Rail 564: No, Ian I am not impressed with your business plan

It sounded jolly good when Network Rail announced in its 2007 Business Plan, published in early April, that there would be a ‘£2.4bn expansion programme’ over the next two years. The press release sang: ‘hundreds of platforms will be lengthened, new platforms added, new tracks laid and line speeds raised’ as well as signalling schemes that will add capacity.

Iain Coucher, soon to be anointed as chief executive, rattled through a PowerPoint presentation which, at one point, had a list of the 900 promised schemes which scrolled through far too fast to see precisely what they were. ‘I know  you are a difficult man to impress’ Coucher confided in me just before the event, ‘but you can’t fail to be impressed by this programme’.

Oh yes I can, Iain. And, in fact, there was not much to be impressed by. Much of the press, which as usual, were taken in, echoing most of NR’s upbeat tone. This was partly because several of the regular transport correspondents were on a jolly in France for the TGV’s record run which was a rather unfortunate clash that overshadowed much of the day anyway. The billboards of the Evening Standardexcitedly announced that there was relief for overcrowded rail passengers, implying it was a victory for that newspaper’s worthy but rather misguided campaign to get everyone a seat (does the editor understand the huge financial implications of what is being suggested?) while The Times announced ‘Overcrowded railways get a £2.4bn boost’ though the accompanying story did at least explain that not all the money was coming from Network Rail’s coffers.

Indeed, that was the first of several holes in Network Rail’s good news announcement. I am not wishing to be churlish here. It is great that Network Rail is turning towards enhancement and building that into its programme, and yes, it is welcome that more money will be devoted to capacity building, rather than simply maintenance and renewal, but there are several reasons why the reality does not quite match up to the spin.

First, as The Times pointed out – but several newspapers missed – is the fact that just under a third of the money is not from NR’s own resources. Only £1.7bn is coming from Network Rail with the rest from third parties, ranging from the Scottish and Welsh governments and local councils to port authorities and freight groups. Putting the overall total in a press release would be all right if Network Rail admitted to its status as a public company. But for a supposedly private outfit to claim credit for other people’s money being invested in its business is bordering on the dishonest.

Secondly, the fact that more money is being channelled towards enhancements was programmed into the five year programme for 2004/9 set out by the rail regulator back in 2003. The regulatory settlement was always backloaded, with more money becoming available in the final two years, partly because of the reduction in spending on the West Coast Main Line refurbishment and partly because of the government withholding part of NR’s direct grant until the latter years of the regulatory control period. At the press conference, when I asked whether any new money was being announced, the assembled bigwigs looked at each other shuffling their papers and finally admitted that there was none. So in effect the announcement was a rejigging of previous business plans and a mere restatement of the original regulatory settlement.

Worst, though, was the fact that there is no precise list of exactly what is being done and when it will be completed. The bulk of the information was contained in 26 separate route plans, which are available on line or in hard copy, but ploughing through these documents still does not provide a clear list of 900 schemes as the appendices at the end contain both definite and aspirational schemes.

When I rang the press office, I was directed to another document on the website containing ‘additional information’ and there, indeed, was a list – but only of 165 schemes. Where were the other 725 plus? Indeed, where were the details of the ‘hundreds’ of platform extensions?

Several phone calls later I was told there was no definitive list: ‘Some of these schemes are in the early stages and they may fail their cost benefit analysis, and therefore we do not want to create unrealistic expectations among the public. If a scheme fails, then it will be replaced by another’. Ah, I said, then what happens if that one, too, is deemed not worthwhile? ‘Oh that’s very unlikely to happen’ I was told. So the implication of the PowerPoint show, with its list scrolling through on screen, was a mirage which disappeared as one approached it.

The detail cannot, therefore, be trusted. Saying there are to be ‘hundreds of platforms’ that are to be lengthened implies that there are to be at least 201 platform extensions out of the 900 schemes’. Yet, of the 165 definite schemes listed, only 28 relate to platforms but some might involve more than one. Nevertheless, that leaves a lot of schemes to find to bring up to the promised total and again it is unclear what will eventually see the light of day.

This whole exercise is such blatant spin that one has to ask why Network Rail felt it necessary to publish this information in such an overstated, yet opaque, way. Raitrack used to do this annually, putting out Network Management Statements whose thickness increased at the same rate as they descended into fantasy, but then it had the excuse that its bosses had to try to fool the stock market and satisfy the shareholders that better times were around the corner. Network Rail does not have to do this, which means the only possible explanation is that its bosses feel they are under ever greater pressure from the government to show that something is being done about overcrowding.

Next time, let’s have a straight list of what is happening over the next couple of years, rather than overstated claims that cannot be backed up when even relatively simple questions are asked. As other commentators in the industry have noted, there is a tone of complacency – even arrogance – beginning to emerge from Network Rail, which may have contributed to the recent Grayrigg accident and which needs to be nipped in the bud.

There is another danger, too. Network Rail has, so far, had a generally good press partly because it has been quietly improving its performance and becoming more efficient but also because the costs issue – its real Achilles Heel –  has not really hit the mainstream media. But if NR starts to overplay its hands and fails to deliver, there will be a serious risk that the press will revert to its default knocking mode and start examining exactly what we are all getting for the billions pouring into the rail industry.

Tories make big play of railways but will they deliver the money?

There was spin, too, from the Tories, who, in a press conference primarily aimed at the local government elections, said that rail would be at the centrepiece of their new transport strategy. Not wishing to be churlish, this does represent something of a momentous change with the Tories eager to get people to ‘vote blue, go green’ and move away from being seen as the party of the motorist. But, again, there are more questions than answers.

Unfortunately, the Tories are still mostly at the knocking stage, slamming Labour for its failings rather than setting out a coherent alternative strategy. Labour’s failure to implement its own ten year plan, published in 2000, is an all to easy target, although that does not mean the criticism is not merited. Chris Grayling, the Tories transport spokesman, did, however, rightly spotlight the fact that Gordon Brown has underspent on his promises on transport investment. Instead of investing £20.8 billion in the three years 2005 to 2008, he spent £18.1 billion, a shortfall of 15 per cent. Given that the railways have taken up more than expected, the real losers have been the light rail schemes. Instead of the 25 proposed in the ten year plan, there will have been at most half a dozen by 2010, and most of those will be extensions to the Docklands Light Railway. As Grayling points out, local taxpayers have lost millions in developing now defunct schemes in Liverpool, Leeds and South Hampshire.

However, the weak underbelly of the Tories’ argument is their refusal to make any commitments to reverse any of these cuts or, indeed, to grow the railway. One of the centrepieces of the Tories’ strategy will be to rekindle the idea of a north south railway but there is no getting away from the fact that this will require state subsidy to construct – and, if it is to go to Scotland, probably to operate. Yet, the shadow chancellor, George Osborne, appears even tighter with the purse strings than Gordon Brown. Will the Tories really want to support the railways if it means extra spending above and beyond the enormous sums currently being spent? It seems unlikely.

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