My new question: What is the Office of Rail and Road for?
CHRISTIAN WOLMAR is unhappy with the role of the regulator, believing that outside of its excellent performance on rail safety, it has under-achieved
it time for another Wolmar question? I reckon ‘What is franchising for?’ will soon become redundant as the Government chooses a different model. So how about ‘What is the Office of Rail and Road (ORR) for?’
I am not questioning its safety role, which it took over from the Health and Safety Executive a dozen years ago. It has been very successful, although one could ask why there has to be a separate Rail Accident Investigation Branch rather than the two being in the same organisation. But given rail’s excellent recent safety record, this structure is probably best left well alone.
It is the role of economic regulator that is in question, as principally this involves the ORR overseeing Network Rail - an unnecessary process of ‘man-marking’. The recent lamentable record of Network Rail, which seems incapable of creating a workable timetable and completely messed up its investment programme during the current Control Period 5 (CP5), must therefore reflect on ORR’s performance, too.
The ORR’s economic regulator role is convoluted. Essentially, the organisation examines whether the investment plans put forward by the industry are affordable and realistic, and then either raises concerns or rubber stamps them. However, given the fiasco over CP5 (which is now in its final year), where clearly ORR had failed to notice that NR’s plans were totally undeliverable, one could well ask what is the purpose of going through this lengthy bureaucratic process?
It might seem perverse to be suggesting that ORR’s oversight is unnecessary. Surely, Network Rail’s poor record would suggest that it does need regulatory oversight?
I disagree. A confident organisation, certain in its ability to provide a good service and with a competent management team, should not need to be overseen by a body staffed by people with little practical experience of running a railway. Contrast British Rail in its late heyday (an efficient dynamic organisation which looked after every taxpayer’s penny) with the shambles that Network Rail has become.
Relying on a regulator to ensure that Network Rail is efficient is the wrong way to improve its efficiency. BR made mistakes, but it was able to learn from them and had several brilliant chairmen who could steer the organisation in the right direction. Above all, it did not have ministers breathing down its neck the whole time.
As with much else to do with the structure of the railways, the current relationship between ORR and Network Rail came about by accident. While it may have made sense for an independent regulator to ensure that Railtrack (a private company with a duty to maximise profits) played by the rules, the idea that one government agency (the ORR) should oversee the performance of another (Network Rail) is nonsensical, as highlighted by the fact that fines imposed by the ORR simply move from one state coffer to another.
Perhaps realising this, the ORR has begun to put greater emphasis on the operating (rather than the economic) performance of the railway. As I mentioned in RAIL 855, I was surprised that ORR Chairman Stephen Glaister has been given the role of investigating the recent timetabling chaos, given that its remit suggests that the organisation should have been aware of the impending problems and helped nip them in the bud. Indeed, the ORR sat on the very Readiness Committee that should have stopped the process going ahead before the starting gun was fired.
Lord Berkeley asked a question in the House of Lords about Glaister’s role and was given the inevitable-brush off, with the minister responding: “In undertaking this work, ORR will be supported by an expert panel of independent advisers. This will be one of the means to ensure the ORR’s own role as regulator of Network Rail and the train operating companies has been properly assessed by the Inquiry.” So, everyone needs regulating except the regulator, who can selfregulate.
Moreover, I doubt anything much will come from this investigation if past performance is anything to go by. Take the report published a couple of weeks ago, on the performance decline on the Wessex part of what is now known as South Western Railway, but which used to be South West Trains.
The executive summary of the 50-plus-page report lists a number of failings by the company. For example, it found that contingency plans had not been revised since 2011, “the consequences of which could lead to sub-optimal decisions when responding to incidents”.
There was also an example where, following a track circuit failure at Vauxhall, “an Asset Response Manager was not appointed which hindered its ability to respond to the incident”. The ORR also “found that Incident Learning Reviews (ILRs) were only held for a small number of incidents, rather than all large incidents”, and that many instances of recommended actions were not acted upon.
There was much more in a similar vein. I recognise that improving performance is an incremental process, but banal is too kind a
word for this sort of nonsense. These were hardly heinous crimes, nor (frankly) do they seem to be at the root of why performance has deteriorated.
SWT, as it used to be called, was generally a well-run franchise under Stagecoach, but suffered greatly from overcrowding and the fact that Waterloo was operating at full capacity. Yes, there were failings, but surely any experienced train manager, working under a franchising system which is supposed to drive performance improvements, would be alert to these issues.
Frankly, I would have more faith in the managers of Stagecoach and its successor, First/MTR, to solve the problems than the busybodies of ORR making ‘statements of the bleeding obvious’. For example, having frequent ‘Incident Learning Reviews’ would use up enormous amounts of management time which might well detract from performance. The ORR’s criticism smacks of a box-ticking exercise rather than on genuine ways to make improvements.
Oddly, ORR’s examination of the performance became rather irrelevant after Secretary of State for Transport Chris Grayling announced a wider investigation into the troubles in the franchise, to be conducted by the highly experienced railway manager Michael Holden.
Here is another bit of blandness from the annual report, around an ‘investigation’ into the difficulties over the recent major London Bridge scheme: “We found evidence that it had a sustained focus on getting the basics right, from planning to day-to-day operations. We also found that the different parts of Network Rail, those that upgrade the infrastructure (such as installing new points at London Bridge) and those that run the railway in real time, are now working more closely together.”
The ORR costs the industry (and therefore us) £31 million per year, of which half goes on its rail safety role and £12.7m on its economic regulator function, with the rest going on its relatively new roads responsibility. This is not a fortune and would hardly make a difference to ticket prices, but this ‘man-marking’ is a major hidden cost both in direct economic terms and in efficiency. After the woeful performance of the ORR during CP5, can it possibly argue that things would not be better without it?
ORR’s other main economic function is to encourage competition in an industry where, because of its very nature and the limited number of paths, monopoly is the best option. Of course, that requires some regulation, but this could easily be carried out by a far smaller and focused outfit than the ORR, which seems to be trying to spread its tentacles into areas covered already by Transport Focus.
The existence of the ORR, along with all the organisations with acronyms that the public find totally incomprehensible, is another result of the fragmentation of the industry which lies at the root of its current problems. There is a case for abolishing the lot of them… and creating a single strategic body overseeing the industry at arm’s length from government.