Transport Secretary Chris Grayling this week announced that he was going to give UK rail infrastructure body Network Rail a whipping. Its Oxford-Cambridge East West Rail project will now be built by a separate organisation, and future rail franchises will be more “vertically integrated”, with “joined-up teams” running tracks and trains.
The news was reported as a return to private control of infrastructure, much to the Telegraph’s glee and the Guardian’s horror. But to understand what this means requires a quick recap on how the railways in Great Britain work.
I’ve written about this in these pages before, but here’s the quick version. Network Rail owns and runs the tracks. Grayling’s Department for Transport (DfT) is in charge of franchised train operating companies (TOCs), which compete by tendering – like an auction – for the obligation to run a level of service defined by the DfT on a set of routes defined by the DfT, in exchange for a monopoly of services on those routes. TOCs pay Network Rail to use its tracks. Some tracks are only used by one TOC; the busiest tracks are used by several TOCs at the same time.
Freight and open-access operating companies, which are all for-profit, just pay Network Rail directly to use its tracks. All freight and open access services run over track that’s also used by one or more TOCs. Network Rail is in charge of the links between the different companies involved: it manages the national timetable; it calculates who’s running trains where and how much they need to pay; and ,when things go wrong, how much it costs and whose fault it is.
Like Newton’s laws, this simplified model is wrong in various ways that don’t matter here. The only important one, which I’ll come back to, is that some TOCs are commissioned by the devolved governments, rather than the DfT.
This system, which has been going in its current form for about 15 years, has various advantages and disadvantages over the previous ways that railways in GB have been structured.
Its advantages over the immediately previous system with TOCs and privately-owned tracks are extremely clear. The infrastructure is no longer owned by property developers, but by a public sector body; Network Rail has tended to be safety- and performance-led rather than financial results-led; and it has rebuilt the nationwide operational expertise and leadership that was lost under Railtrack.
Its advantages over the system before that, where British Rail was a single national public sector operator, are harder to judge, thanks to the major changes in technology, costs, rider numbers and public expectations over the last 25 years. But we do know that it’s moving far more people, making them much less late, and killing or injuring them much less, than British Rail did, while also carrying more freight.
(As an aside, it’s also paying its staff much better than they were paid in the BR days. My personal view is that this is a positive: good pay is entirely fair enough for a highly skilled, safety-critical industry that requires deeply antisocial hours. It’s noticeable that very few of the people who claim otherwise tend to follow through and quit their 9-5s for railway jobs.)
The main problem is that the current setup is expensive. Net government subsidy paid – although it’s fallen a lot over the last few years – is still much higher than for British Rail. And although services run well, that isn’t much comfort for delayed commuters paying high fares (even though those fares are high mostly because the subsidy remains low compared to other countries).
So how will Grayling’s plans help? The short answer is they won’t do much at all. Aligning NR and TOC operating teams has been tried on South West Trains and in Scotland, with uninspiring results; and it’s unlikely the new initiative will be much different. Although old hands drone on about vertical integration, the track operator must be able to work with multiple train operators, and NR is set up to do this as efficiently as possible
Similarly, the East West Rail announcement is being spun as a change – but as a separate agency with some public and some private funding, it’s actually similar to most major new-build projects like HS1, Crossrail and HS2. It’s likely that, as with HS1, Network Rail will take over operations once the line is complete.
The most worrying part of Grayling’s speech was actually rather hidden: he has ruled out further devolution of franchise commissioning to local governments. This change has had a positive impact on services wherever it’s been carried out, most noticeably London and Scotland – so why would anyone oppose it?
The answer was revealed starkly in London’s Evening Standard in a leaked letter Grayling wrote to former London mayor Boris Johnson in 2013: because he doesn’t want Labour to get control of things, and most English cities are Labour-supporting, most of the time.
So the lack of reality behind Grayling’s latest Network Rail announcements is a relief. But his pettiness and spite is far more worrying for the long-term future of the industry.