The railways must act.
LET’S assume that ‘back to normal’ is (say) an 80% railway. In other words, that the passenger timetable will be pared back in order to match the lower level of demand that is likely to be the norm for some time to come.
Even the optimists (and I am not one of them) accept that it will be a couple of years before we get back to 2019 passenger numbers, and therefore the imperative will be to save money.
The Treasury is parking its tanks on the Department for Transport’s lawn (a small patch as it is). And, as ever, it is on the railways that the guns are trained - not roads or indeed aviation.
Now, those Treasury mandarins unfamiliar with the railway might assume on the back of an envelope that if only 80% of trains are running, then that will cost 20% less. If only it were that simple.
Many of the railway’s costs are fixed. There is not going to be any significant saving in large swathes of the railway’s expenditure.
For example, this small reduction in services is hardly going to mean fewer people will be needed to run the control centres and signalling boxes that keep the network going.
Platform staff will still be needed if the trains arrive every 15 minutes instead of every 12.
Booking offices will still be required - although, of course, there is pressure to push more people to buy their tickets online.
Yes, the number of drivers needed may be slightly fewer, but the overall savings will not be large.
For the operators, the biggest expense other than track access charges is, of course, the leasing and operation of rolling stock. The question is: would a permanent reduction to an 80% service lead to any significant cuts?
There will be some savings in terms of reducing the cost of diesel or electricity, which is now much more precisely metered than it was in the past.
Many train operators have in-house operations to carry out the light maintenance, and clearly there are some savings to be had if mileage is reduced because this will mean longer gaps between having to do the work.
There will also be a reduction in spare parts, but overall none of this will be a game changer. One source suggested to me that a 20% reduction in mileage would lead to a 10% cut in costs.
The main cost of rolling stock, however, is the leasing charge. And there is no chance of any reductions there.
If an operator ends up with surplus stock, the big saving would be to dispose of it. Let’s say they have enough trains for 75 paths, but now only require 60 - theoretically they could dispose of 15 trains.
But (memo to any Treasury mandarins reading this), it is not so easy. The rolling stock companies which own most of the trains are not going to simply take back redundant stock unless they have an alternative lessee. They are, after all, companies with shareholders, not charities. Unless they have an alternative user, they are not going to take any stock back before the lease runs out.
This is where the desire of government to retain a strong private sector interest in the railways conflicts with its aim of keeping costs to a minimum.
The obvious solution would be to have the much trailed ‘guiding mind’ (BritRail, as it may be called) being made responsible for rolling stock allocations. It would, of course, have to be able to allocate and pay for stock, and ultimately make decisions about future use, taking away some of the freedom of franchise to do so. However, that would result in the most efficient usage of the current stock, as BritRail would then be able to allocate stock where it was most needed.
The key is flexibility. But as a result of the differing and at times contrasting interests of the various operators, the required level of cooperation is impossible to achieve if things are left to the free market.
This is a classic example of the contradictions inherent in the kind of public/private mix
that the Government is insisting on creating post-pandemic.
Ultimately, given the crisis and the reduction in passenger numbers, the solution would be simply for the agency set up by the Government (BritRail) to operate the railway and to make the key long-term investment decisions.
But ideology, as I wrote in RAIL 925, is preventing this sensible approach. Instead, we get a continuation of the pretend capitalism which has caused so much extra expense and grief to the rail industry.
When the railways were first privatised, there was a discussion at the Association of
Train Operating Companies (the previous totally sensible moniker for the now ridiculously named Rail Delivery Group) about whether it should allow train tickets to be booked through the National Enquiries website. This would then have been a sole and universally used agency run entirely by the industry, which would have ensured all the money stayed within it.
Instead, National Express, which at the time had seven franchises, blocked the idea as it favoured its own cross-industry website (which never really took off).
So, people going onto the National Rail Enquiries website have to then be transferred to the train operators to book a ticket.
Now, since franchising has been effectively dead for a year with all receipts from fares going to the Government, a new app should have been created to enable direct control of bookings, making it easier for passengers and ensuring that no money leeched out of the impoverished rail network. But obviously, it is far too simple and ideologically socialist for the Government to allow that, and nothing of the sort has been created.
Ensuring there is co-operation rather than competition on the railway in these ways would not only save money, it would also ensure that people received a better service, as it would enable routes that are still crowded to get extra trains or coaches.
This is all about trying to make things better for the passenger, but here’s the rub: improving the service is going to be a long way down the list of priorities for the railway if the Treasury is allowed to dictate how the industry is run.
This is really worrying, as it will be completely the wrong way to ensuring there is a rapid recovery in passenger numbers.
The railways need to sell themselves and offer a better product. Instead, I can imagine that efforts to (say) improve the ghastly seats on the Thameslink trains or provide better food on trains will be vetoed by the Treasury.
For their part, the train operators, with no interest in revenue and only keen to keep costs down, may do daft things such as reducing the number of people on the gatelines or checking tickets on trains.
As one senior rail manager told me: “No one gives a **** about passenger experience in the current climate.”
If that really is the case, then as Private Frazer used to say: “We’re doomed!”
“Those Treasury mandarins unfamiliar with the railway might assume on the back of an envelope that if only 80% of trains are running, then that will cost 20% less. If only it were that simple.”