COVID-19 has ravaged demand but the ‘new normal’ for train operators won’t be the same as the ‘old normal’

 
A deserted Kings Cross station, pictured in early April

 
The pandemic created an interesting change for the railways. The calls for re-nationalisation may have been answered, at least temporarily with operators being overseen by government during a period of management contracts. Add to this the fund for reopening former Beeching lines and it is like going back in time. Currently, with all franchises suspended, certain operators will have breathed a sigh of relief at a time when financial problems are looming. Maybe the lessons of repeated franchise failings have actually been learned with even the most lucrative franchises suffering downturns and an inability to operate as expected.

It now seems unlikely that a return to the ‘old normal’ will be possible

It now seems unlikely that a return to the ‘old normal’ will be possible. In effect, government has taken direct control of the train operators as well as Network Rail, the infrastructure provider that holds them all together. However, experience tells us that having the Department of Transport involved at anything less than a strategic level is not a good idea, but at least it provides some sense of cohesion, surely a necessity for a national network.

Putting profit aside

The railway has been plagued by funding issues for decades but in recent years the money has been flowing for infrastructure repairs and upgrades. This is to overcome a much longer spell of failure to manage assets properly and political dogma that thought that starving the railway of funds would push it towards profit. One extraordinary achievement was that InterCity was profitable eventually and managed without government support. In contrast, the London and South East and Regional Railways sectors (i.e. everything else) needed revenue support. This was nothing new – at nationalisation in 1948, only one of the ‘Big Four’ railways made any profit, made worse by the heavy effects of wartime. The 1990s privatisation cost huge amounts and billions have been pouring into services and infrastructure ever since.

We are still nowhere near the funding levels of other counties which take a rather more pragmatic view and appear to value their railways more highly

Now we pay far more for the railway than we did before but in the background are two opposing interests. On the one hand we have a political stance in which users should pay more (which has never applied to aviation or roads, although the bus industry is funded by revenue alone). And on the other we are still nowhere near the funding levels of other counties which take a rather more pragmatic view and appear to value their railways more highly.

Dealing with the present

The boom in demand for rail travel over the last 15n years or so exceeded any expectations but is seems that it has reached its limits on those routes that are now full. This is the fragility of the railway – any slight problem is magnified because everything on major routes is working at capacity and nothing more can be squeezed out of it. There are longer trains, more platforms are being created at larger stations, junctions and signalling are being rearranged and so on but capacity constraints crop up everywhere.

The pandemic has created new problems of social distancing which means that commuter trains cannot be as full as they were, far from it. On major routes into large cities, trains have been standing room only on a regular basis so it would take at least four or five times the number of trains to accommodate social distancing. It simply isn’t going to work unless demand is restrained hugely.

Social distancing on trains can be achieved if most of the users do not appear and recent observation supports the view that many trains are largely empty for now. Peak spreading will help ease demand but this may not be nearly enough. It isn’t possible to provide any more trains unless they are taken off other services – where new fleets are replacing old, it might be possible to retain the old ones to work alongside new fleets if there is sufficient capacity on routes, in stations and depots, all of which seems unlikely.

Government insists on DfT representation on TfL’s board in exchange for supplying the funding to keep it going. This is an extraordinary step towards more state control by a Tory government

While any form of social distancing takes place, trains will not make sufficient revenue to cover their huge overhead costs. In turn, this means that easing government funding support will take a long time. By implication, this means that there is more to be paid back and as we have seen with Transport for London’s bailout, there are strings attached. Government insists on DfT representation on TfL’s board in exchange for supplying the funding to keep it going. This is an extraordinary step towards more state control by a Tory government.

What isn’t mentioned is the fact that the government refused to continue its revenue support for TfL, running into the hundreds of millions, because Londoners had voted for a Labour mayor. Giving money requires payback, perhaps something that the bus industry should be concerned about.

Meanwhile, on the trains, perhaps they are not as essential as was thought. Key workers are less likely to use trains than others as a consequence of the location of their workplaces, the type of workers and their generally embarrassingly low pay rates. For them, trains do not go where they want or when they need and are not affordable, especially at peak times. The backbone of the economy seems to be key workers rather than the aspirations of comfortable commuters, for now at least. Reinstating a railway network that is reliable and profitable must accommodate the demands of many, but not all. Unfortunately those in planning roles usually see things from their own point of view, rather than the consumers’ point of view for which the priorities may be very different.

Longer term warnings

There may be structural changes in demand as a legacy of the pandemic. Businesses will wonder why they pay huge rents for offices when many of their workers don’t need to be in them. Fighting for corporate space in overheated urban centres is non-sensical if people can work at home with much-reduced overheads. A further problem is that businesses will have found out that they don’t need so many staff, particularly with a recession underway, which will reduce peak demand for trains.

While the take-up of online conversations and meetings has become widespread, it has taken a crisis for the benefits to be realised fully. People still persist in meeting face-to-face even while online communications have been in place for years. There remains a high proportion of jobs for which travel is essential, many of which are local, to sites or premises which are fixed. We may see more dispersal of business activities to smaller agglomerations with lower overheads than the great corporate aspirations of the past. Workers can then be closer to their markets and clients without losing touch with their colleagues. Social distancing means that many office functions are now not possible such as people talking to each other informally or attending meetings in the traditional way.

The long-awaited Williams Review has yet to be revealed (two years after it was commissioned) but could offer some fresh thinking about how rail services can best be provided

The long-awaited Williams Review has yet to be revealed (two years after it was commissioned) but could offer some fresh thinking about how rail services can best be provided. Clearly this needs to consider funding risks and where they are attributed which has been a contentious issue with franchise bidders. There are wider considerations such as how competition is applied and is there scope for a move away from a series of territorially-defined monopolies with a few open access services thrown in. True open access across the network could help to contain costs and limit risks of default with potential benefits for passengers.

Not many of the original franchisees remain on the scene which says something about the viability of franchising and the risks experienced to date; having just two contenders for a particular franchise, as happened with South Western, suggests that it isn’t really competitive after all. Another observation from the semi-lockdown is that many trains are now more punctual which proves the old adage that it is easier to run trains where there aren’t any passengers.

Whatever governance, strategic planning and funding regimes may emerge post-pandemic, there is now a massive opportunity for change.

 
ABOUT THE AUTHOR: Nick Richardson is Technical Principal at transport consultancy Mott MacDonald, a Director of the UK Chartered Institute of Logistics and Transport (www.ciltuk.org.uk), Chair of CILT’s Bus and Coach Policy Group, Chair of PTRC Education and Research Services Ltd and a former Chair of the Transport Planning Society. In addition, he has held a PCV licence for over 30 years.

 
Get the latest news delivered to your inbox. CLICK HERE to subscribe to our e-newsletter.