Louise Haigh, the new Secretary of State, has certainly hit the ground running, consistent with her mantra of “move fast and fix things”. The most striking early move was the appointment of Lord Peter Hendy as her deputy and Rail Minister. This was one of those events which was totally unexpected, yet seemed such an obvious and welcome move when it was announced.
Peter Hendy knows how the transport industry works – an enormous advantage in comparison to almost all his recent predecessors, who have come into post with little knowledge of transport (in some cases with little interest in the brief too) and were usually reshuffled before they had the chance to get to grips with the issues and make any impact. In contrast, Lord Hendy will certainly be likely to want to move fast and fix things, and I would expect that the Department will now get clear direction to drive forward change quickly.
I don’t want to be too critical of the Department’s civil servants, many of whom I’m sure will welcome clear direction and the opportunity to deliver. The great majority of them have worked diligently and conscientiously in the face of the massive crisis of the pandemic, the constant churn of Transport Ministers and, immediately prior to the election, fundamental disinterest in the rail industry at the most senior level of government, vividly demonstrated by the total lack of progress in implementation of the 2019 Williams review. In the dying days of the Conservative government, transport policy focussed on reversing the perceived “war against the motorist” and the incoherent and half-baked cancellation of HS2 Phase 2.
However, I’m clear that there needs to be a radical change of culture within the Department, with an orientation towards action. Its governance processes have become sclerotic, with authorisation of any initiatives going through numerous stages, with different review levels at each stage. In part, I suspect this ultra-slow, cautious approach was a reaction to the 2012 shambles of the abortive West Coast franchise award, which had to be cancelled in the face of a legal challenge from Virgin. But the right approach is rigorous challenge and debate, not death by committee. If Ministers wish to move fast, this is one of the things they need to fix.
And Ministers are moving fast. The Passenger Railway Services (Public Ownership) Bill has already had its second reading and is expected to get through the House of Commons on 3September. The Bill reverses the requirement to let franchises to the public sector and enables the Government to take control of existing franchises as current contracts expire, in advance of the wider changes needed to set up Great British Railways. The present Bill is a short, straightforward change, which interestingly would probably have been much more difficult had we remained in the European Union, as EU policy envisages a gradual transfer to private sector franchises, at least for local and regional operations. Perhaps a rare example of a Brexit dividend?
The next step will be a more comprehensive Railways Bill, also promised for this Parliamentary session. I would guess and hope that, in parallel with taking this through Parliament, Ministers will set up and populate a shadow Great British Railways board structure and task this with managing the train operating entities to deliver “joined up” policies which focus on delivering for passengers, net revenue growth and improved financial performance.
It seems to be the case that parts of the industry are still addicted to competition between operators, rather than delivering the best possible outcomes for the railways and the country as a whole. Is it really sensible that a major part of the market between the West Midlands and London uses the much slower London Northwestern trains via Northampton instead of the faster Avanti services because of historic price competition between the two different franchises?
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The new Government is moving quickly in other areas, too. The Chancellor has made a number of immediate spending cuts, including cancelling the “Restoring Your Railways” programme. In truth, this was moving very slowly, and didn’t have sufficient funding to go much further than initial studies. The great majority of schemes would never have seen the light of day in any case; in large part the scheme was about providing local communities with a warm feeling about restoring old branches to perceived, halcyon pre-Beeching days.
It will still be possible for individual schemes to be taken forward on their merits, as has been delivered with the reopening of Okehampton and the Northumberland Line between Newcastle and Ashington, together with Levenmouth in Scotland.
Nothing was said in the spending statement about the future of HS2, despite speculation that the Chancellor was going to announce that there would be no funding for the Old Oak Common – Euston section. The project remains an unloved orphan, moderately useful for travel from London to Birmingham, for perhaps three trains an hour but with much less value further north. High speed trains would rejoin the existing West Coast Main Line just south of one of the worst capacity pinch-points on the route, and with lower capacity trains than the existing Pendolinos.
One of the latest revelations is that the Curzon Street terminus in Birmingham will still be built with space for seven platforms, although only three will be used – it’s apparently too late to downsize that part of the project.
The Government is already between a rock and a hard place on infrastructure investment. There are immense public spending pressures but short term measures to tackle these inevitably conflict with its long term mission to grow the economy, essential if there is to be adequate funding to ensure high standard public services. The way to break out of this vicious circle may be to reinvent some form of Private Finance Initiative (PFI). PFIs became a dirty word part way through the period of Conservative government, reflecting poor value for money and unbalanced contracts but it’s almost certainly time to have another look at the concept.
HS2 offers two prime “PFI” candidates, Phase 2A from Lichfield to Crewe and Old Oak Common to Euston. Phase 2A would probably be presented in a different guise but, sensibly, would use the existing parliamentary powers while the Euston extension would be presented as ultimately funded by development. With the addition of these two elements, the project would then at least deliver some economic benefits, going some way to giving a return on its obscene cost.
Photo credit: Paul Bigland.
