Return to Archive -by date - by topic.
The future of the railway is increasingly in Network Rail's hands – but no VI please.
As the White Paper puts it, the aim of the new structure is to provide a single clear line of accountability for performance and eliminate the current culture of blame and buck-passing. However, it pointedly eschews the obvious solution of vertical integration (VI).
There are, the Government believes, ‘a number of characteristics of the UK rail industry which suggest that a structure of this kind (VI) would not be appropriate'. In particular, where track is shared by long distance, local and freight traffic there could be conflicts of interest between the dominant train/infrastructure operator and other passenger and freight users.
Also militating against VI is the need to maximise value for money by having franchisees competing to operate services. ‘It would be much more difficult to secure effective competition if track and train companies were merged to create regional monopolies' argues the White Paper.
This is a sad case of post Thatcherite tosh. Franchises are now so tightly specified that the Franchisee is just a thin layer of cost control on top of the railway managers who will run the railway irrespective of ownership. As for conflicts of interest, we have the new Network Code designed for the new world.
But the biggest lacuna in this argument is the fact that the new structure for the railways gives Network Rail considerable power over train operation, even including timetabling. In which case, why franchise?
As the White Paper says, the TOCs will concentrate on their core strengths of customer service, marketing and train operation. So it's bye bye bus bandits, hello bin emptiers as the facilities providers like Serco move in.
In the news structure Government says it will decide:
*The overall size and shape of the network
*the key timetable outputs
*Policy on regulated fares
*Minimum performance targets
*Enhancement priorities (younger readers should ask older colleagues about this concept)
*Policy on information provision and accessibility
In addition, franchise contracts will be aligned with the binding arrangement with Network Rail. There will be a ‘consistent view' on performance and service frequencies in franchises will match the capacity Network Rail will be required to deliver. Clever, that.
Network Rail and the TOCs will each be accountable for any failure to meet the minimum performance targets – the TOCs through their franchise agreements and Network Rail through enforcement by the Office of Rail Regulation.
But while all animals are accountable, some animals are more accountable than others and the White Paper gives the 25 stone gorilla a course of steroids.
Network Rail will be accountable for the operational management of the network and for coordinating the industry's planning. This is in addition to the existing responsibility for operations, maintenance and renewals.
On top of this Network Rail will take over the SRA's task of drawing up Route Utilisation Strategies (RUS) aimed at making the best use of available capacity. These will be endorsed by Government.
Network Rail will then devise ‘efficient and clear timetables', whatever a clear timetable is. This, has, predictably got the TOCs warning about a return to the production led railway of the 1970s.
But hang on. The White Paper also says that in producing RUS and timetables, Network Rail will ‘draw on input from passenger and freight operators and from others involved in the supply and delivery of rail services including passenger representatives.
Skipping lightly over the fact that local passenger representation is being left to rail users groups who lack the synoptic view of the to-be-binned local RPC committees, this ‘new' process sounds very much like the existing approach to timetables. In fact, the only way to handle an RUS or Timetable change is to get everyone together at a Timetable conference and start iterating.
But note that ORR will also have to confirm that Network Rail's proposed timetable will actually deliver the level of service specified in the Government's Statement of Reasonable Requirements (SRR). To do this, ORR will have ‘general powers to obtain information from the industry and access industry information systems to support its investigations'.
This role of ‘Information Finder General' seems tailor made for ORR Board Member Chris Stokes who when at OPRAF would discomfit franchise bidders by exposing flaws in the service proposals with nothing more than pen, paper and a long career as an operator.
Meanwhile, back to VI, where the fight continues. First, when I suggested to a high level chum that Network Rail might take over South Eastern as pilot scheme the immediate reaction was not ‘don't be silly' but ‘I don't think we'd be allowed to'.
And then, when researching this piece a very senior public sector Informed Source opined ‘Until they run a pilot, VI won't go away'. Finally, have you noticed that the new structure is geographically based and around routes? All to play for.
One of the ironies of the white Paper is the way in which the Office of the Rail Regulator, which was seen by many as the cause of the railways' problems, has become the Office of Rail Regulation with an even wider role and powers than ever Tom Winsor enjoyed.
Its specific responsibilities, described by the White Paper as a ‘complex and challenging task', will be:
• to assess the cost of the outputs specified by the Secretary of State and to determine the size of Network Rail's income
• to regulate access contracts and arbitrate between conflicting industry interests;
• to help ensure that the railway provides value-for-money for both the fare-payer and the taxpayer, taking into account safety, performance and cost;
• to enforce health and safety legislation in respect of the operational railway. Note that this covers all railways, including the London Underground and heritage lines;
• to investigate and make recommendations on performance problems and cost overruns;
• to license railway operators;
• to exercise competition law functions concurrently with the Office of Fair Trading, where these relate to the railways; and
• to act as a single repository for rail industry data.
Several of these are potentially open ended tasks. How far, for example, does ORR's remit extend on monitoring value for money or performance problems?
Is ORR, expected to say that a lightly used line with high subsidies does not provide value for money? Will ORR demand financial accounts from TOCs with cost breakdowns detailed? What will be the relationship with the Regions and their devolved powers on the allocation of their transport spending?
For sure, ORR will have to expand, even before its takes over responsibility for railway safety matters. It seems likely that some of the staff, for example those needed for performance monitoring may be transferred across as the Strategic Rail Authority winds down.
Meanwhile, Alistair Darling may be comforted by the thought that he no longer has to deal with a clansman coming at him head on, claymore held high. Tom Winsor 's policy was to speak loudly and carry a very big stick. Chris Bolt , I suspect, is going to speak quietly, and only when necessary, but carry a very sharp stiletto.