A feeling of déjà vu descends when reading the government’s new strategic vision for rail. Have some key lessons finally been learnt?

The ScotRail Alliance. Could this be a model for others?
“Connecting People” is the strapline for the government’s recently published strategic vision for rail. It’s a clever title. At one level it’s about connecting passengers but in another it’s about connecting those people in the company matrix so that they can themselves deliver better outcomes, not just for passengers, but for the economy and communities, both nationally and regionally.

There are some senses in which a feeling of déjà vu descends in reading the document. The overriding theme is about a more joined up approach to running the railway. While a horses for courses approach is envisaged, “integration” is the methodology. Sadly it is at this point that someone of my background and longevity is prompted to recall all of those previous occasions when this topic has been hotly debated and either ignored or kicked into the long grass. It even recalls the “privatisation” debates when a previous government of the “blue” variety rejected professional advice that the structure of franchising should follow the integrated company model created by British Rail. The subject remained hot as Railtrack took the industry to the brink with crashes at Hatfield, Potters Bar, et al, exposing not only the lunacy of the gap between operator and infrastructure owner, but the self inflicted wound of the further gap between infrastructure owner and infrastructure maintainer.

The collapse of Railtrack flowed directly from these failings and when a “pink” government fired the assassination bullet, Network Rail popped up as a not-for-profit company with a centralising tendency so severe that it would not have been out of place in Franco’s Spain. Of course the changes necessitated by the Hatfield crash were partly instrumental in a massive increase in government funding of the railways, but the management style of Network Rail then meant there was no appetite for joined up thinking unless it could command the TOCs – something actively canvassed for by Network Rail at the time.

Eventually the industry and politicians had enough and changes at the top heralded the arrival of a new CEO with devolutionary tendencies. For a while, Pete Wilkinson, currently head of passenger rail at the Department for Transport (and one suspects the key architect of much of the new strategy) was employed by Network Rail to develop “alliancing” agreements with TOCs. I was even drafted in by a bidder for the West Coast franchise back in 2012 when an alliance with Network Rail was a crucial part of the process.

Then there was McNulty, on whose advisory board I sat. He came up with recommendations that went beyond alliances, proposing vertical integration in certain cases. Commissioned by a “pinko” secretary of state for transport (Andrew Adonis), it hit the “blue” desk of his successor, Philip Hammond, in 2010. He did nothing with it and nothing of note has occurred since, apart from a failed attempt to integrate activities at South West Trains, and more recently a Scottish scenario in which Alex Hynes heads up both the infrastructure and TOC. In this case the politics are tartan with a “pinkish” tinge. One cannot help thinking that the next step will be full scale nationalisation, something that Chris Grayling will no doubt be anxious to avoid elsewhere.

On the bright side, the government’s latest document goes beyond the mantra that the operational divide must be ended. It suggests how it will be achieved. That is progress. So on South Eastern we will see a board where infrastructure and train operations are covered by a unified management team under a single leader. That sounds like the Scottish model and, given the absence of other train operators on the infrastructure (apart from freight), there are no practical grounds for believing that this model cannot work. My own experience of this part of the railway tells me that this kind of operation lends itself to an integrated model. I would go further and make it a concession that would include responsibility for the renewal and maintenance of the infrastructure. There are other operations where a similar model should be applied and, assuming the “red white and blue” Brexiteer, Chris Grayling, gets his way, the fig leaf objection of European regulations preventing integration will not stand in his way. Come on Chris. Give it a go.

Oh yes, Chris, and it could easily have been privatised in just that format at the time

More modest approaches are proposed for other upcoming franchise competitions, some of which roll back the clock to when I was younger than my oldest child is now. Was it really 30 years ago that I established a TOC/Infrastructure Alliance on the ECML-branded “Inter City East Coast”? I’m afraid it was. So please forgive any cynicism if I fail to greet the proposal to recreate such an obvious entity as an innovation. I am more inclined to see it as 30 wasted years. Oh yes, Chris, and it could easily have been privatised in just that format at the time.

Behind all of these models lies the principle that Network Rail continues to exist. I have no issue with this but the government’s proposals for future operations and franchising implicitly require Network Rail “routes” to submit themselves to a role that is not one of leader, or even of equal partner. The role is one of “favoured supplier”. I don’t buy the idea that “integration” is a partnership of equals. If the needs of passengers are pre-eminent then the TOCs who are there to serve them must be in the driving seat. Network Rail must be accountable to TOCs. This simple truth must not be fudged even though it will be difficult for some to accept. Calling the relationship an “alliance” is not a good idea because it implies an equality that can only be a recipe for fudge.

I have insufficient time here to dwell much on other aspects of the vision, which is generally laudable, not least in terms of the network expansion plans that it promotes. These demonstrate that the DfT has moved solidly into the territory of seeing the railways as a tool to drive economic and regional development. All this is good and represents a sea change. When I was promoting Crossrail and Thameslink to governments of the colour blue in the 1990s they canned them. It took the “pinks” in the form of Gordon Brown and Andrew Adonis to fund them and although the “blues” have committed to HS2, that too was started by their predecessors.

An all party consensus? In a sense, yes, but it is equally possible that the government’s structural changes could be just the route that the “reds” are looking for to renationalise the railway.

 

About the author:

After leaving British Rail in 1997 to set up his own businesses, John Nelson founded open access operator Hull Trains and consultancy First Class Partnerships. He is currently Chairman of Flash Forward Consulting and a Director of Tracsis Plc.


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