Avanti West Coast: should the state take over this train wreck?
The railways are beset by delays, cancellations and staff unrest, writes Jon Yeomans, and private operators are at risk of being derailed
Jon Yeomans
Sunday September 11 2022, 12.01am, The Sunday Times
On a balmy Tuesday evening in August, about 30 people stepped off their late-arriving Avanti train at Oxenholme station in the Lake District. Already tired and grumpy from the delay, the passengers were in for a worse shock: the gates to get out of the station were locked shut. Staff had gone home, believing they were finished for the day. At least one passenger attempted to scale the fence before a Network Rail employee with keys arrived to free them.
The episode was the latest blunder by a train company that was already on the ropes. Avanti faces questions about its competence after widespread cancellations and delays, and could even be stripped of its contract to run the West Coast Main Line, one of Britain’s most important rail arteries, connecting London with Birmingham, Manchester and Scotland. The firm is controlled by FTSE 250 company FirstGroup, while Trenitalia, owned by Italy’s state railway, holds a 30 per cent stake. It has run the West Coast line since late 2019, when it took over from Virgin Trains; last year, it delivered an £11.5 million dividend to its owners.
Last month, Avanti slashed the number of trains between London and Manchester from three an hour to one, blaming a chronic shortage of drivers. Staff, it claimed, are refusing to work on their rest days to deliver a weekend service. Managing director Phil Whittingham accused unions of staging “unofficial action” in a wider dispute about pay. The rail drivers’ union Aslef denounced the claims as a lie. Whittingham was sacked at the start of this month, but the wrangles continue, with new transport secretary Anne-Marie Trevelyan due to decide by October 16 whether or not to grant it a full ten-year contract for the line.
With passengers feeling the pain from its poor service, Avanti has become an unwilling poster boy for the campaign to nationalise bad rail operators. But the jury is still out on whether the state could run it any better.
Ellie Harrison, founder of the campaign group Bring Back British Rail, is sure nationalisation is the only solution. “It seems completely insane, given what’s going on with Avanti, to even contemplate extending that contract for ten years,” she said. Harrison argues that private operators are shielded from public scrutiny; they do not, for example, have to respond to Freedom of Information requests. “Railways always require vast amounts of public money,” she added. “Why, then, are we allowing these private companies to not only extract huge amounts of profit, but to do so without being subject to basic rules of accountability and transparency?”
Though privatised in the 1990s, the railways never entirely left public control, as rail franchises had to meet detailed conditions set by the Department for Transport (DfT). At various times, several failing private services have been taken over by the state. Today, the so-called Operator of Last Resort runs east coast rail company London North Eastern Railway (LNER), Northern Trains and Southeastern. ScotRail and Transport for Wales Rail are controlled by the devolved administrations.
Franchises were abolished at the start of the pandemic as lockdowns made them financially unviable. Under the new system, private train companies operate on contracts set by the DfT and earn a flat fee of about 1.5 per cent of revenues. Oversight of trains and track will fall under a new body called Great British Railways from 2024.
Avanti’s performance scores, as rated by regulator the Office of Rail and Road, have lagged those of publicly run rival LNER in recent years. LNER runs services on the East Coast Main Line from London to Yorkshire, Berwick and Edinburgh, the closest equivalent to Avanti’s line. LNER is generally regarded as well run with lower fares. Does that mean the case for renationalisation is open and shut?
Not quite, according to Ian Yeowart, who founded Grand Central Railway in the late 1990s to challenge the incumbent franchisee on the east coast. “Competition has got to be a good thing,” he said. “On the east coast, you’ve got LNER, Hull Trains, Grand Central and Lumo. They’ve all had to raise their game.”
The latter three of those are “open- access operators”, which apply for permission to run trains on certain routes and take on the full financial risk if the service flops. There are none on the West Coast Main Line, although Yeowart’s new venture, Grand Union Trains, has applied to run a service from London to Stirling, with limited stops in England. He also wants to run a fast service from the capital to South Wales.
“It’s very, very wise, and in the interests of passengers, to have high-speed operators in competition with each other,” said Tony Lodge, a researcher at the Centre for Policy Studies think tank. “But the Treasury has always been concerned about approving new open-access operators, in case they reduce the funds that come from the franchisee who’s already on the line.”
Approval for Grand Union’s plans could be a first test case for the new transport secretary, and how she wants the railway to develop. In the case of the London-South Wales route, the incumbent operator is Great Western Railway, run by FirstGroup, which, apart from controlling Avanti, operates the open-access company Lumo on the east coast.
A challenger to Avanti seems unlikely, for now; the same problems that have beset it are likely to bedevil any rival. There is, undoubtedly, a shortage of drivers in the industry. Junior transport minister Trudy Harrison told the Commons last week: “When the average age is 51 years and the average age of retirement is 59, we clearly have a problem with retention.” She admitted also that the gender balance of drivers was “woefully low”, with just 12 per cent being women.
The length of the coastal routes — both east and west — has compound the problem. Journey times are much longer, so Avanti needs more drivers per service than a commuter line into London, for example. Driver training is an expensive process and can take 18 months.
These problems are not unique to Avanti. Last week, TransPennine said it would move to an emergency timetable.
Although Harrison insisted that “all options are on the table” in regards to Avanti’s future, she added: “I am not convinced that bringing the railways into public ownership … will provide the solutions that passengers are looking for.” Avanti is working on a “recovery plan” but has yet to say when normal service might be restored, or when passengers will be able to book advance tickets beyond a few days.
Avanti admits that it is “not delivering the service our customers rightly expect” and said that its focus is on “working hard to rebuild our timetable in a resilient and sustainable way”.
Ministers are clearly unhappy with Avanti’s performance, although Harrison attempted a partial defence of the company when she noted that it had only had 16 weeks to get to grips with the line before Covid hit in 2020. However, most of Avanti’s rank-and-file — and its managers, including Whittingham — were inherited from Virgin Trains, so knew the line intimately.
The arguments for renationalisation are likely to rage on ahead of the next election, especially given Labour’s repeated calls to look at taking lines back under state control. Advocates of privatisation are quick to note that passenger numbers have jumped in the past 30 years. Others point out that many train lines have ended up being operated by state-owned foreign railways.
Train operators, meanwhile, have lobbied to be given more of the “revenue risk” to give them an incentive to grow passenger numbers again. This could mean earning a bigger slice of rail fares, or else bonus payments, in return for shouldering more of the risk of passenger journeys falling. Critics say that would wind the clock back to the franchise era.
Most parties can agree, however, that the railway cannot rely on goodwill to staff weekend shifts — even if this has been long-term practice at all train companies. While not entirely endorsing the view that unions were to blame, Harrison noted that “40 of the 50 [Avanti] drivers who regularly work their rest days” are no longer willing to do so.
The DfT now wants to “modernise” working arrangements — but this could entail another fight with unions, and yet more strike action. There’s no light at the end of the tunnel for passengers yet.