Government To Scrap Rail Franchises

[The Stationmaster]

To be honest I don't think there is much wrong with the franchising idea - when it works it has worked very well.  What is wrong with it is that franchise awards are in the hands of DafT and they seem to have about as much idea of what they're about as the cat from up the road  that likes to carp in other people's gardens

[royaloak]

Franchising can work if it is a decent length, 5 to 7 year ones are far too short but the Chiltern one at 25 years was perfect, plenty of 'check' points to ensure they were complying but long enough for them to invest their own money and make a return on it.

[lmsforever]

Agree length of franchise the key  Chiltern indeed is a shining example we have had continuous development and good service  but I do wonder what will happen when it is renewed and for how long .

[mdvle]

33 minutes ago, royaloak said:

Franchising can work if it is a decent length, 5 to 7 year ones are far too short but the Chiltern one at 25 years was perfect, plenty of 'check' points to ensure they were complying but long enough for them to invest their own money and make a return on it.

 

Yes and no.

 

Yes, in that it (at least in the short term) shifts infrastructure costs onto the customers through higher fares (with the possibility that the improvements will lead to growth thus perhaps reducing fare hike pressure) thus sparing the government from having to fund them through NR.

 

But the no is because it leads to the same feast/famine that plagues government funded stuff.  Once Chiltern (or any long term franchise) reaches the second half of their franchise period they cut off funding any investment because the franchise has essentially become that standard short term franchise and no longer has sufficient time to make a return.

 

So Chiltern did Evergreen 3 (a commitment made to DfT to get the long term franchise) but haven't provided funding for any improvements since then and - with the usual caveats about Wikipedia - there is on the WIkipedia Chiltern page a list of desired improvements with no funding or anticipation of funding from Chiltern as they have fulfilled their DfT franchise obligations.

[royaloak]

At least it transferred some of the costs in the early days which none of the short term franchises do, as for the increase in fares to pay for it I am going to disagree because it is the increase in passenger numbers which repays the investment hence the need for longer franchises to allow the time to recoup that investment.

 

Once you get into the last 7 years or so there isnt any time left to recoup the investment so you dont invest, its a case of spend and no return so you dont spend, its that simple.

[96701]

The elephant in the room is that if Her Majesty's Government didn't fund Network Rail to the extent that it does, Network Rail would have to charge larger access fees which the privatised TOCs would not be able to make a return to pay their "shareholders". I intentionally put shareholders in quotation marks because most of them are European state owned railways.

[Dunsignalling]

On ‎17‎/‎10‎/‎2019 at 17:22, royaloak said:

At least it transferred some of the costs in the early days which none of the short term franchises do, as for the increase in fares to pay for it I am going to disagree because it is the increase in passenger numbers which repays the investment hence the need for longer franchises to allow the time to recoup that investment.

 

Once you get into the last 7 years or so there isnt any time left to recoup the investment so you dont invest, its a case of spend and no return so you dont spend, its that simple.

That's inevitable whatever the length of the franchise, and "nothing left in it for us" is possibly the biggest flaw in "Rail Privatisation" as practiced in the UK.

 

Maybe one answer might be rolling short-term franchises that get renewed so long as things keep improving and investment continues.

 

Say seven years with the final two years of that being a "transition" period, during which the next phase gets agreed if all is going well, or the franchise is opened up to a new bidding process if not.

 

Performance to be reviewed by a Committee of MPs and county councillors whose constituencies are served by the franchise, definitely not the DfT.  

 

John

[royaloak]

10 hours ago, Dunsignalling said:

That's inevitable whatever the length of the franchise, and "nothing left in it for us" is possibly the biggest flaw in "Rail Privatisation" as practiced in the UK.

 

Maybe one answer might be rolling short-term franchises that get renewed so long as things keep improving and investment continues.

 

Say seven years with the final two years of that being a "transition" period, during which the next phase gets agreed if all is going well, or the franchise is opened up to a new bidding process if not.

 

Performance to be reviewed by a Committee of MPs and county councillors whose constituencies are served by the franchise, definitely not the DfT.  

 

John

Too much risk, nice idea though.

[Covkid]

On 14/10/2019 at 19:15, andyman7 said:

They've not really been franchises in the commercial sense for some years now - they are government contracts. So it's a bit of spin that just reflects the direction of travel and will no doubt be reflected in the Williams review. The more critical issue will be sorting out an effective managment structure for contracting. Getting the DfT to do it has been an abject failure - there is neither the industry experience nor the distance from short term politics needed to make strategic decisions and see them through. 

 

Yup.  I try not to get too stressed about it but when you start to consider.

 

LNER is the well known OLR operation after the ECML franchise turned into a mess, but look at the others.

The GWR franchise is currently an extension and I believe it theoretically cannot go beyond 31st March 2020.

The Southeastern franchise competition has been cancelled as has XC.

SWR is in big trouble  ansd suggestions both SWR and SE might become OLRs.

Then there is talk of Northern becoming another OLR operation.

 

Then I understand Scotrail and GA are not in a great place financially.

 

Add it all up and becomes a very sad indicator of our railway system in the UK which ironically up until last year has a seen a growth in ridership.  Think about that - an industry where more and more people want to pay to use your services, but your industry is so screwed up that a proportion of your brand new trains are parked up at such places as Longtown, Worksop, Old Oak Common, Basford Hall etc etc

 

A damning indictment I am afraid.    

Edited October 21, 2019 by Covkid
typo

[The Stationmaster]

On 17/10/2019 at 17:22, royaloak said:

At least it transferred some of the costs in the early days which none of the short term franchises do, as for the increase in fares to pay for it I am going to disagree because it is the increase in passenger numbers which repays the investment hence the need for longer franchises to allow the time to recoup that investment.

 

Once you get into the last 7 years or so there isnt any time left to recoup the investment so you dont invest, its a case of spend and no return so you dont spend, its that simple.

Your latter comment is not strictly correct.  It actually applies what you are investing in so in some cases where the return is fairly quick you will still get investment, possibly even when a franchise only has a couple of years to run but in other cases you won't.  Good examples on GWR where they found it profitable to hire in an extra set at their cost to work Reading - Basingstoke (subsequently dropped when DafT changed the franchise to contract terms so it would have meant DafT paying for it and they obviously wouldn't).  Another GWR example is the multi-storey car park at Didcot which was seen as paying back in the time left in the franchise while major improvements to parking at Twyford were seen as not paying back and a multi-storey car park was completely out of the picture (although that also relates to site difficulties and the nature of the ground which would mean very high costs).

 

Train and station changes or improvements are obviously looked at on the same basis so again it all depends what it costs and teh pay back period for the investment.  Then of course there are DafT impositions - such as contactless ticketing,  where the TOC has to pay (although it may well also involve some sort of grant or other adjustment from DafT).

[Nearholmer]

I'll bore everyone by trotting out my hobby horses on this topic again:

 

IMO, the two big issues are that there is needless and artificial separation between the body that looks after the infrastructure, and the bodies that runs the trains and stations, and, perhaps more importantly, the line of democratic accountability sin most parts of the UK far, far too long and diffuse, and polluted by civil servantry.

 

The ldemocratic accountability thing is dead easy to solve in places where the service geography maps closely to the political geography (London, problem solved in 1933, and despite tinkering and bad patches, still doing pretty well today; Manchester; possibly the whole of Scotland; etc.), but a pig to solve where the service geography spans multiple political boundaries so that no regional body with reasonably short accountability chain is a natural fit, and then only answer is a ministry in central government. Poof! (That was effective democratic accountability disappearing in a cloud of pink smoke).

 

You will notice that what I am advocating is not less involvement by politicians, but more and better. Why? because railways gobble-up public money, so effective democratic involvement is an absolute necessity (and oddly, it can lead to people being prepared to be taxed more to pay for better), but the politicians must, must, must stick to holding professional railway managers accountable for meeting broad targets and objectives, not roll their sleeves up and dabble.

 

Banging on, the dabblers actually tend not to be elected politicians, who tend either to be too busy smiling at cameras, or actually fairly focused on objectives, but civil servants (local or national) with no real "skin in the game". Things work best when a professional railwayman eyeballs a democratically elected politician and vice-versa, because at that level sane conversations, grounded in reality, happen. The twin realities of elector-wants and railway practicalities can be ground together to get a workable answer.

 

So, where central government involvement is unavoidable, because the route geography doesn't map onto a lower level of government, I would have the Railway CEO report directly to The Minister, eyeball to eyeball ....... maybe one CEO for each of ECML, WCML, and GW(intercity). Regional bodies should look after the rest.

 

Oh, and I would have "railways", fully vertically integrated. Horizontally split things just cause confusion and waste.

 

And, somehow, I would give FOCs a direct lightening-rod to The Minister too, possibly by having a Commissioner for National Rail Freight or something.

 

(Jim S, like your earlier analysis ....... it does feel currently as if "Old BR" is being re-erected by stealth and default.)

 

Kevin

[Classsix T]

Sounds dangerously like joined-up thinking to me Kev. Which is seemingly anathema to Whitehall if last Summer's fiasco is anything to go by. 

Further, maybe I missed it, but do the Pax TOC's get any say? Can't see many signing up on that basis. 

 

But as I've said before, if you make the franchise model unattractive enough (or it just doesn't work) hey presto, a state run railway cos the private sector can't or won't get involved. 

 

C6T. 

Edited October 22, 2019 by Classsix T

[boxbrownie]

On 14/10/2019 at 20:24, EdChap said:

I guess what is needed is some form of Railway body that could take a strategic look at the railways and have the authority to make things happen. I just can't think of a suitable name though.

 

Would it be naughty to suggest “English Rail” 

 

Welsh Rail would be a branch with those funny little undersize trains, and the one at the top......well.......might not even have to name that one soon 

[Classsix T]

Qué SRA SRA...

 

C6T. 

[stewartingram]

19 hours ago, Covkid said:

 

Yup.  I try not to get too stressed about it but when you start to consider.

 

LNER is the well known OLR operation after the ECML franchise turned into a mess, but look at the others.

The GWR franchise is currently an extension and I believe it theoretically cannot go beyond 31st March 2020.

The Southeastern franchise competition has been cancelled as has XC.

SWR is in big trouble  ansd suggestions both SWR and SE might become OLRs.

Then there is talk of Northern becoming another OLR operation.

 

Then I understand Scotrail and GA are not in a great place financially.

 

Add it all up and becomes a very sad indicator of our railway system in the UK which ironically up until last year has a seen a growth in ridership.  Think about that - an industry where more and more people want to pay to use your services, but your industry is so screwed up that a proportion of your brand new trains are parked up at such places as Longtown, Worksop, Old Oak Common, Basford Hall etc etc

 

A damning indictment I am afraid.    

Interesting to note that those TOCS that have gone for wholesale (or near) fleet replacements with new stock (my local GA for instance, but also some of the others), are very much in the "in difficulty" list - co-incidence or what?

 

Stewart

[Classsix T]

Dunno if it's the same where you are Stewart, but locally what AGA needs to do is revenue protection. I see blatant fare dodging daily. Were I not an honest John I'd probably do the same.

My home shack has had a trident of ineffective bollox wrt this. They tried penalty fare, installed platform ticket machines and recently added smart card reading pillars. No barriers mind, and the ticket machine is beyond the card reader on the platform. It's farcical.

 

C6T. 

[The Stationmaster]

Having worked in the old BR and the vertically disintegrated railway it has always interested me to compare the pros and cons of the two methods of organisation.

 

The big problem with the BR organisation, although in some respects resolved by full sectorisation (allthough that also created its own problems!) was where you placed the ultimate decision making in the event of  managerial (e.g inter-departmental) conflict and the basis (i.e. which form of 'favouritism') by which any such conflicts would be resolved.  The big advantage it had was that generally things tended to work out 'reasonably well' because those resolving conflict had the knowledge and and a wide range of experience to enable them to do so.  But various parts of the organisation often missed out - for example a heavy concentration of civil engineering spending on the intercity routes meant there was a dearth of spending on rural byways.  Now a big problem in putting it all back together would be that the breadth of experience, knowledge, and 'corporate thinking' simply doesn't exist any more - those who grew up in that atmosphere and with those opportunities to acquire those vital (to such an organisation.

 

Interestingly the main example we have so far (where we know anything about i) of putting together a train operator in close managerial conclave with a geographical part of Network Rail didn't work in a corporate way but became very much a 'one operator inclined' show - i.e it recaptured the very worst part of the way things had (not) worked in BR days.   On a multi business (= multi train operator) railway you cannot have just one operator sitting in close conclave with the infrastructure controller deciding things which will affect all operators - you are simply recreating the worst aspect of the BR fully sectorised railway, the one that didn't have enough time to fully display its consequences.

 

Now to what we have.  Well forgetting franchising for one moment the big advantage now is that notwithstanding some watering down and the ludicrous idea of bringing in the legal trade the industry does have a structure with properly set out relationships (enshrined in contracts and various agreements) between the various parties involved.  Such critical matters as train paths and track access are protected by contract - not by the word of a senior manager who will be in a different job in a few years time and whose successor might have a different view.  But part of the overall concern - the infrastructure - is now at a further step removed from direct dealing with the end customer and his minimal chance of ever getting involved in that relationship.  But in reality is that so different?  In the past the operator would shout at the technical depts to minimise possession duration and make sure that the track and signalling worked when it was needed - now it is a 'customer' within the industry who does exactly the same and, unlike old BR, this 'customer' has contract terms which he can wave under the infrastructure folks' noses and a clear arbitration procedure.

 

Overall the organisation now has - despite what I originally thought of it when it was first mooted - a number of advantages compared with 'old BR'.  The big disadvantage that I can see seems to be the lack of management of the everyday working railway where NR appears to have lost its way in all sorts of corporate stuff instead of looking at its responsibility to its customers which is to keep trains moving.  That I suspect might be down to a newer generation of managers who don't understand the previous culture of the railway (and have tended to despise it while concentrating on other, often 'faddish'  organisational things).  There has more recently been some signs of change to those attitudes and we can hope (and perhaps expect?) to see more - and I know exactly where I would start, with senior operating managers back 'on call' pdq so they have to face and deal with their real responsibilities.  But on the other hand NR has achieved a lot and that must not be overlooked, particularly some of its technical achievements.

 

Franchising is a different ball game and here I have no doubt of what has gone so desperately wrong - micro-management by inexperienced Civil Servants whose eyes are considerably larger than their brains and ability.  I still maintain that properly managed there isn't very much wrong with the franchising system - although 'stakeholder' involvement  could perhaps be expanded in some instances?  The original Franchising Director made very sure he was well out of the clutches and influence of Marsham St (and its 'railway people' back then were a darned sight better than those who are there today - for ar start they left the detail to the professionals)

[Nearholmer]

”But part of the overall concern - the infrastructure - is now at a further step removed from direct dealing with the end customer and his minimal chance of ever getting involved in that relationship.  But in reality is that so different? “

 

Whether it is any different is one question; whether it is any good is another.

 

My personal view is that, because it is big, heavily-publicly-funded, and pan-national, NR has lots and lots of influence in the industry, ‘power’ to use another word, and that because it is far-removed from real, direct, in-your-face, final-customer contact, it is incredibly ill-placed to be fully responsive. It tries to be, and it tries very hard to make sure it’s people ‘think customer’, but is forever batting against its own structural position.

 

Things are “upside down” when compared with any sane railway, in which the infrastructure engineers are properly “valued servants” of the operator/customer-service-team.

[mdvle]

1 hour ago, The Stationmaster said:

 

The big disadvantage that I can see seems to be the lack of management of the everyday working railway where NR appears to have lost its way in all sorts of corporate stuff instead of looking at its responsibility to its customers which is to keep trains moving.  That I suspect might be down to a newer generation of managers who don't understand the previous culture of the railway (and have tended to despise it while concentrating on other, often 'faddish'  organisational things). 

 

I suspect that if BR had been kept it too would have suffered from that issue.  The business world in general seems to have suffered, starting in the 80s and perhaps with the rise of the MBA, a replacement of the "promote from within / work your way up from the bottom" to a hire into the managerial class directly from higher education.  This in turn, combined with the increased emphasis on quarterly results, resulted in the implementing of the latest fad or whatever the schools are teaching at the moment regardless of whether it is good for the long term health of the company.

 

The key point really is to acknowledge that private companies aren't inherently perfect, and the opposite that government run companies aren't inherently badly run.

 

To that end, and with the caveat that we can't entirely rule it out from happening to BR, the key thing that a franchised railway brought was a forcing of significant additional government spending on the railway which it desperately needed (and continues to need).

[lmsforever]

Reading the informed posts it is clear that running the railways has become a real problem ,bringing back BR is not the answer as it will increase governmental interferience.Franchising should be simple but has been made difficult by DAFT in that they set up everything and there is no real chance for winners to actually innovate .Bidders are just taking on contracts set up by civil servants who do not want to  allow any deviation from the contract.  We need rail as it will quickly become the only way to travel long distances due to the clamour for no private cars so a  robust system with operators running services that they have specified .Then we will have services that reflect local conditions  plus the ability to innovate should the need arise.The UK is in the worst state I have ever seen and it appears that those supposedly in charge have not the slightest idea what to do.Good luck to any company that takes on a franchise they will need it!

[96701]

Having been involved in the rail industry since 1973, and still being involved, I find it very strange to read that some people think that BR was incapable of running a railway, that the current method of running a railway results in poor results. Anybody got any solutions? I certainly don't. One thing that 46 years on the railway has taught me is that no one person knows how to run a railway.

[Covkid]

18 minutes ago, 96701 said:

Having been involved in the rail industry since 1973, and still being involved, I find it very strange to read that some people think that BR was incapable of running a railway, that the current method of running a railway results in poor results. Anybody got any solutions? I certainly don't. One thing that 46 years on the railway has taught me is that no one person knows how to run a railway.

 

Totally agree.

The industry has become way too fragmented but tied up in knots to be resolved easily. 

[96701]

9 minutes ago, Covkid said:

 

Totally agree.

The industry has become way too fragmented but tied up in knots to be resolved easily. 

It has always been so. One thing that grieves me is that when I worked for Inter City, I worked for East Coast and we were a self accounting unit in that we charged money for our services. Whilst this was "wooden dollars" at first, as soon as Railtrack came into being, there was actual money changing hands. The practice that we had whilst working for Inter City was invaluable. We as engineers were trained in customer care. Inter City was a profitable part of BR. The only profitable parts of Inter City were East Coast and Gatwick Express. I find it really odd that there have been a couple of failures of ECML franchises.

[boxbrownie]

10 hours ago, 96701 said:

Having been involved in the rail industry since 1973, and still being involved, I find it very strange to read that some people think that BR was incapable of running a railway, that the current method of running a railway results in poor results. Anybody got any solutions? I certainly don't. One thing that 46 years on the railway has taught me is that no one person knows how to run a railway.

There is no “golden bullet”.......my Uncle was cleaner, fireman and driver at the + , he joined in LNER in 1947 a year before it all became BR......after 49 years he decided to retire and miss out on his 50th year as he had absolutely had it “up to the blast pipes” with the franchise services that had been running the ECML in his last years, they really spoiled a dedicated and railwayman through and through employee........says it all to me.

 

ps, he liked the Scotsman but always said he was an A4 man at heart 

[caradoc]

22 hours ago, The Stationmaster said:

Having worked in the old BR and the vertically disintegrated railway it has always interested me to compare the pros and cons of the two methods of organisation.

 

The big problem with the BR organisation, although in some respects resolved by full sectorisation (allthough that also created its own problems!) was where you placed the ultimate decision making in the event of  managerial (e.g inter-departmental) conflict and the basis (i.e. which form of 'favouritism') by which any such conflicts would be resolved.  The big advantage it had was that generally things tended to work out 'reasonably well' because those resolving conflict had the knowledge and and a wide range of experience to enable them to do so.  But various parts of the organisation often missed out - for example a heavy concentration of civil engineering spending on the intercity routes meant there was a dearth of spending on rural byways.  Now a big problem in putting it all back together would be that the breadth of experience, knowledge, and 'corporate thinking' simply doesn't exist any more - those who grew up in that atmosphere and with those opportunities to acquire those vital (to such an organisation.

 

Interestingly the main example we have so far (where we know anything about i) of putting together a train operator in close managerial conclave with a geographical part of Network Rail didn't work in a corporate way but became very much a 'one operator inclined' show - i.e it recaptured the very worst part of the way things had (not) worked in BR days.   On a multi business (= multi train operator) railway you cannot have just one operator sitting in close conclave with the infrastructure controller deciding things which will affect all operators - you are simply recreating the worst aspect of the BR fully sectorised railway, the one that didn't have enough time to fully display its consequences.

 

My own experience of an attempt to bring Network Rail (NR) and a Train Operator (TOC) closer together (not I suspect the area Stationmaster refers to) was one of the factors in my decision to retire 3 years ago.

 

On the NR side we felt disregarded and sidelined. For example, in my office, co-located with the TOC, the filling of NR vacancies was put on hold pending re-organisation, and additional staff shortages then arose due to long term sickness and other issues. This resulted in staff being asked to work excessive hours (I did not expect, at the age of 56, to be working 7-turn nightshifts, with the first and last of those being 12-hours !), and/or desks left uncovered with the remaining staff having to do two jobs. No such restrictions applied to the TOC side of the office.

 

Things got so bad that I began to regard the process as a hostile takeover (by the TOC) rather than a merger/co-operation/alliance, or whatever the latest buzzword is. We always felt that within the limitations of today's railway industry, we treated every operator as fairly as we possibly could. How that can be achieved if a single dominant operator takes control of the infrastructure, as has been suggested for the ECML for example, given experience so far, will be a challenging task.