Great British Railways Plan – But Will It Be Great?

The Government has published the Williams Review of proposals for how Britain’s railways should be reformed. The existing franchise system for the train operating companies with a separate company managing the tracks which was introduced in the 1990s has proved to be a dismal failure.

Network Rail went bust and although the franchise services have been improved in some regards, the recent collapse in ridership due to the Covid epidemic has meant the Government had to step in to keep franchises afloat. The franchise system was also exceedingly complicated with horrendously complicated contracts to supposedly provide the right incentives to train operators. It did not stop arguments over who was to blame for delays to services. But the Government (i.e. you and me via taxation) ended up providing even bigger subsidies and in ways that were not that obvious.

Train delays are common. The report says that one third of trains were late in 2019/20 and this has barely improved in the past five years.

Now the Williams-Shapps Plan is now proposing a brave new world of Government control. Grant Shapps, the Transport Secretary, said: “Great British Railways marks a new era in the history of our railways. It will become a single familiar brand with a bold new vision for passengers – of punctual services, simpler tickets, and a modern and green railway that meets the needs of the nation.”

That sounds remarkably like the ambitions of the old British Rail does it not?

New flexible season tickets are promised that will help those who are now only commuting into offices a few days per week and simpler and less confusing tickets are foretold. Paper tickets will disappear and there will be a new app to enable easy booking. This will compete with companies such as Trainline (TRN) on the web whose share price has dropped by 25% since the announcement. There were lots of people shorting the stock even before the news broke, probably because the company has never made a profit and looks financially to be somewhat unstable. Trainline issued some soothing comments including: “The Company believes the proposals will provide Trainline with new opportunities to innovate for the benefit of customers and further grow its business” but it’s clearly a major threat.

The Williams report says that train operating franchises will be replaced by “Passenger Service Contacts”. It is not clear how that is different though. More fine words from the report are: “Under single national leadership, our railways will be more agile: able to react quicker, spot opportunities, make common-sense choices, and use the kind of operational flexibilities normal in most organisations, but difficult or impossible in the current contractual spider’s web”. One claim is that Great British Railways will make the railways more efficient, long the complaint of those who have looked at the finances of the system.

Comment: There is certainly a desire for change as the existing franchise system and separate rail track maintenance system was clearly inefficient. Rail passengers still do not pay for the real costs of running the trains and building/maintaining the tracks except on heavily used commuter lines in the London area. But the essential problem is that the cost of operating trains is high when passenger usage is concentrated into a few hours per day while the public expects a service 18 hours per day or longer. Another problem is that the cost of building and maintaining the tracks and signalling is enormously expensive in comparison with roads.

For example, according to articles in the Guardian (a keen supporter of railways), the cost per mile of building a motorway is £30 million per mile. Does that sound high? But the cost of a new railway such as HS2 is £307 million per mile!

Railways are old technology that intrinsically require expensive track and expensive signalling systems to maintain safety. If a train breaks down or signals fail the whole network is disrupted while this rarely causes a problem on roads. The breakdown of one vehicle on a road makes little impact and traffic actually flows through broken traffic lights quite easily while they are easier to repair.

There is a very amusing section in the report on the “blame culture” that operates at present, and how arguments thus generated are resolved. That’s very worth reading alone.

Changing a rail timetable normally takes 9 months apparently and there have been some big problems as a result in the past. For example in 2019 Northern Rail missed more than a quarter of million stops allegedly after a botched timetable change and generated thousands of customer complaints. You don’t hear of such problems with bus services which are intrinsically more flexible.

How will Great British Railways affect services in London, where commuter surface rail lines are operated by separate companies at present. This is what the Williams report says: “In London and the South East, a new strategic partnership will be established to support housing, economic growth and the environment across the highly interconnected transport network in that part of the country. This will bring together Great British Railways, TfL and local authorities and businesses to coordinate timetabling and investments and to provide a consistent passenger experience in areas such as accessibility, ticketing and communications”. Sounds wonderful does it not, but the devil is surely in the detail.

Ultimately the Government will still be in control of the railways under this plan, so it’s effectively a renationalisation under a different name. That may please some but no nationalised industry has ever been an economic success or pleased their customers. I foretell disappointment.

You can read the full Williams report, which is a panegyric to the future of rail travel in the country here: https://tinyurl.com/3rhcd8e5

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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