Railway franchises in the coming year

[rockershovel]

I’m far from clear what point, or points The Stationmaster is trying to make, above. Is he saying that the Conservative administration of the day, and their New Labour successors, never stated openly that mass casualisation and wage erosion was a goal? Why, I don’t believe they did; but exactly those effects were immediately apparent and have consistently manifested themselves since, over a long period of time. 

 

Is he saying that the authors of the project did not give thought to whether the franchisees might expect to make a profit? 

 

Regarding the 2012 Olympics, I seem to recall that the Army eventually inherited the task of of dealing with the failure of the commercial contractors involved? 

[Nearholmer]

33 minutes ago, rockershovel said:

Regarding the 2012 Olympics, I seem to recall that the Army eventually inherited the task of of dealing with the failure of the commercial contractors involved? 

 

Not in the transport provision, which is what I was talking about, they didn't.

 

With no disrespect to the Army, they really wouldn't know how to deliver a significant railway project, or run the transport system of a capital city if they were asked to.

 

 

[96701]

10 hours ago, The Stationmaster said:

There was a strong point of view that infrastructure maintenance costs on BR were excessive and that introducing more (i.e. complete) privatisation of the work would achieve financial savings.  

Well, that might have been a correct point of view, but........

1. I'm convinced that the initial privatisation must have increased costs because of the way that the RT1A contracts were set up to allow the contractors to charge Railtrack for "cost plus" work arising. This led to Railtrack employing more Engineers to allow "man to man marking" with the contractors, therefore increasing costs
2. If Network Rail were allowed to charge TOCs and FOCs sufficient money for train paths such that the Government didn't have to subsidise Network Rail,  would the TOCs and FOCs make any profit?

In view of the above, does anybody know the true cost of maintaining the railway?

[mdvle]

3 hours ago, rockershovel said:

I’m far from clear what point, or points The Stationmaster is trying to make, above. Is he saying that the Conservative administration of the day, and their New Labour successors, never stated openly that mass casualisation and wage erosion was a goal? Why, I don’t believe they did; but exactly those effects were immediately apparent and have consistently manifested themselves since, over a long period of time. 

 

I believe he is saying that wage erosion was not a goal at least to the extent that it was never mentioned in any of the meetings that were held to arrange the new system.

 

But I also think (and I think Stationmaster is also saying this) that the wage erosion isn't as cut and dried as some like to claim.

 

First, there have been many discussions over the years on here on how (relatively) poor BR employees were paid in general, and thus there really wasn't much wage erosion that was going to be possible.  In fact, the consensus (as mentioned by Stationmaster) is that at least for the skilled workers they frequently achieved significant wage increases in the post-BR railway and to that end privatization benefited them enormously.

 

As for the less skilled positions, given that those wage issues effectively have become the new normal for any business (not to say that they are correct or good) and linking them to privatization is likely a false conclusion - that BR, if it still existed, would have also taken advantage of the general move to low wages and uncertain hours much like they were moving to a more airline oriented fare system.  To that end Stationmaster points out that even parts of BR were outsourcing infrastructure maintenance, and much like Railtrack/NR that likely would have not only continued under BR but would have expanded (if not necessarily in the same way).

 

3 hours ago, rockershovel said:

Is he saying that the authors of the project did not give thought to whether the franchisees might expect to make a profit?

 

No, I believe he is saying the goal was to reduce the government subsidy.

 

Obviously there would have been an expectation that franchise holders would make a profit, but the expectation was not that the government would make a profit off of it but rather simply cut how much taxpayer money was funding the railway.  That of course did not work as intended and the government continues to try and reduce the subsidy (by trying to force the passengers to pay a larger share of the cost).

[rockershovel]

Interesting replies, there. They appear to embody two important fallacies of modern times. 

 

Firstly, that the actions of elected governments can be understood in the context of their stated objectives. They do, after all, undergo periodic re-election. 

 

Secondly, that issues of this nature can be understood in the context of single threads within those issues. 

 

 

[corneliuslundie]

Re outsourcing, it was being done in the early days of the Southern Railway for station maintenance, and probably (what I read is not clear) by the LSWR.

I don't know about other companies.

Jonathan

[Nearholmer]

Railway companies have bought-in goods and services since the dawn of the industry.

 

Even at the very height of ‘vertical combinations’, barely any railway provided for all its needs in-house - the Pennsylvania in the USA possibly got nearest.

[The Stationmaster]

19 hours ago, rockershovel said:

I’m far from clear what point, or points The Stationmaster is trying to make, above. Is he saying that the Conservative administration of the day, and their New Labour successors, never stated openly that mass casualisation and wage erosion was a goal? Why, I don’t believe they did; but exactly those effects were immediately apparent and have consistently manifested themselves since, over a long period of time. 

 

Is he saying that the authors of the project did not give thought to whether the franchisees might expect to make a profit? 

 

Regarding the 2012 Olympics, I seem to recall that the Army eventually inherited the task of of dealing with the failure of the commercial contractors involved? 

For the very simple reason it  wasn't a goal - the people who first introduced were construction and civil engineering companies which took over various aspects of infrastructure construction and maintenance.   The only goal was a belief in non-railway coircles that flogging off civil engineering, in particular, to private companies would reduce the costs because private companies were 'more efficient'.    Train operating companies didn't introduce any sort of 'casualisation' thing for some time and only then through contractors carrying out carriage cleaning or operating a trolley service on some trains - and that still isn't universal anyway and again hardly amounts to 'casualisation'.  And don't forget that until NR started getting invrestment money to replace the cash Railtrack had leeched out of the industry (disguised as 'profits') the directly state supported part of the industry hadn't introduced any casualisation at all beyond the two areas I have already mentioned - and in some respects that was no different from what had happened in BR days.

 

I really cannot understand why you keep on about 'mass casualisation' - it was private sector infrastructure companies that introduced it , no different from the way they had done things in the past (and still do today) in their earlier fields of operation.  How many people employed on building Crossrail are full time long term employees of the contractors undertaking the work who started with them as trainees or apprentices and will remain with them until the day they retire?

[Nearholmer]

To have a sensible conversation about the  nature of employment in the railway industry one needs at very least to differentiate between operations, maintenance and ‘projects’ (which includes rolling stock build and heavy overhaul), and really to differentiate between disciplines in maintenance and ‘projects’.

 

Sweeping generalisations are just that.

 

And, not only has the picture varied by time, it has always varied hugely by engineering discipline. My own, electrical engineering, for instance, is one where railways have never had large in-house teams capable of significant project work, that class of work has always been something for specialist contractors* for good reason, whereas some railways did build-up large direct labour teams for civil and p.way projects.

 

Books could be written about it - in fact I think they have.

 

* Thete was some mega-casual work in that sector until at least the 1980s, with guys literally being spot-hired from outside pubs in Camden Town of a Saturday night. I’ve overseen jobs where the contractor’s gangs were ‘straight off the bog’, which is to say guys who worked seasonally for Bord Na Mona, coming over for a few months, hired by the man as they got off the boat. That degree of casualness no longer exists in the sector.  

Edited March 17, 2020 by Nearholmer

[corneliuslundie]

My reference to the Southern Railway was about station maintenance/repainting, not rolling stock procurement, which I agree has always in some companies been largely from outside sources, or signalling for example, where outside companies have been involved from almost the start. But it is evident that neither the SECR nor the Brighton had outsources such maintenance and it was regarded as something unusual - but to be extended across the new company.

Jonathan

[Nearholmer]

I'm sure you are right that outsourcing station maintenance was publicised because it was unusual, but my statement holds good, and for many things besides rolling stock and signalling capital works.

 

Different railways at different time struck the in-house, out-of-house balance in different places.

 

One example worth exploring with this in mind is the symbiotic relationship between the LBSCR and the Pullman Car Company, which could be viewed as the LBSCR letting a concession for the provision of half-decent rolling stock, and catering services, to save it investing its own capital in those things and having the fag of managing them ....... a.k.a. 'outsourcing' in modern parlance.

 

Travel agents are another case ......... they acted for railways, selling their services in places where the railway had no direct presence, in exchange for a small 'cut', thereby saving the railway setting-up its own office. The railways were buying a service of ticket-selling.

 

 

 

 

 

 

Edited March 17, 2020 by Nearholmer

[corneliuslundie]

No argument at all about that. In fact I suspect that you can find almost any model you like if you trawl through the various companies. Actually (tongue in cheek) the Pullmans were a way of providing toilets on trains. The Board did not think more than a few were necessary - see Ian White's recent volume on LB&SCR carriages. And of course in most companies a lot of construction was always by contract, Few companies built their own lines by direct labour, or their own stations, staff accommodation etc. But those were one-off contracts, unlike the Pullman example.

Anyway back on topic?

My feeling much earlier this year was that there would be few bidders for any new franchises if the current model was followed. Since then so much has changed that I wonder if any of the companies with franchises will still be around in a year. Cutting services is one thing, but cutting leasing costs, staff costs etc is another. So I believe that whatever the government wants or suggests it will be forced to a different model, though I have not a clue what that will be except that as the country (for that read world) will be in deep recession there will not be government money to spare.

Of course one option is to increase public spending, but unless there is the tax income to support it that means printing money, and therefore inflation. And in the past that has usually been capital projects rather than running costs. (I shall be very happy to hear of examples which prove that statement wrong.)

Anyway, back to modelling the pregrouping era when, of course, everything was wonderful - well the trains were pretty anyway, even if not much else was.

Jonathan

[rockershovel]

All the above are true, for a given value of “true”, but they avert their eyes from a central fact. 

 

Privatisation of the railways would lead directly and rapidly to concentration of maintenance of a safety-critical aspect - permanent way - in the hands of a small number of contractors, most notably Jarvis, which would undergo rapid expansion and transformation of their structure including the mass casualisation and consequent high turnover of their workforces. This sort of transformation does not happen overnight, or without planning.

 

It defies belief that the government of the day (which was, after all, the direct successor to the 1979-90 administrations which has been elected on a manifesto to restrain and reconfigure labour relations. It defies belief that their successors  not understand and anticipate that this was likely to occur, given that it was widely predicted. 

 

Successive governments pressed for accession of the A8 countries, pushing this much faster than the EU wished to go. Detailed and accurate projections were produced of the likely outcome, most notably by the German and Dutch governments, and controls provided - which were discarded by the Westminster government. 

 

Jarvis would collapse abruptly after the Potters Bar incident, in which their role and performance was severely criticised. 

 

 

 

 

 

 

 

 

[Nearholmer]

You are right that casualisation was part of the PWay disaster.

 

My reading is that the ideologues involved saw the cost savings to be had, real or illusory, and had neither the wit nor wisdom to foresee the safety consequences.

 

Stripping-out competent and diligent supervision/lower-management, and disempowering/re-chipping the client engineering teams also contributed.

[phil-b259]

20 hours ago, The Stationmaster said:

I really cannot understand why you keep on about 'mass casualisation' - it was private sector infrastructure companies that introduced it , no different from the way they had done things in the past (and still do today) in their earlier fields of operation.  How many people employed on building Crossrail are full time long term employees of the contractors undertaking the work who started with them as trainees or apprentices and will remain with them until the day they retire?

 

I would say there is a very big difference between 'Projects' and routine maintenance / renewal.

 

With the former it has long been the case for railways to engage outside contractors - mainly for the very logical reason that they would otherwise have to pay lots of folk to do nothing while there weren't any projects happening!

 

Maintenance, fault fixing or minor renewals are a whole different ball game - and its in these areas where casualisation has accelerated rapidly under privatisation.

 

My view is that the safest operating practice is for most track staff* is for them to KNOW their site of work - and to be able to TRUST their colleagues. In both cases having permanent teams who don't stray far and wide allows that knowledge of the places they go, plus trust amongst themselves to be maintained.

 

* That is those who are out working with Lookouts / while train services are still running as opposed to big possessions

Edited March 18, 2020 by phil-b259

[Nearholmer]

Just now, phil-b259 said:

safest operating practice is for most track staff* is for them to KNOW their site of work

To a greater or lesser degree the same applies to other disciplines, not only from a safety perspective but from a maintenance and, especially, a fault-find-and-fix perspective.

 

Being asked to fault-find on a complex system that you’ve only got generic, as opposed to location/application specific knowledge makes the whole job take ages longer, poring over drawings etc.

[rockershovel]

One consistent aspect of privatisation, in all its forms, has been the immediate shedding of directly employed personnel and the introduction of casual terms of service. Contracting of work to entities raised for the purpose, often with direct vested interests involved, seems endemic. 

 

Royal Mail seems to be a recent example, with its abrupt transition into casualised staffing and the resulting industrial relations problems. 

[caradoc]

My experience as an Operations Controller with BR, Railtrack and Network Rail, is that, as far as maintenance and operations are concerned, there was no 'mass casualisation' of labour; In both disciplines existing staff simply transferred to the new employer. In Scotland for example our maintenance contractor was First Engineering, whose staff were no less competent and dedicated than their BR equivalents, unsurprising as they were pretty much the same people ! As for operations, in June 1994 (we were a bit behind the times !) BR Scottish Region Control was split into Railtrack and Scotrail Controls, which required IIRC around 12 additional staff; Without exception these were recruited from existing, experienced railway staff, eg Traffic Inspectors, Signalling Centre Supervisors.

 

Certainly the new set-up post-privatisation made life more complicated, with a different company responsible for maintaining the railway, but that was a mistake which was quickly rectified by Network Rail.

[lmsforever]

Will be surprised if any franchises are let this year due to the turmoil within the industry ,all that will probably happen is more operations of   last resort  .Thus BR will come back under a new guise  but with bright liveries and uniforms  is it progress, I dont think so.

[30368]

The sooner our rail network is re-nationalised the better for all concerned. The cost of risk mitigation, and the need for profit to be made at each contractual relationship, of which there are many, slows process and costs the taxpayer and the passenger a great deal of money. The folly of rail privatisation will be revealed over the coming months when the TOCs seek funding from the taxpayer to maintain services and shareholder profit. In a national emergency you need a national network, something we have not had since the demise of BR.

 

After 25 or so years of this experiment we have lost most of our experienced engineers and operational staff and are not really training anything like enough young people to sustain an indigenous rail industry. That is not to say that there are not good people out there, just not enough.

How can it be sensible for a nation to purchase virtually all its rail rolling stock from abroad and then to let the builders maintain them in their maintenence depots? We have TOC's that have little real knowledge about the stock they operate simply beacause if you pass all the risk to the rolling stock builder/maintenance company you can factor this into the franchise bid and avoid unforseen maintenence costs. However you are a bit vulnerable when your "wonder train" is not as reliable as promissed and don't have the skills to manage your supplier.

 

Should we ever see sense and re-nationalise our network we should not repeat BR but establish a National Rail Corporation and allow it to borrow all this cheap money to revitalise the network and help to offset the economic impact of Covid-19. I am certain that HS2 could be built (if that's what we wish to do) at half the figures quoted by the current suppliers.

 

There I have said it.

 

Kind regards,

 

Richard B

 

 

 

Edited March 19, 2020 by 30368

[rockershovel]

30368, above, has come to the heart of the matter, which is the actual purpose of the national rail network. 

 

I see no historic reason to believe that the railways were ever capable of making a profit. They were almost nationalised during the First World War, were Grouped in 1923 and nationalised in 1948, in mostly very poor financial health. 

 

I am unable to name any European network which is profitable, and the serial bankruptcies of the US network point in the same direction. 

 

We have passed through a period described as “socialisation of debt, privatisation of profit”, which now appears to have run its course. I don’t believe the electorate will stand for much more of it. It’s my feeling also that a de-facto re-nationalisation, under some pretext or other, primarily through a piecemeal mechanism of default, relinquishing at best, and reversion upon expiry, is largely inevitable and for the best. 

[Nearholmer]

It’s pretty clear that dealing with Coronavirus is going to massively depress income to the public coffers, and massively increase outgoings, so post that every aspect of public spending is going to come under mega-close scrutiny again, so whatever next for the railways is likely to be about looking to reduce their demand on the public purse.

 

Which probably means public ownership, to strip profit-streams and interface costs, but starved of capital.

 

Been there before, and it wasn’t nice.

 

1950; take two.

 

Allowing for the fact that the railways are physically in a lot better shape now that in 1950 (cue debate), and might be able to withstand capital starvation if demand takes a long while to recover, with what capital can be afforded being spent in the north.

 

HS2 is a hard one to call .......... it might remain funded as stimulus, but if borrowing costs go up because the UK looks like a weak economy in global terms???

 

 

 

 

Edited March 18, 2020 by Nearholmer

[Trog]

11 hours ago, Nearholmer said:

You are right that casualisation was part of the PWay disaster.

............................

 

It had its good points though I once had a casual labour gang of painters, who thought that a Sunday working for the P-Way might be a nice little earner. You should have seen their faces when they found out that the first job for the day was moving a 200 yard string of CWR a quarter of a mile by hand. Needless to say there were only just enough of us to lift the rail if we held right on to the ends of the rail scooter handles, and when we went over a low spot in the ballast shoulder our feet left the floor. For some strange reason we never saw them again.

 

Another problem with the same re-railing job, was that the new non-railway supervisor at the Central Materials Depot, had found a load of old nylons the same as the orange ones but made from blue plastic*, and decided to send them out instead of new orange ones. So we had to send a van to get the right ones.

 

* Blue nylons (Not the GRN type for F40s) are used on Pandrol sleepers where you would normally use orange nylons (note that orange nylons are now butter yellow) but where 98 or 109lb rail is being used as the angle of the top of the rail foot is slightly different to that of 110A and 113A rail.

[lmsforever]

LNER seem to be making a good job on the ecml admitedly with new trains maybe this is the way forward have not read much about the new Northern operators activities.Franchises at the start were definitely a bright new way to run railways ,new ideas ,new trains but DAFT have gradually ruined this new start.They are interfering inadequately trained and led by people who seem to only want to bully operators ,witness the wcml fiasco.I like the idea of a national rail authority but it must be kept away from DAFT and any form of poltical interferience as BR was.

[mdvle]

2 hours ago, rockershovel said:

30368, above, has come to the heart of the matter, which is the actual purpose of the national rail network. 

 

I see no historic reason to believe that the railways were ever capable of making a profit. They were almost nationalised during the First World War, were Grouped in 1923 and nationalised in 1948, in mostly very poor financial health. 

 

I am unable to name any European network which is profitable, and the serial bankruptcies of the US network point in the same direction.

 

The thing to remember is that the largest portion of railway bankruptcies in the US were the direct result of government interference - restrictions on the ability to raise rates, restrictions on the abandonment of no longer viable routes, and a refusal until the creation of Amtrak to get out of the money losing passenger business (which really only became a financial albatross post WW2 when the arrival of the Interstate highway system, and then the airlines made long distance rail problematic).

 

Once the US got through the 70s and early 80s when the system "rebirthed" itself with fewer lines, etc. it has been healthy (and certainly much healthier over the post 1980 period than the airlines).