In time, each Sector would develop its own identity, but the main idea was to allow their directors to keep a close eye on running costs and overheads with a view to cutting subsidy, creating confidence and building the case for investment.
It sounded like the perfect solution to BR’s problems, although some managers remembered (as Fiennes had remembered) that companies bled when reorganised, and feared that fragmentation would erode the clear chains of command and communication essential to safety.
Soon after the process began, a magazine article commented on BR’s “state of revolutionary change” and ran an interview with David Kirby, London & South East’s director who also happened to be the General Manager of the Southern Region.
Kirby, who had joined BR as a management trainee in 1954, rose to lead the company’s shipping division (Sealink) before his move onto dry land. Dodging a quip about “reprimanding himself in the style of Basil Fawlty”, there was much talk of “balance” and Kirby’s unique position ensuring that his feet stayed on the ground.
Reading the piece now, there can be no doubt that Kirby’s thinking was ‘market-led’, which of course was the whole point of the exercise. But although he would stay at the Southern’s regional headquarters at Waterloo, his counterparts remained at the Board’s home of 222 Marylebone Road. And it was from here - in April 1982 - that BR Chief Executive Bob Reid asked the Sector Directors to develop business plans, review and challenge investment, and focus on service cost reduction.
Soon, though, there would also be the little matter of the Serpell Report to fend off. Sir David Serpell was a former member not only of the Stedeford Committee, but also of the BRB. His own committee’s report - Review of Railway Finances, published in January 1983 - was critical of BR management, aspects of its ticketing policy and engineering costs. It also castigated the Board for being over-optimistic in its appraisal of “high-risk” projects such as the Advanced Passenger Train, and concluded that line closures would be needed if subsidies were to be “lowered substantially”.
To illustrate the point, the committee presented six network options, from a ‘high-investment’ version consisting of the existing 10,370 route miles (less a planned reduction of 300) to the ‘Beeching-like’ Option A, which assumed a network size of just 1,630 route miles.
Many of Serpell’s findings were hardly revelations - they were freely admitted by the Board, whose members spoke with unguarded self-criticism in the hope that something supportive might emerge. Instead, the report seemed to argue against investment, failed to consider service quality, and did not acknowledge reforms that were already in hand such as substantial staff reductions and the installation of automatic level crossings.
The BRB shunted the whole thing into a siding by nudging the media towards Option A and the threat of commuter fare increases, and by publishing a formal response which (while accepting that improvements could be made in engineering and government interaction) condemned the report as “disappointing, inaccurate, implausible and misleading”.
Shelved pending the June 1983 General Election, the Serpell Report quickly lost all credibility, although Parker would later write that it had at least “cleared the air”. In time, it would also give BR the impetus to pursue efficiency and ‘firm up’ its investment management practices.
By then, however, BR would have a new chairman. Parker knew the next phase of BR’s development had to be led from within, and Bob Reid, who had joined the London & North Eastern Railway as an apprentice in 1947, was the ideal candidate. Parker, who laid the foundations of Sector management and fought hard for investment in the Advanced Passenger Train and electrification, finally left BR in September 1983.
Serpell had welcomed sectorisation, but doubted it would work without the Sector Directors being afforded the appropriate level of authority. But so it came to pass - as the 1980s wore on, more and more power was removed from the Regions, as their managers became increasingly involved with production delivery (although even this had drifted towards the Sector Directors by 1987).
By this time, the Western Region had moved to Swindon and the London Midland to Birmingham, the latter move spelling the end of 222 Marylebone Road. But there was more change to come.
In September 1988, the Board debated future organisational development and opted to enhance Sector control further. The following year, a study by consultant Coopers & Lybrand recommended that British Rail simplify and decentralise on business lines. The result was the Organising for Quality initiative (OfQ).
This name had been coined by London Midland General Manager Ivor Warburton, and led to a greater focus on business-led ‘profit centres’ within the Sectors.
By April 1991 the Scottish, Anglia and Southern had been reorganised, with the Scottish (by now known as ‘ScotRail’) having been identified as a possible profit centre of Provincial, for example. The general managers of Southern and Anglia were to report to Chris Green as Director Network SouthEast (formerly Kirby’s old domain), and six profit centres would be formed to cover the routes in both.
Naturally, the biggest and most complicated region - London Midland - was left until last, although Colin Clifton (then Area Safety Adviser at LM Watford and now Head of Safety and Environment at Southeastern) recalls that “change was in the wind early in 1991”. Indeed, it was around this time that Area Manager Michael Holden left to become Production Director for the new South West Division of Network SouthEast (NSE).
“The DC lines, then branded as ‘North London Lines’ and the ‘Grand Union’ services to Northampton, Rugby and Bedford, were already the main focus of attention,” recalls Clifton.
This meant that “the transition towards the new North Division of NSE was relatively straightforward”. The NSE team, “who were based at Euston, and also had responsibility for Thameslink at the time, gradually moved north to Watford, with Thameslink being established as a separate Division based in the then newly built Friars Bridge Court on Blackfriars Road along with the South Eastern and South Western Divisions, and (of course) Railfreight Distribution.”
By February 1992, the new organisation was all but complete. Warburton officially took control of the West Coast Main Line ‘profit centre’ of InterCity from April 6.
As Terry Gourvish wrote in British Rail 1974-1997: From Integration to Privatisation, the organisation now “represented the full flowering of the business-led, sector management concept BR introduced on a modest scale in 1982”.
Some critics felt that OfQ unnecessarily fragmented operations and engineering and introduced too much complexity, while many saw it as an excellent manifestation of the virtues of flexibility and focusing on core tasks. For Gourvish, “it offered Britain the best prospects of a more streamlined, customer-oriented, empowered organisation in an integrated form”.
Yet history was not to allow it to bed in and prove itself, for by April 1992 - just as new logos on ties, mugs and letterheads were starting to appear - John Major’s Conservative government was re-elected.
Major’s pre-election promise was to sell BR off. More reorganisation was on the way…
- My grateful thanks to Colin Clifton for his assistance in the preparation of this article.
This feature was published in RAIL 824 on 8th April 2017