If the government is really serious about devolving the railway, it is to the customer they should look. Small really is beautiful!

Much has been made over recent months about ‘devolution’ of the railways. The McNulty report on industry costs, Network Rail’s own reorganisation and the Department for Transport’s “Command Paper” all talk in one form or another about devolution of power and authority.

In truth, what this is really about is the unravelling of the regime of highly centralised and political control introduced by two secretaries of state – Stephen Byers and Alastair Darling – between 2002 and 2005, which gave Whitehall more direct power and influence over the railways in the UK than at any time in our history, including both World Wars.

The three incoming Labour ministers, John Prescott, Byers and Darling had been appalled by the fact that the regime put into place by the Major government had rendered them largely powerless to intervene in many aspects of the railways, whilst privatisation had yet to take sufficient hold to remove them, in the public’s view, from responsibility for what happened. In this, of course, they were handicapped by their own political rhetoric, summed up in Tony Blair’s famous phrase, “a publicly owned, publicly accountable railway”.

This is the ultimate political nightmare – being blamed for something that you can do nothing about (the fate of Home Office ministers since the 1960s). It was all right, of course, when this was only about running the trains on time, but three high profile accidents in as many years – Southall, Ladbroke Grove and Hatfield – provided an imperative for action. Not only did they cause significant public disquiet, they effectively wrecked the financial model of the Tories’ privatisation scheme (especially Railtrack) and apparently proved that the contracting out model upon which Railtrack had been built was a flawed one. This provided a perfect opportunity – some would argue an obligation – for an interventionist government to reassert control.

What followed was a huge increase in public funding for the rail network, partly driven by a political imperative to make the trains run on time (and political imperatives always come expensive) and partly by rising unit costs imposed by complex contractual structures and a highly assertive Health and Safety culture aimed at delivering a “totally safe railway” (another thing which tends to come expensive, as well as being unachievable).

Another way of looking at the money is to characterise it as the railway network biting back – against years of underinvestment and the old BR policy of make do and mend. Fine when the only thing asked of management was the orderly management of decline; less so when the market shifts and within a decade you find yourselves carrying more passengers than at any time since 1923 on a network that is half the size. And particularly difficult when a recession means that the money has run out, but demand still keeps on rising.

Anyway, here we are 10 years on from the demise of Railtrack, and there can be little doubt that there has been massive progress. Investment has been huge – dwarfing even the vast sums poured into the network after the 1955 Modernisation Plan. Capacity has improved and the public performance measure has risen significantly. Customer satisfaction on the network as a whole has risen as well, though this remains patchy, and perceptions of value for money remain problematic. This is especially true when passengers are invited to pay an increasing share of the costs of the network, as is happening at the moment.

Meanwhile, though, demand has gone through the roof, which suggests that when it comes to making choices, rail has become the mode of choice for a significantly greater number of people – whatever they may tell researchers about the price they’ve paid.

So, rising demand, increasingly satisfied customers, more services which run more reliably, and huge modernisation plans either completed (West Coast Main Line, East London Line, major stations like Leeds, Manchester Piccadilly and King’s Cross) or in the pipeline (Thameslink, Crossrail, Northern Hub, Reading, Birmingham New Street).

In most industries, this would add up to a success story. Why not this one?

I reckon that there are three possible answers, two slightly flippant and one rather more serious.

The first is that this is modern Britain, where nobody is satisfied with anything, and everyone spends all their time harking after a vanished age in which everything was much better than now (newspapers, television, education, policemen, politicians as well as railways). The second answer is that these are the railways we’re talking about – an industry where, as one former BR chairman once pointed out rather ruefully, you have 52 million people who think they can do your job better.

And the third, more serious answer is that – for all the progress they have made in all sorts of ways over the last 25 years, the railways remain an operations-led business in which the customer is at best a necessary evil and at worst a downright, bloody nuisance.

At times of disruption, it is trains that the operators worry about moving, not customers. On-train staff disappear and on-board service becomes a threat to safety rather than a customer obligation. Even on the best days, passengers getting on InterCity trains are greeted with a long litany about what tickets are not available and how they must check the date and time otherwise they’ll have to pay again. Hardly conducive to being made to feel welcome, inducing a feeling of security in an alien environment or reducing stress levels (most people find travelling stressful and often very tiring).

The fundamental problem is that, with the odd exception, most train operators and their staff do not see customers as individuals who need to be looked after and made to feel welcome. The main focus of the business is moving very large chunks of metal along steel rails in accordance with this abstract thing called a timetable.

Over the years since privatisation, only two train operators have established really strong brands with good customer awareness and strong relationships – GNER (a reputation not always totally justified, but which was quickly thrown away by an inept, grasping National Express management team) and Anglia (whose own achievements were similarly thrown away by the same grasping bunch). Others have achieved strong reputations, too, and grown rapidly as a result, including Chiltern, Wessex and TransPennine and c2c.

What distinguishes all these franchises is that they are, or were, relatively small (at least by railway standards). Their management teams were able therefore to get close to customers, close to the operation and – crucially in my view – close to the staff. None of these is possible in a much larger business, and consequently there is a disconnect between the management of the business and the customer. This is not a criticism of particular managers in large TOCs, many of whom are constantly out on the ground. It is just a fact of life – a diseconomy of scale, if you like, that goes with the territory.

Our railways were founded as local businesses, and many of them still are – connecting communities and providing access to services and employment. You would think, therefore, that all the talk of railway devolution would involve reforms that put the railways back in touch with their customers.

But not a bit of it. No reform of the franchise map seems to be envisaged – save further consolidation (Southern into Thameslink, TransPennine into Northern) which will actually widen the gap between managers and customers.

If the government is really serious devolving railway management, it is to the customer they should look. Small really is beautiful!


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