Rail 538: Sir Humphrey’s flounderings will mean a wider role for NR

The Rail Review has given civil servants the whip-hand in determining the way our railway is run – but, claims CHRISTIAN WOLMAR, the signs are they are simply not up to it.

It’s an irony that the railways currently endure a greater deal of state interference than they did when they were nationalised. As Nigel Harris, in his Comment in the last issue pointed out, Transport Secretary Alistair Darling had said many times that civil servants would not run the railway, but since the demise of the Strategic Rail Authority, that seems to be exactly what is happening.

Moreover, unlike the senior people at the SRA, the civil servants hide away, making few public utterances and contributing little to the debate on the future of the railways. One of the few to ever be seen in public is Mark Lambirth, a career civil servant and one of Mitchell’s deputies, responsible for ‘strategy and finance’, an interesting juxtaposition. He was one of the architects of the rail review, obsessed by the need to rein in the regulator after the debacle over Tom Winsor’s generous settlement to NR in the current five-year period following the last access charges review.

Lambirth, as befits a man who once did a stint on the Soviet trade desk at the Board of Trade, has the rather passé air of a detective in The Sweeney. He came up to me at one of those all-too-numerous award ceremonies to berate me, ever so gently, about a suggestion I had made in one of these columns. I had written that the department’s Rail Group was warning the industry that cuts of £1 billion from the current £5bn taxpayers’ bill would need to be made to satisfy the Treasury, and Lambirth told me that no such speech had been made.

Civil servants speak in riddles but the gist of what he said was that no such concerns were being expressed and that the railways had been sorted out with the rail review and the subsequent legislation. The High Level Output Specification, to be issued next year, had precisely been called an ‘output’ statement because it would be up to the rail industry to sort out the inputs and therefore they were bound to be deliverable.

I will leave those thoughts to future columns but then he added: “Why do you worry about all this – why don’t you get a life instead?” He was joking, of course, but only half. I am sure Lambirth will never even share a joke with me in future because I have revealed his off-the-cuff comments but that will hardly be a great loss, since getting information out of the department is rather like getting information in the days before the National Rail Enquiry Service.

There is, though, a serious message in his quip that begs the question of what on earth ministers were thinking of when they abolished SRA and brought most of its responsibilities in-house to the department. Under the British tradition of civil servants, they are non specialist, non-partisan and focused entirely on policy-making. Delivery is not in their tradition even in the simple matter of providing information (for which I do not blame the helpful press officers but the policy constraints they work under). For example, transport journalists used to drop into the SRA quite regularly for briefings of all sorts, whereas now such events are rare.

Indeed, the department now has a host of delivery responsibilities, from letting franchises to determining the High Speed Train replacement. And every sign is that the civil servants are simply not up to it.

You only have to look at the top where the lugubrious Mike Mitchell, currently the subject of a prosecution for allegedly assaulting a train guard, sits completely taciturn at press conferences, unable or unwilling to speak. If the government had replaced the SRA with a new delivery-focused Railways Agency, the railways would have had a voice that could have been heard separately from that of ministers, as happened with BR. That, however, would have gone against New Labour’s control freakery traditions and instead we have a man at the helm with no voice.

The department’s flounderings on a series of issues are equally worrying. Take its relationship with the rolling stock companies. In the Rail Review, the profitability of the ROSCOs was questioned, with the clear implication that taxpayers were being ripped off. The government commissioned a report from Ernst & Young which seemed to back up its case, but the ROSCOs questioned the validity of the research. And there the matter has stuck, largely because the SRA had signed off most of the rolling stock deals in March 2004 and there was nothing the government could do about it. So why antagonise the rolling stock companies in a hopeless cause?

The same kind of sequence of events appears to have happened over the Northern Rail review. Ministers apparently thought that too much subsidy was going into little-used trains in the Northern franchise. Instead of doing a bit of behind-the-scenes research and, shock horror, even taking a trip north of Watford, they commissioned a review and the consultants found that little money could be saved by reducing services. So a lot of anger and resentment was stirred up, all to no effect.

Then there was the fiasco over South West branch line services which resulted in a public row with the newly reappointed franchisee, FirstGroup. Did the civil servants specifying the franchise have any idea what a fuss they were causing by deleting a few trains, whose marginal cost could hardly have been worth the trouble?

Worse, there is the mess over the East Coast. Should the DfT really be interfering over a few trains to Sunderland?

Now the DfT has issued a stern statement saying that franchisees will not be baled out should they get into financial trouble. Well, jolly good, as the SRA was far too easy a touch for the “please sir, can I have some PIC1: Alistair Darling may be clear about the role his department should play in Britain’s railways but, argues Wolmar, his civil servants seem intent on taking a different view and involving themselves in the detail of railway operations, right down to timetabling. more?” begging letters. However, what if there is an economic downturn and a whole series of franchises gets into trouble? And does the government not realise that if a franchise has to be taken away, then bidders for the replacement deal will inevitably bid for more subsidy or lower premiums, so the department is on to a hiding for nothing anyway. It is its refusal to allow some franchisees to remain in public hands as a benchmark or as a last resort that gives the private sector bidders the upper hand in these situations. Where the department could play a useful role, it moves with all the speed of a freight train over Shap summit such as, for example, forcing the operators to adopt Oyster card technology to integrate with London Transport.

The argument for killing off the SRA was that it was up to the government to provide the strategy because, ultimately, taxpayers coughed up the dosh. However, the separation between strategy and delivery is a finer line than might first be thought. A strategy needs to be delivered by railway people with government-set parameters in mind, not by civil servants taking advice from the railway industry. For example, while the decision to commission a successor to the High Speed Train is obviously a strategic one, its delivery depends on an intimate knowledge of the rail industry and the available technologies. While the department has committees made up of ‘stakeholders’ to advise it on this vital question, ultimately the various policy alternatives – such as whether it should be powered by diesel or electricity – will be drawn up by civil servants for decision by ministers. (It was most worrying, incidentally, that when pressed for his preferred option, Network Rail’s chief executive, John Armitt, could only think of his own organisation’s narrow interests, citing that putting up pylons across swathes of the South West might be viewed negatively by local residents and environmentalists.)

It might, therefore, seem a contradiction to argue that NR should have been given a much wider remit under the reorganisation prompted by the Rail Review of 2004. But that is what should have happened and, indeed, I am certain will eventually happen. NR, after all, is in charge of delivering the railway. If it had a role in specifying and allocating the franchises, then it would have become an organisation with a wider interest than merely operating, maintaining and renewing the infrastructure. It would have been forced into the role of balancing the interests of operators and engineers, rather than simply batting for the interests of the latter and for an easy life, as witnessed by Armitt’s comments about HST2.

Surely, a Network Rail with the functions of franchising the railway and, therefore, with a great interest in seeing a coherent strategy for the industry, would have been preferable to the nationalisation by the back door that we have ended up with? The railway would have had not only the voice it needs to represent itself to the public, but also as a counterpoint to the often-negative influence of the DfT.

Mystic Wolmar does not usually look too far in the future, but this time he is willing to suggest that this will be the ultimate outcome, when the inevitable debacle of the High Level Output Specification process comes to be analysed.

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