“I think NR has been too arrogant, and I think it has been far too ready to criticise train operators. Sometimes this has been a result of ignorance, sometimes out of self-interest, so I’m really reluctant to do that as well.
“That said, I do also think that there are parts of the Schedule 8 regime that don’t logically incentivise the right behaviour. I can give you an example of a railway not a million miles away from here, where about half of all delay goes uninvestigated because it’s less than three minutes. Half of all delay! The second half is then split about 30% primary and 70% reactionary, so we are actually only looking at about 15% of the causes of delay and then attributing all these financial payments on the back of that 15%!
“That cannot be the best way to drive good outcomes for passengers. I take your point but frankly, if you have a train operator who isn’t playing that game, they are probably letting their shareholders down. So, this is not about bad guys among the train operators - you will not hear me criticising customers. The very best of our Route Managing Directors impress me because however tough things get, they never criticise train operators - because it’s oh-so-easy to do that. It’s that the system is highly unlikely to deliver the best outcomes for passengers.”
These are among the fundamentals that Williams needs to address.
“These things need to change because the public has lost confidence in Britain’s railways, and it’s quite easy these days for people to lose trust. We’ve not yet seen this loss of trust in significant shifts of people away, and I don’t think we will - I strongly believe there is a strong growth story for railways.
“But I think people don’t trust us. Look at Transport for London. If you use contactless on TfL, when was the last time you checked whether or not TfL actually charged you the right amount? You don’t! You trust it to work. I don’t think Britain’s railways have the same relationship.”
Is that because of the widely held (but erroneous) view that the profit-obsessed private sector is only interested in making money?
“I think it’s much more deep-seated than that,” he replies. “There’s the fares system… but I fear it’s mostly because as a railway we promise things and then we don’t deliver these things.”
DEVOLUTION
OK, let’s talk about NR internally. You were very frank in telling the interviewing panel that if they were not serious about deeper devolution, then they should not even consider appointing you to this job. That implies you wish to be much more radical?
“Yes, absolutely.”
Your Transport Select Committee appearance last September seemed to indicate that you believed that devolution thus far has been more lip service than effective reality?
“That’s a bit harsh - there was definitely devolution and there are definitely individuals who are accountable… the problem is that they weren’t given the tools to deliver against that accountability.
“I think if you asked NR people ‘who is accountable?’ on London North Eastern they would say straightaway that it’s Rob Mac . Nobody would doubt that. But if you ask Rob Mac if he has the tools to do that… or ask what influence he has over strategic planning? Or what influence he has over timetable production, infrastructure sponsorship and delivery, his ability to hire and fire people, he would have to reply that those powers are still held elsewhere.”
He continues: “I am by nature a decentralist. When I left Railtrack in 1997 it was to run a decentralised South West Trains for Stagecoach. When I ran FirstGroup and we had the biggest and most diverse group that it has probably been since privatisation, it was run on a very decentralised basis. There was no big flashy headquarters, just B block in MacMillan house at Paddington - that was it. There was probably just 500 square feet of central offices, because I believe that if you are close to the customers then you are more likely to succeed.
“For Network Rail, the very nature of monopoly means that the infrastructure operator feels like a natural monopoly. Proximity to passengers and freight customers is the best possible means of actually getting a service that delivers on its promises.”
We’ve heard NR managers and ministers saying for years that we should put the customer at the heart of all we do. But we don’t - do we?
“No - and that’s one of my key messages internally. How many times have you heard a chief executive at Network Rail talk about putting passengers first with real conviction?”
There’s a brief discussion that some did so - but my recollection is that that some were also overt that the Regulator was NR’s most important customer.
“But we have to be judged by our actions and not words, don’t we?”
On that, we agree. I ask him about the very senior manager who he mentioned (but declined to name!) in his speech at the last RAIL 100 Breakfast Club. This was the executive who pushed back against Haines’ belief that NR is a service company, not an asset manager.
“Yes, and the same person who rejected that we are a customer service organisation, and insisted we’re an asset management company, also claimed that the problem with devolution is that RMDs ‘take their eye off the ball if they concentrate on their customers’.
“How does concentrating on customers mean taking your eye off the ball?! He had a sort-of-point in that until you have mature relationships, then if all you do is say yes to whatever a new customer wants, actually it’s not a business model that survives very long. But his firm belief was that the very last thing you want in Network Rail is people who are customer-responsive.”
But surely the best way to keep your customers happy is by providing a reliable infrastructure?
“Of course it is!” he replies with passion. “It’s about having a reliable infrastructure… it’s about making capacity decisions that actually work for passengers… and it’s about looking after them when things are not going very well.”
I tell Haines that at the start of his tenure as CEO, Mark Carne had told me that by the time he left there would be less than 2,000 headcount at the Milton Keynes campus HQ. There are more than 3,500 there today. So, will devolution to you be confirmed by getting that headcount down at Milton Keynes?
“No. What real devolution will mean is that the people that we hold accountable will actually have their hands on the levers. If they say that the best way for me to run the railway is to use colleagues based in Milton Keynes, that’s what we’ll do.”
What Haines does do is reinforce the message that the days of IP in its current form are done.
“The reality now is that IP is being disaggregated to the RMDs, so they have their own capability and they can grow or reduce that according to the demand in their area and the alternatives.”
So, will people have to physically move to the Routes from MK?
“It’s not about Milton Keynes, it’s about the mindset of power. Many IP staff are already based out in the Routes.”
So, they’re already out in the regions - it’s the reporting lines that have changed. How is that going down?
“We’re still early days.”
That’s an interesting answer. Are they very protective of the old IP? Will they resist change, as many believe the ‘permafrost’ always has?
“I’ve heard a lot of positive feedback, but not everybody is going to tell me what they really think,” he says with a wry smile.
“I’m very, very conscious that people are not going to be completely open and transparent with me in these early days - but I’ve had a lot of people say to me that they do understand why we’re doing this. In fairness to IP, I think we can do this now as they have some really good, mature delivery systems, run by capable people.
“If you look at the vast number of projects IP has delivered, they have delivered to time and to budget.”
He immediately heads off my next question before I even have a chance to ask it.
“Yes, we can argue about whether or not the budget should have been lower, we can argue whether or not we should be more ambitious with timings… but those hurdles were the ones set and we have been meeting them. We have capability now that means the people are disaggregated - because you’ll never persuade me that the TransPennine Route Upgrade is better managed from the centre than it is from York.”
I ask him about timetabling. He has also been extremely critical of capability that was destroyed under previous regimes which believed that experienced people could be replaced by technology.
“Well, it was done deliberately,” he says, simply. “You can talk to people who were the architects of centralising timetabling in Milton Keynes, and it was partly about efficiency and partly about ‘getting rid of the cardigan brigade’ as they were described.
“This policy completely failed to recognise the scale of change which the DfT was buying. Franchise commitments that came into force last summer - and over the next few summers - have clearly been in franchises for years, so we’ve had years to build that capability.
“Should all this timetable change come as a shock to us? No. There was a complete disconnect - and a part of the disconnect is the Routes not owning their timetables. I had been really surprised when I joined that I would meet what I would regard as a smart RMD and ask them about their forthcoming timetables - and they didn’t really know. There was certainly no detailed knowledge because they didn’t see it as their product.”
So, were they also seeing their role merely as an asset management job?
“They were seeing timetabling as something that someone else did for them -that the timetable process between the system operator and the TOC churned out this product, and as long as the regulator has granted access rights, what could they do about it anyway?
