Remedying the deficiencies

4.8.7.1 Network Rail replaces Railtrack

It is a widely held view that Railtrack was a dysfunctional organisation (c.f. Wolmar 2005) with inappropriate processes and poor leadership, not only in the area of train planning.

The more general problems came to a head following the derailment near Hatfield on 17 October 2000 in which 4 people were killed. It was not the accident itself which caused the demise of Railtrack, rather the way in which the senior management had a corporate

‘mental breakdown’ in the following hours, imposing draconian speed limits across the network because they felt that they could not be certain that a similar accident was about to happen somewhere else on the network. Railtrack had few engineers on its staff, with the process it had devised at its inception being to rely on its contractors to identify work required. There was of course a direct incentive for Railtrack to minimise renewals as this reduced payments to the contractors and an important indirect one too as when

‘possessions’ of the track were granted to contractors to carry out work Railtrack would have to make payments to the train operators to compensate them for the loss of revenue as their trains had been cancelled or diverted. Whilst this provided an

appropriate commercial incentive on Railtrack not to take unnecessary possessions, if, as proved to be the case, Railtrack did not have appropriate expertise to judge when work was essential then it could postpone work which was safety-critical: the renewal of the faulty rail at Hatfield was postponed by several months to avoid higher compensation

payments to the train operators.

The implication for Railtrack of imposing speed limits across the network was massive compensation payments to the train operators. It later compounded this outflow of cash by throwing money at the contractors to improve the condition of the track. Railtrack went ‘cap in hand’ to government on several occasions asking for grants to cover this extra expenditure. Railtrack appeared to government and others to be ‘out of control’

and, on 7^th October 2001, the government decided to use a mechanism set up as a ‘last resort’ in the Railways Act 1993 (and intended for use with train operators in difficulty rather than Railtrack) – Railway Administration. In a speech to the House of Commons the following week, Stephen Byers, Secretary of State for Transport, Local Government and the Regions, set out how the government intended to replace Railtrack (Hansard, 2001):

“We shall be proposing to the Administrator that a private company limited by guarantee be established to take over Railtrack's responsibilities. Any operating surplus it makes would be re-invested in the railway network itself. Such a company would have the needs of the travelling public and other users as its priority. With no shareholders we would remove the conflict between the need to increase shareholder value with the interests of rail passengers. The company we propose would have responsibility for operations, maintenance and renewals. It would have a small professional Board of executive and non-executive directors. Performance targets would be set linked to levels of service, safety and value for money. A Board working on commercial lines but

focused solely on delivering a safe well-maintained rail network that is fit for the 21st century.”

Network Rail took over Railtrack in 2002 and immediately started to get the organisation and its activities back ‘under control’. How it did this and the extent to which it

succeeded will no doubt in time be recorded by other researchers. Turning to train planning, the first formal position statement by Network Rail appeared in its March 2003 Business Plan, in which Network Rail accepted that there were problems – as it

describes them, ‘historical shortcomings’:

1. “inadequate understanding of future traffic patterns, whether arising from

existing commitments or changing customer requirements;

2. gaps in our modelling and strategic access planning systems capability;

3. outdated rules and standards used in timetable construction;

4. late availability of engineering access requirements and short notice change requests;

5. a labour intensive and inefficient timetabling process;

6. failure to meet the required timescales for notification of timetable changes (Informed Traveller); and

7. validation of train paths only partially completed prior to operation.”

In the Business Plan it also set out what it intended to do:

“Over the next two years we have identified priority actions to deliver our goals:

1. working closely with the SRA (Strategic Rail Authority) to support its Capacity Utilisation Policy and to develop Route Utilisation Strategies which optimise capacity usage and clarify future requirements; (discussed in the text below on the SRA);

2. completing development and implementation of a suite of Strategic Access Planning tools and systems to ensure the impact of changing capacity and traffic patterns is understood prior to timetable development;

(see chapter 6);

3. continuing review of the rules on which timetables are developed, in conjunction with the SRA; (see chapter 4);

4. national coordination of regional Integrated Planning Units to ensure the improvements in engineering planning also benefit the timetabling process; (a restructuring to reduce the internal interfaces; in addition, Network Rail set up a ‘Strategic Access Planning’ unit to focus its forward capacity planning activities in a single team);

5. begin a comprehensive overhaul of our timetabling systems and tools, which is scheduled to continue until 2007 (see chapter 6); and

6. contribute to an industry-wide recovery plan to meet the Informed Traveller timescales, through improved engineering planning and cutting process cycle time“. (‘Informed Traveller’ was a project to ensure that passenger information systems and reservations systems were up to date

10 to 12 weeks before the day the train ran – following Hatfield forward information, particularly for weekends, had deteriorated to the position that sometimes the changes were only notified by Railtrack/Network Rail to the train operators a few days before the day the trains ran).

“In addition, we will implement EU Directive requirements to move to a single annual timetable change each December” (this was to bring all EU countries into line to simplify the timetabling of trains crossing national boundaries – this of course has very little impact on the UK).

4.8.7.2 The Strategic Rail Authority

The Strategic Rail Authority (SRA) came into being on 1 February 2001, following the passage of the Transport Act 2000, after running in ‘shadow mode’ for a period of time before that. It was set up to “create a clear, coherent and strategic programme for the development of the railways and provide a single body accountable to the Secretary of State for strategic planning, co-ordinating and supervising the activities of the rail industry and for the disbursement of appropriate public funds” (SRA, 2003,1). The formation of the SRA was seen as necessary to ensure that the overall direction that the railway industry took was focused on meeting government objectives, particularly its

‘Ten Year Plan’ for transport (Department for Transport, 2000), as the government, even before the Hatfield accident, was aware that strategic direction was lacking.

Of particular importance to this thesis is that the SRA was required to “develop a policy for the utilisation of network capacity” (Directions and Guidance to SRA from the Secretary of State, SRA, 2001). The Directions and Guidance go on to say that “in an ideal world sufficient capacity would be available for all users. Much more can be done to optimise the capacity of the existing network and the SRA should work closely with Railtrack and the industry to identify measures to achieve this. Where this is not

possible, for instance where physical locations are constrained, hard choices may have to be made to identify priorities where operators’ aspirations may conflict with one another”.

From the beginning of 2002, the SRA studied how it could achieve better capacity

utilisation. It published several documents which set out its position: its Capacity Utilisation Policy consultation (SRA, 2002), Statement of Principles (SRA, 2002,1), Network Utilisation Strategy (SRA, 2003, 2) and its first route-specific study, the Midland Main Line Route Utilisation Strategy (SRA, 2004,1). In addition, it published its Strategic Plan (SRA, 2002, 2003), setting out its wider objectives and plans and its Appraisal Guidelines (SRA, 2003, 3), which set out how different options would be judged. The SRA reviewed how much freedom it gave franchisees to set their own timetables and, to control their activities in this area, new franchisees were required to get the SRA’s approval before seeking access rights or bidding for specific paths. This was done to enable the SRA to work towards more effective use of network capacity.

Returning to the case studies, the SRA was able to use its power (as funder of the industry and specifier of the franchises) to put right some of the problems caused. For the cross country services (case study A), the SRA worked with all operators to produce a coherent service pattern, agreeing reductions in service levels with other operators (e.g. Central Trains) where duplication existed and where benefits were exceeded by costs, particularly performance disbenefits. For the West Coast (Case Study B), a Strategy was developed and published (SRA, 2004), setting out a rational set of

infrastructure enhancements focused on cost-effectively meeting the needs of the many users of the route – this proposal being based on detailed timetabling analysis. 140mph running was ruled out, at least for the short term, as the capacity and performance problems that this higher speed creates have been judged to outweigh the benefits of shorter journey times. The problems of case studies C and D have to some extent been resolved by restricting franchised operators’ freedom to bid for additional or varied paths – franchise agreements now require any train operator seeking to vary its access rights or paths to get the SRA’s permission first. However it was not possible for the SRA, or, since the demise of the SRA, the Department for Transport, to control Open Access operators. Although the Office of Rail Regulation does take account of effective network utilisation when considering requests for access from open access operators in the same way as it does for access requests from franchised operators, issues have re-emerged more recently (see the discussion in the following section regarding Grand Central).

Two further examples demonstrate how capacity utilisation was improved through the

SRA working with train operators. The first related to a proposal put forward in 2002 by First Great Western, the train operator running franchised services from London to the West Country and South Wales (First Great Western, 2002). By restructuring the timetable between London and Reading and changing the types of trains used, the train operator found that it would be possible to increase the number of peak hours seats by 30% and, at the same time, improve performance. The second example is the work undertaken to develop the Midland Main Line Route Utilisation Strategy, in which it was found that extra peak hour seats and extra inter-urban services could be provided without a material performance impact through the introduction of longer trains and restructuring the timetable to reduce knock-on delays.