Analysis: The vision from devolution is not yet in focus

How is our new government faring on rail reform? In the build-up to last July’s General Election (RAIL 1012), we consulted with the industry to devise a seven-point manifesto for Britain’s railways. In this issue, Richard Wilcock considers the progress on devolution.

In ten years’ time, when Great British Railways has been established and is operating our railways, how that railway looks in each city could be very different.

If devolution is implemented correctly, it could mean a fundamental shift in responsibility for a region’s transport network.

Or it could look exactly the same - it’s currently too soon to tell.

Any devolution of rail in England will follow the guidance and laws set by the government and outlined in the English Devolution White Paper - published late last year.

The rail reform bill on which the government is currently consulting (Rail Reform: A railway fit for the future) has broadly mirrored that White Paper to outline its own framework for how devolution will look for rail.

One of the key elements in the English Devolution White Paper is a significant transfer of powers from Whitehall to the regions, including in matters such as planning, innovation, skills, housing, and transport. All these areas will see potential for radical overhaul, allowing some regions significant control over almost every part of the infrastructure and their citizens’ lives.

Broadly, the White Paper outlines that each devolved region will have different levels of devolution.

The highest level is described by Jim McMahon, the Minister for Devolution, as “devolution by default”. It will establish six top-tier ‘Established Mayoral Strategic Authorities’ (MSAs) - Greater Manchester, West Midlands, the North East, South Yorkshire, West Yorkshire, and Liverpool City Region. The one omittance here is Greater London, which the White Paper accepts as already having the highest level of devolution in England.

In a departure from current legislation, these six MSAs will have ‘integrated settlements’ which would be agreed by themselves and government.

In short, these regions will receive a consolidated budget which it will be free to spend how it likes over a specified period (likely five years). This framework isn’t too dissimilar to how Network Rail works within its five-year Control Period framework.

In theory, for transport and for rail, this should mean that it will be reasonably straightforward for the top-tier MSAs to establish their own integrated transport networks and assume control of its region’s railways as part of that. Services, full routes and possibly larger interchange stations would come under their control.

Five of those six MSAs will have a “right to request” full devolution. Liverpool City Region’s current concessionary structure is seen as full devolution already, and a model similar to Transport for London and the benchmark by which devolution is measured in the rail reform bill.

However, putting theory into practice may not be straightforward, as some powers (it seems) will still sit with the Secretary of State. In the bill, this includes assessing an MSA’s request for further devolution. There is little in the way of detail on how that decision is made, other than a promise of the process being “transparent”.

Below the top tier, other shades of devolution are less clear. Some MSAs will get specific funding pots (including one for transport) that will be subject to the government’s budget, with how that money would be spent to be agreed in advance. Others will get quicker decisions made on rail decisions and localised spending support.

But the bill itself highlights possible difficulties.

Plans within the bill indicate a “statutory role for devolved governments and the Mayoral Strategic Authorities”, which will give them legal rights and potentially a recourse for dispute resolution that they didn’t have before. But the wording in the bill highlights the complexity of the industry.

“We propose to create a statutory role for devolved governments and MSAs in governing, managing, planning, and developing the rail network. This will bring decision-making as close as possible to local communities, while recognising that - as a nationally integrated network - the railway’s governance must balance local, commuter, regional, national, international and high-speed services, as well as the role of freight.”

This demonstrates that while local authorities such as Greater Manchester may have a desire to assume control of their rail services (in Greater Manchester’s case, this would mean much of the network operated by Northern, with the wheels already set in motion), they will still have to navigate a myriad of concerns and potential obstacles put in place for the greater good of the national network.

One area is in funding itself. It is no secret that the government would like the railway to be both more efficient and self-sufficient.

It is likely that budgets will therefore be constrained within those settlements, and mayors will need to make tough decisions on where to spend their transport budget while keeping in mind Great British Railways’ overall vision and priorities.

GBR still has the ambition to be the “directing mind” for the whole industry, meaning that trade-offs will invariably be required.

With the overall direction set by GBR, including for freight, infrastructure and (to a certain extent) ticketing, it is still unclear how any local needs would be integrated into an overall strategic vision.

If freight is causing problems on a city’s network capacity (and therefore hindering services for which a local authority is responsible), it will potentially clash with a national vision and target.

How does GBR grow freight in these areas while keeping mayors happy? And how is that potential argument resolved without involving the Office of Rail and Road? Ultimately, there will be winners and losers.

The government says that agreements can be tailored to each region’s needs, but that each authority should be ready for a few months at the negotiating table.

However, the bill is even a little woolly on what kind of “statutory role” it will have. It states: “The statutory role will ensure devolved leaders will be appropriately consulted on GBR’s activity (including the development of railway plans, strategies, and services), are able to scrutinise GBR’s performance, and that GBR has due regard to devolved transport strategies depending on that region’s capability to operate its own transport network.”

It also adds that “GBR will work closely with devolved operators, co-ordinating on timetabling of services and access to operate on GBR infrastructure and vice-versa, to ensure that there is a coherent network across Great Britain”.

This could be interpreted here as GBR letting mayoral authorities know what it intends to do, with the added caveat that the mayoral authorities will be able to ask questions and possibly push for their transport needs to be integrated into its thinking.

But it is far from certain how these mechanisms will work. And it’s even less certain how much the government would be willing to listen. Again, the power could still sit with the Secretary of State.

Despite these complications, there are some positive signs.

Transport for Greater Manchester, emboldened by this shift towards rail devolution, has announced that it intends to bring eight routes under the control of its Bee Network.

Additionally, the government has launched its Integrated National Transport Strategy, which it hopes will spearhead a revolution in localised travel, and which will likely involve some improvements in some MSAs’ rail infrastructure.

London Mayor Sir Sadiq Khan is also hopeful that further suburban services can be added to Transport for London’s burgeoning London Overground network, once certain franchises have ended.

To truly assess where rail devolution currently sits (and if the government is succeeding), it’s worth looking at what came before.

Before Labour came to power, the Conservative government had made some strides towards its own vision of rail devolution.

It had established some combined authorities (including West Yorkshire) and given them decision-making powers for their own transport networks.

In 2016, it began to introduce transport bodies - including Transport for the North, Midlands Connect and England’s Economic Heartland.

Although many of the current seven transport bodies were intended to have statutory powers, only Transport for the North has managed to secure them - perhaps highlighting the nervousness of government at the time to hand over further powers to regional bodies.

But it seemed that much of the previous government’s focus was on localised rail improvements, and grand schemes including the Midlands Rail Hub, West Yorkshire Metro and East West Rail, but with the power and budgets still sitting with the Department for Transport and HM Treasury.

This made mayors nervous - and frustrated at not being able to acquire the powers they need to make those effective transport decisions.

Despite the evident ambition of this government to reset the balance of power between regions and Whitehall, the current rail reform bill acknowledges that a one-size fits all approach cannot work. But in doing so, it has also presented a confusing pathway that is lacking in detail - almost as if it cannot square the circle.

Even so, it is encouraging that there is momentum, and that the wheels are in motion, with plenty to suggest that while there are challenges ahead, devolution for rail is now a more attainable goal for some of England’s biggest cities.