Rail 977 - A farewell to micro-management

Those who attended the recent George Bradshaw Address to hear Mark Harper deliver his first major speech on rail since becoming Secretary of State for Transport were unlikely to have left disappointed.

The speech was certainly light on detail, but then it wasn’t intended to fill in all the blanks. Instead, what we saw was a clear signal of the policy direction this government plans to take under Harper’s leadership of the transport portfolio (see pages 6-7).

It was perhaps inevitable that he first zoomed in on the need to reduce the level of financial support currently being provided to our railways.

It is unfortunate that the industrial relations landscape remains so poor. But there is no escaping the fact that, through its words and deeds over the past year, our government collectively has contrived to turn a set of pay and productivity disputes into a political battle drawn along conventional class lines - something many of us hoped might have been left behind.

A more consistent message has been transmitted in recent months: there is no more money for rail, and pay reviews can only be funded by productivity deals. This remains a solid message, but one that needs to be delivered in a less confrontational way. The Government needs to see the rail workforce as friends who need to be brought along on a difficult journey, not an enemy to be beaten.

Here are the arguments I’d like to hear articulated more clearly, but sympathetically:

Railways represent comparatively secure employment with excellent terms and conditions, and with pay which is largely good in comparison with other sectors.

When funds are in short supply, government must prioritise the needs of health, defence and education over rail.

There remains considerable scope for productivity, which does not involve trashing all those working conditions that have been hard won and remain valued.

The current level of government financial support is unsustainable, so we need to use the available support more efficiently or the alternative must be service and job cuts. 

I also believe the disputes should be separated back out into their constituent parts, and then resolved on a company by company basis. The current outlook remains dismal, and nothing much can change on the wider front until such time as strikes come to an end.

Harper then produced his first major policy announcement: a firm commitment to the concept of Great British Railways. He made clear that GBR is to be a genuinely arms-length body, and one that is commercially focused in the interests of customers - be they passengers or freight. The Secretary of State intends that government should once again confine itself to setting policy and providing high-level direction, and a specialist expert agency should once again lead on both the development of what that means in detail and its implementation.

Arguments against the separate management of cost and revenue have clearly hit home, as has the disempowerment of managers across the industry to actually do any managing. Train company Managing Directors will once again be allowed to both direct and manage, according to Harper.

We can perhaps see this best as a proposal to call time on the over-centralisation of control and decision-making which we have endured in response to the pandemic. Winding up the overly nationalised railway created by his predecessor but one, Grant Shapps, is another way of interpreting it.

We are also going to see the green-lighting of some much overdue reform of fares and ticketing, even if it’s still embryonic and to be trialled on part of the network. GBR has developed a fares model for longer-distance trips based exclusively on single-leg pricing, with three tiers of flexible, semi-flexible and train-specific prices.

It seems the Treasury has finally (praise be!) been persuaded that change to the existing fares structure is needed. It’s unfortunate that this has been misreported in the mainstream media as an end to return tickets, leaving people feeling that it’s just another way to jack up prices, when the reality is the opposite.

For shorter-distance journeys, the intention is to extend Pay As You Go contactless models out from London and the other major cities that already have such systems. This is a sensible way of ‘building out’ based on something already proven to work, rather than going for a ‘big bang’ change in such a notoriously complex area.

Something for the GBR Transition Team to do next is to craft a narrative to better explain the proposed changes and the benefits for rail passengers in simple terms that the ‘person on the Clapham omnibus’ can more easily understand. At the moment, the public and media cynicism is almost palpable.

But it was on the role of the private sector where the most marked shift in policy came in Harper’s speech.

Many of us have argued for some time that there is little or no value in carrying on with the current framework of Passenger Service Contracts, which combine the cost and complexity of concessioning the delivery of train services but with no benefit to show over in-house alternatives. The intention now is to identify forms of contracting which can harness the positive power of the private sector, while minimising the loss of benefits arising from control and integration. These changes include the appropriate transfer of some risk, so that it is placed where it can be best managed.

But the most seismic change is the shift to being supportive of open access. In practice, most of the industry has collectively opposed this for the past 25 years. The Department for Transport has been particularly hostile, seeing it as little more than cherry-picking.

If open access is now to be encouraged, much needs to be done to make it workable on a larger scale. There will need to be a reform of access charging, to ensure that it pays more of its way to use the infrastructure, and a reform of access planning to ensure that the necessary joined-up timetabling takes place to optimise the use of scarce capacity on our main lines.

This is complicated stuff and will require a great deal of thought to flesh out the detailed framework. Work on this needs to be put in hand immediately if meaningful progress is to be made within two years.

Harper’s speech was a breath of fresh air and offers a new beginning. We trust that it represents the beginning of the end of a lengthy period of intense drift that our wonderful industry has endured.

■ Nigel Harris is away following a family bereavement.

Sir Michael Holden