CHIEF EXECUTIVE
The appointment in May 2018 of Andrew Haines as NR’s CEO meant that for the first time, our rail infrastructure owner was being run by a time-served railwayman with experience not only of train operation (with South West Trains and FirstGroup), but also infrastructure (from his Railtrack days).
Haines arrived with a decade’s further experience as CEO of the Civil Aviation Authority, where he had impressed Government not only with the way he had shown steel by standing up to powerful men such as Ryanair’s Michael O’Leary, who were accustomed to getting their own way, but also by reacting promptly and effectively to set up his own virtual airline overnight in 2017 when Monarch collapsed, stranding thousands of British holidaymakers overseas. Haines not only got them all home, many actually flew back on their due departure day, if not actually in the same time slot.
Haines therefore took up the reins at NR in 2018 with an impressive and wide-ranging set of skills, to work alongside a highly engaged non-executive chairman who not only also had respected rail and metro credentials (through his time as Transport Commissioner for London, 2006-15), but also the sharp political insight and connections which are so crucial for success in such a very high-profile and frequently controversial role.
Haines spent last summer travelling the country, talking to railwaymen and women in advance of taking up his appointment. This would have been a lively exercise at any time, but Haines did this fact-finding during the Northern and Thameslink timetable meltdowns, so he could not have chosen a more controversial time to do this. The die was cast, however. This chaos didn’t put him off and he succeeded Mark Carne with an enormous weight of expectation resting on his shoulders.
Normally, I would have preferred to carry out a formal interview such as this much earlier, but Haines was working on his 100-day proposals, whereby he’d present a strategic plan to the NR board after 100 days in office (around the end of January). We couldn’t meet for this - Haines’ first formal on-the-record interview - until February 25, when we settled in Haines’ very modest office in NR’s newish London HQ offices at Britain’s busiest railway station, off the mezzanine at Waterloo.
Haines admits to being taken aback at what he found during his grand tour in the summer of 2018.
“The things that have really shocked me are, first of all, just how incredibly busy the railway is. I know that sounds stupid, but you forget just how much traffic has grown in the last ten years…”
Says the man who used to run Waterloo, I murmur.
“Exactly - it was full and standing as I remember it around 20 years ago, but today’s trains are now that much busier again. It’s that, as much as the additional trains now on the network.
“Secondly, virtually nothing else has changed. So, we are still running with the same train planning process, the same performance regimes, the same track access contracts… a lot of those mechanisms are exactly the same as they were back then. We haven’t flexed to take account of the fact that we are a very different railway now.
“Thirdly, DfT is all over everything now - and I just don’t think it wants to be. And fourthly, I’d forgotten how brilliant our people are - just the sheer number of people of real skill and capability is so noticeable. Those are the things that have generally been the biggest surprises for me.”
Haines pauses and reflects before adding a potentially controversial comment. Get used to this. People all over the railway will learn that Haines is unafraid to ‘call it as it is’ - even (especially?) in relation to railway people generally and Network Rail in particular.
“Actually… there is a fifth surprise, which is related to the second. A lot of people in the industry are behaving like victims. The thinking seems to be ‘as long as I can explain why it can’t be done then it’s OK’ - and that was really quite striking. That’s true externally, but it’s true internally at NR as well. If you can explain why passengers are inconvenienced, then that’s regarded as OK.”
Is it because they don’t care? Or is it because the sheer pressure of keeping the trains moving pushes all other sensibilities to the margin?
“It’s not that people don’t care - I think what happens is that we end up redefining what winning is, or what good looks like. If you end up saying: ‘look I have 250 franchise commitments, what matters is delivering those franchise commitments’; or ‘I have this scorecard which says I have to deliver this by that date - the fact that I have delivered the physical infrastructure and it doesn’t work for passengers, that’s not on the scorecard and it’s a tough enough job just getting the scorecard clear’.
“There is no sense of recognition that the industry must come together to get the right outcome for passengers. It’s almost the first thing that goes by the wayside, when it should be front and centre.”
I tell him that I pick up enormous frustration on NR’s Routes about the sheer amount of time and energy needed to manage relationships with train operators - not because the TOCs are in any way awkward (though maybe in some ways that’s true, too…) but principally because of the serious misalignment of objectives, incentives and accountabilities between the two. Does he agree?
“That’s a function of those things I’ve just been talking about. Because the systems haven’t changed since the 1990s, the entire system is more congested, so there are fewer easy wins.”
Haines has no hesitation in cutting to the heart of the matter: “DfT is micro-managing everything, so Routes and TOCs don’t have permission to move, and committed people are just really busy.”
Does he share Chairman Sir Peter Hendy’s view that the DfT and Secretary of State really have had enough? That they finally accept that they cannot (and indeed should not) be as involved as they are, and are now seeking a way back from the front line via the creation of a specialist body to deliver railway strategy - and be accountable for it?
I still have lingering doubts personally because I clearly recall the vigour with which the late Sir David Rowlands, Permanent Secretary at the DfT in 2004, worked to bury the Strategic Rail Authority and seize back its powers, which he always believed should rest with the Department. Again, there’s no hesitation – Haines is very much in agreement with Hendy on this crucial and key point.
“I think they absolutely are of that view,” he says. “I think even Sir David Rowlands - God rest this soul - would be dismayed at how far we’ve gone since the SRA was scrapped.
“There was the battle of the egos. Richard and Tom . The combination of Richard and Tom made it easy for the DfT to take over, and that was as much as a reaction to individuals driving strategy and funding as it was anything wrong with the system.
“The SRA was, I think, actually working (generally speaking) pretty decently. What then happened in 2012 was the FirstGroup and West Coast franchise debacle, and the response of the Department was to be much, much more specific - to be much more controlling.
“Then we had the reclassification of Network Rail onto the public books. I believe that not even David Rowlands generally envisioned where we would end up where we are in 2019, and I honestly don’t think that even he would have supported the extent to which the DfT is now involved, micro-managing everything.”
Haines adds: “I first came across David pre-privatisation, and the pre-privatised railway didn’t have ministers involved in every decision.”
So, you believe he wasn’t obsessed with simply taking over what he believed were powers that the DfT should never have lost to the SRA in the first place?
“Rowlands was given a mission to make sure that the costs of the railway didn’t go completely out of control.”
But do you agree that there was a clear impression that the DfT regarded the SRA as a cocky bunch of overpaid upstarts?
“That comes down to the ego thing again,” Haines replies. “Rowlands’ problem was that he believed that the SRA should have ‘known its place’ - but Richard Bowker was never going to play to that agenda. Bowker was an individual of vision and ambition. I think that while Rowlands certainly wanted to rein in the SRA, I don’t believe he thought that micro-management of the railway by civil servants was ever the right thing to do. He and I came across each other at Gatwick Airport, because he was the chairman of Gatwick, so I came to know him quite well.”
Hmm. That is interesting. I sense that Haines is speaking from knowledge from late-night private conversations that he won’t breach the confidence of… and it’s certainly the first time that I’ve come across the idea that what we have now would even have dismayed Rowlands, whom I also came to know better in retirement when he was chairman of Angel Trains. I kick myself now for not talking to him about this.
Haines implies some sympathy with Rowlands, given that for the first time he is now also an accounting officer with direct, personal responsibility for the public pounds in his care.
“I need to be on top of this because…”
You could go to jail?!
“Yes. Or I will be up in front of the Public Accounts Committee and be personally lambasted… my reputation and my professionalism would be undermined, and therefore it’s just not tenable to go in front of them and say ‘I don’t know’ - because that’s actually not a great outcome for Network Rail or for the train operator.”
Haines argues that we have all - DfT included - fallen or been sucked into this model, rather than it having been a deliberate strategy. And that’s why it’s very difficult to escape from.
In the broadest sense, franchises were once relatively simple. But partly because of abuse by first-generation TOCs, the SRA under Bowker tightened them up and made them much more prescriptive. That was acceptable (if not fine) while margins were 5%, but subsequent deliberate policy by the DfT to squeeze the industry for every pound possible has driven margins down to a barely viable 2%.
At the same time, financial and reputational risk have gone through the roof, to the extent that National Express has abandoned UK rail. And that was an owner which once operated no fewer than nine franchises - around half the entire passenger network. Is Haines optimistic that the Williams Review can push the pendulum back to the sweet spot where private delivery of the publicly owned passenger service works for everyone - especially the passenger?
“I’m optimistic in the sense that ministers and senior officials don’t want to be as involved as they currently are. I’m also optimistic because I think train owning groups are asking ‘why do I want to buy more of the same?’ How many bidders have made money on franchising since they won in 2014?”
None, I suggest.
“That’s the rumour I heard. I almost don’t even want to know.”
Does Haines agree that the UK passenger network is effectively being propped up by Schedule 8 disruption payments from NR?
“Well, in certain parts of the country, that’s a big, big number…”
Are operators hanging back in doing the right thing for passengers, and waiting for NR to cancel trains in order to secure the Schedule 8 payments? That optimal operating decisions should have been made earlier, by them? There’s a longish pause…
“I find this a really hard subject,” he replies slowly. “Because - and let me be completely honest - I think Network Rail has spent far too much time beating up its customers historically.”
His honesty then cranks up several notches.
