BR’s Re­gions

Twenty-five years ago, in April 1992, Bri­tish Rail’s last Re­gion gave way to sec­tori­sa­tion. GREGMORSE ex­plains where the Re­gions

Rail (UK) - - Contents -

Twenty-five years ago, BR’s last Re­gion gave way to sec­tori­sa­tion.

RAIL looks at where the re­gions came from and where they went.

One of the best things about writ­ing books is that you get to read books. Re­search­ing The Six­ties Rail­way, it was only nat­u­ral that I’d re­visit Gerry Fi­ennes’ clas­sic I Tried to Run a Rail­way (1967).

if he hadn’t been sacked for the tone of his tome, he’d set his heart on re­tire­ment by 1971 any­way.

But, of course, the rail­ways have al­ways re­or­gan­ised: when the Liver­pool & goal, mak­ing it work - which they did… for a while. Yet their meth­ods would come un­der in­creas­ing scru­tiny in the years ahead, their re­or­gan­i­sa­tion (and re­or­gan­i­sa­tion again) driven most of­ten by gov­ern­ments seek­ing

By the end of the decade, the Gov­ern­ment was again un­happy with the fig­ures, it be­ing clear to most that the cost of the mid-50s Moderni­sa­tion Plan was spi­ralling ‘out of con­trol’.

In 1960, Prime Min­is­ter Harold Macmil­lan thus told the House of Com­mons that “the rail­way sys­tem must be re­mod­elled to meet cur­rent needs, and the Moderni­sa­tion Plan must be adapted to this new shape”.

In what might have seemed an odd mar­riage, Macmil­lan (a for­mer di­rec­tor of the GWR) put his faith in Ernest Marples (a road-en­gi­neer­ing con­trac­tor in­volved in mo­tor­way con­struc­tion). To avoid any con­flict of in­ter­est, the new Trans­port Min­is­ter di­vested him­self of his shares in the Marples, Ridge­way com­pany (to his wife, as it turned out). In the years ahead, he would be ac­cused of im­pro­pri­ety and much more. Ei­ther way, he cer­tainly shared the ‘pro­road’ stance of his col­leagues and the coun­try at large.

As op­er­at­ing costs in­creased and pas­sen­gers be­gan to pre­fer their Mor­ris Mi­nors and Austin A30s to the train, BR’s sur­plus started to be­come a deficit.

Marples lost lit­tle time in ap­point­ing a spe­cial com­mit­tee - headed by the chair­man of Tube In­vest­ments Sir Ivan St­ede­ford. Among other things, this com­mit­tee felt that BTC think­ing had fo­cused too much on en­gi­neer­ing mat­ters. Its pro­pos­als there­fore led to the can­cel­la­tion of some elec­tri­fi­ca­tion schemes (in­clud­ing the Coven­try avoid­ing line), the re­ver­sal of the de­ci­sion to build a fly­over at Col­wich, and the scrap­ping of cen­tralised sig­nalling on the Nuneaton-Crewe route.

The chair­man of the BTC - by then Gen­eral Sir Brian Robert­son - crit­i­cised the cuts, com­ment­ing on the “chasm of dif­fer­ence” be­tween his view of the rail­way as a pub­lic ser­vice and the Gov­ern­ment’s idea of it as a mere trans­port com­peti­tor. But Robert­son was due to re­tire at the end of May 1961, and the ap­point­ment of a St­ede­ford Com­mit­tee mem­ber as his suc­ces­sor was a clear sign that White­hall meant to fol­low a more com­mer­cial path...

By the end of the decade, the Gov­ern­ment was again un­happy with the fig­ures, it be­ing clear to most that the cost of the mid-50s Moderni­sa­tion Plan was spi­ralling ‘out of con­trol’.

As a di­rec­tor of ICI, the ci­gar-smok­ing Dr Richard Beech­ing had just the sort of sharp busi­ness brain that Marples sought, al­though such virtues came at a price.

As a di­rec­tor of ICI, the ci­gar-smok­ing Dr Richard Beech­ing had just the sort of sharp busi­ness brain that Marples sought, al­though such virtues came at a price. Part of the deal was that Beech­ing’s ICI salary would be matched - this brought him £ 24,000 a year, £14,000 more than Robert­son and £10,000 more than the Prime Min­is­ter. How­ever, for this he was ex­pected to de­liver a so­lu­tion to a prob­lem that had per­sisted since the 19th cen­tury - mak­ing the rail­ways pay.

Beech­ing knew this is­sue could only be ad­dressed af­ter deep anal­y­sis of the fig­ures. By the end of 1961, he’d man­dated a thor­ough study to as­sess which traf­fic ran at a profit, which ran at a loss, which lines made money, and which ex­isted only through sub­sidy.

He also set about sim­pli­fy­ing Robert­son’s com­plex man­age­ment struc­ture of ‘gen­er­als’, com­mit­tees and sub-com­mit­tees, opt­ing to re­cruit pri­vate sec­tor ex­perts in a move to bring fi­nan­cial (as op­posed to mil­i­tary) dis­ci­pline to the Com­mis­sion.

Fur­ther sim­pli­fi­ca­tion came with the 1962 Trans­port Act, which abol­ished the BTC and es­tab­lished a Bri­tish Rail­ways Board (BRB), with pow­ers to set pas­sen­ger fares and more free­dom with freight rates than hith­erto.

Beech­ing be­came its first chair­man on Jan­uary 1 1963. Two months and count­less ci­gars later, Her Majesty’s Sta­tionery Of­fice pub­lished The Re­shap­ing of Bri­tish Rail­ways, which set out Beech­ing’s plan to put the rail­way ‘in the black’ by 1970.

His­tory would show that the doc­tor’s reme­dies - the line clo­sures, the fo­cus on block freight work­ings, and so on - only man­aged to con­tain BR’s deficit. Fur­ther­more, by 1968, the po­lit­i­cal land­scape had changed such that Harold Wil­son’s Labour gov­ern­ment was seek­ing to sup­port lines that were un­prof­itable, if they were so­cially de­sir­able.

That year’s Trans­port Act - the fourth ma­jor piece of rail­way leg­is­la­tion since the war - there­fore not only wiped out BR’s debt of £153 mil­lion, it also es­tab­lished Pas­sen­ger Trans­port Ex­ec­u­tives (PTEs) in and around Greater Manch­ester, Glas­gow, Mersey­side, Ty­ne­side and the West Mid­lands.

The idea was that the PTEs would co-or­di­nate lo­cal bus and rail ser­vices, ‘pur­chas­ing’ the lat­ter from BR on a con­tract ba­sis. Grants were also avail­able for the ‘so­cial’ rail­way, in­clud­ing £ 400,000 for Padding­tonOx­ford ser­vices, £ 2.5m for Glas­gow North and South sub­ur­ban ser­vices, and £ 9m for South­ern Re­gion com­muter traf­fic.

All well and won­der­ful, but the tides ever do change, and within five or six years more new White­hall brooms were seek­ing to re­duce the sub­si­dies pro­vided to fund these loss-mak­ing ser­vices, and to cut the level of in­vest­ment.

Re­gard­ing the lat­ter, the BRB’s An­nual Re­port for 1972 pointed out that “in terms of cap­i­tal in­vest­ment for re­newal, re­search, de­vel­op­ment and im­prove­ment, the rail­ways’ share has not been com­pa­ra­ble with the mil­lions poured into other forms of trans­port”.

New mo­tor­ways and trunk roads, it went on, “rep­re­sent a na­tional in­vest­ment every year more than five times greater than in­vest­ment in Bri­tish Rail, and even then most of the rail­way in­vest­ment is to keep the sys­tem go­ing”.

In 1974, an­other new Labour gov­ern­ment brought in a new Rail­ways Act which re­duced BR’s cap­i­tal debt from £438.7m to £ 250m and of­fered fi­nan­cial aid to busi­nesses for set­ting up pri­vate sid­ings.

It also re­placed the in­di­vid­ual pay­ments for pas­sen­ger ser­vices brought in by the 1968 Act with one Pub­lic Ser­vice Obli­ga­tion (PSO) grant. This was a vi­tal step for­ward in the fi­nan­cial re­la­tion­ship be­tween the rail­way and the Gov­ern­ment, giv­ing new se­cu­rity and self-re­spect to the man­age­ment and help­ing to safe­guard BR’s re­gional pas­sen­ger busi­ness. Of course, it didn’t last, and by 1977 the Gov­ern­ment had de­cided that the whole of the freight busi­ness and In­ter-City should pay their way, even if other parts of the pas­sen­ger busi­ness were to re­ceive aid.

What might be deemed the ul­ti­mate so­lu­tion had been hinted at af­ter the 1979 Gen­eral Elec­tion, at which Labour had been ousted by the Con­ser­va­tives fol­low­ing a se­ries of strikes over a pub­lic sec­tor pay freeze im­posed to con­trol in­fla­tion.

Un­der the chair­man­ship of Sir Peter Parker, the BRB had re­alised that there would be lit­tle chance of Mar­garet Thatcher’s regime in­vest­ing in rail un­less some­thing was done to in­crease pro­duc­tiv­ity. With this in mind, that Novem­ber it pub­lished Chal­lenge of the

’80s, which out­lined its aim to de­velop the rail­way’s com­mer­cial strengths, but also stressed the need to re­form the op­er­a­tion and man­ning of trains, ter­mi­nals and en­gi­neer­ing es­tab­lish­ments.

The up­shot was that on Jan­uary 4 1982, the

rail­way’s com­mer­cial un­der­tak­ing was di­vided into sep­a­rate el­e­ments. Freight and parcels had al­ways been seen as dis­tinct en­ti­ties, and these nat­u­rally formed two of the new sec­tors. On the pas­sen­ger side, In­ter-City was taken out first, af­ter which Lon­don com­muter ser­vices were grouped to form Lon­don & South East (later Network South East). Ev­ery­thing else be­came Other Pro­vin­cial Ser­vices (later re­named Pro­vin­cial, and later still Re­gional Rail­ways). The last two were the ‘so­cial rail­way’, re­quir­ing con­tin­u­ing sup­port for the pro­vi­sion of so­cially es­sen­tial ser­vices in the cap­i­tal, in the great conur­ba­tions, and in ru­ral ar­eas.

Be­fore this, the five Re­gions (the Eastern and North Eastern had be­come one in 1967) had been re­spon­si­ble for mar­ket­ing, op­er­a­tions, en­gi­neer­ing, fi­nance, in­vest­ment and per­son­nel (as it was still called back then). The Gen­eral Man­agers had con­trol of these ar­eas, al­though the fact that the mar­kets served cut across the Re­gional bound­aries meant that most of the fi­nan­cial re­spon­si­bil­ity resided with the Board.

Sec­tor man­age­ment would place man­age­rial re­spon­si­bil­ity on one di­rec­tor, with­out chang­ing the or­gan­i­sa­tion un­duly and with­out in­cur­ring crip­pling ad­min­is­tra­tion costs. In­deed, it would put BR on more of a busi­ness foot­ing than even Beech­ing had en­vis­aged, with each Sec­tor re­spon­si­ble for spon­sor­ing track, sig­nalling and rolling stock in­vest­ment, along with the moderni­sa­tion of sta­tions and so on.

In time, each Sec­tor would de­velop its own iden­tity, but the main idea was to al­low their di­rec­tors to keep a close eye on run­ning costs and over­heads with a view to cut­ting sub­sidy, cre­at­ing con­fi­dence and build­ing the case for in­vest­ment.

It sounded like the per­fect so­lu­tion to BR’s prob­lems, al­though some man­agers re­mem­bered (as Fi­ennes had re­mem­bered) that com­pa­nies bled when re­or­gan­ised, and feared that frag­men­ta­tion would erode the clear chains of com­mand and com­mu­ni­ca­tion es­sen­tial to safety.

Soon af­ter the process be­gan, a mag­a­zine ar­ti­cle com­mented on BR’s “state of revo­lu­tion­ary change” and ran an in­ter­view with David Kirby, Lon­don & South East’s di­rec­tor who also hap­pened to be the Gen­eral Man­ager of the South­ern Re­gion.

Kirby, who had joined BR as a man­age­ment trainee in 1954, rose to lead the com­pany’s ship­ping di­vi­sion (Sealink) be­fore his move onto dry land. Dodg­ing a quip about “rep­ri­mand­ing him­self in the style of Basil Fawlty”, there was much talk of “bal­ance” and Kirby’s unique po­si­tion en­sur­ing that his feet stayed on the ground.

Read­ing the piece now, there can be no

the ex­er­cise. But al­though he would stay at the South­ern’s re­gional head­quar­ters at Water­loo, his coun­ter­parts re­mained at the Board’s home of 222 Maryle­bone Road. And it was from here - in April 1982 - that BR Chief Ex­ec­u­tive Bob Reid asked the Sec­tor Di­rec­tors to de­velop busi­ness plans, re­view and chal­lenge in­vest­ment, and fo­cus on ser­vice cost re­duc­tion.

Soon, though, there would also be the lit­tle mat­ter of the Ser­pell Re­port to fend off. Sir David Ser­pell was a for­mer mem­ber not only of the St­ede­ford Com­mit­tee, but also of the BRB. His own com­mit­tee’s re­port - Re­view of

Rail­way Fi­nances, pub­lished in Jan­uary 1983 - was crit­i­cal of BR man­age­ment, as­pects of its tick­et­ing pol­icy and en­gi­neer­ing costs. It also cas­ti­gated the Board for be­ing over-op­ti­mistic in its ap­praisal of “high-risk” projects such as the Ad­vanced Pas­sen­ger Train, and con­cluded that line clo­sures would be needed if sub­si­dies were to be “low­ered sub­stan­tially”.

To il­lus­trate the point, the com­mit­tee pre­sented six network op­tions, from a ‘high- in­vest­ment’ ver­sion con­sist­ing of the ex­ist­ing 10,370 route miles (less a planned re­duc­tion of 300) to the ‘Beech­ing-like’ Op­tion A, which as­sumed a network size of just 1,630 route miles.

Many of Ser­pell’s find­ings were hardly rev­e­la­tions - they were freely ad­mit­ted by the Board, whose mem­bers spoke with un­guarded self-crit­i­cism in the hope that some­thing sup­port­ive might emerge. In­stead, the re­port seemed to ar­gue against in­vest­ment, failed to con­sider ser­vice qual­ity, and did not ac­knowl­edge re­forms that were al­ready in hand such as sub­stan­tial staff re­duc­tions and the in­stal­la­tion of au­to­matic level cross­ings.

The BRB shunted the whole thing into a sid­ing by nudg­ing the me­dia to­wards Op­tion A and the threat of com­muter fare in­creases, and by pub­lish­ing a for­mal re­sponse which (while ac­cept­ing that im­prove­ments could be made in en­gi­neer­ing and gov­ern­ment in­ter­ac­tion) con­demned the re­port as “dis­ap­point­ing, in­ac­cu­rate, im­plau­si­ble and mis­lead­ing”.

Shelved pend­ing the June 1983 Gen­eral Elec­tion, the Ser­pell Re­port quickly lost all cred­i­bil­ity, al­though Parker would later write that it had at least “cleared the air”. In time, it would also give BR the im­pe­tus to pur­sue ef­fi­ciency and ‘firm up’ its in­vest­ment man­age­ment prac­tices.

By then, how­ever, BR would have a new chair­man. Parker knew the next phase of BR’s de­vel­op­ment had to be led from within, and Bob Reid, who had joined the Lon­don & North Eastern Rail­way as an ap­pren­tice in 1947, was the ideal can­di­date. Parker, who laid the foun­da­tions of Sec­tor man­age­ment and fought hard for in­vest­ment in the Ad­vanced Pas­sen­ger Train and elec­tri­fi­ca­tion, fi­nally left BR in Septem­ber 1983.

Ser­pell had wel­comed sec­tori­sa­tion, but doubted it would work with­out the Sec­tor Di­rec­tors be­ing af­forded the ap­pro­pri­ate level of author­ity. But so it came to pass - as the 1980s wore on, more and more power was re­moved from the Re­gions, as their man­agers

Shelved pend­ing the June 1983 Gen­eral Elec­tion, the Ser­pell Re­port quickly lost all cred­i­bil­ity, al­though Parker would later write that it had at least “cleared the air”. In time, it would also give BR the im­pe­tus to pur­sue ef­fi­ciency and ‘firm up’ its in­vest­ment man­age­ment prac­tices.

be­came in­creas­ingly in­volved with pro­duc­tion de­liv­ery (al­though even this had drifted to­wards the Sec­tor Di­rec­tors by 1987).

By this time, the Western Re­gion had moved to Swin­don and the Lon­don Mid­land to Birm­ing­ham, the lat­ter move spell­ing the end of 222 Maryle­bone Road. But there was more change to come.

In Septem­ber 1988, the Board de­bated fu­ture or­gan­i­sa­tional de­vel­op­ment and opted to en­hance Sec­tor con­trol fur­ther. The fol­low­ing year, a study by con­sul­tant Coop­ers & Ly­brand rec­om­mended that Bri­tish Rail sim­plify and de­cen­tralise on busi­ness lines. The re­sult was the Or­gan­is­ing for Qual­ity ini­tia­tive (OfQ).

This name had been coined by Lon­don Mid­land Gen­eral Man­ager Ivor War­bur­ton, and led to a greater fo­cus on busi­ness-led ‘profit cen­tres’ within the Sec­tors.

By April 1991 the Scot­tish, Anglia and South­ern had been re­or­gan­ised, with the Scot­tish ( by now known as ‘ScotRail’) hav­ing been iden­ti­fied as a pos­si­ble profit cen­tre of Pro­vin­cial, for ex­am­ple. The gen­eral man­agers of South­ern and Anglia were to re­port to Chris Green as Di­rec­tor Network South­East (for­merly Kirby’s old do­main), and six profit cen­tres would be formed to cover the routes in both.

Nat­u­rally, the big­gest and most com­pli­cated re­gion - Lon­don Mid­land - was left un­til last, al­though Colin Clifton (then Area Safety Ad­viser at LM Wat­ford and now Head of Safety and En­vi­ron­ment at South­east­ern) re­calls that “change was in the wind early in 1991”. In­deed, it was around this time that Area Man­ager Michael Holden left to be­come Pro­duc­tion Di­rec­tor for the new South West Di­vi­sion of Network South­East (NSE).

“The DC lines, then branded as ‘North Lon­don Lines’ and the ‘Grand Union’ ser­vices to Northamp­ton, Rugby and Bed­ford, were al­ready the main fo­cus of at­ten­tion,” re­calls Clifton.

This meant that “the tran­si­tion to­wards the new North Di­vi­sion of NSE was rel­a­tively straight­for­ward”. The NSE team, “who were based at Euston, and also had re­spon­si­bil­ity for Thames­link at the time, grad­u­ally moved north to Wat­ford, with Thames­link be­ing es­tab­lished as a sep­a­rate Di­vi­sion based in the then newly built Fri­ars Bridge Court on Black­fri­ars Road along with the South Eastern and South Western Di­vi­sions, and (of course) Rail­freight Distri­bu­tion.”

By Fe­bru­ary 1992, the new or­gan­i­sa­tion was all but com­plete. War­bur­ton of­fi­cially took con­trol of the West Coast Main Line ‘profit cen­tre’ of In­ter­City from April 6. As Terry Gourvish wrote in Bri­tish Rail 1974-1997: From In­te­gra­tion to Pri­vati­sa­tion, the or­gan­i­sa­tion now “rep­re­sented the full flow­er­ing of the busi­ness-led, sec­tor man­age­ment con­cept BR in­tro­duced on a mod­est scale in 1982”.

Some crit­ics felt that OfQ un­nec­es­sar­ily frag­mented op­er­a­tions and en­gi­neer­ing and in­tro­duced too much com­plex­ity, while many saw it as an ex­cel­lent man­i­fes­ta­tion of the virtues of flex­i­bil­ity and fo­cus­ing on core tasks. For Gourvish, “it of­fered Bri­tain the best prospects of a more stream­lined, cus­tomeror­i­ented, em­pow­ered or­gan­i­sa­tion in an in­te­grated form”.

Yet his­tory was not to al­low it to bed in and prove it­self, for by April 1992 - just as new lo­gos on ties, mugs and let­ter­heads were start­ing to ap­pear - John Ma­jor’s Con­ser­va­tive gov­ern­ment was re-elected.

Ma­jor’s pre-elec­tion prom­ise was to sell BR off. More re­or­gan­i­sa­tion was on the way…

My grate­ful thanks to Colin Clifton for his as­sis­tance in the prepa­ra­tion of this ar­ti­cle.

NA­TIONAL RAIL­WAY. SSPL/

BR be­gin­nings: Ex-LNER B1 class 4-6-0 61251 Oliver Bury leaves St Pan­cras with a Down ser­vice on July 17 1948. The rail­ways of Bri­tain were na­tion­alised in Jan­uary 1948, hav­ing pre­vi­ously con­sisted of four sep­a­rate com­pa­nies, Lon­don & North Eastern Rail­way, Great Western Rail­way, Lon­don, Mid­land & Scot­tish Rail­way and South­ern Rail­way.

By the end of the 1980s, the Sec­tors had started to de­velop their own iden­ti­ties. On Oc­to­ber 8 1994, 91008

ALAMY.

Built as a ho­tel, 222 Maryle­bone Road was for many years the home of the Bri­tish Trans­port Com­mis­sion and then the Bri­tish Rail­ways Board. It is now a ho­tel once again.

The pass­ing of BR’s Lon­don Mid­land Re­gion, as re­ported in 173.

Chris Green, for­mer Gen­eral Man­ager of ScotRail, went on to head the Lon­don & South East sec­tor, which flour­ished un­der him as Network South­East.

ANTONY GUPPY.

In 1988, the Class 442s were in­tro­duced by Network South­East on Water­loo-Wey­mouth ser­vices, the third rail hav­ing fi­nally reached the Dorset port ear­lier that year. On Au­gust 5 1988, a South West Trains ‘442’ still bear­ing NSE colours, ar­rives at Eastleigh form­ing the 1541 Poole-Water­loo. In the back­ground Yeo­man 59002 Yeo­man En­ter­prise waits to de­part on the Eastleigh-Mere­head.

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