Rail 984: Reluctant renationalisation

Well here’s an apparent paradox. The Conservative Secretary of State for Transport, Mark Harper has decided to effectively renationalise TransPennineExpress because its performance was ‘unacceptable’. Yet, this is the Government which was drawing up plans to create a new organisation to oversee the reprivatisation of the industry through new service contracts. The central idea of Great British Railways was that all services would, once again, be run by private contractors although they would not for the time being at least, take the ‘revenue risk’ – in other words, the fares would go to the state and the train operators would merely get a fee for running the trains.

I have written ‘was’ because it seems that Great British Railways, which has already survived a near death experience when Harper took over as Transport Secretary in the autumn may well be in the condemned cell yet again. When it was rescued last year, an emphasis on the private sector which previously had not been in the plan, was added but it may be that this has not been enough to save it .

I will return to GBR later in this column, but first, the question of how come a minister from a party whose very raison d’etre is to privatise everything should bring back TransPennine into government hands. Moreover, this is the fourth company to be taken in by the operator of last resort, the state owned operator which already runs SouthEastern, Northern, and LNER. Harper’s explanation of why he was not renewing FirstGroup’s contract for TransPennine largely avoided any criticism of the company. Instead he said that the main causes of TransPennine’s problems were industrial action and Covid, neither of which could be laid at the door of FirstGroup. He did point out that there was a huge backlog of driver training stretching to 4,000 days which could be attributed to the company’s failure to deal with the aftermath of the pandemic and said that despite weekly meetings with the company, there were cancellation rates of almost a quarter on Monday to Friday services, and gaps in services on some routes of up to six hours. Certainly, according to my sources in the industry, FirstGroup has focussed far more on its prestigious Great Western franchise than on TransPennine, but part of the difference in performance between the two may be down to the role of the skills of Mark Hopwood, the very experienced and adept GWR managing director.

Nevertheless, taking the radical step of taking back the contract in house contrasts markedly with the decision to allow Avanti, where the poor performance has had far greater publicity, to retain its contract. The key reason for the move against TransPennine is, in fact, nakedly political. The area served by TransPennine serves numerous constituencies which were part of the infamous Red Wall, and the chair of Transport for the North, is the very canny Conservative politician Lord Patrick McLoughlin, the former transport secretary. I understand that he was instrumental in pressing Harper to take over TransPennine as it was seen as a big political issue in the north.

Whether it does any good is another matter. At least initially, the same management team and staff will be operating the service. One hoped for improvement might be the attitude of the drivers whose union, ASLEF, clearly set out to bring about this outcome. The lack of cooperation from drivers over rest day working was the main reason for the poor performance, though it must be said that FirstGroup should have addressed this issue at some point during its decade of running the franchise.

It must be hoped, too, that gradually new managers will take over, with the expectation that they will have a workable relationship with ASLEF but passengers should not hold their breath over immediate improvements. In a sensible world, Harper and his team might learn from this experience and realise that their insistence on privatising all railway operations is based on ideology, not evidence-based criteria. As I wrote in The Guardian , ‘it should not really have taken Einstein to work out that doing the same thing and expecting a different result is the definition of insanity’. Yet, that is precisely what Harper is planning on doing. Once Great British Railways is up and running, its remit will be to contract out all services to the private sector including the three services which have been very effectively run by the Operator of Last Resort. Harper made this clear in his statement by saying: ‘Once market conditions allow, we intend to subject this, and indeed all contracts…including those under the OLR [Operator of Last Resort] to competitive tendering.

One could ask why? The whole process of competitive tendering is expensive, requiring the creation of complex contracts and taking up a huge amount of civil servants’ time. If the idea is that this will prevent strikes, let’s all share a hollow laugh. If the plan is to attract go-getting entrepreneurs, there are unlikely to be a queue of private sector organisations fighting over the right to run contracts where they get a 2 per cent margin. Moreover, the contracts are likely to be so tightly drawn up that there will be little opportunity for the winning bidders to make much difference (see my adjoining story about wi-fi!).

And then, as mentioned above, there remains a big question mark over the future of Great British Railways. The Times on May 18th ran a story stating that the plan to create Great British Railways had been shelved as there would be no legislation to establish it in the King’s Speech. Other media followed up the story forcing the Department for Transport into making a statement which said that the government was ‘still fully committed to reforming our railways and will introduce legislation as soon as parliamentary time allows…’ Reading between the lines, this avoids any commitment to create Great British Railways and hides behind the argument that there is no parliamentary time. That is a standard fudge. If the Government really wanted to push through these reforms, then they could prioritise rail legislation. As I wrote in my last column, without legislation the letting of contracts will remain with the Department and therefore Great British Railways will be unable to perform its key function. All this is of great concern to railway managers who, above all, require stability and certainty for the industry. It seems that at the moment they are getting the precise opposite.



The sad case of the disappearing wifi


If one wanted an example of why the railways need commercial independence from the Department for Transport, a story I came across for my Calling All Stations podcast provides confirmation. In early May, the Department, on instructions from the Transport Secretary Mark Harper, sent out instructions to the train operators to prepare to disconnect their wifi services to passengers. When I got wind of the story, I contacted the Department which confirmed the story saying that a Transport Focus report found that Wi-Fi was a lower priority for passengers than ‘value for money of ticket prices, reliability, punctuality and personal security’. The statement went on to say that ‘in many cases, the on train Wi-Fi equipment is in need of replacement’ and  ‘many non inter-city journeys are of relatively short durations and the usage of the on train Wi-Fi has typically been low.

Well, yes, as I point out in detail in the podcast, the fact that passengers value other factors above wifi does not mean they do not want it. I consider that wifi connection is now as routinely required as on board toilets. Moreover, while some of the equipment is old, it was installed in 2016 as a result of a fine imposed on Network Rail for poor performance, and therefore has been paid for by passengers and taxpayers. Astonishingly, wifi is now vital for operational purposes on trains and therefore the equipment will need to be updated anyway, but not for passenger use.

As for people not using the train wifi, yes, it can be useless at times, but there are still many parts of the rail network – especially tunnels – where no external service is available. Despite what the Department says, people want trains to be connected directly and the answer to the present problems is not to cut the service but to improve it. People want to work – or play – on trains and not having the internet will undoubtedly make some people travel by other means. At a time when the railways need to attract more passengers, this is the sort of mean-minded decision that one might expect of an accountant, which Harper happens to be. The savings will be marginal, and likely to be far less than the loss in revenue. The train operators are privately fiercely opposed to the move but the Department insists that the current finances of the railways are not sustainable. Yet, this kind of decision will only worsen the economics of the industry.







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