Is a dose of regionalisation the cure for Britain’s troubled railways?

Manchester Victoria. Image: Getty.

It’s not easy to get the north to agree on anything, but the recent disruption to the region’s rail services has managed to do it. Such was the level of anger that on 10 June northern council leaders called for complete devolution of the region’s railways, through new powers for the currently toothless Transport for the North (TfN).

The chaos wrought by National Rail’s timetable changes laid bare the disastrous fragility of Britain’s transport network: 12,000 journeys were affected across the country, with the north-west particularly affected.  

The debacle has been partly blamed on the inability of Network Rail to electrify lines by agreed deadlines, thanks to track being in a worse condition than expected. Consequently, drivers trained in operating electric trains had to be re-trained, which takes weeks. So ultimately, the debacle leads back to the old problem of underinvestment in northern infrastructure: average investment per person is 2.6 times less that in London.

This has led to familiar criticism of low local transport spending. Given the chaos on even basic services in the north, is it right that London should get Crossrail 2? Or that so much political capital is spent on high-speed connectivity in the north when local trains are in such a state?

Franchise fragmentation

Essential to undoing rail chaos is effective every day operations. However, Britain’s complex rail franchising system, under which Northern operates, is a constraint to efficiently preventing problems before they happen.

Why? The timetables that caused such trouble are signed off by government-funded Network Rail, which owns the track. The trains are owned by rolling stock operating companies such as Eversholt, and the rail services by train operating companies (TOCs) such as Virgin Trains, who are contracted under the Department for Transport (DfT).

Rail expert  Christian Wolmar says that centralisation of timetabling for all northern rail services in 2012 to the Network Rail centre in Milton Keynes led to the loss of local knowledge, and made staff distant from the routes they manage. Meanwhile, Northern, who run the actual operations, were left with timetables that could never work.

When something does go wrong, commuters do not know whether to blame Network Rail, the TOC or Chris Grayling, leading to an absence of accountability. Poor performing train operations should have their contracts revoked. Chris Grayling, after a verbal mauling in

Parliament from MPs, did suggest Northern rail could be banned from bidding for future franchises – but this is unlikely, as fewer companies bidding would lead to higher prices for the DfT.


Deutsche Fan

For answers, we must turn to Germany, where since 1996 rail has been regionally devolved. The federal government subsidises federal states (Landers) to run local rail networks.

German public transport authorities (PTAs), of which there are 27, have significant freedom to award and remove franchise contracts, which contain detailed definitions on quality of service, such as staff numbers, age of rolling stock and carriage numbers.

While most services are run by state-owned company Deutsche Bahn (DB), other TOCs now have a 24 per cent market share in Germany. The result is an “expansion of transport services” and a “steady increase in competitive tenders”, whilst passenger volume has expanded by 30 per cent within 10 years to a total of 2.5bn passengers. The operating performance of DB’s competitors has tripled, meaning they ran 159m km of regional services in 2012 compared to 49m in 2002.

A dose of regionalisation, alongside a dominant state-owned train and infrastructure operator, has therefore brought genuine competition to Germany’s rail system.

One solution: devolution

At ResPublica, we’ve long supported giving local people and places more control over their public services. When we called for the creation of the Manchester Metro-mayor post in 2014, we said this had to come with full devolution of rail to city regions.

It’s time to listen to our northern leaders. Transport for the North should be empowered to commission and run services, just as Transport for London can. Being able to set and regulate their own contracts would make rail operators more accountable to their customers. This is true whether trains are privately or publicly run.

Giving it responsibility for infrastructure and management could improve efficiency and coordination between the disparate strands of the rail hierarchy. Ongoing management at a local level between operators and authorities is the only way to avoid a repeat of the recent fiasco. Surely that’s something even Yorkshire and Lancashire can agree on.

Ollie Potter is a research assistant at the think tank ResPublica.

 
 
 
 

To boost the high street, cities should invest in offices

Offices in Northampton. Image: Getty.

Access to cheap borrowing has encouraged local authorities to proactively invest in commercial property. These assets can be a valuable tool for cities looking to improve the built environment they offer businesses and residents.

Councils are estimated to have spent £3.8bn on property between 2013 and 2017, funded through the government’s Public Works Loan Board (PWLB) at very low interest rates. Offices accounted for half of this investment, and roughly a third (£1.2bn) has been spent on retail properties. And local authorities were the biggest investor group for UK shopping centres in the first quarter of 2018.

Why are cities investing? There are two major motivations.

First, at a time when cuts are squeezing council revenue budgets, property investments can provide a long-term revenue stream to keep quality public services up and running. Second, ownership of buildings in areas marked for redevelopment allows councils to assemble land more easily and gives them more influence over the changes taking place, allowing them to make sure the space evolves to meet their objectives.

But how exactly can cities turn property ownership into successful place-making? How should they adapt the buildings they invest in to improve the performance of the economies?

Cities need workers

When developing the city’s property offer, the aim should be to get jobs back into the city centre while reducing the dominance of retail space. For councils who have invested in existing retail space and shopping centres, in particular, the temptation may be to try and retain their existing use, with new retail strategies designed to reduce vacancies.

But as the Centre for Cities’ recent Building Blocks report illustrates, the evidence points to this being a dead-end. Instead, cities may need to convert the properties they own so they house a more diverse group of businesses.

Many city centres already have a lot of retail – and this has not offered significant economic benefit. Almost half (43 per cent) of city centre space in the weakest city economies is taken up by shops, while retail only accounts for 18 per cent of space in strong city centre economies. And many of these shops lie empty: in weaker city centres vacancy rates of high-street services (retail, food and leisure) are on average 16 per cent, compared with 9 per cent in stronger city economies. In Newport, nearly a quarter of these premises are empty, as the map below shows.

The big issue in these city centres is the lack of office jobs – which are an important contributor to footfall for retailers. This means that, in order to improve the fortunes of the high street, policy will need to tackle the barriers that deter those businesses from moving to their city centres.

One of these barriers is the quality of office space. In a number of struggling city centres, the quality of office space on offer is poor. But the low returns available for private investors mean that some form of public sector involvement will be required.


Ownership of buildings gives cities the opportunity to reshape the type of commercial space on offer. Some of this will involve improving the existing office stock available, some will involve converting retail to office, and some of will require demolishing part of the space without replacing it, in the short term at least. Without ownership of the land and buildings on it, this task becomes very difficult to do but will be a fundamental part of turning the fortunes of a city centre around.

Cheap borrowing has provided a way not only for local authorities to generate an income stream through property investment. but also opens up the opportunity to have greater control over the development of their city centres. For those choosing to invest, the focus must be on using ownership to make the city centre a more attractive place for all businesses to invest, rather than hoping to revive retail alone.

Rebecca McDonald is an analyst at the Centre for Cities, on whose blog this article first appeared.