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You'll find the Revenge of the Sir Humphreys tucked away in the small print – and it makes grim reading.
A reader recently reprimanded me for an excess of literary and classical references in this column, pointing out that not everyone went to Oxbridge. True, while enjoying a grammar school education I then went Rugby College of Engineering Technology, not noted for its humanities department.
But reading through the new Railways Bill it struck me that the fall of the house of Railtrack, and its aftermath, was straight out of Greek tragedy. Bear in mind this extract from the Orestia of Aeschylus as we explore Schedule 4 of the Bill and its causes.
‘For a wound of death let a death wound atone.
For a word of hatred spoken let hatred's word be fulfilled.
Justice demands
Who acts must suffer'.
Act 1 of this latter-day tragedy began on October 5 2001 when then Transport Secretary Stephen Byers ambushed Railtrack's Chairman and told him that the ailing company would be put into administration. Only the Rail Regulator could have saved Railtrack with the promise of an interim review.
But Byers called in Tom Winsor and told him that he had a Bill waiting to rob him of his powers which would go to Parliament if he tried to help Railtrack. Tom still offered to help with an interim review, but Railtrack's Board was in panic mode and could see no further than the money it needed next week.
So Railtrack went into administration and the Government spin was ‘Regulator humiliated'. It wasn't a death wound, but it was a word of hatred.
Byers subsequently went under a cloud. But that was not enough for the Regulator. Tom bided his time.
Act 2 began when Network Rail took over Railtrack in 2002 and asked the Regulator for an interim review of track access charges. A lot more public money was needed but since the Strategic Rail Authority indemnifies Train Operating Companies against increases in access charges, what the Regulator determined Network Rail needed, the Treasury would have to pay. The Government was about to find out that ‘who acts, must suffer'.
It was the Regulator's duty to take into account the SRA's budget. But when he asked the SRA what sort of cut-back railway it could afford, there was, in Tom Winsor 's now famous phrase, ‘radio silence'. SRA did come up with an answer, but the cut backs were so procrustean that the Transport Secretary Alistair Darling dared not authorise its release.
So the Interim Review gave Network Rail a budget-busting extra £7billion and the Treasury had to pay up. More words of hatred were spoken.
Tom Winsor boasted of his direct access to Chancellor Gordon Brown's wallet. The Government counter-spun that an unelected regulator was determining how the taxpayers money was spent.
There was more revenge to come. When the ‘The future of rail' White Paper was launched in January 2004, the Government emphasised that, in future, ministers would decided how much was spent on railways not an unelected Regulator.
Bad move. Tom Winsor promptly extracted from Mr Darling a statement that the rights of private sector companies in the railway would be respected. In other words, the new ORR would retain powers to direct Government funding.
At which point we come to the erinyes, the avengers in Greek tragedy. While ministers, regulators and even Network Rail chairmen are ephemeral, the civil service is eternal. Having suffered two humiliations at the hands of ministers and regulators, the Railways Bill is the Sir Humphey's chance to demonstrate that who acts must suffer.
First to get an atoning death wound is the Secretary of State. Before the bill was published, senior civil servants were claiming that radio silence would be banned in future Reviews. And they have got their way in Schedule 4 of the Bill ‘Revision by ORR of access charges and licence conditions'.
ORR will start the next Access Charge Review with a formal notification to the Secretary of State for Transport , the Scottish ministers and the Treasury, plus those with access agreements. The Bill specifies a minimum notice of three months, which sounds optimistic. In urgent situations, four weeks' notice will be allowed.
In response, the Secretary of State must specify what the railway is required to achieve during the next review period and the funding likely to be available. From now on, assume that everything also applies to the Scottish ministers
What the Secretary of State ‘must' give the ORR before a review starts
a)information about what he wants to be achieved by railway activities in Great Britain as a whole during the review period and
b)such information as is reasonable for him to provide about the public financial resources that are or are likely to become available to be applied during the review period for purposes that contribute (directly or indirectly) towards the achievement of what he wants
Railways bill Section 1D(1)
To stop any backsliding, typical information to be provided, covering both objectives and standards, is listed in some detail (Table 1). Do you reckon that this degree of micro-specification could be achieved at three months' notice? Neither do I, and there is provision in the Bill for ORR to allow additional time for its collation.
Typical objectives and standards of what the railways are to achieve.
Capacity (types and number of trains) of networks.
Frequency of passenger services.
Journey times.
Reliability.
Measures to prevent or mitigate overcrowding.
Fares levels and ticket types.
Quality of passenger information.
Accessibility for the disabled.
Implementation of major projects ‘to improve railway services'.
‘Protection of persons from dangers arising from the operation of railways'.
Armed with the Government's shopping list and budget, ORR starts the review. If it subsequently becomes clear that the funding won't cover the objectives and standards, ORR has to tell the Secretary of State, with a copy of the notice to the Treasury.
As you can see, the Sir Humphreys have already ensured that their Secretary of State has to stick his head above the parapet and take the flak when the Little Snoring Rail Users' Group discovers that the specification cuts their hourly service to one train in each peak. And the Treasury has to come clean on what it really wants to spend on railways.
Any mismatch between aspiration and funding is expected to result in an iterative process, under which, presumably, Network Rail finds savings and the Transport Secretary lowers his sights until an affordable railway is achieved. Or, to paraphrase Paragraph F, if the review shows that the available public financial resources will be inadequate to achieve the desired objectives and standards, the Secretary of State ‘may review any information provided to ORR together with any suggestions made under Paragraph 1E.
Paragraph 1E, allows Transport Secretary to ‘suggest' when the next access charges review should be undertaken. I interpret this as meaning that if the invasion of North Korea is proving expensive, the Great Western Main line renewal can be deferred to the next control period
But note, that the erinyes have yet to visit ORR, the source of much humiliation for the Department. The revenge is exquisite, its instrument is Paragraph 1G Section (2) of Schedule 4. No one else seems to have spotted this, but it is 92 pages into the Bill.
Schedule 4 1G(2)
Where in the case of an access charges review the Office of Rail Regulation considers, (notwithstanding any notification or revision under Paragraph 1F) that the public financial resources that are or are likely to become available will be inadequate to secure the achievement of everything the Secretary of State wants to be achieved it is for that Office to determine for the purposes of the review, how much of what is wanted should be achieved using (but only for the purposes for which they may be applied) all the public financial resources that it considers are or are likely to be available.
What Paragraph 1G(2) says that if the review can't deliver the railway specified for the money available, even after several iterations, then it is the ORR Board that must decide what is to be cut. If that doesn't win the Civil Service Associations ‘Gotcha of the year' award, I will be surprised.
Just consider. Instead of the unelected Regulator deciding how much money is spent on the railways, we now have the unelected Office of Rail Regulation legally required to do a Beeching to fit the railway to the money available.
This is likely to cause a major row when the Bill is going through committee. To see why, consider what happens if, in 2008, funding is a billion or two short for the next Control Period and ORR has to start cutting back.
One option is to spread the pain by reducing maintenance and accepting a steady increase in TSRs during the coming five years. But the Train Operating Companies have signed up to their franchises on the basis of a railway able to deliver 100 Units of output.
ORR''s economies will reduce the actual capability to 95 units. Slower, fewer trains with more delays mean less revenue, the business plan is shot, the Franchisee's profits fall. Even worse, what happens to freight, which really is private sector, if secondary lines bear the brunt of the economies?
Under Licence condition 7 Network Rail is required to meet the reasonable requirements of its customers. ORR is meant to protect these rights, but if it is required to plan economies that conflict with Licence Condition 7 it is effectively challenging itself.
Back to Alistair Darling's statement in the House of Commons on 9 February 2004 , intended to reassure the city that the forthcoming Railway Review would not prejudice .
He emphasised the independence of economic regulation and also ruled out ‘any change to the rights of third parties, which will be protected. There is no question of weakening the effectiveness of economic regulation. The Government recognises that maintaining fully effective and independent economic regulation is critical for retaining investor confidence. There will be no diminution in the regulatory protection of the private sector investors in the railway'.
For light exercise over Christmas and the New Year readers might like to try reconciling that statement with Schedule 4 Para 1G(2). According to Informed Sources, the Sir Humphreys, or Lady Humphreys to be more precise, think they can get away with it. Watch this space.
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