September brought a little clarity on the policy response to these challenges, and for both the government and the opposition structural reform is firmly on the agenda. On September 20, secretary of state for transport, Mr Chris Grayling, announced that former British Airways chief executive, Mr Keith Williams, will lead a major review of the industry, which is being billed by the Department for Transport (DfT) as the most significant structural assessment of Britain’s railways since privatisation in the mid-1990s.
A week later opposition, leader Mr Jeremy Corbyn reaffirmed the Labour party’s commitment to renationalisation if it gains power - a distinct possibility given the current tumult over the government’s Brexit plans, which could soon trigger a general election.
Nobody questions the need to deal with the fundamental problems that have caused such hardship and frustration for the railway’s customers this year, but the prospect of further structural upheaval will elicit groans of despair from an industry which has seen more than its fair share of organisational realignment since privatisation. Sadly, the noise of political dogma and tired arguments over public vs private ownership continues to drown out rational discussion about how the industry can tackle structural deficiencies in a pragmatic way.
There is a growing realisation that moving decision making closer to the point of delivery can make rail more flexible and more responsive to local needs, and this is where the focus now needs to be.
Ten years ago, a report by another former British Airways chief executive, Sir Rod Eddington, argued that “effective governance at a sub-national level is a crucial issue for the future” if transport is to play a role in supporting the economic success of the regions. Devolution has brought a strong focus on improving services at a local level in Scotland, Wales and Northern Ireland, and the devolved administrations are starting to play a much deeper role in the governance of their railways.
In August, the Scottish government announced that it would allow public sector bodies to bid for rail franchises, with publicly-owned ferry operator David MacBrayne already lined up as a potential bidder for the next ScotRail franchise. The Scottish government has previously clashed over this issue with the DfT, which explicitly ruled out public sector bids for the current ScotRail and Caledonian Sleeper franchises.
In May, the Welsh government awarded a Keolis-Amey joint venture a 15-year contract to operate the Wales & Borders franchise and develop the South Wales Metro. Despite delays in the devolution of powers over transport granted under an agreement between the British and Welsh governments in 2014, Transport for Wales (TfW), a company wholly-owned by the Welsh government took the lead in procurement. “TfW had to demonstrate to the DfT that it could run a tender and it’s been highly professional in how it did this,” Keolis international CEO, Mr Bernard Tabary, told me at InnoTrans last month. “Their people were keen, they understood what they wanted to achieve, and they were prepared to listen.”
Transport for Wales took the lead in procuring the new Wales and Borders franchise.
The lack of devolution of powers from central government means English regions have had to find other ways of pursuing their ambitions for better rail links. In northern England, 19 local transport authorities and business leaders have formed Transport for the North (TfN) with the aim of speaking with a single voice on transport investment. In January the government passed legislation making TfN England’s first sub-national transport body, and it took on its statutory powers in April.
The West Midlands Rail Executive (WMRE), a partnership of 16 local transport authorities, played a key role in the competition for the West Midlands franchise and responsibility for managing most passenger services in the region was devolved to West Midlands Rail (WMR), a limited company owned by the WMRE partner authorities, when the new franchise began in December 2017. WMR helped to specify the contract, evaluate the bids, and ultimately take over responsibility for overseeing the delivery of the new agreement.
Devolution is also being pursued by infrastructure manager Network Rail (NR), which since 2014 has gradually decentralised the day-to-day operation of the railway by transferring powers to its nine routes, each with its own managing director and senior leadership team. Independent Route Supervisory Boards are being set up to ensure that management is accountable to the end user. Each route will have its own regulatory settlement and its own income streams and business plans. NR will also step up collaborative working with operators to integrate track and train more closely.
Infrastructure manager Network Rail is devolving powers to its routes.
Of course, there is a need for a ‘guiding mind’ to ensure all of these stakeholders maintain a cohesive network that works in the national interest and this is one of the key failings of the current system.
With the abolition of the Strategic Rail Authority in 2006, the DfT assumed a huge degree of control over the running of the railway, including many tasks which should not be within the remit of a government ministry. A new independent body is needed to ensure cross-industry coordination and collaboration while keeping the day-to-day functioning of the railway at arm’s length from the DfT and ministers.
Since 2006, the DfT has presided over a procession of critical errors in the tendering of rail services, including the mismanagement of the Inter-City West Coast franchise in 2012, and more recently the ICEC collapse, the result of an overambitious bid by Virgin and Stagecoach. A report last month by the parliamentary Transport Select Committee scorned the DfT for including unrealistic benchmarks in the Invitation to Tender and fuelling overbidding.
Scotland, Wales and the West Midlands are demonstrating the value of moving franchise procurement and management away from the core, and regional and local authorities have shown a willingness to work with their private sector partners to deliver innovation in rail services. Both main political parties need to steer the discussion away from shrill theoretical debates about ownership and onto real-world solutions that can deliver tangible improvements quickly.