Great British Railways: Is this an admission that rail privatisation was a failure?

[WesternLancer]

I remember quotes around the time it was happening, that Thatcher had looked at privatising BR & didn't want to do it - not sure if there's any substance to any of those but I like to think so. Makes Major's decision even more boneheaded.

I think BT going private was the one that really worked ( wasn't that the first one? I wasn't terribly old when it happened ), although there's a lack of real competition even now. The other utilities I'm more dubious about , especially power distribution. Some industries like shipbuilding should never have been publically owned in the first place.

I recall the era very well. I was sure I had seen a list of privatizations by date but can not now locate it - this article gives an overview

A short history of privatisation in the UK: 1979-2012 | Richard Seymour

Richard Seymour: From the first experiments with British Aerospace through British Telecom, water and electricity to the NHS and Royal Mail

www.theguardian.com

There was much before BT actually - but tended to be sold in a different way (Sealink and BR's hotel's division for example) - but BT was probably the 1st big public flotation. Of course different definitions of how ell it 'worked' exist - for example, as far as I was concerned as a consumer there was no meaningful phone competition to BT for many years that I could avail myself of. A point you allude to of course as even relevant now.

I don't know that Thatch didn't want to privatsie BR - I am sure she would have done so if deemed feasible, just could not see it as a viable privatization at the time, given the models they used at the time. I think Major was wedded to it because they had to offer more sell off in their 1992 manifesto (probably to 'look consistently Tory') and that was, of course, an election they did not expect to win! They were then dogmatic in their approach, whilst commentators have pointed out a different model of privatization might have worked better (the BR plc concept).

I think important to recognize that things like shipbuilding (and I would also include Rolls Royce, car industry - British Leyland and some others, probably BaE) were not nationalized due to ideology, really, but more because it was strategically unthinkable to political and social mindsets of the era that the UK would be without what were seen as these key strategic industries, which were going broke at the time state ownership happened - esp in the post war and cold war era context and political mindset. I have heard Heseltine on that subject in the context of the aerospace industry making this point. So rather different than the debate about whether public services (like rail, post, energy and even tlecomms) should be publicly owned or not.

Interestingly, I am aware that the biggest sale of all (that has m,ade more money for the UK govt than all the other privatizations put together) is the sale of council houses - but again a very different model - as that is sale to individuals, not corporate sales or shareholder sales.

 

[takno]

Interestingly, I am aware that the biggest sale of all (that has m,ade more money for the UK govt than all the other privatizations put together) is the sale of council houses - but again a very different model - as that is sale to individuals, not corporate sales or shareholder sales.

Almost certainly true, and yet ironically they are probably the asset which was sold furthest below value, so they represent the biggest loss of wealth to the UK government, and are arguably the most damaging one to society. In comparison to that, the increased cost of subsidy/investment in the rail industry is pretty small fry.

 

[WesternLancer]

Almost certainly true, and yet ironically they are probably the asset which was sold furthest below value, so they represent the biggest loss of wealth to the UK government, and are arguably the most damaging one to society. In comparison to that, the increased cost of subsidy/investment in the rail industry is pretty small fry.

Yes, your point is very well made IMHO (tho we are getting off topic).

Also shows that these sorts of sales are not always about raising money - there will be other social and political objectives as part of the process, or indeed financial objectives (eg in the case of council houses transferring the liability to pay for ongoing repairs and cyclical renovations of the homes to their private owners, away from the government, in this case via the local council as the landlord, for example).

 

[deltic]

Having worked in the treasury, would you say that there is/was an attitude that the railway should pay its way, and not be dependent on state handouts? "The customer should pay the true cost of their travel"? Or was it more the case that the government simply wasn't actually authorising more money to be spent in the first place? Who ultimately had the power to decide if BR would be getting more or less money from one year to the next?

The reality of life at the Treasury is that you are working to an overall budget that the government of the day is prepared to spend and an historic level of spending by each government department. Each Minister put in their bids for the year ahead which in total were far in excess of the money available. The Treasury approaches each department with its suggestions where savings can be made to get back to the overall budget that its having to work to. Whether departments get their additional money or their budget cuts depends very much on their Minister's ability to negotiate, and his/her standing with the Chancellor and No 10. So with regard to BR, Treasury would be pushing for efficency savings and for them to stop doing non-core activities if that saved cash. The Minister may be pro/neutral/anti rail and respond accordingly. Treasury would also be pushing the line that the state should only be intervening if there was a market failure. Hence the demand that freight and intercity should not be supported as there were private sector companies also operating in these markets, ie raod haulage companies, airlines and coach operators. There may have been some other political reason why BR got more money one year for a particular project - eg to buy new rolling stock to support employment in a given part of the country.

So BR would put in its request to DfT each year, the Minister would potentially agree or disagree that request, Treasury may then seek cuts which may or may not be agreed to by the Minister, if no decision was reached it would go to Star chamber (a group of senior minsters whose departments had settled thier budgets) and on rare occassions to Cabinet. So who ultimately had the power over BR's budget would effectively vary from year to year depending on a range of factors.

 

[NSEFAN]

The reality of life at the Treasury is that you are working to an overall budget that the government of the day is prepared to spend and an historic level of spending by each government department. Each Minister put in their bids for the year ahead which in total were far in excess of the money available. The Treasury approaches each department with its suggestions where savings can be made to get back to the overall budget that its having to work to. Whether departments get their additional money or their budget cuts depends very much on their Minister's ability to negotiate, and his/her standing with the Chancellor and No 10. So with regard to BR, Treasury would be pushing for efficency savings and for them to stop doing non-core activities if that saved cash. The Minister may be pro/neutral/anti rail and respond accordingly. Treasury would also be pushing the line that the state should only be intervening if there was a market failure. Hence the demand that freight and intercity should not be supported as there were private sector companies also operating in these markets, ie raod haulage companies, airlines and coach operators. There may have been some other political reason why BR got more money one year for a particular project - eg to buy new rolling stock to support employment in a given part of the country.

So BR would put in its request to DfT each year, the Minister would potentially agree or disagree that request, Treasury may then seek cuts which may or may not be agreed to by the Minister, if no decision was reached it would go to Star chamber (a group of senior minsters whose departments had settled thier budgets) and on rare occassions to Cabinet. So who ultimately had the power over BR's budget would effectively vary from year to year depending on a range of factors.

It sounds like a very interesting and highly political arrangement. It's not surprising that BR's budget was so uncertain, if power over it could change hands so easily. It's easy to see how privatisation could have been so appealing, the private sector not subject to such politics (well, at least somewhat less political. The business has to make money, at the end of the day) and perhaps able to take a longer-term and more sustainable view on things.

I'm not sure what could be done to allow better longer-term planning for national infrastructure while keeping it in state ownership. The railway is the sort of industry that needs 30 year plans, not annual budget-driven thinking.

 

[WesternLancer]

It sounds like a very interesting and highly political arrangement. It's not surprising that BR's budget was so uncertain, if power over it could change hands so easily. It's easy to see how privatisation could have been so appealing, the private sector not subject to such politics (well, at least somewhat less political. The business has to make money, at the end of the day) and perhaps able to take a longer-term and more sustainable view on things.

I'm not sure what could be done to allow better longer-term planning for national infrastructure while keeping it in state ownership. The railway is the sort of industry that needs 30 year plans, not annual budget-driven thinking.

You have to bear in mind that if anyone (any industry, any organisation etc) wants or needs funds form the taxpayer, they have to expect the taxpayer's representatives to be involved in that decision. Those representatives are politicians (even if, as in some local councils, they sometimes called themselves "independents"). Even down at your town hall exactly the same sort of thing will happen as deltic describes, possibly down to, say, a decision on the hours your local library stays open for example.

This is absolutely right and proper in a democracy IMHO.

In my view this is not really 'highly political'. You can of course have less involvement by politicians if you don't need the money they control. But even then they will still be making laws that effect your business across a range of your activity, but that's a wider issue perhaps.

The problem , for BR, that deltic outlines (in an excellently informative post @deltic ) was probably that too much of this cycle was maybe annual, not longer term, say at least 5 years, when as you say infrastructure - and it's not just railways, it probably applies to all sorts of infrastructure, from roads to hospitals, benefits from longer term planning and investment cycles.

 

[Ken H]

You have to bear in mind that if anyone (any industry, any organisation etc) wants or needs funds form the taxpayer, they have to expect the taxpayer's representatives to be involved in that decision. Those representatives are politicians (even if, as in some local councils, they sometimes called themselves "independents"). Even down at your town hall exactly the same sort of thing will happen as deltic describes, possibly down to, say, a decision on the hours your local library stays open for example.

This is absolutely right and proper in a democracy IMHO.

In my view this is not really 'highly political'. You can of course have less involvement by politicians if you don't need the money they control. But even then they will still be making laws that effect your business across a range of your activity, but that's a wider issue perhaps.

The problem , for BR, that deltic outlines (in an excellently informative post @deltic ) was probably that too much of this cycle was maybe annual, not longer term, say at least 5 years, when as you say infrastructure - and it's not just railways, it probably applies to all sorts of infrastructure, from roads to hospitals, benefits from longer term planning and investment cycles.

BR had its budget changed year on year depending on the economy and government tax revenues. Also its commuter income changed with the health of the economy. So BR could suddenly find itself very short of cash. So very difficult to plan, and even make contracts for stuff to be invoiced in the next financial year. A steady state of investment is far more efficient.

 

[GRALISTAIR]

Privatisation wasn't a failure, and will continue with freight, rolling stock, open access and concessions.

One of the telling phrases in the White Paper is the railways' "can't do attitude", which has become rife.

Yes I saw that- very telling indeed imho

 

[WesternLancer]

BR had its budget changed year on year depending on the economy and government tax revenues. Also its commuter income changed with the health of the economy. So BR could suddenly find itself very short of cash. So very difficult to plan, and even make contracts for stuff to be invoiced in the next financial year. A steady state of investment is far more efficient.

Yes, exactly my point Ken, thanks for the additional clarification.
Of course this would be the same for many private companies. Sell fewer seats on your airline, or sell less widgets, or have to cut the price of widgets due to competition, then less income to invest next year (potentially), unless the bank trusts you to lend you some money based on the probability of you being able to pay it back via profits in years to come.

One of the advantages of state ownership should have been that the financial power of the state can prevent the problem you outline. Depending of course on the politicians 'making it so'.

 

[GRALISTAIR]

On balance I think privatisation has unleashed more good than bad but the dead hands of the Treasury and DfT have been running the show for over a decade behind the scenes and leaving the private companies to be blamed for everything that goes wrong.

Is my view too.

 

[Nagora]

Almost certainly true, and yet ironically they are probably the asset which was sold furthest below value, so they represent the biggest loss of wealth to the UK government, and are arguably the most damaging one to society. In comparison to that, the increased cost of subsidy/investment in the rail industry is pretty small fry.

The sell-off of the railways and council housing were both mainly driven by political ideology, and indeed petty-minded ideology. The method of privatization was chosen in order to make nationalisation as hard as possible, not to make the service better while council housing was devastated to the lasting detriment of the country in order to cripple Labour-led councils' powers.

From a political PoV, both were successes. From a service PoV, failures. But better service was never the objective.

 

[Clarence Yard]

Just to be clear, BR had it’s annual settlement (which could be varied in year if the Treasury was short) but it was also required to produce a 5 year Railplan to show what it needed over time. This also could be subject to change and, for example, the 1990 Railplan was subject to frequent alterations as the present and future money taps were being progressively turned off.

And guess what has now re-appeared? Back to the future with a 5 year GBR Railplan!

 

[WesternLancer]

Is my view too.

But we can't get away from the fact that the model of privatization drove up costs massively, and a lot of those costs have then been passe don to passengers in the forms of fares rises that BR would never have been able to implement. A study of Barry Doe's fare tables of rises incurred TOC by TOC (latest one in Rail a few weeks back IIRC) shows this very clearly.

These rises have been distorted by political decision making but also 'baked in' to the model and aspects of fares regulation that were part of it.

If BR had had the sort of money that has gone into the industry since c1994 it does not necessarily follow that 'privatisation unleashed more good than bad'. Of course you can never know but I don't think that much that was achieved since 1994 by the private sector would not have been delivered by BR.

Passenger growth is driven by wider economic, lifestyle and demographic changes and has little to do with privatisation (London Underground passenger growth had little to do with it for example).

The thing was, government(s), having decided that they were not going to reverse privatisation, then ended up having to put more money in just to try and make it work properly. That is wasteful.

The sell-off of the railways and council housing were both mainly driven by political ideology, and indeed petty-minded ideology. The method of privatization was chosen in order to make nationalisation as hard as possible, not to make the service better while council housing was devastated to the lasting detriment of the country in order to cripple Labour-led councils' powers.

From a political PoV, both were successes. From a service PoV, failures. But better service was never the objective.

In the case of council housing I think this is only partly true - the homes are still there, people can still live in them, they are available to buy, and usually cheaper than other homes to buy in their localities.

It was ideology that drove it - but that ideology was in part about not having people in the town hall decide whether you could build a conservatory on your house or not, or when you could have a new kitchen fitted, or down to the infamous colour of the front door. It was an ideology that said - 'allow people to decide these things for themselves' (and pay for them if they can afford to - if they can't afford to, of course, tough luck).

I very much doubt, that in the early 80s Thatch and co saw large numbers of those homes finding their way into the hands of private landlords who would then be worse in their approach than the paternalism (or lack of interest) at the town hall. At that time the march towards owner occupation seemed unstoppable.

The real national tragedy is that when people can't afford those rents for those ex council houses now rented out by a private landlord at twice the rent and more, the taxpayer gets to pick up the bill via Housing Benefit. But that has been an unintended consequence I believe. But perhaps one that shpuld have been predicted.

As a policy failure it's nothing like the scale of failure demonstrated by the botched rail privatsiation.

 

[Merle Haggard]

I formed the opinion that when Mrs T. de-regulated long distance road coach licencing the aim was that the entrepreneurs so released would soon wipe out uncompetitive British Rail, solving the 'nationalised problem'.
One of the new coach companies formed was British Coachways but it wasn't enduringly successful. Anyone remember St Pancras Coach Station?
Another example of the line of Government thinking of the time was the Marylebone Coachway.
The resurgence of railways is amazing to anyone who remembers their treatment in the 1980s.

 

[Djgr]

I remember quotes around the time it was happening, that Thatcher had looked at privatising BR & didn't want to do it - not sure if there's any substance to any of those but I like to think so. Makes Major's decision even more boneheaded.

I think BT going private was the one that really worked ( wasn't that the first one? I wasn't terribly old when it happened ), although there's a lack of real competition even now. The other utilities I'm more dubious about , especially power distribution. Some industries like shipbuilding should never have been publically owned in the first place.

I do wonder if we would be better off with (Great) British Mobile. I defy anyone to tell me with evidence that they are on the best mobile tariff for them given that the Telecom Bandits engage in confusion marketing on widespread scale.

 

[takno]

I do wonder if we would be better off with (Great) British Mobile. I defy anyone to tell me with evidence that they are on the best mobile tariff for them given that the Telecom Bandits engage in confusion marketing on widespread scale.

I did try to switch when the last inflation-based rise came in, but as far as I can see £5.32 a month for 3gb on a rolling monthly contract on a decent network really is about as good as it gets right now.

I'm a bit torn, because people seem to be able to take over other peoples' phone numbers and commit massive fraud with ease, which suggests that a bit more bureaucracy would be handy at times. On the other hand none of the companies are making any interesting returns, so it's unlikely to make anything cheaper.

 

[ac6000cw]

I did try to switch when the last inflation-based rise came in, but as far as I can see £5.32 a month for 3gb on a rolling monthly contract on a decent network really is about as good as it gets right now.

I think you're probably correct there

I'm a bit torn, because people seem to be able to take over other peoples' phone numbers and commit massive fraud with ease, which suggests that a bit more bureaucracy would be handy at times.

I'd love to know how 'more bureaucracy' would reduce fraud?

I'd quite like a (legally mandated) system where you could roam onto other operators networks (at extra but reasonable cost) within the UK if you needed, to effectively extend coverage for everyone in less well served areas.

 

[yorksrob]

Interesting question.

From the Conservative privatisers point of view, the privatisation was supposed to reduce subsidy and reduce inefficiency. That clearly has failed.

As a passenger of BR, I was worried that the privatisation would lead to cuts and closures of non profitable railways, lack of through ticketing etc, run down of the railway. Clearly that hasn't happenned, so in a way the privatised railway has been successful.

Is the railway better now than BR ? In some ways -more frequency, some cheaper fares.

In some ways no - trains less comfortable, catering facilities, walk on fares very expensive.

So personally - I don't think it's a failure. Our network is still what it was, passengers were still here (before lockdown anyway) .

Was it worth destroying BR ? Still a no from me I'm afraid.

 

[Irascible]

I think important to recognize that things like shipbuilding (and I would also include Rolls Royce, car industry - British Leyland and some others, probably BaE) were not nationalized due to ideology, really, but more because it was strategically unthinkable to political and social mindsets of the era that the UK would be without what were seen as these key strategic industries, which were going broke at the time state ownership happened - esp in the post war and cold war era context and political mindset. I have heard Heseltine on that subject in the context of the aerospace industry making this point. So rather different than the debate about whether public services (like rail, post, energy and even tlecomms) should be publicly owned or not.

RR was a bailout & I don't really count them, but BAC & the shipyards to pick two were probably idealogical - you can as a government retain capability by ordering products, which does put tax income in the hands of shareholders but also means you don't have to run an industry. I think there was less about retaining capability & more just about retaining jobs, and unfortunately very little about modernising which is a bit of a theme of the era. I'm generally leftish I guess, but I started being aware of the world in the mid 70s & boy that was not an era of ideology I want to go near again... Ironically BR and the NCB - two of the biggest - were quite big on new ideas at the time, but they'd both been publically owned for quite a while.

This govt doesn't have any ideology, so I really have no idea what they're aiming for with the railway - am watching with some bemusement.

 

[Ken H]

the massive cost increases on the railway have been in infrastructure costs. Health and safety has made so much engineering more difficult and expensive*. Compensation payments to TOC's for possessions is another big cost. But I also think there is quite a lot of gold plating of many schemes which also drives up costs. When privatisation started, Railtrack got all its income from TOC's
But why has infrastructure got so expensive? And is Network Rail comparable with other rail infrastructure providers abroad?

* I am not saying Health and Safety is a bad thing, just trying to explain where the additional costs come from.

 

[Harold Hill]

First thing I thought was oh no, how long until a national rail strike?

 

[Dublo71]

I think that the only people likely to be most happy will be the unions.

 

[ABB125]

I think that the only people likely to be most happy will be the unions.

Except they aren't (at least, their official position is that they aren't!).

 

[Irascible]

But I also think there is quite a lot of gold plating of many schemes which also drives up costs.

Lack of competition in supply, no choice not to procure, pretty much guaranteed not to be good value when there's little control of the supply. The licence-to-filter-away-public-money model of "privatisation". Given how last year's govt spending went I can't see *that* aspect changing.

 

[tbtc]

I think that most of the people complaining about it being a "failure" were always going to want to complain that it was a "failure" - it's a very emotional/ political /sensitive issue, where people will want to see it through their own "prism"

But what are the criteria we're meant to assess it against?

We had pretty much twenty five years of solid year-on-year growth (before Covid), so that seems a fairly successful set of numbers

You can argue that the growth would have happened anyway under "BR" if you want (which may be true, may not be), but then you'd have to accept that the majority of cost increases would have happened under any model - the construction industry has seen costs rise significantly above inflation over the past generation, the Health & Safety requirements have become a lot more onerous (i.e. expensive) over this period too - I think that these would have significantly impacted upon the costs of any "BR" (and the construction costs/ Health'n'Safety had a much bigger impact on total railway costs than repainting trains every seven years and occasionally replacing staff uniforms!).

As I see it, the vast majority of the increase in spending has been on the infrastructure side of things, i.e. the publicly owned Network Rail. And much of this has been necessary, to provide the safe/reliable railway that we all say we want. So if most of the complaints about privatisation are about the increase in costs, and most of the increase in costs has been due to the publicly owned Network Rail, then I think we have to accept that a lot of the increase in costs would have happened regardless.

What other metrics can you use to assess the success of privatisation?

Network size? We've seen a number of lines opened/ re-opened since privatisation - obviously not enough to satisfy the Beeching obsessives but pretty much all of the low hanging fruit from the BR closures - as well as some brand new alignments. I appreciate that some enthusiasts are more interested in "how many miles of re-opened lines have there been" (as if this is an end in itself) - just as some people are more focussed on things like seat designs or liveries - it takes all sorts - but I think that anything "obvious" has been re-opened or is fairly far down the pipeline of things to be re-opened shortly

We've not seen many closures either - BR were still closing lines and stations in the 1990s but the number of lines/stations closed since privatisation has been pretty much a rounding error - either those which were a small price to pay to facilitate other projects like Croydon's Tramlink or were incredibly lightly used like Newhaven Marina or had no future like the stations built to serve IBM/ British Steel. However, the number of lines/stations closed in the past twenty five years has been significantly lower than the number of lines/stations closed in the previous twenty five years. There's not even been serious attempts to try to trim the network back (in the way that BR tried to chop things like the Settle & Carlisle)

We've not seen many lines see their services reduced - pretty much every line gets at least as good a service now as it did twenty five years ago - you can complain about the lack of direct links between far flung places but I think that pretty much every line still has at least the same number of services along it (even if in some cases these now terminate in a nearby city rather than running to random destinations hundreds of miles away, given the weird and wonderful through services that BR provided a handful of times a day). Whereas, in BR days, it wasn't uncommon to see cuts to services - evenings and Sundays especially - there was nothing to stop them - whereas a TOC has committed to maintaining a baseline service for the next "seven" years

Fares have generally only gone up once a year and generally only gone up by a maximum of RPI + 1% - and been fairly uniform across the country - compared to the way that BR had free hand to increase fares when and where they wanted. Obviously there are a few places that have seen bigger rises than others, but a regular train ticket today is broadly in line with what it cost in the 1990s in real terms. If you think that train tickets have gone up by a lot over twenty five years then I suggest you try bus travel (where there's no RPI links and no requirement for just one rise a year!)

In the "positive" column, there are a lot more cheap "advanced' fares nowadays. In the "negative" column, the restrictions are more onerous now than I remember (I grew up in the simple era of "blue days" and "white days" determining the price of your ticket!). The "off peak" seems to be getting shorter and shorter in some areas, as TOCs tried to make money since the inflation-linked ticket prices meant it was hard to just put prices up.

Staff wages have gone up by more than ticket prices over that period, and rail staff still have salary related pension and various other "conditions" that the scaremongers might have suggested would be removed by now.

Overall subsidy has certainly gone up by a lot, but then the private TOCs haven't been able to plug revenue holes by bumping up prices, closing lines and thinning out services. Complaining that the subsidy costs more whilst requiring all of the loss making services/ stations/ lines to keep at least the services inherited from BR seems a bit unfair (given that BR had a lot more tools at their disposal to plug gaps in funds)

The medium term nature of franchises has made it a lot harder to make cuts to things and has given the network much more stability. The Government could rob money from BR's budgets (because who would BR appeal to?) but they wouldn't pick a fight with people like Richard Branson or the German/ Dutch Government. So railways got to flourish without looking over their shoulder. Will the "nationalised" railway be able to fend off political interference? Look at other bits of the public sector, where the current Government are stuffing boards with "their kind of people", neutering them, ensuring that they will compliantly do what the Government want and not kick up a fuss. If the Government decide that the next "five year plan" won't be so generous (or cuts things it had previously promised to fund) then who's going to be able to argue?

DOO? There have been some minor increases (Drumgelloch to Edinburgh) but nothing on the scale that BR had previously introduced.

Strikes? We've had a few but not on the national scale that we used to. I don't know how many days were lost but generally only on a "local" level, however annoying it is for people in that area.

Private companies made money from the railway? That was the case a long time before privatisation. Some people are happy to disengeously confuse "subsidy"/ "revenue" and "profit", but the general level of "profit" was around 3%, so only enough to pay for one single year of inflationary increases - it's not the difference between the railway being profitable and unprofitable.

Also, what's your benchmark that you're measuring privatisation against? The previous twenty five years of BR (which closed routes, increased fares whenever they wanted, trimmed back many services etc)? The bits of public sector that have stayed in the public sector (Civil Service, NHS, Prisons, Education etc)? Your fantasy version of BR (in which it did all of the good things but was able to stand up to the Government and therefore didn't get affected by the decade of austerity that ruined a lot of public service

td;dr - most of the "negatives" would have happened anyway (the increased costs are generally on the "public sect infrastructure" side of things) or are the result of the messy part-privatisation (which has meant the Government kept their sticky fingers all over the railway and stopped private companies from having the freedoms that BR had) - against many criteria things are better (or at least no worse) now than twenty five years ago

Did we even have full privatisation?

Perhaps things weren’t privatised enough to deliver the efficiencies desired? We had a typical half measures approach incorporating loads of duplication and then are surprised when it didn’t perform as intended.

I’m not necessarily in support of the above view, just putting it out there and challenging the narrative.

Agreed - we seemed to go for a weird mix of private companies but Government stopping them from actually trimming back any dead wood (and also Government bringing us things like the IEP contract)

My feeling was that the "old" model had a lot of downsides but that no alternative could be guaranteed to work any better - but you can't blame private companies for everything when the Government were the ones pulling the strings

 

[nw1]

Perhaps the biggest problem was not so much public vs private, but the fragmentation of the network.

The theory was that competition would bring prices down, but it's difficult to have true competition on a constrained system like the railways where there are only limited paths.

Public or private, it should be one organisation running the railways (apart, perhaps from some local self-contained branch lines - such as there are post-Beeching anyhow, which could be run by local companies - as they did in Germany as long ago as the mid-80s). But to prevent the issues with monopolies, there needs to be some regulation on fares and government subsidies for unprofitable but socially-necessary lines.

As for the T***es, don't even get me started on them.

Incidentally... to add, I am wondering if some of the early 1990s service reductions were on ideological grounds, to make BR 'seem' bad and privatisation 'seem' better. Not saying this did happen, but I do remember the early 90s in particular being a period where the railway seemed to be being run down on some routes. For example I remember the 1993 timetable had just two (!) trains an hour down the Portsmouth Direct, the worst service since before 1981.


Perhaps it was just a reaction to the early 1990s recession, but I do seem to recall things were recovering by 1993.

 

[coppercapped]

Well fancy that. 'Privatisation' has been a failure. Who would have thought it? Countless millions wasted to satisfy Tory backwoodsmen, the problem being that those who hailed the break up of British Rail will now be shouting how GBR is the way forward. It would be nice to hear some of the Tories who have wasted all this money admit that they were wrong. The whole saga has seen fortunes made by contractors sucking up sums of money BR could only dream about. The guilty politicians will, of course, blame the Pandemic and claim that they are riding to the rescue, conveniently ignoring that the rest of the world is facing the same problems. Forward the railway with a silly name. Surely something like British Railways or British Rail would be more appropriate. Still, I suppose that Northern Ireland Railways will carry on being state owned as before as a prize for not being privatised in the first place. What goes round comes round.

'Privatisation' has not been a failure. Much of the model is being retained - for example, independent freight operating companies, open access passenger train operators, third party ownership and supply of rolling stock.

What is being scrapped is the current model of franchising passenger train operations. It should be very clearly understood that the model of franchising which has just been dropped is very different from the model set up by the Railways Act 1993.

The new framework proposed in the White Paper still sees the need for private operators to compete for 'franchises' except that as these will no longer include the need for the potential TOC to both accept the Treasury's growth model for the economy and its own predictions for the future are now called 'concessions'.

The White Paper is fundamentally a smoke screen to deflect attention and disguise the appalling mess the Department for Transport has created in attempting to be judge, jury and executioner and Fat Controller of the railways since it abolished the Office for Passenger Rail Franchising in January 2001; created and then absorbed some of the functions of the erstwhile Strategic Rail Authority and emaciated the Office of the Rail Regulator which became, firstly, the Office of Rail Regulation and then the Office of Rail and Road.

 

[yorksrob]

Having recently had my last train via one operator cancelled, I still had another operator refusing to let me on their train (with a non-AP, albeit via a different route ticket). And that's with written, stamped confirmation from the first operator that the train had been cancelled and "please can you let him use your service instead". I was even treated to some B.S. along the lines of "if you bought a tin of beans fromm one shop you wouldn't take it back to another
.... etc.

That sort of thing really is a failure of privatisation and needs to be quashed.

 

[coppercapped]

Perhaps the biggest problem was not so much public vs private, but the fragmentation of the network.

The theory was that competition would bring prices down, but it's difficult to have true competition on a constrained system like the railways where there are only limited paths.

This is absolutely incorrect. Any reading or understanding of the way that privatisation came about and was organised would realise this statement is not true.

While there was general agreement that the involvement of the private sector would reduce costs and improve service levels the issue to be solved was how to pay private companies to operate loss-making services in a manner that was transparent.

The issue of 'on rail' competition was recognised very early in the debate for exactly the reasons you mention as well as the need to find a method of stopping operators 'cherry picking' routes and times and also running 'spoiler' trains just in front of another operator's principal express.

This is why the model was dropped and cost reductions driven through the franchise competition process whereby the winner would gain a time-limited monopoly of services in a given geographic area. It was recognised that there would be some overlaps at the boundaries but it meant that payments were allocated to a set of services the broad outline of which were defined in the contract.

Public or private, it should be one organisation running the railways (apart, perhaps from some local self-contained branch lines - such as there are post-Beeching anyhow, which could be run by local companies - as they did in Germany as long ago as the mid-80s). But to prevent the issues with monopolies, there needs to be some regulation on fares and government subsidies for unprofitable but socially-necessary lines.

As for the T***es, don't even get me started on them.

Incidentally... to add, I am wondering if some of the early 1990s service reductions were on ideological grounds, to make BR 'seem' bad and privatisation 'seem' better. Not saying this did happen, but I do remember the early 90s in particular being a period where the railway seemed to be being run down on some routes. For example I remember the 1993 timetable had just two (!) trains an hour down the Portsmouth Direct, the worst service since before 1981.


Perhaps it was just a reaction to the early 1990s recession, but I do seem to recall things were recovering by 1993.

There was a nationwide recession in the early 1990s. The reasons are complex and don't really belong here, but a world wide slowdown coincided with a home grown SNAFU. The Wikipedia article https://en.wikipedia.org/wiki/Early_1990s_recession and this article https://www.economicshelp.org/macroeconomics/economic-growth/uk-recession-1991/ describe the two recessions.

BR did not operate in a vacuum.

 

[WesternLancer]

I think that most of the people complaining about it being a "failure" were always going to want to complain that it was a "failure" - it's a very emotional/ political /sensitive issue, where people will want to see it through their own "prism"

But what are the criteria we're meant to assess it against?

We had pretty much twenty five years of solid year-on-year growth (before Covid), so that seems a fairly successful set of numbers

You can argue that the growth would have happened anyway under "BR" if you want (which may be true, may not be), but then you'd have to accept that the majority of cost increases would have happened under any model - the construction industry has seen costs rise significantly above inflation over the past generation, the Health & Safety requirements have become a lot more onerous (i.e. expensive) over this period too - I think that these would have significantly impacted upon the costs of any "BR" (and the construction costs/ Health'n'Safety had a much bigger impact on total railway costs than repainting trains every seven years and occasionally replacing staff uniforms!).

As I see it, the vast majority of the increase in spending has been on the infrastructure side of things, i.e. the publicly owned Network Rail. And much of this has been necessary, to provide the safe/reliable railway that we all say we want. So if most of the complaints about privatisation are about the increase in costs, and most of the increase in costs has been due to the publicly owned Network Rail, then I think we have to accept that a lot of the increase in costs would have happened regardless.

What other metrics can you use to assess the success of privatisation?

Network size? We've seen a number of lines opened/ re-opened since privatisation - obviously not enough to satisfy the Beeching obsessives but pretty much all of the low hanging fruit from the BR closures - as well as some brand new alignments. I appreciate that some enthusiasts are more interested in "how many miles of re-opened lines have there been" (as if this is an end in itself) - just as some people are more focussed on things like seat designs or liveries - it takes all sorts - but I think that anything "obvious" has been re-opened or is fairly far down the pipeline of things to be re-opened shortly

We've not seen many closures either - BR were still closing lines and stations in the 1990s but the number of lines/stations closed since privatisation has been pretty much a rounding error - either those which were a small price to pay to facilitate other projects like Croydon's Tramlink or were incredibly lightly used like Newhaven Marina or had no future like the stations built to serve IBM/ British Steel. However, the number of lines/stations closed in the past twenty five years has been significantly lower than the number of lines/stations closed in the previous twenty five years. There's not even been serious attempts to try to trim the network back (in the way that BR tried to chop things like the Settle & Carlisle)

We've not seen many lines see their services reduced - pretty much every line gets at least as good a service now as it did twenty five years ago - you can complain about the lack of direct links between far flung places but I think that pretty much every line still has at least the same number of services along it (even if in some cases these now terminate in a nearby city rather than running to random destinations hundreds of miles away, given the weird and wonderful through services that BR provided a handful of times a day). Whereas, in BR days, it wasn't uncommon to see cuts to services - evenings and Sundays especially - there was nothing to stop them - whereas a TOC has committed to maintaining a baseline service for the next "seven" years

Fares have generally only gone up once a year and generally only gone up by a maximum of RPI + 1% - and been fairly uniform across the country - compared to the way that BR had free hand to increase fares when and where they wanted. Obviously there are a few places that have seen bigger rises than others, but a regular train ticket today is broadly in line with what it cost in the 1990s in real terms. If you think that train tickets have gone up by a lot over twenty five years then I suggest you try bus travel (where there's no RPI links and no requirement for just one rise a year!)

In the "positive" column, there are a lot more cheap "advanced' fares nowadays. In the "negative" column, the restrictions are more onerous now than I remember (I grew up in the simple era of "blue days" and "white days" determining the price of your ticket!). The "off peak" seems to be getting shorter and shorter in some areas, as TOCs tried to make money since the inflation-linked ticket prices meant it was hard to just put prices up.

Staff wages have gone up by more than ticket prices over that period, and rail staff still have salary related pension and various other "conditions" that the scaremongers might have suggested would be removed by now.

Overall subsidy has certainly gone up by a lot, but then the private TOCs haven't been able to plug revenue holes by bumping up prices, closing lines and thinning out services. Complaining that the subsidy costs more whilst requiring all of the loss making services/ stations/ lines to keep at least the services inherited from BR seems a bit unfair (given that BR had a lot more tools at their disposal to plug gaps in funds)

The medium term nature of franchises has made it a lot harder to make cuts to things and has given the network much more stability. The Government could rob money from BR's budgets (because who would BR appeal to?) but they wouldn't pick a fight with people like Richard Branson or the German/ Dutch Government. So railways got to flourish without looking over their shoulder. Will the "nationalised" railway be able to fend off political interference? Look at other bits of the public sector, where the current Government are stuffing boards with "their kind of people", neutering them, ensuring that they will compliantly do what the Government want and not kick up a fuss. If the Government decide that the next "five year plan" won't be so generous (or cuts things it had previously promised to fund) then who's going to be able to argue?

DOO? There have been some minor increases (Drumgelloch to Edinburgh) but nothing on the scale that BR had previously introduced.

Strikes? We've had a few but not on the national scale that we used to. I don't know how many days were lost but generally only on a "local" level, however annoying it is for people in that area.

Private companies made money from the railway? That was the case a long time before privatisation. Some people are happy to disengeously confuse "subsidy"/ "revenue" and "profit", but the general level of "profit" was around 3%, so only enough to pay for one single year of inflationary increases - it's not the difference between the railway being profitable and unprofitable.

Also, what's your benchmark that you're measuring privatisation against? The previous twenty five years of BR (which closed routes, increased fares whenever they wanted, trimmed back many services etc)? The bits of public sector that have stayed in the public sector (Civil Service, NHS, Prisons, Education etc)? Your fantasy version of BR (in which it did all of the good things but was able to stand up to the Government and therefore didn't get affected by the decade of austerity that ruined a lot of public service

td;dr - most of the "negatives" would have happened anyway (the increased costs are generally on the "public sect infrastructure" side of things) or are the result of the messy part-privatisation (which has meant the Government kept their sticky fingers all over the railway and stopped private companies from having the freedoms that BR had) - against many criteria things are better (or at least no worse) now than twenty five years ago



Agreed - we seemed to go for a weird mix of private companies but Government stopping them from actually trimming back any dead wood (and also Government bringing us things like the IEP contract)

My feeling was that the "old" model had a lot of downsides but that no alternative could be guaranteed to work any better - but you can't blame private companies for everything when the Government were the ones pulling the strings

Good and thoughtful post - but Railtrack costs were going through the roof before publicly owned NR came along (WCML modernization being the extreme example)

Having recently had my last train via one operator cancelled, I still had another operator refusing to let me on their train (with a non-AP, albeit via a different route ticket). And that's with written, stamped confirmation from the first operator that the train had been cancelled and "please can you let him use your service instead". I was even treated to some B.S. along the lines of "if you bought a tin of beans fromm one shop you wouldn't take it back to another
.... etc.

That sort of thing really is a failure of privatisation and needs to be quashed.

Yep - one short customer orientated example of why a majority of the public that use trains want rid of the current system. Abd another example of why many with choice to use something else will not use the train or would not do so again after that.