NEWS


S


ir Roy McNulty’s value-for- money study, published on


May 19, makes it clear that failure to adopt his recommendations could leave the country having to contemplate Beeching-style net- work cuts.


He calls his proposals ‘Plan A’, add- ing: “Only if all concerned failed to deliver the improvements which the Study judges to be both neces- sary and possible, would considera- tion conceivably have to be given to a Plan B – a smaller railway.”


Blame game


The value-for-money study urged the industry to avoid ‘blame games’, inquests into past mistakes and pointless arguments, urging it instead to focus on the future. The industry was quick to implement one of his key recommendations in this regard,


immediately


establishing a Rail Delivery Group formed of the key players to get things moving.


McNulty’s report does not ignore the past, however, making the point that British Rail became relatively good at keeping the cost of running the railways low, saying: “While the budgetary constraints under which British Rail operated may have been too severe at times, and probably contributed to a signifi- cant backlog of investment, those constraints were arguably more ef- fective in controlling industry costs and finances than the post-privati- sation control regime has been.”


He also said the solutions set out in the 2004 White Paper, ‘The Future of Rail’, were mostly ignored – and he took the lesson from that pe- riod that the people implementing change should be different to the people affected by that change, to ensure action.


Responsibility


McNulty is careful to balance criti- cism of Network Rail’s ‘arrogance’ and over-centralisation with praise


Fares


Many of the review’s most publi- cised recommendations have been over fare structures. The Govern- ment has announced a full review of fares policy in acknowledge- ment of this, and Transport Secre- tary Philip Hammond had heavily trailed the proposals in his recent speeches and soundbites on the “perverse” fares structure.


He seemed to rule out, however, McNulty’s recommendation to cut regulation of some fares. The DfT said the proposal to reduce Gov- ernment control of off-peak tickets to give TOCs more flexibility, and offset cuts in the cost of some peak- time tickets, would not go ahead, and nor would the complete lifting of restrictions on the busiest peak commuter services.


Passenger Focus chief executive Anthony Smith had already con- demned the idea of giving train op- erators more freedom to set ticket prices, saying: “All the experience, all the history shows there will be more losers than winners. Afford- able, flexible travel for longer jour-


4 | rail technology magazine Apr/May 11


for its successful achievement of savings targets in this spending Control Period, and notes that over the past year it has adopted a more open and transparent approach with other industry players, and has begun to decentralise.


He added: “Given that Network Rail has accepted the challenge of meeting its Control Period 4 targets and is preparing to continue the savings drive in Control Period 5, a substantial proportion of the re- maining efficiency gap would have to be closed by reducing TOC and ROSCO costs.”


He does not blame private rail companies for seeking to maximise profits, but does condemn “short- termism” and offers a number of incentive-based recommendations to encourage investment and a strategic view.


neys will be confined to a brief win- dow in the middle of the day.”


Hammond did say, however, that in the long term, as industry costs fall, steep fare increases will be a thing of the past.


McNulty is clear that “rail fares are already too high”, and despite his proposals calling for some people to pay more – especially those travel- ling ‘near’ the current peak periods – there will have to be equivalent cuts in other ticket prices to meet his recommendation that the over- all effect will be revenue-neutral.


The network


His proposals on the future struc- ture of the railway stuck to reform of the current system – he did not contemplate renationalisation or complete privatisation, though he jokes that he is not “theologically opposed” to either, and he also shied away from recommending abolishing or merging the main players.


Network Rail has already pre- empted his calls for it to act in a more decentralised and devolved way through its new ‘business units’ based on its core routes, of which he suggests there should be 12.


He also steers closer to ATOC’s pro- posal, however, for more vertical integration of track, infrastructure and train operations, initially on self-contained routes like Anglia or Merseyrail.


He says: “The Study considers that one route-level concession should be let to an independent asset man- agement company by 2014/15.”


The report also states: “It may be possible to pilot vertical integra- tion for Anglia in 2014, although a significant amount of work will be needed to meet that timescale.


“If, for reasons of timescale, Anglia is not possible as a pilot, then anoth- er substantial franchise and route,


whose characteristics are suitable for vertical integration, should be identified for introduction around the same 2014 timescale.”


Subsidy


The report is scathing about the current use of subsidy payments, saying “it is not possible at present to understand what the subsidy provided by the Government is buying”. He adds: “There can also be a vision longer-term of a future for GB rail in which InterCity and London and the South East services can operate with little or no subsidy, and in which the subsidy for Regional services, while still continuing, is better controlled and much more precisely targeted.”


Regulation


He calls for the ORR to take a greater role, and the Department for Transport a lesser role, in regulating the rail network, to avoid duplication and unnecessary complication.


Other recommendations


• Overhauling the overly-prescrip- tive Ticketing and Settlement Agreement;


• Establishing a Rail Systems Agency (RSA) to improve stand- ards management, technical in- tegration, and drive innovation;


• Establishing a Rail Delivery Group (RDG) to push through the changes;


• Increased standardisation and more effective procurement of rolling stock, plus establishing strategic partnerships with the ROSCOs;


• Avoiding “excessive wage drift”, at all levels;


• Less prescriptive franchises; • Decentralisation and devolution; • Greater budget/responsibility for local authorities and PTEs;


• A shift from “predict and provide” towards “predict, manage and provide”, with a greater focus on making better use of existing capacity.


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