Wednesday, January 27, 2016

Ideology from the Left and Right does not help us find a solution to the problem of the railways - we need a third way.

An independent study has found Britain's railways to be the worst in Europe. No surprise there then. The problem with much of the debate about the Railways is that it assumes that there are only two models - Franchising or Nationalisation. There is woolly and conventional doctrinaire thinking behind both alternatives. We need a third way and if we start with the passenger we might actually find a way of getting there! (I refuse to use the generic “customer” by the way. We are passengers and if we acknowledge that from the start there is a better chance of finding a solution.) 

We need a “solution” because there’s a problem, and that problem is a direct consequence of the botching of privatisation, compounded by further botching in the decades since. The first utterly demented failure was the spouting of the shibboleth that “competition would improve services”. With a few minor exceptions the Railway franchisees are private sector monopolies. This is the worst operational model known to man. There is, by definition, no competition. Equally the driver for the business being profit the monopolist will so finesse pricing and service to maximise it. Then the regulator, or Government, will try and constrain that operator. It leads to shambles and bureaucracy. It has. 

When the private sector monopoly Railtrack collapsed into a mess of its own making it showed that the “Private Sector good, Public Sector bad” war cry was so much baloney. Now, as Network Rail, it does much better what it should be doing. Not because it’s publicly owned, but because its publicly accountable. And there’s the model for you. It applies also to the London Underground which, a few employee relations issues aside, provides a very good publicly accountable service. 

Back to the railways. On the successful model of Network Rail or the “Tube” let’s create a network of train services that fulfils the following criteria: 

1. Service levels that make the Train the preferred option for most travel. The Cost/Benefit Analysis (CBA) of this overwhelmingly positive. The train is green when the alternatives are not. Every rail passenger who would otherwise take a car (especially) helps our environmental goals. 

2. Offers total connectivity across the network. Trains and train times driven by a comprehensive network plan, not the commercial imperatives of individual franchisees. 

3. A transparent and understandable fares policy and one that is designed to attract passengers not put them off and drive them to alternative forms of transport. 

4. Absolute consistency in brand and offer across the network. Obviously consistency predicated on high standards but not skewed by the serendipity of what we have now. 

5. A commercially driven price and service structure which is designed to generate returns, but one that is comprehensible as well as fair. 

6. No overt “subsidies” but an acceptance that some services will have operational losses (see CBA in (1) above) 

7. Reinvestment of operating margins in the network and services. As the London Underground puts it: “We don't make a profit because we reinvest all our income to run and improve your services. We are a public body, with no shareholders or parent companies, which means we can reinvest every pound of income in the transport network” 

The railways should be a “public body” like the Tube but that does not necessarily that everything should be publicly owned and certainly does not mean that all employees should be public sector employees. As I have argued previously in respect of the NHS there should be no objection to the “contracting out” of some services to the private sector. Providing that this contracting out is done against competitive tenders and against agreed cost and service standards. In some cases this may mean a measure of franchising and various other models – including regional structures. But the guiding rule has to be creating integrated services that are accountable not to faceless shareholders but to we the people. 


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