Philip Haigh

DfT’s un­timely in­ter­ven­tion.

Rail (UK) - - Contents -

A splash in The In­de­pen­dent news­pa­per on March 31 thrust into wider pub­lic per­cep­tion a prob­lem for Network Rail that has been qui­etly wor­ry­ing the rail­way for some time. That prob­lem is a loom­ing lack of money, with the com­pany now un­der tight con­trol by Her Majesty’s Trea­sury and no longer able to bor­row money from pri­vate mar­kets.

With­out see­ing the let­ter on which the news­pa­per based its story, it’s hard to know its real thrust. Quotes in the pa­per point to­wards spend­ing cuts, but there’s likely to be more to the let­ter than just those quotes.

NR told me that The Indy’s story was ex­ag­ger­ated and in­ac­cu­rate, and that it had com­plained for­mally to the press reg­u­la­tor. It said the news­pa­per could not jus­tify its claim that Bri­tain’s rail­ways faced their big­gest spend­ing cut­backs since the fi­nan­cial crash of 2008.

What ap­pears true more gen­er­ally is that Bri­tain faces some very dif­fi­cult spend­ing de­ci­sions across many ar­eas. In re­cent days, for ex­am­ple, there have been re­ports of longer NHS wait­ing times and sug­ges­tions of cuts to the armed forces.

Rail­ways can­not ex­pect to be ex­empt from gov­ern­ment spend­ing cuts. It doesn’t help that Network Rail has mas­sively over­spent on project such as the Great Western elec­tri­fi­ca­tion. Nor does it help that the com­pany is con­sis­tently as­sessed by its reg­u­la­tor as less ef­fi­cient than it could be.

Over the past decade and more, Bri­tain’s rail­way has been the re­cip­i­ent of huge sums of money. Some has been pub­lic money flow­ing into Network Rail to mod­ernise and up­grade track, sig­nalling and struc­tures. Some has been pri­vate money, chiefly to bring new trains. Both have helped at­tract more pas­sen­gers, such that num­bers have dou­bled since pri­vati­sa­tion.

Gov­ern­ment and NR are now keen to at­tract pri­vate money into in­fra­struc­ture. It al­ready hap­pens, as Cross­rail il­lus­trates. Gov­ern­ment hopes that East West Rail will prove to be an­other suc­cess.

But at­tract­ing pri­vate money onto the ex­ist­ing network will be much harder. NR does not have a good record of timely de­liv­ery within bud­get, and has been crit­i­cised for many years for hav­ing in­suf­fi­cient knowl­edge of the con­di­tion of its network. Such knowl­edge is im­por­tant if NR and pri­vate in­vestors are to agree who bears the risk for un­fore­seen prob­lems - prob­lems such as the land­slip that kept the Set­tle-Carlisle route closed for a year (see pages 10-11).

Network Rail has be­come more ef­fi­cient in terms of spend­ing on daily op­er­a­tions and main­te­nance. It has also in­vested in kit and

“Much as I’d like to see to­day’s rail­way keep grow­ing phys­i­cally, it’s time for Gov­ern­ment to curb its am­bi­tions and give Network Rail a chance to catch its breath. DfT should pro­duce an HLOS that is grounded in the re­al­ity of what the rail­way can de­liver.”

sis­ter mag­a­zine RailRe­view, and con­cluded that NR has an al­most im­pos­si­ble task in keep­ing up with a par­ent that keeps chang­ing its mind.

That par­ent is the De­part­ment for Trans­port. Back in 2012, the DfT let its imag­i­na­tion run riot with a very am­bi­tious High Level Out­put Spec­i­fi­ca­tion (HLOS) that in­cluded sev­eral elec­tri­fi­ca­tion schemes as well as spe­cific tar­gets for ca­pac­ity into ma­jor cities.

Yet within a cou­ple of years it had changed its mind and upped the ca­pac­ity tar­gets for Leeds and Manch­ester, when it pro­cured a new op­er­a­tor for the trans-Pen­nine fran­chise. This means that NR faces pres­sure from TPE to de­liver what­ever is needed for the train op­er­a­tor’s tar­gets, with only the money granted by its reg­u­la­tor (the Of­fice of Rail and Road, ORR) for DfT’s lower but now ob­so­lete tar­gets.

Sit­ting in the cen­tre, but obliv­i­ous to the prob­lems it has caused, is the DfT. If there was ever an ar­gu­ment against na­tion­al­i­sa­tion, it’s that Gov­ern­ment can never keep its mind fixed on a prob­lem for long enough to see it solved.

Much as I’d like to see to­day’s rail­way keep grow­ing phys­i­cally, it’s time for Gov­ern­ment an HLOS that is grounded in the re­al­ity of what the rail­way can de­liver, and re­flects what DfT has al­ready asked for in fran­chise com­pe­ti­tions and what it plans to de­mand in fu­ture com­pe­ti­tions.

ORR pub­lished a for­mal no­tice in late March that es­tab­lishes its re­view of NR’s ac­cess charges for 2019-24 (Con­trol Pe­riod 6). In set­ting NR’s charges, ORR re­views what NR must spend over the pe­riod. This spend­ing is driven by its op­er­at­ing, main­te­nance, re­newals and en­hance­ment plans. NR’s plans must re­flect what the Bri­tish and Scot­tish Gov­ern­ments want from their rail­ways and how much they are pre­pared to con­trib­ute fi­nan­cially. Their wants are ex­pressed in the HLOS.

RAIL 823 re­vealed that the Bri­tish Gov­ern­ment was not plan­ning to pub­lish the in­dus­try’s ad­vice of what HLOS should con­tain for Eng­land and Wales (the Scot­tish Gov­ern­ment has al­lowed this ad­vice to be pub­lished). This hinted that DfT would make its de­ci­sions be­hind closed doors, with­out the pub­lic and stake­hold­ers even know­ing what the rail in­dus­try thought should be done.

Since then, DfT tells me that it plans to con­duct a full pub­lic con­sul­ta­tion to dis­cover what peo­ple think should be the pri­or­i­ties for in­vest­ment over 2019-24 (it hasn’t done this in pre­vi­ous Pe­ri­odic Re­views).

The stan­dard time for such con­sul­ta­tions has been 12 weeks, to which time must be added for DfT to con­sider what re­spon­dents have said. The ORR’s for­mal no­tice said that it wanted HLOS state­ments by July 20. Count back 12 weeks and you’re in mid-April. While Gov­ern­ment no longer says that con­sul­ta­tions must be 12 weeks, it’s clear that it’s run­ning out of time if it is to con­sult and de­cide pri­or­i­ties for HLOS in time for ORR’s July dead­line.

The al­ter­na­tive is that it con­sults on HLOS it­self, in which case ORR will have to wait for a fi­nal ver­sion some­time in the au­tumn. This cuts the time avail­able for Network Rail to de­velop its plans and for ORR to scru­ti­nise them.

Rushed plans and in­ad­e­quate scru­tiny lie be­hind many of NR’s cur­rent en­hance­ment project prob­lems. Gov­ern­ment’s late-in-the-day de­ci­sion to con­sult looks set to once again dis­rupt plan­ning and de­lay de­liv­ery.

It gives civil ser­vants an­other op­por­tu­nity to change their minds. They must re­sist that temp­ta­tion.


Network Rail faces a tough few years now that it can no longer bor­row money to fund its work. On March 27, Co­las Rail 37219 Jonty Jarvis leads a Derby-Ferme Park NR test train through Horse­moor (near March), with 37175 on the rear.

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