UK success
12 pages of news and analysis from RAIL’s National Rail Recovery Conference as the railway seeks to build back better.
KEITH Williams has called on the Government and the rail industry to get behind the findings of the long-awaited rail review that is on the verge of being published in his name.
The former chairman of British Airways was commissioned in September 2018 to lead a root and branch review of the structure of the industry. It was due to have been completed last spring but has been heavily delayed by the Coronavirus pandemic.
Speaking on February 25 in one of the most hotly anticipated presentations at RAIL’s National
Rail Recovery Conference (a three-day virtual event for which more than 1,900 people registered), Williams confirmed that “events which could not have been predicted” - including an enforced end to franchising - had caused some of his recommendations to be redrafted.
These are now set to form the basis of a Government White Paper and reform package that Rail Minister Chris HeatonHarris pledged during his own keynote speech at the NRRC to publish “as soon as possible” (see page 9).
“It has been far from stuck in the sidings. Over the last nine months the review has been tested against the pandemic,” Williams revealed. “It would have been foolish to think that long-term reform could happen in isolation without considering the short-term changes.”
He added: “We might well be coming to the end of the pandemic, but the impacts are long-lasting. Work has already been undertaken on how we hit the ground running as the situation improves, and we now need to get on with it.”
In a carefully prepared and hintladen speech, Williams (pictured) referred to the pandemic as a “black swan” event for the rail industry, owing to its rareness and severe consequences.
He gave a telling comparison between how the rail sector seems likely to respond to the pandemic and how the aviation sector has previously dealt with its own black swan events, including the 9/11 terrorist attacks in 2001 and the Iceland volcanic eruption in 2010.
He claimed the reaction of airlines had been defined by “consolidation, more competition, and greater emphasis on customer engagement”, adding: “It is selfevident that rail now faces many challenges - how to adapt to new customer behaviours, to what degree and how to re-energise private investment in rail, and how to balance off customer and taxpayer.”
Williams continued in this theme by offering some clues into how this balance could be struck.
Firstly, politicians would need to “retain ownership of the strategic direction of rail and the guiding mind over long-term vision” and continue to make decisions on the level of financial support that they are willing to provide.
Under any future industry structure, he said it would also be up to government to ensure that the conditions are right for inward investment and that “the private sector is well-placed to take on appropriate levels of risk and reward”.
Even before the pandemic, Williams had spoken publicly about the need to end franchising in favour of running the network as concessions.
Following the unforeseen collapse of franchising last March and its subsequent replacement by Emergency Recovery Measures Agreements, Williams said creative thinking was now critically needed around how the private sector could be incentivised to expand the industry’s revenue base.
He also said that any new structure would need to facilitate the opportunities for efficiencies identified in previous reviews
conducted by Sir Roy McNulty in 2011 and Richard Brown in 2013.
These include greater alignment of objectives between Network Rail and train operators, less fragmentation and ‘interfaces’ in the industry, and a franchise system that encouraged cost reduction.
Williams compared this task of identifying problems and then the structures needed to remedy them as “diagnosing the illness and then prescribing the cure”. He said that history - and by heavy implication the failure to respond to the McNulty and Brown reports in particular - had shown that
“one cannot be done without the other”.
He added: “It was supposedly Einstein who said that insanity was ‘doing the same thing over and over again and expecting different results’. In other words, looking for better outcomes needs a structure in place to deliver it.”
That structure, he argued, will require the industry to take greater responsibility and accountability for operational decision-making, via the establishment of a “guiding mind” that is at arm’s length from ministers and officials at the Department for Transport.
This is consistent with the constant refrain made within RAIL editorials since 2018 that the role of politicians and civil servants ought to be making strategic and investment choices, while operational matters are the sole preserve of industry experts and professionals.
Such a move would restore a distinction that has not existed since the demise of the Strategic Rail Authority in 2004.
Williams concluded: “The Government will always play the role of guiding mind to rail.
It is essential to consumer and industry confidence. But that does not mean to say it is best placed to take operational control of either the finances or the day-to-day operations such as timetabling. These are best placed with those closer to operations.”