Christian Wolmar
A new structure: a better railway.
recent weeks, I have interviewed numerous ex-BR managers for my next book, which is about the successes and failures of public ownership of the railways.
The book, actually commissioned a year ago, could not be better timed. Whatever the future pattern of the pandemic, there is no doubt that there will not be a return to the old way of running the railways. And the new structure will undoubtedly have a stronger role for the state.
It is therefore timely to consider what would be the ideal arrangement for the industry when things finally settle down - which, by the way, I do not expect to happen this year. In particular, let’s look at the role of the state.
The Conservative government that was reelected in 1992 promoted privatisation of the railways based on the failings of British Rail. Working on a TV programme in 2008, I managed to obtain a response from Sir John Major, the Prime Minister at the time of privatisation, about why the railways had been privatised. This was a major breakthrough, since in his 900-page autobiography published two years previously, astonishingly there was nary a mention of rail privatisation.
In the letter, which has never been published, Major described the accusation that the privatisation was ideological as “nonsense” and that “the impetus for privatisation was my wish to improve public services”.
In particular, he said: “I believed a transfer to the private sector would improve British Rail through the use of private sector skills, thereby making it possible to raise funds from the market in sums a publicly-funded railway could never have managed.”
He went on to say that “no government would ever provide the railways with adequate funding, which was one of the principal reasons for the calamitous state of the service pre-1993”.
With the benefit of hindsight, it is clear that much of this was wrong. The BR managers I have spoken to, who are by no means all opponents of privatisation, all agree that the push for privatisation was entirely ideological. British Rail, which had created three quasiindependent passenger sectors (InterCity, Network SouthEast and Regional Railways), had instituted a programme called Organisation for Quality that was proving to be highly effective.
All the ex-BR managers I have spoken with agree that far from BR being in a “calamitous state”, it was working effectively and efficiently. Ideology was the only reason it was broken up at that point in time.
As for the point about no government giving sufficient funding to the railways, this has always been the strongest argument in favour of privatisation. British Railways, throughout its history, was dogged by rapid and inexplicable changes in its funding arrangements. However, during the course of privatisation, far more money has been provided than previously - not least because of the inefficiency of the system. And as the recent cut of £1 billion in Network Rail’s investment programme shows, even under the current system the government is ultimately in control.
So, the first point for the new organisation (the ‘guiding mind’, as it is now universally called) must be a strong element of independence which must include a long-term financial structure. It is quite possible for government to commit to (say) a five-year plan under a nationalised structure. This is an administrative decision, not an ideological one.
We have, of course, been here before. The Labour government elected in 1997 created the
Strategic Rail Authority (SRA), which did not have any direct role in the operation of the railways, but which was supposed to be the ‘guiding mind’. But it all went horribly wrong, and it is important to learn from the mistakes of the time.
The first, and most pressing, is recruitment. The new organisation - let’s call it Britrail for the sake of convenience - will need some of the best talents in the business. Crucially, it cannot rely on outsiders who would have to spend a year learning about what is a very specific industry.
Alex Warner, a former employee and now chief executive of Flash Forward Consulting, reckons the SRA “was not blessed with the cutting-edge of the talent of the industry” and that its whole approach to taking on people was haphazard, since he himself was “taken on without a clear remit and job description”.
So, Task Number One will be to ensure salaries are high enough to attract the best people in the industry. Government will therefore need to show that Britrail has a longterm future at the heart of Britain’s railways.
Then there was leadership. Richard Bowker, the chairman and chief executive of the SRA, took on Secretary of State for Transport Alastair Darling and his very savvy counterpart at the Office of Rail Regulation, Tom Winsor, and lost out in the resulting power struggle - with the consequence that the SRA was abolished rather than the ORR, which had little role after the effective renationalisation of Railtrack and thus should have been for the chop.
Therefore, clearly there needs to be a very strong and politically canny leader. While my number one candidate is Network Rail Chief Executive Andrew Haines, my other potential leader is Peter Wilkinson. He has had the difficult task at the Department for Transport of finding a way out of the mess and did much to ensure that the railways were properly funded right from the onset of the pandemic.
The need for good leadership is also clear from the history of British Railways.
Initially, it had a series of rather unexciting leaders. It was not until the arrival in 1976 of Peter Parker (from the private sector, which merely shows the exception proves the rule, and who understood the principles of good management and of taking people with him) that BR began to develop into an effective organisation. His successor Bob Reid (1, as he was succeeded by another Bob Reid) was a very different character, but he brought about the transformation of the organisation from a producer-led ethos to one that was both commercial and customer-facing.
If those are the lessons from the short sad life of the SRA, then the experience of BR should also inform the creation of Britrail. Talking to the old BR sweats, a number of common themes emerge.
The first (difficult to re-create in the current environment, but essential) is a good graduate management training scheme which crucially involves people working in different roles across the industry.
Absolutely all the graduates of these schemes with whom I have spoken stress how vital it was for their future work in the industry. The BR scheme was actually based on the one devised by the old London & North Eastern Railway, the second largest of the inter-war Big Four.
Another key factor (again difficult to reproduce with the current structure) is the need for a collegiate atmosphere in which people’s interests and aspirations are aligned. There is a need to create the feeling that everyone is working together towards a common goal, creating a better railway.
At the moment, the structure is set up precisely to prevent this, as it sets parts of the industry against others. Just look at the ineffectiveness of the Rail Delivery Group, which can only ever issue the blandest of statements and which has never been able to take the lead that the industry craves.
Another key lesson from BR is the need for planning and certainty.
Of course, BR suffered greatly from the vagaries of ministerial decision-making and the constant threat of losing its funding, but oddly the present structure has also proved difficult for forward planning. Witness the fact that it is still unclear what projects are supposed to be completed in the current fiveyear Network Rail Control Period, which started in April 2019.
Finally (only because I have run out of space - I suspect this will be a subject I will return to several times this year), the organisation must be able to think strategically and make crucial decisions for the whole industry, otherwise it will not be able to perform a useful role.
This is a momentous year for the industry, with a new structure to be created as happened in 1923, 1948 and 1997. Let’s hope that it is not ideology, but rather the desire to create a better railway, that determines the final outcome for Britrail.