Bereft of Imagination?

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6 April 2005

 

SRA Chairman Richard Bowker told a Select Committee on 8 July 2003, that BR managers - by inference, all - were “bereft of imagination”. The Select Committee’s Report does not mention how that conclusion was reached. I have not been quizzed on my performance nor has anyone to whom I have spoken. Every industry has unimaginative managers. Motor cycle industry managers did not foresee the popularity of small motor cycles, opening the door to the Japanese and Italians, who consigned UK products to history. Textiles collapsed under foreign competition. The motor car industry lost overseas - and much of its domestic - markets due to poor designs and poor quality. Shipbuilding vanished because it did not modernise nor adopt project and management techniques used by BR.[1]  In every field, unimaginative UK industry lost a world lead, and addressed labour problems by increasing wages [2] instead of productivity. Were these the perfect industries [3] that BR was told to emulate? From the mid 1950s, BR introduced - and employees accepted - work and method study, work measurement, etc. BR civil engineers introduced labour saving machinery in 1948 - BR’s first year of existence - and continued over ensuing years, without the disputes that greeted similar attempts in UK industry. BR engineers and managers initiated and implemented - without strikes - thousands of imaginative changes annually to cut labour, material and asset costs; and to improve services.[4] Unions delayed some changes, but even those were, nevertheless, made. In contrast, UK industry threw in the towel. 

 

Some disagreed with Richard Bowker:

Tory MP, Michael Stephen: I do not subscribe to the view the railway is badly managed. I have been impressed by BR senior and middle-level managers; they are excellent, dedicated people.[5]  Other MPs who praised BR include Robert Adley (formerly Transport Select Committee chairman), Adrian Bayley, Nick Harvey, Nigel Spearing, Sir Keith Speed, William Vane, Brian Wilson and John MacGregor [6], Garnett, Chief Executive of GNER said “BR was bloody efficient”.[7]

“BR managers were very effective in dissuading staff from industrial action. Today’s managers do not have the same skills. Many [current] staff believe managers are incompetent, and know little about railways. One man has seven so-called managers: ‘Under InterCity, I had one. I knew what to do and who to report to. Now, I haven’t a clue’. Running a rail service came as a shock to those from the bus industry who thought it would be a passage to easy profits”. [8]

“Stop treating comparison with BR as irrelevant. BR had many faults, but delivered probably the most cost effective railway of its type in the world. There is much to be learned from its history and little to be gained by routinely dismissing comparisons between then and now”. [9]

 

Areas in which BR did lack imagination

Investment

BR gave priority to infrastructure, not shops which congest concourses. New boys have convinced the public that new rolling stock & assets are funded by the private sector, when taxpayers fund most through bigger subsidies! Moreover, the average age of rolling stock is worse than under BR. [10]

Connex envisaged creating “humane standing room” in coaches by replacing 67 seats by 32! “They are recruiting a manager to sell this to the public”. [11] Unimaginative BR focused on trying to provide more seats by lengthening trains or running additional services.

“For three decades BR infrastructure projects cost £5m per mile, usually minus a bit. Now West Coast route modernisation is £16-23m per mile. The project is two years late and five times the original cost”. [12]

Performance

To improve punctuality, BR didn’t extend journey times, break connections [13] or miss advertised station calls, leaving passengers on platforms and carrying others beyond their destination. Nor did we calculate millions of minutes delay. Improving punctuality needs attention to individual trains. There is a vast difference between telling the public that x% of trains are punctual, and blinding them with millions of minutes delay cut by z%, which may leave train punctuality unchanged or worse.  

BR’s unified Control Office organisation – which managed day-today performance, connections, etc, - was abolished, and, later, replaced by less effective separate bodies.

Up to the day before privatisation, incompetence was deemed to be the cause of all train delays. The next day, ‘decrepit stock’ was the cause! BR punctuality was better than that achieved now [14] despite calls being missed and connections broken under the new imaginative regime.

Unimaginative BR managers did not plead “circumstances beyond our control” - which would have been jeered.  Now, it is the number one excuse. When I tried to compare rail to bus services, National Express would not supply the basis of schedules nor punctuality records, but said most delays were due to “circumstances beyond our control”. BR - they believed - had no similar excuse to theirs: human error, sickness, foul weather, defective private sector made equipment, vandalism, congestion and accidents - despite road vehicles crashing into bridges or onto the line! With no hint he realised the irony of his remark, Trevor Smallwood, Chairman of  FirstBus which planned to go into railways said trains must be reliable! Locally, FirstBus services are a byword for unreliability.

BR managers did not realise that blocking lines for months was “less inconvenient”, whilst millions extended journey times and changed twice or thrice. It is claimed that weekend possessions give only a few hours work. If a BR engineer had made such a defeatist claim, he would have been told to find employment more suited to his limited talents! Long blockages are said to save £0.5bn. The unanswered question is what would otherwise be the cost, and over what period and mileage. It may be 0.001% of estimated engineering cost over 25 years, but what of other costs - e.g., buses - and lost revenue. On average, BR renewed track every 25 years or so, mostly during 16 hour weekend blockages in which up to 14 hours work was safely done - the balance being required to safely take possession, get track machines and trains to site, and restore lines safely to traffic. Railtrack extended renewals to an average 125 years [15] causing a dangerous backlog. Now, possessions fail to end on time, “due to a safety problem”. The public has not grasped that the same scenario will occur somewhere annually, and in the same places every 25 years or so. Imaginative PR will dress it up in differently. In the bad old days, BR engineers had to hand back on time, with safety guaranteed.

Current long blockages are not remotely similar to the 7-week blockage at Crewe in 1984, as some claim. Then, most trains bypassed Crewe station via the Independent Lines, where a temporary platform was built to serve Crewe, whilst buses catered for a minority. Work ended on schedule.

It is claimed that blockages of four track routes - where BR kept two tracks open - is required by the H&SE - but they say it is a railway decision. It is unclear why men may work safely on motorways protected by cones, but not railways. Cones do not prevent vehicles swerving into workers, railway lines do, and train drivers obey safety speed limits.

“The SRA will thin out trains to ease congestion and help trains run on time .... so a problem with one train doesn’t delay others” [16]. “Inter city face cuts in frequency to drag railways out of a three year punctuality slump. Long distance operators run too many lightly used services which congest the network and delay other trains”.[17] It has taken eight years for imaginative new managers to learn a lesson applied by BR for decades.

Imaginative new boys are planning to partially re-merge what should not have been fragmented. Ministers were warned by their backbenchers that fragmentation would be catastrophic. The much misquoted Brussels Directive 91/440 did require it - requiring only separate train and infrastructure accounts. It was never mentioned during privatisation debates as a reason for fragmentation.

Complaints

BR lacked the imagination to re-designate “complaints” as “comments”, “observations” or “invited feedback”, as now applies. I tried to relate complaints to journeys as a measure, but watchdogs would not wear it. Now, they accept it, as “complaints are low in percentage terms”. The current percentage is 100 times BR’s in my day.[18] We didn’t imply that passengers wasted time and postage: “Thank you for taking the time and trouble to send your comments” is a typical private sector response now adopted by train companies to an unambiguous complaint.

Fares & Inquiries

Long distance fares rose twice as fast as inflation and are likely to rise further. The £3.4bn in fares [in 2003/4] is half of rail costs. The SRA believes fares must rise to force people outside the peak.[19] Unimaginative BR managers cut off-peak fares to tempt passengers outside the peak! The SRA said: “the cap of inflation minus 1% is unsustainable and is harming the industry. The cap should be inflation plus 2%”.[20] Given inflation minus 1%, BR would have been £11 billions better off.[21] 

Newcomers imaginatively publicise book-ahead, train-specific fares, but not soaring walk-on fares. In the BR era, watchdogs demanded equal fares for all. Having trumpeted plans to simplify fares with fewer confusing options, they have increased from BR’s typical 4-5 options to 13-15! [22]

Imaginative newcomers limit staff who answer calls, to basic inquiries to expedite answering. This leads to many making two or more calls: to NRES and to a train company to see if any cheap tickets are left. There, one suffers the time-consuming obstacle course of a “voice activated service” and push button options. NRES refer enquiries regarding carpark fees to a train company, who refer one to a station - whose ex-directory number they do not have! Delay in answering these extra calls is excluded from statistics comparing NRES with BR, making it appear that enquiries are answered quicker. NRES cannot give addresses of Rail Watchdogs, which should reduce complaints. Contentious calls are referred to backroom staff - “who will be with you in a minute”.

Subsidy

BR managers lacked the imagination to double the subsidy [23] by splitting profitable InterCity into seven unprofitable companies. Likewise, splitting Network SouthEast - which had cut its subsidy and achieved parity - into eleven unprofitable companies. The imagination to quintuple subsidies was way beyond BR skills! Newcomers claim that subsidies should increase as there are more passengers - largely due to economic upturn! Increased business should cut subsidies. BR managers would have delivered a gold plated railway for current subsidies.[24] 

Politicians forecast that imaginative entrepreneurs would need lower subsidies. BR repeatedly told Ministers that commuter trains were expensive due to the peaks, but lacked the imagination to convince Ministers that this required more subsidy and higher fares, which newcomers have claimed. If their imagination fails them - “they [train companies] are protected against decline: the Franchising Director will increase subsidies if passengers reduce!”[25]  InterCity companies should defer boasts of paying a premium, until they have repaid - with interest - subsidies hitherto paid, as BR’s InterCity was unsubsidised

“The cost of maintaining railways soared under Railtrack. The bill has been paid by taxpayers. The SRA propped up companies with extra subsidies and is keen to see them have more freedom on fares”.[26] The SRA recognises there is a limit to risk that companies will take.”[27] 

GB Railways was bailed out by £3.8m extra subsidy. Go-Ahead sought re-negotiation of a loss-making franchise. Anglia gets £23m on top of £16.5m granted for 2002-4. Anglia said “it wasn’t management failure but external factors not envisaged at the time of the original franchise. A new agreement gave South Central £670m, almost twice that under previous agreements. South West Trains subsidy is up £120m: 250%. Connex asked for an outrageous extra £200m subsidy on top of £58m already agreed. [28]

BR lacked the imagination to pursue bustitution without a subsidy cut. If BR was allowed to withdraw a train service, the subsidy was cut at once. For 20 years, if a bus company provided a replacement service, BR had to subsidise them, even though BR was not then subsidised. BR would not have had the imagination to farm out 1200 route miles to local groups using unpaid labour, or replacing trains by buses, whilst keeping the subsidy! That is imaginative!

John MacGregor said: “We have chosen to subsidise operators, not Railtrack. Subsidy is best directed at the continued provision of socially necessary passenger services which might otherwise disappear. Railtrack will operate on commercial lines, making an appropriate return”.[29] He stated: “If - this is entirely hypothetical - a franchisee runs into problems, he will be able to return to discuss the contract. In the unlikely event of a failure of the franchisee, the franchising authority will find alternative operators for the franchise”.[30]  Inevitably, they would want a bigger subsidy.

National Express will buy more buses and rationalise its interests in trains after another sobering year. “If we don’t think we are going to get a return out of a bid, we will walk away”.[31] That’s private sector imagination and enterprise!

One excuse to justify rocketing subsidies is that track had not been renewed since the 1960s - the West Coast route was highlighted. West Coast rails were renewed about every 20 years or so, on a rolling programme.

Monopoly

Unimaginative BR managers failed to convince Ministers that there was no BR monopoly. Ministers had admitted BR had no monopoly fifty years ago.[32] New boys told politicians that there was a profusion of external competition. Politicians were then convinced.

Whereas, government permit private sector train operators to operate buses, BR could not operate buses as feeders or alternatives. When buses were needed after an accident or to replace late or cancelled trains, BR paid top dollar! Sweden with whom BR was adversely compared, allow their state railways to own buses, and the infrastructure and to run 90% of trains. Their Chairman said UK proposals for privatisation were insane.[33] 

 

Areas in which BR managers were imaginative

Productivity

From 1948, managers continually developed ways to cut costs and improve performance. Under privatisation, whizz kids came in and sacked staff, and had to cancel thousands of trains. “Through the 1980s Bob Reid [34] expected 3% year-on-year efficiency savings from managers - if not - you were replaced by someone who could”.[35]

Advisors

BR created a profitable consultancy [36] employing BR managers and engineers on secondment, to meet demands from eighty countries to solve operating, planning, engineering, technical and other problems. It also sold BR designed equipment and products. New boys employ advisors from countries which sought BR advice!

Investment

BR train design staff had the imagination to liaise at an early stage with those responsible for infrastructure, avoiding the risk that trains could not be used due to inadequate power supplies or a need to re-build platforms.

Imaginative BR managers and engineers developed: car-sleepers, Parkway stations; driver simulators, HST (at service frequencies well in advance of the world), MGR non-stop coal trains, freightliner (precipitating a container revolution), slab track (benefiting private sector Eurotunnel), point heaters, new bogies, solid state interlocking, improved electric transmission systems [37], ticket machines, new lubricants, track maintenance machines, call centre booking and much more.[38]

BR asset renewals practice minimised track defects. BR engineers had the sense to apply different maintenance and renewal standards to track and signalling on inter city and rural lines. The new boys have now discovered “it made no sense to apply the same standards used on 125mph InterCity lines to rural railways.”[39]

Under career railwayman Sir Henry Johnson, BR set up a rolling stock leasing company in 1971, but was told by the Treasury to terminate it in 1975.[40]. Under privatisation, the Treasury designated leasing as flavour of the month.

Accidents

BR managers had the imagination not to involve lawyers and accountants in accidents. BR developed contingency plans - revised with each timetable change - for use if a line was blocked by accident, floods, lorries on the line, suicides, etc. The Control organisation was empowered to make decisions and implement these plans. Controls had been subject to economies and modernisation over many years.  Accidents such as that at Southall would have been avoided had newcomers retained unified Controls. Still, credit where it is due, ten years after destroying the unified Control structure, they are moving towards re-integrated Control - and making it sound like a new idea! 

Fares

Imaginative BR managers introduced railcards for senior citizen, students, young persons, family and disabled; Savers, Weekend First and London Travelcard, etc. They lacked the imagination to copyright these ideas, allowing newcomers to infer that they are a product of privatisation. This is remarkable, because Ministers only agreed that Railcards would be retained after a revolt by backbenchers, who feared that Cards would disappear. “Train companies imposed conditions that make the South East railcard useless for 90% journeys”.[41]

Safety      

BR managers had the imagination to rely on the skills of low graded staff, such as a track patrolman, who was empowered to enter a signalbox or signalling centre and block a line or impose a speed restriction for safety reasons without higher authority. Confident that staff would perform their duties with the skill born of experience, we didn’t panic when one restriction was imposed, and impose thousands elsewhere. After an accident, BR managers safely restored lines to traffic much quicker than applies today, having first established the cause. 

 

Reality or Perception

The Reality is that private sector imagination has led to higher subsidies, more complaints, worse safety worse performance and a higher average age of rolling stock [42]. A SRA Policy Statement stated that franchisees failed to achieve what was promised under privatisation, that several have not been viable and have been given extra subsidy. “The extent to which risk has transferred to the private sector is questionable”.

Mr. Bowker told a Select Committee that “the current perception of services is poor, but it is not the reality”. In fact, the Reality is that the public now see that they have a service that is worse than under BR; [42] and that, it was then that they had the misleading perception, when there was nothing with which to compare. Stimulated by the media, they were led to believe that railways would become UK’s first perfect industry: no complaints, 100% safe, prices below inflation, no subsidy, total reliability. Now, the media concedes those standards are unattainable.

MPs complained that BR’s last London-Berwick train was 6.30pm. Imaginative newcomers retimed it to 6.0pm, and have not - as MPs expected [43] - reinstated direct overnight sleepers from Berwick to London, which BR withdrew.

“Cost control is now so weak that upgrading costs nearly three times as much as under BR. Privatisation has achieved none of the promised benefits. It hasn’t improved services, reduced public funding or made managers more responsive to customers”.[44] “Too many suffer dirty overcrowded trains with unusable lavatories and are starved of essential information when services go wrong. Franchises should re-written with financial incentives to run cleaner, more user-friendly operations. Services go downhill when managers spend more time bidding for each other’s networks than concentrating on boring old punctuality and reliability”.[45] Surely, the incentive is supposed to be implicit in private sector operation?

3.12.04

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[1] Britain’s Railways - The Reality, p.91

[2] For a classic example of excessive industrial wages - see Britain’s Railways - The Reality, p.175

[3] I once asked a critic: “Which perfect bloody industry do you work for?” - a question posed often since. It is a great con­versation stopper

[4] Britain’s Railways - The Reality, ch 13. This book also mentions (pp95,98,99) a few of the imaginative changes that I made.

[5] Hansard 24 May 1993, cols 646-647

[6] During the debate on his privatisation Bill

[7] Rail No. 466

[8] Railway World, March 2002

[9] Modern Railways, January 2003

[10] Britain’s Railways - The Reality, p.84

[11] The Times 5 August 2002

[12] Modern Railways, January 2003, p.20

[13] BR listed some trains that may be held for a pre-determined margin, if connection could be made. Others had no margin, to avoid the snowball effect, which politicians assumed was overlooked

[14] Britain’s Railways - The Reality, p.164

[15] Railway World, April 1996

[16] Sunday Telegraph 19 January 2003

[17] Daily Telegraph 17 June 2003

[18] Britain’s Railways - The Reality, pp.105-108

[19] Under unimaginative BR, fares 1989-95 covered 85% of costs. See BRB Report 1994/5

[20] Daily Telegraph 19 July 2002

[21] Britain’s Railways - The Reality, p.184

[22] See BR and current Fares Manuals

[23] BRB Annual Report 1994/5, p.5

[24] The Times, 21 January 2004

[25] Daily Telegraph 18 May 1995

[26] The Times 19 July 2002

[27] Daily Telegraph  7 September 2002

[28] Respectively: Daily Telegraph 19 June 2002; 28 March, 13 May & 12 July 2003; Times 28 June 2003

[29] Hansard 2 February 1993. Railtrack could not manage without subsidies

[30] Hansard 14 July 1992, col 979

[31] Daily Telegraph 14 March 2003

[32] Blueprints for Bankruptcy, pp.48, 50

[33] Hansard, vol. 216, col. 772

[34] He was the second - and last - career manager to run BR

[35] Modern Railways, January 2003, p.21

[36] Transmark earned the Queens Award for exports. “Britain’s Railways - The Reality”, ch 3

[37] The technology was sold abroad. Since privatisation, Eurostar trains caused damage on the East Coast due to them having incompatible pantographs

[38] Britain’s Railways - The Reality, chapters 6-9

[39] The Times 27 February 2004

[40] Britain’s Railways - The Reality, page 71. In contrast, The Sunday Times 10 November 2002 said that Richard Bowker “made his name with an innovative deal to buy trains for the Underground”

[41] Private Eye No. 1056 June 2002

[42] Britain’s Railways - The Reality

[43] Hansard 11.7.91, cols 1148-52

[44] Private Eye No 1056 June 2002

[45] Richard Bowker, Daily Telegraph  4 December 2002

 

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