McNulty taken through the grinder

I blogged about the McNulty report yesterday for TSSA – http://www.tssajournal.com/blogs/christian-wolmar/dream-radical-approach-railways – and will be writing about it in my next Rail column. I am also about to put the Times piece I wrote on this website which will be found in the R-Z section (which reminds me of the old London phone directories, although the blue one was S-Z wasn’t it?)

Just a couple of additional thoughts, though. It is very clear that the report has been through the civil service grinder, which has taken out any radical edge or, indeed, clear conclusions. Remember the earlier bits about how the railway was unaffordable with the dark hint of closures. All gone

Even the much publicised section on the labour force is muddled, stressing on the one hand that a casualised labour force would not be a good idea but on the other arguing that there are too many staff and that they are overpaid.

  • Pottshrigley

    arguing that there are too many staff and that they are overpaid

    Does he mean the ASLEF boys theyve have been the real cash lottery winners in the wages grades of this fragmentation and breaking up of old BR. 

  • Davewatterson62

    Well said!! since BR days drivers have not just won the lottery but it was a double rollover that week.
    And I will always remember a few years ago when the drivers went on strike at Northern, it was commented within the messroom by a certain senior instructor “Its not the management that run Northern Rail really its the drivers” and that true. 
    All I can say and all I will keep saying is that the industry I have worked in for over 23years since leaving school is that nationlisation is the answer.  Why can’t governments just have the nerve to do it and stop these private firms ripping britains railways of millions!
     

  • Anonymous

     Maybe the real mistake was hiring someone like McNulty to critique the railways – given his aviation background which is an industry which is also fragmented – the airlines, the airport operators, the air traffic control and the regulatory authorities are a mix of disparate organisations both public and private and it has the added dimension that it has to work across international boundaries.  And it, for the most part works.  So, of course he was going to cheer on the fragmented model for the railways – but what is good for the goose isn’t necessarily good for the gander. 
    Looking at aviation – what’s interesting is that the heavily unionised legacy flag carrying airlines – many of whom have terrible industrial relations problems – our own BA being a good example –  are merging to stay in business, or going out of business completely.  The rise of independent full service carriers like Virgin Atlantic, and of course the low-cost carriers have “rebooted” the aviation industry to get wages and costs under control, and they exist largely due to free market forces.

    And there’s the rub – how could a similar “reboot” happen on the railways???  Writing off Network Rail’s debts would be a start.  At the extreme end, cutting off the subsidy tap completely and opening the railways up to free market forces would mean we would have no railway at all since they are an inherently loss making business.  Staying with the status quo will only result in a tiny reduction in costs at best if  McNulty’s advice is heeded – a £1bn saving over 8 years isn’t even enough to service Network Rail’s soaring debts for a year never mind pay it off.  Merely ‘playing’ with vertical integration is not enough, it needs to happen completely and quickly. 

    As CW says, pandering to the populist opinion and going back to full state ownership might only go back to the bad old days of BR where investment is grudgingly made on a stop/start cycle.  And the current lot in power are still IMHO too ideologically opposed to any form of public ownership for that to happen.

  • Paul Holt

    Difficult to “reboot” without laying/relaying a lot of track to make/remake the links broken by Beeching.   Aircraft can go in (within reason) any direction to any destination.   So can cars.   But where there are no rails, there is no railway.   Thus there is no “free market” if many journeys are not viable by rail.

    Your point is valid, and the solution much less simple than politicians would have us believe.

  • Derek

    Interesting feature of franchising, flagged up in Private Eye 1289 (“Signal Failures”). FGW are walking away from the franchise at a break point 3 years prior to the 10 year end date. The overall “premium” for the 10 years is £1.6bn, but £1.1bn of that is payable in the 3 years they have walked away from.

    So they had subsidy for 3 years (not clear to me how much, but it looks like a lot), then were supposed to pay £532m for the next 4 years (I wonder if they are doing so, given the “revenue support” arrangements), but the bulk of the payment is in the last 3 years, which they don’t have to do.

    Hardly surprising that the railway is costing big bucks, when the system seems to provide shed-loads to the franchisee in the early years, and then, when the tax-payer is supposed to get a benefit, the franchisee walks away.

    And, no doubt, when the franchise is re-let, the same will apply.

  • Newfarci

    As Britain’s Leading Transport Commentator, I would have expected a detailed analysis and surgical criticism on the McNulty Report. This is likely to be ignored by the government on the basis that they are already in thrall to the financial interests who make mucho dinero from the status quo.

    Everyone interested in transport knows that current rail and bus policy is only in the interest of post-Thatcher merchant bankers. Passengers (sorry, customers!) don’t figure.

    Please prove me wrong

  • Anonymous

    Newfarci: It’s in Rail magazine, out on sale next Wed. I’m afraid that the print media must still have priority – because it pays the bills. Will be on the site in a couple of weeks.

  • Gordon

    I did say some time ago, would McNulty be brave enough to say the blatantly obvious, and the answer in No. So look forward to botched re-organisations lots of quangos and empire building, followed some time in the future another report.

  • exile

    Ironically I suspect a “benefit” that was expected from privatisation was that wages would be reduced over time, but the reverse has happened. Clearly, a host of operating companies are going to need to hire more drivers per passenger or tonne-km than a single organisation as economies of scale are lost. Unless the government turns off the subsidy tap, there is no way this is going to change.

    In Latin America, privatisation around the year 2000 was followed by a decision by governments not to provide subsidy to what were now commercial operators. The result was that passenger service more or less disappeared overnight. 

    Being pro-rail I would hardly advocate that approach but with severe pressure on public finances the Treasury must feel very tempted. But the industry does have to control its costs and the current structure acts directly against this.

  • Anonymous

    My initial thoughts on the McNulty report are simple ones – for the pro-privatisers and pro-fragmentisers (those driven by ideology, and those that are not) this really is the “last chance saloon” to make it work.  Politically those who think it is a good idea to keep the status quo will be severely weakened if say, 5 or 6 years down the road and things aren’t demonstrably any better

    Interesting that Nigel Harris echoed my point down below in RAIL 671’s editorial about aviation being fragmented yet works – this point really jarred me as I say again it is too facile to compare one with another and draw the tired old Jeremy Clarkson argument – “how hard can it be??”  Aviation is fragmented not because someone intentionally designed it that way – rather it has evolved that way over decades and is an industry which is intrinsically suited to that particular model by its very nature – it has to work across international boundaries for a start.  Planes, once they leave the ground can go anywhere.  Trains are tightly controlled to be in a certain place at a certain time.

    Yet here’s one for you – the most profitable airlines in the world just happen to be the ones that are the LEAST fragmented.  I mean the dreaded low cost carriers.  They do their own marketing, don’t use travel agents, don’t participate in the hub and spoke system with other airlines as they only fly point-to-point and therefore have as few dependencies on other companies as possible, and now free themselves as much as possible from check-in and baggage handling service companies as well.

  • Anonymous

    Two interesting points Rapid. I have pointed out to Nigel several times that railways are different because every inch of the way is controlled by signalling and requires staying on a fixed path. And I like your point about successful airlines being less fragmented. 

  • Anonymous

    I should have said also that no-one really knows what the true cost of the aviation industry actually is – when there are so many disparate organisations that are both publicly and privately owned.  So it is very dangerous to try and compare like with like because they aren’t.  Then you get to the legacy flag carrying airlines – many of which have been propped up by government subsidies and protectionist measures for years (America’s “Big Four”: American, United/Continental, Delta and US Airways come to mind).

    There is an old maxim that the easiest way to become a millionaire is begin as a billionaire and go into the aviation industry.  What a terrible advertisement for fragmentation!

  • Percy

    Its not just that they need more drivers as they cant share, one example being  Virgin Trains Manchester drivers  are taken to and from Holyhead in North Wales by Taxi – a journey over 100 miles –  for the first out and last shifts in as opposed to the local depot which operated the Euston trains to Crewe in BR days, its also that the companies are bidding against one another to attract and retain Drivers. If you have a seven year franchise and it takes tow years to train a man off the street to be fully certified as a train driver for your company then it makes sense to poache people with the necessary certification and also fight a rearguard action to retian staff as well, the bottom linde here is it pays the Train Company to pay their drivers a lot more to attract them and keep them, in effect the structure has created a drivers market where the driver is a valued commodity unlike BR days.   If you look at train driving in the diesel & Electric era which has been with us for over 40 years now you’d be hard pressed with the current individual companies and ongoing standardisation to find a man with nearly fifteen different types of traction knowledge, a wide and diverse route knowledge and ability to drive all classes of trains from 1 to 9, those men did exist and existed in quantity not so long ago in BR days however they were paid peanuts because BR was the only game in town and apart from the odd advert in RailNews asking BR drivers if they would like to relocate to Western Austrailia to drive iron ore trains the market for a drivers skills in the UK didint exist.

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