Had a quick read through it and it seems to skirt around a number of issues. Essentially it's mostly a narrative and set of opinions and doesn't offer any real solutions.
There's a collision course coming between the TOCs, NR, the Government, the Unions and passengers. There is a limit of how much you can squeeze out of passengers and right now a limit of tax payers money. The industry is too expensive and is stuck in a cul-de-sac, which it cannot seem to easily address, exacerbated by increases in passenger numbers.
People, cannot seem to decide whether it is a business or public service. This seems to be a political question.
Add to this there are a couple of real elephants in the room which the politicians seem unable to address or won't address. One wage levels are out of control and privatisation has not addressed costs or introduced much in the way or real efficiency - apart from freight.
Firstly private companies seen unable to make efficiencies. Yes, passenger numbers have doubled but so have costs. There have been many suggestions to why this may be including:
- Increase in capital costs, introduced to accommodative additional numbers and to make up for past under investment.
- Increase in staff costs, while the unions criticise privatisation there is no question their members have done very well out of it. For example drivers are now on 50-75k per year, which puts them in the top 5-10% of earners. This wasn't the case under BR.
- Running more, shorter trains. In theory a longer train, with the same number of crew taking the same path as a shorter train is cheaper, provided seat factors are kept high through yield management. The airline industry cut costs from the 60s using larger planes, whereas the rail industry has used shorter trains, requiring more crew, more trains, more paths and in some cases more infrastructure. Although it must be recognised that rail is not the same market as a whole and people demand walk on travel, where frequency is important.
- More industry interfaces and management. In any company management is a sign of inefficiency, very small companies tend to have less of it, because it's expensive. In some cases there are no managers, for example in professional practice. The railway's solution to everything seems to introduce more, often at the expense of front line workers. Middle management numbers have spiralled under privatisation. This was not well understood at privatisation essentially the idea was to introduce competition, all that has happened is complexity and interfaces (which require more managers) have gone up.
- Artificial costs have been introduced - compensation, accounting for staff travel, train leasing and so on
- Constant interference from government has led to private companies building in more cost because of risk. There was less government control and money going in when it was nationalised.
- Innovation in the rail industry is low, although there is signs this is changing, R&D budgets are almost non-existent in many cases.
The government doesn't seen to want to introduce full privatisation, as suggested by Dr Richard Wellings, because of the inevitable fall out when many lines are closed. There is also a lack of consideration by economists in the UK many of our cities were built around railways, and people rely on rail for commuting, especially in London. High house prices mean people need to commute more in the SE. Closing rural lines could potentially mean more rural depopulation, which means more people move to cities, which in turn puts house prices under pressure, which means some people have to commute.
On the other hand the government doesn't want to introduce full nationalisation, nor control wages, because it would be seen as interfering in the market. Even though the market is almost entirely artificial and does not operate like most other businesses.
