Our Whitehall insider imagines what’s going on inside the minds of the mandarins at Great Minster House, home of the DfT

 
One of the things I’m increasingly hearing is that the cost of the railways with the new Emergency Measures Agreements (EMAs) in place is simply not sustainable. Mind you, that’s hardly rocket science! So all the talk today is about how we get to a cheaper railway. The trouble is that there seems to be a consensus that we won’t get back to pre-lockdown patronage levels for some considerable time – perhaps not for 18 months or more – and I’ve heard it said that we will only be back to about 50% of pre-lockdown levels by this Christmas. So if the train operators are going to need substantial on-going subsidy for, say, 18 months, how on earth do we deliver a cheaper railway?

Actually, this is not a new issue. The cost of the UK’s railways is something that has exercised minds, off and on, for some considerable time. It’s what caused the government to initiate the McNulty Review back in late 2009, and when Sir Roy McNulty delivered his report (published in May 2011) he made a range of recommendations to make the railways more efficient, cost effective and affordable. Sadly, many, if not most, of Sir Roy’s recommendations were never implemented.

When it comes to the cost of the railways, I’m not sure it’s the train operators should be worrying about. It’s Network Rail. Sadly, this is hardly a new issue either. There has long been a concern that Network Rail over-specifies and gold-plates its projects, even its routine maintenance and renewals work. Network Rail has an effective monopoly on all rail investment and, if we are really honest with ourselves, we have never made any serious attempt to address the issue. We’ve had opportunities to do so mind you, but for reasons that I’m not at all clear about, we seem to have failed to do anything, or anything that is genuinely transformational.

First there was the review of Network Rail by Nicola Shaw. When she published her report there was a good deal of speculation – never convincingly denied – that she was “persuaded” by this department to water down her original recommendations which, among other things, included a proposal to break up Network Rail. Very little changed as a result of Nicola’s review.

Then a couple of years or so ago we came out with that Market Led Proposals (MLP) initiative. Remember that? The idea was to encourage private sector interests to come forward with investment proposals of their own. Plenty of ideas were submitted but none came to fruition, none at least that I’m aware of. There was much muttering that Network Rail did not really, truly, support the initiative and so worked hard to kill it off.

How is it possible that a decade after the McNulty Review – a review initiated to reduce the cost of the railways – we are still talking about the need to reduce the cost of the railways?

Whatever the rights or wrongs of the claims about Network Rail over specifies and gold-plates its projects, it’s certainly an issue that down the years has generated much discussion and debate. To be fair, Network Rail has done much to improve things, with the creation of its regions and its devolution agenda. But still we are talking about the need to reduce the costs of the railways. It just feels to me that we’ve had opportunity after opportunity to do so, but nothing much ever seems to happen. How is it possible that a decade after the McNulty Review – a review initiated to reduce the cost of the railways – we are still talking about the need to reduce the cost of the railways? So it must be the case that, as sure as night follows day, whatever reforms might have been made following the McNulty Review, nothing fundamental has changed. The Shaw Review of Network Rail doesn’t seem to have delivered very much either – if it had why are we still talking about the need to reduce the cost of the railways – and the MLP initiative just seems to have fizzled out.

And so here we are yet again pondering how we reduce the cost of the railways. I hope nobody is going to suggest we have another rail review!! That would be too silly for words given that none of the other reviews have actually resulted in any major transformation in the cost of the railways. And, of course, the Williams Review has not yet even seen the light of day courtesy of COVID-19. The fact of the matter is that if we take all the data we have gleaned down the years from the myriad of rail reviews that we’ve had we don’t need any more reviews. We just need to do something!

So when I hear colleagues talking about the need to reduce the cost of the railways, I really do start to wonder how much institutional knowledge we really have. How is it possible that we seem to go round and round in circles every few years asking the same questions that we asked three, five or 10 years ago. COVID-19 has certainly thrown a massive spanner in the works, but it hasn’t changed the fundamental principles as to why the UK railway cost as much as it does. We’ve done enough navel gazing down the years. Now is the time for decisive action, and if the problem really does lie at Network Rail’s door, then it’s time for some more radical surgery.

So I’ve come up with a novel, perhaps even crazy, idea – let’s (re)privatise the railways!

 
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