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The Enterprising Railway

Integrated Rail Plan – a considered view

The Integrated Rail Plan:  A Considered View

A perspective from the Rail Reform Group

The background to the Integrated Rail Plan (IRP) is that the country is still going through a pandemic that has ravaged its finances, and changed the market for travel to the extent that rail has lost as much as 50% of its commuting business. Despite this, the Government is still prepared to invest £96bn in rail infrastructure for the North and Midlands. This is a massive vote of confidence in both rail and the economies of the North and Midlands. That should be a cause for celebration, not cries of betrayal, which for the most part seem to be politically motivated.

Context

The IRP was intended to identify how HS2, Northern Powerhouse Rail and Midlands Rail Hub would dovetail together for a network of high speed routes, exploring the scope for shared use of new infrastructure and setting out an overarching delivery schedule in order to deliver maximum benefits quicker and to provide a realistic workbank for the supply industry. It was not meant to be a total blueprint for the Midlands and North. This means that proposals such as the Leamside Line are considered to be City Region schemes with alternative funding streams. This may be why no mention was made of Manchester’s Castlefield Corridor, for which there are ongoing workstreams. Incidentally, it does appear that IRP would take two paths off this corridor in each direction; a Liverpool-Manchester Airport semi-fast and a Redcar-Manchester Airport based on the current timetable.

Northern Powerhouse Rail (NPR)

A lot of the criticism is that ‘only’ upgraded lines and not new build is to be provided. Do passengers really care whether the line is new or upgraded if the trains are fast, frequent, comfortable and, of course, on time? An electrified, resignalled and improved Transpennine and Midland Main Lines (MML) is precisely the investment that has been called for over many years.  Whilst ‘upgrading’ implies disruption to services on the existing lines, the industry has improved its management of the required blockades. New Build implies less disruption to existing services, but there will be wider community impacts. If one regards Ditton Junction to Marsden as a new railway, this would then be a similar mileage to the proposed Manchester – Leeds via Bradford route.

Until IRP there were two schemes; the Transpennine Rail Upgrade (TRU), which seemed something of a patchwork of smaller schemes, but are at least already in delivery or under development. This included Manchester-Victoria-Stalybridge electrification, Huddersfield-Ravensthorpe quadrupling and electrification and Colton Junction – Church Fenton electrification. Then there was the showcase new build NPR line linking Manchester to Leeds via Bradford. Both these projects seemed to involve a degree of duplication, that would inevitably push NPR into the distant future while short and medium terms investment focussed on a series of TRU schemes. What we get now is a combination of the two, with the intention of more benefits being delivered sooner.

Commentators refer to a Warrington to Marsden new high-speed line but have missed the point that what is being delivered is a new fast electrified main line between Liverpool and Manchester.  The IRP should have majored on this. The Ditton Junction – Warrington Bank Quay Low Level line, now virtually disused since Fiddlers Ferry power station closed, will be rebuilt as a high-speed electrified line that reaches to within ten miles of Liverpool. That remaining ten miles is a four-track railway with spare capacity, except for a short section at Wavertree Junction, and all of this will doubtless be modernised to fulfil its new NPR role. This new main line from Liverpool and Warrington will be linked by new build to HS2 thus giving them direct HS2 services to Birmingham and London as well as NPR services to Manchester and Leeds. Provision for the new junction from HS2 to the Liverpool direction is already in development under HS2 phase 2b and the route into Manchester (mostly tunnel from the Airport) is already specified. This is precisely the synergy that IRP was intended to deliver.

There remains the question as to whether Liverpool Lime Street can accommodate both 200m long HS2 trains and an increased NPR service, or whether a new station, probably underground, in central Liverpool is required as mooted by Liverpool City Region. If so, the pragmatism that sees Ditton Junction to Warrington converted to a new main line could be further employed by using either the Wapping or Waterloo / Victoria tunnels that extend west from Edge Hill, and whose future use for transport has been safeguarded by Merseytravel.

Just as the new Liverpool – Manchester main line is necessitated by the intensity of local services on the two existing routes, so new build from Piccadilly eastwards recognises that the level of local services on routes east of Piccadilly requires new build for NPR. Speculation that this will be built on ‘stilts’ rather than in tunnel is premature as development work, tasked to HS2, will be in its infancy if it has even started. Whilst one can understand the residents of Buckinghamshire objecting to an HS2 that they will not benefit from, it seems perverse indeed to try and generate opposition to NPR in a city that will be one of the prime beneficiaries of it.

If the Manchester HS2/NPR station has to be a dead-end surface station to avoid the billions of pounds in tunnelling costs, then the track layout in the limited space between that station and the tunnel mouth near Longsight will need to be carefully designed to minimise conflicting movements and prevent station capacity being constrained. This implies a flying or burrowing junction between the Leeds and Crewe routes.

Further east, IRP implies the construction of a new Standedge tunnel, or the refurbishment of the existing disused bores. That should minimise disruption to services on this key section of route. There is clearly scope for three or four-tracking on the existing formation between Marsden and Huddersfield, but there is an unanswered question as to what will be done between Ravensthorpe and Leeds. Morley Tunnel is an obvious bottleneck, and with West Yorkshire planning a new station to serve the White Rose Shopping Centre, it is hard to see how new infrastructure provision can be avoided if local services are to be protected, if not enhanced. This should be spelled out.

HS2 East

The Eastern leg was always a less satisfactory plan than the Western. Toton Interchange was a political compromise that didn’t really satisfy anyone travelling to or from the centres of Derby or Nottingham. Chesterfield and Sheffield were going to be served by a spur from HS2 onto the MML as there was no clear consensus on the location of a station to serve South Yorkshire on a direct HS2 route. Full electrification of MML means that Derby and Nottingham will now get HS2 services to their city centre stations which will better attract inbound traffic than a parkway station such as Toton.  Chesterfield and Sheffield will likewise continue to be served via the MML. The diversion of the Eastern leg to East Midlands Parkway was heralded by the National Infrastructure Commission’s report which saw this providing better east-west regional connectivity. It is not a surprise.

Yorkshire

IRP points out the considerable investment already planned on the East Coast Main Line (ECML) with a promise of more to come. This points to a Government attitude that with this much investment in ECML it should continue to be the primary route between London, Yorkshire, the North East and Edinburgh, and hints at 140 mph operation on certain stretches. Time for another look at Welwyn Tunnels and Viaduct? More clarity on this, and what is to be done east of Leeds to York and Hull for NPR will be needed to assuage the anger felt in Yorkshire.

Bradford clearly loses out.  Electrification from Leeds to Bradford is intended to be a consolation prize but more should be done if stakeholders and the public are to be won over. Firstly, a regular service from Kings Cross to Bradford via Leeds and New Pudsey would be a boost. This electrification should be a first phase of Calder Valley electrification, long considered to be a high priority in the North. A second phase could take the wires to Halifax and Huddersfield via Brighouse. This would give the potential for a modern electric service linking four of West Yorkshire’s boroughs. However, phasing would be crucial. The Calder Valley could not be electrified when it needs to be a diversionary route during modernisation of the Standedge route. Finally, Bradford – Manchester services via Leeds, or, in due course via Halifax and Brighouse and the NPR would provide attractive journey times compared to the Calder Valley today.

Electrification

The Government has made electrification a firm policy commitment in its Decarbonisation Strategy. The benefits of reduced operating costs, decarbonisation, faster journey times and ‘sparks effect’ increases in ridership are well understood. The supply industry has done much work recently to improve designs, reduce costs and tackle issues such reducing clearances needed under structures such as bridges.

IPR gives a good start, with two main line schemes, but more needs to be done if zero carbon by 2040 is to be achieved. It hints at electrification from Sheffield to Manchester via the Hope Valley, which would then start to see a rolling programme for the north. An essential addition, about which IRP says little, is from Leeds and Doncaster to Sheffield. This would enable fast regional services from York and points north through Sheffield to Manchester and on to Birmingham via HS2 West. Hull to Leeds and Sheffield should also be listed.

Questions

A high-level document such as IRP naturally generates more questions than it answers, some of which this paper has already posed.

Timescales are still excessively long. Can we not deliver infrastructure in this country any quicker? NPR from Liverpool to Manchester is to be delivered by 2042 coinciding with HS2 phase 2b, but Manchester – Leeds has to wait until 2045. This is supposed to be quicker than the original Manchester-Bradford-Leeds NPR!  This is where the focus of Northern politicians’ campaigning should be.

Electrification from Manchester to Stalybridge is planned to complete in 2027. How can around seven miles of work, for which bridges have already raised, take 6 years to complete? Huddersfield to Leeds is shown for 2030. West Coast Main Line electrification from Euston to Birmingham, Liverpool and Manchester was delivered in less time. Ominously, no timescales are shown for electrification from Stalybridge to Huddersfield to complete the Manchester-Leeds route. Does this have to wait for the new route to be completed in 24 years time?

The Government has rightly demanded that the rail industry and its suppliers improve their delivery processes as part of Project Speed. It needs to sharpen its own processes too. The East -West Rail Transport & Works Order took 18 months to sign off. The DCO to enable provision of three miles of new railway to link Portishead to the national rail network has been with the DfT for two years and at the time of COP26 it was announced that a further six months was required to give further consideration to environmental issues! The paperwork already amounts to 27,000 sheets, which if laid end to end would reach longer than the line they seek to restore. This strongly suggests that there is no sense of urgency in delivering schemes that benefit local economies and the environment in the drive to net zero.

Will organisational change with the establishment of Great British Railways further delay this process?

Conclusion

The announcement of the Integrated Rail Plan is a bold step that is to be welcomed given the difficult circumstances in which it has been launched. There is a clear commitment to improved regional and inter-city rail links for economic and environmental benefits. This is a framework and the devil is as always in the detail. It is to be hoped that regional stakeholders and Government will work together to make this happen recognising both financial constraints post pandemic and regional aspirations. It is to be hoped that concerted efforts will be made to streamline the approvals process so that the long timescales indicated can be improved on.

November 30th 2021

 

 

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The Enterprising Railway

Williams – Shapps report comment

RAIL REFORM GROUP – PRESS RELEASE

Monday May 24th 2021

New Railways Report ‘sadly disappointing’ says independent rail think-tank

The Rail Reform Group, an independent ‘think tank’ of senior rail professionals, has published a sharply critical analysis of ‘the ‘William-Shapps Report’ on the future of the railways.

The Group says that “After such a long time in gestation the Williams-Shapps Report is sadly disappointing.  There is no analysis of the deep-rooted problems in the industry which led to the report’s commissioning two years ago. There is scant reference, let alone, analysis, of the other key issues that need to be addressed such as decarbonisation (electrification) and infrastructure development (e.g. Northern Powerhouse, Midlands Engine) or of why Great Western electrification costs rose out of control.”

“The demise of the franchise system is over-stated. The new ‘National Rail Contracts’ are merely franchises with the revenue risk stripped out.  The same issues as currently exist, including ‘delay attribution’ which is detailed as an example of how contractual (and costly) the railways have become, will continue across the wheel/rail divide (the separation of infrastructure management from train operations), which has been perpetuated for no obvious reason and with no justification.”

The Group suggests that the re-branding to ‘Great British Railways’ covering both the English passenger railway and the Great Britain-wide network will add complexity, confusion and reduce accountability in the railways run by devolved administrations, each of which has their own strong identity. “It seems to be a political ploy to support the Government’s ‘defend the union’ agenda.”

The Group is caustic about the claims to reform fares and ticketing. Some of the suggestions for fares reform have already been available with some operators, there are no new major proposals.

The supportive for community-rail partnerships is welcomed. “It is hoped they will get further funding to develop their work. However, expecting them to bid on their own for ‘micro-franchises’ could be over-optimistic unless resources are made available to assist them.”

The Group suggests that the new GBR “could be a return to the old days of London-based centralisation with little understanding of regional, let alone local, markets…..Centralised control of timetables and fares lacks any link to local markets which are key to growing rail business, yet whilst reference is made to the five current regions (one of which is Scotland and run quite differently) there is no indication that the regions will be the key  specifiers and drivers. It appears that the ‘single guiding mind’ translates into a highly centralised operation, much like the railway of the 1950s, 60s and 70s. Instead we need mutually-owned regional companies to run the railways that Ministers and the public can trust – creating a railway for the Common Good.”

Full analysis here: https://railreformgroup.org.uk/williams-shapps-report-sadly-disappointing

More information Paul Salveson 07795 008691

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The Enterprising Railway

Williams – Shapps report ‘sadly disappointing’

‘Great British Railways – The Williams-Shapps Plan for Rail’ : Back to the Future?

The Rail Reform Group’s response

The Rail Reform Group is an independent network of rail professionals each with a lifetime of experience in the railway industry, at senior levels. It is completely independent and receives no external funding. www.railreformgroup.org.uk

Summary

After such a long time in gestation the Williams Report, now re-named to indicate the clearly considerable Government (DfT) involvement, has been published.  The major change is that it appears to recognise that the railway is a complete system and needs to be managed as such, reversing the Treasury imposed fragmentation of the 1993 Privatisation.  However the detail is sadly disappointing as it fails to follow through, retaining a commercially-slimmed private sector involvement in train operating, but one where there now appears to be little value in the continued fraction in the system delivery.  There is no analysis of the problems that resulted in the establishment of the original Williams report.  There is scant reference, let alone, analysis, of the other key issues that need to be addressed, such as decarbonisation (electrification) and infrastructure development (e.g. Northern Powerhouse, Midlands Engine) or of why Great Western electrification costs rose out of control.

Conversely there are numerous references to railway industry failings, such as poor accessibility, uncomfortable modern trains, lack of cycle space, May 2018 but with no recognition or acceptance that the DfT were, as a minimum, party to these issues and in some cases specified the outcomes.  So much for accountability.

The demise of the franchise is over-stated as the new ‘National Rail Contracts’ are merely franchises with the revenue risk stripped out.  The same issues as currently exist, including delay attribution which is detailed as an example of how contractual the railways have become, will continue across the wheel/rail divide, which has been perpetrated for no obvious reason and with no justification.

The change to an overt ‘Great British Railways’ brand covering both the English passenger railway and the Great Britain-wide network will add complexity, confusion and reduce accountability in the railways run by devolved administrations, each of which has their own strong identity.

The report is supportive of community-rail partnerships and it is hoped they will get further funding to develop their work. However, expecting them to bid on their own for ‘micro-franchises’ could be over-optimstic unless resources are made available to assist them.

Fares simplification has been on the agenda for nearly ten years with the ticket type name change taking place in 2013, but no further progress, because it is an extremely complex issue.  But apart from more flexible ticketing to reflect part-week working, which has been available with some operators, there are no new proposals.

Centralised control of timetables and fares lacks any link to local markets which are key to growing rail business, yet whilst reference is made to the five current regions (one of which is Scotland and run quite differently) there is no indication that the regions will be the key  specifiers and drivers.

It appears, as so often is the case, that the ‘single guiding mind’ translates into a highly centralised operation, much like the railway of the 1950s, 60s and 70s.  This will suit rail freight which is clearly seeing much needed recognition of its value, although that will need to be translated into action if decarbonisation of freight movement is to happen.

In the end it is has some laudable ideas with some totally unjustified complications. It is lacking in crucial detail, which given how long it has been under development, is disappointing – but perhaps not surprising.

Analysis of the Report

The Government standard process for investment is based on appraisal with a clearly prescribed process which requires the background to be explained, the problems identified, objectives set and then options developed to deliver the objectives, and thus solve the problems. This report does not follow that format.  It does suggests some problems: franchises failing, lack of bidders and competition for franchises with a move to direct awards, the May 2018 timetable problems and the changes in potential use post-Covid, in particular a big drop in commuting and a consequential loss of passenger revenue.

It specifically draws out delay attribution and the ‘Blame culture’, leading on to an observation that the system is too complex. It cites weak oversight and lack of accountability resulting in decisions that did not consider the network as a whole and failed to respond and look after passengers with a loss pf trust in the management.

Williams, (presumably pre-Covid) work found that the railways were not getting the basics right – running trains on time, making it easy to buy a ticket and making rail more accessible and inclusive.

The final problem is one of loss of income because of Covid, in part induced by the ministerial panic to frighten passengers off public transport during 2020.

From this jumble of ideas ten ‘outcomes’ are conjured:

  1. Modern passenger experience
  2. Retail revolution
  3. New way of working with the private sector
  4. Economic recovery and financially sustainable railways
  5. Greater control for local people and places
  6. Cleaner, greener railways
  7. New offer for freig
  8. Increased speed of delivery and efficient enhancements
  9. Skilled innovative workforce
  10. Simpler industry structure

Of this list it seems that some (1, 2, 4, 6, 7) are outcomes, but that the others (3, 5, 8, 9, 10) are facilitators to deliver on the outcomes and are changes to the processes underlying the operation of the rail industry. There is then a short section (Chapter 2) setting out the long term commitment to the railway, including ‘levelling up’. But then with Chapter 3 it pitches straight into the solutions – ‘Integrating the railway’ but observes that McNulty had highlighted the lack of whole-system thinking ten years ago, so the problem, at last, is defined as lack of accountability coupled with out of control costs and franchising no longer working.

However the report fails to address, and does not appear to understand, that this is an England issue, with the DfT acting in its capacity as responsible for railways in England. Railways in Scotland Wales and Merseyside are already operating and much more integrated units with very clear accountability both within the railway industry and politically.  So the new public body – Great British Railways (GBR) is basically ‘Great English Railways’.  Much of the rest of the discussion is confused because this is not made clear.

GBR is presented as a single entity which will run the whole network, shades of the Railway Executive of the 1950s. There is however one clear statement – that ‘the railways to be run as a public service with the financial discipline of a modern business’.

However the ‘single guiding mind’ and ‘leader’ implies all this is focussed onto one individual and that this is a centralised organisation. There are refences to budgets being ‘pushed down to regional and even local levels’ which does little to allay the fears of centralised control of everything including timetables and fares.

The longer term financial planning which came with privatisation is to be retained, recognising that the old public sector British Rail was severely hampered by the ‘stop-start funding’ implicit in the public sector.

Common sense has re-emerged with the retention of not only the double arrow, but also the Rail Alphabet typeface which is universally recognised as one of the most readable – which is after all what it is all about. In effect this is dismissing the ‘froth’ of private sector involvement in the railways – short term, ‘have to be different’ image.  It is tacit recognition that British Rail had got it right.

The move to one, on-going brand – including on-trains – is following London buses and ScotRail, and is to be welcomed, as long as it is done sensitively and well.

There is a strong emphasis on GBR being a new organisation, not just an expanded Network Rail, with an expectation of staff being recruited from other parts of railway and externally. The latter is of some concern as the record of external appointments has been mixed and there still seems to be a lack of understanding that, for whole system thinking, managers need whole system experience.

There is a clear remit developing with “its primary focus serving the interests of passenger, freight customers and taxpayers and growing rail usage”. That is not one, but four objectives, which are likely to be opposition with each other and is little different to the current confused and contradictory duties laid on ORR by the 1993 Railways Act.  That this will require ‘strong measures and structures’ to prevent it cutting services instead of cutting inefficiency shows it is at least recognised.  But this could have been and in theory has been the case with OR oversight of Network Rail for the whole of privatisation does not suggest great hope of success.  Moreover it implies quite intrusive oversight by UK Government. This is reinforced by statements that “ministers will take key funding decision” and have “strong levers to set direction.”

This is then countered by offering local involvement and control but implies that the same template will operate over the five Network Rail regions, of which one is Scotland, where financial responsibility lies entirely with the Scottish Government, who have, as far as the legislation permits, adopted a vertically integrated approach. It does offer the possibility on a Northern Region in the future, but only after “Northern Powerhouse Rail (NPR) transforms travel between the major cities across the Pennines” whereas the need is now to cost effectively develop and deliver NPR.  It then offers “greater control over local ticketing and services” having previously stated that fares will be set, and services planned by GBR.  Local input into fares is unlikely to resolve many of the issues with long distance fares and rebooking that are seen as key problems with the existing fares.

Devolved administrations are unlikely to be reassured by the short section, especially as the requirement to support the one GBR website and app implies a loss of local branding.  The two need to be able to co-exists as national (UK) and national (Scotland and Wales) and regional (London and MerseyRail) operations, especially as for most users of these networks it is the integrity of their local travel network that is important.  The impact on Scotland and Wales is clearly not considered in this report as these new arrangements are to be ‘explored’ with Transport Scotland and Transport for Wales.  Certainly in Scotland there is a risk that the current well integrated structure will be replaced by a confusing model based on that as yet untried model being developed for England.  There is support for the Community Rail concept and potentially, hidden in the words, for micro-franchising of local routes.

The retention of HS2 Ltd as a free-standing organisation is understandable, but the retention of East West Rail is perverse. If this is an acceptable model for a railway with will interact with three NR Regions then it is perverse not to agree to the Scottish Government’s desire to take full ownership of the Scottish Region enabling it to pursue the same broad agenda as is being applied to railways in England.

New track access rules are proposed, but there are no details, because they have not been considered. The devil is in the detail in railways, and this is a prime example.  The implication of this section is that the Train Operators will continue to hold access rights, even if timetables are decided by GBR.  None of this will encourage the development of new Open Access operation, leaving the specification of the train service to GBR.

Much is made of replacing franchising and the new Passenger Service Contracts.   Reference is made to continental regional and local services and London Overground, but the concessions proposed are on a completely different scale and in long distance operations will be direct competition with other modes which are operated commercially.

What is not stated is the benefits that private sector operation brings. They will not bring imagination to the customer offer as it will all be specified by GBR, so it will only be in the delivery, which will require a whole new monitoring organisation and a whole new set of penalty/performance figure with the commercial risk being played out in that regime.  Train operators are going to have punctuality and performance targets.  Across every boundary there will need to be rules – which will need to be legally binding, and penalty based for non-compliance.  So the much quoted delay attribution process will still need to be replicated in some form.

Revenue incentives are to be built into the new contracts, which is not the same as now, but will only be effective if the new operators are able to influence ridership and revenue, which with GBR in charge of timetables and fares along with possibly more local organisations suggests little room to make a difference.

The implications are that there could be a lot more operators with differing levels of activity, but there is no reference to staffing and resourcing – so the impact of the timetable on resourcing is not mentioned nor is the on-going problem of differing conditions for staff in different operators and the thorny issue of industrial disputes – where franchising has actually given staff greater power and has driven up wage levels and costs. Nothing in these proposals addresses this issue.

By implication the train operators will still be leasing rolling stock, which brings another interface, especially with an aging diesel fleet that will largely need replacement in the next 15 years.

The expectation is a larger number of bidders, which implies organisations with less experience of rail, which in the past has not proved to be a great success. However the possibilities for truly local operations are raised, but with no indication how the barriers to entry are to be reduced or resolved.  These include such critical issues as being licenced as a railway operator and holding a Railway Safety Case.

There are exciting offers about a retailing revolution, but all of this has been possible for some time but government has not been prepared to push forward. That GBR is responsible for ticketing and retailing does not make it clear who will be retailing tickets at stations – GBR staff of train operator staff?

It is not clear how the GBR website and app will interface with local integrated travel offers and retailing. One-team working will be important and runs with the ‘GBR’ theme as well as reducing costs.

The fares changes are all promises that have been made in the past – easy to say, fiendishly difficult to deliver, especially as there is an implicit control on fares increases. If it had been easy we would be a lot further ahead now.

The section on bikes is a quiet reversal of government policy which reduced space on the IEPs! And the observation about the dire quality of modern trains fails to note that this was a direct result of central government policy and specification.  So whilst it is good to see reversals in policy the blame has been laid off onto the railway.  Even more interesting and welcome is the reduction in ‘annoying and repetitious recorded announcements’ which have been introduced for a reason, but it is not clear how that reason now disappears.

Whilst there is a strong claim that the new train operators will bring innovation, as they are no longer taking revenue risks it is not clear how they will justify investments and there is no evidence presented where this has happened elsewhere. A side example of investment in longer platforms being wasted by the operator deciding to run more shorter trains illustrates the difficulties in the future – as presumably GBR would specify the longer trains and also the capacity required – so directly impacting on the resources that the train operator will have to provide.  It does not seem a very stable business model.

Whilst there are a lot of fine words about innovation and doing the right thing for passengers, this is not likely to happen without the right incentives as any costs will be rigorously controlled by the Train Operators and these nice ideas usually have a cost, which is not now going to be offset by any potential revenue or brand benefits.

There are more positive words about electrification, but the risk is that relying on GBR will just push more delay into the process, although the removal of payments to train operators during planned disruption will help reduce costs, but risks increasing the number of line blockages.

There are positives in the proposals with a more competitive approach to procurement, more joined up thinking on R&D where money has been spread about with little obvious policy direction and importantly a move to cross-sector training and workforce.

But there are some underlying concerns. There is no indication that there is any marketing behind this.  The railway brand will become GBR.  GBR control much of the product (timetable), but not the other part – the trains – unless they specify them in some detail in the new contracts, the fares and some, unclear, aspects of retailing but nothing is said of marketing and there is no clue to how the long distance routes are going to be specified and managed.

But GBR will only be the brand in England, with the dominant brands in the devolved railways remaining, which gives a clue to the wider politics driving the report. This is at best a link back to the early days of BR sectorisation where the businesses set the specification and did the wider marketing, but the regions operated the services. That was quickly superseded by the full sectorisation, despite all parties being part of British Rail who would manage to deliver the corporate good, as specified by government.

So how do the private sector operators fit in, without creating a new industry of contracts, monitoring and compliance? It fails to deliver on proper vertical integration and leaves a lot of the worst aspects of the rail/wheel split in place, but for no benefit at all.

In the end it is full of fine words, but lacking in crucial detail, which given how long it has been under development, is surprising.

 

 The Rail Reform Group                                24 May 2021

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The Enterprising Railway

A Railway Fit for The Future

RAIL REFORM GROUP

A Railway Fit For the Future? Some thoughts on trends and the impact of Covid-19 

by Dr Nicola Forsdike

Introduction

This paper is written against a background in which the infection rate of Covid-19 is once again increasing. Writing this in the run up to Christmas 2020 it is difficult to see life returning fully to its former rhythm any time soon, notwithstanding the beginning of a vaccination programme.  The impact this is having on the transportation systems of the UK is profound and brings both challenges and opportunities for Britain’s rail network. This paper argues that the impact of Covid-19 on the way people live and work and hence on our economy will have a lasting effect.  This is because many of the trends we are seeing were already in evidence before Covid-19 arrived in the UK and have simply been accelerated.

Whilst the immediate impact of Covid-19  is presenting policy makers and transport operators with very urgent issues of funding and service provision, longer term trends call into question the very role of passenger rail in Britain. There is a need for a reappraisal of this and for a re-focussing on the competitive advantages of rail within a multimodal transport approach. Whilst the temptation will be to shunt these issues into a siding until the immediate crisis has passed, a better outcome will be obtained if rather than focussing solely on where we are now, decision makers hold to a longer-term vision. In that way, decisions taken now can build towards that, rather than acting as barriers to future development. As anyone who has tried to restore railway lines, infrastructure or other facilities will know, decisions taken in the past can be difficult and costly to reverse if the original decision makers failed to take into account potential futures

Rail is a derived demand service – that is, very few people get up in the morning with the objective of catching a train (any train!) that day for the pure joy of the ride. For most, a rail journey is a means to get to work, go on holiday, enjoy an area of natural beauty, visit friends, go shopping, go to an event and so on. Whilst some of these demands are temporarily suppressed by the restrictions on people’s social lives imposed as a result of Covid-19, others were being shaped by wider events even before Covid hit. This paper will first reflect on these, and the potential impact these may have on rail travel, before turning to the question of what these may mean in terms of the sustainability of Britain’s passenger rail network, and how the UK plc might organise resources to best deliver this.

My observations are based on my experience of working in and researching on the rail industry. They are also informed by my professional background in strategy and marketing, both of which encourage an outward view and a focus on those who pay for the railway (funders), those who use it, and other stakeholders such as taxpayers, employees and local communities. I begin by setting the contexts within which Britain’s network developed and within which it now operates. 

Context

To understand today’s industry, it is useful to explore how it has reached its current form. Britain was the first to the market with rail systems. As is so often the case in innovation, first to market does not necessarily mean best; later entrants are able to learn from the experience of the first entrant and use that to improve their operations.

In his book “The World’s First Railway System” Mark Casson suggests that the model by which Britain’s railways were initially constructed, that is, led by the private sector with minimal state subsidy, led to the creation of a railway system that was incredibly inefficient. In particular, it led to major cities such as London, Manchester and Leeds failing to develop as major railway hubs as the competitive environment encouraged the building of separate stations rather than integration. A system laid down over 100 years ago continues to present barriers to cross country travel today. In contrast to the railway system that was developed, Casson’s counterfactual model of an efficient railway for Britain has stronger city hubs and a much better cross-country network than the one we are forced to work with now.

Casson relates how much of the early rail network in Britain was developed with a focus on international trade.  In northern England, transPennine routes were developed to link the ports of the east and west coasts, for example, from the west coast through Carlisle to Newcastle or from Liverpool to Hull. These routes formed part of an international transport network that stretched from northern Europe to North America. Similarly, Britain’s ports played a leading role in the development of key routes to London alongside regional cities looking to link to the capital. The railways thus promoted to meet the economic needs of the mid-nineteenth century continue to be the backbone of the network today. As such, our patterns of living and working have been to some extent ‘hardwired’ by actions taken over a century before we were born.

Not surprisingly given the inefficiencies in the early system, over time, companies consolidated until the delivery of rail services in each of a number of specific geographic regions was dominated by a single vertically integrated organisation, operating both track and train. This vertical integration appears to be the ‘natural form’ of a railway system left to its own devices, a form explained by the fact that a railway is a complex system, requiring the integration of fixed resources (track, stations etc), moving resources (trains) and people. For the system to work efficiently, an understanding and oversight of each component part is absolutely fundamental.  Splitting the operation of the system into different components under different bodies inevitably leads to inefficiencies as no one organisation can have perfect knowledge of what is happening in another, whilst there are costs to managing interfaces. This can of course happen in large integrated organisations! The difference in the case of the latter is that relationships may be bound by corporate kinship, not contracts, whilst a single board retains complete oversight. Information is able to flow more freely, facilitated by mechanisms such as joint training across different disciplines, (as practised by Britain’s former nationalised rail operator, British Rail), joint planning and so on. Importantly, each element has a common objective and goal.

In contrast, Britain’s railway as we knew it prior to Covid-19 was split into a myriad of different operators all answering to different shareholders. The operation of the track was split from the operation of the train with the infrastructure operator held to account by an independent regulator. Whilst train operators work to short-term objectives, needing to realise the return on any investment within the lifetime of a seven-year franchise, the infrastructure operator is investing for the long-term. Obtaining system efficiencies under this structure becomes difficult.

The railway system we have inherited was created for an industrial Britain that no longer exists. The cost of changing infrastructure means travel corridors remain hard- wired. Decisions have a long-term impact and act as a constraint on economic development. As a travel mode, with expensive, fixed infrastructure, rail is not always best placed to respond rapidly to changes in the market.

Trends

I suggested earlier that the impact of Covid-19 might be not so much to bring new pressures to the railway, as to accelerate trends that we could already see. As a derived demand service, rail is susceptible to changes in in its wider environment. I suggest the following stand out as potentially having a negative impact on rail demand:

1) Changes to patterns of living and working. For several years now it’s been obvious that the commuting patterns for some workers have changed. In particular, many management and professional roles no longer require people to be located in a central office between the hours of 9 am and 5pm 5 days a week. Train operators on some routes have found that rather than trains being equally full in the rush hour every day of the week, certain days of the week may be quieter, as commuters work from home on one or more days whilst there has been a vocal and very public demand for more flexible season tickets, a demand the industry has been slow to respond to. The impact of increased home working during the Covid-19 crisis has demonstrated to major companies, including financial services companies with major offices in the centre of London, that they function perfectly well without the expensive overheads of large working spaces. Despite the protestations of Government, it is hard to see how old working patterns will ever return. It hardly needs to be said that this will have a major knock-on effect on commuter rail services into city centres, and especially into London.

2) Changes to leisure travel. For as long as social-distancing applies it is hard to see how demand for travel to sporting and cultural events will return to pre-Covid levels. The Alice in Wonderland system of rail franchising has encouraged rail operators to compete with each other by attracting ever increasing numbers of rail users. This in turn has led to a complex system of demand management and associated fares. Lower fares fill up excess capacity but also generate new journeys. Increasing demand is used to justify calls for new services and more investment into new routes such as HS2. No one questions whether an endless pursuit of growth is actually in the interest of the taxpayer. The economic argument would be that more travel opportunity increases demand for products such as events, which in turn allows them to sell out at higher prices. In this way the economy grows. On a finite railway system, (indeed, on a planet with finite resources!) it is hard to see how this model, which might work admirably in the short term, is sustainable in the longer term. With some predicting any recovery in the economy might take until 2024 (a date which seems to be less and less achievable the longer Covid continues) this would seem to call for a permanent reduction in the number of trains run pre-Covid.

3) Attitudes to the environment, particularly relating to air travel. Air travel is forecast to take a number of years to return to pre-Covid levels. Fewer air trips mean fewer trips to airports. Some airlines may go out of business and is difficult to call whether the era of cheap flights and weekends away in destinations abroad will survive, particularly if environmental concerns continue to lead people away from air travel. All this suggests a longer- term negative impact on the demand for rail services to airports.  At the same time, countries in mainland Europe are restoring axed overnight long-distance rail services to reduce the demand for short-haul flights. Is there a role for rail to take over the journeys from short-haul flights in Britain, both domestic and international ones?

4) Changes to patterns of shopping will also impact rail travel. Given the increasing importance of online sales will people continue to use such channels rather than travelling to physical shops once restrictions are eased? At the same time, a kick back against ‘fast fashion’ amongst those concerned with its impact on the environment, combined with an economic recession, will serve to reduce trips to the high street and shopping leisure days out. This too will impact on rail trips, particularly at weekends unless retail can rebuild its position as a safe social experience.

Implications for our rail system

 

Notwithstanding the admirable speed at which government and railway adapted to the initial Covid-19 situation, in the longer-term rail is not well placed to adapt quickly to major shifts in the way people live, work and relax. One the one hand it is hard to flex infrastructure quickly. Stations are fixed into position and hard to move, as are railway lines.  At the same time the industry is not organised for change. It is hard to see who is accountable for considering the long term role of rail in  Britain. Given that decisions on infrastructure made over 100 years ago are still having a major impact on our travel patterns today there is a pressing need to consider the travellers of 100 years hence. Schemes such as HS2 appear to be predicated on casting forwards selected economic trends, not on envisioning what Britain might be in 100 years’ time (in fairness, I should point out that the route of HS2 is not unlike a model proposed by Casson as considerably more efficient than the existing pattern of competing main lines from London to the north, though sadly HS2 perpetuates the problem of having different terminal stations for different rail routes).

Fragmentation within the rail industry means the costs and benefits of innovations that would benefit both taxpayers and travellers do not always fall to the same party. The technology for nationally available smartcards for example has existed for many years, but it is in no operator’s  interest to implement this. In today’s world, power comes not from monopolising routes but by monopolising data. The incentive then is for each operator to gather and jealously hold information on customers and customer journeys, mitigating against a national system. In optimising their individual positions, each player undermines the efficiency of the system as a whole

A railway for the future

Thinking about the world two generations hence, is it conceivable that people will still live in suburbs and satellite towns, commuting into work in city centres? Will London and the City still dominate the economy? And even if it does, with the growth of digital technology will people still need or want to travel to the same extent as before Covid hit? From my attic in the north of England it seems unimaginable that the world will simply go back to as it was before.

If not, what is the alternative, and where does rail fit in with that? Possible solutions could include:

  • A network planning approach to re-shaping the network. We need to dare to imagine what economy we want for our country in 50-100 years’ time, where the economic centres will be and how wealth will be shared. We will then have road map to shaping the infrastructure we have to fit that, not around the needs of Victorian Britain built for a dominant London centre of finance and Northern centres of manufacturing. This might mean having the courage to close some routes or stations, or at least move them. It also means that new rail schemes should be based on a sensible colouring in of the rail network map, not developed piecemeal as a series of one-off schemes based on who has paid for the best consultants or has the greatest political influence.
  • As part of this, we should focus on improved connectivity between regional towns and cities – Oxford-Cambridge is a start, TransPennine should be much more of a priority than HS2
  • Using flexible modes – eg tramtrain or technologies that do not yet exist to develop local networks in new ways and to integrate them better into  the mainline rail network.

It’s important to note that the rail industry has only so much resource, not just financial resource but also skilled people. It’s arguable as to whether UK plc cannot pursue more than 1-2 grand schemes at once. Whilst the suspension of CrossRail 2 helps, with HS2 and Oxford-Cambridge drawing in so much money and expertise, where does that leave other schemes?

Organising for a different future

Going forwards, there is much talk of changes to the franchising system. One possibility is that the government might go for an extension of the TfL model, where a regional transport authority takes the revenue risk for rail services, whist operations are let as concessions through competitive tender. It’s not clear how the taxpayer can get the best deal from this. Amongst other things, why are local authorities better placed to anticipate market demands than the private sector – and what would the impact of a regionalised structure be on intra-regional travel, which as Casson points out has been weak right from the first day of the development of Britain’s railway? Indeed, a cynic might suggest that this looks like an attempt by national government to ensure any blame for failings of rail in future falls on regional transport authorities.

Conversely, devolution of transport powers seems to be working relatively well in Scotland and Wales, resulting in investment in the network. Here however, transport powers are linked to a wider devolution of responsibility for other public services and economic growth, allowing authorities to plan in a holistic way that seems beyond the reach of the government in England.

There are also a number of contractual mechanisms and alternatives, which could be used to help the railway be more responsive to market changes. I’ve outlined previously (see http://www.paulsalveson.org.uk/2020/05/01/the-enterprising-railway-2/). These include developing a contractual structure that encourages information sharing, knowledge development and challenging of the cost base whilst rewarding collaborative innovation.

Afterword

This paper has outlined some of the market changes taking place and suggests that rather than focussing solely on where we are now, decision makers should hold to a longer-term view. It remains to be seen whether the Government will have the vision and courage to embrace a longer- term view or whether the vested interests of the political system and rail industry in Britain will allow this chance to shape the future to pass by, prioritising short term expediency over long term gains. We currently have an opportunity to re-set the vision for Britain’s railway network. It would be irresponsible to waste it.

December 16th 2020

 

 

Categories
The Enterprising Railway

Elephant on the Line: time for Vertical Integration

The Elephant on the Line – has the time come for ‘Vertical Integration’?

David Prescott, Rail Reform Group

For the third time in just over one hundred years privatised railways have been brought under complete government control.  In 1914 and 1939 it was to support the war effort, and to concentrate the whole of the rail industry in supporting the war effort and also compensate for supressing non-essential travel.  The same has happened with Covid-19. This time it is more to keep the industry on life-support as virtually all passenger travel has been suppressed to help tackle the health crisis  Essential freight is still required and arrangements needed to be made to ensure as much national resource was directed to moving essential supplies.

Due to the fragmented nature of the rail industry and the wider scale and reach of the multi-modal logistics industry, the rail freight operators have not been brought under direct government control.  However they can still benefit from the general economic support arrangement available to all employers, if they require this.

So with all franchise passenger operators and Network Rail under government control any changes to industry structures will be easier to make.  Moreover as the current railway industry economic model is almost certainly untenable in the foreseeable future there will need to be both a significant reduction in operating costs to match the changed income and much quicker decision making to reallocate under-used or redundant resources to meet the new economic future, in particular the ‘Reverse Beeching’ re-openings as part of the ‘levelling up’ that has been promised.

There have been three recent opinion pieces from industry leaders in the railway press: Sir Michael Holden, Professor Andrew McNaughton and Network Rail’s CEO Andrew Haines all looking at the future of rail in the 2020s (RAIL May Issues 904/5)

None of these commentators have strayed from the current vertical separation that characterises the current railway; in spite of all of them raising issues that need solving, but which arise specifically as a result of vertical separation.

The background

The current rail industry structure arose from a mix of a European Directive designed to solve a European cross-border rail problem and policies developed by the free market, neoliberal Adam Smith Institute.  This was used at the time to support the policy to privatise the railways with the desire to introduce competition on the railway.  It was specifically intended not to privatise British Rail as a single unit.  Rail privatisation was carried out at incredible speed, given the scale of the change.  Consequently, as the implications of the initial decision to privatise operations and leave the network (Railtrack) in the public sector started emerge, there was not time to revisit previous policy decisions.  So franchising was created; on-rail competition in the passenger market was restricted (and still is), with freight operations being the only competitive on-rail activity.

The key driver to the growth in efficiency that characterised the Business-led railway of the 1985 to 1994 era was the ‘single controlling mind’ which was well structured, starting at the local level with business managers responsible for the entire business performance of manageable sections of railway.  They were the base of a classic chain of command and were overseen by sub-divisions of the five Businesses, the Business HQ and finally BR HQ.  This coupled with clear delegation, within clearly defined parameters, and with clear and agreed objectives, resulted in a responsive organisation which was able reduce the costs to the exchequer and to improve the quality of the services provided.

Ultimately it was this very organisation that was able to carry through the privatisation break up so effectively and lead to where we are now.  John Nelson who was at the heart of the break up process is clear in his book “Losing Track” that that vertical integration was seen as the most financially and operationally efficient manner in which to operate the railway.

Lack of a guiding mind

There is now no single guiding mind at any level in the industry.  In its place is a mass of bureaucratic process across the industry, including funders, to regulate the contracts and interfaces.  The linkages between costs and benefits, which are so fundamental to the operation of an efficient industry, have been completely lost and with it all natural pressures on cost control.  Contractual requirements can be in conflict, in spite of them all coming from the DfT.  In short the industry has become too fragmented, too big and too complex to be managed effectively as a single unit.

It is suggested that this issue is at the heart of the problems of the current rail industry in that it is trying to perform in a way that is contrary to the model for which it was designed.   It says something about the general resilience of the railway industry and the dedication of many of its staff that it has managed to get this far.

The key issue will be to reduce the interfaces between the many organisations. To do this the industry needs to return to its first principles; that the most efficient form of railway operation is one that is vertically integrated.  The early Victorians, in the unregulated capitalism that operated then, soon discovered that, when inefficient businesses went bust.  It is often forgotten that the Stockton and Darlington Railway started life offering what we would call “Open Access” mirroring the Turnpikes of the day.  But railways, with their fixed network and need for moves to be fully choreographed, are not the same as roads.  This lesson was forgotten in the privatisation era.

In fairness the DfT is not against vertical integration with two examples: the largely self-contained South Wales Valley lines network has transferred to the franchisee as part of the planned upgrade of the Welsh network and the creation of a bespoke Valley Lines operation, which also operates on Network Rail infrastructure.  Perhaps more surprisingly the DfT is promoting East West Rail as a vertically integrated operation in spite of it being at the heart of the rail network in the English South Midlands, having physical interfaces with at least three Network Rail Regions and all of its train services requiring access onto Network Rail infrastructure.  This is fairly obviously an added complication in managing the network, but seen as more appropriate for the project delivery phase.  However it illustrates that arguments about fragmentation of infrastructure management are not sustainable.

Vertical Integration in the UK

Other vertically integrated networks remain in the UK including Northern Ireland Railways, London Underground and the Tyne and Wear Metro, all of which interface with other operators.  Crossrail has been built as a section of vertically integrated infrastructure, even going as far as providing its own, non-standard, signalling system which prevents other operators running through their tunnels.  The concept of vertical integration is also integral to the operation of tram networks in the UK, in spite of the obvious option of the track being provided by the highway authority.

At privatisation the network/train operator interface largely revolved around the wheel/rail interface, with the vehicle/structure interface (platforms and bridges etc.) and for some the electric traction power provision (third rail or overhead).  Signalling was a managed activity relying largely on passive equipment and a human interface (drivers).

Whilst these interfaces still apply a totally new interface in the form of ‘Cab Signalling’ has arrived, which substantially increases the involvement of the network operator in physical train operation.  As this is seen as the new future for signalling, there is a huge programme of new signalling works fast approaching which will require very detailed, complex and safety critical working between operators and Network Rail.

Now is the time to change

Now is the time to change, while all of the operation is under government control and with a strong need to reduce costs – and before the massive, complex and costly provision of network-wide in-cab signalling starts.

A model more akin to urban metros, (London Underground or Tyne and Wear Metro), where track and train are still run as a vertically integrated operation, is suggested as the model that is also suited for heavy rail operation in metropolitan areas.  The dense suburban networks (London or elsewhere) need to secure efficient use of the constrained infrastructure and consequently there is a strong need for a single ‘controlling mind’.  The absence of such oversight has been so well illustrated in Manchester.  In these cases there is little likelihood of rail-on-rail competition, so the current structure is not operating in the manner for which it was intended and is hindering the delivery of cost effective and market responsive rail services.

For long distance operators it is conceivable that a rail-on-rail competition model could operate effectively and ORR has recognised this with its CP6 Open Access charging mechanism, designed to ensure that Open Access operators contribute to the fixed costs of the infrastructure. In fact the rate for the Open Access Fixed Track Access charge is higher than that paid by long distance franchise operators.  In these operations, where there is sufficient business to sustain more than one operator, on-rail competition can offer real benefits to customers.  Open Access Operators are also serving locations that the London based DfT has not sought to serve at all or only with a token service.

There are a finite number of paths on main lines and capacity at terminal stations is potentially a limitation, so the design of the train services, especially stopping patterns and train performance, can have a huge impact on the use of the infrastructure.  Surprisingly it appears that HS2 is not intended to operate as open access infrastructure, in spite of all its paths being the same on the High speed Line, but that the train paths will effectively be under HS2 (i.e. DfT) control. It is, of course, desirable to use the infrastructure sensitively as this will deliver the greatest economic benefit for the expenditure on the network.  The consequence of this is that potentially the network operator will be substantially involved in train service design with a number of competing operators.

So for long distance routes a different model may be appropriate.

Developing the ‘vertical concession’ model

The operation of the railway as a number of long duration, local or geographic vertical concessions, leasing all of the infrastructure for the state (i.e. a much reduced Network Rail to provide protection against default of catastrophic failure either of the infrastructure or of the market as seen with Covid-19.) is suggested as the most cost effective and responsive way to operate the railway in the future.  It eliminates a lot of the inefficiencies that the current contractual system contains, reduced the double staffing implied by the contracts, will speed decision making so reducing costs and responding better to market and business needs.

The interfaces that remain with ‘penetrating operators’ can be managed by standard bi-lateral agreements, as used between London Underground and Network Rail and LU and Chiltern Railways.  The industry is used to ORR’s “Model Contracts” so this is an established process but one which will at least have the potential in many cases to be more balanced with the roles being reversed and both parties being train operator and Network Operator to each other in different, often adjacent area.

Freight operators would be expected to have a presumed general contractual right to operate over most infrastructure belonging to the various network companies.  The ORR model contracts form a good base for this type of operation.

The detailed definition of the vertically integrated units will need careful consideration to deliver maximum benefit, along with local accountability.

Ensuring national oversight

National oversight can be maintained by a combination of the existing organisations, all under overall control of the local operators, much in the same way as the Railway Clearing House Operated prior to nationalisation.

Independent oversight would remain with ORR and RAIB to ensure safety and prevent anti-competitive activity, but with ORR having a light touch approach to economic regulation.  The DfT in England would set overall policy just as it always used to, without being involved in the detail.

Whilst this is a significant task it is not unprecedented as British Rail was fully privatised into a completely different form in only five years from the start of the concept to completion.  This is more of a re-arrangement process with much of the fundamental contractual structure already in place, only needing adaption where required, but with a lot of it redundant.

The current crisis gives both the government and the rail industry an opportunity to adapt the industry to the new future and deliver cost-effective railway to meet the challenging economic times ahead.   ‘Never waste a good crisis’ – this is the opportunity that the industry needed to move forward.  They must take it, otherwise the risk is back to cash limits and managed decline as the financial impacts of Covid-19 begin to bite.

So the options are clear:

Tinker around the edges with an inherently cumbersome, bureaucratic, unresponsive, expensive and non-customer orientated railway industry

OR

Move to a much better defined, locally integrated, customer focussed, cost-effective and value orientated group of railway operations

This is a once in a generation opportunity. The railway industry – and the Government – must grasp it while it can, to deliver on the future net-zero emissions requirement.

David Prescott                       25 May 2020

Categories
The Enterprising Railway

The Enterprising Railway

The Enterprising Railway: 

beyond the current crisis

 

New perspectives from The Rail Reform Group

 Papers by:

Dr Nicola Forsdike

John Kitchen

Chris Kimberley

Prof. Paul Salveson

 

Foreword by Peter Wilkinson, Department for Transport

 

Introduction

The Rail Reform Group is a small, informal group of rail professionals with a shared interest in developing new and innovative idea on how to develop our railways. We don’t have a ‘party line’; neither have we any party political axes to grind.

These papers are based on talks that were to be given at a seminar in Manchester on March 19th, organised by the Rail Reform Group. The theme was ‘the enterprising railway’ – aiming to look at ways of building a more dynamic, entrepreneurial and customer-led railway that could make a strong contribution to combating climate change.

The Manchester event was cancelled owing to the coronavirus situation. However, we agreed that it would be helpful to the debate about the future of Britain’s railways to publish a series of papers based on what would have been said on March 19th. At a time when ‘business as usual’ is suspended indefinitely and the railways are firmly under government control, now is the time to be looking to the longer term and not assume we will return to doing the same old things in the same old ways.

Comments are welcome on each or all of the papers. We hope to publish further contributions on this, and other subjects, over the next few months.

 

The Enterprising Railway: 

beyond the current crisis

 The Papers:

  1. The Enterprising Railway: what would it do? Chris Kimberley
  2. The Enterprising Railway: beyond the current model. Dr Nicola Forsdike
  3. The Enterprising Railway: an opportunity for local enterprise. Prof. Paul Salveson
  4. Cumbrian Railways: opportunities and caveats. John Kitchen

 Brief biographies

Chris Kimberley is a highly-respected senior rail industry professional with decades of experience in the industry. He has undertaken senior operational management, business planning and project lead roles, including the successful bids for the Northern Rail and Caledonian Sleeper franchises. Chris was most recently Director of Rail Operations at HS2 Ltd where he was accountable for the successful development of the initial customer-centric operational strategies for the UK’s new high speed railway. He has worked in Australia, India, the Philippines and North America and is now semi-retired.

Dr Nicola Forsdike has an extensive background in developing business and marketing plans for railways. In 2018 she completed a PhD in Management at the University of York exploring how rail industry managers know what they know and why new timetables fail in implementation. Alongside her continued research she teaches marketing, business planning and entrepreneurship at undergraduate and postgraduate level.

Prof. Paul Salveson initiated the ‘community rail’ concept in the 1990s and went on to lead the Association of Community Rail Partnerships. He held several senior positions in the railway industry, having started his operating career as a guard at Blackburn in 1975. He is author of Railpolitik: bringing railways back to the community (2012) and other works of local history. His most recent work is a novel, The Works, set in Horwich Loco Works (2020). He is co-ordinator of the Rail Reform Group

John Kitchen spent 30 years as professional information scientist in chemical and automotive industries. He is a railway preservationist, having owned, restored and run a standard gauge steam locomotive. He was the first Community Rail Officer for Mid Cheshire Community Rail Partnership 2003 – 2007, then Rail Officer Cumbria County Council 2007 – 2012. He established The Cumbrian Coast and Furness CRPs and was a board member of the Association of Community Rail Partnerships from 2005 to 2011.

 

 

 

 

 

 

Foreword by Peter Wilkinson

Managing Director, Passenger Services

Department for Transport

 

 

Over the past few weeks I and my colleagues across the Department for Transport have been impressed by how the rail industry, its’ fabulous supply chain and many of the Industry’s key stakeholders have come together to support the country’s efforts to tackle the Covid-19 pandemic.

 

In my mind this altruistic, can-do attitude highlights everything good within the rail industry. It’s the willingness of the industry to push itself to evolve, to ask itself the difficult questions which results in exceptional and innovative ways to support and care for its customers, staff and its communities that stands out for me.

 

As we look at how the Rail Industry has had to face up to the COVID-19 crisis, we must now capitalise on what we have achieved as we chart our course towards a societally more value-adding horizon. The railways have to evolve to meet the ever changing needs of its passengers whose expectations will almost certainly be different again after this current COVID-19 crisis.

 

These articles are important as they should prompt everyone across the industry to ask the hard questions of themselves and their organisations. Questions such as “Are our customers and our railway communities being cared for in the way we need them to?” and “How can we be better?”

 

To my mind, asking these questions every day will help create a truly enterprising and inspirational railway.

 

 

April 2020

 

 

 

 

The Enterprising Railway – What Would it Do? 

Chris Kimberley

Context

The focus of this paper is to suggest an approach to defining what an ‘Enterprising Railway’ would do.  It does not seek to address delivery models as these are the subject of other papers, but rather will argue that too often popular commentary about the Railway focuses almost single-mindedly and obsessively on organisational form without first spending enough time and effort in gaining coherent and consistent direction as to what success will look and feel like.

This lack of “time and effort” is actually my short-hand for a contention that there is a skills and capability shortfall in some public sector client organisations in being able to properly define and ultimately manage the strategic outcomes that are required from “their” Railway, and similarly there is a lack of incentive on many of the Railway sector’s core operating companies to apply a professional service design approach to User Needs – motivation being driven increasingly by regulatory requirements and/or contractual obligations rather than future customer needs.

Its contents are the personal views of the author and, whilst drawn from his extensive experience of operations and business management within the railway sector, do not necessarily represent the views of any particular organisation.

In order to give some “real-world” context to the arguments I put forward (and in an attempt to convince the reader that I am not “cherry picking” un-representative examples, I will occasionally in this paper use my own local rail service – I live in Glossop, Derbyshire – to illustrate a point.  Again, this is not intended to point specifically to either Northern or Network Rail as a compliment or criticism but rather to illustrate the general point I am making.

Introduction

I have played a part in the railway sector in one role or another for over 45 years.  During that time and through all its ups and downs, and various restructurings two constants have remained:

The railway is a complex, interdependent system – not only in its delivery but also in its planning – and initiatives which seek to over-simplify the roles of individual components – such as infrastructure, train operations and retail sales – often fail to acknowledge that the interfaces between the components within the system require active management and if left inadequately addressed result in sub-optimal performance of the system as a whole.  I will return to the relevance of this point in the context of an Enterprising Railway later.

The railway sector as a whole has a large population of People within it and given that we have not yet (although the time may be fast approaching) embedded artificial intelligence into the decision making of what we want to achieve (as opposed to some delivery processes) it is People who bring enterprise to the table by deploying innovation and securing delivery of what they believe success should look like – be it at a society, organisational or individual level.

Motivation drives enterprise and we should be cognisant of the fact that without organisational clarity of purpose and motivation to achieve it human behaviour will substitute other assumed measures of success – either at the individual level or at some wider but unquantified societal level – and the resulting enterprise unsurprisingly is likely to become dysfunctional in achieving any coherent objectives.

People are key to enterprise

Building on the latter of these “two universal truths” my experience would suggest that to harness and motivate the collective effort of many people in a complex system requires a clear and consistently held definition of what success looks and feels like – both rationally and emotionally.  It is probably now an overworked analogy but the story I am always minded of in this context is that of US President J F Kennedy on a visit to the NASA space centre asking a cleaner what his job was, to which he replied “helping to put a man on the moon”.  For me this speaks to the simplicity of vision and leadership where there is clarity of end purpose, and also a sense of emotion in terms of what today we would no doubt call “staff engagement”.

There are plenty of examples from within the Railway’s history, including its relatively recent past, of where enterprise has been applied to deliver a compelling mission – although the missions themselves have often been about addressing some negative crisis or “burning platform” such as the aftermath of an operational incident or the financial targets set by Government to the British Railways Board in the 1980’s.  On the other hand the interpretation of what success for system performance was meant to be in the period following the separation of Infrastructure Management from Train Operations in the early years of privatisation led to tribal behaviours where the enterprising capability focused on increasingly innovative ways to evidence why it was the other party’s fault rather than focus on initiatives that would improve the top level outputs.  For me this is a classic example of an enterprising approach by very smart People which became dysfunctional through, for example delay attribution warfare.

I want to stress that this is not about “good people” and “bad people” (although I would argue  that the Railway as a whole is failing to be as entrepreneurial as it could be because despite all the talk we are a long way from embracing a truly diverse and inclusive approach to our thinking)  but rather that People respond to motivation and if motivation is driven by “delivering the contract” then we need to be sure that whatever the “contract” is we truly understand how its obligations contribute to the strategic goals (equivalent to putting a man on the moon) in a very systematic and quantified way.  This is particularly important given that the Railway is not directed as a system through a unified “command and control” organisation but rather is formed through a complex set of commercial relationships between separately owned and governed entities within both private and public sectors.

To be successful in the medium- and long-term success is not about “fixing problems” – vital as that is as a prerequisite but is having the clarity of purpose to be able to articulate what the mission is all about. Lots of people spend lots of time and money, often asking other people, who spend even more time and money, developing very clever Vision and Mission Statements of what they and their organisations are all about.   I am not arguing against the need to have a compelling Vision or of the significant potential benefits of achieving “buy in” from management teams and colleagues to initiatives aimed at positive change, but these cannot be a successful substitute for being crystal clear on the required outcomes (whether referred to as objectives, benefits or other measures) and how these “fit in” to the system as a whole.

So, what would an Enterprising Railway do?

My experience suggests that for a passenger railway there are only three key success factors that really matter – and they form a triangular dynamic which forces trade off’s to occur in order to create an optimised success statement (for the “techies” – a balanced scorecard):

  • Customer Utility and Experience
  • Sustainable Economic Growth
  • Value for Money and Affordability

I will briefly explain what I mean by each of these but the key point to keep in mind is that I am suggesting everything that others might put forward as specific success measures can be rolled up as contributing to one or more of these three points on the triangle.

This approach also presumes and assumes a legal and regulatory context which provides a number of pre-conditions or “boundaries” to the envelope of success, for example in relation to health and safety, environmental impact, accessibility, consumer protection, minimum employment requirements etc. – these are not success measures in the strategic sense but are critical hygiene factors which have to be met if the Railway is to maintain its “licence to operate”.

Customer Utility and Experience

We so often hear the mantra of “putting the customer at the heart of everything we do”.  But even when those saying that genuinely intend that to be the case the application of professional Service Design principles are often lacking, certainly in comparison to other consumer sectors that are exposed fully to the fast-changing User Needs that their customers have.   As with all good design this is not about designing things that cost more but designing things where the “acceptance criteria” of knowing whether it has done its job are clear, objective and agreed between those involved in developing the functional requirements for the system.

So, here is what in isolation might be considered an isolated trivial example, but I would suggest is a microcosm of a more widespread issue.  Broadbottom Station is one of my local stations.  It is a relatively simple station with just two platforms, one for trains heading in to Manchester and one for trains heading out to Glossop and Hadfield.  It has no station staff apart from a ticket clerk on weekday and Saturday mornings who spends his/her whole time behind the ticket office window selling tickets and giving out information when asked at the window.    Following relatively recent investment it now has a visual and audible real time train running information system and also a self-service ticket vending machine.

Now consider just one simple ‘User Need’ of customers of Broadbottom station that is particularly important to new or infrequent travellers:

“I want to be confident that I am waiting in the right place on the correct platform to board my train quickly and safely and find a comfortable place on the train.”

Note that the described User Need is not expressed in any “railway operational language” and is fundamentally about confidence in access to the service.

Now picture the setting.  At the main entrance to the station from the car park there is a functioning “standard” real time information display indicating next trains – which for most of the day simply alternate between the trains to Manchester and Hadfield.   The display indicates whether each individual train departs from Platform 1 or Platform 2 and whether it is running on time or, if not, its expected departure time.  I assume that as long as it is functioning as intended it meets the “contract”.   And I do not want to belittle the fact that this information is at least now provided.  However, let’s go back to the User Need and draw out a few observations:

Although the information display indicates whether trains go from Platform 1 or 2, the platforms themselves are not numbered!

From the main station entrance if I am catching a train to Manchester – the predominant destination – I am confronted with a footbridge with no ramps.   There is no information pushed to me on my App, or at the station entrance, to tell me what to do if I have difficulty using the steps – even though the platform I want to use has step free access from a separate road over-bridge.

Although all trains at Broadbottom Station are formed of 3-car trains of a fixed length the stopping area for the train is not specifically identified, and the opportunity therefore to assist easier boarding by marking the places to stand is missed.

My main point in using this trivial example is that I wonder how critically User Needs are appraised, developed into Operational Functional Requirements and linked back to celebrating the success of measuring resultant improvements in Customer Experience.  If success is motivated from delivering contractual compliance, then we should not be surprised that whilst Broadbottom probably passes the test it doesn’t deliver the best Customer Experience it could with the resources available to it.

Sustainable Economic Growth

By sustainable economic growth I mean medium- and long-term growth in economic prosperity, social inclusion and wellbeing, with lowest reasonable negative environmental impact.  Today this latter point is enhanced through the commitments made to achievement of carbon neutrality. These conditions are enabled through many factors ranging from education, skills development and training; attitudes and approach to diversity and inclusivity; access to markets and local and regional planning policies.  These concepts are generally well developed and understood at National and Sub-National Government levels and it is not the purpose of this Paper to debate them here.

Railways have the potential to deliver significant benefits that are not captured directly through customer utility and experience and these can be quantified and used in accordance with HM Treasury Guidance and other relevant planning appraisal frameworks.   These non-user benefits are often used to justify capital investments and operational expenditure to procure services made by the public sector where the user-benefits are not sufficient to cover the whole-life costs of the service in question.

One of the challenges, and potential opportunities, I would note in creating an environment for a successful Enterprising Railway is the current lack of linkage back to success measures for the Railway in delivering its contribution to these non-user benefits.

So again, thinking about the local line between Manchester and Glossop what are the specific non-user outcomes that the service is intended to contribute towards, and how could these be better articulated into a “scorecard” which the “Railway’s management” has clarity of ownership of?

This is not just about the current community engagement practices that have resulted in much improved station and service improvements – enterprising as they are in their own right.  Rather it is being clear what quantified outcomes are required in, for example

  • relieving road congestion on the A628/A57/M67 corridor; or
  • enabling access to education, skills development and employment for the communities of Gorton, Hyde or Hattersley; or
  • in achieving a lower carbon footprint for the total service including everything from source generation and transmission of the traction power supplies through to local sourcing of consumables and support services in order to reduce “road miles”

Again my point here is that although these are increasingly well understood issues that need to be addressed, the way to release the full enabling potential of an enterprising culture is to be clear on specifically what outcomes are required at a sufficiently granular level that they are capable of being understood and managed. Then ensuring that a benefits capture plan is developed, managed and reported against to give results which are governed with as much rigour as the direct user benefits and costs.

Value for Money and Affordability

These two concepts (which are neither novel not the same thing!) are vitally important to put the checks and balances on the two primary outcomes described in the preceding section.

For me Value for Money is simply about being sure that for every penny or pound of expenditure that either a customer or taxpayer is being asked for that the resulting benefits (both user and non-user) are achieved in the most effective and efficient way.  This is probably where this Paper will yield to others who will argue various perspectives on the strengths of different industry delivery models, but I contend that if success is clearly defined as achieving a particular outcome in the most effective and efficient way then there is plenty of enterprising resource which can be harnessed either competitively or collaboratively to deliver success.  But to harness this effectively also requires a willingness and confidence to “let go” of many legacy concepts in order to free up the enterprising mind and the associated innovation to come forward in a commercially sustainable way.

Again using the Glossop line as an example I am forced to wonder why for customer utility and experience, and for the non-user benefit contributions to the sustainable economic growth strategy (in this case of the Northern Powerhouse) the Railway could not be delivered as efficiently and effectively as, say, the Metrolink services operating to similar markets within the Manchester city region.  Whilst I can already hear the clamour of experts telling me all the reasons as to why a class 323 train from Glossop to Manchester needs two members of staff, and an on board toilet, and why the tram-train is not yet a proven concept beyond South Yorkshire (which as far as I know is actually also a part of the North!), and that the Infrastructure Manager (Network Rail) has national standards to assure, or why there will be a major confrontation with the Trades Unions if changes in working practices were to be contemplated (all of which I acknowledge as real issues) these seem to me to be examples of the very issues that an enterprising culture would be unleashed to address in order to ensure best value for money in achieving the benefits.

A word on affordability – it is worth reminding ourselves that it doesn’t matter how valuable something is if we cannot afford it, we cannot buy it.    So again, for both the customer utility & experience benefits that we are seeking to deliver, and for the wider on-user benefits we wish to capture, there needs to be realism in prioritising these to affordability even once value for money has been optimised.

There would have been little point in getting everyone excited about putting a man on the moon if there hadn’t been a commitment to pay for it!

Capability and capacity to enable an Enterprising Railway

This Paper does not seek to reprise the many issues that will have been considered by the recent Williams review of the organisation of Britain’s railways.  Whilst its findings have yet to be published and Government will have to determine the acceptability of its recommendations, I would contend that to achieve the Enterprising Railway that itself delivers the success which will ultimately be celebrated by both customers and taxpayers requires:

A step change in the capability and capacity of some public sector client organisations (and learning from best practice from organisations such as Transport for London who are arguably more advanced in this space) in defining the strategic outcomes (benefits) that are required of “their” Railways in ways that are clear, objective and capable of being cascaded down to manageable delivery units where responsibility and accountability for achievement is equally clear.  This will also require the building of confidence in relinquishing a desire in client organisations to specify the detail of how an outcome is to be achieved.

An environment within which Service Design principles become the norm for defining User Needs – especially in looking proactively to future needs – rather than being totally consumed in either fixing problems associated with customer satisfaction in the “here and now” or seeing anything beyond contractual compliance as being an unrewarded “nice to have”.   This also means the Railway really challenging itself to ensure that it negates as far as it can “unconscious bias” from the decades of conventional wisdom of the personas and needs of typical Railway Customers and Staff, and applies an open and welcoming mind in embracing the diversity of People and input that our society is capable of.

If these two enabling conditions are addressed, I have every confidence that there is no shortage of enterprise in the People who will make up the Railway in being able to address the opportunities, and challenges, through innovation and commitment to delivery.

Conclusion

Whilst The Railway is a complex, interdependent system it has the potential to deliver significant enterprise through its People provided there is at every level a set of clear, consistent strategic outcomes that represent what success will look and feel like both rationally and emotionally.

Although the breakdown of the top-level strategic outcomes into the supporting system hierarchies and organisational interfaces is a non-trivial task at the top-level success can and should be defined as simply as possible around

  • Intended Customer Utility and Experience
  • Contribution to wider Sustainable Economic Growth
  • Value for Money and Affordability

By establishing “Success Scorecards” at a sufficiently granular level of “the Railway” it becomes easier to communicate, and ultimately motivate, People to apply their enterprising skills to harness innovation and be committed to delivery – and build a virtuous circle where it is the resulting success which is celebrated and rewarded.

The capability to achieve both definition and delivery of these top-level strategic outcomes is not of itself dependent on the choice of delivery model but does require commitment to resourcing the transformational work required in both client and delivery organisations to achieve this.   It also critically requires proactive management of the key interfaces within the Railway as a system to ensure alignment of outputs through the myriad of contractual interfaces.

The Enterprising Railway  –  beyond the current model

Dr Nicola Forsdike

Context

The railway is facing challenging times. The franchising model applied to passenger services was stretched to breaking point even before the current crisis situation arose. Yet the privatisation of these services was supposed to help the railway access exactly the kind of management capability and entrepreneurial flair that will be so badly needed to re-set the dial of our public transport in the future.

This paper considers how we might create an innovative railway that can meet the needs for the future and is neither simply a straight trajectory of the present (as it was understood until March 2020) nor a knee-jerk reaction to a crisis. I argue here that the future that can be built depends on the knowledge base of the people in the rail industry.  This view is informed by both my doctoral research and my experience of working in the industry before and after privatisation.

Introduction

During the 1990s a huge political experiment was carried out on Britain’s railways, fragmenting what had been a unified organisation into an industry of over one hundred separate firms. The political vision behind this was bold – an injection of private sector management, it was argued, would introduce a much-needed spirit of enterprise into Britain’s railways. This in turn would introduce innovation into the sector whilst radically improving efficiency. Exposing rail services to market forces and competition, it was argued, would give the rail sector more incentive to improve its service to customers and more freedom to respond to what customers wanted.

In practice, the years immediately following privatisation the industry were dogged by a series of failures and the privatised industry has singularly failed to be customer-led.  Over the last 20 years there has been a series of not only high- profile timetable failures but also franchise failures. As the recent hand backs of the East Coast and Northern franchises have illustrated, the franchising system and the stop-start pattern of improvements which this incentivises remains inherently flawed.  Privatisation has failed to deliver the benefits of lower costs and greater customer focus that were fundamental to the arguments promoting it.

The reasons for this are many.  First, contrary to popular belief Britain’s railway was both efficient and customer-led prior to privatisation. Far from being insulated from competition it strove to compete with air on long distance services and the private car on shorter ones. It had very strong financial reasons to respond to what customer wanted. For example, in the 1980s regional rail services in Britain were in desperate need of investment. In the words of the cliché, ‘do nothing’ was not an option and as any business manager knows, there are only two levers a business can pull – one is marked ‘revenue’ and one marked ‘cost’. Whilst closing down routes was initially seen by some as the ultimate way of achieving cost improvements, there was little political will to do that (as any of us who can remember the debate on the closure of the Settle-Carlisle line will remember). The only option the railway had left was to make its offer more attractive to potential users. Doing this on a shoestring budget required imagination, a deep understanding of the potential market and huge technical capability, particularly in understanding rail operations. From this came the development of successful networks and routes such as TransPennine Express which owe much to the groundwork laid during the years of British Rail (BR).

Second, the model of privatisation chosen imported new costs into the railway system. In fragmenting a unified whole into an industry of over 100 component firms, civil servants and their advisors at a stroke invented multiple interfaces. Running a train service requires an operator to have in place contracts with Network Rail, Rolling Stock companies as well as with myriad private sector suppliers of services such as on-board catering, station maintenance, management of call centres and so on. At the same time, it must manage its contract from the Department for Transport (DfT). Each interface builds in cost – for example, management support to manage those interfaces (support which might otherwise be focussed on making things better for passengers) and in particular to manage the details of the contract. Each party to an interface is likely to have different objectives; this in turn has an impact on other parts of their organisations, adding to the management time required to resolve issues.

Transaction costs explain why since their foundation railways the world over, public and private, have largely taken the form of an integrated structure, in which the management of railway operations, both track and train, are combined under a single entity. I suspect that within the current system of privatisation many transaction costs are ‘hidden’ and include the costs of three bid teams competing for a franchise, tying up scarce and expert resource for 3-6 months in developing 7- year business plans. These plans inevitably change when a franchise is won and the winning team (or more often a management team which has little or no involvement in developing the bid) is faced with reconciling a plan based on an imperfect understanding of the costs and operation of the business with reality. Not only are transaction costs baked into that system, but there is an additional opportunity cost – what would the impact be if the resources of all three bid teams had worked together within an integrated railway to design and deliver improvements?

Therefore, the dilemma this paper seeks to address is ‘how can Britain’s rail network reduce its operating costs whilst at the same time delivering customer improvements, with minimum disruption to the structure and organisation of the rail industry’? In doing so it acknowledges the lack of appetite amongst policy makers to re-unify the industry and so seeks other ways of reducing the transaction costs that inevitably arise from current industry arrangements. Of course, Covid-19 may prove a game-changer, opening up possibilities driven less by ideologies of privatisation and more by a need to revolutionise the cost base of providing essential rail services whilst being more accountable to the communities those serve.  This may be particularly important if ‘new’ patterns of working from home become much more the norm, allowing businesses to shed expensive city centre office accommodation, and changing the pattern of travel in and between our town and cities.

In what follows, then, I first consider key issues, summarised as the separation of the industry between an infrastructure and train operators, changes in the knowledge base of the industry, the ‘rules of the game’, managing to the contract and loss of challenge. I then offer an alternative view of the future together with steps that might take us there.

What are the difficulties?

Structure. The first and obvious difficulty is the structure of the industry. The railway operates as a system, and changing one element of that (for example, the track, the trains, signalling or even the skills of its people) impacts on the rest of it. In an organisationally fragmented industry, players are incentivised to improve their own individual position, rather than to focus on the system as a whole. Whilst in the short term they improve their own part of the system, in the longer term this approach leads to overall inefficiency in the overall system. From my work within the industry I know that this is a genuine issue, compounded by a structure where the costs and benefits of innovation do not always fall to the same party.

Over the last 10 years there have been many different attempts by the government to try to understand how the rail industry could perform better. In general, Government and industry reports have tended to focus on structural issues, without seriously addressing them, papering over the cracks in the structure via mechanisms such as the  Rail Delivery Group or attempts to align specific parts of Network Rail with Train Operators in “partnerships” in which the two parties attempt to reconcile their huge differences and sometimes conflicting objectives in order to deliver efficiencies, an enterprise that has so far proved beyond reach.

However, I do not believe that changing the structure will of itself solve the issue. I believe structure to be not the root cause of issues, but a symptom of other problems, the most serious of which is the failure to recognise the need for managers in the rail industry – whichever specialism they work within in – to have a deep rooted understanding of the railway as a system.

Knowing the railway as a system. From my research know that the loss of an integrated structure has exacerbated a fundamental and largely hidden problem.  Over the past decade various government-commissioned reports including those by Sir Roy McNulty published in 2011 and Nicola Shaw, published in 2016, have highlighted the issue of knowledge loss in the industry and in particular the lack of understanding of today’s railway as a system. The last generation of BR’s management trainees who underwent a thorough grounding in the operation of both track and train, as well as commercial and other training is approaching retirement age. This pool provides much of the expertise which keeps the industry innovating and improving (think Gibb Review, Brown Review, leading Network Rail, bid teams, advisors to the DfT). There are no replacement resources coming up behind them – in effect, we have a lost generation of managers who lack the system-wide training and thinking of individuals who have experienced an integrated railway.

My research suggests that whilst some of the knowledge can be learned through study and in a classroom, the vast majority of it comes through experience. Today’s managers develop only a partial system knowledge. This is compounded by increased specialisation within the industry. For example, not only is the training of Network Rail’s graduate trainees focussed on only half of the railway system, it is largely fragmented into specialisms such as project management, such as a safety, human resources, project management and network strategy, all functions that would once have been carried out in the past within a pre-privatisation BR by managers who had first been through a single integrated general railway management training scheme . Network Rail has tried to address this, for example, through placements with operators, but there is no industry-wide initiative to develop an integrated knowledge base – although it has a potential model in the Track and Train scheme which ran 2012-13.

Structural changes alone however do not explain the erosion of this knowledge base. An increasing specialisation of roles in pre-privatisation BR (for example, splitting the general management entry route into a number of specialisms such as operations and commercial) began this. I believe that the prioritisation of commercial knowledge from the 1980s onwards and a tendency to take the industry’s operating knowledge base for granted, led to its erosion, whilst in today’s industry, it is not operating knowledge but understanding the ‘rules of the game’ that deliver (short-term) commercial success.

The rules of the game.  A potential franchisee has to take risks in its financial assumptions in order to win, with rail franchise bidders winning or losing on the basis of their ability to put forward the ‘most robust’ financial case. This can lead to the taking of risks in relation to both new revenue that can be earned and levels of cost reduction that can be achieved.  To its credit, the DfT has proved adept at learning over the 20 or more years in which franchising has been in operation, trying to reduce the risk of over-bold bidding through careful analysis of bids. Yet it is in an invidious position. On the one hand, it has to procure franchises that please a myriad of stakeholders who often have conflicting visions as to what a rail franchise might look like but all of whom require some form of innovation (imagine the fate of a bidder who offered no improvements in rail services or efficiency!). On the other, it doesn’t have a crystal ball and can’t see for certain how either markets or rail capacity will evolve in the future. Like the operators who bid for franchises the DfT and its advisors have only imperfect knowledge of the true situation within the franchise and imperfect understandings, based on economic modelling rather than market-led scenario planning – of how future demand may evolve.

Crucially, the DfT may know what it expects to happen but it doesn’t know exactly how markets will evolve. In order to be able to compare bids fairly therefore it has little choice but to lay down rules to try to keep the competition as fair as possible and to make it as easy as possible to distinguish between the different bid offers. These rules include mandating the methodologies and even the models that bidders must use to predict demand. At a stroke, the business plan is handed over to the economists. Predicting the future on the basis of the past becomes the norm and much of the space in which business thinking can flourish is closed down. Winning is dependent on understanding the rules and on playing the game – not on entrepreneurial capability.

Similarly, my research into the initial failure of Virgin CrossCountry’s 2002 timetable suggests this had much to do with timetabling modelling done in the abstract, using computer modelling into which certain assumptions (for example, that certain trains could run over certain tracks at certain times) had been built. Much like Northern in 2018, when Virgin CrossCountry came to implement their timetable they found that the assumptions they had made did not reflect current reality. The result, in both cases, was a complete melt down of rail services leading to widespread disruption and very unhappy consumers. Yet it is difficult to see how this could be any different under the pattern of rail franchising practised until now.

Under the franchising model, bidders have to make assumptions as to when particular improvements to track or signalling that enable more services or faster services can be run. For example, where electrification schemes are being implemented by Network Rail, bidders work from a specified (and often erroneous) assumption that infrastructure will be available at a certain time. Whilst there is a mechanism for train operators to be compensated in these circumstances, implementing a change is a delicate interplay of ensuring track is available, new trains which can take advantage of new line speeds or overhead wires are ready to use,  and drivers who understand the characteristics of both the trains and the infrastructure are trained and ready to go. Delay in one element risks increasing the costs in the others, as resources cannot be fully used. At the same time, it ties up a lot of management time which could otherwise be used to work on other issues. Once a bid is won, understanding the minutiae of the franchise contract in relation to this and other issues becomes the difference between profit and loss.

Managing to the contract. In the early days of privatisation, both the infrastructure and train operating companies quickly realised that managing to the contract(s) and pleasing institutional stakeholders was the key to financial success, not satisfying and adapting to changing customer needs. This remains the situation today. In such a context, management skills focus on data and contract management. Investment in managerial experience and capability focuses around these, exacerbated by a franchise environment in which improvements are seen as contractual promises to be delivered through project management, not through an empathy with service users.

The DfT has done much to try to facilitate change, for example, through the introduction of a mechanism allowing bidders to be recompensed for the ‘residual value’ of investments made during the franchise that are not fully realised during the franchise period and to encourage bidders to spread investment over time. Nevertheless, it is not hard to understand why anyone working on a seven- year contract would wish to see the majority of major improvements – for example, new services, investment in new or refurbished rolling stock and so on – occur as close to start of the franchise as possible. This leads to a situation where the current franchise process leads to a lot of change happening at once, increasing the risk that things will go wrong. In contrast,  BR’s approach to innovation in rail passenger services in the years before privatisation was much more incremental than is the case now. In the case of TransPennine Express for example, service levels were built up over a number of years, a less risky approach, it turned out, than the ‘big bang’ experienced in 2018 when multiple services had to be cancelled.

The final issue, which links back to the loss of understanding the railway as a system, and the financial and other incentives for industry players to ‘play the game’ rather than to work together to improve the system for the long-term relates to what I term a ‘lack of challenge’.

Lack of challenge (eg to the cost base). To make this point it is perhaps helpful to go back in time. I acknowledge that I could be accused of hypocrisy here – on the one hand I have suggested that understanding markets based on what has happened in the past is a flawed approach, yet here I am suggesting we look to history to see whether we can do things better in the future. Bear with me – there is a difference. First, I have not sought to hardwire selected elements of history (elements selected because they were easy to measure) into a computer model and assumed that they will tell us what the future will be. Second, I’m very aware of the contextual nature of things – we cannot simply ‘cut and paste’ experience from one place to another and assume that things will work as we expect. With those caveats in mind, let’s look at how improvements were made in the days before privatisation.

From interviews I’ve done with former and current managers within the rail industry it is clear that those who’ve experienced both the pre and post privatisation railway found BR to be more enterprising, more innovative in its use of resource to deliver efficiencies in cost whilst delivering improvements for customers than today’s companies. Of course, BR, and the institutional arrangements (such as short-term government funding) was far from perfect and I’m not advocating a return to those days. However, it is clear to me that BR in the 1980s gave people the freedom to think and deliver change, a freedom that was eroded by privatisation where the focus was on contract delivery not continuous improvement. Alongside, the loss of a system-wide view of the costs of the railway that is a direct result of privatisation, lies a loss of challenge.  Let me expand on that last issue.

BR in the 1980s ran a sector management system. There were five business sectors – three focussed on different passenger markets such as Intercity or London commuter services, one on parcels and one on freight. Initially these effectively functioned as Product Managers – that is, they were the interface between the customer and the operations. Their job was to significantly improve revenue by making sure that the products delivered – train services – met customer needs, whilst ensuring what was spent on operations was appropriate for both current and future markets. In this version of the world, engineering costs were challenged – why renew the bridge to take heavy loco-hauled trains when we only run lightweight trains over it at present and for the foreseeable future? Why renew the junction that way when doing it this way will give us the capacity we will need in 5 years’ time? Why spend that much when we know the potential revenue is worth so much less – is there another way of doing things? That is not to say that today’s industry lacks challenge – Network Rail’s process for project approvals is deliberately designed to force managers to think such issues through.  However, under review processes, an operator with no accountability for the delivery of the infrastructure may object to a potential cost saving on the grounds that a particular feature may be needed in the future. Under the BR system such objections could be over-ridden by the lead manager(s) on the principle of ‘the user pays’ -that is, if another part of the railway wanted an upgrade then it was up to them to fund it, ensuring cost and revenue were aligned. Moreover, in BR the challenge came from managers responsible for the bottom line – the profit and loss, the customer ridership and the costs. Their careers depended on the approach they took to managing the railway as a whole, not the delivery of an engineering scheme.

Many of these managers were graduates of BR’s general management training scheme, and had been trained as managers of an integrated rail system. Crucially they had gained their knowledge through direct experience of working on it day to day. They understood at a real level the relationship between track, signals, trains and driver skills. Knowledge of marketing, managing stakeholders and commercial management was then in many cases grafted onto that base load of knowledge.

How can we tackle these difficulties to build a different future?

Build the knowledge base. The first step is building a knowledge base amongst managers in today’s rail industry that helps them to understand better the industry in the round. This could be done by developing integrated cross-industry training at recruitment, middle manger and senior manager levels. The industry could and should be incentivised to train rail industry managers not Network Rail ones or TOC ones.  Crucially, this needs to be not (or not just) classroom- based training but through a planned rotation of placements that allow managers to get a wide range of experience. Middle management level training could take the form of working with others to develop a project – for example, a new station layout or the development of a new market. Experience would thus be gained of working on a small, multi-functional project team comprising operations, commercial, finance, engineering and other experts working across the boundaries of their different technical specialisms and drawn from Network Rail, TOC and client-side organisations such as Transport for the North. This could be training projects or working on real live cases. Yes, funding would have to be found for this, but making a business case could be justified on the basis of efficiencies found and costs saved as a result of better decision making.

Change the rules of the game. The operation of rail services could be public or private sector. For example, rail operators might bid for franchises on ‘as is’ basis – with franchising separated from service improvements. In this scenario, operators would be judged on the strength of the Directors they propose to put in place, track record, (particularly in areas such as open book accounting and customer focus), strengths of their management processes and the management expertise they would bring to improve the franchise.

Closer working, based on open book accounting would reduce the inefficiencies from transaction costs, potentially saving money and increasing the chances that improvements will be introduced successfully. Changing franchising award criteria would reduce the risk of bidders over-bidding in order to give themselves any chance of winning the bid. Moving the focus of service development away from bid teams to managers involved in day to day operation has the potential to reduce the risk of using abstract computer models to model revenue, resources and timetables by allowing the space for real world knowledge of customers, changes in the market, people and what is possible (for example the time taken to travel between two points on a railway network) to be factored into that and further reduce risk. Building a world where improvements are continuous and gradual, rather than big, one-off initiatives will reduce the risk of trying to do new things. All this is possible whilst retaining private sector involvement and competition not only for operating franchises but also for development funding.

 

 

 

 

 

Move the focus away from managing to the contract.  Once the knowledge base is in place a new system can be developed for developing and funding service and other improvements. This begins with the alignment of stakeholders, train and infrastructure operators. Although not easy, it could be delivered as a public/private sector partnership, particularly if open-booking accounting is adopted and the evidence from this taken into account when allocating central government funds to each partner.  There would need to be trust, long-term relationships, mutual understanding and shared objectives. These comes from allowing teams of people to work with each other over time, not from today’s short- term project-led approach to managing change, and from a clear and shared vision of what success looks like. Together this multi-player team would be responsible for developing and delivering both short and long-term business plans to operate and develop rail services in their area (in an ideal world this would encompass all transport modes but let’s not be too ambitious at once). These would be integrated into a single industry-wide plan, suggesting some form of oversight body is needed to reconcile the plans. This should be light touch and should support, not dictate.

Alongside this a central fund could be established to support the development of innovation in the railway. This would differ from existing technologically focussed innovation initiatives, being focussed on improvements for passengers at all stages of their journey. It should be managed at arms’ length from central government and used to fund the business plans of the stakeholder partnerships. Funds could be set aside and a competition(s) established to bid for funds for the development and implementation of new timetables and infrastructure, encouraging incremental and continuous change, and system-wide thinking. Bids for funding would need to be collaborative between the train operator, infrastructure operator and local/regional transport authority (as already happens with bids for the New Stations Fund). Where routes have CRPs, then I see no reason why these too couldn’t have input. Clear bidding criteria would need to be established at government or (better) by the arms’ length body responsible for co-ordinating plans and allocating funding. These criteria should include being clear on how success will be measured.

NOTE: funding would need to move away from patterns whereby money continuously goes to already ‘successful’ areas because economic models suggest that is where it would get most return. Instead, there needs to be – to borrow a business term – a balanced portfolio scenario, where funding is also directed at routes/services that have the potential to do more than they are currently doing (including contributing more to the success of their local economies – however that success is defined).

Build in challenge. An integrated knowledge base has the potential to begin to address issues of efficiency. This is because improved knowledge reduces transaction costs. For example, a TOC may rely on costings from Network Rail to increase station capacity. But the solutions a train operator comes to versus that developed by an infrastructure operator may be very different – including in cost terms.  An understanding of each other’s position begins to help reduce these costs and to lead to a better solution.  However, whilst organisations continue to work to different objectives, achieving solutions optimal for both parties continues to be difficult. Changing the rules of the game as suggested above and moving towards a more open-book form of relationships would build in the space for challenging costs.

Summary.  Figure one below illustrates how by making the adjustments above, it is possible to envisage a future in which change is continuous, market-led and relatively low-risk compared with current franchising arrangements. I don’t pretend to have the last answer on how to do this – ultimately someone or somebody will have to be accountable for delivery. But any new delivery model will need to take account of the issues highlighted above it is to deliver outcomes that are significantly different from those delivered by today’s industry.

 

 

 

 

Figure one: contrasting the present and the future

 

Conclusion

What this paper has aimed to do is illustrate the art of the possible, even without major structural change. The suggestions above aren’t meant to be the ultimate word, but are designed to open up thinking.  Even without some of the more radical changes suggested above, a system-wide knowledge base could be built for relatively little cost whilst a move to open book accounting might begin to erode some of the transaction costs that are currently built into the industry. Of course, the ideal would be to move to some form of vertically integrated structure, whilst the current crisis might mean a nationalised, vertically-integrated railway system becomes a more attractive proposition than in the past. Either way, however, unless conscious steps are taken to build an appropriate knowledge base quickly which sees the railway as an integrated whole, changes to structure alone will not of itself necessarily deliver hoped for improvements.

 

 

 

 

 

The Locally Enterprising Railway and the current crisis: an opportunity

Prof. Paul Salveson

Context

The emerging coronavirus crisis poses some very big challenges for the transport sector as a whole and the more peripheral parts of the network in particular. The ‘community rail sector’ is now a mature movement. It has been going for over 25 years and we’ve some very impressive achievements to our credit. Some of its perspectives are likely to be of particular relevance in making sure that local rail survives the current crisis, and is perhaps put on a stronger footing by having done so. Now’s the time for radical thinking.

The Threat

Writing in late-March, we are starting to see how the pandemic will affect the UK as a whole and the rail sector specifically. There has been a major reduction in travel demand; only key workers are being carried. The railways have in effect been nationalised, with franchises being run as management contracts on behalf of Government.  If the pandemic worsens further and more and more people are infected, fewer trains will be able to operate because there won’t the train crews to operate them or the staff to maintain the trains. From an infrastructure perspective, track maintenance gangs will be depleted, together with more specialist teams. In that situation, it is inevitable that train companies and Network Rail will be pushed more to concentrate on their ‘premier’ routes and possibly reduce or even suspend services on more marginal routes, leaving already struggling communities isolated.

An opportunity

Could the coronavirus be an opportunity to actually implement some of the ideas that we’ve talked about since the early 1990s, for locally-managed railways, at least as far as the peripheral network is concerned? A starting point could be the Cumbrian Coast Line from Carlisle to Barrow and Lancaster, which is relatively lightly-used but of strategic importance, not least because of Sellafield. The line can’t be allowed to cease operating, because of the nuclear traffic and the need to get employees to and from work. Of course the line has other roles as well, but at a time of national crisis (whatever one’s views on nuclear power in the long term) the need to keep power stations operating are of crucial importance.

Should Northern Trains, Network Rail, Government and Community Rail Cumbrian grasp the opportunity to create a locally-managed Cumbrian Railways that could take over the route, including train operations and infrastructure, under the (broad) umbrella of Northern Trains but evolving from being a semi-autonomous operation with its own dedicated staff and rolling stock into something more arms-length and truly locally owned and controlled?

West Cumbria could be a testbed for developing new ideas which combine employee and user involvement with local and regional authorities, with ways of bringing in external investment. The ‘Fair Shares’ business model being developed at Sheffield University offers a possible model that could ensure active participation of key stakeholders. See http://fsi.coop/wp-content/uploads/2017/11/fairshares-institute-brochure.pdf

Some practicalities

Having dedicated rolling stock and staff will help ensure high standards of hygiene and cleanliness, avoiding – or at least minimising – passenger and staff fears about infection.  In the short/medium term, it would be easier to test people using the trains for the virus avoiding the ‘network effect’ of spreading the virus across the railway network through several changes of train. The Cumbrian Coast Line could – if the crisis starts to affect petrol supplies – become the main form of transport in West Cumbria and its continued operation would become, quite literally, a lifeline for local communities.

And once again, a crisis situation could act as the midwife of other long-desired changes, i.e. real integration between train and bus, with stations along the line functioning as railheads for connecting bus, minibus and taxi services. The possibility of a serious growth in cycling to and from stations is also a real possibility (I’ve suddenly become a convert to electric bikes – their potential is vast, but so too is the humble ordinary push bike). Once the crisis has receded, Cumbria could re-invent itself as a sustainable tourism exemplar, with bike hire at stations and a network of walking and cycling routes radiating from them. The station itself becomes a tourism hub with shops, cafes and other facilities.

Making a start

There’s a real risk that the nation gets into a mindset that everything is going to shut down, for possibly months, and there’s nothing we can do. But – necessity is the mother of invention. I’m not minimising the seriousness of the crisis for one moment, but there will be some things that we will need to continue doing, which includes running essential services but also making sure there is food in the shops. We could do them differently, and better. Again, rail could have a role to play in more geographical remote areas such as West Cumbria, taking on new commercial activities which we’d all assumed it had surrendered decades ago and would never come back. Can food and other goods be brought in by rail to local distribution centres for onward local shipment to shops and village communities, using bike-carts as well as motorised vehicles?

Creating an enterprising environment

Creating a locally-managed railway would free up opportunities for some radical new departures in how our railways are run.  It needs having the right people on board, who are motivated by a combination of service and entrepreneurship, with a motivated and determined team working with them. Developing new leisure opportunities may well be the last thing that’s on anyone’s minds at the moment, but we need to lay the ground for a resurgence in the tourist economy once the current threat has receded. Cumbrian Railways could be at the heart of that, functioning as a sub-regional regeneration agency, working with local tourism providers and facilitating sustainable transport links across Cumbria and the Lakes.

Developing stations as community enterprise centres could form part of the medium to long term strategy. Local businesses, which will have been hard hit by the crisis, could be offered incentives to set up businesses at and around stations. This could be running a station cafe, providing bike hire at a station, a pop-up stall, or operating an on-train service. We have hardly begun to tap into the potential.

Buildings and land

The argument for bringing redundant railway buildings back into community use has been won but we still struggle with actual projects. Having an integrated local management structure could help facilitate use of empty buildings but also encourage new build where appropriate. At the same time, there is huge scope for imaginative development of redundant railway land for social housing, with a community land trust acting as developer, a local authority or even the railway itself.

Smaller plots offer huge potential for growing vegetables and fruit. The ‘incredible edible’ movement which has swept the country started off on Todmorden station. Locally produced food will become of critical importance in the coming months and there are lots of opportunities to grow, and sell, food at stations. Stations could provide space for raised beds to grow vegetables and herbs, which may become in increasingly short supply.

Conclusion

The current crisis should not be an excuse to hunker down and do nothing, hoping it will wash over us after a few months. There is every possibility it will last for longer than we think, and it will change how we live forever. That could be a real opportunity for local rail. At the same time, the fear of infection could force people to stop using trains and buses and getting them back won’t be easy. It doesn’t have to be so. We should use the current situation as an opportunity to bring short-term support to embattled communities but create the possibility of running our local railways in a much more imaginative and innovative way, placing them at the heart of their communities – economically, socially and environmentally. This is integrated sustainable transport taken to its logical and necessary conclusion.

Now’s the time to take some risks before we get overwhelmed. Northern Trains (Operator of Last Resort) should not be an ‘Operator of Doing Nothing New’. It should seize this opportunity and make a truly positive contribution to local resilience, whilst laying the basis for strong resurgence in due course as the pandemic dies down. However, to take forward such a radical departure needs strong Government support and the backing of Cumbria County Council, Transport for the North and the unions.

March 17th, revised April 2nd  2020

 

 

 

Cumbria Railways? Further Thoughts and Caveats

John Kitchen

Railways in West Cumbria: a caveat

The basic problem with all the railways in West Cumbria is the potential failure of sea defences or one of the multitudinous bridges – this sort of cost is well beyond the means of anyone but a major national agency to repair. This means that a full local take over is probably not practical as things stand – unless Cumbrian GDP and economic activity rises substantially. However, after the Workington floods major road bridges were rebuilt with government funding to re-establish the network. This model could be adopted to insure the railways against unforeseen capital expenditure together with remaining inside the larger “railway family”.

The Opportunity

If more control were passed to a local management team with rail and infrastructure brought into a single team progress could be made. A locally based management would provide a strong focus on serving the local community and economy. Strong relationships already facilitated by the work of Community Rail Cumbria could be developed with local industry and employers as well as the transport authorities. Links are already well established with the County Council, LEP, Sellafield, DRS, local communities, etc. The new coal mine at Whitehaven is being used as an opportunity to lever in some much needed infrastructure improvements to the St Bees – Carlisle end of the route. Stimulation of demand is key to maintaining the incremental improvement of these routes. A virtuous circle can be created by improved infrastructure supporting increased economic activity. There is a strong history of the Partnerships achieving capital improvements with shelters / Harrington Humps / CIS schemes / station development at Millom, Maryport and Workington amounting to a seven figure sum over the past 10 years. Demonstrably beneficial inputs have secured improved outputs and services with a Sunday service throughout the line being achieved in 2018 for the first time in 50 years.

The paucity of public transport in Cumbria means the railway forms the principal transport spine, epitomised by the railway being the only public transport offered south of Whitehaven and north of Barrow on a Sunday. Local bus services have largely collapsed with the loss of subsidised services since 2011 leaving a residual rump of commercial services. Even rail replacement services when required rely on local bus preservation groups. All of these characteristics make west Cumbria a uniquely challenging environment in which to operate a public transport service particularly when allied to substantial post industrial and rural deprivation.

The present rail management arrangements for the route are skeletal and have been for 40 years of managed decline. Improvements are required along the route – examples being;

  • 2 platform station allied to track rationalisation at Maryport. Why? Present single platform requires four point ends not required if plain line station. It also is a capacity constraint on the passenger timetable.
  • Speed enhancements particularly Parton – Harrington , Maryport – Carlisle Why? Associated with Maryport station speed enhancements would permit sub 55 minute Whitehaven – Carlisle timing which would save one train and one crew on the section whilst producing a clock face timetable. It would provide connections into the West Coast standard hour at Carlisle.
  • More capacity throughout Why? Flexibility / resilience
  • Elimination of manual level crossings Why? Cost savings
  • Signalling improvements Why? Cost savings plus increased operational flexibility.
  • Station enhancements Why? Many stations constrain business by not offering sufficient parking in particular and lack facilities appropriate to weather in West Cumbria
  • Car parking – Eg. park and ride at Wigton Car parking at most stations is poor, Wigton in particular could serve as a hub for a large area of North Cumbria enabling car free access to Carlisle
  • Freight development – Iggesund / Innovia / Barrow / Workington Docks /Ghyll Scaur quarry etc.
  • Development of differentiated tourist offer. Jacobite role in the Highlands linked to West Coast at Carnforth.
  • Development of a route plan for both Carnforth – Barrow and Barrow – Carlisle. Exploration of new traffic opportunities.
    Promotion of tourism outside the central Lake District – off line activity akin to work of Settle and Carlisle.
  • Continuation and development of the Community strategy embedding the railway in its communities and promoting a direct sense of local ownership to local people.
  • An engagement strategy providing exchange of views with local stakeholders particularly focussing on local area plans for employment and residential areas.
  • Greater degree of managerial autonomy with allocated budget for local projects and capability to develop and action local schemes.
  • Enhanced local maintenance facilities providing jobs in the local community and more independence from remote depots – both track and train and stations.
  • Integration of the railway within the local transport plan.
  • Development of a recovery plan from the corona virus disruption to maximise rail participation in regeneration.
  • Integration into green access strategies for Western Lake District.
  • Increased support for green commuting to Sellafield.

One of the major failings of the present railway is that it does not actively make it easy to grow business with multiple agencies being involved in progressing an idea through to delivery of a solution. For many years two major businesses in West Cumbria have wished to try to use rail for major logistic flows. Even though the rail freight companies are more entrepreneurial than hitherto they can only be as flexible as infrastructure constraints allow them to be with private siding agreements forming a prohibitive barrier. The client would like the railway to offer the same seamless logistics service that competitor road hauliers can offer – this is very hard to achieve on the present railway system. Network changes have to be planned years in advance and NR indemnified against all costs.

Any future rail devolution must bring representation from the business and economic communities into the railway ambit. In a modest way this has been achieved in Cumbria by Sellafield Ltd and DRS representation on the board of Community Rail Cumbria associated with financial contributions. The involvement of Community Rail Cumbria in the development of LEP capital plans also points the way to how the railway should better align with local priorities. The new coal mine at Whitehaven is also involved and is also mindful of the Partnership and the reputational gain from minimising environmental impact of their operation.

I would like to see an overall strategy for any railway line starting from a SWOT analysis. During my time in the industry there was a total lack of robust information about costs making any business case extremely hard to develop into a simple cost benefit or return on investment calculation. Even when NR accepts that something should be examined the client has to raise the finance to cover NR’s GRIP costs before anything can be done – even for quite modest capital spends. Processes are also glacially slow with improvement works bedevilled by issues such as station leases and capacity to develop schemes at both TOCs and NR. To achieve improved process times the ability to make decisions nearer to the community served a solution is required to get away from the Kremlin mentality.

Staffing Issues

The present union arrangements are long established and certainly the railway staff in West Cumbria benefit from high salaries and relative job security in a local context. The operation of Cumbria Rail would need their cooperation to stand a chance of approaching German or Dutch local railway operation standards. To this end there would need to be absolute assurances that national standards would be maintained with respect to T&Cs and operational standards.

Local Government

Cumbria County Council is the transport authority with a tiny part of Lancashire involved at the southern end. Both local authorities are strapped for financial resources and are unlikely to support anything that carries even a modicum of financial commitment. This situation was recognised some years ago by Community Rail Cumbria and the Partnerships have received little or no support from the County Council ever since.

How to do it

The basic structures already exist within Community Rail Cumbria exist to form a local Board for a semi independent body – well established connections with local stakeholders from all aspects of the community. The first objective of this organisation would be to develop a modus operandi for a local business unit starting work by identification of what stakeholders require of their railway with regards to the business / social / economic agenda, particularly in the context of the current emergency and looking to the recovery phase.

The lines would benefit from local operational management with a manager for each line. The railway operators would have a role with respect to corporate functions but would delegate to the Business Unit where possible. This approach could be flexible in the light of experience.

An example could be dedicated captive stock diagrams with local maintenance would provide an opportunity for Cumbria to gain jobs and adapt equipment to align more closely with local needs. For example, the Settle and Carlisle Railway Development Co. has operated refreshment trollies for many years in addition to providing hosting.

Local development of station infrastructure would also facilitate improvement. Most importantly, there would be the opportunity to work with other operators (particularly DRS) to achieve a Cumbrian esprit de corps.

Conclusion

Cumbria forms an ideal testbed for a more local railway approach, given an area that has a strong local identity and a strong track record in delivering improvements on the system. The Workington Floods was a perfect illustration of how things can be achieved. The Cumbrian Coast Business Unit would seek to build on and take further this track record of innovative development.

 

 

 

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The Enterprising Railway

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