AT first glance, the task might seem a simple one, to create “a simpler, better railway for everyone in Britain” that meets the government’s five key strategic objectives, which include meeting customer needs, delivering financial sustainability and contributing to economic growth. The creation of Great British Railways (GBR) is also intended to deliver environmental sustainability, and support connectivity as well as “levelling up” policies seeking to achieve higher levels of prosperity and opportunity across the regions of England, and not just in the economic powerhouse of London and the southeast.
But behind a simple slogan lies the major challenge of reducing the complexity and cost of the contractual relationships that have governed how Britain’s national network has operated since April 1 1994, when train operations and infrastructure management were separated in preparation for the privatisation of British Rail. As one speaker put it at an industry conference earlier this year, “this is a once in a generation opportunity to solve all those things that we have been moaning about for the past 30 years,” and expertise is being drawn in from across the railway to find simpler and more collaborative ways of working.
The reform programme is being taken forward by the Great British Railways Transition Team (GBRTT), established as a subsidiary of infrastructure manager Network Rail (NR), with staff seconded from 18 organisations across the sector, including NR, operators, the supply chain and wider stakeholders.
In both its corporate structure and organisational ethos, GBRTT is trying to implement the policies of collaborative working and moving decision-making as far down the organisational hierarchy as possible, in line with the recommendations of the independent review of the industry conducted for the government by former British Airways chief executive, Mr Keith Williams. The Williams Rail Review in turn produced the Williams-Shapps Plan for Rail, co-authored with former secretary of state for transport, Mr Grant Shapps, which was published in May 2021 as the template for major restructuring which should see GBR come into being in 2024.
“Williams said the current structures don’t work and you’ve got to take more of the responsibility out of the government and the Department for Transport so it’s closer to the railway,” says Mr Michael Clark, programme director for policy and transformation at GBRTT.
“The whole point of the Transition Team is to try to build that integrated, cross-sector workforce and culture - no more silos, no more finger-pointing, no more blame game. We’re trying to show, without jumping the gun on GBR, how we are going to work differently with the sector and more widely with stakeholders.”
“GBRTT is about building towards GBR and realising some instant benefits,” says Clark, who stresses that restructuring the railway will be a long-term process. “This is a 10-year programme. So 2024 is actually the first step in GBR, it won’t be the final state that we are hoping to achieve. This is a long-term programme looking at primary change, looking to change processes as well as moving capabilities around and building those capabilities. So we’re in this for the long haul. But 2024 is one of those first big moments when a lot of that comes together. Rather than looking at it as the completion of a process, it’s really just the start.”
The Williams-Shapps Plan commissioned a 30-year strategy that will set key priorities for the sector, which is being developed for the government by GBRTT. The Whole Industry Strategic Plan (WISP) workstream is being led by director of strategic planning, Ms Elaine Seagriff, and in December 2021 GBRTT launched a call for evidence based on the government’s five key strategic objectives. Evidence was submitted by 307 organisations and individuals and the first version of the strategy is expected to be ready towards the end of 2022.
“This is a not a definitive strategy,” Clark stresses. “It won’t set out exactly how the railway will operate for the next 30 years, that would be absurd, and wouldn’t survive any kind of political change.” Rather, the WISP is meant to set out “what is the railway in Britain good at, and if you wanted it to be better at certain things, what you would do? It’s very much a kind of framework which people can then use to help make business planning process choices against. We’ve got those five objectives from government, which is actually quite a revolutionary thing for the British railway to have that’s not been achieved before.”
“We want to move away from the fragmented, short-term, incentivised approach that has been slowly failing in Britain for the last 10 to 12 years,” Clark says. “I think that the Williams Review showed, and we are very confident that this consensus holds to this day, that everyone would like a change to the model. It has run out of rope for the private operator, for the funder and, far more importantly, for the passenger.”
The long-term strategy will follow the objectives set by government, integrated with wider public transport policy at regional and national level. “That is then broken down by our regions, which are really our driving units within the future GBR. They will have a regional profit and loss account that will incorporate how they work with their regional partners. This is not a pipeline of projects, it is a framework for how we do business.”
Priority for freight
GBRTT has also been tasked with developing a range of options for the rail freight growth target that the government is to set under the Williams-Shapps Plan. A call for evidence was due to end on September 27. Whatever the outcome of this process, it is clear that freight is a priority in the creation of GBR and a new operating model that will end the situation where “the railway’s not really set up to prioritise freight at the moment.”
Clark says that GBRTT gets the sense that the government and many stakeholders would like to see this change. “Freight has been something of a success story during the pandemic, so how do we make the most of that push forward?” There is also an obvious role for rail freight to support decarbonisation and the economic growth agenda.
“I would want people in Network Rail or elsewhere to be incentivised to give up paths for freight or renew the network for freight or build interchanges,” Clark says. “We are really trying to drive that through our operating model now.”
Meeting the wishes of the rail freight sector, GBR will have a National Strategic Freight Unit and regional representatives ensuring that freight is taken into full consideration in the profit and loss account that each region will have under the new structure. “The target is one way of exploring how we embed that in the incentives of the executives and managers to make sure it happens,” Clark explains.
“You hand the profit and loss responsibility to a regional managing director. You want to make sure they don’t disadvantage freight or open-access operators. The idea here is not necessarily to grow GBR. The idea is to grow the railway and what it can do for Britain. We’re trying to build that structure that is very conscious of driving revenue and reducing costs. But doing so with and alongside those third-party users of the railway rather than leaving them aside.”
GBRTT’s third major workstream is better industry processes. It has been commissioned by the government to make the planning and delivery of rail services simpler, provide clear accountability, simplify the station and depot access regime and encourage joint working. Work is underway on the access and management regulations, on station and depot access contracts - which Clark describes as “in some cases convoluted and unnecessarily complex” - and on the Network Code that sets out the contractual rules incorporated into every track access agreement between NR and a train operator.
“We intend to publish towards the end of the year a series of position papers on how we would look to simplify those, removing interfaces, speeding them up, making them clear in the new GBR sector where we are the guiding mind,” Clark says. “We are working very closely with some very interested parties from the freight and open-access sectors to make sure that whatever we do in the future will also work for those people in the market.”
GBRTT is working closely with rail regulator the Office of Rail and Road (ORR) on simplifying the contractual regime. “What you don’t want is to integrate the railway and then all of the processes hold you back,” Clark says. “So we have a workstream that is looking at how you can improve the timetabling process, so that you make it strategic but much more flexible in the short term to the changes that are required.”
Changes to the performance regime are also being considered, and in particular to Schedule 8 of track access contracts where NR compensates operators for delays and cancellations due to faults attributable to the infrastructure. With GBR also set to become the authority that procures and manages passenger operating contracts, it would effectively be paying compensation to its own contractors who might in turn be making payments to GBR. “What is the point of Schedule 8 if we are passing money to our own contractors who are passing it back to us?” Clark asks. “How do we not lose that incentivisation but how do we improve on it? It’s all about adapting to the new world.”
The 20 or so position papers expected to be published towards the end of this year will form the basis for discussion with the industry, enabling GBRTT to make recommendations to DfT for policy and new regulations. “We would expect by March or April of next year to have a sense of what might replace the access regulations as part of secondary legislation,” Clark says. The new access regime would hopefully be in place by the time GBR is set up in 2024, but Clark stresses this is dependent on the time that is allotted in parliament for considering new legislation, including the primary legislation required to establish GBR and transfer responsibilities from the secretary of state for transport to the new body, such as the tendering and management of passenger operating contracts.
“We have a really talented group of people here mostly drawn from the operators who are working on national revenue campaigns and analysing what revenue is doing now in these post-Covid times.”Michael Clark
One further complication is the recent change in leadership of the governing Conservative Party, which saw Ms Liz Truss take up the post of prime minister on September 6, and changes to the ministerial team at DfT where Ms Anne-Marie Trevelyan replaced Shapps as secretary of state for transport. The new government has yet to set its legislative timetable, but Clark is not expecting any major change in rail policy. “The government intends to legislate for GBR, but the schedule has just been thrown up in the air,” he says. “We are very confident that it will come through.”
Ultimately, it is hoped that simpler industry processes and more cooperation will reduce the cost of the railway. “There’s a commitment from the government that in setting up GBR we would find £1.5bn of efficiencies,” Clark says. “That would come from removal of interfaces, improved working practices and collaboration across boundaries. We are working very closely with NR and DfT to drive those forward.”
Under Project Speed (swift, pragmatic and efficient enhancement delivery), NR and DfT have already identified ways to reduce the cost and accelerate delivery of infrastructure projects through simpler planning and procurement processes and a “one-team culture” to facilitate collaborative decision-making. “So far, it has identified £3bn of cost savings from the projects it looked at just by changing ways of working and working better together, which is what GBR is all about,” Clark says.
“You then put that alongside the long-term plan, you put that alongside the one profit and loss account, and what we are really finding is that you then understand where you can make the most efficient reductions in your cost drivers. Rather than just cutting costs at the operator or at Network Rail, you can then understand the effect on revenue of what you do, which at the moment is not done.”
Alongside long-term programmes to restructure the railway and its processes, GBRTT is also leading industry efforts to make good the dramatic fall in passenger revenue caused by the Covid-19 pandemic. “We’re not just sitting around, because the railway is obviously in dire need of a bit of help now, and we’re doing strong work on revenue recovery,” Clark says. “We have a really talented group of people here mostly drawn from the operators who are working on national revenue campaigns and analysing what revenue is doing now in these post-Covid times.”
Initiatives have included “Let’s get back on track,” the first national campaign to promote travel by rail for 20 years, and “Book with Confidence”, an easing of the terms and conditions for changing or redeeming tickets booked in advance which, according to Clark, delivered an extra £104m in revenue.
Running from April 19 to May 2 this year, the Great British Rail Sale offered 1 million tickets at a discount of up to 50%. Although modest in scope, “it brought about 70,000 people back to rail who hadn’t travelled since the pandemic,” Clark says. “We managed to coordinate a national campaign and underneath that the operators were able to flex and adapt to their local circumstances. For me it was a good example of what could work in the future - a system-wide view and then the local flexibility and real market and customer-facing grip from operators.”
GBRTT is also leading the fares, ticketing and retail (FTR) reform programme, backed with £360m of government funding. FTR runs until 2027 and has five workstreams, including the introduction of pay-as-you-go ticketing, enabling passengers to pay for their journeys by touching their contactless bank cards on a station reader, as pioneered in Britain by Transport for London. This programme will be accelerated over the next 18 months, and by January 2025 Clark expects contactless ticketing to be rolled out at 700 stations in urban areas outside London and southeast England, which under the FTR programme will include over 400 in the north of England. Over 200 stations in southeast England will also be equipped.
According to Clark, the Williams Review revealed that 84% of people found the ticketing system in Britain to be confusing, and it is something that GBRTT wants to tackle. “We really want to get customers on the railway, make it simpler, make it better,” he says. “Pay-as-you-go is a simplification of fares, an easy one, one that people trust.” Advance fares and yield management are also under scrutiny, with the aim of improving revenue yield while making the system simpler and more consistent. “Hopefully that will lead to the ability to offer more and cheaper fares at certain times,” Clark adds.
The idea is to grow the railway and what it can do for Britain. We’re trying to build that structure that is very conscious of driving revenue and reducing costs.”Michael Clark
Online retail is the third FTR workstream. “There is a lot of frustration with the varying quality of operator websites, and there is a very effective third-party retailer but there’s pretty much only one,” Clark says, referring to Trainline. To remedy this situation, GBR will become an online retailer in its own right. “We’re putting a business case together for an online retailing unit that will be a much-improved baseline public offering.”
This is expected to replace some operator websites and would incorporate the existing National Rail Enquiries site which provides station, timetable and fares information, but not the facility to purchase tickets which Clark himself finds frustrating. “It’s all about making it an easier, simpler, one-stop shop,” he says. “We would then hope to stimulate more third-party retailing investment, to lower the barrier to entry in that market which we find to be quite high.”
Although the fine detail of GBR’s future online retailing operation has still to be agreed by the government, Clark hopes that it will come into being over the next 18 months and will also offer tickets for travel with open-access operators. “It will be a whole railway site,” he says.
Retailing standards will be improved by setting a minimum, simplified standard that will provide the benchmark for operators to follow. “At the moment, it’s haphazard, it’s too poor in too many places,” Clark says. Station retailing is the fifth and final FTR workstream, looking to build on the creation of GBR as a single guiding mind for the railway. The goal is to avoid the situation where a passenger walks into a major station and is faced with a potentially confusing array of ticket machines selling tickets from different operators. Through a unified approach, Clark hopes that station retailing can be made more efficient and enable operators to deploy station staff more effectively in customer-facing roles.
GBRTT has also been asked by DfT to work with disability groups and the industry to develop a national accessibility strategy for the first time. “Part of that is working with DfT to carry out an audit of every station on the network, and we’ve got through about 2000 of them so far,” Clark says. “One thing we found through the Williams Review was that there was no really accurate picture of what facilities were available at stations and how you could get hold of them. It’s incredibly frustrating and we’re very keen to push that on further.”
On accessibility, as with other issues across the industry, it is hoped that the creation of GBR will bring clarity and accountability to a complex system that is no longer considered fit for purpose. “It’s so difficult now to work out who is accountable for what,” Clark says. “It comes together on the secretary of state’s desk, but they don’t have the capability and oversight or time to oversee all of this stuff. That’s the whole idea of the guiding mind - to take that systemwide view.”