Ear to the Ground
Industr y gossip from ‘The Mole’
One does sometimes wonder what the expensive and disruptive privatisation of the British railway system was actually supposed to achieve. Greater efficiency, one assumes? The trouble with this assumption is that for nearly twenty years, we’ve had no publicly owned yardstick with which to compare the performance of the private rail franchises... until now.
Since National Express was booted off the East Coast franchise in November 2009, after contracting to pay a premium it couldn’t possibly afford, the East Coast franchise has been run by Directly Operated Railways, in reality a division of the Department for (Road) Transport, and thus, to all intents and purposes, the ghost of British Rail past.
According to the Free Enterprise culture much in vogue these days, the general expectation was that DOR would prove a cumbersome, rudderless whale, nibbled by lithe, efficient, free enterprise minnows. Nothing could be further from the truth, because DOR has come up with all manner of marketing innovations. It was the first franchise to introduce a loyalty ‘train miles’ scheme, offering free WiFi and First Class upgrades to regular travellers. Good idea. It also launched a concerted assault on competing airlines, with a campaign that included texting the phones of frequent business flyers using the airline’s own database, and advertising on WiFi at Edinburgh and Newcastle airports. Cheeky.
The campaign increased East Coast’s market share from 45% to 53% and won the company a Gold Award at the 2011 Media Week Awards.
Just the stuff we expect from private enterprise, but embarrassingly for those pushing the free enterprise line, DOR is nationalised. Maybe it’s an exception to the rule? We can’t be sure, because when our railway system was laughably ‘opened up to competition’, British Rail was not allowed to bid for franchises. Neither is DOR today, but bizarrely state-owned foreign companies are, and these mostly European railway companies now run nearly half of our rail www.atob.org.uk
A to B 87 Dec 11 franchises, and one of the three ‘Open Access’ operations too. French, German, Dutch, and now Spanish railway companies have expressed an interest in bidding for future franchises too, including East Coast, which the government is determined to let.
Incidentally, all of the foreign operators but Keolis (part-owned by French state operator SNCF, and currently responsible for banning folding bikes from Southern and SouthEastern platforms) have proved notably bike friendly. But only our own East Coast allows you to book a bicycle space when you buy a ticket on-line.
Unless you are a Daily Mail reader, you may not be particularly worried about Johnny Foreigner running our trains.You might even be quite pleased: German timekeeping, Dutch cycle-friendliness and French, er, style, are no doubt very welcome, but they do come at a price.
In 2010/11 DOR made a surplus of just under £200 million on the East Coast franchise, and being state-owned, it paid this premium straight to the Treasury, and thus to the Great British Public, knocking a few quid off our tax bills. Good news. Unfortunately East Coast is in line for privatisation, after which any profits above and beyond the franchise premium will go either to National Express and its slippery ilk, or the national governments of Germany, Holland, France or Spain, thus helping to keep their taxes down.
Is one being terribly naive in asking the rather obvious question that if a British state operator is doing very nicely at
“...being state-owned, it paid this premium straight to...
the British tax payer...”
present, it should surely be allowed to bid against foreign competitors when the franchise is relet in 2013? And if East Coast can do a perfectly good - arguably exceptional - job of running the line without a franchise, why bother going to the trouble and expense of putting these services out to tender at all? Why not keep this solitary state-run service as an efficiency yardstick against which future private and state-owned foreign bids could be assessed? If the state can do it better, why bother spending millions of pounds on lawyers, barristers and consultants in an endless round of refranchising?
What else do they do rather better on the Continent? Why yes, cycle policy of course, but that may be about to change. When the Department for Transport asked the Transport Research Laboratory to produce a report on infrastructure for cyclists, the car-minded civil servants were presumably hoping for a rubber stamp to the segregation of cyclists on railway paths and other dingy byways. But the report has actually come down in favour of keeping cyclists on traffic calmed roads: “Providing segregated networks may reduce risks to cyclists, although evidence suggests that the points at which segregated networks intersect with highways can be relatively high-risk, sometimes of sufficient magnitude to offset any safety benefits of removing cyclists from the carriageway... Of all interventions to increase cycle safety, the greatest benefits come from reducing motor vehicle speeds.” Used ‘Cyclists Dismount’ signs anyone?
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