Rail reform Rail reform

At the point at which the Williams Review was announced in September 2018 there was a sense that the privatised rail system set up by John Major in the 1990s had exhausted itself and run out of steam. Whilst privatisation had delivered some notable successes – a doubling of passenger numbers, a 33 percent increase in timetabled passenger services and a significant investment in new trains – a number of structural issues were plaguing GB Rail. These included:

• A lack of industry leadership with a blurring of roles between the various industry parties, including Government.
• Insufficient integration between track and train with the industry not working together as well as it should to deliver the required outcomes.
• A sense that fares were overly complicated and offered poor value and that passenger journey information, delivered by multiple parties, was often unreliable.
• The industry missing opportunities to meet the needs of local stakeholders.
• Concerns about the franchising system and its commercial viability.

Prior to the Williams Review, these issues had begun to manifest themselves in a number of well publicised failings such as:

• Continuing decline in train punctuality – most notably around Greater Manchester and in the West Midlands where franchising decisions had resulted in undeliverable timetables.
• Enhancement programmes such as Great Western electrification running significantly over time and budget.
• Failure to deliver the May 2018 timetable changes which caused severe disruption.
• The collapse and hand back to Government of the East Coast franchise.

Two and a half years on, the May 2021 White Paper should receive a positive welcome as it presents a coherent set of policy prescriptions that tackle the issues that prompted the Williams Review head-on.

• A new national rail body, Great British Railways (GBR) will provide industry leadership and set the long term direction for the railways through a 30 year strategy. As the industry leader, GBR will be the single point of accountability to Government, Passengers and Freight Users both for train performance and for the management of the industry’s finances.
• GBR will be responsible for integrating activities across track and train such that on each part of the network, all the industry actors are working to a single plan.
• It is proposed to simplify the fares system with the introduction of new products such as flexible season tickets.
• Decision making will become more localised. Within GBR passenger and freight operations will be managed at a Regional level with the rail body working closely with local funders / stakeholders such as Metro Mayors and sub-national transport bodies such as Transport for Greater Manchester and Transport for London (TfL).
• There will be a wholesale reform of the franchising system. GBR will take responsibility for fares and ticketing and develop new national branding for the railway providing passengers with a more coherent offer. Train Operators will focus on delivering rail services to high standards of efficiency, punctuality, and customer service via new Passenger Service Contracts (PSCs) which draw from the concession model implemented by TfL on London Overground.

As well as the right policy prescriptions, it is critical that going forwards the industry has the right leadership. Given his background as former CEO of a major train operator, South West Trains, and existing CEO of Network Rail, few would question the credentials of Andrew Haines to lead the interim work required to develop the new rail body. Therefore, taken together, these announcements represent a major step forward for the railways both in terms of the more coherent structure that will be established, and the new leadership will be put in place. 

The size of the task of implementing the reforms over the next couple of years should not be underestimated. The Review has taken two and a half years to conclude and the starting point is a highly fragmented industry which faces significant financial challenges following the impact of COVID-19 pandemic on passenger journey numbers. It is therefore imperative that the new industry leadership makes a fast start on the work required to prepare for the reforms whilst the necessary legislation is finalised and taken through Parliament. To get on the front foot, this body must:

• Focus on the recovery of rail revenues including accelerating fares and ticketing reform to win back public trust.
• Move towards managing rail finances on a whole-system basis to put the industry on a more sustainable footing.
• Progress the development of the new Passenger Services Contracts to secure the basis for future private sector participation in train operations.
• Begin work on a long term strategy that fully integrates decisions across infrastructure and operations and prepares the railway for the next set of challenges such as decarbonisation, levelling up and workforce reform.