Why is there now an obsession with re-nationalisation?

[LNW-GW Joint]

I was interested to hear that John Armitt, ex-MD of Network Rail and now Chair of the National Infrastructure Commission (and National Express), had said that the rail franchise model was broken.
This sounded like more ammunition for the nationalisers, but in fact he was saying that the balance of risk had tilted too far towards the TOCs and away from the DfT.
He wanted to see a formula which coped better with the ebb and flow of the rail economy.
The current method for recent franchises is to track moves in GDP, which is not following rail revenues.
https://www.bbc.co.uk/news/business-44777252

"But in fact the rail franchise companies, as we've seen, have to take very significant revenue risk, and that's got them into trouble, because the government will always go for the most optimistic forecast of revenue," he said.
"That model, I think, is bust, and it needs to be reviewed, and a more appropriate sharing of risk on the railway needs to take place."

 

[The Ham]

I do wonder if there's a need to shift the balance of penalties for late running trains to be in favour of the passengers.

In doing so (for instance) if NR caused a delay then although the TOC would be compensated for the cost of running their services they wouldn't make a profit from a delay. In doing so it would be in the TOC's interest to ensure that problems were fixed.

Although this may not be enough to make much difference it could ensure that there's two organisations looking out for problem patterns and the TOC's may even put up some of their own money for infrastructure works (which could just tip the balance for such works to go ahead).

It would also probably result in TOC's running most services with a minimum of 2 units. As this would ensure that if a unit failed it could be rescued quickly and/or that individual services were less likely to be cancelled to minimise the costs associated with cancelling a service.

I would also like to see a move towards guidance on minimum service level provission based on how busy individual stations and lines are. In setting this it would be possible to see where there was a need for TOC's to improve services. There would need to be a regional bias as stations in the South East would likely need to have a lower level of provision per 100,000 passengers busy as there's not scope to improve things.

Although some of this could be covered by the service level being more bias towards quieter stations (for instance you are never going to be able provide seats for everyone at Waterloo, yet along a route where the stations have 10 million passengers you'd probably want the trains to be able to carry 12-17 million passengers seated so that the trains weren't too busy in the peaks.

 

[Rail Blues]

balance of risk had tilted too far towards the TOCs and away from the DfT.

To misquote Mandy Rice Davies, he would say that wouldn't he?

 

[The Ham]

One of the problems with nationalised organisations is that they often have similar problems to council's.

I'm aware of a local council who has got some work that needs doing (small level stuff which should cost £300-£500) where two companies have been asked for quotes (where they've done work the council before for a reasonable quote) one has said they don't want the work because it's for said council. The other has given a very inflated figure (circa £2,000-£3,000) again because they don't really want to do the work. Clearly there's a reason that these companies have changed their prices, which I wouldn't want to speculate on, but that's where government should be looking to fix things.

However, because of the way things are set up they would do the same work for a competitive price for the private organisation which operates certain services for the same council.

In this case it's a charity, however it the above is an example of how private companies could be set up to operate doing nothing more that asking for two quotes, one for the council and one privately. They then get council approval for the figure on the council quote and approve the works using their quote. They finally invoice the council for the agreed figure and then keep the difference.

If the council involved were to ever to try and bring it back in house there would be no cost savings as the same companies who had been doing the work would continue to provide the same quotes to them.

It's this kind of efficiencies which was the reason for privatisation in the first place.

 

[yorksrob]

Are franchises not specified wi

One of the problems with nationalised organisations is that they often have similar problems to council's.

I'm aware of a local council who has got some work that needs doing (small level stuff which should cost £300-£500) where two companies have been asked for quotes (where they've done work the council before for a reasonable quote) one has said they don't want the work because it's for said council. The other has given a very inflated figure (circa £2,000-£3,000) again because they don't really want to do the work. Clearly there's a reason that these companies have changed their prices, which I wouldn't want to speculate on, but that's where government should be looking to fix things.

However, because of the way things are set up they would do the same work for a competitive price for the private organisation which operates certain services for the same council.

In this case it's a charity, however it the above is an example of how private companies could be set up to operate doing nothing more that asking for two quotes, one for the council and one privately. They then get council approval for the figure on the council quote and approve the works using their quote. They finally invoice the council for the agreed figure and then keep the difference.

If the council involved were to ever to try and bring it back in house there would be no cost savings as the same companies who had been doing the work would continue to provide the same quotes to them.

It's this kind of efficiencies which was the reason for privatisation in the first place.

Surely in such circumstances with an organisation the size of Network Rail, the answer is to do more work in-house.

 

[Northhighland]

I was interested to hear that John Armitt, ex-MD of Network Rail and now Chair of the National Infrastructure Commission (and National Express), had said that the rail franchise model was broken.
This sounded like more ammunition for the nationalisers, but in fact he was saying that the balance of risk had tilted too far towards the TOCs and away from the DfT.
He wanted to see a formula which coped better with the ebb and flow of the rail economy.
The current method for recent franchises is to track moves in GDP, which is not following rail revenues.
https://www.bbc.co.uk/news/business-44777252

I am not so sure that the public are too bothered who runs the trains provided they run as timetabled and at a reasonable cost with a seat for your journey. Pretty basic requirements that the current model doesn’t deliver nearly consistently enough.

The recent timetable debacle is a clear illustration the current system is broken. It is a disgrace that after billions of pounds of investment, years of putting up with overcrowding and ref promise of jam tomorrow, just as the jam was due to be delivered the companies failed abysmally to plan for it or deliver it.

Yet there is no accountability. Not at Government level, not at Network rail level, not at TOC level. If you ever needed an illustration of how little TOC managers understand or care about passengers then the SR bloke taking two seats in first class while chucking out passengers clearly provided it.

I know the apologists will come on here and say there were half empty coaches at the other end etc etc. But the issue was he had little or no understanding or compassion for long suffering passengers.

We need a different model for our railways. TOC’s are not customer focused. They do not deliver any better a service to the customer now than 10 years ago when looking at direct travelling experience.

I don’t know if nationalisation is the answer or not but the distaste with which some in here use the word is equally as wrong as the most ardent proponent of nationalisation

I see little vision from anyone how we make the rail system deliver better experience for the passenger or the taxpayer.

This is an industry that has enjoyed billions in subsidy and failed to deliver the experience passengers and taxpayers are paying for.

We need new thinking and less political dogma. In fact less politics full stop.

 

[Railwaysceptic]

To misquote Mandy Rice Davies, he would say that wouldn't he?

I don't think that is a misquote.

 

[Railwaysceptic]

I don’t know if nationalisation is the answer or not but the distaste with which some in here use the word is equally as wrong as the most ardent proponent of nationalisation

I see little vision from anyone how we make the rail system deliver better experience for the passenger or the taxpayer.

This is an industry that has enjoyed billions in subsidy and failed to deliver the experience passengers and taxpayers are paying for.

We need new thinking and less political dogma. In fact less politics full stop.

The only realistic, practicable vision available to us is the vision of how the old B. R. - with massive strength-in-depth of knowledge, experience and understanding - might have performed if they had been given about half as much of taxpayers' money as has been showered onto the railway since "privatisation." As B. R. no longer exists, it is difficult to envisage a workable return to a well-run railway system that provides value for taxpayers' money.

 

[etr221]

We need a different model for our railways. TOC’s are not customer focused. They do not deliver any better a service to the customer now than 10 years ago when looking at direct travelling experience.

But who are the TOC's customers? The passengers or the DfT? Everybody thinks they are the passengers - but to get their franchise, the TOC puts their pitch to the DfT - who after granting the franchise may or may not be bothered by any inadequacy in performance, and may or may not have a meaningful comeback to it (see https://twitter.com/garius/status/1014495685310402562 for an example) - so arguably the important customer is the DfT.

 

[Rail Blues]

I don't think that is a misquote.

She actually said 'He would wouldn't he?' when the prosecution put it her that Lord Astor denied ever having met her.

A bit like 'Alas Poor Yorrick I knew him well' and 'Play it again Sam' the misquote has entered the public consciousness.

 

[backontrack]

Would we call it an 'obsession'? I don't think it really is, much. There's been public support for nationalising for a while now, and the idea of renationalisation the railways has been floating about for a fair few years. I'd argue that it's only really come to the forefront now because one of the main political parties is offering it.

The memorable phrase "poll tax on wheels" was coined at around this time.

Very memorable. I shall remember that.

On another topic...as much as the lack of rail renationalisation can be used as a scapegoat for the railway's failings (although I've also seen considered and well-thought-out arguments from some of its proponents)...why is the answer to the question "Why shouldn't we renationalise?" always "Because British Rail"?

BR is obviously the only example of a nationalised system we've had in Britain, but surely nationalised networks in other European countries that are currently operating, rather than one in our own country that ceased to be 20 years ago, could be used to form a more apt comparison?

 

[Northhighland]

But who are the TOC's customers? The passengers or the DfT? Everybody thinks they are the passengers - but to get their franchise, the TOC puts their pitch to the DfT - who after granting the franchise may or may not be bothered by any inadequacy in performance, and may or may not have a meaningful comeback to it (see https://twitter.com/garius/status/1014495685310402562 for an example) - so arguably the important customer is the DfT.

The customer is the passenger. That is the problem with current franchising System it introduces the concept of two customers, the relationship with the DFt is more important than fare paying passenger. As long as this perverse relationship exists the passenger will always be an afterthought.

 

[Dr Hoo]

The customer is the passenger. That is the problem with current franchising System it introduces the concept of two customers, the relationship with the DFt is more important than fare paying passenger. As long as this perverse relationship exists the passenger will always be an afterthought.

This isn't a new concept. Even in the 'mid-BR' days under the chairmanship of Sir Peter Parker he was keen to promote the idea of a "contract" with government as a better idea than simply being a subsidy junkie. The subsidiary "contracts" with PTEs were also recognised. Under these contracts both sides had obligations - funders to subsidise (and invest where they wanted to) and BR to run services on as thin a shoestring as possible. The passengers (and to a large extent freight customers) moved out of focus from that point on.

 

[LNW-GW Joint]

To misquote Mandy Rice Davies, he would say that wouldn't he?

Why?
He has led both public and private sector enterprises (not least the Olympic Delivery Authority) and is currently running the Treasury's infrastructure planning group.
He was competent at Network Rail (then nominally outside the public sector, but in reality inside it).
He did, however, come up with the "electrification is just another interface to go wrong" quote (before NR screwed the programme up after his watch).
If there is to be a "single controlling mind" for the railway, it's likely to be someone like him, I think (maybe too old now though, at 72).

 

[Railwaysceptic]

She actually said 'He would wouldn't he?' when the prosecution put it her that Lord Astor denied ever having met her.

A bit like 'Alas Poor Yorrick I knew him well' and 'Play it again Sam' the misquote has entered the public consciousness.

You're right, or at least almost. I'm so familiar with the quote that I misread the exact words you were using. I think the exact quote is "Well, he would, wouldn't he?"

 

[matt_world2004]

In doing so (for instance) if NR caused a delay then although the TOC would be compensated for the cost of running their services they wouldn't make a profit from a delay. In doing so it would be in the TOC's interest to ensure that problems were fixed.

Although this may not be enough to make much difference it could ensure that there's two organisations looking out for problem patterns and the TOC's may even put up some of their own money for infrastructure works (which could just tip the balance for such works to go ahead).
.

This is how tfl rail and london overground work. They are fined for the delay regardless of reason to encourage service recobery

 

[Basher]

As a guy who has been around for some time and an ex railway employee of many years ago I’v seen and heard it all before. Politicians will always take the view on a topic that suits them to stay in power. When the railways were privatised the country had no need to finance any new rolling stock, so the capital that that would have been spent on equipment, and rolling stock suddenly was available to spend on other things (such as benefits). It is the same principle as PFI, government capital spend stopped on hospitals, schools etc, so big amounts of cash were available to wow voters (Mr Brown was responsible) But as the project came on line the revenue account started to rise increasing the governments need for more tax rises. So pre-privatisation of rail companies would attract the union vote. As I live where there is no rail services, why should I pay more tax for a railway system that does not give me and many other people benefit?

 

[matt_world2004]

As a guy who has been around for some time and an ex railway employee of many years ago I’v seen and heard it all before. Politicians will always take the view on a topic that suits them to stay in power. When the railways were privatised the country had no need to finance any new rolling stock, so the capital that that would have been spent on equipment, and rolling stock suddenly was available to spend on other things (such as benefits). It is the same principle as PFI, government capital spend stopped on hospitals, schools etc, so big amounts of cash were available to wow voters (Mr Brown was responsible) But as the project came on line the revenue account started to rise increasing the governments need for more tax rises. So pre-privatisation of rail companies would attract the union vote. As I live where there is no rail services, why should I pay more tax for a railway system that does not give me and many other people benefit?

Your taxes are being paid to help run the railway now..,

 

[Railwaysceptic]

Your taxes are being paid to help run the railway now..,

Yes, and that's what he's questioning! Why should he have to pay tax for something he's unable to use when items his family value, such as free university tuition or bobbies on the beat, are now proclaimed by politicians as being unaffordable.

 

[The Ham]

Yes, and that's what he's questioning! Why should he have to pay tax for something he's unable to use when items his family value, such as free university tuition or bobbies on the beat, are now proclaimed by politicians as being unaffordable.

The problem is that regardless of how easy it is for one person to benefit from something the government pays for they do benefit from it indirectly.

For instance the railways. Unless you never go anywhere where there is a railway then there's going to be times when you travel where congestion is less because others are going by train.

I don't recall the last time I even had to have as GP's appointment, yet I value the NHS for the times that it's been there for people I know.

Likewise none of my family have ever needed benefits, yet I value it being there as it provides a safety net for those that need it.

Even the development budget be benefits us through giving the UK a good reputation and more directly still by being the second biggest contribution to stopping the spread of Ebola. The latter is it had not been stopped the cost to the NHS alone in a year or two would have dwarfed the development spend for the last 20 years.

 

[Gareth Marston]

Yes, and that's what he's questioning! Why should he have to pay tax for something he's unable to use when items his family value, such as free university tuition or bobbies on the beat, are now proclaimed by politicians as being unaffordable.

Explain how it will work when people start picking and choosing what their taxes are spent on? I don't want mine spent on the Royal Family/subsidizing the Road Haulage Industry/ Nuclear weapons etc. Forms of hypothecation is totally impractical and that's why we don't have it.

 

[Railwaysceptic]

The problem is that regardless of how easy it is for one person to benefit from something the government pays for they do benefit from it indirectly.

For instance the railways. Unless you never go anywhere where there is a railway then there's going to be times when you travel where congestion is less because others are going by train.

I don't recall the last time I even had to have as GP's appointment, yet I value the NHS for the times that it's been there for people I know.

Likewise none of my family have ever needed benefits, yet I value it being there as it provides a safety net for those that need it.

Even the development budget be benefits us through giving the UK a good reputation and more directly still by being the second biggest contribution to stopping the spread of Ebola. The latter is it had not been stopped the cost to the NHS alone in a year or two would have dwarfed the development spend for the last 20 years.

That's a nice line of argument, and I'm not going to challenge any of it because it's way off topic. However, the NHS and welfare benefits are there if you ever need them. The railway is not there him if he ever needs it, so he'd rather his taxes were spent on things he values.

I think he's raised a very important point of principle which far too many contributors to this forum are determined to ignore: that taxpayers have their own rights and do not have stand still while being exploited by a parasitical railway industry which makes no real attempt to pay its own way.

 

[Goldfish62]

Explain how it will work when people start picking and choosing what their taxes are spent on? I don't want mine spent on the Royal Family/subsidizing the Road Haulage Industry/ Nuclear weapons etc. Forms of hypothecation is totally impractical and that's why we don't have it.

Quite. Picking and choosing as described is on the road to anarchy. When you live in a civilised society you have to accept that money will be spent on things that you personally don't agree with.

 

[Gareth Marston]

I am not so sure that the public are too bothered who runs the trains provided they run as timetabled and at a reasonable cost with a seat for your journey. Pretty basic requirements that the current model doesn’t deliver nearly consistently enough.

The recent timetable debacle is a clear illustration the current system is broken. It is a disgrace that after billions of pounds of investment, years of putting up with overcrowding and ref promise of jam tomorrow, just as the jam was due to be delivered the companies failed abysmally to plan for it or deliver it.

Yet there is no accountability. Not at Government level, not at Network rail level, not at TOC level. If you ever needed an illustration of how little TOC managers understand or care about passengers then the SR bloke taking two seats in first class while chucking out passengers clearly provided it.

I know the apologists will come on here and say there were half empty coaches at the other end etc etc. But the issue was he had little or no understanding or compassion for long suffering passengers.

We need a different model for our railways. TOC’s are not customer focused. They do not deliver any better a service to the customer now than 10 years ago when looking at direct travelling experience.

I don’t know if nationalisation is the answer or not but the distaste with which some in here use the word is equally as wrong as the most ardent proponent of nationalisation

I see little vision from anyone how we make the rail system deliver better experience for the passenger or the taxpayer.

This is an industry that has enjoyed billions in subsidy and failed to deliver the experience passengers and taxpayers are paying for.

We need new thinking and less political dogma. In fact less politics full stop.

The current lack of accountability is perhaps the biggest obstacle as some people are petrified of losing it.

 

[Railwaysceptic]

Quite. Picking and choosing as described is on the road to anarchy. When you live in a civilised society you have to accept that money will be spent on things that you personally don't agree with.

As long as it's done within the framework and principles of democracy.

No-one in this thread has suggested that any tax-payer can refuse to pay any particular tax.

For the most part Governments spend money on policies which have substantial support and minimal opposition; e.g. education, law enforcement, the NHS. Included in this is expenditure which benefits only a small minority: very few people object to extra help for the disabled. There is also expenditure on minority interests which do not have much public support: e.g. subsidising opera. However there is little strong feeling about subsidies to the arts because most people recognise that the sums involved are small.

The sums spent subsiding railways are not small but most people in this country do not use railways. The question which has been raised is: it is proper to spend such large amounts to subsidise a minority form of transport which is not available to some people?

 

[Esker-pades]

Yes, and that's what he's questioning! Why should he have to pay tax for something he's unable to use when items his family value, such as free university tuition or bobbies on the beat, are now proclaimed by politicians as being unaffordable.

Because tax pays for things which are a public service for the public good. The railways easily come under that. Affordable and fast public transport is one of the most important things when it comes to stimulating an economy.

 

[AndrewE]

The railway is not there him if he ever needs it, so he'd rather his taxes were spent on things he values.
I think he's raised a very important point of principle which far too many contributors to this forum are determined to ignore: that taxpayers have their own rights and do not have stand still while being exploited by a parasitical railway industry which makes no real attempt to pay its own way.

The sums spent subsiding railways are not small but most people in this country do not use railways. The question which has been raised is: it is proper to spend such large amounts to subsidise a minority form of transport which is not available to some people?

He does benefit: people on trains are therefore not driving, causing congestion on the roads round him (and also adding to the pressure for more roadbuilding - I say that as someone in the middle of a 3 month road blockade for a big road junction enlargement, which when completed will make our life more difficult too.) Not to mention the loss of farmland and groundwater recharge because of the amount of tarmac being put down.

Because tax pays for things which are a public service for the public good. The railways easily come under that. Affordable and fast public transport is one of the most important things when it comes to stimulating an economy.

Exactly, and it also cuts pollution and consequent ill-health which a narrow-minded complainant might ignore.

 

[Gareth Marston]

As long as it's done within the framework and principles of democracy.

No-one in this thread has suggested that any tax-payer can refuse to pay any particular tax.

For the most part Governments spend money on policies which have substantial support and minimal opposition; e.g. education, law enforcement, the NHS. Included in this is expenditure which benefits only a small minority: very few people object to extra help for the disabled. There is also expenditure on minority interests which do not have much public support: e.g. subsidising opera. However there is little strong feeling about subsidies to the arts because most people recognise that the sums involved are small.

The sums spent subsiding railways are not small but most people in this country do not use railways. The question which has been raised is: it is proper to spend such large amounts to subsidise a minority form of transport which is not available to some people?

As has been pointed out to you before in other threads studies like the annual Transport Trends from the DfT consistently show 60% of UK population claim to have made at least one journey a year by rail. Most people do use the railway.

 

[Esker-pades]

Exactly, and it also cuts pollution and consequent ill-health which a narrow-minded complainant might ignore.

And reduces road congestion. It's almost like railways are a good idea.

 

[AndrewE]

As has been pointed out to you before in other threads studies like the annual Transport Trends from the DfT consistently show 60% of UK population claim to have made at least one journey a year by rail. Most people do use the railway.

but even the ones that don't benefit in lots of ways by the fact that others do. Even eventually from lower NHS bills from fitter people who walk to the station and don't pollute the atmosphere?