Rail 785: Who runs the railway?

Well this is fun. We have just learnt that when the Department said it was pausing – rather than cancelling – the electrification of the Transpennine and Midland Main Line routes, it meant just that. The pause, announced in mid July, lasted barely two months and now, with a bit of lengthening of the programme, the schemes have been ‘unpaused’, a word which will now have to be added to the lexicon for Scrabble aficionados.

Hold on a minute, though. This may be amusing to those who like me make their income from covering the tos and fros in the railways  but it is no way to run a railway. These shenanigans raise an awful lot of questions about how the industry is being run and the prospects for the next few years.  The announcement by Patrick McLoughlin certainly took many people by surprise, not least the new chairman of Network Rail, Peter Hendy, who was reported to be incandescent given that he had been tasked with producing a report on what could be rescued from the ashes of the railway’s investment  plans. However, as an old campaigner like Hendy knows, politics is always king in this industry and McLoughlin was clearly instructed from above to get some good news out there, in time to pinch a few headlines on the last day of the Labour party conference. (which is the only possible explanation as to why it was announced in the week before the Tories’ own event). Indeed, sometimes discerning any clear purpose to ministerial actions is impossible without assuming the worst and most base motives.

It is clear that the process by which railway projects were determined in the current five year control period (2014/9) has not worked. The idea was for the government to produce a specification and an assessment of the available funds, and then that would be assessed by the Office of Rail and Road to see whether it was feasible. Obviously no one had noticed that Network Rail did not seem to have the resources or ability to manage the £38bn programme and just a year after the start of the programme, it proved unworkable. However, McLoughlin’s sudden announcement to ‘unpause’ parts of the programme suggests that it is no longer ORR, Network Rail or even the Department that is determining priorities but, rather, the upper echelons of government – indeed my sources suggest it is No 10 and the Treasury which made the ‘unpause’ decision.

McLoughlin’s sudden announcement came before either of the other two reports into the debacle over the industry’s investment programme have been produced. One is due to be by Collette Bowe into the causes of the debacle and is supposedly damning of all concerned including ministers and civil servants. The other is on the future structure of the rail industry, by Nicola Shaw, once of OPRAF (the Office of Passenger Rail Franchising) and now boss of High Speed One. She caused a recent stir when suggesting that nothing was being ruled out including the reprivatisation of Network Rail.

So in an industry that needs stability and long term planning, we have the possibility of reprivatisation from the current government and the opposite, wholesale renationalisation, being considered by the main opposition party. While I doubt either will come about, there is no doubt that change is afoot. The various reports being produced will undoubtedly lead to a different rail structure.

Already, the fact that the announcement about ‘unpausing’ came from people with a high pay grade than McLoughlin or Mark Carne suggests that as ever, the Treasury’s claws are all over the industry, but working out precisely what is happening needs a combination of Sherlock Holmes and Edward Snowden (the Pentagon leaker). One key motivator behind the changes is a dislike of Network Rail because it is the nationalised entity and George Osborne is no fan of that type of ownership. However, rather than a Nicola Shaw type overall sale, a more likely outcome, being discussed in Whitehall. The last thing Osborne wants is a growing and more powerful body at the centre of the rail network.

So bits of Network Rail may be hived off in various ways. First, we have the devolution agenda. There is much talk about the possibility of handing over sections of the infrastructure to the new local government bodies, such as Rail North, which will have a say – as yet unclear how much – over operations. If they are granted considerable power over the franchise, the logical next step would be to create an integrated network. Various attempts have already been made in this regard, with the South West Trains alliance and the failed attempt for an integrated franchise for Merseyrail, and possibly the lesson is that unless Network Rail is actually broken up, nothing will ever happen. It would, however, be a major step  and is being resisted by Network Rail executives.

Then, also hoping to be the recipient of some of Network Rail’s functions is the ridiculously-named Rail Delivery Group which is still searching for a raison d’être. Clearly its current position as a kind of pan industry body that does not include half the relevant stakeholders, as Nigel Harris stressed in his revealing interview with the chairman, Martin Griffiths in the latest issue of Rail Review. The new boss of the RDG, Paul Plummer, who was formerly with Network Rail and earnt a stunning £346,000 annually, has clearly not taken the job as a mere sinecure. He will be seeking out to expand the role of the organisation and under discussion is the possibility that the RDG would take on the role of ‘systems authority’ – which would mean being responsible for timetabling, train planning, and other strategic functions. However, to be entrusted with such functions, RDG would have to be opened up to become a genuinely inclusive body which it patently is not at the moment since so many parts of the supply chain and even the rolling stock companies are currently barred from membership. As Nigel pointed out to Griffiths, it is a bit bizarre that National Express, which only has one surviving franchise, should be represented on the board while a company such as Alstom or Siemens does not. Indeed, this anomalous situation has led to the creation of another body, the Rail Supply Group, and logic would dictate that somehow the two are reconciled.

Just to further complicate matters, at the Conservative Party conference, George Osborne announced the creation of a quasi independent infrastructure board to make decisions about big new schemes. That begs questions about who will make determine what new railway schemes get approved. Add in questions about the role of the Railway Safety and Standards Board which has come under fire for failing to produce sufficiently relevant research for the industry, and it is clear that there is scope for a major restructuring and simplification of the way the railways are run.

The problem is there is no clear model or ‘road map’ of where we are going. The nationalisation of British Railways in 1948 might have been a nakedly political move, but it was done with a clear purpose in mind. So was privatisation in the mid 1990s even if it was misguided in many respects. Now, though, no one knows where we are going, or what the endgame is. Yes, there is a need for a guiding mind – or rather a fat controller – but how will one emerge if there is to be more fragmentation and extra interfaces? There is a need for a proper independent enquiry into investment and operations of the railway – not three different reports being produced into narrow aspects of the industry. One for Mr McLaughlin, I suspect.

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