Rail 921: The railways must adapt to survive

Well not even Mystic Wolmar if he were a genius could have predicted the events of 2020. As I keep on stressing, things are not going to get back to normal. Not for years, and probably never. There will be a new normal but not the previous one. The future is going to look very different from the past. 2020 will be a landmark year in history books written in the 22nd century, like 1914, 1929 or 1939.

It is not a matter of a few trends being accelerated but rather such the most momentous change facing the railway in peacetime.  I am usually an optimist but I’m afraid that at this point time it is very difficult to find anything to be optimistic about given the impact of the pandemic and our departure from the European which, even with a deal, will have a negative effect on the economy. Just think of the headlines of what has happened over the past year:

  • Rail use has plummeted to around a third of the 2019 levels;
  • Franchising has ended but there is still no clarity about what will replace the system;
  • Half of HS2 is now seriously in doubt (not that I mind);
  • £1bn, at least, has been cut of rail’s £10.4bn five year investment programme;
  • Crossrail has been further delayed;
  • Season ticket sales are plummeting
  • The Treasury is on the warpath over rail subsidies;
  • Ministers are insisting on an above inflation fares rise;
  • Working from home has changed from a niche activity to being mainstream;
  • The first fatal accident on the railways for more than a decade raising the issue of climate change

 

Taken individually, each one of these events represents a big change. Taken together they ensure that nothing short of a revolution is taking place, with no one knowing what the end game will be or any real idea of how many people will be taking a train next year. If you are in the optimist camp, just consider that on the Tuesday in mid December when I wrote this column, vehicle use was 123 per cent of the effective figure the previous year – that is nearly a quarter greater and, note, that much of the country was in Tier 3 with hospitality venues all closed – while rail was a meagre 29 per cent – less than a third of the old ‘normal’. And what is the government doing? Putting the fares up by above inflation, stalling on any ‘flexible’ ticketing arrangements which have been discussed ever since the first lockdown, hesitating over the future structure of the industry and bickering among themselves. And of course, preparing to send more ‘don’t travel by train’ messages.

If there had not been the pandemic, by now we would have had the publication of the Williams review, or at least a White Paper based on it, and we would be moving forward to a new structure of the railways. Instead, there is now paralysis with neither ministers or nor most industry leaders having the foggiest idea of how to get out of this mess and how to find a new equilibrium in the railways. Instead, we are in the midst of a major row between the Department for Transport and the owning groups over how much money they should pay to be allowed to terminate their franchise contracts and move towards the new system of ERMAs – Emergency Recovery Measures Agreements.  You could not make it up. Nothing exposes the failings of the structure of  the industry created a quarter of a century ago than the inability of the railways to even begin to set out a future role within the new world that we are entering.

Just to make matters worse, there is no love lost between Network Rail, and both the Rail Delivery Group, the ridiculously named body that purports to represent the industry but mainly spends its time issuing the most platitudinous press releases, and the Office of Road and Rail. In an interview with rail journalists a week before Xmas, Network Rail boss Andrew Haines made plain that he wanted to see Network Rail centre stage in any reorganisation of the railways whereas the Rail Delivery Group had suggested that effectively it should be sidelined. As for the Office of Road and Rail, Haines argued that the industry, not the regulator, should determine the capacity in terms of the number of paths available on a particular route. I’m with Haines on all these issues.

This is all part of a fascinating bit of argy bargy being played out within the industry to determine the new structure of the industry and crucially which of these organisations might follow the Strategic Rail Authority into oblivion. Haines made clear that Network Rail as it is currently set up cannot be the ‘guiding mind’ required to ensure the railway escapes the clutches of the Department for Transport.  However, he was also adamant  that within the new arrangements for operating and investing in the railway, Network Rail will be a key player and will need to be a strong voice in the future of the industry.

However, for the time being, nothing is happening. Chris Heaton Harris, the rail minister, told the Commons Transport Committee last month that the Williams review would be published ‘next month’ i.e. December but then this was contradicted in his answer a couple of weeks later to an oral question in the chamber when he said ‘our plans for the railway [would be published] in a White Paper when the course of the pandemic becomes clearer’. Perhaps if he spent less time putting really bad jokes on Twitter (‘How should you drain pasta at Christmas? Using an Advent  Colander’ – yes really!) the minister might know what is happening in the Department.

Almost everyone is agreed that a pan-industry body, a ‘guiding mind’ as it were, is an essential prerequisite of any new structure. But what will that look like and who will head it? The lessons of the demise of the Strategic Rail Authority must be learnt. It was killed off because it became bloated with more than 500 staff and countless millions being spent on consultants and its boss, Richard Bowker, overreached himself. He totally misunderstood its relationship with government and according to one insider, when he boasted at one point to the then Transport Secretary Alistair Darling, that he had friends in No 10 (Tony Blair with whom he apparently once jammed on a guitar (See my column in Rail 454) that sealed the fate of his organisation. A great pity as it could have been a very useful buffer between the department and the industry, but Bowker had none of the canny skills like the great British Rail chairman, such as Peter Parker and Bob Reid (the first in particular) needed to deal with politicians. With the bill to run the railway mounting every week, and the likelihood that long term subsidy of a level never seen before will be required to keep the industry running, the urgency of sorting out the new structure cannot be overstressed. Without clear action and a precise road map (or rail route) to recovery, the future looks very bleak indeed. So Happy New Year folks.

 

 

 

 

Mystic Wolmar’s off the mark predictions can be forgiven but he scored quite well otherwise

 

Last year Mystic made his usual set of predictions and apart from not predicting that there would be a pandemic which closed shops, pubs and restaurants for three months and reduced the railways to less than 10 per cent of its usual patronage, he did not do too badly.

They were:

  1. HS2 will survive its review but the government will claim that costs are being pared back.
  2. Transport for London will announce that the main Crossrail tunnels will not open till 2022.
  3. Sadiq Khan will be re-elected as mayor of London with a reduced majority because he will have to admit that fares will go up during his next four year term.
  4. The Williams Review will not be published but instead a White Paper will suggest the creation of a new strategic railway body and the retention of a modified franchising system (the Wolmar question, ‘what is franchising for?’ will not be answered).
  5. However, one of the existing bodies with a pan industry role such as the Rail Delivery Group, will not survive.
  6. Grant Shapps will not be Transport Secretary after the February reshuffle.

 

1 and 2 are definitely correct and while Khan did not have to endure an election, he is nearly 50 per cent in the polls and he has, indeed, been forced to put up fares. As for the White Paper, it has not quite happened yet so half a mark for that one and while the Rail Delivery Group is clearly stuttering towards oblivion, it has not quite got there. And 6 was plain wrong. So kind of 3 ½ out of  which is not as bad as in some years.

 

Watch out for a new bunch of predictions in the next issue. And do make any suggestions if you can as ‘it ain’t gonna be easy’ and Mystic needs all the help he can get.