Railway nationalisation.

[John Brannelly]

A statement: “It was felt that private owners only cared about their shareholders and would do anything to increase shareholder dividend”.
Many of us might think that the same applies now, but this statement was made by a Labour government minister after the 1945 election. The appearance at least, is that the TOCs presently are not really focused on running trains - witness the number of services that are terminated short of their destination, or entirely cancelled. I don’t know if re-nationalisation is the answer, but we need some body - a regulator? - who can bring about the will to run rail services to the timetables. I have said that this is the appearance, and accept that it may be incorrect. Some correspondents will know far better than I.

 

[zwk500]

So we already have the Office of Rail and Road to regulate train services and penalty mechanisms for poor performance.
The physical infrastructure is already owned by a Government-owned company (Network Rail). Rolling stock is private but it's highly likely that a renationalised operator would have a very similar ownership structure due to the cost of financing new stock.
The DfT has a contract with each franchised operator setting out minimum standards and service levels for the private company to achieve. In theory this means that Shareholder's interests are best served by having the train service run as punctually as possible to generate revenue and avoid fines. A similar performance regime would likely be part of any re-nationalisation.

What would a substantially different setup achieve, and how?

 

[Deepgreen]

So we already have the Office of Rail and Road to regulate train services and penalty mechanisms for poor performance.
The physical infrastructure is already owned by a Government-owned company (Network Rail). Rolling stock is private but it's highly likely that a renationalised operator would have a very similar ownership structure due to the cost of financing new stock.
The DfT has a contract with each franchised operator setting out minimum standards and service levels for the private company to achieve. In theory this means that Shareholder's interests are best served by having the train service run as punctually as possible to generate revenue and avoid fines. A similar performance regime would likely be part of any re-nationalisation.

What would a substantially different setup achieve, and how?

It should achieve vast cost savings from the abolition of individual TOCs' legal teams to review and possibly fight everything that comes their way regarding service performance, claims, etc. It should achieve a national strategy for rolling stock, service integration and so on which is lacking now, despite bodies set up to attempt that role. It should provide a uniform and proper set of information requirements that provides clear and standardised information, rather than every TOC going its own way and trying to reinvent the wheel regarding liveries, public signage, etc. It should provide standardised and universal ticketing and fares across the UK rather than fragmented and confusing ones. It should get back to providing sensible connections policies such that it's passengers' journeys that matter rather than trains'.

Nationalisation would not be perfect, of course, but it must surely be a vast improvement in our fragmented and disparate present system. For me, one of the many proofs of failure is that the UK is rapidly running out of potential bidders for the TOCs because there are fewer and fewer who are either capable of taking it on or performing acceptably if they do. The trouble is, of course, that the current failed system is so entrenched now that it will cost a vast amout to correct. The Tories didn't privatise the railways to improve them (their ethos is opposed to public transport anyway); it did so ostensibly to rid itself of apparent responsibility for them. The trouble is that now, most of the people who really know how to run a railway have been dispensed with in favour of generic business people.

Two fundamental factors were, and are, not present to make privatisation a success - genuine profit and genuine competition at point of use.

 

[snowball]

There's an existing thread here. It was also a poll but the poll has closed.

 

[Dr Hoo]

It [Nationalisation] should achieve vast cost savings from the abolition of individual TOCs' legal teams to review and possibly fight everything that comes their way regarding service performance, claims, etc.

How many lawyers does a typical TOC have in its performance team? I thought that delay attribution was still undertaken by relatively 'front line' operational staff in controls and performance management teams as was the case when BR invented delay attribution and the TRUST system in the first place.

How much have the 'public' operators - ScotRail, TfW, Merseyrail, London Overground, LNER, Northern and Southeastern achieved by 'cutting out the lawyers' in their dealings with Network Rail?

 

[zwk500]

It should achieve vast cost savings from the abolition of individual TOCs' legal teams to review and possibly fight everything that comes their way regarding service performance, claims, etc.

Delay attribution is handled by delay attributers from planning/operational teams not legal teams.

It should achieve a national strategy for rolling stock, service integration and so on which is lacking now, despite bodies set up to attempt that role.

As you point out, this would be possible today if there was the will for it.

It should provide a uniform and proper set of information requirements that provides clear and standardised information, rather than every TOC going its own way and trying to reinvent the wheel regarding liveries, public signage, etc.

It is no bad thing to have the ability to experiment and innovate to challenge the orthodoxy on information presentation - as the debate about Thameslink signage has shown. It is perfectly possible within the current setup to have minimum requirements as to disruption comms etc.

It should provide standardised and universal ticketing and fares across the UK rather than fragmented and confusing ones.

Again, this would be possible within the current structure if there was the political will for it.

It should get back to providing sensible connections policies such that it's passengers' journeys that matter rather than trains'.

Again, some TOCs do this already and would be possible with only small tweaks to the performance regime.

Nationalisation would not be perfect, of course, but it must surely be a vast improvement in our fragmented and disparate present system.

I'm far from convinced it would be implemented properly. I think it *Theoretically* would be, but there's no guarantee of execution - as the experience since 1992 has shown us.

For me, one of the many proofs of failure is that the UK is rapidly running out of potential bidders for the TOCs because there are fewer and fewer who are either capable of taking it on or performing acceptably if they do.

We're running out of bidders in no small part because the DfT is insisting bidders take on the pension liabilities.

The trouble is, of course, that the current failed system is so entrenched now that it will cost a vast amout to correct.

Agreed.

The Tories didn't privatise the railways to improve them (their ethos is opposed to public transport anyway); it did so ostensibly to rid itself of apparent responsibility for them.

I'm not sure the Tory 'ethos' is opposed to public transport - remember a significant portion of their vote is (was) London & SE commuters. It privatised the railways in an attempt to shift the debt burden off the public books (with largely aligns with your reasoning) and to stop Labour from being able to reverse their policies of the past 18 years.

The trouble is that now, most of the people who really know how to run a railway have been dispensed with in favour of generic business people.

I'm not sure this is entirely fair. A large number of senior management at TOCs and NR are very experienced Railway people. There's also nothing to say that it suddenly being one company would lead to a massive increase in 'railway people' being brought through to the top.

Two fundamental factors were, and are, not present to make privatisation a success - genuine profit and genuine competition at point of use.

I agree on profit. However I think the lack of competition was less of a factor than the awkward hand of the political machine left in the mix. Because so much public subsidy was required, politicians were unwilling to relinquish full control.

 

[Oxfordblues]

I have some sympathy with those advocating renationalisation of the passenger railway, but for rail-freight it would be a complete disaster. Gone would be the competition and efficiencies enjoyed by the private freight companies. It would mean a return to the dead-hand of British Rail's monopoly. It might only make any sense if the road-freight industry were nationalised at the same time, enabling the transfer of suitable traffic from road to rail. That would meet with fierce resistance from the entrenched haulage lobby. And just how much would it cost the Treasury to buy Eddie Stobart?

 

[zwk500]

I have some sympathy with those advocating renationalisation of the passenger railway, but for rail-freight it would be a complete disaster. Gone would be the competition and efficiencies enjoyed by the private freight companies. It would mean a return to the dead-hand of British Rail's monopoly. It might only make any sense if the road-freight industry were nationalised at the same time, enabling the transfer of suitable traffic from road to rail. That would meet with fierce resistance from the entrenched haulage lobby. And just how much would it cost the Treasury to buy Eddie Stobart?

There's no reason why nationalisation would mean the exclusion of Open-Access operators. They are one of the big success stories of UK rail, and the EU has looked to the UK example for it's new rules about opening up the continental network to competition.
It's perfectly possible for BR mk.2 to simply operate the services the current franchises do and for OAO (including Freight) to bid for other paths. That is indeed what GBR was originally proposed to do.

 

[JamesT]

There's no reason why nationalisation would mean the exclusion of Open-Access operators. They are one of the big success stories of UK rail, and the EU has looked to the UK example for it's new rules about opening up the continental network to competition.
It's perfectly possible for BR mk.2 to simply operate the services the current franchises do and for OAO (including Freight) to bid for other paths. That is indeed what GBR was originally proposed to do.

One of the purported advantages of a nationalised system is being able to get rid of all the bits that handle interfacing between different organisations as it would be one organisation. But if you still have Open Access then you need to keep a lot of the system in place to prevent BR mk.2 unfairly handling the other operators.

 

[zwk500]

One of the purported advantages of a nationalised system is being able to get rid of all the bits that handle interfacing between different organisations as it would be one organisation. But if you still have Open Access then you need to keep a lot of the system in place to prevent BR mk.2 unfairly handling the other operators.

To be honest with the scale of a BR Mk2 there'd be very little difference between handling relations from the internal and external operators. People imaging that just because it's all one brand it would suddenly shift into a German or Japanese level of productivity clearly haven't seen how NR (or for that matter any company with c.20,000 employees) runs at the moment. Some of the worst issues are caused between NR departments rather than between NR and TOCs.

 

[Sorcerer]

In my opinion the easiest way to fully nationalise the railways in this country is having a state-owned train operator that operates in a similar way to current train operators without paying the premiums or access charges since both it and the railways would both be owned by the Department for Transport and ran by the railway workers and experts with a strong passenger-focused goal. This way wouldn't be too radically different from the current state of affairs and it would still permit open-access operators who have done a fine job, likely in no small part because of their freedom to operate as a private business instead of operating to any government commitments that are sometimes nigh-unachievable. Furthermore any profits go to the DfT which can be reinvested back into the railways rather than private companies whose first priority is to deliver a return/profit to their shareholders. Maybe I'm being somewhat idealistic though.

 

[zwk500]

In my opinion the easiest way to fully nationalise the railways in this country is having a state-owned train operator that operates in a similar way to current train operators without paying the premiums or access charges since both it and the railways would both be owned by the Department for Transport and ran by the railway workers and experts with a strong passenger-focused goal. This way wouldn't be too radically different from the current state of affairs and it would still permit open-access operators who have done a fine job, likely in no small part because of their freedom to operate as a private business instead of operating to any government commitments that are sometimes nigh-unachievable.

So, basically what GBR is proposed to be?

Furthermore any profits go to the DfT which can be reinvested back into the railways rather than private companies whose first priority is to deliver a return/profit to their shareholders. Maybe I'm being somewhat idealistic though.

There won't be any profits, but any revenue would be circulated within the new operator rather than go back to the DfT?

 

[Sorcerer]

So, basically what GBR is proposed to be?

I was under the impression GBR would be more like TfL with concessionary agreements with private companies rather than fully state-owned enterprises. I'll take your word for it though.

There won't be any profits, but any revenue would be circulated within the new operator rather than go back to the DfT?

I would suppose that might depend on the arrangement. Circulation within the operator might not be ideal though if it can't invest in the infrastructure. If the DfT acted like a shareholder it might be possible. I must confess to only having came up with the idea on the spot though.

 

[zwk500]

I was under the impression GBR would be more like TfL with concessionary agreements with private companies rather than fully state-owned enterprises. I'll take your word for it though.

I don't know how firm anything got, but the last I heard was that GBR would set timetables and service levels etc then invite companies to operate the services under the GBR brand, similar to London Buses. Not sure where the revenue was due to go though.

I would suppose that might depend on the arrangement. Circulation within the operator might not be ideal though if it can't invest in the infrastructure. If the DfT acted like a shareholder it might be possible. I must confess to only having came up with the idea on the spot though.

The railway doesn't make profit, so investment could only come with external money. The DfT would probably be the primary (likely only) shareholder of GBR.

 

[Sorcerer]

I don't know how firm anything got, but the last I heard was that GBR would set timetables and service levels etc then invite companies to operate the services under the GBR brand, similar to London Buses. Not sure where the revenue was due to go though.

I see. In my idea there is no private company operating under the brand, it's all state-owned, so it's not entirely the same. I imagine in either case the revenue would need to go to the right places to be efficient.

The railway doesn't make profit, so investment could only come with external money. The DfT would probably be the primary (likely only) shareholder of GBR.

Probably true. Unfortunately it seems railways making profits are an exception rather than the norm, the only one I can think of being the Hong Kong MTR which actually subsidises government. It would also be impractical to try to replicate a local rapid transit model onto a 20,000-mile long mixed-traffic national railway network, and furthermore MTR also makes money through other means such as real estate and advertisement.

 

[mike57]

Effectively passenger services are almost nationalised, with some TOCs receiving a fee and fare revenue going straight to the DfT, and other failed ToCs are run by the OLR and then just a few OA operators. Network Rail is already state owned. Freight is privately operated.

The problems surround the passenger operations, so do away with all directly funded ToCs and bring it into one passenger operation (GBR???). Allow OA operators to continue, and ensure that the nationalised operator cannot force them out of business. Freight operations should remain privately operated, under the same terms as now, and Network Rail carries on as now. GBR may then decide to sub-contract some operations out, same as with any other public body, but GBR retain control of and accountability for delivering the service agreed with the government of the day under one brand, with a common livery, and control all the rolling stock, either through existing leases or once its been paid for by outright ownership. You then have one common pool of stock which can then be moved about more easily in both short or longer term. From a public point of view you have one point of contact, GBR, unless you are using one of the open access operators.

 

[Meerkat]

Are the two alleged advantages of 'railway will be run better' and 'get rid of delay attribution costs' compatible - if you stop bothering about why the trains are late how are you going to stop them being late?

Private TOCs thinking about their shareholders' profits isn't necessarily a bad thing - the profits come from selling tickets so the TOC running your particular rail service has an interest in standing up for your interests against Network Rail and the government.
If a private TOC is only interested in shareholders' profits then its reasonable to say that GBR will only be interested in reducing government subsidies.
Passengers might vote, but more non-rail user taxpayers vote, and the voter power is not very even - how do northern commuters feel their voter influence on government rail policy compares to that of home counties commuters?

 

[zwk500]

Are the two alleged advantages of 'railway will be run better' and 'get rid of delay attribution costs' compatible - if you stop bothering about why the trains are late how are you going to stop them being late?

I think a substantial part of the thought is that the blame-trading of the current delay attribution will be less and instead a more accurate picture of delays would be available. However having seen current NR internal Delay attribution back-and-forths I don't accept that this would be any improvement.

 

[Meerkat]

I think a substantial part of the thought is that the blame-trading of the current delay attribution will be less and instead a more accurate picture of delays would be available. However having seen current NR internal Delay attribution back-and-forths I don't accept that this would be any improvement

Are the NR incentives between teams just bonus/promotion related? I can just imagine perverse incentives - take too much blame so your stuff gets the investment.
In the finance sector I have definitely had much experience of blamestorming between internal teams! This is when you need to send the minions who do the work on the lash together so they develop a relationship and start fixing things without it going up to managers........

 

[zwk500]

Are the NR incentives between teams just bonus/promotion related? I can just imagine perverse incentives - take too much blame so your stuff gets the investment.
In the finance sector I have definitely had much experience of blamestorming between internal teams! This is when you need to send the minions who do the work on the lash together so they develop a relationship and start fixing things without it going up to managers........

Budget and target related, probably linked to bonus/review grades but less so to promotion (officially). I didn't have any experience of people deliberately taking blame they weren't responsible for though, I don't think the budgets were set up in that way. Or, at least, the managers didn't want to have the chat with their higher ups about why they were blowing through their delay targets.

 

[A0wen]

It should achieve vast cost savings from the abolition of individual TOCs' legal teams to review and possibly fight everything that comes their way regarding service performance, claims, etc. It should achieve a national strategy for rolling stock, service integration and so on which is lacking now, despite bodies set up to attempt that role. It should provide a uniform and proper set of information requirements that provides clear and standardised information, rather than every TOC going its own way and trying to reinvent the wheel regarding liveries, public signage, etc. It should provide standardised and universal ticketing and fares across the UK rather than fragmented and confusing ones. It should get back to providing sensible connections policies such that it's passengers' journeys that matter rather than trains'.

Nationalisation would not be perfect, of course, but it must surely be a vast improvement in our fragmented and disparate present system. For me, one of the many proofs of failure is that the UK is rapidly running out of potential bidders for the TOCs because there are fewer and fewer who are either capable of taking it on or performing acceptably if they do. The trouble is, of course, that the current failed system is so entrenched now that it will cost a vast amout to correct. The Tories didn't privatise the railways to improve them (their ethos is opposed to public transport anyway); it did so ostensibly to rid itself of apparent responsibility for them. The trouble is that now, most of the people who really know how to run a railway have been dispensed with in favour of generic business people.

Two fundamental factors were, and are, not present to make privatisation a success - genuine profit and genuine competition at point of use.

" It should provide standardised and universal ticketing and fares across the UK rather than fragmented and confusing ones. "

Conveniently overlooking the fact the current fares structure is essentially the one which was in place when privatisation started in the mid 1990s - so is basically the nationalised BR's fare structure. British Rail had almost 50 years to sort such things out and didn't. This claim that somehow nationalisation will cure such ills is a fallacy.

 

[Bald Rick]

It should achieve vast cost savings from the abolition of individual TOCs' legal teams to review and possibly fight everything that comes their way regarding service performance, claims, etc.

I’ve been involved in service performance / delay attribution, on and off, since it became financial in 1994/5. In all that time I have never seen a lawyer involved.

 

[Thirteen]

I don't think nationalising the railways again would be the solution that solves everything. There will still be delays and strikes just like there was under BR.