He points at a mound of manila. “Those folders under there are the 80 - yes 80 - regulatory targets plus the 3,700 regulatory indicators from ORR. And if we satisfied all of those, I don’t think that qualifies as satisfying the customer!
What do the customers want?
“Simple truths are usually best - so, who’s paying? The customers. Virgin is entitled to be considered a customer, it’s paying NR to use our tracks. I think that’s really important, and I think that’s why Nicola’s right again, to ask who are the customers? What do they want from the railway? It’s really important to consider that.”
I tell Hendy that the previous week, NR Managing Director Scotland Phil Verster had given an inspirational presentation to the RAIL 100 Scottish Breakfast Club, in Glasgow. Verster had talked a lot about customers, and in his list of priorities he said that while some would regard it as controversial, he put the ORR firmly at the bottom of his list of priorities. His philosophy is that if you do your job right and satisfy passengers and the TOCs/FOCs, then those regulatory demands would all fall into place.
Hendy nods in obvious and vigorous agreement: “I’m not going to be too rude about regulation because if you’ve got private money involved then you need regulation. Also, there are some functions in safety regulation which are obviously crucial. But my observation is that regulation is in no way a substitute for good customer service.
“I think the railway does need to have good customer service at its heart. And if you’re torn between satisfying some regulatory indicator and giving good customer service, Phil’s absolutely right. You should give good customer service.
“Culturally, I think probably you’ve said everything if a previous chief executive of NR thought the regulator was the customer - that tells you why the culture of the organisation might be in a different place from where you might think it should be if you’re standing waiting for a train to Liverpool.
“Bear in mind I ran quite a very busy railway for nine and a half years - not a very big railway geographically, but it had four million people on it every day. But I never had an economic regulator. I didn’t have anybody who advised me how I should spend our money - we decided ourselves. We were quite grown-up. We knew how much we should spend on the infrastructure and we spent all that money trying to service our customers. And that was quite a good thing to do.”
One of the things that leapt out of the RailReview Manifesto was that success requires Network Rail to have strong leadership - not only at the top, but right down to the bottom. It won’t happen otherwise.
“Yeah, that’s fair enough,” Hendy acknowledges.
So do you think you’ve got that top-to-bottom leadership?
“I think Mark is an exceptionally good leader,” he replies. “I’m really impressed by the grip that he has on the organisation, and I’m very impressed by his resilience facing up to the massively changed circumstance of public ownership.
“And I’m very supportive. I think the development of the Route Managing Director jobs is a really good thing. And he said to them he’s looking forward to them growing into those jobs. I’ve met some of them personally - I think they’re a good bunch of people.
“It reminds me in some ways of what happened in London buses 25 years ago, when they established the managing directors of companies that were previously divisions. It gave people the opportunity to grow and do things. I’ve seen some good people out there.
“When I look at what Philip Verster is doing in Scotland, I think he’s doing a great job. The Scottish Government love him - as you heard yourself, he knows who the customers are.
"Bloody extraordinary engineering"
“So I think there’s quite a lot of hope. But yes, I think it does take time to change the organisation. I also think that some of the engineering stuff that’s been done has not been celebrated because it’s all gone alright. Actually, it’s bloody extraordinary engineering!
“Look at Birmingham New Street station! I never knew all that was going on until it was finished. That’s a fantastic job. If you look at last Christmas, that was the biggest Christmas programme ever and most of it went really well. And there were some clever jobs. They just screwed up on some of them - and that’s a real shame.
“Dawlish… that was a pretty good bit of engineering. There’s that very good stuff around, and it’s very easy for the national media to say it’s all fallen to bits because one thing’s gone wrong. There’s been people working, doing some fantastic jobs here, just as they were doing on the Tube.”
Surely NR’s biggest problem is coping safely with massive and ongoing growth on an infrastructure that’s just not built for it?
“That’s right,” he agrees. “Of all the issues for the railway, growth is one of the biggest. How do you cope with it? What is it that you can do? And regardless of how you do it, the reason for doing it is because the people who can’t travel if you get it wrong are not, by and large, people going to the seaside at Skegness for the day or going to Brighton to walk along the front. They are the millions of people at Clapham Junction, Wimbledon and East Croydon who can’t get to work.
“That’s why you have to keep the railway growing. This is also true in the urban centres outside London, and that’s what the imperative is. That’s exactly the same problem we faced at TfL, which is if you don’t do this and you’re not clever technically and if you don’t have enough money, you just force people off the railway.
“But realistically there’s no other method of travel in those areas - conceptually you could drive, but practically you just can’t. That has a damaging effect on the economy. That’s the point. That’s why you’ve got to keep going. That’s why this is a seriously big issue.
I take his point about London and the South East. But in my view the margins matter, too - even if the numbers are not as large. Rural and inter-urban railways are also important to their communities.
So how do we avoid daftness at the fringe - at places such as Gainsborough? RAIL has reported in detail about a half million pounds of NR money that’s been wasted there… with NO passenger benefit. Is this acceptable to him? Is it acceptable that when challenged about the utterly pointless £200,000 footbridge replacement at Gainsborough Central, and the closure of the foot crossing, NR dismissively pronounced that train operator Northern would have to provide taxis. This would be so that passengers could cross from one platform to another - there was no concern that this would take 40 minutes and 20 miles in a taxi. How is that serving the customer?
“What you will find is that the minutiae of some interventions come about in very curious ways. It’s a big system and not everything will go right on a big system. I can’t yet account for why some things are done in some places and why some things are not done in others.”
That’s an uncharacteristically evasive answer for Hendy. Surely how things go wrong at the fringes is symptomatic of a wider malaise?
“I don’t know enough about the history. I think one of the things is you do always want somebody to ask the intelligent questions and see if there’s a decent answer to it.
Precisely - who in the room says ‘hang on, this looks a bit silly’? Anyone? Hendy’s answer, I suspect, starts to put his finger on the cause of the Gaisnborough madness.
“What I don’t know is whether there’s some imperative driven by one of those 3,700 regulatory indicators that suggests you should do something. I’ve got no idea. But anyway, I’ve told them they can go and look at it - and find out.”
But there’s two stations there, and half a million quid of your money gone. And for no benefit to anyone?
“The only thing I’d say, in a week where we’ve just got a pasting about Elsenham which was a terrible thing to happen, actually putting in more foot crossings is not an acceptable answer.”
It’s not putting one in, it’s already there and it’s for only three trains a day - on Saturdays Only. On the other hand, there are foot crossings with mini-lights and phone control on the Midland Main Line at Loughborough (that’s a 100mph section) and at Stamford (on a blind bend). It seems that no one’s actually looking at Gainsborough, assessing the risk and taking the sensible decision. Instead, £200,000 is being wasted on a bridge that no one wants or needs! What happened to risk assessment and proportionality?
Again Hendy’s answer is, I suspect, on the money.
“I do suspect that there’s probably a very strong antipathy to doing anything to improve a crossing, rather than get rid of it. And I would understand that. I did have a railway when it didn’t have any foot crossings, and there was a reason for that.”
I understand that in principle, but nobody seems to look at individual circumstances, and it’s burning through a lot of money. That’s why, at the other side of town, NR has spent another quarter of a million pounds on bi-directional signalling and a brand new point for a yard that will never be used again. There are processes on the railway that are just burning through money, to no benefit for anyone. Surely this sort of waste at the fringe is going to undermine whatever improvements you make at the centre?
“There’s no accounting for some of the things that go on in the railway and other really big organisations,” he replies. “The serious point I get out of it, because I don’t know what the answers are, is that is why you’re looking for decent local management to take a sensible view.”
So devolution ought to start tackling this sort of thing?
“It should, yes. And I can find you some other examples - but I won’t tell you because then you’ll print them!”
OK, but are you happy having an RMD writing to people saying Northern will pay for taxis for passengers who want to move between platforms?
“No.” (He thinks for a moment before expanding his point). “What I would expect of a devolved organisation is that the people running it on a more local basis would make some intelligent interventions to stop people pissing money down the drain. That you can quote. Because if it looks stupid and it is stupid, it’s something you shouldn’t do.”
Can I ask you to have a look at this Gainsborough issue?
“I had a look at your Comment [RAIL 788] about this yesterday and said: ‘What’s going on here then?’ That’s what we used to do in our old job, so I’m doing it now. I do want to know what’s going on.”
- Readers were invited to respond to Hendy's interview in RailReview Q1-2016. Read the Hendy review of reader's responses.
