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| Trouble on the line: what caused the train franchise fiasco? | Trouble on the line: what caused the train franchise fiasco? |
| (30 days later) | |
| At the time of writing, the number of civil servants suspended over the awarding of the West Coast mainline rail franchise to First Group is three. They had misapplied the awarding criteria, and their suspension seems unfair on the face of it, like being expelled from school for failing a maths test. One newspaper damned the incompetence of the civil service, then rather undercut its own indignation by admitting that the calculations behind the awarding of rail franchises was "horrendously complicated". | At the time of writing, the number of civil servants suspended over the awarding of the West Coast mainline rail franchise to First Group is three. They had misapplied the awarding criteria, and their suspension seems unfair on the face of it, like being expelled from school for failing a maths test. One newspaper damned the incompetence of the civil service, then rather undercut its own indignation by admitting that the calculations behind the awarding of rail franchises was "horrendously complicated". |
| The companies bidding to run our rail franchises must make predictions of future revenue. The maths becomes very complicated when it spirals into these hypothecations, but the tendency is to make an optimistic prediction, so as to justify making an attractively high offer to the perennially cash-strapped Department of Transport. Two franchisees on the East Coast mainline went bust having overbid, and several other franchisees are under what are touchingly called "special measures", having got into trouble through over-bidding. So our railway is becoming like a carehome for disappointed optimists, who must gradually be brought down to earth by doses of reality. | The companies bidding to run our rail franchises must make predictions of future revenue. The maths becomes very complicated when it spirals into these hypothecations, but the tendency is to make an optimistic prediction, so as to justify making an attractively high offer to the perennially cash-strapped Department of Transport. Two franchisees on the East Coast mainline went bust having overbid, and several other franchisees are under what are touchingly called "special measures", having got into trouble through over-bidding. So our railway is becoming like a carehome for disappointed optimists, who must gradually be brought down to earth by doses of reality. |
| By mounting a legal challenge to the First Group's bid for the West Coast franchise, which he considered insupportably risky, Sir Richard Branson may have begun the unravelling of the whole franchising process. It is to be put under review, and may be deemed fundamentally flawed. So a principal beneficiary of our system of privatised railways (one of Branson's colleagues let slip that the West Coast franchise was "a licence to print money") may have brought about its undoing. | By mounting a legal challenge to the First Group's bid for the West Coast franchise, which he considered insupportably risky, Sir Richard Branson may have begun the unravelling of the whole franchising process. It is to be put under review, and may be deemed fundamentally flawed. So a principal beneficiary of our system of privatised railways (one of Branson's colleagues let slip that the West Coast franchise was "a licence to print money") may have brought about its undoing. |
| Branson has operated the West Coast for 15 years, and there seems little doubt that he has operated it well. At least, there was little doubt on the 16.57 Virgin train from Euston to Glasgow on Thursday. I asked a man in the lavatory queue whether, in view of the franchising chaos, he would favour a return to nationalised railway. "Ah, but then we wouldn't have Mr Branson, would we?" A couple sitting in standard class used the service regularly. "It's generally excellent. There was a bit of a problem coming into Euston this morning, but that was trespassers on the line, and you can't blame Richard Branson for that." Did they think he should be allowed to keep the franchise? "Definitely." A hundred and forty thousand users of the line have signed a petition to that effect. | Branson has operated the West Coast for 15 years, and there seems little doubt that he has operated it well. At least, there was little doubt on the 16.57 Virgin train from Euston to Glasgow on Thursday. I asked a man in the lavatory queue whether, in view of the franchising chaos, he would favour a return to nationalised railway. "Ah, but then we wouldn't have Mr Branson, would we?" A couple sitting in standard class used the service regularly. "It's generally excellent. There was a bit of a problem coming into Euston this morning, but that was trespassers on the line, and you can't blame Richard Branson for that." Did they think he should be allowed to keep the franchise? "Definitely." A hundred and forty thousand users of the line have signed a petition to that effect. |
| Branson did not personally upgrade the West Coast mainline. That was down to Network Rail, the body that operates the infrastructure of the privatised railway. But people generally approve of the Pendolino trains he brought in to run on the line. At Tamworth, where I disembarked from the Glasgow train, I met a rail enthusiast whose approximate age was indicated by his name: Harold. After we'd been momentarily deafened by a Virgin train definitely non-stopping at Tamworth (it roared through at 125 miles an hour) Harold nodded approvingly, and said: "Some of the lads at Doncaster had been hoping Branson would get the East Coast franchise – so they could see those every day." | Branson did not personally upgrade the West Coast mainline. That was down to Network Rail, the body that operates the infrastructure of the privatised railway. But people generally approve of the Pendolino trains he brought in to run on the line. At Tamworth, where I disembarked from the Glasgow train, I met a rail enthusiast whose approximate age was indicated by his name: Harold. After we'd been momentarily deafened by a Virgin train definitely non-stopping at Tamworth (it roared through at 125 miles an hour) Harold nodded approvingly, and said: "Some of the lads at Doncaster had been hoping Branson would get the East Coast franchise – so they could see those every day." |
| Personally, I do not like the trains. They are, like Branson himself, flash. The livery is yellow and red, the colour of a squeezed spot. The carriages feel cramped, the warm red of the seats undermined by the blue of the hand holds and carpet. Many of the seats are not aligned to windows, whereas almost all the luggage racks are. The electronic doors are liable to open when their occupants least expect it, presenting traumatising scenes to those passing by, and the passenger alarm is located where the flush button ought to be, so one hears the repeated triple quack of that alarm on almost every journey. The buffet on the trains is crassly called a "shop", and the people who work there are required to wear red shirts reading "Team VT", meaning "Virgin Trains", because there's a direct equivalence between serving Grab Bags of crisps and running 100 metres in the Olympics. | Personally, I do not like the trains. They are, like Branson himself, flash. The livery is yellow and red, the colour of a squeezed spot. The carriages feel cramped, the warm red of the seats undermined by the blue of the hand holds and carpet. Many of the seats are not aligned to windows, whereas almost all the luggage racks are. The electronic doors are liable to open when their occupants least expect it, presenting traumatising scenes to those passing by, and the passenger alarm is located where the flush button ought to be, so one hears the repeated triple quack of that alarm on almost every journey. The buffet on the trains is crassly called a "shop", and the people who work there are required to wear red shirts reading "Team VT", meaning "Virgin Trains", because there's a direct equivalence between serving Grab Bags of crisps and running 100 metres in the Olympics. |
| But then the West Coast mainline has never been a thing of beauty. Contrary to its name, it is deeply embedded in the industrial Midlands and North, and it is rooted at the hideous Euston. As for Branson, the railways have always attracted flamboyant plutocrats. For a relatively brief period, however (1948-1997), we had a People's Railway. I refer to British Railways, latterly British Rail, and as the son of one of its employees, I feel a surge of nostalgia whenever I see the BR double arrow logo that still points the way to the station in most towns. It seems increasing numbers of people are similarly susceptible, and Labour's transport spokesperson, Maria Eagle, welcomed a thinktank report this summer that advocated a return to public ownership. | But then the West Coast mainline has never been a thing of beauty. Contrary to its name, it is deeply embedded in the industrial Midlands and North, and it is rooted at the hideous Euston. As for Branson, the railways have always attracted flamboyant plutocrats. For a relatively brief period, however (1948-1997), we had a People's Railway. I refer to British Railways, latterly British Rail, and as the son of one of its employees, I feel a surge of nostalgia whenever I see the BR double arrow logo that still points the way to the station in most towns. It seems increasing numbers of people are similarly susceptible, and Labour's transport spokesperson, Maria Eagle, welcomed a thinktank report this summer that advocated a return to public ownership. |
| It is now regularly pointed out that the railway operating subsidy is about four times higher under a privatised system than it was in the days of BR. The privatised system is expensive partly because of "fracturing". We rail users encounter this every day, and it engenders a persistent migraine. For example, I knew I would have to change at Rugby on my way back to London from Tamworth. But the train proposing to take me there was not a Virgin train. I had bought my ticket from a Virgin-themed booking office at Euston; I had come to Tamworth by Virgin, but here was an all together more modest London Midland train at the platform. Should I board it? Perhaps my ticket did not entitle me to, and I would have to pay a penalty fare? Eventually a guard turned up and reassured me. "You're fine; your ticket says 'Any permitted', you see." He was a nice chap, so I didn't bother saying that "Any permitted" is meaningless. He explained that Virgin was not the sole operator on the West Coast mainline, only the principal operator, hence this different train. I asked whether passengers were often confused by this. "Constantly." | It is now regularly pointed out that the railway operating subsidy is about four times higher under a privatised system than it was in the days of BR. The privatised system is expensive partly because of "fracturing". We rail users encounter this every day, and it engenders a persistent migraine. For example, I knew I would have to change at Rugby on my way back to London from Tamworth. But the train proposing to take me there was not a Virgin train. I had bought my ticket from a Virgin-themed booking office at Euston; I had come to Tamworth by Virgin, but here was an all together more modest London Midland train at the platform. Should I board it? Perhaps my ticket did not entitle me to, and I would have to pay a penalty fare? Eventually a guard turned up and reassured me. "You're fine; your ticket says 'Any permitted', you see." He was a nice chap, so I didn't bother saying that "Any permitted" is meaningless. He explained that Virgin was not the sole operator on the West Coast mainline, only the principal operator, hence this different train. I asked whether passengers were often confused by this. "Constantly." |
| This fracturing denies economies of scale, and creates a need to paper over the cracks between the regional franchises by means of complicated contracts – or it might be simpler to think of that paper as taking the form of cheques paid to accountants and lawyers. Then there is the money lost to the system by the profit-taking of the train-operating companies. This is their reward for their supposed dynamism and entrepreneurial flair. But as Richard Hebditch of the Campaign for Better Transport points out, "Is entrepreneurial flair the main requirement in running a railway? I'd have thought that Prussian military efficiency was more the thing." | This fracturing denies economies of scale, and creates a need to paper over the cracks between the regional franchises by means of complicated contracts – or it might be simpler to think of that paper as taking the form of cheques paid to accountants and lawyers. Then there is the money lost to the system by the profit-taking of the train-operating companies. This is their reward for their supposed dynamism and entrepreneurial flair. But as Richard Hebditch of the Campaign for Better Transport points out, "Is entrepreneurial flair the main requirement in running a railway? I'd have thought that Prussian military efficiency was more the thing." |
| Even though we as a country invented railways, we have always had a neurotic attitude to their operation. We have never settled down to running them as they are run in most of Europe: as a service that is unlikely to be profitable, but that is nonetheless socially essential. It has been suggested that this was because we never had a standing army, so never accustomed ourselves to systematic, state-wide organisation. The tension was inherent in BR. | Even though we as a country invented railways, we have always had a neurotic attitude to their operation. We have never settled down to running them as they are run in most of Europe: as a service that is unlikely to be profitable, but that is nonetheless socially essential. It has been suggested that this was because we never had a standing army, so never accustomed ourselves to systematic, state-wide organisation. The tension was inherent in BR. |
| If you asked my father where he worked, he'd proudly say, "Head office!" by which he meant North Eastern Region HQ of British Rail in York. (It's true that on his desk was a plaque reading "I am surrounded by idiots", but that was a joke). He and his colleagues were railwaymen, securely and proudly inhabiting a railway world. We went on holiday with the British Rail Touring Club. As a boy I played snooker at the Railway Institute; I was assistant stage manager for the Railway Players. When I boarded a train with my dad, he was never required to show Privilege tickets because he knew all the collectors by name. Even now, in retirement, the first thing he does when I call him proposing a visit is reach for a timetable. | If you asked my father where he worked, he'd proudly say, "Head office!" by which he meant North Eastern Region HQ of British Rail in York. (It's true that on his desk was a plaque reading "I am surrounded by idiots", but that was a joke). He and his colleagues were railwaymen, securely and proudly inhabiting a railway world. We went on holiday with the British Rail Touring Club. As a boy I played snooker at the Railway Institute; I was assistant stage manager for the Railway Players. When I boarded a train with my dad, he was never required to show Privilege tickets because he knew all the collectors by name. Even now, in retirement, the first thing he does when I call him proposing a visit is reach for a timetable. |
| He thought of himself as providing a service to the country much as a doctor working for the NHS does (or did). But that world gradually became less secure. My father would complain that BR was denied the ability to plan financially. "Every year we have to go cap-in-hand to the treasury," and there was a particular bitterness to those words "cap-in-hand", as though it was a personal humiliation. He seemed to be swimming against the tide. Perhaps railways were not essential after all; perhaps the car was the answer. In the 1970s, my dad had a rival: a travelling salesman who lived at the end of our road. "I'd abolish the bloody railways," he would rudely proclaim. "Too expensive, too inefficient, too unionised. I'd replace them with a network of motorways." My dad once lured him into a trap: "And would those roads be dead straight with a constant succession of comfortable coaches running along them?" "They would," said the man. "Then that's called a railway!" my dad shot back. | He thought of himself as providing a service to the country much as a doctor working for the NHS does (or did). But that world gradually became less secure. My father would complain that BR was denied the ability to plan financially. "Every year we have to go cap-in-hand to the treasury," and there was a particular bitterness to those words "cap-in-hand", as though it was a personal humiliation. He seemed to be swimming against the tide. Perhaps railways were not essential after all; perhaps the car was the answer. In the 1970s, my dad had a rival: a travelling salesman who lived at the end of our road. "I'd abolish the bloody railways," he would rudely proclaim. "Too expensive, too inefficient, too unionised. I'd replace them with a network of motorways." My dad once lured him into a trap: "And would those roads be dead straight with a constant succession of comfortable coaches running along them?" "They would," said the man. "Then that's called a railway!" my dad shot back. |
| Nobody thinks like that man now. The penny has dropped about the railways. They are essential in a society where the demand for travel is increasing inexorably. (Even in a recession, rail use is at its highest since the 1920s, and rising). And they do have "non-user benefits", being environmentally friendly, and capable of social regeneration. It is the social regeneration offered by high-speed rail that David Cameron has been commending to us. If the railways are a national good, then it might be asked why the farepayer is asked to contribute an increasingly large proportion of the costs of running them. Wouldn't it be more logical to penalise the people who don't use them? But let's not get into that. Instead, let's note that the utility of railway is being recognised by some of the highest levels of investment in living memory. This investment partly explains why the annual bill for running our railways is so high. It would be wrong to think of all the money as being funnelled into the pockets of the fat cats. | Nobody thinks like that man now. The penny has dropped about the railways. They are essential in a society where the demand for travel is increasing inexorably. (Even in a recession, rail use is at its highest since the 1920s, and rising). And they do have "non-user benefits", being environmentally friendly, and capable of social regeneration. It is the social regeneration offered by high-speed rail that David Cameron has been commending to us. If the railways are a national good, then it might be asked why the farepayer is asked to contribute an increasingly large proportion of the costs of running them. Wouldn't it be more logical to penalise the people who don't use them? But let's not get into that. Instead, let's note that the utility of railway is being recognised by some of the highest levels of investment in living memory. This investment partly explains why the annual bill for running our railways is so high. It would be wrong to think of all the money as being funnelled into the pockets of the fat cats. |
| In fact, the question of how the train-operating companies are franchised is marginal compared to the infrastructure operation of Network Rail, an organisation ambiguously defined, but whose vast levels of borrowing are backed by the government. It is, in effect, nationalised, and the government does make most of the decisions to do with the railways. Our railways might be thought of as a giant state-owned and managed tower block, with a privatised penthouse at the top, in which the train operators disport themselves. Should the state take over that penthouse and close down the rather embarrassing party going on within? It would simply be a matter of letting the franchises fall back into the lap of the state as they come up for renewal. | In fact, the question of how the train-operating companies are franchised is marginal compared to the infrastructure operation of Network Rail, an organisation ambiguously defined, but whose vast levels of borrowing are backed by the government. It is, in effect, nationalised, and the government does make most of the decisions to do with the railways. Our railways might be thought of as a giant state-owned and managed tower block, with a privatised penthouse at the top, in which the train operators disport themselves. Should the state take over that penthouse and close down the rather embarrassing party going on within? It would simply be a matter of letting the franchises fall back into the lap of the state as they come up for renewal. |
| I was disappointed to discover that most of the experts don't favour a return to BR, as such. It would be too centralised in London. Professor Paul Salveson, railway consultant, thinks a nationalised intercity network of main lines might work. But it would be complimented by a reinforcement of local control over franchises, as already happens in Scotland and Wales – and on Merseyside, where Merseyrail was franchised by the Merseyside Passenger Transport Executive, as opposed to the Department of Transport. He argues that "local authorities should be free to decide what's best for them, and the franchisees would be subject to a degree of democratic accountability." Salveson also speaks excitedly of plans for a new transport executive to unite the main northern conurbations. | I was disappointed to discover that most of the experts don't favour a return to BR, as such. It would be too centralised in London. Professor Paul Salveson, railway consultant, thinks a nationalised intercity network of main lines might work. But it would be complimented by a reinforcement of local control over franchises, as already happens in Scotland and Wales – and on Merseyside, where Merseyrail was franchised by the Merseyside Passenger Transport Executive, as opposed to the Department of Transport. He argues that "local authorities should be free to decide what's best for them, and the franchisees would be subject to a degree of democratic accountability." Salveson also speaks excitedly of plans for a new transport executive to unite the main northern conurbations. |
| This is very much the line taken by the Campaign for Better Transport, whose executive director, Stephen Joseph, also invokes the orbital London railway, the London Overground. This is a model railway in many respects. It is, elegantly branded, scenic (in a demotic way, going past many fascinating back gardens), and has stylish new trains. It is locally franchised (by Transport for London), and that franchise differs from the high-pressure ones handed out by the Department of Transport. The franchisee (a consortia of companies) did not have to guess future revenues, and does not bear all the financial risk of the operation. It is, in effect, paid a fixed fee for running a railway. That is demanding enough in itself, without requiring railway men and women to be accountants, lawyers, PRs and crystal ball gazers into the bargain. | This is very much the line taken by the Campaign for Better Transport, whose executive director, Stephen Joseph, also invokes the orbital London railway, the London Overground. This is a model railway in many respects. It is, elegantly branded, scenic (in a demotic way, going past many fascinating back gardens), and has stylish new trains. It is locally franchised (by Transport for London), and that franchise differs from the high-pressure ones handed out by the Department of Transport. The franchisee (a consortia of companies) did not have to guess future revenues, and does not bear all the financial risk of the operation. It is, in effect, paid a fixed fee for running a railway. That is demanding enough in itself, without requiring railway men and women to be accountants, lawyers, PRs and crystal ball gazers into the bargain. |
| Andrew Martin is the author of The Baghdad Railway Club | Andrew Martin is the author of The Baghdad Railway Club |
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