Greening gets a taste of her own medicine from ATOC

Having been rapped on the knuckles in my one ever (short) conversation with Justine Greening, I take some pleasure from the fact that she has had the same treatment meted out to her by the normally supine ATOC. My verbal bashing as I have reported before, came at the press conference to launch the government’s long awaited Command Paper.

I had the temerity to suggest that Paper did not seem to demonstrate how the £2.5-£3.5bn which was supposed to be saved annually would be found. ‘Well’, she snapped back ‘it’s fortunate you did not write it because I can’ .Ouch but explanation there came none.  Now however, ATOC has come out on my side in relation to another unfulfilled promse in the Command Paper, the failure to include anything about franchise reform.

Tom Smith, the usually mild-mannered chairman of ATOC, is clearly at the end of his tether when it comes to expecting change over franchising. In his speech today to the Institution of Civil Engineers he says that despite two years of promises,the government has failed to come up with a plan for franchise reform. Given there are so many franchises coming up soon, he reckons there is a ‘narrow window of opportunity to implement genuine reform’. He suggests: ‘We need a new spirit in the relationship between the Government and the companies enfranchised to run train services and a new form of contract. Without reform, we will continue with inflexible, overly prescribed franchises that do not unlock the full potential of the industry to achieve growth and efficiency.’

He then goes on to make a direct criticism of the government, a rarity from ATOC: ‘Over the two year period since the coalition government came to power we have heard a lot about their commitment to reforming franchises along these lines – to be longer, less prescriptive, more output based and giving incentives to train companies to be innovative to grow their businesses in ways that meet the needs of their customers. Sadly that commitment has barely begun to be turned into reality, and we need tangible evidence that it will be.’ There you are Ms Greening, that’s how it feels like. Can I hear the ‘ouch’ in Marsham Street?

  • RapidAssistant

    Maybe their indecision re. franchises is because when they drill down through the things they can reform, they find themselves asking the Wolmar Question and don’t want to admit it…..

  • Fandroid

    They just cannot square the circle of how to cut short a long-term failing franchise without short-term review dates, which then effectively convert the franchise (in the bidder’s mind (& wallet)) back into a short-term one.

    There’s also the problem that DfT instinctively wants to get Everything covered in each contract. They are then up against the cold reality that formal contracts either restrict the operator so much that ‘innovation’ is just a dream, or are so loose that  they can make money without bothering with passenger satisfaction. No written franchise contract can provide value for money responses to external change. Long-term contracts freeze the world in the state that it was when the drafter imperfectly gazed into his/her crystal ball. Either that or essential changes happen but at huge prices. An Operator, having been squeezed savagely by the competitive bidding process, will instinctively be looking for ways to make a decent return over and above that dictated by the bid price.

    As CW recognised years ago, the system is bust. It needs fundamental change.

  • Greg Tingey

    And that the “London” model is a much better one to follow …..

  • Christian Wolmar

    That’s very well put Fandroid – I like that bit about the world being frozen when the franchise is drawn up; so true