Coucher departure suggests acrimony at NR

The departure of Iain Coucher as chief executive of Network Rail was presented as a standard ‘pursue other interests’ kind of arrangement but it was nothing of the sort. The timing was all wrong for that. Had Coucher left a year ago when the new five year control period for investment had just started, then indeed it could have been presented as ‘the right time to go’.

 Instead, Coucher is leaving at a difficult time for Network Rail, just when continuity and stability were needed. The company faces unprecedented challenges in the coming months, given the new government’s desire to cut costs and tighten control of Network Rail, and the truth is that Coucher was totally the wrong man to confront them. Partly, to be fair, he realised this himself but he was unsure about whether to resign until with the election of the new government the going has got really tough, both for the company and Coucher himself.

 Coucher’s difficulties started a year ago when a new chairman, Rick Haythornthwaite, was appointed to replace Ian McAllister and immediately showed himself to be more prepared to confront Coucher, whose fierce manner had terrified most of his senior colleagues, than his more emollient predecessor. Haythornthwaite was remarkably open about the fact that he disliked the culture of Network Rail, which very much reflected the character of its boss: aggressive, belligerent, single-minded and unwilling to compromise or, often, debate.

 The surprise, therefore, is more that it has taken Haythornthwaite a year to dislodge Coucher. He needed a good cause to push for the change and he was provided with one by the election of a government which had a greater interest in making Network Rail more accountable than its predecessor.

 Coucher probably sealed his fate when he refused to countenance a cut in his massive £613,000 salary which was doubled by a bonus system that set ridiculously low hurdles for the executives to greatly increase their remuneration. Soon after Philip Hammond was appointed as the new transport secretary, he wrote to Haythornthwaite urging Network Rail to be sensitive about the remuneration of its employees with taxpayer-funded bonuses.

 Coucher, though would have none of it. Although he did forgo part of his bonus last year, Coucher responded by telling The Times that every one of Network Rail’s 37,000 employees which presumably included himself, ‘is worth what we pay them’.

 There has, too, been growing disquiet within the company about the role of Victoria Pender,  the director of corporate and government affairs, who is paid £215,000 per year for being what is essentially a glorified director of communications. Coucher and Pender are friends who worked together at Tube Lines and formed a now dormant company Coucher Pender Associates which received a bonus after Network Rail was established from the ashes of Railtrack in 2002.

  The new boss of Network Rail – the only leading inside candidate is the chief operating officers, Robin Gisby – is going to have to work hard to change the culture of the company.

The former transport secretary, Lord Adonis, highlighted the failings of Network Rail in a highly critical article in The Times on June 19. He cited, for example, the continued closures at weekends for engineering works, despite the company’s aspiration. It was a weekend last spring when both lines between London and Scotland were closed when ‘it really got to him’. Network Rail’s excuses were the usual bluster, as Adonis notes: ‘The company wasn’t even apologetic. Minister, you don’t understand the complexity of track renewal work. But what of the “seven-day railway”, one of its mission slogans? Ah, minister, that shouldn’t be taken to mean that the railway will always be open at weekends, just that we would like it to be so’.  

 Tellingly, Adonis pointed to British Rail’s 1978 Easter timetable sent to him by an exasperated rail manager which showed that despite engineering work, there were no routes on which a rail service was not offered. As another example of Network Rail’s lack of customer focus, he also noted that Marks and Spencer’s was eager to open more food outlets at stations but was frustrated by the lack of interest from Network Rail which does not even have a senior executive in charge of stations.

 Coucher’s response to such criticism was never emollient and, quite the opposite, was often belligerent, as shown by his attitude to his salary. In the past year, the company stupidly seemed to set itself apart from government by publishing alternative plans for a high speed line and for electrification, without, it seems, consulting with the Department for Transport.

 As Hammond’s remark about publicly finance bonus payments suggests, the arrival of the new government and the need for austerity has blown apart the excuse that Network Rail is a private company, outside the control of government. In his Times article Adonis tellingly points suggests that the new person at the head of Network Rail ought to report directly to the Department for Transport. As Adonis knows all too well, that effectively means renationalising the company – or rather recognising its de facto status.

 In fact, that is the only sensible way forward and it is by no means inconceivable that the Tories would do it. Just before the election, I was told by the former transport minister Steve Norris, that there were many senior people within the Tory party who recognised that Network Rail’s present status is not sustainable, and that nationalisation is the only answer. What an irony that would be – that a Tory government would be readier to nationalise a major company than Labour. Network Rail’s ludicrous state of limbo where it pretends that it is private, thereby avoiding the kind of accountability to which a government agency would be subject such as the Freedom of Information Act, and yet has no shareholders who are able to ask questions of it, must be ended. Coucher’s demise makes change all the more likely.