How have the ground rules changed, except as a result of privatisation itself ? And if the ground rules have changed, how does this excuse the lack of practical improvement for many passengers post-privatisation ?
For the avoidance of doubt, there is no such thing as a completely privatised railway in the UK at the moment. You should realise this so your continual banging on about the perceived disadvantages of the ’privatised’ railway seems to me to be more about trying to make a political point than in contributing in any material manner to an informed debate on how the railway business should develop in the future.
I assume that you are well aware that the way the railways are governed/directed/funded since the 2003 Railways Act has been through several changes. What now exists bears little relationship to the structure as originally conceived which lasted only about three years. The following twenty years have seen Government involved more and more in the minutiae of railway operation.
A short summary of the main changes - a history lesson if you like. For simplicity I discuss only the passenger railway.
Original arrangement.
Franchises were let by the Office for Passenger Rail Franchising (OPRAF), the bids were accepted on the basis of lowest subsidy/highest premium. There were no specifications for train operation and rolling stock except that the timetable had be broadly the same as that operated by BR in the same area. In practice in order to increase income most of the franchisees increased train frequencies using spare capacity in existing diagrams and/or tried to break into other areas where it was felt a profitable market existed. All these changes could be made with reference to the DfT as long as the franchisee’s global subsidy limits were not exceeded or the premium payable was reduced.
Infrastructure was controlled by Railtrack a publicly listed company and the Office of the Rail Regulator (ORR) was intended to act as the TOC’s champion in their dealings with the monopoly supplier Railtrack and adjudicate on track access.
Strategic Rail Authority (SRA)
Following Labour’s election to form the Government in 1997 it was clear that because of ideological reasons it could not allow the structure set up by the previous Government to continue unchanged - even before the new structures could properly bed in. In 1997 it set up the SRA, firstly in Shadow form which was then given legal basis by the Transport Act 2000. It took over OPRAF’s functions in awarding and ensuring compliance with the franchise contracts.
After some dalliance with the concepts of longer franchises to attract more private capital into the infrastructure (Chiltern being the only result of this phase) the second round of franchise awards became more prescriptive because of perceived weaknesses in the services that some franchisees were offering compared to what the SRA thought it was buying. Details included service frequencies to be offered, times of first and last trains, cleanliness and so on.
Post-Hatfield
Following the Hatfield crash it became clear that Railtrack needed more finance and that the settlement agreed with the Rail Regulator for Control Period 2 was not sufficient. Hatfield had cost some £500m for repairs and replacing miles of rail and £500m for compensation to the TOCs for delays. So in April 2001 the government agreed with Railtrack to bring forward £1.5bn from Control Period 3 (which would have run from April 2006). This money was not forthcoming as the government could not find a way of transferring it without it ending up on the Public Sector Borrowing Requirement (PSBR, now called the Budget Deficit). The then Chancellor of the Exchequer would not countenance an increase in the PSBR so this decision contributed to the funding shortfall which led to Railtrack being put into administration.
The Government was now committed to pumping much more money into Network Rail than the Treasury had planned for and was looking for ways to limit its exposure. By this time (2002/3) it was clear that the increase in passenger numbers seen since 1994/5 was going to continue and not fade away as such increases so often did under BR. (This is not meant as a criticism - it is simply a statement of what had happened). As a result the Government saw an opportunity to raise more money from both the passengers and the TOCs and two things happened:
- in 2004 the regulated fare cap was changed from RPI-1% to RPI+1%.
- for future franchises a pre-determined profile for the increase in the premium payments was incorporated into the Invitation to Tender. For example the East Coast ITT required a Compound Annual Growth Rate (CAGR) of 8.7% for the franchise starting in May 2005 - this was still in the period when Gordon Brown had banished ‘boom and bust’. If the bidders did not follow the requirements the bid would be deemed ’non-compliant’ and rejected. Even as seen then, the CAGR appeared to be very brave. The main point is, though, that it was the government, not the bidder, determining up to 10 years in advance, what premiums should be paid.
New trains and timetables
first Great Western started to consider a replacement for the HSTs in the early 2000s. The SRA considered that this activity properly belonged in its area of interest as it thought the concept could be used on other routes and stopped fGW from pursuing its work with the ROSCOs. After the SRA was wound up a year or so later the activities transferred to the DfT which in June 2005 announced what it called the HST2 programme. This morphed into the IEP.
In 2008 Stuart Baker of the DfT presented the IEP to a meeting of GW management in Swindon. Based on a notional timetable and the DfT’s analysis of train loadings a service pattern was unveiled which, among other things, called for a 5+5 trains from Paddington to split at Swindon to serve different destinations. The sets would be re-joined at Swindon for the leg back to Paddington. I am reliably informed that questions were asked along the lines of what would happen if one of the two in-bound parts were to be late. Would train crew be held spare at Swindon so that both parts could be run independently to Paddington or would the first part of the train to arrive be held for 10, 15, 20 minutes or whatever until the second part arrived. Apparently no clear answer was given.
In 2011 I attended an IMechE meeting where I first heard Mr Baker talking about the non-stop Bristol Parkway - Paddington services. The DfT was now writing the timetables - not the TOC.
So we now have a situation where the IEP train fleet:
- is sized to service a notional timetable drawn up in 2007/8 but now, 10 years later, has to operate a real one with the actual flows
- is issued to the TOC which pays for them on a schedule agreed between Agility Trains and the DfT
- has to get the trains back to the pre-planned maintenance depot at the end of the diagram to meet the terms of the maintenance contract, agreed between the DfT and Agility Trains.
All this without significant participation of the people actually operating the trains.
Because of issues in gaining approvals for the first trains built after 1995/6 to operate on Railtrack/Network Rail’s infrastructure and because of the DfT’s spat with the ROSCOs (although they are creatures of the DfT) the DfT took over the specification and procurement - but not the funding - of new trains.
One fleet was the IEP the other the Class 700. In the latter case the Department issued the invitation to tender for the trains in November 2008, estimating that it would take around 16 months to complete the procurement and award the contract. In fact it took over four and a half years, with the Department finally awarding the contract in June 2013. It had, in fact, already selected the trains and builder two years earlier in June 2011. If the DfT had bought the trains outright, or if it had left the procurement to a ROSCO, then the two extra years development might have meant that the Moving Average of the Miles per Technical Incident would by now be better than 6342 - about the level reached by a Pacer.
One of the people closely involved with the new trains, Clarence Yard whose contributions I value, posts in these Forums and wrote in this
post :
… The network and services on it are a political construction where political considerations, such as service frequency or seats from particular locations, are required to be provided and if they are not too expensive, they get baked into the franchise, concession or DA.
SNIP
… But that’s not how we currently decide services - the DfT specifies, the TOC provides (even if it thinks it’s daft) and the DfT have to pay for it, frequently though the nose because we TOCs have much better lawyers than they do when it comes to the franchise agreement.
By no stretch of the imagination can this be called a privatised railway. I am not surprised that you find it difficult to identify the benefits of privatisation.
