Rail 857: Is the Office of Rail and Road really necessary?

Is it time for another Wolmar question since ‘what is franchising for?’ will, I reckon, soon become redundant as the government chooses a different model. So how about ‘What is the Office of Road and Rail for?’.

I am not, of course, questioning its safety role which it took over from the Health and Safety Executive a dozen years ago and has been very successful – and blessed with luck, too. One could ask why there has to be a separate Rail Accident Investigation Board rather than the two being in the same organisation but given rail’s excellent recent safety record, this structure is probably best left well alone.

It is, though, its role of economic regulator that is in question as principally this involves the ORR overseeing Network Rail, an unnecessary process of ‘man marking’. The recent lamentable record of Network Rail, which seems incapable of creating a workable timetable and completely messed up its investment programme during the current Control Period 5, must reflect, therefore, on ORR’s performance, too.

The ORR’s economic regulator role is convoluted. Essentially, the organisation examines whether the investment plans put forward by the industry are affordable and realistic, and then either raises concerns or rubber stamps them. However, given the fiasco over Control Period 5 (which is now in its final year) where clearly ORR had failed to notice that Network Rail’s plans were totally undeliverable, one could well ask what is the purpose of going through this lengthy bureaucratic process?

It might seem perverse to be suggesting that ORR’s oversight it unnecessary. Surely, Network Rail’s poor record would suggest that it does need regulatory oversight? I would disagree. A confident organisation, certain in its ability to provide a good service and with a competent management team should not need the oversight of a body staffed by people with little practical experience of running a railway. Contrast British Rail in its late heyday, an efficient dynamic organisation which looked after every taxpayer’s penny with the shambles that Network Rail has become. Relying on a regulator to ensure that Network Rail is efficient is the wrong way to improve its efficiency. Of course BR made mistakes but it was able to learn from them and had several brilliant chairmen who could steer the organisation in the right direction. Above all, it did not have ministers breathing down its neck the whole time.

As with much else to do with the structure of the railways, the current relationship between ORR and Network Rail came about by accident. While it may have made sense for an independent regulator to ensure that Railtrack, which was a private company with a duty to maximise profits, played by the rules, the idea that one government agency – the ORR – should oversee the performance of another – Network Rail – is rather nonsensical, as highlighted by the fact that fines imposed by the ORR simply move from one state coffer to another.

Perhaps realising this, the ORR has begun to put greater emphasis on the operating, rather than the economic, performance of the railway. As I mentioned a couple of issues ago, I was rather surprised that the ORR chairman Stephen Glaister has been given the role of investigating the recent timetabling chaos given that its remit suggests that the organisation should have been aware of the impending problems and helped nip them in the bud. Indeed, the ORR sat on the very Readiness Committee that should have stopped the process going ahead before the starting gun was fired. So the guards seemed to be overseeing themselves.

Lord Berkeley asked a question in the House of Lords about Glaister’s role and got the inevitable brush off, with the minister responding that ‘In undertaking this work, ORR will be supported by an expert panel of independent advisers. This will be one of the means to ensure the ORR’s own role as regulator of Network Rail and the train operating companies has been properly assessed by the Inquiry’. So everyone needs regulating except the regulator who can self-regulate. Hmmmm.

Moreover, I doubt anything much will come from this investigation if past performance is anything to go by.  Take the report published a couple of weeks ago on the performance decline on the Wessex part of what is now known as South Western Trains but used to be South West Trains.

The executive summary of the 50+ page report lists a number of failings by the company. For example, it found that contingency plans had not been revised since 2011, ‘the consequences of which could lead to sub-optimal decisions when responding to incidents’. There was, too, an example where following a track circuit failure at Vauxhall, ‘an Asset Response Manager was not appointed which hindered its ability to respond to the incident’. The ORR also, shockingly ’found that Incident Learning Reviews (ILRs) were only held for a small number of incidents, rather than all large incidents’ and that many instances of recommended actions were not, well, acted upon. There was much more in a similar vein.

I recognise that improving performance is an incremental process but banal is too kind a word for this sort of nonsense. These were hardly heinous crimes, nor, frankly do they seem to be at the root of why performance has deteriorated. SWT, as it used to be called, was generally a well-run franchise under Stagecoach which suffered greatly from overcrowding and the fact that Waterloo was operating at full capacity. Yes, of course, there were failings but surely any experienced train manager, working under a franchising system which is supposed to drive performance improvements, would be alert to these issues.  Frankly I would have more faith in the managers of Stagecoach and its successor, First/MTR to solve the problems than the busybodies of ORR making statements of the bleeding obvious. For example, having frequent ‘Incident Learning Reviews’ would use up enormous amounts of management time which might well detract from performance. The ORR’s criticism smacks of a focus on box ticking exercise rather than on genuine ways to make improvements.

Oddly, ORR’s examination of the performance became rather irrelevant since Chris Grayling announced a wider investigation into the troubles in the franchise by the highly-experienced railway manager Michael Holden who seems to have been unaware that the ORR was carrying out this work.

Here is another bit of bland BS from the annual report around an ‘investigation’ into the difficulties over the recent major London Bridge scheme: ’We found evidence that it had a sustained focus on getting the basics right, from planning to day-to-day operations. We also found that the different parts of Network Rail, those that upgrade the infrastructure (such as installing new points at London Bridge) and those that run the railway in real time, are now working more closely together’. Gosh, I wonder how much they paid for that?

The ORR costs the industry (and therefore us) £31m per year of which half goes on its rail safety role and £12.7m on its economic regulator function, with the rest going on its relatively new roads responsibility. It’s not a fortune and would hardly make a difference to ticket prices, but this man marking is a major hidden cost both in direct economic terms and in efficiency. After the woeful performance of the ORR during CP5, can it possibly argue that things would not be better without it?

ORR’s other main economic function is to encourage competition in an industry where, because of its very nature and the limited number of paths, monopoly is the best option. Of course that requires some regulation but this could easily be carried out by a far smaller and focussed outfit than the ORR which seems to be trying to spread its tentacles into areas covered already by Passenger Focus. The existence of the ORR, along with all the organisations with acronyms that the public find totally incomprehensible, is another result of the fragmentation of the industry which is at the root of its current problems. There is a case for abolishing the lot of them and creating a single strategic body overseeing the industry at arm’s Length from government



Drop the drop off tax


We’ve all got used to paying to drop off our friends and family at airports but now a station has got in on the act. Manchester Airport’s station has been a great success since it opened a quarter of a century ago by British Rail (which of course never did anything clever or commercial) and now has around 12,000 users daily.

For some time, the airport – owned by a consortium of local authorities – has charged drivers £3 for dropping off or picking up passengers, something which has become routine at many other airports. However, it was possible to drop passengers off at the station which is between the two terminals and given that everyone now has wheelie suitcases, the extra walk was worth saving the money and hassle. However, those sharp brains at the airport got wind of this trick and have now decided to impose a £3 charge, rising to £4 if dropping off granny takes a bit longer than 15 minutes, for station users, too.

Nobody in the railway industry has agreed to this but because the station is within the boundaries of the airport, it has imposed the charge with little or no consultation. However, the extra cost will clearly have an impact on the number of people using what is clearly a very useful link into the rail system for local people. It may well be that all those extra services at the airport station promised under the new – now postponed – timetable may well be far emptier than expected. Time for a little joint action from the local transport interests to get this new charge reversed? Remember the concept of integrated transport anyone?

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