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Railway franchises in the coming year


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13 hours ago, Davexoc said:

Recently reported that SWR are in talks with the government and could be about to hand back the keys having lost £137m.

 

So if Northern and TPE get stripped of their franchises, that could be 4 of them being state run soon.

And then there is Scotrail....

According to my information the situation with SWR is rather more complex than that and a clue to that complexity is hinted at by a recent personnel move.

 

16 hours ago, rockershovel said:

A difficult question, as you point out at some length. There’s no doubt that the destruction of the former structure of BR is far advanced and in all likelihood, beyond repair. There is also a good case to be made that many of the worst problems are concentrated on routes which weren’t noted for financial health in pre-nationalisation days - LNER and the ECML being a good example. 

 

BR was dead and buried well beyond any possible hope of being reintroduced in its previous form the better part of 20 years ago.  Things have changed so much, in some cases two or three times, since the death of BR that recreating it would be nigh on impossible as many of the essential 'general management' skills, let alone various of the task oriented managerial skills and attitudes to 'the job' no longer exist in the industry.  

 

Re-nationalisation would probably create a monster under even tighter, ill-informed from a practical viewpoint, situation of control by DfT than exists at present.  Similarly new train procurement would be subject to The Treasury approving expenditure and it wouk

ld be in competition for money with, say, the NHS and education - which do you want, new trains or a local health centre?    And of course any halfway sensible politician interested in the self-preservation of retaining their seat in Parliament would be scared stiff of it because they will then be seen by the public as being 'responsible for the railways' and their postbags and constituency meetings will be full of it because there won't be any pawns of franchisees to shove the blame onto.  I recall vividly a speech Roy Hattersley made to a Railway Study Association dinner when the Govt were pushing hard towards railway privatisation and he said that whatever they might say in public or vote against in Parliament the vast majority of MPs would welcome rail privatisation with open arms because it would drastically reduce the size of their postbags and save them a lot of bother and time dealing with minor grouses from constituents.  Roy Hattersley never struck me as a cynic and as far as some (many?) MPs were concerned he was undoubtedly right.

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50 minutes ago, The Stationmaster said:

According to my information the situation with SWR is rather more complex than that and a clue to that complexity is hinted at by a recent personnel move.

Whilst I am nowhere near as close to the fact as Mr. Stationmaster is I can strongly agree with this comment.

 

The tabloid snooze-papers have generated a great deal of uncertainty and nervousness amongst staff today and understandably so. The fact remains that if SWR is handed back or taken back then DOR becomes the operator of last resort and all but a handful of staff will transfer under TUPE.  Indeed many SWR staff are already TUPEd from SWT days.

 

The actual operation of the railway won't change by any tangible extent although the content of the pre-recorded announcements might.  And since a majority of service failures are actually attributable to Network Rail at the end of the day then your 17.23 to Little Nuttingford is just as likely to suffer delay or cancellation as it always was.  

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I don’t think there can be any doubt that the “re-nationalisation” of the railways will take the form of moribund contracts being propped up on a cost-plus basis, simply because there is no other structure available to operate the system, day to day; and has already been observed, no politician has any incentive to accept responsibility for a situation which should never have been allowed to develop, and can have no possible popular outcome. It’s not as though the nationalised BR were universally popular, is it? 

 

 Longer term issues of strategic control will emerge, and be resolved on a case-by-case basis. 

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40 minutes ago, corneliuslundie said:

Is the phrase "strategic control" understood in Whitehall?

Jonathan

 

Oh, yes; it was, for many years, their principal function. Sir Humphrey DID know a great deal more than Jim Hacker, in that respect. The problem is that they require that strategy to be defined, because they are not the government of the day. It would be quite sufficient for them to be given the directive “run the railways at the minimum cost, to a defined level of service, involving private or public resources as seems most effective, justifying your actions by costed reports at annual intervals” and left to get on with it. 

 

However that isn’t the situation. The Conservatives committed a huge, unforced error in the dying days of the 1992-7 administration, privatising with indecent haste and without sufficient preparation or plans, for ideological reasons. They could have left Labour to own the action and its consequences, but could not be sure it would happen (they had no more idea than most others, of the actual character of their successors in office) and feared, without subsequent justification, that they would be back in office within five years. 

 

That has the long-term problem of leaving them no real option but to say, “we were wrong all along”, which they will not do at any cost. The only justification would have been success, and that is conspicuously lacking - in some respects, at least. So, we lurch from pillar to post, the press baying at the heels of whoever is unlucky enough to be perceived as owning the whole mess, and the travelling public growing increasingly mutinous. 

 

 

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Grant Shapps has today made a written statement to Parliament confirming that a decision about the continuation of the current Northern franchise operated by Arriva will be made 'before the end of January 2020'.

 

Details here;

Grant Shapps written statement - 09/01/2020

 

His recent TV interview referred to a decision being made 'soon'.

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15 hours ago, rockershovel said:

 

Oh, yes; it was, for many years, their principal function. Sir Humphrey DID know a great deal more than Jim Hacker, in that respect. The problem is that they require that strategy to be defined, because they are not the government of the day. It would be quite sufficient for them to be given the directive “run the railways at the minimum cost, to a defined level of service, involving private or public resources as seems most effective, justifying your actions by costed reports at annual intervals” and left to get on with it. 

 

However that isn’t the situation. The Conservatives committed a huge, unforced error in the dying days of the 1992-7 administration, privatising with indecent haste and without sufficient preparation or plans, for ideological reasons. They could have left Labour to own the action and its consequences, but could not be sure it would happen (they had no more idea than most others, of the actual character of their successors in office) and feared, without subsequent justification, that they would be back in office within five years. 

 

That has the long-term problem of leaving them no real option but to say, “we were wrong all along”, which they will not do at any cost. The only justification would have been success, and that is conspicuously lacking - in some respects, at least. So, we lurch from pillar to post, the press baying at the heels of whoever is unlucky enough to be perceived as owning the whole mess, and the travelling public growing increasingly mutinous. 

 

 

Let us not forget that at privatisation the legislation, for all its haste, created both a regulator (the ORR but back then with far more teeth) and the SRA, the Strategic Rail Authority.  The latter was abolished by a subsequent Labour Govt and its role transferred into what is now the DfT. 

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10 minutes ago, The Stationmaster said:

Let us not forget that at privatisation the legislation, for all its haste, created both a regulator (the ORR but back then with far more teeth) and the SRA, the Strategic Rail Authority.  The latter was abolished by a subsequent Labour Govt and its role transferred into what is now the DfT. 

 

Probably also worth adding that some of the previous incumbents who held the position of Rail Regulator were far more willing to stand up to the politicians of the day to defend their independence from the Department for Transport.  I'm thinking particularly of Rail Regulator Tom Winsor and his 'run in' with then Labour Transport Secretary Stephen Byers over the future of Railtrack.

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3 hours ago, 4630 said:

 

Probably also worth adding that some of the previous incumbents who held the position of Rail Regulator were far more willing to stand up to the politicians of the day to defend their independence from the Department for Transport.  I'm thinking particularly of Rail Regulator Tom Winsor and his 'run in' with then Labour Transport Secretary Stephen Byers over the future of Railtrack.

 

3 hours ago, The Stationmaster said:

Let us not forget that at privatisation the legislation, for all its haste, created both a regulator (the ORR but back then with far more teeth) and the SRA, the Strategic Rail Authority.  The latter was abolished by a subsequent Labour Govt and its role transferred into what is now the DfT. 

 

Hence my comment, that the Conservative government of 1992-7 had little, or no idea of the actual nature of the incoming Labour administration, nor its duration. 

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I thought the Strategic Rail Authority was created by the Blair government, not by the Major one?

 

The way things are going, I can see nationalisation happening simply because nobody will tender for contracts. At the moment, IMHO, the main role of the companies is to take the blame for mismanagement by civil servants—and when they aren't, in many cases, making any profit any more, what's the incentive for them to bid?

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7 minutes ago, D9020 Nimbus said:

I thought the Strategic Rail Authority was created by the Blair government, not by the Major one?

 

 

 

It was.  It was set up in 'Shadow' form during 1999 and came into full legal existence, after the passing of the Transport Act 2000, on 1st February 2001.

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14 minutes ago, D9020 Nimbus said:

I thought the Strategic Rail Authority was created by the Blair government, not by the Major one?

 

The way things are going, I can see nationalisation happening simply because nobody will tender for contracts. At the moment, IMHO, the main role of the companies is to take the blame for mismanagement by civil servants—and when they aren't, in many cases, making any profit any more, what's the incentive for them to bid?

 

Exactly so. It won’t be called nationalisation, and there will be no legislation - rather, a process by which contracts lapse over time, revert to the government as operator of last resort. We will also pass through a process of increasing scrutiny of public finances, and many things will change.

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13 hours ago, ess1uk said:

Thought Shapps was going to announce something at the end of January?


The press has now been briefed that the announcement will come in the next few weeks.

The word is, a new authority is to be created to award the management contracts and oversee their operation.

How far this will remove the DafT’s sticky fingers from direct control, is yet to be revealed.


 

 

.

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Be interesting to hear how, when and the timescale for getting this underway.

 

If the new authority is, for want of a better description, going to be a sort of cross between the former bodies the Strategic Rail Authority (SRA) and the Office for Passenger Rail Franchising (OPRAF), then it will probably require primary legislation to set it up and can’t be done by Ministerial dictat via a ‘Statutory Instrument’.

 

My understand is that this will require parliamentary time and a budget for the proposed new authority.  Consequently, I would anticipate an announcement simultaneous with the forthcoming Budget. Which, as we know after last weeks reshuffle, has been put back for a short time.

 

Presumably, if the announcement also has implications for some of the existing franchisees who are quoted on the UK Stock Exchange, then a ‘Regulated News Statement’ might be required.  By convention, these are usually made outside of UK stock market trading hours. 

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I am pleased that the Govt is looking to do something about the franchising model. Indeed, I think they are being "courageous" as per Sir Humphrey.

 

But what they are proposing seems remarkably similar to what John McDonnell (Labour Shadow Chancellor) was proposing before the election....

 

I won't say any more for fear of bringing politics onto RMweb.

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14 minutes ago, Joseph_Pestell said:

I am pleased that the Govt is looking to do something about the franchising model. Indeed, I think they are being "courageous" as per Sir Humphrey.

 

But what they are proposing seems remarkably similar to what John McDonnell (Labour Shadow Chancellor) was proposing before the election....

 

I won't say any more for fear of bringing politics onto RMweb.

 

Well, there are only a finite number of options. 

 

Either the government wishes to run things directly (which it clearly doesn’t); or it wishes to underwrite private sector profits at public expense, in all circumstances (which it would probably still prefer to do, but which has become unelectable); or it tries to micro-manage without providing clear strategic direction (which has been the case, and has become unsustainable); or it provides overall strategic direction through a policy of holding controlling interests in more-or-less cost-plus contractors (which is, on the evidence, the least worst option - although the capital investment, employment and training policies of those contractors has become problematical, electorally). 

 

 

 

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To be honest I can't see overmuch wrong with the philosophical basis of the franchising system.  But I can see an awful lot wrong with the way Daft has grossly mismanaged it in recent years going for the equivalent of the typical Civil Service approach of cheapest offer on the table wins and without proper cap & collar arrangements to allow for changes in the national economy.  

 

In my view a comparison should have been made in the review with those 'franchises' which are already being effectively run as management contracts and the impact that has had on passengers (usually not so good as a straightforward franchise - several examples come to mind).  So we look as if we might possibly end up with a more constricted and centrally mis-planned approach than franchsing has achieved.  All we need do is look at the Class 800 saga to see what happens when amateurs become decision makers - where we still don't know the real costs of various centrally made decisions (and perhaps never will) or we look at franchises where the cheapest (for Govt) option was selected - such as the ECML which twice went to the highest bidder who finished up handing back the keys.

 

Overall it looks, from press whispers, that what we might end up with is a win-win situation for the Civil Service and a potentially worse deal for passengers and MPs post bags.

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1 hour ago, 96701 said:

Contractors don't always behave as expected, and remember Carillion and Jarvis? They were both involved in railway maintenance, and no longer exist.......

 

I’m not sure about “don’t behave as expected”, the ruthless and irresponsible behaviour, combined with the practice of “cheapness at any price” and abrogation of responsibility, were immediately recognisable to anyone who had worked through the “management contracting” years of the 1980s and early 1990s. The employment practices were often straight out of “McAlpine’s Fusiliers” and the ultimately catastrophic financial over-reach was pure 1980s. 

 

Contractors MAY make good servants but they ALWAYS make bad masters. 

 

The same goes for attempting to let contracts which you don’t understand in sufficient detail. This has been shown repeatedly in the chronic cost over-runs and failures of delivery which have plagued government IT projects, especially those let to Indian and Asian contractors (because letting contracts to agents based outside your legal jurisdiction, operating under very different cultural assumptions and speaking a language you don’t speak, is NEVER a good idea). It’s pure bad management practice and NEVER succeeds. 

 

Combine lack of core competencies, with the lack of probity and sense of duty (particularly, the failure to exclude conflicts of interest and ideology) which has been increasingly obvious in governments of all descriptions for a long time, and the present outcome is entirely predictable, and has long been so. 

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Re Stationmaster, above, I’d be interested to know what the “philosophical basis of the franchising system” actually IS, in his view? 

 

As far as I could ever see, it amounted to “privatisation at all costs” to “the usual suspects” plus a series of new companies (Jarvis being a classic example) involving clear conflicts of interest 

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What a mess the DFT have made of railways over many years  and still they think that its perfect , civil servants are not the people to let franchises or buy trains.The new authority must have railwaymen on it and the power to take the best offer that will give passengers a good service  also certain companies should be told to shape up or not be considered for any future bids.  What will happen with Scotrail are the government taking over or will another group run things?One franchise I am concerned about is Chiltern  going on past events encumbertants are not favoured and again the cheapest is favoured.Our current company provide a reliable service with clean trains ,on time,good customer relations, but DAFT think this is not worth considering.

 

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There is a fundamental problem with any sort of subdivision of any large organisation - there are elements which are simply not profitable, can never be profitable, but are felt to be necessary in the wider scheme of things. Even the USA finds Amtrak to be a necessary evil, in the interests of having any public transport at all. 

 

ECML is a classic example. This route has been financially problematical for many years, but it would be inconceivable NOT to have a direct route from London to Edinburgh. Royal Mail is another example; it simply cannot be compared to courier services, because it is legally obliged to provide services which couriers simply disregard as not profitable. 

 

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Another problem is the false question “which would you rather have - a rail service or a new hospital?” Taken in isolation, outside the context of overall public spending, it is deeply flawed. I would bet folding money, any day of the week, that the electorate would happily vote for the discontinuation of numerous outgoings which would pay for both, and more besides. 

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6 minutes ago, rockershovel said:

ECML is a classic example. This route has been financially problematical for many years, but it would be inconceivable NOT to have a direct route from London to Edinburgh.

Hardly that problematical — just the winning company bid far too much (in each case). You'd have thought that if a previous operator had failed to make enough to cover the payments to be made to Government, future operators wouldn't offer even more… and the malaise is spreading to other operations now.

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