RAIL 926 - It’s time to get on with it!

Thanks to everyone involved in our National Rail Recovery Conference (February 23-25) - especially the 1,900+ folk who registered to engage with our stellar array of more than 40 speakers/specialist chairs.

Speakers included Rail Minister Chris Heaton-Harris and Labour Shadow Transport Secretary Jim McMahon. But with respect to these gents, the most anticipated speaker was Keith Williams, independent chairman of the Government Rail Review launched in September 2018 by Secretary of State for Transport Chris Grayling, following the chaotic May 2018 timetable collapse. 

Grayling had insisted that he was not ‘in charge’. However, May 2018’s fiasco laid bare the fatal flaw created when SoS Alistair Darling scrapped the Strategic Rail Authority in his 2004 review, putting DfT civil servants back in control. He had asked my opinion. “You’ve nationalised blame,” I replied. “When it all goes spectacularly wrong, the storm will break on the SoS’s desk, because there’s nowhere else. The buck will stop in this office.” 

That 2004 prediction took 14 years to come to pass, when the music finally stopped in May 2018 with Grayling ‘holding the parcel’ - when the political/media roof collapsed on his head. 

That fatal structural flaw (as has featured on this page many times!) was the separation of accountability and authority. As the biggest rail player, Network Rail was usually held accountable for failings, but had no authority to change anything to solve the problems. The DfT had been given that authority in 2004 - but consistently ducked accountability. 

This flaw dogged our railways for 14 years, partly because (in Margaret Thatcher’s memorable phrase) the industry was too ‘frit’ to upset the DfT, which controlled everything - and thus always escaped censure. Government had been clearly warned at least a decade earlier - as Keith Williams’ canny NRRC speech on Thursday February 25 laid bare (see pages 6-7).

Those expecting a ‘big reveal’ were disappointed. However, Williams’ speech repays careful scrutiny. He does not prescribe, but by summarising what various players should not do, alongside outlining good strategy, the gap framed by his words created a clear outline of what rail’s future structure should look like. 

In praising his ‘old industry’, Williams saluted aviation’s fast, flexible and successful responses to ‘Black Swan’ events: 9/11 (2001),  SARS (2003), swine flu (2009), MERS (2012) and avian flu (2017). Says Williams: “The (aviation) industry has seen both consolidation and more competition - arguably encouraged generally by less government intervention - and greater emphasis on customer engagement, improved security and greater levels of innovation… consequently air travel has reverted to normal growth patterns post-each Black Swan event. Customer trust has been retained.”

Note the passing crucial reference to “less government intervention”. He hammers this  home: “…airlines and their supply chains have adapted quite well to a series of major adverse events and I think will be well placed post the current pandemic.” His message is clear.

Williams emphasises the need for Government to be clear what kind of railway it wants (and by definition its budget), and thereby also ensure the creation of the right conditions for investment - because the massive costs and skills requirements mean this has to be a successful public-private collaboration. Look no further than the Vaccines Task Force for a spectacular example of getting a skilled group of people together and then letting them get on with it. (See Comment, RAIL 925). All this, says Williams, must be “led from the top” with Government “the guiding mind to rail” in order to ensure “consumer and industry confidence.”

But Williams really cuts to the heart of it here: “…that does not mean to say it (Government) is best placed to take operational control of either the finances or the day to day operations such as timetabling. These are best placed with those closer to the operations.”

He makes it crystal clear that DfT should end the railway micro-management it has pursued since 2004, in favour of a new, arms-length operational body. I believe this would be best created quickly by rebooting part of NR - as I have argued repeatedly in Comment. Williams describes private sector collaboration as ‘critical’ in expanding revenues… and also investment, which the public sector alone could never afford. 

Of the 30 rail reviews since 2006, Williams repeatedly references the 2011/2013 reviews by McNulty and Brown, who (he makes clear) identified the same issues, which he discusses, a full decade or so ago. 

He also summarises McNulty’s list of problems, including: fragmentation of structures and interfaces; lack of co-operation; failure by Government to provide clarity on policy while involving itself in day-to-day operations; ineffective/misaligned objectives, especially between NR and train operators; and a franchise system that did not encourage cost reduction and overall culture.

Williams sharply references the 2013 Brown Review’s criticism of franchising and the DfT’s assumption that passenger numbers would continue to increase, with no contingency for any decline - let alone a Black Swan event.

“One only needs to go back to Richard Brown’s review in in 2013 to see this,” says Williams, “…recommending that franchise agreements should be linked to GDP and that franchisees should not be exposed to macro economic or exogenous risks.” Government and Treasury ignored these clear 2013 warnings and ploughed on for the next seven years with its flawed, cash-generating policy of micro-management.  

In his most important sentence, Williams answers my opening summary of rail’s fatal flaw when he told RAIL’s NRRC: “If operational and financial benefits are to be achieved then someone - call it an operational mind - needs to take both accountability and responsibility.” 

And there you have it. Williams’ parting words are: “Time to get on with it.”

He’s right. I sense desire, ambition, enthusiasm - and impatience - in the railway
to deliver to Government a high-value post-pandemic railway. But this cannot happen until Government creates an empowered group of specialists - and lets them get on with it.

Boris Johnson is already comfortable with this principle, because it’s how Transport for London and its Commissioner have always operated for the Mayor. As I observed to NR Chairman Sir Peter Hendy CBE (a former two-term Transport Commissioner) in our end-of-conference discussion: “Surely the PM leans towards this solution, involving rebooting part of NR? After all, he has direct experience of this principle in practice, in London - with you?”

Hendy paused. “Well, you said it!” he replied with a broad smile.

I’m with Keith. Are we there yet?

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