Nigel Harris
Network Rail Chief Executive ANDREW HAINES will call on years of railway experience in his determination to put passengers at the heart of NR culture. He tells NIGEL HARRIS of his plans to restore public trust in the railway
“Haines spent last summer travelling the country, talking to railwaymen and women. This would have been a lively exercise at any time, but he did this fact-finding during the Northern and Thameslink timetable meltdowns.”
There is no sense of recognition that the industry must come together to get the right outcome for passengers. It’s almost the first thing that goes by the wayside, when it should be front and centre.
The appointment in May 2018 of Andrew Haines as Network Rail’s Chief Executive meant that for the first time, our rail infrastructure owner was being run by a time-served railwayman with experience not only of train operation (with South West Trains and FirstGroup), but also infrastructure (from his Railtrack days).
Haines arrived with a decade’s further experience as CEO of the Civil Aviation Authority, where he had impressed Government not only with the way he had shown steel by standing up to powerful men such as Ryanair’s Michael O’Leary, who were accustomed to getting their own way, but also by reacting promptly and effectively to set up his own virtual airline overnight in 2017 when Monarch collapsed, stranding thousands of British holidaymakers overseas. Haines not only got them all home, many actually flew back on their due departure day, if not actually in the same time slot.
Haines therefore took up the reins at NR in 2018 with an impressive and wide-ranging set of skills, to work alongside a highly engaged non-executive chairman (Sir Peter Hendy CBE) who not only also had respected rail and metro credentials (through his time as Transport Commissioner for London, 2006-15), but also the sharp political insight and connections which are so crucial for success in such a very high-profile and frequently controversial role.
He spent last summer travelling the country, talking to railwaymen and women in advance of taking up his appointment. This would have been a lively exercise at any time, but Haines did this fact-finding during the Northern and Thameslink timetable meltdowns, so he could not have chosen a more controversial time to do this.
The die was cast, however. This chaos didn’t put him off and he succeeded Mark Carne with an enormous weight of expectation resting on his shoulders.
Haines admits to being taken aback at what
he found during his grand tour in the summer of 2018: “The things that have really shocked me are, first of all, just how incredibly busy the railway is. I know that sounds stupid, but you forget just how much traffic has grown in the last ten years…”
Says the man who used to run Waterloo, I murmur.
“Exactly - it was full and standing as I remember it around 20 years ago, but today’s trains are now that much busier again. It’s that, as much as the additional trains now on the network.
“Secondly, virtually nothing else has changed. So, we are still running with the same train planning process, the same performance regimes, the same track access contracts… a lot of those mechanisms are exactly the same as they were back then. We haven’t flexed to take account of the fact that we are a very different railway now.
“Thirdly, DfT is all over everything now - and I just don’t think it wants to be. And fourthly, I’d forgotten how brilliant our people are - just the sheer number of people of real skill and capability is so noticeable. Those are the things that have generally been the biggest surprises for me.”
Haines pauses and reflects before adding a potentially controversial comment.
“Actually… there is a fifth surprise, which is related to the second. A lot of people in the industry are behaving like victims. The thinking seems to be ‘as long as I can explain why it can’t be done then it’s OK’ - and that was really quite striking. That’s true externally, but it’s true internally at NR as well. If you can explain why passengers are inconvenienced, then that’s regarded as OK.”
Is it because they don’t care? Or is it because the sheer pressure of keeping the trains moving pushes all other sensibilities to the margin?
“It’s not that people don’t care - I think what happens is that we end up redefining what winning is, or what good looks like. If you end up saying: ‘Look I have 250 franchise commitments, what matters is delivering those franchise commitments’; or ‘I have this scorecard which says I have to deliver this by that date - the fact that I have delivered the physical infrastructure and it doesn’t work for passengers, that’s not on the scorecard and it’s a tough enough job just getting the scorecard clear’.
“There is no sense of recognition that the industry must come together to get the right outcome for passengers. It’s almost the first thing that goes by the wayside, when it should be front and centre.”
I tell him that I pick up enormous frustration on NR’s Routes about the sheer amount of time and energy needed to manage relationships with train operators - not because the TOCs are in any way awkward (though maybe in some ways that’s true, too…) but principally because of the serious misalignment of objectives, incentives and accountabilities between the two. Does he agree?
“That’s a function of those things I’ve just been talking about. Because the systems haven’t changed since the 1990s, the entire system is more congested, so there are fewer easy wins.”
Haines has no hesitation in cutting to the heart of the matter: “DfT is micro-managing everything, so Routes and TOCs don’t have permission to move, and committed people are just really busy.”
Does he share NR Chairman Sir Peter Hendy’s view that the DfT and Secretary of State really have had enough? That they finally accept that they cannot (and indeed should not) be as involved as they are, and are now
I think Network Rail has spent far too much time beating up its customers historically. I think NR has been too arrogant, and I think it has been far too ready to criticise train operators. Sometimes this has been a result of ignorance, sometimes out of self-interest. Andrew Haines, Chief Executive, Network Rail
Look at Transport for London. If you use contactless on TfL, when was the last time you checked whether or not TfL actually charged you the right amount? You don’t! You trust it to work. I don’t think Britain’s railways have the same relationship.
seeking a way back from the front line via the creation of a specialist body to deliver railway strategy - and be accountable for it?
“I think they absolutely are of that view,” he says. “I think even Sir David Rowlands [Permanent Secretary at the DfT in 2004] would be dismayed at how far we’ve gone since the Strategic Rail Authority was scrapped.
“The SRA was, I think, actually working (generally speaking) pretty decently. What then happened in 2012 was the FirstGroup and West Coast franchise debacle, and the response of the Department was to be much, much more specific - to be much more controlling.
“Then we had the reclassification of Network Rail onto the public books. I believe that not even David Rowlands generally envisioned where we would end up where we are in 2019, and I honestly don’t think that even he would have supported the extent to which the DfT is now involved, micro-managing everything.”
Haines adds: “I first came across David pre-privatisation, and the pre-privatised railway didn’t have ministers involved in every decision.”
He argues that we have all - DfT included - fallen or been sucked into this model, rather than it having been a deliberate strategy. And that’s why it’s very difficult to escape from.
In the broadest sense, franchises were once relatively simple. But partly because of abuse by first-generation TOCs, the SRA (under chairman and CEO Richard Bowker) tightened them up and made them much more prescriptive. That was acceptable (if not fine) while margins were 5%, but subsequent deliberate policy by the DfT to squeeze the industry for every pound possible has driven margins down to a barely viable 2%.
At the same time, financial and reputational risk have gone through the roof, to the extent that National Express has abandoned UK rail. And that was an owner which once operated no fewer than nine franchises - around half the entire passenger network. Is Haines optimistic that the Williams Review can push the pendulum back to the sweet spot where private delivery of the publicly owned passenger service works for everyone - especially the passenger?
“I’m optimistic in the sense that ministers and senior officials don’t want to be as involved as they currently are. I’m also optimistic because I think train owning groups are asking ‘why do I want to buy more of the same?’ How many bidders have made money on franchising since they won in 2014?” None, I suggest. “That’s the rumour I heard. I almost don’t even want to know.”
Does Haines agree that the UK passenger network is effectively being propped up by Schedule 8 disruption payments from NR?
“Well, in certain parts of the country, that’s a big, big number…”
Are operators hanging back in doing the right thing for passengers, and waiting for NR to cancel trains in order to secure the Schedule 8 payments? That optimal operating decisions should have been made earlier, by them? There’s a longish pause…
“I find this a really hard subject,” he replies slowly. “Because - and let me be completely honest - I think Network Rail has spent far too much time beating up its customers historically.”
“I think NR has been too arrogant, and I think it has been far too ready to criticise train operators. Sometimes this has been a result of ignorance, sometimes out of self-interest, so I’m really reluctant to do that as well.
“That said, I do also think that there are parts of the Schedule 8 regime that don’t logically incentivise the right behaviour. I can give you an example of a railway not a million miles away from here, where about half of all delay goes uninvestigated because it’s less than three minutes. Half of all delay! The second half is then split about 30% primary and 70% reactionary, so we are actually only looking at about 15% of the causes of delay and then attributing all these financial payments on the back of that 15%!
“That cannot be the best way to drive good outcomes for passengers. I take your point but frankly, if you have a train operator who isn’t playing that game, they are probably letting their shareholders down. So, this is not about bad guys among the train operators - you will not hear me criticising customers. The very best of our Route Managing Directors impress me because however tough things get, they never criticise train operators - because it’s oh-so-easy to do that. It’s that the system is highly unlikely to deliver the best outcomes for passengers.”
These are among the fundamentals that Williams needs to address.
“These things need to change because the public has lost confidence in Britain’s railways, and it’s quite easy these days for people to lose trust. We’ve not yet seen this loss of trust in significant shifts of people away, and I don’t think we will - I strongly believe there is a strong growth story for railways.
“But I think people don’t trust us. Look at Transport for London. If you use contactless on TfL, when was the last time you checked whether or not TfL actually charged you the right amount? You don’t! You trust it to work. I don’t think Britain’s railways have the same relationship.”
Is that because of the widely held ( but erroneous) view that the profit-obsessed private sector is only interested in making money?
“I think it’s much more deep-seated than that,” he replies. “There’s the fares system… but I fear it’s mostly because as a railway we promise things and then we don’t deliver these things.”
DEVOLUTION
Your Transport Select Committee appearance last September seemed to indicate that you believed that Network Rail devolution thus far has been more lip service than effective reality?
“That’s a bit harsh - there was definitely devolution and there are definitely individuals who are accountable… the problem is that they weren’t given the tools to deliver against that accountability.
“I think if you asked NR people ‘who is accountable?’ on London North Eastern they would say straightaway that it’s Rob Mac [Route Managing Director Rob McIntosh]. Nobody would doubt that. But if you ask Rob Mac if he has the tools to do that… or ask what influence he has over strategic planning… or what influence he has over timetable production, infrastructure sponsorship and delivery, his ability to hire and fire people, he
Should all this timetable change come as a shock to us? No. There was a complete disconnect - and a part of the disconnect is the Routes not owning their timetables.
would have to reply that those powers are still held elsewhere.
“For Network Rail, the very nature of monopoly means that the infrastructure operator feels like a natural monopoly. Proximity to passengers and freight customers is the best possible means of actually getting a service that delivers on its promises.”
We’ve heard NR managers and ministers saying for years that we should put the customer at the heart of all we do. But we don’t - do we?
“No - and that’s one of my key messages internally. How many times have you heard a chief executive at Network Rail talk about putting passengers first with real conviction?”
There’s a brief discussion that some did so - but my recollection is that that some were also overt that the Regulator was NR’s most important customer.
“But we have to be judged by our actions and not words, don’t we?”
I tell Haines that at the start of his tenure as CEO, Mark Carne had told me that by the time he left there would be less than 2,000 headcount at the Milton Keynes campus HQ. There are more than 3,500 there today. So, will devolution be confirmed by getting that headcount down at Milton Keynes?
“No. What real devolution will mean is that the people that we hold accountable will actually have their hands on the levers. If they say that the best way for me to run the railway is to use colleagues based in Milton Keynes, that’s what we’ll do.”
What Haines does do is reinforce the message that the days of Infastructure Projects in its current form are done: “The reality now is that IP is being disaggregated to the RMDs, so they have their own capability and they can grow or reduce that according to the demand in their area and the alternatives.
“I’m very, very conscious that people are not going to be completely open and transparent with me in these early days - but I’ve had a lot of people say to me that they do understand why we’re doing this. In fairness to IP, I think we can do this now as they have some really good, mature delivery systems, run by capable people.
“If you look at the vast number of projects IP has delivered, they have delivered to time and to budget.”
“Yes, we can argue about whether or not the budget should have been lower, we can argue whether or not we should be more ambitious with timings… but those hurdles were the ones set and we have been meeting them. We have capability now that means the people are disaggregated - because you’ll never persuade me that the TransPennine Route Upgrade is better managed from the centre than it is from York.”
I ask him about timetabling. He has also been extremely critical of capability that was destroyed under previous regimes which believed that experienced people could be replaced by technology.
“Well, it was done deliberately,” he says, simply. “You can talk to people who were the architects of centralising timetabling in Milton Keynes, and it was partly about efficiency and partly about ‘getting rid of the cardigan brigade’ as they were described.
“This policy completely failed to recognise the scale of change which the DfT was buying. Franchise commitments that came into force last summer - and over the next few summers - have clearly been in franchises for years, so we’ve had years to build that capability.
“Should all this timetable change come as a shock to us? No. There was a complete disconnect - and a part of the disconnect is the Routes not owning their timetables. I had been really surprised when I joined that I would meet what I would regard as a smart RMD and ask them about their forthcoming timetables - and they didn’t really know. There was certainly no detailed knowledge because they didn’t see it as their product.”
So, were they also seeing their role merely as an asset management job?
“They were seeing timetabling as something that someone else did for them -that the timetable process between the system operator and the TOC churned out this product, and as long as the regulator has granted access rights, what could they do about it anyway?
“It was another part of the victim mentality - they couldn’t influence it. One of the very first things we are doing in the new organisation is to make sure that in each of these regions we have somebody who clearly owns the timetable.”
So, you are disaggregating timetabling and train planning alongside IP?
“We are not disaggregating production at the moment because right now, where the handle is turned is not as important as who is doing the turning!
“This December is the first timetable for several years which hasn’t been constrained by the capacity of NR to process change. So the last thing I want to do is chuck the way we do production up in the air, until it’s really stable and passengers are getting the service enhancements they’ve been promised.
“Next year is the year to look more fully at how we do timetabling, because we would have had the Williams Review, plus we will have had my experiment of actually giving ownership of timetabling to the Routes, and we will be doing some things with operators being given direct access to our systems. A sensible year of trialling some things in 2019, and then next year taking fundamental decisions on how we should do it, in the light of those trials.” So, it will stay centralised until at least then? “The regions will take over the process two timetables down the line. They will work with TOCs and then hand over their joint efforts
to Milton Keynes to actually deliver the nuts and bolts.”
Haines really is unafraid of controversy and his open honesty will, for some people, take some getting used to. The expression ‘unvarnished truth’ springs to mind. I remark that during franchise considerations thus far, NR has been a consultee and not a signatory to the finished timetables as signed off by Government.
“From what I have seen, I’ve seen limited evidence of Network Rail actively trying to fix problems. What I saw is evidence of Network Rail simply saying certain timetables wouldn’t work,” he replies.
“NR didn’t actually come to the party and say ‘but this is what we could do instead’. In a grown-up world we can’t keep saying ‘won’t work, won’t work, won’t work’. We have to get in there and say what will work. That’s what we will be doing with future timetables.
“We do see some silly business where the function of the contract means that operators end up obliged to specify; to bid what’s in their specification even if they know it won’t work. And at the moment, the system doesn’t stop them doing that.
“What we are trying to do is to put in place NR people with accountability who will say ‘that won’t work and you know it won’t work’. And we’ll offer alternatives that will work.”
So, how will you break down the permafrost in the middle - those who will listen to what you say in silence - and then carry on precisely as they have always done?
“We change that by sending very clear signals of what is important. You measure delivery by outcomes, and you have honest conversations with the people who are not pulling their weight. So, I want every single person in NR to be influenced by the National Rail Passenger Satisfaction (NRPS) survey. If you are entitled to a performance incentive element to your pay, then that will flex up or down according to NRPS scores.
“Are passengers feeling better or worse about the railway? Forget all the fancy metrics - just what is passenger sentiment like? Because over 20 years, what 30,000 people think tends not to lie - it’s a pretty decent barometer. It would be a simple way of saying to people this is what matters - it directly affects everyone. What is it that people are really feeling about the railway?”
Haines is absolutely focused on the customer. And for the passenger, who pretty much takes safety for granted, that means punctuality.
“Punctuality is king because it’s about our competence to run a railway,” he says. “It’s not just about what passengers expect, it’s about the pride we have in what we do.
“I think we’ve lost ground on that territory as an industry in the last seven or eight years. I will talk a heck of a lot more about that, because I think it is the glue that holds us together and the thing that fundamentally starts to shape people’s perceptions of the railway.
“If they think it’s reliable then their inclination is to use it, to pay more, and to support it when things go wrong.”
OPERATING THE RAILWAY
Operating the railway is coming under renewed scrutiny under Haines’ leadership. At the RAIL 100 Breakfast Club in London on January 24, he spoke with power and eloquence about how he believes operating has been neglected and run down as a skill within NR, and that this must change… quickly.
“When you have a corporate vision called ‘engineering excellence’, it should come as no surprise that operations have been eclipsed.
“Let me be very direct, I am the first chief executive of Network Rail or Railtrack since John Edmonds to have any previous rail experience. I have huge respect for my predecessors, many of whom have brought world-class engineering capability, but if you think you can run a congested railway simply by having fantastic assets then you’re kidding yourself, because we carry passengers. We are Britain’s biggest neighbour so we also have trespass - sadly we are also subject to suicides. We also have trees, level crossings - you know our problems. We are much more than just an asset portfolio.”
So how will this withered expertise be revived, and put back front and centre? Have those skills left the company? Does it need to relearn operational skills from scratch?
“We do still have a great deal of operational experts in Network Rail, but they’ve gone on to quieter lives. Some of my colleagues will not thank me for saying this, but it needs to be said: There is currently a view in this organisation that if you want a quieter life, a better salary, a better office, a better phone - then you go to work on a project. Life is just so much easier on a project.
How many times have you heard a chief executive at Network Rail talk about putting passengers first with real conviction?
“I see people now who have chosen to go into those areas because we haven’t built a career path for operators. NR’s Head of Operations currently reports to the Chief Engineer. Where is the career pattern that would cultivate and encourage good operators?”
You told our Breakfast Club that people of lesser operational experience were managing people of far greater operational experience. You’re going to change that?
“Yes, absolutely,” he says with great emphasis. “There will be change through our rewards structures, through our professional capabilities.”
A new operating department? How overt are you going to be about it?
“We are going to be very explicit,” he says. “It’s not very ‘sexy’, but one of my senior directors is now our Network Services Director. Internally, this has been the subject I have had the most positive feedback on.
“This is from people in the operating function who feel as if they have been suppressed, neglected and marginalised. They have been frustrated that others have not understood the risks we potentially bear in terms of reliability, but also safety, when we corporately underestimate the importance of operating.”
DIGITAL RAILWAY
Is digital railway dead, following the departure of Digital Railway Group Managing Director David Waboso?
“No, absolutely not!” Haines insists. “It can’t be dead. Digital railway cannot be dead.
“The only reason I talk less about digital railway is because the technology is not quite there yet - but the hard reality is that 60% of our signalling needs renewing in the next few years.
“Even with the sort of funding we are getting in CP6, we will not replace signalling like-for-like for the next 15 years, so we have to find a way of making it all work. What I think has been wrong is there has been too much talk about it and not actually breaking it down into the practical steps we can take.”
I suggest that when I talk to digital signalling experts, I am told constantly that it cannot work on a mixed-traffic railway.
“It’s a heck of a lot tougher if you overlay it on an existing conventional network - I absolutely get that. But we are going to have to make it work - forget about East Coast, how is HS2 going to work when it gets to Crewe? We have to find a way through this.”
“We are testing on the East Coast, chiefly because of the limited life of the signalling in the South. If you chose not to do this, what would you be saying? It’s put-up-or-shut-up time for much of the supply chain, too, because the recently signed Rail Sector Deal promises 30% reduction in costs.”
So, how are you going to secure those 30% savings?
“That is why we are testing.”
WILLIAMS REVIEW
We close with a discussion about the Williams Review. And once again, Haines’ view is clear and very direct: let’s not wait.
“My big challenge is, let’s not wait for Williams to put things right for us. Let’s establish where we can work collectively to sort things for ourselves. I see parts of the system working really, really well currently.” Where? “Look at Southeastern. They’ve had a bit of a blip recently, but if you look over the last six months or so, performance has actually been really good. I see really good collaboration with the operator and Network Rail. I see good stakeholder engagement. That said, I don’t see a plan for the future, but that’s partly because of the franchising process.”
Haines clearly has a plan… and I’m looking forward to watching that plan unfold.