Peer review: Richard McClean
Mobilisation Director, Arriva Rail North
Michael Holden has deployed his unparalleled experience within the rail industry to lay out with clarity a comprehensive ‘tour de horizon’ of the current state of affairs.
It may be tempting to take issue with the route Michael has taken in his analysis and with some of his specific assertions - in particular the oft-quoted but never substantiated £30 million ‘lost’ premium and potential disbenefit to subsidy to rural services, laid at the door of the small but successful open access operations that have managed to find a place on the network.
But suffice to say that the only detailed assessments actually done on these points suggest that the competitive spur the innovative and hugely popular open access operations have given the otherwise monopoly inter-city operators has led to accelerated growth of the overall market at the limited points of interaction.
In addition, it is worth remembering that the open access services specifically serve and have opened up connections to communities previously poorly served by rail, and actively abandoned by these same monopoly inter-city operators.
However, despite these points of analysis, I find his conclusions sound and his perspectives of the current priorities for focus and action to be uncontestable.
It is always useful to establish the foundations of “how did we get here?” while attempting to address what is going well and where further improvements can be made. Clearly the successive failures of a range of structures for the infrastructure manager and the relentless focus on “competition for the market” are pivotal factors in any such assessment. Keeping these in mind gives us a good starting place when considering the most appropriate areas for action.
Michael is right to highlight areas where improvements need to be made - there is no doubt that rail fare structures often leave passengers confused, while some stations have not received the significant improvements in quality that are evident in many rolling stock fleets. However, progress is most often made by reinforcing the momentum of improvement in areas where substantial progress has and continues to be made. Indeed, this approach is likely to sweep up the problem areas, too. With this in mind, there are many areas where the industry should be proud:
- The dependence of the industry on taxpayer subsidy to cover the cost of day-to-day operations has been broadly eliminated.
- More passengers are travelling by rail every year, with use growing faster than basic capacity increases.
- Rail is increasingly seen by policy makers as an enabler of personal, regional and economic growth.
Central to these trends have been a number of factors that are worthy of reinforcement in order to drive further progress:
- The developing relationship between local operators and devolved transport bodies is becoming increasingly effective, as can be seen in London, Scotland, Wales and (soon) the Northern Powerhouse. The key factor is a close working relationship between a local policy maker and a dedicated professional operator.
- The emergence of commercially viable inter-city operators with a strong direct relationship with passengers, although these operators are too often being held back by the unnecessary and overly prescriptive service specifications which are then minutely managed by DfT.
To really unlock these positive factors it will be necessary to:
- Support DfT in moving into a role establishing overall industry policy and objectives, and out of the day-to-day oversight of frontline operations.
- Enable DfT to properly let go of the management of local public service operations, and empower the devolved transport bodies being established to fill this space.
- Free the commercial operators from the constraints of their franchises to maximise the value they can deliver from their use of the network, and establish mechanisms to allow these commercial operators to contribute directly to the costs of providing the network.
- Restructure Network Rail into a series of locally responsive delivery units with an overarching planning entity.
To enable this structure to work most effectively, it will be necessary to ensure that passengers using the commercial inter-city services have real choice between alternative operators, by breaking up the current inter-city franchise monopolies. This should be possible by restructuring the current operations into three or four equal-sized sub-units, with immediate value realised through a trade sale generating immediate benefit.
These new free and commercial businesses, working with the devolved regional transport authorities, would be able to address Michael’s concerns regarding NR’s inability to identify and manage route capacity, deliver infrastructure investments, and leverage much-needed third party investment into the network.
