Anthony’s excellent analysis of the 20 years of franchising makes for a great starting point for anyone seeking to address the Wolmar question: “What are franchises for?”
There has to be a message here, in that franchising has survived everything that has been thrown at it in this time - and there have been some truly enormous shocks. Its biggest success has been the use of competitive bid pressure to drive growth in the volume of rail use, to make the best use of an already busy network. In the process franchising has significantly improved the economics of rail, and improved social and economic cohesion.
But there are areas where it has been less successful. It has tended to institutionalise old-fashioned and inefficient working practices, because these are difficult to change without the Government taking the revenue risk from a strike. The result is that terms and conditions of employment have not changed with the times and are only now being tackled through the mechanism of the GTR franchise, which was (out of necessity) let on a gross cost basis.
While passenger satisfaction has improved enormously over the 20-year period, there are two glaring areas of ongoing weakness.
Firstly, operational performance remains weak, which is largely due to inadequate focus by Network Rail and its regulator on willing the means to improve the basics of infrastructure reliability. There is little point in spending billions on infrastructure upgrades only for it to be repeatedly let down by points failures, track faults, signal failures and the like, on the older infrastructure all around the new. Early efforts by Railtrack to introduce competitive pressure in infrastructure maintenance failed due to inadequate framing of the contracts and their incentives. Since then, sadly, much of the regulatory downward pressure on Network Rail’s cost base has been felt on just this part of the business. A cat and mouse game is played out over five-yearly regulatory cycles, and the end result has been really quite unsatisfactory.
Secondly, fares and ticketing has proved to be too challenging to tackle in a grown-up way through franchising. A single national approach is required, to enable the entire system to be modernised and made much simpler for the general public to understand.
Such an approach needs the franchising authority to play a leading role in determining vision and strategy, which it has singularly failed to do so far. This is probably at the root of many of the problems currently seen in franchising. Because of the absence of any vision, the Government’s approach to franchising largely looks at each franchise in isolation just before it is due for renewal. As such, identifying sensible re-mapping changes often fails to get due consideration.
Also, with so many big franchises, the scope for change in each competition tends to be focused on the most important parts of each franchise. Secondary routes often do not get adequate consideration. Take the Reading-Gatwick Airport route: peripheral to the Great Western franchise, but an important and under-developed route. It needs some infill electrification, integration into the South West franchise, and a much improved service pattern.
Franchising will probably survive the current difficulties in the supplier base, and the over-complexity in the bid process, if only for the fact that the alternative way of delivering rail services remains so unattractive.
