The tide is turning at Network Rail

“The fundamental philosophy is that we devolve as much as we can. You devolve decision-making as close to your customers as you can. But, of course, there are things that you need to do centrally across the network.” 

I remember the last CEO-but-one Iain Coucher said something very similar, but it just didn’t happen - partly (it was implied) because there wasn’t the right quality of people to devolve to. When I asked in the past why it still wasn’t happening, Carne’s view was because the RMDs were not seizing the opportunity. What has changed to make it happen now?

“The organisational changes we initiated in 2014 were really fundamental changes, and they have taken two years to properly filter through. Also, our original devolution was about devolution of operational control. That’s only one element of devolution - I’m now talking about devolution of business management.

“I want complete business management to be commercial - I want the routes to raise finance and be cost-competitive. I want them to be relentlessly efficient, focused utterly on customers. The other thing that has really changed is the transparency around our performance and setting targets for our performance, based on customers.

“That was a really profound change last year, when we asked our customers to set our targets. This year we are taking it to the next step, with even more of our scorecards focused on aligned incentives.

“There is also a new supervisory board for Great Western, which I am very excited about. Dick Fearn - do you know Dick Fearn?”

Very well - and for many years. A very successful career railwayman for BR… former Railtrack Zone Director… ran Ireland’s integrated railway for a decade. He’s now a National Rail Awards Judge and is even Chairman of the Bluebell Railway.

“Dick is going to chair this new supervisory board for the Great Western Railway. As you say, he’s really experienced, and he’s going to be holding GWR Managing Director Mark Hopwood and our RMD Mark Langman to account to deliver for passengers. That supervisory board will have Transport Focus on it as well. So we are pulling track and train together.” (See Network News, page 21).

So are you ‘getting in first’ and implementing the plan that Secretary of State for Transport Chris Grayling announced before Christmas? Regional joint boards with someone in charge?

“Absolutely everything that the Secretary of State has said he wants we are already doing, in a way. We are already bringing track and train together, although that said, you still have to recognise that there are elements of running the track that are different to anything a TOC does and vice-versa. So you’re never going to achieve perfect alignment, but this is a huge and very exciting step forward.”

Carne is keen to get across that this new-look NR is not hidebound by blinkered thinking, and nor is it seeking to impose a one-size-fits-all solution across the country. He says NR will be flexible to individual train operator needs and requirements, although he does have concerns about TOCs moving at different speeds towards this more integrated approach - he is anxious that progress should not be hampered by a gulf opening up as a result of rapid evolution that leaves some operators behind. What does he see as the problems? Are they cultural or managerial within the operators and their owners?

“It’s sometimes culture, but it can also be management capability, the length of the franchise remaining and lots of other factors. The exciting thing about our model and the way we are working is that it is not one size fits all.

“I’m not requiring TOCs to work with me in a particular way - actually it’s the other way around. I have a model which is flexible to meet the needs of TOCs. If they want a deeper alliance, like Abellio in Scotland, we’ll do that. If they want a supervisory board alliance like in Great Western, we’ll do that too. We can flex the model depending on what the customer wants, but its beauty is that you can flex while still keeping the national framework absolutely consistent.”

Is Carne succeeding in communicating an understanding within NR on what should be done nationally and what should be done more regionally - because there has been a strong, if muted, view that NR’s centre is still too big and is holding onto too much? 

For the first time, I sense if not irritation, then certainly impatience. There’s also a strong echo of Hendy’s frequent public scorning of “grey-haired old railway blokes living in the past, wanting things to remain unchanged”.

“That is rubbish!” he says with considerable passion. “Honestly it is! The people who say that are living in the past… this railway is full of people who remember what it was like and still think it should be like that - and they talk a lot of rubbish! They should come and look at the way NR is organised today, how we set it up, and people will be astonished at the amount of change that we have actually driven in a very short period of time.”

His strength of belief in a flexibility of approach is interesting, and once again very much in contrast to his predecessors. Again I recall previous NR CEO Iain Coucher’s insistence on consistency of approach. “There cannot be five best ways of doing something,” he told me on more than one occasion. This is certainly a very different NR, and it will be intriguing to watch. 

Carne returns to the subject of flexibility to emphasise his point: “Take CrossCountry. There’s a really interesting example of how aligning incentives really works in practice. When we started out on the scorecard discussion, I asked CrossCountry MD Andy Cooper what was important to him and whether he was happy with 92% PPM.

“He said: ‘That’s not what I want from you. If one of my trains arrives in Birmingham New Street nine minutes late, you count it as a success because it’s within the PPM measure, but I count it as a failure because all my passengers have missed their connection.’ 

“So the most important metric for Andy is right-time arrival at Birmingham New Street, because it’s the hub for his entire network. So RMD Martin Frobisher now has right-time running as one of his performance metrics on his scorecard. This changes behaviour.”

I ask Carne that if this is so important, why wasn’t it all done earlier?

“Yes, I do think that this should have been done earlier - but I wouldn’t criticise any of my predecessors. I think the circumstances that CEOs such as Iain Coucher found himself in were very different to those that we are in today. Iain had to pull a pretty dysfunctional organisation together.”