The Rail Reform Group’s submission to the Rail Review argues for a new approach to railways in Britain…

Last year was a bad time for rail travellers. In the midst of chaotic scenes following the introduction of new timetables, former Transport Secretary Chris Grayling announced a ‘fundamental review’ of how Britain’s railways are managed, financed and structured. He wanted to see proposals that include ‘commercial models for the provision of rail services that prioritise the interests of passengers and taxpayers’ together with ‘rail industry structures that promote clear accountability and effective joint-working for both passengers and the freight sector.’ At the same time, the review wants to see a rail system that is ‘financially sustainable and able to address long-term cost pressures.’

Our current mishmash of public and private, set up by the 1993 Railways Act, isn’t delivering on any of these. Many senior rail managers recognise that the current system is dysfunctional but don’t want a return to the short-termism and Treasury control of the 1970s and 80s. As things stand, we have state-owned Network Rail responsible for infrastructure, with train operations delivered by the private sector but specified, mostly, by the Department for Transport. Privatisation brought in a plethora of additional players creating hundreds of additional interfaces and adding further to costs. This combination of fragmentation with short-term franchises – railways are essentially a long-term industry – is enormously costly and inhibits new development even when we know there is a strong business case.

The North of England suffered particularly badly in last year’s rail meltdown. The introduction of a new timetable should have been a ‘good news’ story with additional services and new trains on the way. But the system was simply unable to cope, and the lack of a strong ‘guiding mind’ led to a collective nervous breakdown on the North’s railways, from which we are only just recovering. It’s in the North where the need for change is greatest.

The Rail Reform Group has brought together a small team of senior rail professionals whose experience goes back to BR days in the 1970s, many of us having worked at the ‘sharp end’ of operations in the North. Our submission to the Rail Review, chaired by former British Airways MD (and, significantly, Deputy Chair of The John Lewis Partnership) argues for a new approach to railways in Britain which avoids the rigidities of nationalisation as well as the limitations of the fragmented and short-term privatised system that we have now.

The North has a great railway tradition. Some of the most entrepreneurial railways were based in the North – such as the Lancashire and Yorkshire Railway which stretched across from the Humber to the Mersey. It was ‘vertically integrated’ with infrastructure and operations run by the same company. It built its own locomotives at its Horwich works and had a range of ‘peripheral’ but commercially successful businesses: hotels and catering, feeder bus services, cross-channel steamers to Ireland and mainland Europe and tourist-based enterprises. It was an early pioneer of electrification. It wasn’t totally self-contained, sharing tracks for longer distance services with other companies. Through ticketing was achieved by the companies working together through the ‘railway Clearing House’. The L&YR disappeared in 1922 and a year later formed part of the giant London Midland and Scottish Railway. This too was absorbed in the nationalised British Railways in 1948.

The Rail Reform Group is proposing a new ‘Lancashire and Yorkshire Railways’ that would cover much the same area as its forebear, taking in the towns and cities stretching from the Mersey to the Humber. It would reintegrate the Northern and TransPennine Express operations, currently stand-alone franchises, into one railway business, managing more of its infrastructure in partnership with Network Rail. We are arguing for a ‘Network Rail North’ which would cover the whole of the proposed area of Lancashire and Yorkshire Railways, Cumbria and the North-East, to bring a much clearer focus to the needs of the North of England rail network.

Franchising, at least in the rail context, has failed. The problem is how to avoid the drawbacks of traditional nationalisation whilst ensuring public accountability and commercial dynamism, that does not throw away the many real achievements of the last 25 years. Railways in the North are a long way from covering their costs and this is currently recognised through franchise payments. Even a more sustainable system will require public funding, and accountability is essential.

We are proposing that Lancashire and Yorkshire Railways should be constituted as a ‘mutual’ social enterprise with a strong degree of accountability to regional bodies including Transport for the North and the northern combined authorities, but with employee and passenger involvement. If the ‘new’ L&YR was set up as such a mutual enterprise (a great Northern tradition), the people who travel on the trains, and work on them, would have a direct say in the business. It should be managed as a commercial business run by railway professionals, free of bureaucratic micro-management, free to innovate and attract investment funding from a variety of sources.

Let’s hope that review chair Keith Williams will bring some of his experience in the John Lewis Partnership and apply it, creatively, to rail. We need to find a model that gives accountability combined with a greater degree of commercial and operational freedom to the railway, avoiding ideological fixations.

Lancashire and Yorkshire Railways should in effect be created by Government as a free-standing social enterprise, with a basic framework requirement of services, and allowed to get on with it – with no ‘end date’. Periodic reviews, yes, but passengers and employees want to see stability, and benefit from a long-term vision which includes much-needed investment in electrification, new trains, better stations and rail reopenings. There is scope for external investment, particularly in new station development and line re-openings.

One area of great potential is in the less intensively used parts of the network. The ‘Community Rail’ initiative, first launched in the 1990s, has been highly effective in revitalising local lines, many of which had been threatened with closure in the 1960s. Community involvement through bringing station buildings back into use, ‘station adoption’ schemes and schools involvement in arts projects have combined to give many ‘no hope’ lines a new lease of life reflected in major increases in passenger numbers.

The Government introduced its new ‘Community Rail Development Strategy’ which highlights the importance of community engagement, encouraging healthy journeys and enabling social and economic development which is diverse and socially inclusive. There is no reason why much more of the rail network should not be covered by community rail partnerships with a much wider scope than simply marketing and promotion.

Our proposals are for a specific part of the country, essentially Yorkshire and the North-West; it’s the area that we know best. Our ideas could work equally well in other parts of Britain, including East Anglia, the South West and elsewhere. Intercity operators, particularly north-south services, should obviously not be broken up, but may operate over different infrastructure regimes. ‘One size doesn’t fit all’ and other models should be tried, and successful operations, such as Merseyrail and Chiltern, should be left as they are, and even extended. It’s interesting that both are relatively self-contained and have long franchises.

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