Fare rise, same excuse!

[ACE1888]

One modern trend I detest is 'spin', championed under 'Blair', and used in full swing by TOC's, is the Government investing it back into the system? New Lines, new stock...is it f*** Grrrrrrrr
You scratch my back TOC, and I'll scratch yours Government...
Modern day 'jobs for the boys'
Rant Over....

 

[HH]

The idea of privatising the railway was to make the railway less of a burden to the taxpayer and exactly the opposite has happened.

For it's size BR was quiet efficient whereas now we have each TOC with it's own management structure and accountancy structure which by it's very nature is going to be more costly than one single company.

If I was the government looking to cut the deficit then I'd look at renationalising but that going to happen as it would go against the grain and also would upset some shareholders.....

There's a letter in this month's Rail Pro which points out why these comparisons are flawed.

Tax.

BR didn't pay any. The TOCs, FOCS, ROSCOs and even NR pay millions.

As for management structures, I can quite definitely say that most TOCs are a model of efficiency compared to what was at BR.

Anyone who has studied even a little bit of economics will realise the problems of "Diseconomies of scale", which is why super TOCs don't work either, and NR is generally less efficient than TOCs.

Another good comparison is BTP, which has twice as many back office staff per frontline staff as TOCs.

 

[Holly]

There's a letter in this month's Rail Pro which points out why these comparisons are flawed.
Tax.
BR didn't pay any. The TOCs, FOCS, ROSCOs and even NR pay millions.
....

Yes exactly.
They would need to pay about 3billion, not mere millions, to be a break even situation for the tax payer.

All this cost and what do we get for it?
Smaller more cramped seating and less luggage space.

 

[Xenophon PCDGS]

Yes exactly. They would need to pay about £3 billion, not mere millions, to be a break even situation for the tax payer.

All this cost and what do we get for it? Smaller more cramped seating and less luggage space.

It does not stop them wheeling out the same old mantra, year on year, in the hope that the more times it will be heard and seen, that the public will accept it as a common truth and not one to be questioned.

As I said earlier in the thread, Northern who are still under the "no growth" franchise stipulation until 2014, should be exempted from this "surcharge", as I cannot recall the time when "new trains" as so described have ever been seen since Northern took over the franchise. Perhaps my understanding of the word "new" differs from the understanding of others.

 

[yorksrob]

Tax.

BR didn't pay any. The TOCs, FOCS, ROSCOs and even NR pay millions.

As for management structures, I can quite definitely say that most TOCs are a model of efficiency compared to what was at BR.

Anyone who has studied even a little bit of economics will realise the problems of "Diseconomies of scale", which is why super TOCs don't work either, and NR is generally less efficient than TOCs.

I'm afraid I still don't see the point in receiving all of this tax if it merely has to be paid out to the railway again to keep it running. Infact, this whole situation merely leads to more Government control of the railway because it ends up shifting all of the money around the system.

With regard to management, are you saying that there are now fewer managers on the railway receiving less in total wages than under BR ?

 

[ANorthernGuard]

It does not stop them wheeling out the same old mantra, year on year, in the hope that the more times it will be heard and seen, that the public will accept it as a common truth and not one to be questioned.

As I said earlier in the thread, Northern who are still under the "no growth" franchise stipulation until 2014, should be exempted from this "surcharge", as I cannot recall the time when "new trains" as so described have ever been seen since Northern took over the franchise. Perhaps my understanding of the word "new" differs from the understanding of others.

Northern (according to our MD our doing so badly we cannot have any xmas vouchers or even a card this year), (I am NOT kidding), so guys/gals if you think yourselves as Passengers get treated poorly, so do ourselves who have to work on our decrepid stock, Goodwill is what keeps the railway going, when MD's start treating their staff like s**t (TPE is avery good example) The company as a whole suffers. The annoying thing is we know how much money we make them and how much they get paid, no one likes Bulls**t especially when it comes from above

 

[CosherB]

3p of everyones pound spent on railways goes as profit to the railways. For Coca Cola it is 27p of every pound. Yet train companies are made to look greedy? Bit of a ridiculous world to be honest.

That's an odd viewpoint. Do you know how businesses work? Maybe Coca Cola makes a good profit because it is a heck of a lot more efficient than the railway, and that if Coca Cola were running trains we could halve fares?

I could turn your argument around and say your figures show that the railway is being greedy for absorbing such a lot of revenue to run inefficient internal systems, whereas Coca Cola is lean and efficient and returns good profits for its shareholders.

Presumably Coca Cola is competitive with other fizzy drink companies as it manages to stay in business and that's what ensures it's lean and efficient. The competition for the rialways is largely non-existant especially for London commuters so where's the incentive for efficiency?

 

[northwichcat]

Northern (according to our MD our doing so badly we cannot have any xmas vouchers or even a card this year), (I am NOT kidding), so guys/gals if you think yourselves as Passengers get treated poorly, so do ourselves who have to work on our decrepid stock, Goodwill is what keeps the railway going, when MD's start treating their staff like s**t (TPE is avery good example) The company as a whole suffers. The annoying thing is we know how much money we make them and how much they get paid, no one likes Bulls**t especially when it comes from above

You'll find that's the same in virtually any industry. Profits fall and the normal employees suffer not the management.

Many office based workers have to pay for their own Christmas party/dinner now and the employers tend to choose somewhere that's more expensive than most employees are happy to pay. If you refuse to go then you're not seen as a team player.

Rail employees have the option of union representation so don't get blackmailed in to doing things like working overtime without pay without union action being taken.

And one important perk of being a rail employee is usually free travel to and from work. Most people would be extremely happy if their employer offered that.
--- old post above --- --- new post below ---

That's an odd viewpoint. Do you know how businesses work? Maybe Coca Cola makes a good profit because it is a heck of a lot more efficient than the railway, and that if Coca Cola were running trains we could halve fares?

I could turn your argument around and say your figures show that the railway is being greedy for absorbing such a lot of revenue to run inefficient internal systems, whereas Coca Cola is lean and efficient and returns good profits for its shareholders.

Presumably Coca Cola is competitive with other fizzy drink companies as it manages to stay in business and that's what ensures it's lean and efficient. The competition for the rialways is largely non-existant especially for London commuters so where's the incentive for efficiency?

Quite. Comparing Coca Cola to a train operator is a non-starter. Coca Cola offer many products internationally whereas TPE offer a few products in one part of one country. Comparing Coca Cola to First Group and to Kelios are better comparisons.

 

[175001]

Northern (according to our MD our doing so badly we cannot have any xmas vouchers or even a card this year), (I am NOT kidding), so guys/gals if you think yourselves as Passengers get treated poorly, so do ourselves who have to work on our decrepid stock, Goodwill is what keeps the railway going, when MD's start treating their staff like s**t (TPE is avery good example) The company as a whole suffers. The annoying thing is we know how much money we make them and how much they get paid, no one likes Bulls**t especially when it comes from above

Yep, but from a fellow Northern guard to another.....Merry Christmas mate

 

[ANorthernGuard]

Yep, but from a fellow Northern guard to another.....Merry Christmas mate

and you mate
--- old post above --- --- new post below ---

And one important perk of being a rail employee is usually free travel to and from work. Most people would be extremely happy if their employer offered that.

Not if you work the first/last trains, kind of goes against the point. Northern are making record Profits and since Heidi left, relations having been getting more and more strained, the new MD seems to like battling even more than the unions, I just hope it does not get to a point when no one wants to speak to each other (Management & Unions) because if that happens, well you can imagine, it was never about the vouchers it is more about being acknowlodged as the people who make them money and make them successful, a firm is only as good as its staff, and Northern have excellent staff!

 

[HH]

Yes exactly.
They would need to pay about 3billion, not mere millions, to be a break even situation for the tax payer.

It amounts to billions, when you add all the millions up. It probably doesn't "break even", but neither are you comparing like with like.

Same old, same old just gets trotted out, by people who either don't have a clue or who have a political agenda.
--- old post above --- --- new post below ---

With regard to management, are you saying that there are now fewer managers on the railway receiving less in total wages than under BR ?

There are fewer back office (such functions as finance, HR, projects) managers in TOCs than there were in the same parts of the organisation under BR, despite a large increase in work brought on by the complex legal framework that now exists.

I exclude line managers, which can't be looked at in the same way - they are essential to everyday running. These have increased just like the staff they manage, due to higher passenger numbers and more trains.

Wages have increased throughout the industry, both staff and managers since (so-called) privatisation. In some cases deservedly. Even now though TOC management wages could not be seen as high in comparison to businesses of a similar size. Despite the increase in wages though, the overall cost in nominal terms for TOC back office is lower than under BR.

Network Rail is probably not so much different from BR, because it's still publicly owned. In such companies there are different motives than efficiency/profitability.

 

[yorksrob]

It amounts to billions, when you add all the millions up. It probably doesn't "break even", but neither are you comparing like with like.

Same old, same old just gets trotted out, by people who either don't have a clue or who have a political agenda.
--- old post above --- --- new post below ---


There are fewer back office (such functions as finance, HR, projects) managers in TOCs than there were in the same parts of the organisation under BR, despite a large increase in work brought on by the complex legal framework that now exists.

I exclude line managers, which can't be looked at in the same way - they are essential to everyday running. These have increased just like the staff they manage, due to higher passenger numbers and more trains.

Wages have increased throughout the industry, both staff and managers since (so-called) privatisation. In some cases deservedly. Even now though TOC management wages could not be seen as high in comparison to businesses of a similar size. Despite the increase in wages though, the overall cost in nominal terms for TOC back office is lower than under BR.

Network Rail is probably not so much different from BR, because it's still publicly owned. In such companies there are different motives than efficiency/profitability.

Bearing in mind, McNulty himself found the railway in its present set-up to be less efficient than its European counterparts at the moment, I'm not convinced that what improvements in efficiency there may have been (I've not seen anything quantified as yet) are entirely down to the private TOC model.

That's as opposed to other technical advances which might have happened anyway (an example being the increased use of software etc which has transformed back office and clerical functions throughout industry over the last twenty years) and outsourcing etc.

 

[Zoe]

Network Rail is probably not so much different from BR, because it's still publicly owned. In such companies there are different motives than efficiency/profitability.

Network Rail is not publicly owned, it is a company limited by guarantee in the private sector that is required to reinvest profits. We did of course have a "for dividend" company running the railways for some years after BR and we all know how that ended.

 

[HH]

Network Rail is not publicly owned, it is a company limited by guarantee in the private sector that is required to reinvest profits. We did of course have a "for dividend" company running the railways for some years after BR and we all know how that ended.

That's semantics. All the money to run NR comes from taxes. The reason it's set up as a company limited by guarantee is to get it off the government's balance sheet.

 

[Zoe]

All the money to run NR comes from taxes.

Not all of it, part of it is from the fare box through the TOCs. If NR was not subsidized then it's likely that fares would have to be increased even more to cover this.

 

[yorksrob]

And of course, by a similar note, not all TOC money comes from the fare box.

 

[Zoe]

And of course, by a similar note, not all TOC money comes from the fare box.

Some TOCs get a government subsidy yes but others have to pay a premium to the DfT so fares have to be high to cover this and the payments to Network Rail. If you scrap the government subsidy to Network Rail then track access charges would have to be increased.

 

[yorksrob]

Some TOCs get a government subsidy yes but others have to pay a premium to the DfT so fares have to be high to cover this and the payments to Network Rail. If you scrap the government subsidy to Network Rail then track access charges would have to be increased.

Indeed. I don't disagree with any of that.

 

[HH]

Bearing in mind, McNulty himself found the railway in its present set-up to be less efficient than its European counterparts at the moment, I'm not convinced that what improvements in efficiency there may have been (I've not seen anything quantified as yet) are entirely down to the private TOC model.

That's as opposed to other technical advances which might have happened anyway (an example being the increased use of software etc which has transformed back office and clerical functions throughout industry over the last twenty years) and outsourcing etc.

McNulty found exactly what it was set up to find - quelle surprise! Not that I don't think efficiency can be improved. It can be improved significantly. But when it comes down to specific suggestions on improving efficiency McNulty is pretty thin on the ground.

My own recipe for improvement would be:

1. NR purchasing. Must be the biggest area for savings as it is the biggest cost. NR tend to go for gold-plated solutions and vanity projects. To be fair they have already made some improvements, but there is plenty of room for more.
2. Removal of arcane staff practices that lead to huge inefficiencies - the practical side of this however is a complete minefield, and I doubt that anyone has the intestinal fortitude to take it on.
3. Removing duplicate duties, red tape, etc. that lead to pointless posts & consultant fees at DfT, ORR, NR, and to a very minor extent at TOCs. This last is much smaller in scope than the other two in terms of savings, but it may help pave the way for number 1.

As for your second point, it's simply factually wrong:

1. The TOCs started in 1997, which is 15 years ago, not 20.

2. Many of the same systems that were in place then are still in place. For example SAP is still used by many TOCs including all the First ones, and what the others use is actually less advanced, not more.

3. Where systems have been updated, e.g. Lennon replacing Capri, they have often led to additional posts. This is a common misconception; more information needs more analysis. The pay back on Lennon is in increased revenue yields.

The savings that have been made are real savings. Current organisational structures are much flatter than under BR, with whole levels of management removed.
--- old post above --- --- new post below ---

Not all of it, part of it is from the fare box through the TOCs. If NR was not subsidized then it's likely that fares would have to be increased even more to cover this.

Yes, of course, NR get paid Track & Station Access from the TOCs, many of whom also receive direct subsidies from the government, but many who pay. Regardless, this is the same finance mechanism as under BR.

 

[Zoe]

The TOCs started in 1997, which is 15 years ago, not 20.

The first franchises started in 1996.
--- old post above --- --- new post below ---

Regardless, this is the same finance mechanism as under BR.

BR had split operations and infrastructure in line with the EU directive? Intercity paid a track access charge?

 

[HH]

The first franchises started in 1996.
--- old post above --- --- new post below ---

BR had split operations and infrastructure in line with the EU directive? Intercity paid a track access charge?

End of'96 OK, still 15 years ago, not 20.

BR was funded partly by fares and partly by taxes. Is that any different to now?

 

[Zoe]

End of'96

February 1996.

 

[yorksrob]

As for your second point, it's simply factually wrong:

1. The TOCs started in 1997, which is 15 years ago, not 20.

The sort of changes I was alluding to are those which have transformed back office and clerical functions such as human resources etc across all industry rather than just railway specific software, hence the twenty year time frame. My point is the same for fifteen years anyway.

The savings that have been made are real savings. Current organisational structures are much flatter than under BR, with whole levels of management removed.

Bearing in mind there isn’t any sort of management above the level of the South Eastern division of Network SouthEast for example, I’m not surprised that we have a flatter organizational structure than under BR – although since the vacuum just has to be filled in by civil servants, I would argue that this is not altogether a good thing.

Regarding efficiencies within TOC level, I’ll have to take your word for it. I doubt whether any such savings would have been enough to counteract the dislocation, lack of direction and direct government interference precipitated by the privatization fiasco.

 

[HH]

The sort of changes I was alluding to are those which have transformed back office and clerical functions such as human resources etc across all industry rather than just railway specific software, hence the twenty year time frame. My point is the same for fifteen years anyway.

And my point was that they happened 20+ years ago. There haven't been many major changes to back office and clerical functions since privatisation. Station Accounts, for instance, is only being automated currently. The savings have not come through these changes, due to ATOC moving exceedingly slowly.

Bearing in mind there isn’t any sort of management above the level of the South Eastern division of Network SouthEast for example, I’m not surprised that we have a flatter organizational structure than under BR – although since the vacuum just has to be filled in by civil servants, I would argue that this is not altogether a good thing.

I'm talking of like for like at TOC level. Above that, thanks to the plethora of organisations, the structure has grown if anything. BR structures would go something like Head Of/Assistant Head Of/Manager/Assistant Manager/Assistant. TOCs go like Head Of/Manager/Assistant.

Regarding efficiencies within TOC level, I’ll have to take your word for it. I doubt whether any such savings would have been enough to counteract the dislocation, lack of direction and direct government interference precipitated by the privatization fiasco.

What? There was no government interference before "privatisation"? Direction was always clear? Your memories seem somewhat different to mine.

 

[yorksrob]

What? There was no government interference before "privatisation"? Direction was always clear? Your memories seem somewhat different to mine.

Direction always clear ? No - of course not. But then again, how long have we been waiting for someone to start planning for IC125 replacement ? How long have we been waiting for electrification to commence ? How long has Thameslink 2000 been in the pipeline ? BR would have been working on these long ago.

Government interference - Well, that's to be expected in any partially taxpayer funded service, but to the level of current franchise specification ?

With regard to management, everyone needs management - it keeps us on our toes but sorry - I just don't believe that every division of the Southern Region for example requires it's own CEO paid at private sector CEO wages.

 

[HH]

Direction always clear ? No - of course not. But then again, how long have we been waiting for someone to start planning for IC125 replacement ? How long have we been waiting for electrification to commence ? How long has Thameslink 2000 been in the pipeline ? BR would have been working on these long ago.

Government interference - Well, that's to be expected in any partially taxpayer funded service, but to the level of current franchise specification ?

With regard to management, everyone needs management - it keeps us on our toes but sorry - I just don't believe that every division of the Southern Region for example requires it's own CEO paid at private sector CEO wages.

Well yes, DafT are particularly slow, but that's not the direct result of privatisation. It's the lack of firm leadership within DafT. Exactly the same thing could happen at BR.

It has already been recognised that DafT went overboard on specification with the last Franchise round, and we are promised that this time it will be better. From what I've seen of the West Coast ITT, that would look to be true.

The CEOs are certainly not generally (I can't say all as I don't know every single salary, but I've seen a great many of them) paid private sector wages for companies of similar size. Those sorts of wages are reserved for the bosses of the owning groups - as they should be. Whether you think they are paid too much probably depends on your political persuasion, but I don't see too many people from outside the industry clamouring to get in because of the high wages. The only job that attracts that sort of desire is Train Driver.

 

[yorksrob]

Well yes, DafT are particularly slow, but that's not the direct result of privatisation. It's the lack of firm leadership within DafT. Exactly the same thing could happen at BR.

I'm not entirely contrary to that viewpoint. It does strike me though that one of the main reasons put forward in favour of privatisation was that politicians couldn't be trusted with the railway (also something tend to agree with to a large extent), however here we are, still beholden to DafT.

There will always be a lack of firm leadership within DafT precisely because it is a Government department controlled by an ever changing array of politicians. I would argue that it is precisely the fragmented nature of privatisation in this country that has made the railway so dependent on a Government department.

I would agree that there was always the risk that the a lack of leadership could happen at BR as there is with any large organisation, however this was certainly nowhere near the case during the 80's or early 90's so jumping into a situation where drift was almost guaranteed was entirely unnecessary.

It has already been recognised that DafT went overboard on specification with the last Franchise round, and we are promised that this time it will be better. From what I've seen of the West Coast ITT, that would look to be true.

Well that's fifteen years of experimentation, and hopefully they'll get the balance right the next time around, particularly as we'll be locked into these franchises for much longer periods, but it's still been (and is) a massive and unnecessary distraction from the business of running of the railway. I have qualms about the franchising process altogether. Again it seems to be fairly secretive and decided in smoke filled rooms by the Government but you never know. We might get lucky.

The CEOs are certainly not generally (I can't say all as I don't know every single salary, but I've seen a great many of them) paid private sector wages for companies of similar size. Those sorts of wages are reserved for the bosses of the owning groups - as they should be. Whether you think they are paid too much probably depends on your political persuasion, but I don't see too many people from outside the industry clamouring to get in because of the high wages. The only job that attracts that sort of desire is Train Driver.

Well, I don't blame the individual TOC's for privatisation (I save that squarely for the politicians who concocted it) and I know most of them make a good attempt at running the railway as far as they can. I was just never convinced that the fragmentation was a good idea in the first place, and I've yet to be convinced otherwise.

 

[HH]

Yes there are a great many things wrong with the mish-mash we now have. But I don't see the past through rose-tinted specs - there were a lot of things wrong with BR too. And while some things have probably gotten worse (for example rolling stock procurement) some have definitely gotten better (for example making commercial use of the property assets of the railway).

To be fair BR were as good as they'd ever been around the time of privatisation - I'd hazard a guess that indeed it was the 'threat' of privatisation that caused some of the improvement. But given the pratfalls that have befallen other public enterprises since that time, it doesn't follow that they would have remained at that level.

From my own experience over many years, both inside and outside public ownership, I would say that bureaucratic style organisations such as BR (and DfT and NR) foster an attitude of playing safe (arse-covering) and empire building, and they often reward the wrong achievements.

TOCs can certainly get it wrong, but apart from a couple of examples they have been very firmly focussed on the things that matter - operational excellence, good customer service and commerciality. From my experience the people who work in TOCs are railway people through and through and really want to deliver the best service they can. In a few cases the owning group gets in the way of them achieving this, but most of the time it's the government.

 

[djhappy]

Sorry if this has been asked before but does anyone know if the price of the all line rover will rise in January.

 

[tbtc]

As I said earlier in the thread, Northern who are still under the "no growth" franchise stipulation until 2014, should be exempted from this "surcharge", as I cannot recall the time when "new trains" as so described have ever been seen since Northern took over the franchise. Perhaps my understanding of the word "new" differs from the understanding of others.

For all the talk of "no growth", Northern's fleet is larger now than when they took over the franchise. Not because of brand new trains, but the additional Pacers/ Sprinters/ 322s from other TOCs have at least increased the fleet size.

That's an odd viewpoint. Do you know how businesses work? Maybe Coca Cola makes a good profit because it is a heck of a lot more efficient than the railway, and that if Coca Cola were running trains we could halve fares?

I could turn your argument around and say your figures show that the railway is being greedy for absorbing such a lot of revenue to run inefficient internal systems, whereas Coca Cola is lean and efficient and returns good profits for its shareholders.

Presumably Coca Cola is competitive with other fizzy drink companies as it manages to stay in business and that's what ensures it's lean and efficient. The competition for the rialways is largely non-existant especially for London commuters so where's the incentive for efficiency?

The "efficiency" argument is more important than the profit one, in the railways. You could make savings much bigger than the 3% profit margins.

If you wanted to get cheaper fares/ lower taxpayer subsidy I'd look at the efficiencies, not the profit levels.