For a long time the Association of Train Operating Companies (ATOC) has tried to keep a lid on the debate over the future of franchising. With its members divided between those who would like to see a vertically integrated railway and others who are reluctant to endorse any notion of change in the present structure, it was difficult for the organisation to steer a middle way.
Now, however, in an exclusive interview with Rail, Michael Roberts, the chief executive of ATOC, has accepted that the present franchising model is unsatisfactory and suggests that the time is ripe for a debate on the issue. Roberts, who has spent much of the time since he arrived from the Confederation of British Industry in April last year trying to establish ATOC’s role, has now recognised that the franchising model implemented by the Labour government since the abolition of the Strategic Rail Authority three years ago is not delivering for either passengers or the train operators.
When I asked him what is the purpose of franchising, he delivered the standard answer that it is designed to allow ‘the private sector to innovate and invest in the industry’. But he added, given the government’s involvement in the day to day running of the railway, ‘At the moment, the department is prescribing in great detail and that is working in the opposite direction.’ He accepted that under the present model, it was not possible for operators to invest except on aspects of the railway that offered an immediate return. This suggests that, in that ghastly business phrase, the franchise model is not ‘fit for purpose’.
Moreover, the timing is right to look at the purpose of franchising. There is, he says, a perfect opportunity for a rethink because once the SouthCentral franchise has been let later this year, there is a two year gap before any franchise processes have to be started – the next two are Southern and C2C. Roberts is careful not to suggest that there is a well-defined ATOC policy yet, unlike his predecessors, he feels that the organisation should have a policy on such matters and he is trying to ensure that ATOC’s policy development side is ‘beefed up’: ‘The difference between me and what went before – and this is not a criticism – is that we think we need to answer the question. ATOC should try to crystallise these issues. We ought to have views about important issues of the day.’
He is ready, though, to throw out a few suggestions for discussion, recognising that it may sound a bit like ‘a tutti fruti approach to franchising’ but will stimulate the debate. He stresses the huge amount of money needed for investment and is keen to see the private sector contribute. He suggests: ‘The future shape of franchising may not be one size fits all – for example, some franchises could be longer and give TOCs the chance to plan ahead and be more responsive to changes in demand. The franchise requirements might be less specified, allowing more private sector innovation’.
He singles out, in particular, those franchises which are premium payers and asks a series of questions: ‘One could ask if those operators paying premia might not be given more freedom? Does the specification for them have to be as tightly defined? Is franchising there to deliver a civil servants’ specification? Or is it there to respond to passenger needs or to bring forward investment?’ He stresses, firmly, that ‘we have no view yet’. But he points, too, to the fact that the Tories have recently released their policy on the railways (as outlined in my column in the last issue) and put forward both the concept of longer franchises and a trial for vertically integrated railways, an idea espoused very strongly by ATOC members such as Stagecoach and FirstGroup.
Roberts has been canny to accept that there is a need for debate at a time when, with franchises getting into trouble, there is bound to be calls for change to the present structure. Whenever issues about franchising are raised in this way, however, there are more questions than answers. Roberts, of course, is seeking to reduce the burden of ‘microfranchising’ for the train operators but therein lies a fundamental problem.
I interviewed Andrew Adonis recently for Public Finance magazine (see my website for the full article) and he defended very strongly the notion of ‘micromanagement’: ‘The biggest complaint made by the rail companies is that we try to micromanage the railways. I find this quite funny. In my first week in this job, I was told the worst thing I could do was to micromanage. It was only in week two that I realised that micromanagement was in the eyes of the beholder. Micromanagement as a concept is bad, but protecting the public from ticket office closures, from closure of restaurant cars is good.’ Indeed, as a result of this philosophy, requirements for the SouthCentral franchise were tightened up with more detailed specifications for ticket office opening times and staffing of stations.
This is the nub of the franchising debate. And every time that an operator cuts back on ticket office openings, closes catering facilities, removes platform staff or fails to make any improvements for passengers, the argument that franchises should be given their head and allowed to get on with it is weakened.
Michael Roberts’s ability to steer a course through that minefield will determine whether a better version of franchising emerges. Certainly, the pointers are not good from what is happening at National Express whose reaction to financial difficulties is to cut costs at every opportunity, making its product less attractive to potential customers. It is precisely the sort of strategy that a nationalised industry like British Rail might have implemented and backs up my contention that really the railways have never been privatised.
While National Express boasts about how it is very good at ‘getting to know its customer’, a quick glance at its utterly unfathomable website would tend to suggest the opposite. Once you have provided details of the route, a list of trains appears but you first have to click on the type of fare you want before it provides details of how much you need to pay. I realise train companies have a more complex task than airlines when it comes to providing fare details, but there are clearer ways of doing this – indeed, Great Western’s site, which I thought initially was confusing, actually provides an easier route through the jungle.
But what really angered me about NEx’s site was the registration system. First, why is it required to register at all? I have bought Ryanair tickets several times (though I have now tried to give up on low cost airlines) but never registered. Secondly, having allegedly forgotten my password – which I think was actually not true – I had to ask for another one, and so I waited a couple of hours, but it did not arrive. When I rang up to enquire, the harassed woman at the end of ‘web support’ said I had to wait 24 hours to get a password. That is completely ludicrous since it is a process that should be done instantly, as has happened on other websites.
The railways, sadly, can still never ‘get’ new technology and use it in a lumbering and inefficient way. Now here’s a suggestion: which train company will adopt Amazon’s technique and allow me to buy tickets with one click? When I buy obscure books from second hand sellers around Britain, Amazon allows me to click once and the transaction is completed. Here is the sort of thing on which Michael Roberts should be working, improving the services offered by train operators in order to ensure the retention of the franchising system on which they all depend to make their money.
Yeo but no ho ho!
Tim Yeo, the Norfolk Tory MP, did not endear himself to the audience at the excellent Railway Studies Association annual dinner by showing little knowledge of history and making rather confusing references to the state of the industry today. Clearly no great fan of today’s private railway operators, the ruddy-faced Yeo berated them for their poor performance and customer care, especially with on board food – rather ungenerous given that, at least National Express got hold of it, Anglia services had the best catering in the country – but then felt he had to say that BR was worse. So he related how in the days of BR, he used to go through Liverpool Street station and the only food available was the miserable offerings from Travellers’ Fare. He clearly had forgotten that Liverpool Street was one of BR’s great redevelopments and had countless food outlets when it was completed in 1992.
Then Yeo bizarrely compared rail and air travel. While getting on a train at Colchester station was virtually the same experience as in the 19th century, he said, look how things had got better for passengers boarding planes at Stansted airport even since the 1990s he said. Euh, exactly how should the experience of getting on a train be improved? Carpets on the platforms? And my experience of air travel is that the whole process is much more of a nightmare today because of security with your passport being checked half a dozen times and being sent out onto the tarmac at Stansted rather than using a ramp because it is cheaper for the airlines. All in all it was a strange speech to a railway audience, and I somewhat suspect that Yeo will not find himself being invited to address many more railway dinner after this stumbling performance.