“Great British Railways is dead. And it should never have happened. Of course, I can never say this on the record.”
That’s one view. Here’s another: “It isn’t going to happen, quite obviously. I don’t think it is completely dead - there is always something to come from the ashes.”
And a third: “The Treasury is not at all convinced that GBR is a good thing. And if it was the right thing to do three years ago, when it was conceived, that doesn’t mean it is still the right thing to do now. Progress has been minimal.”
These views are increasingly representative of the opinion formers and decision-makers around the rail industry. They are not, however, even remotely representative of the people within GBR itself.
“We weren’t in any way surprised by the delay in the legislative process,” says Michael Clark, policy and transformation director at the GBR Transition Team (GBRTT).
“There is a six-month move back in the timelines. I don’t think that translates as much real-terms delay. We are adjusting our plans. Aspects are still going forward. That still leads us towards what the legislation will enable us to do.”
When Prime Minister Harold Macmillan was asked what he saw as his greatest challenge, he famously responded: “Events, dear boy, events.”
That’s still true today. GBR was proposed as a response to persistently poor performance. But that was before the pandemic… before a war in Europe… and before a cost-of-living crisis, with the Bank of England warning of the longest recession it has ever recorded. And before tax rises that leave even well-off commuters and leisure travellers with fewer choices.
Two years from a General Election, politicians are feeling precarious, and the railway has rarely been a contentious election issue.
The NHS, adult social care, defence spending, and schools running out of money are all higher up the agenda. Why should the railway end up in the Prime Minister’s in-tray at all?
The Government has more pressing priorities than dealing with the railway’s administrative structure. It doesn’t have the money or the bandwidth to take risks, and it doesn’t trust the industry to manage its costs.
Against that backdrop, the need for coherent industry leadership has never been stronger or clearer: the railway is going to have to argue for every penny of public money, and it won’t get what it wants.
The Department for Transport was very keen on the GBR concept at first. It became the prevailing industry narrative.
Initially, a handful of people set it up, under the guidance of Network Rail’s leaders Sir Peter Hendy CBE, Andrew Haines and Anit Chandarana, Keith Williams and his head of secretariat Michael Clark, along with consultant Rufus Boyd.
Now it has a staff of 200, a large proportion of whom are on loan from across the industry. They include some of the brightest minds of their generation.
But where are they all heading?
Is there a future for GBR?
“I’m not expecting a strong, ass-kicking, GBR to emerge this year. Or next year. Or any other year,” says Alistair Lees, managing director of Assertis and chairman of the Independent Rail Retailers.
“It needs to give up on the idea of telling everyone else what to do - being a centralised controller, because it knows best. No Fat Controller. And drop the bombastic name. It needs to become an enabler of change, one that can coax people along. It won’t need a big shiny new headquarters.
“It cannot wait for legislation to come along. That is just going to be too slow. If it has to wait for 2024-25, that’s five or six years since the pandemic started… which is no good at all.
“We’re in a two-year recession. You can’t leave the railway unreformed all the way through that.”
Neil Robertson, chief executive of NSAR (National Skills Academy for Rail), says: “GBR was conceived by previous politicians who have now moved on. No new Secretary of State would want something that has Grant Shapps’ name all over it - they will want to make their own mark.
“I’ve said all along that this should have been done by better regulation, rather than by a new ‘guiding mind’. But the activities that GBRTT is pursuing are substantially directed at the right questions. And the work needs doing, regardless of the name above the door.
“The analysis on what the future holds, how the railway is made cheaper, modernising and improving the workforce - these are the right things. I don’t care what the name is. I’m just glad these activities are happening.”
Steve Medhurst, head of the rail account for insurer RSA, is another sceptic about GBR’s future. “This was very much Boris’s baby. I think the six-month delay is more about giving the Government time to review what it really wants to do. My view is it will do away with GBR and continue to fudge it.
“They can’t go back to the old system - it was broken, and everybody recognises that. But we are at a golden moment where we can redesign the railways to be fit for purpose post-COVID. We don’t need a Monday-Friday peak commuter service now, so a complete rewrite of all the timetables is needed.
“The phrase in the City, ‘Thursday is the new Friday’, is so true. On Fridays, the City is empty. Where I work, you can count the number of staff in the whole office on two hands. It’s nearly the same on a Monday. There is fundamental change.
Meanwhile, we have one of the most modern rolling stock fleets in the world, because of privatisation, so we aren’t going to need many new trains for a few years. There is nothing to stop us getting on with this redesign.
“But first, the industry has to learn from the industrial dispute. All the good messaging has come from the unions. The industry is not good at publicising its position or working as a team, presumably because it needs approval from the Department every time it opens its mouth.
“So, the public only hears about the bad stuff - the strikes and the politics. GBR has been completely silent in all this.”
Alistair Lees adds: “The least likely bit to survive is the Whole Industry Strategic Plan. It’s right to have a long-term vision. But planning 30 years ahead in a pandemic and a recession is just guesswork. It won’t officially be dropped - it will just fall by the wayside. Because that is what happens to most railway reports and reviews.
“If anything is going to survive from GBR, it’s the ticketing and retail reform. There’s a trick missing here. Fares and ticketing are the cost and access mechanisms to travelling. I’m not convinced that travellers are well-served by continuing to have many train operators with many brands and many products, and many different levels of service.
“If we want customers, we have to go out and market to them. That job would be much easier if there was a common product. GBR wouldn’t have the power to impose that, so it will have to guide, rather than impose.
“If you’re a TOC, what is a brand to you now anyway? It doesn’t really matter to you. It only matters when you are a revenue-risk organisation. Now you are the deliverer of a service on behalf of someone else. That has been true for two and a half years now.”
Lees argues that “the Treasury has been scared of big-bang fares reform for some time”, noting: “You can’t make an omelette without breaking eggs. If a million customers do well from a revenue-neutral fares reform, a million will do worse. And the only people the Treasury will hear from are the one million unhappy people. So, instead, everything keeps getting more complex. And more complex is always worse.
“We need a different approach. You need legislation to be an enforcer, to boss others around. You don’t need legislation to be a persuader. So, let’s all agree that big-bang fares reform is dead. GBR need to think about who they are, what they are, and how they behave. They need to work with others, and not act as if the opinions of others are not that important.”
Cara Murphy, GBR client director at consultant Atkins, counters: “GBR is a necessity. While this might not fit the original intention in 2019, it very much needs to be done. It’s a concept and not yet a detailed design.
“One of the biggest failures of the existing structure is the inability for decisions to be made without considerable amounts of governance and processes, which create inefficiencies and add cost. We are in a spiral of not making decisions.
“There needs to be a fundamental shift in culture and a significant increase in commercial maturity, instead of allowing a shifting of risk, blame and accountability to the point where nothing actually gets done.”
And GBRTT Director Michael Clark observes: “How quickly and excitably the death of GBR was written by the newspapers! We were quite sanguine about it. There was a frisson behind it that we didn’t understand.
“People were saying GBR was buried, but we don’t see it that way. We are pushing forward, although more slowly. Nothing too much to read into it, in my view.
“We are still up for it. But it is, of course, still subject to any decisions by the new politicians.”
One profit and loss account
“The Treasury takes the income. The Department for Transport makes the expenditure. So, the point at which profit and loss converge sits with the Prime Minister. Which is bonkers!” says NSAR’s Neil Robertson.
“We have to make a compelling vision of what an industry based around one single profit and loss account looks like. That has to be made patently obvious to the Treasury. We have to get this process out of No. 10 Downing Street, and back into No. 11. And then move it to the Department for Transport. And then on to whatever becomes of Great British Railways.
“Easier said than done… but this is a winnable argument. The real prize is that you overcome one of the big barriers to productivity. The existing contractual relationship is a huge barrier. You just cannot save money without having a look at income and expenditure together.
“For example, we could double the productivity tomorrow with a different kind of arrangement to the hated Schedule 4 and Schedule 8 system - the whole delay attribution nonsense.
“The whole point of one P&L account is to review projects in their wider context - as any other business would do: reviewing cost now against revenue over the years ahead. The railway cannot do that. Imagine a private company that never reviews its own overall performance!
“With one P&L, you can align rolling stock, maintenance, people strategies, digital signalling - all the different areas. At the moment, we exist on a series of tactical reactionary decisions. It is piecemeal, and the result is insufficient and inefficient investment. Opportunities are being lost.”
Michael Clark of GBRTT responds: “One P&L is a key part of reform. Our aim at GBR is to be quite devolved. We want to invest one P&L profit centre at regional level, where you’re on the hook for both revenue and for saving money.
“At the moment, that doesn’t happen below Prime Minister level. Treasury is on the hook for revenue and DfT is on the hook for most of the costs, so you get decision-making that is driven separately by those two streams, and not driven together. That means unintended or perverse consequences can happen.
“This is the whole point: to balance those two in the most efficient way possible, by people who understand what the real drivers and consequences are. No one comes up with a solution that is best for the railway as a whole, for passenger satisfaction or for costs. Every normal business looks across revenue and expenditure to balance the books. The railway does not do that.
“There is a team designing that one P&L. We have a couple of routes where we are putting that together to test it. I have a team working on what might replace the Network Code and the access and management regulations when the ‘guiding mind’ comes.”
Supply chain fears
The last thing the rail industry supply chain wants is more delay and obfuscation. It craves certainty.
“We don’t want this hiatus,” says Darren Caplan, chief executive of the Railway Industry Association.
“We don’t want important decisions delayed by administrative debate - that is the biggest threat to our members. Our understanding is that GBR will happen, but at a later date. How much later? There is going to be a General Eection, mostly likely in spring 2024. Who knows what that means?”
In mid-November, RIA published a poll of 160 members. It found that 77% of suppliers think a hiatus in rail work over the next 12 months is either “quite likely” or “very likely”. The implication is that they would put their investment elsewhere, or invest less, as they lack business confidence.
Caplan adds: “So the delay itself is causing concern. And there is uncertainty over what happens to policy between now and whenever GBR comes in. There’s a concern over the long-term strategic plan, which GBRTT is developing.
“What is the plan on decarbonisation? What is the plan on digitalisation? Not only do we have an issue about an overall structure, but also about elements within it that Government has previously said it was committed to, such as getting diesel trains off the rails by 2040, and net zero by 2050. We don’t know the plan to get there. It is well known that we need to replace 65% of signals within the next 15 years. What is the plan?”
RIA agrees with the principles behind GBR: the bringing of track and train closer together, the single profit and loss account.
It also supports the concept of the Department for Transport giving strategic direction and then leaving rail experts to make the day-to-day decisions in a devolved structure. But the strategic direction is the bit that is missing.
“We think it is really important that GBR is open and transparent about how its plans develop,” says Caplan.
“If there is a delay, we need to know the new timetable. We need a partnership approach - we should be involved. We need to know where private funding will help, and to what extent. We need GBR to be a guiding mind, and not a controlling mind.
“Ninety-seven per cent of people who used rail before the pandemic have returned. They have returned differently, but most people I speak to are now in the office three or four days a week. Only 8% of previous commuters now work from home all the time. So, we have to be careful not to base our structural decisions on what we see now, because it is still clearly evolving.
“In this interim period, we need clarity about who is responsible for what. We have Network Rail, the GBRTT, other rail clients including the devolved administrations, and we have the Department for Transport as well as the Treasury. If this is a longer delay, if we are not going to get full legislation passed in this Parliament, what are the roles of each of those bodies going to be in the interim? That is something we could all do with knowing.”
GBR responds
“To some extent, the delay in legislation is welcome, in that we can prepare better,” says Michael Clark.
As policy and transformation director at GBRTT, he is one of the key architects of the new structure. He worked closely with Keith Williams to draw it up, as part of the Williams Review secretariat.
“We still need to get a Bill into Parliament. We rely on the Government for that - it isn’t within our gift.
“But most of our work continues. We are working on a long-term strategy for the railway - formerly known as WISP, the Whole Industry Strategic Plan, which looks 30 years out. We are looking to have that framework ready at the end of this year or early next year.
“We will have a freight strategy. We are analysing responses to a consultation now, so we can go to the Government with options. If they pick that up, we can move quickly. And we are working on a national accessibility strategy - there is a plan for a consultation on that next year.
“Overall, we are discussing where we can move forward towards building capabilities towards GBR.”
Hang on. Go back and read that again. Does that actually mean anything?
“We are a government programme,” Clark explains. “All of this is subject to government decision. We need to wait while the Government re-establishes itself and becomes clear about what it wants to do. That’s partly why we have a six-month delay.”
Working at GBR sounds rather frustrating…?
“It is interesting working with the range of politicians on this. I am reasonably confident of saying that the railway system is in dire need of comprehensive reform. Lots of it is still working the way it was nearly 30 years ago, when the privatisation plan was devised. It has been tinkered with, pushed in different directions, and finally it has been wiped out by the pandemic.
“Which I think only makes our work more urgent. Sticking plasters won’t do it any longer. It needs a comprehensive remodelling. And we work on the existing premise until we are told not to.
“Ultimately, we require legislation to transfer the franchising power that is currently vested in the Secretary of State, so that can be put alongside Network Rail’s infrastructure management to give an integrated railway.
“We need to see the political appetite for how fast they want us to go over the next 12 to 18 months.”
In the meantime, says Clark, GBR is already doing some of the ‘guiding mind’ capabilities. He’s talking to Transport for the West Midlands and Transport for Greater Manchester about a new regional partnership, which could include some shared pay-as-you-go areas.
“There are lots of strands of work going on. A significant expansion of pay-as-you-go, to 700 more stations, is coming in the next couple of years.
“We are trying to take forward a consolidated retailing unit - dealing with the frustration of not being able to buy from the National Rail Inquiries website, but getting forwarded onto the various operator websites, which are of widely differing quality and ease of use. At the same time, we want to stimulate the third-party retail market.
“We are looking at how we can accelerate that, stripping away a bit of bureaucracy. We can use the next six months to do that, because none of it requires legislation.”
But, for now, the GBR leadership remains on loan, as do most of the seconded staff. Clark thinks a permanent chief executive and chairman will be pegged to the legislation process: the top talent would be unlikely to sign on the dotted line for an organisation which still rests on uncertain political support, and one without legal status.
He says diplomatically: “Better to rely on the current actors until we get onto that stage. We are all here temporarily, and we have other desks we can go back to.”
Rising from the ashes
The Bank of England expects the recession to bite harder through 2023. As the Government trims public expenditure, and as passengers feel less money in their pockets, the railway is going to find the going tough. Stagnation and under-investment seem inevitable.
“There is a gap in Britain’s budget of £40 billion or more, so expensive change will fall off the agenda,” says RSA’s Steve Medhurst.
“There is too much Treasury involvement now, which is hindering rather than supporting the railway. The Treasury is archaic in its thinking, and it is the biggest block to reform of fares and ticketing. The railway needs the freedom to get on with it, but GBR will simply run out of political time to be implemented. An easy project to bin when the Government has more pressing priorities.”
NSAR’s Neil Robertson notes: “At some point, a decision will have to be made on whether the Government wants GBR in a new form, or whether it gives the existing lot another go. Now we’ve had some time for reflection, we might be able to devise a new structure to guide the industry.
“But the activities GBR does are needed now more than ever. It was excellent that the industry secured the opportunity to have a Shadow GBR. That was a wise move.”
So, what will it be? The Government has perhaps five options:
Option 1: Carry on with GBR, exactly as proposed. Everything you’ve seen so far, except from GBRTT itself, suggests this is becoming less likely.
Option 2: Change the name, give it a different shape, but keep the underlying concept. This organisation lets the train operating contracts and manages infrastructure. Seems pretty likely.
Option 3: Go back to split track and train management, with separate profit and loss accounts. This is an unlikely outcome.
Option 4: Nationalise everything, as the unions demand. Shunt GBR into the Department for Transport. Hard to imagine, even under a Labour government, given the cost to the taxpayer.
Option 5: Privatise it all. Get it off the balance sheet - a bit like the National Grid, under very strong regulation that creates incentives to invest. This will have some supporters, but it would split opinion on party political lines, making it undeliverable.
“The fundamental choice here is how the Government sees the role of the private sector,” says Robertson.
“Does everybody think the private sector will continue to provide infrastructure services on a contracted basis? Not even Labour disagrees with that. So, the private sector’s place in infrastructure is secure.
“Why, then, are we asking so many questions about the role of the private sector among operators, when other private sector operations patently work fantastically well? See airlines or logistics.
“It’s the short-termism of the train operators that has been disappointing, and that’s what has to be changed. We created monsters through inappropriate structures and regulation.”
Atkins’ Cara Muprhy observes: “You don’t need legislation to change the culture of not taking responsibility. We need to be more open and communicative. It really isn’t that hard to have the right conversations. Don’t fumble through.
“GBRTT seems to be a collection of very intelligent people with a lot of experience. But, as a consequence, are they bold enough or transformative enough? It seems like they are afraid to fix properly what is broken.
“The railway has to be more cohesive, more collaborative, more to the benefit of society as a whole. It’s the most important element in all this, and it is in danger of not happening.
“I understand that we need revenue now, and that significant reform takes a few years to settle for the revenue benefits to filter through. But you need to spend money to make money: I don’t think this will be as transformative or as exciting as everyone would like or expect it to be.”
Alistair Lees concludes: “This is the opportunity to create a much more sellable product. GBR is not being a driver of revenue. This is a cultural shift that it will find hard because it is still chomping at the bit to control things, and that is wasting time.
“GBR needs to enable others to generate revenue, and it needs to undertake cost control. It needs to be a persuader.
“There are straightforward things it can do, such as a much stronger family or group fare offer. There are somewhere between 40 and 100 different products around the country. That is ludicrous. How can you market that? I have no idea. How can you explain to people why they are eligible for one, but not for another? I have no idea. It’s really stupid. It is ripe for rationalising.
“We have railcards to stimulate demand. But there are 15 national ones and about 50 regional ones. They are all serving little groups of people. Simplify it. Even if it becomes a little more expensive, it will be more useful.
“The one bit of ticketing news that we have seen in 2022 is a punishment. You will be punished to the tune of £100 if you get a choice wrong. That is the only national-scale ticketing promotion you have heard, since Flexi-Seasons were offered a year and a half ago.
“This is just terrible. In any other business, if the only customer initiative you could come up with was a penalty for a mistake, you would definitely be sacked.
“There is a lot of desire within GBR to do fares and ticketing reform, to be fair. But they are finding it heavy going. They need to park the ideas that try to change the world, and get on with collaborative projects that are actually achievable.
“There are some great people at GBR. But the organisation as a whole has no credibility. That’s because it has talked down to people, instead of talking with them, for a year and a half now. And it has nothing to show for that - the credibility gap is widening.
“UK rail is mostly vested interests fighting for their own corner and stabbing each other in the back. This is Government’s problem to solve. There is no vision in Government for how rail should really be.
“I’ll suggest to you what the vision should be: where rail is an option, people choose to use it. We are very far from that goal, and it is getting further away instead of getting closer.”
In that summary lies GBR’s future. Through a summer of strikes, through rising inflation and a cost-of-living crisis, through changing patterns of work, the people who were accustomed to travelling by rail are now getting used to not travelling by rail.
Their trust and loyalty are easily lost… and hard to win back.
