Great British Railways: mind the gap between reforms and costs
The government’s long-overdue strategy to improve the railways - dubbed Great British Railways: The Williams-Shapps Plan for Rail – seeks to put the customer first with a mix of the best of public and private business models.
But although the plan is a much-needed initiative to bring many aspects of the overcomplicated and fragmented network under the control of one new arms-length body, it has done little to calm growing concerns about tackling the devastating financial impact of Covid and plateauing passenger numbers on the railways.
The government plan, based on a review led by businessman Keith Williams, creates a new public body, Great British Railways (GBR), a name that harks back to a time when the UK’s rail system was the envy of the world. The body, which will replace Network Rail in 2023, will run and plan the rail network, own the infrastructure, and set fairs and receive the revenue in a bid to end a quarter of a century of fragmentation.
The plan, unveiled by Transport Secretary Grant Shapps, also promises to coordinate rail services more smoothly with other modes of transport and simplify and modernise confusing ticketing procedures. And it will contract private companies to operate the trains to the timetable and fares it sets, following the model established by London’s Overground service.
This will do nothing to encourage people back to our railways
Shapps told Parliament that the GBR strategy would create simpler structures and clearer leadership that would remove bureaucracy. To illustrate the complexity and waste in the system, he explained that when a train was delayed by being hit by a bird, the size of the bird would determine who got the responsibility between the train company and Network Rail. The network and operators employed around 400 people whose sole job was to resolve disputes about delays, he said.
“It is completely bonkers. This is the sort of thing that will end,“ Shapps told Parliament. “As soon as possible, under our reforms, everyone, including the train operators, will be tasked to work towards common goals and manage costs.”
With the industry now needing to encourage passengers against the backdrop of new working patterns and socially distanced services, there is a pressing need for a radical overhaul to improve the service. However, the GBR strategy has not eased concerns about the financial pressures facing the railways. After the government spent £12b to keep services running through the pandemic, the Treasury is reportedly demanding cost cuts of between 10 per cent and 20 per cent. Unions fear job cuts are coming down the line at Network Rail.
The Transport Secretary has made no promises as to who will cover the lost revenue, only tentatively offering that it would be the responsibility of any future government to balance costs between operators, passengers, and the Treasury.
Operators and transport unions have warned the government that it won’t be able to build a bright new future by slashing budgets.
Manuel Cortes, the general secretary of the Transport Salaried Staffs’ Association (TSSA), has threatened disruption to operations unless an industry-wide approach is taken and workers receive a commitment that no compulsory redundancies will be made.
“A concessions-based model will still see passengers and taxpayer money leak out of our industry in the form of dividend payments for the greedy shareholders of the private operators who will hold them,” he said in a statement. “This will do nothing to encourage people back to our railways.”
With an integrated public transport network poised as a central tenet of both the government’s green recovery and its levelling-up agenda, it is likely to face growing demands to answer the questions of costs quickly and satisfactorily.