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

So we’ve put in place new Emergency Recovery Management Agreements (ERMAs) for the train operators to replace the initial Emergency Management Agreements (EMAs). Do we have a secret committee tasked with dreaming up these titles? Whoever thought of describing these new agreements as “recovery” agreements must have a strange sense of humour! I don’t see much sign of a recovery.

The media was full of excitable headlines reporting that ministers had brought an end to rail franchising 24 years after privatisation. I’m not sure I understand why the media was so surprised. Ever since Keith Williams started his rail review back in 2018 we’ve known that rail franchising as we knew it was over, with Keith Williams telling us during the course of his review that rail franchising was “no longer fit for purpose”. Our secretary of state’s comment that the “pandemic has proven that [rail franchising] is no longer working” were a touch odd. That had been “proven” some considerable time ago!

What I find surprising is that private sector companies are willing to stay in the rail industry. These new ERMAs cut their management fees to a maximum of 1.5% of the cost base of the franchise before the pandemic hit and they have had to agree to tougher performance targets. Quite why the likes of FirstGroup, Arriva or Go-Ahead are willing to accept such low rewards for what is, in many respects, a high risk industry from a performance and reputation point of view is slightly beyond me.

Mind you, given the difficulties also faced by the bus sector, these private sector companies may soon have no real business at all. All train and bus operators are now wholly dependent on government subsidy for their survival, and it’s hard to see patronage recovering to commercially viable levels for some time, possibly years. The days of making profits from public transport without government subsidy are well and truly over. Some would say that with train operators increasingly struggling even before the pandemic, and with bus operators always heavily dependant on the Bus Service Operators Grant, these were never true commercial private businesses anyway.

The other very strange thing about the secretary of state’s announcement was his assertion that the new ERMAs would “keep the best elements of the private sector, including competition….” Really? Where is the competition in these new arrangements? These are, of course, only “transitional contracts” so when we move to new long-term arrangements, understood to be long-term concessions, I assume these will be competed. But for now its hard to see much evidence of “competition” in the provision of rail services. I suspect the secretary of state doesn’t want to be labelled as the Conservative minister who returned the railways to public ownership and control.

It’s going to be a long hard road to recovery for the rail and bus industries, and I for one would not like to predict what the shape and size of our public transport network will all look like once we are though this

Now a brief word about the new Acceleration Unit, headed by Darren Shirley. I’m still chuckling over the name of the unit (another great name from our secret committee!). But on a more serious note, I was a touch surprised that when Lilian Greenwood, the Labour MP for Nottingham South, tabled a question asking who the members of the unit were, we gave the following reply: “Darren Shirley will be the Director of the Unit, the remainder of the team are not members of the Senior Civil Service and therefore are not named.”

How extraordinary. I am unaware of any rule which states that the identity of individuals appointed to these kinds of roles need not be announced if they aren’t senior civil servants. Since these individuals will be performing a public duty in advising the secretary of state, don’t we have a right to know who they are? Perhaps the individuals expressly asked for their identities to be kept anonymous so that, when it becomes apparent that the Acceleration Unit has accelerated, well, very little, they won’t then have their reputations trashed!

Still, it’s nice to be back in print after a summer of lockdown. Mind you, it’s looking increasingly likely that we will have a winter of lockdown too! The government is once again encouraging those who can work from home to do so, and the impact on public transport is surely going to be severe. I can well see that the Treasury is going to start to question what size of railway, and what level of service, we really need if patronage remains in the doldrums, although it’s hard to see that you can do anything but run a near full service in order for those that do travel to adhere to social distancing rules. It’s going to be a long hard road to recovery for the rail and bus industries, and I for one would not like to predict what the shape and size of our public transport network will all look like once we are though this.

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This article appears inside the latest issue of Passenger Transport.

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