Labour has promised to phase out all of Britain’s much maligned – often unfairly in my view – franchised train operators
Labour is planning to nationalise the railway
The headline that Labour is planning to nationalise the railway if they get into power didn’t really arouse me as it would have in previous times. Maybe it’s an age-thing, I tend to get less excited now by most things than I did in my youth. There’s also a fatigue at the slowness at which anything seems to occur these days and also because the headline conjured up the usual narrative around privatisation having failed, trains being delayed, fares being too high and fat cat bonuses.
For those of us working in the sector, we also had that tiresome period in which you were either supposed to think nationalisation is a good or bad thing, depending on the flurry of WhatsApp messages doing the rounds last week. Always one to try and avoid controversy these days – I’ll be honest – I just agreed with whatever message I was receiving. At nearly 53, life’s too short for a barney.
The problem with the railway during my lifetime, is that everything is indeed polarised, including perspectives on individuals and companies. The debate around the future structure of the sector last week made me reflect on this polarisation and culture and how it affects perceptions of people and the organisations they represent.
Industry professionals are either lumped in the ‘good camp’, representing ‘virtue’, or defined as a ‘rogue’ or ‘incompetent’, solely becuase of their employer, rather than your demeanour and ability
Industry professionals are either lumped in the ‘good camp’, representing ‘virtue’, or defined as a ‘rogue’ or ‘incompetent’, solely becuase of their employer, rather than your demeanour and ability – with an element of right/wrong time, right/wrong place coming to bear. For instance, those involved with an operator of last resort tend to automatically get painted externally as representing best practice, the saintly experts coming in to rescue everyone from uselessness or malpractice. It was a similar situation when a company won a franchise and took over, often with a sense of cocksure impunity. Thankfully, this hasn’t been a trait of Directly Operated Holdings Limited (DOHL), but it certainly was of some of the private businesses that won bids.
In this polarised state that has characterised the railway of my career, those employed in the private sector have tended to be seen as the cads and rogues in the cast – and some more than others. If you’ve spent any time at First, you’ll have wrongly been consigned to the fire below, without redemption, and you won’t want it on your CV if you were part of Stagecoach and National Express when their footprint shrunk to zero. Thankfully, you’re near retirement if you were in power at Connex or MTL (remember ‘Northern Spirit’?) back in the day, because they were hated more than Manchester United. If these companies weren’t tarred as rapacious, then they were incompetent – twas a lazy narrative and mindset, and it neglected to realise the success these companies had made in the bus or coach sector or overseas, as well as in UK rail, as risk-takers, innovators and investors, even if they didn’t always get it right.
It genuinely doesn’t feel that the public operators of TOCs get the level of media scrutiny or brickbats that their private counterparts receive. You can see that currently, with no real doffing of a hat in the press to some of the positives that the privatised companies have brought to the party. It’s not appealing to bring these to the fore.
In fairness, DOHL has done a very decent job and I’m sure the team have got a press release sat on a computer in the press office full of stats and facts available to despatch to impetuous wags who might have the temerity to suggest otherwise. Such a release has seldom, if ever, been needed, as miraculously in terms of the media, all the ills of TransPennine Express suddenly evaporated when DOHL took over from First, just as LNER was brilliant the moment Stagecoach exited. As for Northern, the perennial strugglers way back since the beginning of privatisation, well the silence in terms of media criticism has been deafening since Arriva got the bullet.
I’ll be honest, when I was at South Eastern Trains under state ownership, post Connex, way back in the mid-noughties, it always felt like we were treated as paragons of virtue. I’d like to think justifiably so, of course, but it did feel we were set up to succeed rather than fail.
The financial make-up of the rail industry, in terms of subsidy profiles and allocation is so opaque. It’s difficult to really determine whether the TOCs under state ownership have been bequeathed with more dosh than their private sector predecessors. Maybe it is green eye, but talk to those outside of the TOCs that come under the jurisdiction of DOHL and they still make envious comments about what they consider lavish spend the other side of the fence and a less intense level of Department for Transport scrutiny or a bolder approach because there’s no sense of jeopardy of having the franchise removed. It must feel like playing in one of those ‘closed shop’ American sporting leagues, where there’s no threat of relegation.
If the railway genuinely becomes fully nationalised, I suspect that the spectre of punishment for poor performance might be similar to that within NHS trusts, or police forces and education establishments, where a team could still be parachuted in and the organisation placed on ‘special measures’. This ‘jeopardy’ for those at the helm, won’t feel the same as having the profits for an owning group potentially wiped out by having a contract removed, or the share price plummeting. However, from a professional perspective, imagine heading up a geographical area of the railway and being placed in ‘special measures’.You’d carry that stain throughout your career, so that’s an incentive to do a good job.
It would, though, be churlish to undersell the hard work of those in the DOHL TOCs. I genuinely cannot whatsoever recall anything but very good journeys on LNER and on Northern and TransPennine, the energy of their frontline teams is absolutely excellent. On my trips on South Eastern, I get the feeling there is real pro-activity and focus – managing director Steve White nails it when it comes to stakeholder relations, customer and employee engagement, in particular. DOHL was fortunate to have inherited such a first rate team of managing directors and direct reports. However, by the same token, they have done well to keep them engaged and retained and in some respects inspire them to outperform how they might have done if they had remained within the ownership of their previous employers. They’ve also been helped, like others, by the more straightforward playing field in play than previously. They don’t take the revenue risk and as such no longer have the stress of market conditions and having to dream up ways to making a few bob, with a demanding shareholder breathing down their necks, asking why more passengers aren’t getting on-board and spending more.
It’s important that the GBR team don’t let it go to their heads and think they represent virtue as the custodians of policy and the rule book, looking down on the various private sector companies that will, most likely, still comprise the supplier base
It’s important that the GBR team don’t let it go to their heads and think they represent virtue as the custodians of policy and the rule book, looking down on the various private sector companies that will, most likely, still comprise the supplier base. The challenge with such a dominant organisation with a position of power in a sector is that it can be insulated from challenge. You don’t bite the hand that feeds you and suppliers will be constantly fawning over them, blowing smoke up their proverbial, potentially not seeking to question or suggest ideas and alternative approaches. They will know that if they fall out with GBR, then that’s their whole business screwed.
I remain confident (and not because I have fallen into the above sycophantic trap), that under the stewardship of Lord Hendy and Andrew Haines, GBR, when it properly comes into being, will be grounded and responsible. There’s been a definite culture change over time within Network Rail whilst they’ve been at the helm. I’ve also had a recent insight into the GBR Transition Team and I like what I see.
I do think that the ‘guiding mind’ state-owned body is a good thing. A single approach to creating fares policy, retailing tickets and having one overarching brand will be actually quite exciting, rather than constraining. It’s been so long since the railway had one brand that I’d like to judge properly as to whether this hits the sweet spot for customers. My hunch is that a situation similar to Network SouthEast in its prime would be attractive – a strong brand with discreet sub-brands for individual routes or regions. The old timers who ran the railway back then keep telling me that these brands were game-changing. Let’s see how it might work out three decades on.
I am also excited by the prospect of the new framework centralising procurement for big contracts and creating a more seamless, customer-friendly and unified approach. Surely this will be the death knell for the unedifying situation where the owning groups self-award rail replacement contracts, for instance?
I’m not convinced, though, that the operation of the railway itself is – across the board – best served by complete public ownership
I’m not convinced, though, that the operation of the railway itself is – across the board – best served by complete public ownership. I’m a big fan of the Transport for London concession model that has, in my view, hit the right balance on London Overground and more recently Crossrail. Arriva and MTR have performed well as part of the creation and development of these transformational railways, through a collaborative relationship with an understanding, flexible and credible contracting authority in TfL. Performance hasn’t been perfect and there’s an opportunity for a more dynamic, customer-centric approach on both concessions but it’s felt a more stable and positive model than that within the national rail franchises. I do believe that a framework going forward, where the private sector operators are encouraged to run the train service and stations, but in a way, as is the case on the TfL concessions, with requirements more straight-forward and no revenue risk distraction, is the way ahead.
Some will argue that the risk and reward element attached to revenue is what drove passenger numbers to reach an all-time high in privatisation, but it can be overstated. As much as I’m the biggest advocate of keeping customers happy, the scale of each private sector initiative wasn’t sufficient enough to drive big shifts in customer numbers, apart from where the sum of the parts was all consuming – on Virgin West Coast, for instance, where a mixture of Branson and his brand, combined with the West Coast Mainline and the advent of Pendolinos, leading to a reduction in journey times and increased frequencies, proved genuinely game-changing. There weren’t many other parts of the UK franchised railway that experienced such transformational change.
The public loved nothing better than slagging off British Rail. Let’s not dress it up as anything different, it was seen as a national joke and an embarrassment really
Going forward, if there isn’t a rogue or ‘failed’ entity, then how will us lot in the rail industry and indeed the media cope with not having anyone to moan about? The public loved nothing better than slagging off British Rail. Let’s not dress it up as anything different, it was seen as a national joke and an embarrassment really. Operationally it felt more resilient and the trains had comfier seats, but that’s about all it had on today’s railway, in my view. Safety didn’t seem as advanced as today (albeit technology has helped) and there’s no way that the staff were more customer-focused than today’s generation.
I’m sure the debate will rumble on until the election and beyond. There will be rumours of this or that poorly performing company about to get the bullet and much discussion around the specifics of Labour’s proposals. Maybe I’ve got my head in the sand or I’m jaundiced by political promises or the time it takes for anything to come to fruition, but just let me know when it happens. To be blunt, anything seems better than this current dilly-dallying and mind-sapping uncertainty.
This story appears inside the latest issue of Passenger Transport.
Private sector TOCs reach end of the line
by Passenger Transport on May 2, 2024 • 10:57 am No CommentsLabour has promised to phase out all of Britain’s much maligned – often unfairly in my view – franchised train operators
The headline that Labour is planning to nationalise the railway if they get into power didn’t really arouse me as it would have in previous times. Maybe it’s an age-thing, I tend to get less excited now by most things than I did in my youth. There’s also a fatigue at the slowness at which anything seems to occur these days and also because the headline conjured up the usual narrative around privatisation having failed, trains being delayed, fares being too high and fat cat bonuses.
For those of us working in the sector, we also had that tiresome period in which you were either supposed to think nationalisation is a good or bad thing, depending on the flurry of WhatsApp messages doing the rounds last week. Always one to try and avoid controversy these days – I’ll be honest – I just agreed with whatever message I was receiving. At nearly 53, life’s too short for a barney.
The problem with the railway during my lifetime, is that everything is indeed polarised, including perspectives on individuals and companies. The debate around the future structure of the sector last week made me reflect on this polarisation and culture and how it affects perceptions of people and the organisations they represent.
Industry professionals are either lumped in the ‘good camp’, representing ‘virtue’, or defined as a ‘rogue’ or ‘incompetent’, solely becuase of their employer, rather than your demeanour and ability – with an element of right/wrong time, right/wrong place coming to bear. For instance, those involved with an operator of last resort tend to automatically get painted externally as representing best practice, the saintly experts coming in to rescue everyone from uselessness or malpractice. It was a similar situation when a company won a franchise and took over, often with a sense of cocksure impunity. Thankfully, this hasn’t been a trait of Directly Operated Holdings Limited (DOHL), but it certainly was of some of the private businesses that won bids.
In this polarised state that has characterised the railway of my career, those employed in the private sector have tended to be seen as the cads and rogues in the cast – and some more than others. If you’ve spent any time at First, you’ll have wrongly been consigned to the fire below, without redemption, and you won’t want it on your CV if you were part of Stagecoach and National Express when their footprint shrunk to zero. Thankfully, you’re near retirement if you were in power at Connex or MTL (remember ‘Northern Spirit’?) back in the day, because they were hated more than Manchester United. If these companies weren’t tarred as rapacious, then they were incompetent – twas a lazy narrative and mindset, and it neglected to realise the success these companies had made in the bus or coach sector or overseas, as well as in UK rail, as risk-takers, innovators and investors, even if they didn’t always get it right.
It genuinely doesn’t feel that the public operators of TOCs get the level of media scrutiny or brickbats that their private counterparts receive. You can see that currently, with no real doffing of a hat in the press to some of the positives that the privatised companies have brought to the party. It’s not appealing to bring these to the fore.
In fairness, DOHL has done a very decent job and I’m sure the team have got a press release sat on a computer in the press office full of stats and facts available to despatch to impetuous wags who might have the temerity to suggest otherwise. Such a release has seldom, if ever, been needed, as miraculously in terms of the media, all the ills of TransPennine Express suddenly evaporated when DOHL took over from First, just as LNER was brilliant the moment Stagecoach exited. As for Northern, the perennial strugglers way back since the beginning of privatisation, well the silence in terms of media criticism has been deafening since Arriva got the bullet.
I’ll be honest, when I was at South Eastern Trains under state ownership, post Connex, way back in the mid-noughties, it always felt like we were treated as paragons of virtue. I’d like to think justifiably so, of course, but it did feel we were set up to succeed rather than fail.
The financial make-up of the rail industry, in terms of subsidy profiles and allocation is so opaque. It’s difficult to really determine whether the TOCs under state ownership have been bequeathed with more dosh than their private sector predecessors. Maybe it is green eye, but talk to those outside of the TOCs that come under the jurisdiction of DOHL and they still make envious comments about what they consider lavish spend the other side of the fence and a less intense level of Department for Transport scrutiny or a bolder approach because there’s no sense of jeopardy of having the franchise removed. It must feel like playing in one of those ‘closed shop’ American sporting leagues, where there’s no threat of relegation.
If the railway genuinely becomes fully nationalised, I suspect that the spectre of punishment for poor performance might be similar to that within NHS trusts, or police forces and education establishments, where a team could still be parachuted in and the organisation placed on ‘special measures’. This ‘jeopardy’ for those at the helm, won’t feel the same as having the profits for an owning group potentially wiped out by having a contract removed, or the share price plummeting. However, from a professional perspective, imagine heading up a geographical area of the railway and being placed in ‘special measures’.You’d carry that stain throughout your career, so that’s an incentive to do a good job.
It would, though, be churlish to undersell the hard work of those in the DOHL TOCs. I genuinely cannot whatsoever recall anything but very good journeys on LNER and on Northern and TransPennine, the energy of their frontline teams is absolutely excellent. On my trips on South Eastern, I get the feeling there is real pro-activity and focus – managing director Steve White nails it when it comes to stakeholder relations, customer and employee engagement, in particular. DOHL was fortunate to have inherited such a first rate team of managing directors and direct reports. However, by the same token, they have done well to keep them engaged and retained and in some respects inspire them to outperform how they might have done if they had remained within the ownership of their previous employers. They’ve also been helped, like others, by the more straightforward playing field in play than previously. They don’t take the revenue risk and as such no longer have the stress of market conditions and having to dream up ways to making a few bob, with a demanding shareholder breathing down their necks, asking why more passengers aren’t getting on-board and spending more.
It’s important that the GBR team don’t let it go to their heads and think they represent virtue as the custodians of policy and the rule book, looking down on the various private sector companies that will, most likely, still comprise the supplier base. The challenge with such a dominant organisation with a position of power in a sector is that it can be insulated from challenge. You don’t bite the hand that feeds you and suppliers will be constantly fawning over them, blowing smoke up their proverbial, potentially not seeking to question or suggest ideas and alternative approaches. They will know that if they fall out with GBR, then that’s their whole business screwed.
I remain confident (and not because I have fallen into the above sycophantic trap), that under the stewardship of Lord Hendy and Andrew Haines, GBR, when it properly comes into being, will be grounded and responsible. There’s been a definite culture change over time within Network Rail whilst they’ve been at the helm. I’ve also had a recent insight into the GBR Transition Team and I like what I see.
I do think that the ‘guiding mind’ state-owned body is a good thing. A single approach to creating fares policy, retailing tickets and having one overarching brand will be actually quite exciting, rather than constraining. It’s been so long since the railway had one brand that I’d like to judge properly as to whether this hits the sweet spot for customers. My hunch is that a situation similar to Network SouthEast in its prime would be attractive – a strong brand with discreet sub-brands for individual routes or regions. The old timers who ran the railway back then keep telling me that these brands were game-changing. Let’s see how it might work out three decades on.
I am also excited by the prospect of the new framework centralising procurement for big contracts and creating a more seamless, customer-friendly and unified approach. Surely this will be the death knell for the unedifying situation where the owning groups self-award rail replacement contracts, for instance?
I’m not convinced, though, that the operation of the railway itself is – across the board – best served by complete public ownership. I’m a big fan of the Transport for London concession model that has, in my view, hit the right balance on London Overground and more recently Crossrail. Arriva and MTR have performed well as part of the creation and development of these transformational railways, through a collaborative relationship with an understanding, flexible and credible contracting authority in TfL. Performance hasn’t been perfect and there’s an opportunity for a more dynamic, customer-centric approach on both concessions but it’s felt a more stable and positive model than that within the national rail franchises. I do believe that a framework going forward, where the private sector operators are encouraged to run the train service and stations, but in a way, as is the case on the TfL concessions, with requirements more straight-forward and no revenue risk distraction, is the way ahead.
Some will argue that the risk and reward element attached to revenue is what drove passenger numbers to reach an all-time high in privatisation, but it can be overstated. As much as I’m the biggest advocate of keeping customers happy, the scale of each private sector initiative wasn’t sufficient enough to drive big shifts in customer numbers, apart from where the sum of the parts was all consuming – on Virgin West Coast, for instance, where a mixture of Branson and his brand, combined with the West Coast Mainline and the advent of Pendolinos, leading to a reduction in journey times and increased frequencies, proved genuinely game-changing. There weren’t many other parts of the UK franchised railway that experienced such transformational change.
Going forward, if there isn’t a rogue or ‘failed’ entity, then how will us lot in the rail industry and indeed the media cope with not having anyone to moan about? The public loved nothing better than slagging off British Rail. Let’s not dress it up as anything different, it was seen as a national joke and an embarrassment really. Operationally it felt more resilient and the trains had comfier seats, but that’s about all it had on today’s railway, in my view. Safety didn’t seem as advanced as today (albeit technology has helped) and there’s no way that the staff were more customer-focused than today’s generation.
I’m sure the debate will rumble on until the election and beyond. There will be rumours of this or that poorly performing company about to get the bullet and much discussion around the specifics of Labour’s proposals. Maybe I’ve got my head in the sand or I’m jaundiced by political promises or the time it takes for anything to come to fruition, but just let me know when it happens. To be blunt, anything seems better than this current dilly-dallying and mind-sapping uncertainty.
This story appears inside the latest issue of Passenger Transport.
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