Rail 1005: Rail reform process slammed by National Audit Office

One day I hope to be able to write up a report from a government agency highlighting the success of a rail project or policy. This however is not that day. Just as with other recent reports by various bodies on HS2 and the ticket office closures, the National Audit Office’s effort on the rail reform process is a devastating exposé of the failings and floundering of a dying administration which has failed to understand the true value of having an efficient rail network.

It is difficult to find the right words for what has happened in the five years since the May 2018 timetable changes exposed the very dysfunctional nature of the franchise system set up by the privatisation process of the 1990s. Most would involve expressions that begin with f or s.  The chaos caused by the timetable changes all those years ago exposed the fact that the railway lacked a ‘guiding mind’ or fat controller able to direct investment plans in tandem with timetable needs. The implication was always clear: there needed to be integration between track and trains, the wheel-rail interface separated by privatisation had to be stitched back together.

So far so simple. Keith Williams, an aviation and retail businessman with no experience of the railway, was called into to produce a report which was then hijacked by the publicity seeking transport secretary, Grant Shapps.  The resulting document which was actually largely written by Boris Johnson’s transport adviser Andrew Gilligan argued for a very strong state involvement through the creation of an independent body to be called Great British Railways. Again, so far, so good, but then the fun started. Johnson’s Number 10 parties proved to be his undoing and and Gilligan and Shapps were collateral damage. Meanwhile, though, a Great British Railways transition team had been set up the changes in government meant that its remit was no longer clear. There were concerns within the Right of the Tory party, which with the removal of Johnson who has a few liberal tendencies and likes big state projects, was now entirely in control. And they did not like the idea having a strong all powerful Great British Railways which, for example, was to be given responsibility for all ticket sales.

That is the backdrop to what the NAO report highlights as disagreements between the various parties involved. Once the government had changed and we got a Prime Minister uninterested in – hostile even to – railways, the transition team was working in an atmosphere of uncertainty. As the report points out, a third of the 62 (!) commitments required legislation and many of these have now effectively been abandoned.

While it is fun to pick at the nitty gritty detail of the report which is so devastating, taking a bird’s eye view is more revealing as it exposes the sheer unreality of the whole process. The very fact that the process was supposed to encompass 62 different outcomes demonstrates this. This is governance by management consultancy speak as one can’t imagine a great railway leader, such as the Bob Reid (the first BR chairman of that name) setting out 62 things that needed to be done.

The true focus was on saving money and here too the process seems to have descended into chaos. Very ambitious targets were set for the amounts to be saved but these depended on a smooth and rapid transition process to the new structure. And that was never going to happen due to the complexity of the privatised structure of the railways. There was a Catch 22. To drive through change there needed to be a guiding mind and fat controller all rolled up into one. But it was precisely the absence of such an entity which had stimulated the need for change at the outset.

Therefore the unrealistically high levels of saving were impossible to achieve. The reforms were supposed to save the Government £2.6bn by 2024/25 and while the press coverage focused on this supposed overspent, the whole process was set up to fail. More pertinently, one could ask what was all that fat that could be shaved off a railway that for nearly three decades had been in the private sector which is supposedly more efficient than state enterprises. The ticket office closure plan was clearly intended to save considerable sums but again that was set up to fail since it was unlikely that such a radical plan #could be pushed through so quickly. Again, the savings were a fantasy given that the staff were mostly supposed to be redeployed and the whole change was represented as a boon for passengers.

Moreover, there were the unions to contend with. The report sets out that ‘The savings would primarily come from workforce reform plans including modernising ways of working within train stations, improving control and deployment of drivers, and reductions in staff numbers, to create efficiencies and savings’. Again, not only was that unlikely to deliver the levels expected but, then in a paragraph that could be construed as the NAO having a laugh, the report adds ‘DfT told us that it recognised that achieving these workforce reform savings was particularly high risk, as they would be subject to negotiations with trade unions’. Hmm, yes, ‘negotiations’ is an interesting choice of words given that ministers have steadfastly refused to meet the unions for the past year, a clear case of industrial inaction.

The deficiencies in the system highlighted by the Department for Transport resulted in four overall aims, giving rise to 12 ‘high level benefit targets’ but none – that’s right none of them – have been met with five indicated red and seven amber in the traffic light system used widely across Whitehall. At root, the whole reform process has been stymied by a lack of clarity over its purpose. Yes, integrating track with train has been the overriding purpose but there are fundamental differences about what this means. The bald truth, that appals the Right of the Tory party, is that Network Rail is a state owned company and therefore any integrated organisation essentially has also to be in the public sector as no one is suggesting we go through the sale of what was Railtrack all over again. As the NAO highlights: ‘DfT and HMT have disagreed about key aspects of reform. This includes the

extent to which fares and services should be set by Great British Railways or the

private sector, and how best to maximise rail revenue and manage costs’. Moreover, ‘the delay to establishing Great British Railways has also led DfT to revisit the roles and responsibilities of GBRTT’. So now the transition team is no longer preparing for the new structure but, instead, ‘is now focused on cross-industry activity and encouraging joined-up thinking across the sector’. But we are soon to have an election which will put in play the whole process. Surely, the only realistic option for GBRTT is a mercy killing to stop yet more millions being wasted on a process that has lost its way.


Not just mobilty


Now here’s an initiative to cheer us up in these depressing times. Southeastern, one of the rail companies being run by the Department for Transport (through its operator of last resort) has launched a plan to boost social mobility. As Steve White, its very passionate and engaged managing director put it, ‘railways should not just be about mobility, they should support social mobility’. That means tailoring its activities, particularly in relation to employment but also other aspects of its operations, to supporting the wider needs of the communities it serves.

As he put it in an excellent report, southeastern, just published on the idea by The Purpose Coalition, an all party group chaired by the former Transport Secretary Justine Greening, a truly sustainable railway is ‘about connecting people and places and unlocking economic potential’ That’s such a simple but brilliant idea. For example, Southeastern now tries to buy goods and services locally, and hire people from the community. Its worked with the Princes Trust to find the sort of people who would never have the capability or confidence of applying for a job on the railway and yet turn out to be perfectly suitable. Again, as White told me ‘We try to find talented people from lower socio-economic backgrounds to better reflect the communities we serve’. The Purpose Coalition sets out 14 targets for companies to work towards and Southeastern is focussed on four including benchmarking its employment policies to meet key wider criteria and focussing on mental and physical health of its workforce.

As an aside it was great to meet Justine Greening, the transport secretary at the time of the London Olympics, but sadly it shows how far  the Tories have departed from an era when they had senior people like her who were intelligent, engaged and capable. While #Labour supporters like me took issue with some of their policies, at  least one could have debates and discussions, something that is almost absent from the political forum today.

This social mobility project has far wider resonance than Southeastern. White is keen to get many other railway companies involved, and there is no reason why this concept cannot become the norm for all companies. Crucially, though, this must not be a box to be ticked, but, as with Southeastern, it should encompass a wide variety of schemes ranging from employment practices and initiatives through to projects in the most deprived areas of the country. Already Lumo, the open access operator on the East Coast has signed up and White has told me he will help any other company come on board. And after the general election, if Labour is to take back much of the railway in house, it should ensure that all the various routes or regions have a similar commitment to social mobility. To find out more, listen to my podcast, (Calling All Stations series 2 No 16) which has an interview with White.



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