Why does franchising work?

[whole diary]

[Visoflex]

Not that I look for conspiracies or hidden agendas.

Franchising allows the government of the day and the Whitehall Dafties to claim the successes, and to blame the industry for failure to deliver it.  It was also a cute way of avoiding the payment of any compensation to the shareholders of Railtrack.

[SapperPsmith]

This is one of the more interesting threads on the blog.

Many of those who speak of nationalisation seem to forget the many many failings of BR^▸ (British Rail(ways)).  I was a commuter in 1991 and recall the poor service, dirty trains and lack of attention to detail.  There was no incentive to get better apart from professional pride and no capital for modern trains or other improvements.

Although NSE^▸ (Network South East) had inspirational leadership by C Green Esq even he could not deliver the investment needed.  Although the trains are expensive we have probably the lowest average age train fleet in europe provided by private capital.  The infrastructure has been a mess but that goes back to Railtrack and PUG2 and instead of leaving the company to sort itself out HMG decided to step in when then sensed a political opportunity.  This caused years of chaos - if Railtrack had been left alone the system would have been sorted much more quickly.

Finally - I have just travelled to N America via Gatwick - Both outward and return journeys were fantastic.  Despite a wait to get on the stand our bags (including non standard items) were in the hall in a few mins and we were on the platform waiting for a train within 40 mins of leaving the plane.  The new managment at Gatwick has got a grip of what was a shoddy operation and the result is impressive.  This is very different from Heathrow where the new managment has failed to clear out the old BAA culture and we see the consequence.  This failure at LHR is one of the private sector but it is rooted in the former culture.  Now Gatwick is offering stiff competition and Stanstead is to be sold the Heathrow managment will have to shape up or be shipped out. 

I know there are many public servants and organisations which do a good job but in the end organisations tend to look after themselves unless they are shaken out of complacency.  I have worked in public and private organisations over 40 years and I know what works.

[matt473]

Although NSE^▸ (Network South East) had inspirational leadership by C Green Esq even he could not deliver the investment needed.  Although the trains are expensive we have probably the lowest average age train fleet in europe provided by private capital.  The infrastructure has been a mess but that goes back to Railtrack and PUG2 and instead of leaving the company to sort itself out HMG decided to step in when then sensed a political opportunity.  This caused years of chaos - if Railtrack had been left alone the system would have been sorted much more quickly.

The problem with the investment however is that despite the network being imporved and the age of rolling stock decreasing, it does not mean things have improved. The most popular and suitable intercity stock seems to be the hst as it can go almost anywhere with a large amount of capacity and a buffet, essential for intercity services. Post privatisation has seen the introduction of voyagers for example which seem to be the equivelant of the old alphaline services in regards to service provision and comfort as opposed to intercity levels despite being intercity services. Then you have the infrastructure investment which seems very short term focussed as can be seen with the Ebbw Vale line re-opening were everything was done to a price, but now required even more investment to increase frequency which would have been cheaper if a little bit more investment took place in the first place.

I'm not saying that BR^▸ (British Rail(ways)) would be better as there were clearly problems, but the privatised mess we currently have is just as bad, if not worse. Maybe instead of regional franchises, it would have been better to have a UK^▸ (United Kingdom) railway franchise that allows investment and cross subsidy of the whole network with a clear partnership between a franchise holder and network rail with long term planning and investment with suitable investment in rolling stock and infrastructure whilst reducing the needless duplication of staff amongst other things that have greatly increased costs.

At the end of the day, it seems neither the government nor private companies are any good at running the railways, what it requires is to be similair to the Royal Mail set up, free to run itself without input from civil servants or politicans but still owned by the government.

[The SprinterMeister]

Why does franchising work?

It doesn't

The WCML^▸ (West Coast Main Line) debacle proves once and for all that franchising doesn't work. Shame its cost the UK^▸ (United Kingdom) tax payers upwards of ^40 million to find that out but there you go.

[ellendune]

London Overground is still Franchising and people seem to think that works

[The SprinterMeister]

London Overground is still Franchising and people seem to think that works

No it isn't franchising. LOROL^▸ (London Overground Railway Operations Ltd) is a concession let by TfL^» (Transport for London - about), who take the revenue risk. The train operator merely provides the trains, the crews and the expertise to run the service.

Consessions and Franchises are two completely different things. On the basis of LOROL Concessions appear to work. Franchising does not work and has just cost the taxpayers ^40 million pounds to achieve Virgin running the WCML^▸ (West Coast Main Line) as a management for a further 23 months. DfT^» (Department for Transport - about) could have just as easily rung Virgin up last year and done that, it would have been a whole lot cheaper.

[The SprinterMeister]

The infrastructure has been a mess but that goes back to Railtrack and PUG2 and instead of leaving the company to sort itself out HMG decided to step in when then sensed a political opportunity.  This caused years of chaos - if Railtrack had been left alone the system would have been sorted much more quickly.

Wrong. Railtrack were a clueless asset stripping organisation. They would have dissappeared anyway once they had run out of 'surplus' land and other assets to sell off or stations they could build office blocks / shopping malls on top of.

WCML^▸ (West Coast Main Line) PUG2 was in a Railtrack inspired mess from which they would not have recovered. The Hatfield derailment finished Railtrack off, not HMG.

[ellendune]

WCML^▸ (West Coast Main Line) PUG2 was in a Railtrack inspired mess from which they would not have recovered. The Hatfield derailment finished Railtrack off, not HMG.

On that I agree

Many of those who speak of nationalisation seem to forget the many many failings of BR^▸ (British Rail(ways)).  I was a commuter in 1991 and recall the poor service, dirty trains and lack of attention to detail.  There was no incentive to get better apart from professional pride and no capital for modern trains or other improvements.

I am not sure they were failings of BR it was a failing of successive governments.  They were never a nationalised company in the way that our continental neighbours run them.  They were really a branch of the Ministry of Transport.  They did whatever their political masters told them and that was to run down the railway because it was old fashioned and roads were the future.  If it had gone on much longer I am sure they would have hived it off the charity by now like they have done with canals. 

So the failing of the railways under BR and successive governments was to let it run to ruin. Much of the increased costs we have are now paying the price of decades of neglected maintenance of earthworks and structures and restoring capacity that was stripped out.   

[RichardB]

Many of those who speak of nationalisation seem to forget the many many failings of BR^▸ (British Rail(ways)).  I was a commuter in 1991 and recall the poor service, dirty trains and lack of attention to detail.  There was no incentive to get better apart from professional pride and no capital for modern trains or other improvements.

I am not sure they were failings of BR it was a failing of successive governments.  They were never a nationalised company in the way that our continental neighbours run them.  They were really a branch of the Ministry of Transport.  They did whatever their political masters told them and that was to run down the railway because it was old fashioned and roads were the future.  If it had gone on much longer I am sure they would have hived it off the charity by now like they have done with canals. 

So the failing of the railways under BR and successive governments was to let it run to ruin. Much of the increased costs we have are now paying the price of decades of neglected maintenance of earthworks and structures and restoring capacity that was stripped out.   

Perhaps slightly off topic but just to say that BR was far from the basket case it is being made out to be here.

Yes, there was a lot of stripping out of capacity in an attempt to balance the books and this lasted (sadly) until the mid 1980s but BR did lots of good things too and the investment of the late 80s and early 90s in particular was pretty awesome. 

BR certainly wasn't perfect but neither was it a disaster, or anything like it.

[Andrew1939 from West Oxon]

BR^▸ (British Rail(ways)) in its day did have a policy of planned maintenance, i.e. replacing assets at the end of the planned reliable life. Unfortunately, government financial constraints meant that that the planned maintenance did not always happen and the plans fell years behind.
When Railtrack took over its financial management changed all that. I remember reading an article in Modern Railways by a Railtrack financial director proudly crowing that Railtrack has adopted a policy of "if it ain't broke, don't replace it" and that policy was a more efficent way of running the rail infrastructure, not to mention that this increased the ability of Railtrack to pay its shareholders dividends. Unfortunately this meant than when things went wrong, as they seemed to increasingly to do so, the impact on rail services was greater and, as we all know, disastrous in some incidents, leading to Railtrack's demise.

[swrural]

This is one of the more interesting threads on the blog.

Many of those who speak of nationalisation seem to forget the many many failings of BR^▸ (British Rail(ways)).  I was a commuter in 1991 and recall the poor service, dirty trains and lack of attention to detail.  There was no incentive to get better apart from professional pride and no capital for modern trains or other improvements.

Although NSE^▸ (Network South East) had inspirational leadership by C Green Esq even he could not deliver the investment needed.  Although the trains are expensive we have probably the lowest average age train fleet in europe provided by private capital.  The infrastructure has been a mess but that goes back to Railtrack and PUG2 and instead of leaving the company to sort itself out HMG decided to step in when then sensed a political opportunity.  This caused years of chaos - if Railtrack had been left alone the system would have been sorted much more quickly.

Finally - I have just travelled to N America via Gatwick - Both outward and return journeys were fantastic.  Despite a wait to get on the stand our bags (including non standard items) were in the hall in a few mins and we were on the platform waiting for a train within 40 mins of leaving the plane.  The new managment at Gatwick has got a grip of what was a shoddy operation and the result is impressive.  This is very different from Heathrow where the new managment has failed to clear out the old BAA culture and we see the consequence.  This failure at LHR is one of the private sector but it is rooted in the former culture.  Now Gatwick is offering stiff competition and Stanstead is to be sold the Heathrow managment will have to shape up or be shipped out. 

I know there are many public servants and organisations which do a good job but in the end organisations tend to look after themselves unless they are shaken out of complacency.  I have worked in public and private organisations over 40 years and I know what works.

I agree entirely about Gatwick (disagree very much about Railtrack).  Of course it's anecdotal but our experience was the same.  To give support for your plea for competition (was none for Railtrack), starting from South Devon /Dorset border, we noticed that the fares from Taunton to Gatwick were much cheaper than SWT^▸ (South West Trains) from Axminster!  However, one had the long car journey to Taunton plus a hefty parking charge for a fortnight.

The above anecdote is told only to illustrate that having alternatives has merit, but in the end, the quality of the service is most important to the relatively wealthy people of Southern England.  SWT has a very high quality of service and this is noticeable when changing to another operator at Clapham Jcn, for instance (Southern not bad actually, just hugely overcrowded).