Peer review: David Simpson
Production and Safety Director, Caledonian Sleeper
Stephen Hammond’s letter calls for a clean sweep of industry structure, supported by some insightful comments on why this is necessary. In reviewing the justification there are some areas which merit further analysis.
The letter calls into question the ability of Network Rail to understand the customer. From my experience of working at Network Rail, and in dealing with them as a customer in an FOC and now a TOC, most people within Network Rail - especially at Route level - are very motivated to understand customer needs and deliver those as well as they can. But there can be a lack of real understanding about what customers really need; and even where this is present, the labyrinth of processes which must be observed to get even simple things done can make delivery much slower than customers require. Equally, the multiple priorities which are often present within Network Rail can mean it is seen as more important to deliver an ORR milestone than a customer need, as the former can have consequences whereas the latter often doesn’t – and these two things are often not aligned as well as they might be.
While promoting the mantra ‘it’s the customer that counts’ is good, this MUST be backed up by giving teams across Network Rail the ability to deliver to customers more effectively. Despite sporadic efforts over the years, there is still a lack of real challenge to processes and standards which drives unnecessary cost and time into projects. Aligning incentives is critical so that success for the customer means success for Network Rail.
Turning to the proposals on structure – the success of the past few years in driving growth in use of the network has been achieved in a very fragmented, complex and contractually driven environment – and often in a world of constant change, whether that is driven by franchise change or other reorganisation. The best results seem to have been achieved where there has been more stability, which has enabled longer-term relationships to be established between key parts of the industry – Scotland, Chiltern, c2c and Merseyrail are good examples. This has been the case especially where devolved government has allowed for a degree of closer alignment – and in particular where there has been flexibility for the industry to react to changed circumstances. Five-year Control Periods have been a great comfort in respect of funding for the industry, but there is a need to be able to react to new opportunities, and markets, whether freight or passenger, outside of the straitjacket of regulatory outputs which can drive behaviours that are less customer focused.
Stephen suggests ideas for change which perhaps cut across my point that stability has yielded the best results. Both of his solutions for restructuring Network Rail create the challenge of balancing the opportunity to be more responsive locally, finding ways to respond to customer needs cheaper and faster, against creating even more complexity and transactional activity than the current structure imposes. The vast majority of TOCs and FOCs operate over more than one route, and whether Network Rail is split geographically or functionally, more interfaces would be created, all consuming more management time internally instead of devoting time to serving the real customers, fare payers and freight users.
Change may be the only option – but not for change’s sake! Put the real customers at the heart of decision-making, align industry incentives – and then decide the best way to deliver those. That will deliver the massive culture change that Stephen Hammond correctly calls for.
