should be improved and the number of errors on the track reduced. Secondly, people will be more prepared to accept genuine errors if the profit motive has been removed as there was always a whiff of suspicion, however misplaced, that profits were being put before safety. Thirdly, people also suspected, quite rightly, that something was amiss with the structure and this has now been remedied. And finally, Network Rail will now be in a position to ensure that there will be less attempt at buck passing than at recent accidents.

The new maintenance arrangement should enable NR to hold its hand up when it makes mistakes and quickly get down to finding out what has gone wrong. But only if there is an attitude shift to go with the change in structure, ending the awful buck passing at recent accidents. The hope must be that this momentous step will not only reduce risk, but it will also make the railways appear safer, which sadly may be more important.

Small train crash in Switzerland – not many dead

You will probably not have heard that there was a rail crash at Zurich station on October 24, in the Friday evening rush hour. That’s because they handle things rather differently over there.

The accident happened when a train failed to stop at a red signal and hit another with a glancing blow, killing a young female Czech tourist and injuring another 45, eight seriously. A reader, Mark Sullivan, kindly sent me the press coverage and press releases about the accident and the contrast could not be greater than that in the British media.

Instead of blanket coverage, screaming headlines about yet another crash, interviews with survivors of past crashes and hysterical editorials about the dangers of rail travel, there was a very sober account of the accident and the investigation. There was no suggestion that the railways were inherently dangerous or that Swiss Railways should be put in the dock. There were merely serious and sober stories a minimum of speculation about the possible cause, which, of course, is either defective brakes or human error. Moreover, services were fully restored within two days and the system was operating normally by the Monday peak. Would that have happened here?

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