Is the railway about to embark on a massive cost cutting exercise?

[ChristopherJ]

Since COVID has decimated passenger usage and TOC revenue income has fallen off a cliff, is the railway about to embark on a massive cost cutting exercise?

Discuss.

 

[gimmea50anyday]

Yes, and so I think it should.
Covid should be showing up the folly of the inefficiencies caused by 25 franchised train operating companies competing against each other when the real competition is from other modes of transport.

 

[Grumpy Git]

Yes, and so I think it should.
Covid should be showing up the folly of the inefficiencies caused by 25 franchised train operating companies competing against each other when the real competition is from other modes of transport.

Good answer.

There is too much vested interest.

 

[gimmea50anyday]

Let’s start with delay attribution. Ditch the money go round culture of blame and penalties and instead start analysing what is causing the delay and how to prevent it, rather than who is financially liable.

 

[Gloster]

Yes, and so I think it should.
Covid should be showing up the folly of the inefficiencies caused by 25 franchised train operating companies competing against each other when the real competition is from other modes of transport.

Unfortunately, government dogma means that it will be determined to maintain what it calls ‘competition’, so there will be little change to the franchising system. It is possible that a few franchises may be combined, but not much more. The savings will come by staff cuts, cuts in investment and a reduction in facilities/closures.

 

[Watershed]

The DfT has made noises about reducing costs, which has led to the significant reduction in timetables that many routes are currently seeing. TOCs are having to justify running trains in multiple using passenger data. None of these measures save more than a nominal sum, as fixed costs make up the lion's share of operational expenditure.

In reality they serve to keep the Treasury off the DfT's back - "look, we've reduced services as much as we can". They also accommodate (some would say hide!) the fact that many operators have unproductive crew sitting around, because they don't sign the required routes and/or traction. The latter has of course been magnified significantly by restrictions on in-cab training.

I think the railway is unlikely to lose many, if any, routes, but it's likely a lower timetable will continue to operate in the short to medium term. It's probably just about survived the worst of the crisis, so as long as the Treasury doesn't pull the plug at the last minute it will probably get out in much the same day-to-day shape as before.

There have already been some staff cutbacks as a result of Covid - Grand Central's Blackpool operation, outsourced catering staff at SWR and elsewhere and various zero-hour agency staff who haven't been given (m)any hours. It's possible there will be more - if so, I'd have thought these are likely to focus on grades such as catering or ticket office staff rather than guards or drivers.

Network Rail is certainly facing cutbacks to the programme of enhancements it was proposing to undertake in this Control Period - rather unfortunately, Covid has coincided with CP6's change to "authorise funding project by project" rather than the previous "pots" of money for enhancements. I think the largest savings, in cash terms, are likely to come from here.

 

[gimmea50anyday]

I think the grim reality is that the cuts in staff will potentially be in the reappearance of the DOO arguements. The DOO compliant trains have already been introduced and it is a matter of time over what I think is the inevitable, and Covid will merely accelerate that momentum. Obviously for my own sake I don’t want that to happen but I can see these next two years being very turbulent across the industry while the harsh reality of the costs of Covid bite and the money paid out needs to be clawed back from somewhere.

Personally I can see savings in a regrouping. The level and number of middle and some of the lower tiers of higher management that I can see that is just not needed, and the pooling together of regions and their resources will make far bigger savings through things such as ditching commercial rents and reoccupying unused station spaces, merging multiple traincrew depots at single locations and so on. Logic however and reality are far different beasts, and while we can speculate, we just don’t know what will happen, but I certainly cannot see logic being followed while private enterprise and commercialism remain deeply rooted in the DfTs ideaology

 

[The Planner]

Let’s start with delay attribution. Ditch the money go round culture of blame and penalties and instead start analysing what is causing the delay and how to prevent it, rather than who is financially liable.

That analysis does happen, a lot. Attribution still needs to happen regardless and the arguments of what/who is at fault will never go away.

 

[Dr Hoo]

That analysis does happen, a lot. Attribution still needs to happen regardless and the arguments of what/who is at fault will never go away.

Precisely; which is why British Rail ‘invented’ TRUST Delay Attribution in the first place!

 

[HSTEd]

If electric cars really do take off as anticipated, and passenger numbers are slower to recover, the railway could easily find itself in a politically uncomfortable position.

 

[JKF]

Conversely, there could be investment in the railway to stimulate the economy.

Austerity didn’t work particularly well after the last financial downturn and made for a long road back, so I think there will be an attempt to at least look like a different approach is being taken. You do hear Keynsian noises much more often now, and whilst it might just be spin from a government wanting to be liked by the public (see the indulgence of various no-hoper reopening schemes as an example) it is possible that they’re more open to the idea.

 

[43096]

Let’s start with delay attribution. Ditch the money go round culture of blame and penalties and instead start analysing what is causing the delay and how to prevent it, rather than who is financially liable.

That analysis does happen, a lot. Attribution still needs to happen regardless and the arguments of what/who is at fault will never go away.

It's all well and good trotting out the old line of money-go-round, but how do you incentivise improved performance if there's nothing financial attached to it? 25 years after privatisation and no-one has come up with anything better.

 

[HSTEd]

Conversely, there could be investment in the railway to stimulate the economy.

Well those two things are not necessarily contradictory.
For example investment in the railway might take the form of driving ETCS and resignalling faster, leading to substantial reductions in operating costs in the long run - less signalling maintenance work/staff and potentially a headcount reduction for signallers.

 

[LittleAH]

If electric cars really do take off as anticipated, and passenger numbers are slower to recover, the railway could easily find itself in a politically uncomfortable position.

There's a massive misconception with EV's as being some sort of panacea. Reality is that they're still very expensive, still push the world into road building, still pollute albeit quite a bit less so than internal combustion engine (brake dust, tyres, electricity production etc). What we need is a proper integrated transport plan that includes all modes of transport, even cycling and walking.

Passenger numbers may well be slow to recover, there's a really good podcast on The Economist about this and cities a few days ago and for the next few years, maybe even the decade, public transport may well need to be subsidised quite a bit. Because if you reduce frequencies, people will turn away more from public transport.

 

[Hadders]

Expect to see terms like maintenance holiday, patch and mend, 2 new trains for 3 trains scrapped, service reductions on little used lines become common themes...

 

[Philip]

Regarding staff cuts, do people think compulsory redundancy is likely to be on the cards, or are voluntary redundancy schemes (as has happened before fairly recently) more likely?

 

[Razza]

As far as I am aware, their is no compulsory redundancy on the Railway at the moment. The problem with voluntary redundancy it will be rather costly as a lot of staff have got long length's of service and often have large amounts of leave accrued. But I do think there will be closure of a number of ticket offices unless the station has large amount of footfall. I also reckon TfGM will have a more active role in the railway especially as you are based in Manchester.

 

[Watershed]

Regarding staff cuts, do people think compulsory redundancy is likely to be on the cards, or are voluntary redundancy schemes (as has happened before fairly recently) more likely?

The Promotion, Transfer, Redundancy & Resettlement (PTR&R) Agreement refers.

 

[Philip]

As far as I am aware, their is no compulsory redundancy on the Railway at the moment. The problem with voluntary redundancy it will be rather costly as a lot of staff have got long length's of service and often have large amounts of leave accrued. But I do think there will be closure of a number of ticket offices unless the station has large amount of footfall. I also reckon TfGM will have a more active role in the railway especially as you are based in Manchester.

Yes, regardless of the progress made with TVMs; online and mobile tickets, the ticket office still serves a very useful purpose at the busier stations. Speaking from experience, a fair number of passengers get stuck when trying to use the TVM and have trouble accessing or understanding their mobile ticket. I think journey planning is another area where the office comes into its own. And when it comes to disruption it can be like a call centre of questions and enquiries at the booking office. Not particularly pleasant to work through at the time, but healthy in terms of job security!

== Doublepost prevention - post automatically merged: 24 Feb 2021 ==

Yes, regardless of the progress made with TVMs; online and mobile tickets, the ticket office still serves a very useful purpose at the busier stations. Speaking from experience, a fair number of passengers get stuck when trying to use the TVM and have trouble accessing or understanding their mobile ticket. I think journey planning is another area where the office comes into its own. And when it comes to disruption it can be like a call centre of questions and enquiries at the booking office. Not particularly pleasant to work through at the time, but healthy in terms of job security!

The Promotion, Transfer, Redundancy & Resettlement (PTR&R) Agreement refers.

But the agreement would only come into question/operation if the DfT went down the line of compulsory redundancy. Grant Shapps recently said he wanted to freeze pay but to protect jobs instead, so that is reassuring.

 

[HST43257]

Just out of interest, do people thing that an automated driver system‘s costs would pay back much faster than a driver’s wages? I feel like, on shuttle lines, the guard (or train captain) can start the train then check tickets before getting to its destination. So you have full revenue protection, but one less staff member on board.

 

[Llandudno]

The roll out of yet more ‘smart’ motorways like the proposed Warrington - Wigan section on the M6 may well lead to more people travelling by train, I for one won’t drive on a so called, ‘smart’ motorway!

 

[HST43257]

The roll out of yet more ‘smart’ motorways like the proposed Warrington - Wigan section on the M6 may well lead to more people travelling by train, I for one won’t drive on a so called, ‘smart’ motorway!

The bigger issue is surely those working from home. I’d have thought that a smart motorway may just deter travellers in full.

 

[HSTEd]

Just out of interest, do people thing that an automated driver system‘s costs would pay back much faster than a driver’s wages? I feel like, on shuttle lines, the guard (or train captain) can start the train then check tickets before getting to its destination. So you have full revenue protection, but one less staff member on board.

That depends entirely on your interest rate assumptions on the capital required for the fitout, and what measures are deemed necessary to secure track against intruders.

 

[zwk500]

investment in the railway [...] leading to substantial reductions in operating costs in the long run

Almost certainly this will be the only substantial form government funding forthcoming for a long time. Disabled access improvement will also continue, as that is a legal obligation (and it increases the amount of potential passengers).

Just out of interest, do people thing that an automated driver system‘s costs would pay back much faster than a driver’s wages? I feel like, on shuttle lines, the guard (or train captain) can start the train then check tickets before getting to its destination. So you have full revenue protection, but one less staff member on board.

I think the scope for deployment would be relatively limited, needing self-contained lines and dedicated rolling stock. It might be feasible if you could take manual control for trips to the depot. I think most of the lines where it would be possible are either interworked enough to make it too expensive, or better off as part of light rail lines. The trend has been for through services to a major hub for greater connectivity, so these kind of branch-line shuttles are relatively rare (at least as a sole method of operation).

 

[HST43257]

Almost certainly this will be the only substantial form government funding forthcoming for a long time. Disabled access improvement will also continue, as that is a legal obligation (and it increases the amount of potential passengers).

I think the scope for deployment would be relatively limited, needing self-contained lines and dedicated rolling stock. It might be feasible if you could take manual control for trips to the depot. I think most of the lines where it would be possible are either interworked enough to make it too expensive, or better off as part of light rail lines. The trend has been for through services to a major hub for greater connectivity, so these kind of branch-line shuttles are relatively rare (at least as a sole method of operation).

I’m thinking Stourbridge as a pilot, then potential rollout to the GWR all year segregated routes, like the St Ives, Falmouth, Windsor, Henley and Marlow branches. Manually controlled depot trips would certainly be possible.

 

[Bletchleyite]

The roll out of yet more ‘smart’ motorways like the proposed Warrington - Wigan section on the M6 may well lead to more people travelling by train, I for one won’t drive on a so called, ‘smart’ motorway!

The thing about those is that there's a lot of fuss being made about the safety downgrade, but they are no more dangerous (in many ways less dangerous) than a 70mph dual carriageway A road which also doesn't have a hard shoulder. So I'd still drive on them, though I do wonder if they should all be set to a permanent 50 or 60mph limit until the work can be reversed.

I suspect that's a majority view.

 

[The Planner]

The roll out of yet more ‘smart’ motorways like the proposed Warrington - Wigan section on the M6 may well lead to more people travelling by train, I for one won’t drive on a so called, ‘smart’ motorway!

Won't even make a dent, what is different about driving on a 70mph dual carriageway than a 70mph smart motorway? the risks are still there if you have an issue on the inside lane.

 

[zwk500]

I’m thinking Stourbridge as a pilot, then potential rollout to the GWR all year segregated routes, like the St Ives, Falmouth, Windsor, Henley and Marlow branches. Manually controlled depot trips would certainly be possible.

I think, at this time, these lines are too small a pool of units and dispersed over too wide an area to give sufficient savings to justify the investment. To me, a better option would be the Very Light Rail railcar concept under DOO with revenue security conducted at the stations by automatic barriers.

 

[Philip]

How about running DMUs with one less engine working, like the 185s do? Would save a lot in fuel costs? I don't believe it would impact the performance of modern DMUs at least; I've been on 175s with an engine out and the train kept to time.

This sort of thing should be considered before compulsory redundancies are considered. Pay cuts too; if things get desperate staff across all roles may have to accept a drop in pay, but this would be better than redundancies.

 

[zwk500]

How about running DMUs with one less engine, like the 185s do? Would save a lot in fuel costs? I don't believe it would impact the performance of modern DMUs at least; I've been on 175s with an engine out and the train kept to time.

This sort of thing should be considered before compulsory redundancies are considered.

I'm not sure how many DMUs can be configured to run on only 1 engine dynamically. I believe the 185s can utilise all the engines when they need to, I'd guess most DMUs either have the engine off or on for the duration of the trip. Not that it would make much difference in terms of cost - the amount of diesel you'd save would be negligible. Staff costs are the highest operating cost. If you need to cut costs they will, inevitably, have to be reduced. It's possible to reduce the bill through means other than compulsory redundancies such as not replacing natural turnover and salary cuts but the diesel bill barely even registers against the staff bill. Not to mention some TOCs (& NR) don't have a substantial diesel fleet (GTR & SE in particular)