The Southern Rail mess isn’t a privatisation failure – it’s a return to the 1970s

A helpful and informative sign at East Dulwich this morning. Image: Getty.

London’s Southern Railway has been dominating the headlines all summer, due to its sheer awfulness. But the underlying dispute isn’t a failure of privatisation: it’s a fight between unions and managers, directed by Conservative politicians, about how to reform a nationalised industry. This may sound familiar to older readers.

On your journeys to work this summer, particularly if being cooked at 32C on the Central Line, you can at least take solace that some commuters have it worse than you. It’s impossible to open a newspaper without reading of the woes of Southern Railway, which operates trains out of London Bridge and Victoria to outer London, Sussex and Surrey.

Politicians including Jeremy Corbyn, Sadiq Khan, and Conservative backbenchers on the route, have called for the service to be renationalised, stripped of its franchise, or given to Transport for London to manage. CityMetric even called for the latter here.

There’s one small problem: none of these will help.

The most important thing to know about Southern Railway is that it doesn’t actually exist. It used to, from 2001 up until July 2015. Then, it was a fairly standard UK rail franchise. (We’ve talked about those, too.) In summary: the company paid the Department for Transport money for the right to operate trains, collect fares, and take the profits.

But this changed in 2015. Instead of taking new bids when this contract ran out, the DfT merged a whole bunch of services into a single new tender. The new Thameslink, Southern & Great Northern franchise was the largest in the UK in terms of passengers, trains and employees.

And, importantly, it is not a franchise like Southern was.

Instead of auctioning off the right to run trains and collect fares, the new tender was for a service delivery contract. The operator must meet specifications laid down by the DfT, hand over fares to the DfT, and collect a service fee from the DfT in exchange.

There’s nothing wrong with this model. It works well for London Overground and London Buses. And there was a good reason to bring it in: the Thameslink Programme will be finished during the franchise’s term, and many routes that used to terminate at London Bridge or Kings Cross will shift to the cross-London Thameslink route. This is easier to manage if you don’t have to worry about multiple companies allocating profits, costs and delays between themselves.

Several companies bid for the new contract, with Govia Thameslink Railway the winner. GTR doesn’t use its own brand, instead running trains under their old names – including Southern.

It’s these major changes in how the franchise is structured which have created the commuter woes. Some of them can be put down to the massive upheaval you’d expect from a major construction project – one that that both directly gets in the way of services, and involves changing long-established routes, terminuses and timetables.

But there’s a bigger upheaval going on, and to understand that, you need to go back in time.


GTR’s routes have mostly been operating for over a century, and their workers were pioneers in the UK’s union movement. Railwaymen fought the many companies that owned the railways for decent working conditions and pay.

But these were never standardised nationally. Even under British Rail, the great effort of negotiating national standards and practices was a lower priority than simple survival. Instead, changes to create a workforce that suited a modern railway were negotiated piecemeal as upgrades took place, depending on managers’ preferences; and money was made available to sweeten the pill of reduced staffing or more variable hours.

When BR built the original Thameslink route in the 1980s, it shifted its trains to driver-only-operation, because train guards’ role in opening doors and dealing with breakdowns was now redundant. As weekend services grew across British Rail's network, driver contracts on some routes were shifted to a seven-day roster, so that they no longer relied on voluntary overtime. But on most of the network, including what is now Southern, this didn’t happen – and privatisation further reduced the incentive for difficult changes.  

This becomes a big problem when routes with different practices and contracts get merged into one. Thameslink drivers operate the doors; Southern mainline drivers don’t operate the doors. Southern mainline trains always carry guards, while Thameslink trains don’t. Given that these will soon be the same rolling stock, operating the same services, this situation is ridiculous and needs to be resolved.

Now, there’s a long-established model for successfully bringing about changes in working practices, which involves managers and unions working together to come up with efficient solutions that share out the benefits of change. It’s called Germany. There’s also a long-established model for guaranteeing that working practice changes are a disaster, which involves hostile press briefings, strike threats, and refusal to compromise on money on the one side or efficiencies on the other. It’s called 1970s Britain.

We know that the Germany model works and that the 1970s model doesn’t. But we also know that there’s a huge attachment to union-bashing and refusing to settle among Conservative politicians. Who control the DfT. Which – I said this would be important – gets to tell GTR what to do. So Conservative politicians who hate unions ultimately control negotiations with Southern’s staff.

The direct strike action this has provoked would be bad enough if Southern ran a seven-day roster, but it doesn’t: it’s entirely dependent on driver goodwill for its Sunday service, and is understaffed enough that it’s partially dependent on volunteer overtime and swaps for the rest of the week.

There’s only one thing that can fix Southern in the short term, and it’s a complete change in attitude from the people in charge of the government. Who, if you’ve not been paying attention, have just changed.

So, come on Theresa May – are you going to meet the unions and end the painful stalemate your predecessor created? Or are you going to drag this out into a pyrrhic victory where everyone loses, like the miner’s strike your predecessor-minus-a-few created?

Want more of this stuff? Follow CityMetric on Twitter or Facebook.

 
 
 
 

Two east London boroughs are planning to tax nightlife to fund the clean up. Will it work?

A Shoreditch rave, 2013. Image: Getty.

No-one likes cleaning up after a party, but someone’s got to do it. On a city-wide scale, that job falls to the local authority. But that still leaves the question: who pays?

In east London, the number of bars and clubs has increased dramatically in recent years. The thriving club scene has come with benefits – but also a price tag for the morning clean-up and cost of policing. The boroughs of Hackney and Tower Hamlets are now looking to nightlife venues to cover these costs.

Back in 2012, councils were given powers to introduce ‘late night levies’: essentially a tax on all the licensed venues that open between midnight and 6am. The amount venues are expected to pay is based on the premises’ rateable value. Seventy per cent of any money raised goes to the police and the council keeps the rest.

Few councils took up the offer. Four years after the legislation was introduced, only eight local authorities had introduced a levy, including Southampton, Nottingham, and Cheltenham. Three of the levies were in the capital, including Camden and Islington. The most lucrative was in the City of London, where £420,000 was raised in the 2015-16 financial year.

Even in places where levies have been introduced, they haven’t always had the desired effect. Nottingham adopted a late night levy in November 2014. Last year, it emerged that the tax had raised £150,000 less than expected in its first year. Only a few months before, Cheltenham scrapped its levy after it similarly failed to meet expectations.


Last year, the House of Lords committee published its review of the 2003 Licensing Act. The committee found that “hardly any respondents believed that late night levies were currently working as they should be” – and councils reported that the obligation to pass revenues from the levy to the police had made the tax unappealing. Concluding its findings on the late night levy, the committee said: “We believe on balance that it has failed to achieve its objectives, and should be abolished.”

As might be expected of a nightlife tax, late night levies are also vociferously opposed by the hospitality industry. Commenting on the proposed levy in Tower Hamlets, Brigid Simmonds, chief executive at the British Beer and Pub Association, said: “A levy would represent a damaging new tax – it is the wrong approach. The focus should be on partnership working, with the police and local business, to address any issues in the night time economy.”

Nevertheless, boroughs in east London are pressing ahead with their plans. Tower Hamlets was recently forced to restart a consultation on its late night levy after a first attempt was the subject of a successful legal challenge by the Association of Licensed Multiple Retailers (ALMR). Kate Nicholls, chief executive at the ALMR, said:

“We will continue to oppose these measures wherever they are considered in any part of the UK and will urge local authorities’ to work with businesses, not against them, to find solutions to any issues they may have.”

Meanwhile, Hackney council intends to introduce a levy after a consultation which revealed 52 per cents of respondents were in favour of the plans. Announcing the consultation in February, licensing chair Emma Plouviez said:

“With ever-shrinking budgets, we need to find a way to ensure the our nightlife can continue to operate safely, so we’re considering looking to these businesses for a contribution towards making sure their customers can enjoy a safe night out and their neighbours and surrounding community doesn’t suffer.”

With budgets stretched, it’s inevitable that councils will seek to take advantage of any source of income they can. Nevertheless, earlier examples of the late night levy suggest this nightlife tax is unlikely to prove as lucrative as is hoped. Even if it does, should we expect nightlife venues to plug the gap left by public sector cuts?