WILL COVID DRIVE US OFF THE RAILS?
Train operators face an uncertain future as home working becomes the norm, write Jon Yeomans, Oliver Gill and Hasan Chowdhury
This is the 14th instalment of The Future Of... a long-read series which seeks to examine in depth what the next five to 10 years hold in a variety of different areas.
The “Ivanhoe” line from Burton to Leicester has an illustrious heritage. Its track was laid in 1832 by railway pioneer Robert Stephenson. “It’s one of the earliest lines in Britain,” says Geoff Bushell, a former Army engineer and rail enthusiast. It originally served the coal fields of Nottinghamshire and Leicestershire; today it snakes through the National Forest, which was planted to heal the scarred landscape.
Freight trains still ply the route but the last passenger service departed in 1964, as the line fell victim to the infamous “Beeching axe”. Bushell, who is chairman of the Campaign for the Reopening of the Ivanhoe Line, believes the moment has come to restore the service. “Since those days, we’ve had population growth of between 20pc and 40pc in certain places,” he says. “There’s been a lot of housing development. Industry has taken over the old coal land. Everybody commutes by car; the infrastructure hasn’t kept up.”
The campaign is one of 10 chosen to receive central government support from the Restoring Your Railway fund, a £500m pot announced earlier this year to look at reversing some of the Beeching cuts. But its timing may be all wrong. Since the Department for Transport’s invitation for bids, Covid-19 has rocked the country.
The pandemic has wreaked havoc on the rail network, with usage at the height of lockdown dropping to just 5pc of normal levels and since rising to barely 30pc. It is clear the railway is at a turning point. But does its future lie in getting bigger or smaller? And what does the end of the franchising system mean for future services and the passengers who rely on them?
Covid forces reform agenda
The railways were primed for a major overhaul even before Covid hit. Dr Matthew Niblett of the Independent Transport Commission suggests the railways were a victim of their own success: passenger numbers more than doubled between 1995 and 2018 while safety improved.
“This success has, however, placed increased congestion stress on the network and major capacity upgrades have been needed to accommodate the additional demand,” he says.
And so, two years ago, then transport secretary Chris Grayling ordered Keith Williams, the former British Airways chief, to “leave no stone unturned” in his review of UK rail. But as last year dragged on, it became clear that the Williams Review – like so many of Britain’s trains – would be delayed. Williams, also the chairman of Royal Mail, quickly established that “franchising” was not working. Since privatisation, train operators have been handed local network monopolies. They collect the fares and pay the Exchequer in return.
This means the more people they manage to fit on their trains, the more money they make.
If train operating companies – or TOCs – got their sums right, there was a killing to be made. And, for a while, they did; throughout the 2000s train companies hit the headlines by raking in millions as passenger numbers exploded. But margins narrowed in the decade that followed. Dissatisfaction grew all round, not least with the punctuality of services.
Under Williams’ draft conclusions, revealed by The Daily Telegraph in February, franchising would be replaced by concessions. The relationship would be inverted: the Exchequer would collect the fares and in return pay operators a fee, which could be varied based on numerous metrics such as performance and efficiency. Such plans left the Government open to claims of “backdoor nationalisation”. And they were soon shunted into the sidings because of two problems. The first was that Rishi Sunak, the Chancellor, realised such plans could cost the Treasury more, not less. A Cabinet split quickly emerged. But within weeks it was overshadowed by a far more existential threat: coronavirus.
Rail insiders were shocked at the pace with which Whitehall officials moved to impose sweeping changes on the country’s network. On Friday March 13, the DfT issued operators with a series of proposals called Emergency Measures Agreements. These EMAs, announced 10 days later, effectively renationalised the railways.
With passenger numbers plunging 95pc, operators were transferred to a “cost-plus” deal that guaranteed a 2pc profit for a six-month period to ensure services kept running so that doctors, nurses and carers could get to work.
Industry watchers pointed out that the railways were now “outsourced” rather than privatised.
Lessons from the railway’s past could be vital when contemplating whether it now needs to grow or shrink. And if there is one name that dominates the modern history of the railways it is that of Richard Beeching.
The former boss of chemicals giant ICI, Dr Beeching was made chairman of British Railways in the early Sixties with a brief to stop the network haemorrhaging money. Beeching’s two reports recommended wholesale closures of lines. The Beeching cuts accelerated a trend that had begun in the Fifties; indeed between 1950 and 1980, it is calculated that 42pc of Britain’s railways, or 13,000km (8,078 miles), were closed, along with nearly 60pc of stations – some 3,700.
The social and economic effects of Beeching’s cuts remain hotly debated. Researchers at the London School of Economics argued in a 2018 paper that there was a clear link between the decline of the transport network and depopulation of some areas in subsequent years. The report suggested that “without the cuts, population would have been more evenly distributed” across commuting areas, and that the density of London and the South East would have been lower. Instead, the UK was left with north-south trunk routes, but few east-west links. “A key lesson here is that rail infrastructure affects the spatial distribution of population,” the authors concluded.
Beeching came to prominence at a time when the car was beginning its ascendency. “It was a different scenario in those days,” recalls Bushell, of the Ivanhoe campaign in the East Midlands. “People were owning a car for the first time. They didn’t need the trains. The entertainment was there [on their doorstep], they didn’t need to leave the towns much apart from going to Derby County for the football or Blackpool once a year.”
For all his reputation as an “axe man”, Beeching also delivered important suggestions on modernising the railway and handling freight, according to Prof Colin Divall of the University of York.
Beeching’s criteria predominantly revolved around whether individual lines were profitable. However, many rail campaigners argue that different choices would be made today – Covid-19 notwithstanding.
The Campaign for Better Transport believes the Government should spend up to £6.4bn on reopening closed Beeching lines; a far greater sum than the £500m currently set aside, but a trifling amount compared to the vast cost of HS2.
The country has changed drastically since Beeching’s day but then, as now, the railway is facing a funding crisis. Nearly 60 years later, the railways are back fully in public hands and costing the taxpayer around £700m a month.
Long-term funding will require passengers to return in their droves. But even with a vaccine, most experts expect there will be a drop-off in numbers. Internal estimates prepared by trade body the Rail Delivery Group are understood to predict that passenger volumes will only have returned to 90pc of pre-crisis levels in five years’ time. The logical answer might be fewer services. But, with high fixed costs on a line, simply cutting the number of trains might not be enough. Could there be a second swing of the Beeching axe?
The Prime Minister has hinted he is looking into flexible season tickets. The railways could target holidaymakers and day trippers; even offer bespoke services for football matches. The thorny issue of funding remains, however.
Harry Fone, of the Taxpayers’ Alliance, says: “We don’t want to return to the likes of a state-owned British Rail. Overall, privatisation has been a boon to the nation as passenger numbers have soared and taxpayer support has declined.”
Fone suggests more open-access rail lines could provide better value for the taxpayer.
Under this model, train operators compete to win passengers on the same stretch of track: for example, Hull Trains and Grand Central both operate on the east coast line. Openaccess
operators have yet to be convinced, however. Just last week, Grand Central scrapped plans to run a service on the west coast main line.
Another train operating company has drawn up its own suggestions to the Government on the future running of the railway: this would include a more “commercial timetable” that could adapt to changes in demand quickly, instead of taking 50 weeks to plan, as with the new timetable of May 2019 which was notoriously botched. An improved “customer focus” would mean a massive simplification of fares and removal of duplication, and more digital sales of tickets. Changes to jobs, and the inevitable showdown with unions, would be sure to follow.
The Government’s green agenda, including decarbonisation, could play into the railway’s hands. “You have to make assumptions about the future price of transport,” says Prof Chris Nash of the Institute for Transport Studies at the University of Leeds.
“The DfT has been assuming that motoring costs and air fares will go down and rail fares will go up.”
This needs reviewing, he suggests, and it could pave the way for more radical solutions. “If you are pushing charges for the use of roads, there’s the possibility of making a surplus on roads and putting it into rail.”
This would reverse a trend for falling motoring costs and rising rail fares, but might not be a vote winner.
Then there is the question of the future modes of train that will carry people from A to B. In recent years, the industry has been circled by a number of people keen to use technology as a means of solving some of its most pressing issues: slow journey times and emissions.
Among the wackier technologies being suggested are Hyperloop and maglev. Hyperloop, backed by the likes of Elon Musk and Sir Richard Branson, is fundamentally about improving speed by reducing the friction and air resistance that slow trains down. Through narrow tubes, trains designed like pods would, in theory, use magnetic repulsion to levitate just a few inches on top of the track, shuttling people around at close to the speed of sound.
But experts see little chance of these technologies working in Britain because the cost and time needed to build the infrastructure are prohibitive. Plans to launch an inter-city maglev train between Tokyo and Nagoya in Japan in 2027, for example, have faced delays.
What is more likely to receive attention is technology that can reduce emissions. In June, a team of researchers at the University of Birmingham secured a £400,000 grant from the Government for the rollout of HydroFLEX, Britain’s first hydrogen train. Dr Stuart Hillmansen, who worked on the project, says the technology holds promise in the more rural corners of the country where the electrification of shorter, single-line routes quickly loses economic value given the cost involved.
Figures from Network Rail suggest that electrification of existing networks will increase by just six percentage points to 48pc by 2039, with delays hurting a number of projects already. An alternative is needed if targeted emission cuts are to be met.
“Hydrogen per kilogram is actually one of the highest energy density fuels,” Hillmansen says. But there are a few issues with hydrogen. For one, it is difficult to contain, making it a “fickle thing”, and the range it can produce on trains does not match diesel.
Compressed hydrogen could solve this problem and even be retrofitted on to existing trains. Simon Iwnicki, director of the Institute of Railway Research, agrees hydrogen could be a “stop-gap solution” but he maintains the best option is to electrify as much of the network as possible.
Major electrification plans were cancelled on cost grounds two years ago. The Government has shown more enthusiasm for high-speed rail, in the form of HS2, which officially began construction this month. The project has been dogged with controversy, with costs tipped to exceed £100bn.
Lord Berkeley, who wrote a critical assessment of the project earlier this year, says: “The big need in the regions is to create a commuting service, something like we have in London. [HS2] doesn’t do that. I can’t see any point because people are learning to work from home.”
Another rail expert remarks: “HS2 seems to be a classic example of a mega-project where political approval is obtained on some often quite questionable assumptions about travel trends, and then achieves momentum quite apart from actual need.”
An HS2 spokesman insists “the case for HS2 is unchanged”. “It is far too early to make conclusions about the long-term impact of Covid-19, but the strategic case for HS2 – more capacity on our railways, better connectivity in the Midlands and North, and cutting carbon – all remain important issues for the UK,” he says. It will be 2029 at the earliest before passenger appetite for the new line becomes clear. With the EMAs due to expire this month, the Government is expected to announce an extension imminently.
Ministers’ plans, leaked to The Telegraph over the weekend, revealed that franchising will be scrapped from April 2021 and replaced with an outsourced model that tightens state control of the railways. This plan is not a million miles away from what Williams was expected to propose.
Meanwhile, the latest bidders for the Restoring Your Railway fund will soon find out if they have been successful. The DfT insists the scheme is central to the Government’s “levelling up agenda”, saying it is keen to start “reconnecting smaller communities, regenerating local economies and improving access to jobs, homes and education”.
It notes that demand has exceeded expectations on lines that have reopened in the last decade.
The mantra has been “if we build it, they will come”. But this theory faces a huge test in the post-Covid world.
Nonetheless, in the East Midlands, Bushell believes that Stephenson’s Ivanhoe line will once again carry passengers. “Everyone’s behind it – it’s touched a nerve,” he says.
“I don’t want to fail them. It does rest heavily on my shoulders. But I do feel optimistic. We have the best chance in 30 years of this line reopening.”
The Beeching legacy A flexible future?