► Review role is to realign fragmented industry
► Franchising no longer delivering clear benefits
► Railway industry has lost sight of its customers
► Praise for dedicated, hard-working staff
THE railway industry structure is no longer fit for purpose and needs a ‘fundamental realignment’, according to Keith Williams, the author of the government’s Rail Review.
Its full recommendations will not be published until the autumn, but speaking to an industry audience in London last night, Mr Williams revealed some of the conclusions he has already reached after five months of research.
The franchise system and the various organisations which all play a part in running the industry are also its weakness.
He said: ‘I have learned that if the airline industry is like a game of chess, then today’s complexity in the UK rail industry is more like a Rubik’s Cube.’
The railways were privatised between 1994 and 1997, but some of the changes have since been reversed, particularly the scrapping of Stock Exchange-listed Railtrack and its replacement by Network Rail, which is now a government body.
Mr Williams acknowledged that the industry has achieved ‘enormous success’ in a number of ways since the 1990s, but he also said: ‘We cannot ignore some harsh realities: that poor performance, fare hikes, disruptive industrial action and the failures to deliver key infrastructure on time or to budget have contributed to a few dismal years.
‘I can see that worthy efforts to improve things for customers are all too often frustrated not because of lack of will but because no single organisation owns the problem, or is sufficiently incentivised to take responsibility to drive through change.’
He has also made it clear where his priorities lie: ‘What passengers want is a reliable service that gets them where they are going when it says it will. They want to be treated as part of the railway, like customers. Communications are often poor, especially when things go wrong – and we should expect better from operating companies and Network Rail here.’
He continued: ‘It is a hard truth that – despite everything that is being done and all the money that is being spent over time – the rail industry has lost sight of its customers – passengers and freight – and therefore lost public trust.’
Mr Williams did not deal in any detail with the controversial subject of further nationalisation in his speech, saying only: ‘It is no longer helpful or relevant to see the industry purely in terms of ownership, being state run or privatised.
‘Rather, my role is to realign the different parts of this fragmented industry so they face the same way with shared incentives, with risks (and rewards) sitting in the right places. Always with a singular focus on the customer.’
He also had praise for many aspects of the present-day railway, including its very high safety record and the skills of its staff. He said: ‘What a dedicated and hardworking group of employees this industry has. It’s a great benefit for the railways. I will be looking at how we can improve employee engagement in the Review, to get the best from these vital people at the heart of the system.’
What is clear from what he had to say is that franchising – at least the current version – is rapidly reaching the end of the line: ‘Passenger growth can no longer be taken for granted and there is less certainty about how the economy is going to fare in the future.
‘There has been less ability to deliver on innovation. The reputational risk for franchises has increased whilst at the same time returns are less than expected in some areas. These are hardly the conditions we need to develop a modern rail industry to attract future investment.
‘Put bluntly franchising cannot continue in the way it is today. It is no longer delivering clear benefits for either taxpayers or farepayers.’
The Rail Delivery Group has responded to his remarks with broad agreement. RDG chief executive Paul Plummer said: ‘As we’ve long argued, maintaining the status quo on the railway is not an option. This review is absolutely critical to delivering the lasting change that customers, communities and the whole country expects. This is why we are meeting groups around the country, and working together as an industry, to develop our proposals for big lasting change to feed into the review.’
The Department for Transport has also published the first of a series of ‘Evidence Papers’ to coincide with last night’s speech. The first one sets out the evidence on which the review will build its recommendations in preparation for the White Paper in the autumn.