Rail 677: Rail industry could do better, as ever

There’s been so much to write about on the railways recently that the Railway School report has been somewhat delayed, but I am now delighted to present it.. As ever, a mixed bag with as many brickbats as pats on the back.

With so many changes and events in the past year, it is difficult to know where to start but let’s begin with a group that’s been rather stable of late, the operator class. Stable because, well, the government – of which much more later  – has not had time to deal with trying to let franchises. Or rather, has not managed to set out the new franchise model, despite much consultation, so we have the same lot now that we did last year and franchise extensions are being handed out like confetti at a wedding.

For the most part, the class has behaved itself. Sure, there was the usual issue of bunking off school entirely the minute a few snow flakes fell, and there is the expected miserly grasp of any tucker going but otherwise the class can be commended for its good behaviour, with certain individuals making real efforts to do well.

A rap on the knuckles (corporal punishment, surprisingly is still allowed in the railway school), however, for FirstGroup who threw the towel in on its Great Western franchise because they were going to lose money on it. Actually, that’s a bit unfair. The company is quite straightforward about being in it for the money and it was the silliness of the previous government class in giving them a franchise that was backended with millions of pounds of premium which was at fault. So stick out your arm, Alistair Darling, for a hefty whack.

Despite the period of relative calm, this class faces an uncertain future. The idea of ‘horses for courses’ franchises suggests the government has no idea what to do about future deals, and therefore there will be a lot of scope for horse trading during negotiations for new contracts. Moreover, there are lots of major contracts coming up at the same time, which means it will be difficult for the pupils to know which ones to seriously go for.  There is, too, keenness on the part of ministers to limit trips to the tuck shop – so watch for fireworks in this class over the next couple of years.

The most important event of the year in the railway school was the visit of the temporary school inspector, one Sir Roy McNulty. Last year I expressed optimism about his work but unfortunately it has been of a far lower standard than expected. He came, he saw, and he went, leaving behind a report that could have been far better written by many of the pupils. Good on analysis, but oh dear, so weak on prescription and indeed comprehension. And where was the history section, Sir Roy? I hear it was  excised by those control freaks in government class who did not want anything nice said about British Rail. McNulty did what most inspectors do, which is base their findings on their prejudices. Moreover, since he was so influenced by the boys in government class, and indeed much of the report was written by them, any vestige of independent inspection was lost. A shame since there is no doubt that the school is in danger of becoming just a bog-standard comprehensive unless its difficulties are sorted out. His very odd prescription, given that he found most of the problems of the industry were down to fragmentation was, euh, well more fragmentation. If McNulty’s essay had been submitted to the headmaster, he would have barely scraped a C, especially as the language was very poor.

McNulty has now gone, unlikely to be seen again, leaving behind a lot of rather confusing advice for the industry to create yet more committees. In particular, McNulty was keen to see the break-up of Network Rail class. In anticipation of the report and knowing what would be in it since he use to play with McNulty in the Olympics playground, the new head boy at Network Rail, David Higgins, announced that more power would be devolved to the organisation’s nine routes whose directors would be able to make decisions over a range of matters that previously would have had to be referred to head office. He is clearly a canny operator to pre-empt the report in this way but one has to ask whether he is being too clever by half. Is he not worried that the scheme might lead to the eventual break-up of the organisation he heads? Does he really want a part reprivatised Network Rail?

After all, he still has a big job ahead of him to sort out the organisation. The arrogance of the former head boy, Coucher, who incidentally walked away with a pay-out of £1m from the tuck shop, has been deeply damaging to the business and while Higgins is right to want to stir things up, which will result in a host of departures of poor performing pupils, he must ensure that morale is kept up. Not easy at a time of belt tightening. Moreover, one of Higgins fellow prefects told me that there is no doubt that the company will retain a very strong central core which suggests that the changes may be cosmetic.

At least Network Rail may face closer scrutiny in future. One piece of good news in the Office of Rail Regulation class is that it has a new head boy, Richard Price, who seems jolly enthusiastic and keen to change things. That is important as in recent years the organisation has looked more and more like it has been the victim of what is known in the trade as ‘regulatory capture’ which in school terms mean consorting rather too much with the boys and girls of Network Rail Class (although there was apparently quite a lot of consorting within Network Rail, too, in the old days) . This manifested itself in a number of ways, but in particular the mealy-mouthed nature of their essays which always seemed to give the benefit of doubt to Network Rail and far too many injunctions to ‘must do better’. Hopefully, Price will instil a different culture in the class, even though it is still hamstrung by the key question of how do you punish an organisation that is quasi state owned when fining is the only tool at your disposal. Perhaps that could be the first piece of set homework in the New Year.

Indeed, there is some overdue work. We were promised a report by the end of July on open access operations, but it has not yet been seen. Could it, by any chance, have been hijacked  by those control freaks in government class who are not great fans of open access operators? Certainly, they are a meddling and interfering bunch, and as ever they have been making strange decisions such as over the Intercity Express Project and on Thameslink. Trouble ahead on both fronts, boys and girls.

A word on the performance of their prefects. No one questions the intelligence of the head boy, Hammond. Moreover, there is widespread welcome in the whole school for his ability to have supported investment plans across the industry and to have pushed ahead with HS2. He has undoubtedly done well for the railways, but there are doubts over whether he can keep it up and the industry may pay the price when the amount of money available for Control Period 5 (the Network Rail investment plan for 2014/9) is determined.

Of the other ministers, it is clear that Theresa Villiers has had rather too much on her plate. Moreover, she has never resolved the issue of what longer franchises are for, or how to solve the problem of whether they should have breakpoints or not. So instead we have this horses for course policy. A new ministerial arrival is Norman Baker, who will now have some involvement in the industry. He is, by all accounts, very diligent with his red boxes and it will be interesting to see whether he will be able to impose himself on naughty pupils, now that he is responsible for rail performance.

There is one new class in the school, and this is bound to be a source of trouble as all the High Speed Two pupils who have all surprisingly been put together in the same group. There are two factions here, ever ready to start throwing ink-smudged paper darts at each other. On one side, there are those who think that Britain cannot survive without the line, while on the other there are those who reckon it will be a white elephant. I suspect these sides will not resolve their differences but let’s hope they improve on the level of homework they produce which, as highlighted in Rail 676 was astonishingly poor.

Overall, this has been a bit of a year of marking time, waiting for McNulty, as it were, and, watching the coalition government settle in. The forthcoming year is likely to be far more exciting, with attempts to push through McNulty changes, franchise deals, pushing ahead with IEP and Thameslink, preparing for Control Period 5, the continuing debate over HS2 and much more. This is not the time for Mystic Wolmar predictions, but let me slip in one – there will be changes of minister in transport at the first reshuffle.

Unfair ticket penalties reconsidered

I have it on good authority that the train operators may be willing to accept that it is unfair to charge people twice for their tickets when they are found to be travelling on the wrong train. This has long been a bit of a scandal, and is based on the assumption that people with the wrong ticket are necessarily trying to cheat the system, rather than having made an honest mistake, which is not difficult given the complexity of the ticketing system.

Now consideration is being given to an idea long promoted in Rail that the initial payment should be taken into account when the new ticket is issued, rather than charging people the full amount. That would be entirely consistent and fare with normal business practice.

These discussions are part of the current review of the Regulatory Agreement on Fares and Ticketing. On the other hand, operators are also seeking to find ways of limiting the sale of those pesky split tickets – when it becomes cheaper to buy a ticket to a mid point and then another to the final destination – which are a quirk of the system. At the moment, ticket offices are supposed to sell these tickets if asked, but not to offer them unprompted. However, with such information widely available on the internet, they are leading to losses of revenue and operators would love to stem that flow.

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