Shaw Report into Network Rail structure published

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hwl

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The Shaw review of NR structure and future has just been published (on busy news day!):

https://www.gov.uk/government/uploa...uture-shape-and-financing-of-network-rail.pdf

Recommendations

1: Place the needs of passengers and freight shippers at the heart of rail infrastructure management

2: Focus on the customer through deeper route devolution, supported by independent regulation

3: Create a route for the North

4: Clarify the government’s role in the railway and in Network Rail

5: Plan the railway based on customer, passenger and freight needs

6: Explore new ways of paying for the growth in passengers and freight on the railway

7: Develop industry-wide plans to develop skills and improve diversity

So no real surprises…
 
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LNW-GW Joint

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This report is now available, and it rules out full privatisation and many of the wackier proposals.
http://www.bbc.co.uk/news/uk-35822406
https://www.gov.uk/government/publications/shaw-report-final-report-and-recommendations

It concentrates on Network Rail's structure and operation.
The main thing seems to be Route devolution, including a new North route. This would match Transport for the North boundaries.
Unlike BR's first Regional structure, it looks like Sheffield is included the "North" and not "Eastern".
It also hints at a future Midlands route combining East and West.
As ever with redrawing of boundaries, you end up with twilight zones which are unhappy with the new order.
Nothing damaged the Midland structure more than splitting Bristol-Leeds-Carlise between 3 BR regions (4 for a time after North Eastern Region was invented).
I well remember trains "delayed on the Western Region" being an excuse offered by the LMR at New St.

There's a lot to absorb here. It isn't all dry financing by any means.
It covers Network Rail's responsiveness to its real customers (passenger and freight users), monolithic centralised structure and much else.
Seems a good insightful report. The unions have produced the predictable rubbishing response, probably before having read it.

Recommendation 1: Place the needs of passengers and freight shippers at the heart of rail infrastructure management.
Train operators should drive this customer focus into Network Rail through scorecards and agreed action
plans, recognising they are sharing use of the network with others and operating within a national (and international) system.

Recommendation 2: Focus on the customer through deeper route devolution, supported by independent regulation.
Building on the current Network Rail move to greater devolution to its routes, there should be a step-change in the degree of autonomy of these routes to deliver more flexibly and responsively for their customers, passengers and freight shippers.
This change should be supported by regulation by the independent Office of Road and Rail (ORR).

Recommendation 3: Create a route for the North. This new route will work closely with the customers there and in particular the new regional Government body, Transport for the North. Network Rail should also work closely with other integrated transport authorities, city regions, and London, as funding and delivery models evolve.
HS2 will remain a separate organisation but be able to draw on the system operator for access planning and timetabling in particular.

Recommendation 4: Clarify the government’s role in the railway and Network Rail.
In particular, the roles of the Department for Transport (DfT) – as funder, client and owner of Network Rail – should be considered and clarified.
As the body responsible for transport in England and Wales, the DfT should also develop a visible longer-term strategy for rail
travel, coordinating as appropriate with the governments of Scotland and Wales.

Recommendation 5: Plan the railway based on customer, passenger and freight needs.
Enhancement planning should be generated from passenger and freight shipper requirements.
Routes should be given the freedom to build up their plans based on these needs and recognising the role of the railway in the wider transport, economic and social objectives of the area.

Recommendation 6: Explore new ways of paying for the growth in passengers and freight on the railway.
Further options for involving private sector finance – for example, from letting a concession, or involving suppliers in technological investment – should be explored to release Government capital, encourage innovation, and speed up delivery of improvements for passengers.
Routes also be required and empowered to find local sources of funding and financing, including from those (such as local businesses or housing
developers, for example) who stand to benefit from new or additional rail capacity.

Recommendation 7: Develop industry-wide plans to develop skills and improve diversity.
People are one of the railway’s greatest assets. But the industry as a whole needs to support and grow the pool of skilled and talented
people working in the railway better and encourage more diversity.
 
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Gareth Marston

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This report is now available, and it rules out full privatisation and many of the wackier proposals.
http://www.bbc.co.uk/news/uk-35822406
https://www.gov.uk/government/publications/shaw-report-final-report-and-recommendations

It concentrates on Network Rail's structure and operation.
The main thing seems to be Route devolution, including a new North route. This would match Transport for the North boundaries.
Unlike BR's first Regional structure, it looks like Sheffield is included the "North" and not "Eastern".
It also hints at a future Midlands route combining East and West.
As ever with redrawing of boundaries, you end up with twilight zones which are unhappy with the new order.
Nothing damaged the Midland structure more than splitting Bristol-Leeds-Carlise between 3 BR regions (4 for a time after North Eastern Region was invented).
I well remember trains "delayed on the Western Region" being an excuse offered by the LMR at New St.

There's a lot to absorb here. It isn't all dry financing by any means.
It covers Network Rail's responsiveness to its real customers (passenger and freight users), monolithic centralised structure and much else.
Seems a good insightful report. The unions have produced the predictable rubbishing response, probably before having read it.

Rec 4 will cause chair sucking in Whitehall as it implies there's not been clarity from Government to date no doubt this will end up like MCNulty ignored.
 

Philip Phlopp

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monolithic centralised structure

Mark Carne's biggest failing - things were plodding along fairly nicely under David Higgins, then Mark came in and it was back to centralisation and HQ became more like Death Star.

There never has been a happy medium though, in the dim and distant past, when the regions were autonomous, we had Western Region taking the **** with their special locomotives, Eastern Region with their special signalling and various other special bits of equipment, radios and route instructions.

Ah well, here we go again.
 

WatcherZero

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All those recommendations seems pretty light weight and hands off. Has Shaw tasked with producing a radical shakeup (and reducing the amount government has to spend on rail) instead produced a damp squib?
 

coppercapped

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Mark Carne's biggest failing - things were plodding along fairly nicely under David Higgins, then Mark came in and it was back to centralisation and HQ became more like Death Star.


I see it slightly differently - but I do agree that there were changes from centralisation to decentralisation and then back to centralisation which has since been relaxed. And now Shaw recommends that this relaxation continues...

The current Chairman, Sir Peter Hendy replaced Richard Parry-Jones in June 2015. In turn he took over from Rick Haythornthwaite in 2012. The initial decentralisation process started, as far as I can make out, during Haythornwaite's watch.

P-J was Group Vice President-Global Product Development, Chief Technical Officer and Head of Global R&D Operations at Ford Motor Company until he retired in 2007. His Wikipedia entry states that “(he) directed the concurrent development of dozens of vehicles at Ford”.

I would suggest that this meant Ford used some form of matrix structure for its organisation - in the sense that common engines and suspension components could be used with many different models. Looking back, NR’s difficulties appear to have started shortly after P-J took over. Higgins and his MD Network Operations, Robin Gisby, started devolving NR into areas when Haythornthwaite was Chairman and the SWT-NR Alliance was set up during their watch.

Rail Technology Magazine wrote (in September 2014) that Gisby had at one stage been considered a potential successor to David Higgins as chief executive of Network Rail – but the organisation (which I suspect means P-J) decided to appoint an external candidate in the form of Mark Carne. Gisby retired a year ago - but as he is only about 59 or 60 that struck me at the time as being a bit odd. I think he was in effect ‘constructively dismissed’ as being out of sympathy with P-J.

I suspect that P-J didn’t appreciate the differences between Ford and Network Rail. One is a manufacturing company and the other a service industry beholden to Government. While car engines can be used across a range of models - and can come from one design office - civil engineering, signalling and electrification works for railways are custom made for each application. They may use common components, pre-cast concrete bridge spans, overhead line registration equipment, axle-counters and so on, but the implementation is very project specific. The components could be responsibility of the central office - but the project design and installation responsibility should certainly lie with those who are going to use it.

As NR had only one Major Infrastructure Projects team, I suspect that the people in it, reporting through a chain which did not directly link to the regions, could not prioritise their work. They were pulled this way and that - hence the NR man I saw in Swindon in 2015 giving a talk to the IET on the modernisation of the Western essentially waved his hands in the air claiming that it was all very difficult.

There never has been a happy medium though, in the dim and distant past, when the regions were autonomous, we had Western Region taking the **** with their special locomotives, Eastern Region with their special signalling and various other special bits of equipment, radios and route instructions.

Ah well, here we go again.

T'was ever thus - at some point a particular form of organisation runs out of puff/no longer matches the demands placed on it/needs a shake-up/whatever and it will need changing. The skill at director level is judging when that time has come.
 

deltic

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All those recommendations seems pretty light weight and hands off. Has Shaw tasked with producing a radical shakeup (and reducing the amount government has to spend on rail) instead produced a damp squib?

Looks like it - when your first recommendation is "Place the needs of passengers and freight shippers at the heart of rail infrastructure management." you wonder why it took so long to produce.

And why does create a route for the North figure at all in this report - it seems totally unconnected to looking at the structure and future of Network Rail.
 

coppercapped

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All those recommendations seems pretty light weight and hands off. Has Shaw tasked with producing a radical shakeup (and reducing the amount government has to spend on rail) instead produced a damp squib?

Shaw was not charged with a radical shake-up, she was tasked with looking at the future financing of NR. There was never any suggestion that the amount government spends on rail should be reduced - rather that avenues for involving 3rd parties in the financing of improvements should be investigated. Her scoping report showed that for this to be successful the structure of the organisation had also to be examined.

In fact, the general low key recommendations are a good sign. There will not be any large scale re-organisation turmoil but a continuation of devolving the organisation to be closer to its customers who are the TOCs and FOCs and not the ORR and DfT.

The most significant recommendation is the the DfT should re-examine its relationship with NR - being client, owner and financier all at the same time does lead to a lot of confusion.
 

3141

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All those recommendations seems pretty light weight and hands off. Has Shaw tasked with producing a radical shakeup (and reducing the amount government has to spend on rail) instead produced a damp squib?

One problem is that reports commissioned following a big crisis are expected to be presented quite quickly, and though a very competent person may have been asked to do the job it's unlikely that a single person has the necessary range and grasp of all the issues.

What's really needed is a group of people with a solid background in transport who are allowed a sufficient timescale to investigate the issues thoroughly.

But what's also needed is freedom from political constraints - an unlikely situation. I'm sure Nicola Shaw knew that recommending nationalisation wasn't an option. Probably not handing large chunks of the network to three or four private companies for 20 years. Nor closures in any number. Nor a reduction in government expenditure achieved by substantially increasing fares.
 

Railman

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I think the report comes up with the blindingly obvious but does not give any indication as to how anything will be achieved.
How the WCML and ECML will fair if there is a new Northern route will be interesting?
Rec 7 developing and growing staff skills is completely alien to NR which is based on management for managements sake with extra jobs for more managers. Lots of posts with no REAL responsibility but lots of meetings.
Still on the bright side looks like a good cover to "add the cost of re-organisation" to smash through the £40 billion debt level. Carry on everybody, carry on.
 

The Ham

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As I understand it from what others have posted under BR the regions were too autonomous and acted in their own interests. Whilst currently NR is too centralised.

It would appear what is needed is like a burger franchise model where each is autonomous within a clear set of guidelines and using a defined list of suppliers (that list can be fairly long and must have provision for new ones to be trailed and added).

In doing so there should also be some budget allowance which is to be allocated to be allocated by the region, ideally with any cost savings or extra income generated to be retained by that region.
 

DarloRich

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Several posters need to go back to the terms of reference of this report, the Hendy report and the Bowe review.

Mark Carne's biggest failing - things were plodding along fairly nicely under David Higgins, then Mark came in and it was back to centralisation and HQ became more like Death Star.

There never has been a happy medium though, in the dim and distant past, when the regions were autonomous, we had Western Region taking the **** with their special locomotives, Eastern Region with their special signalling and various other special bits of equipment, radios and route instructions.

Ah well, here we go again.

Maybe, maybe not. A lot depends on the contracting autonomy granted to routes. There is clear evidence across many industries for the cost savings achieved in centralized Contracting/ purchasing.

The interesting question is what products the routes are allowed freedom to purchase and what must be purchased centrally.

As I understand it from what others have posted under BR the regions were too autonomous and acted in their own interests. Whilst currently NR is too centralised.

It would appear what is needed is like a burger franchise model where each is autonomous within a clear set of guidelines and using a defined list of suppliers (that list can be fairly long and must have provision for new ones to be trailed and added).

In doing so there should also be some budget allowance which is to be allocated to be allocated by the region, ideally with any cost savings or extra income generated to be retained by that region.

That is what may happen and seems sensible

Why are the unions mumbling? I don't see anything wrong.

Just have a little think why - lots of people uprooted and moved to central locations, leading to a loss of skills and experience as the old hands decide they don't fancy the change and a lot of hassle, stress and expense to all involved all to be repeated a few years later.

That and the potential for job losses.
 

LNW-GW Joint

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As I understand it from what others have posted under BR the regions were too autonomous and acted in their own interests. Whilst currently NR is too centralised.

It would appear what is needed is like a burger franchise model where each is autonomous within a clear set of guidelines and using a defined list of suppliers (that list can be fairly long and must have provision for new ones to be trailed and added).

In doing so there should also be some budget allowance which is to be allocated to be allocated by the region, ideally with any cost savings or extra income generated to be retained by that region.

BR started with fierce loyalty to the old "big 4", and it took many years before the corporate centre finally took control (the elimination of the diesel hydraulics finally nailed the GW faction).

I don't always see eye to eye with what Christian Wolmar writes, but he has a good piece in the current Rail, looking at how railways work in Melbourne.
They have an even crazier system of ownership, franchising and control than we do, partly because of devolution (at federal, state and city level).

I always thought BR had its best organisation at the point when the Regions were abolished in favour of the business sectors, but no sooner had that happened in 1993 than it was all thrown up in the air for privatisation.

I'm looking forward to a localised Network Rail mixing it with urban developers and attempting to get project funding.
Think in terms of Electric Spine being paid for by a precept on the increase in house/business values in nearby towns getting the benefit, rather than by a block vote of £x million by the DfT.
It worked for the Crossrail core.
 
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Philip Phlopp

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Maybe, maybe not. A lot depends on the contracting autonomy granted to routes. There is clear evidence across many industries for the cost savings achieved in centralized Contracting/ purchasing.

The interesting question is what products the routes are allowed freedom to purchase and what must be purchased centrally.

I'm certainly not arguing that procurement couldn't be better and keeping that centralised is a good thing, but what you're able to procure (through HQ) needs to be appropriate for what's happening on the ground, what's ordered by HQ for a station in Cumbria needs to be appropriate for that station, the route, the typical passengers, the service pattern, it might not be suitable to do the same there as you would do in Kent or Essex.
 

DarloRich

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I'm certainly not arguing that procurement couldn't be better and keeping that centralised is a good thing, but what you're able to procure (through HQ) needs to be appropriate for what's happening on the ground, what's ordered by HQ for a station in Cumbria needs to be appropriate for that station, the route, the typical passengers, the service pattern, it might not be suitable to do the same there as you would do in Kent or Essex.

happy to agree entirely with that statement - although we must ensure that the required items offer good value, fits within broad specifications, meets corporate/legal governance requirements etc and are not simply a "personal" choice etc

What concerns me is that we end up with routes being able to buy "big ticket items" like OTM's which are then under utilised and thus waste resource.

it will be an interesting change whatever happens
 

GRALISTAIR

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Just have a little think why - lots of people uprooted and moved to central locations, leading to a loss of skills and experience as the old hands decide they don't fancy the change and a lot of hassle, stress and expense to all involved all to be repeated a few years later.

That and the potential for job losses.

Yes I suppose that makes sense. Some people are very conservative with a small "c" . I don't understand the mindset having been born in Chester, lived in Preston went to university in London moved to the USA and lived in 4 different states. I also suppose the constant reorganization is very unsettling to many too.
 

edwin_m

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Yes I suppose that makes sense. Some people are very conservative with a small "c" . I don't understand the mindset having been born in Chester, lived in Preston went to university in London moved to the USA and lived in 4 different states. I also suppose the constant reorganization is very unsettling to many too.

In many parts of British Rail you had to move around if you wanted to get ahead. But the blow was softened a bit by free or cheap travel to work and a management tolerance for people making long commutes - and you were probably more likely to get a seat 20+ years ago. I would guess most of those benefits no longer apply to people moved around by NR.

Factors such as partners having careers too, and the huge misalignment in property values between different regions, also make it difficult for many people to consider a relocation.

Also in some specialist areas such as timetabling, people would probably have expected to spend an entire career in the same Regional office. I should think when a move was forced on them many of the old hands who kept the job going would just have taken their generous railway pensions and left.
 

Mikey C

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Bit of a non event really.

I'm sure when the report was commissioned, the government expected something more radical, such as privatisation, a regional breakup or letting train operators take over much of Network Rail's activities.

As it is, politically it's a bit of a non event.
 

HSTEd

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As I recall there was at least one Crewe driver in the 80s who lived near Bournemouth.
 

carriageline

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The weirdest part for me, was suggesting selling off WHOLE routes (Anglia and Wessex mooted as profitable) for 'fixed time licensces'
 

DarloRich

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Bit of a non event really.

I'm sure when the report was commissioned, the government expected something more radical, such as privatisation, a regional breakup or letting train operators take over much of Network Rail's activities.

As it is, politically it's a bit of a non event.

Have you thought the result might be the result wanted by the politicians?
 

WatcherZero

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Not really, the politicians desire going in was to find a way to transfer all the NR debt back off the national balance sheet.
 

DarloRich

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Not really, the politicians desire going in was to find a way to transfer all the NR debt back off the national balance sheet.

there is no way that report was published without the approval of the government and without meeting with their approval - from what i understand there was a great deal of horse trading over the contents of the report until the last moment.
 
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mcmad

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What concerns me is that we end up with routes being able to buy "big ticket items" like OTM's which are then under utilised and thus waste resource.

it will be an interesting change whatever happens

That's already happening with things like the mobile maintenance trains and the road/rail gully suckers being ordered (and presumably paid) by the routes albeit ordered as 1 central order.
 

WatcherZero

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there is no way that report was published without the approval of the government and without meeting with their approval - from what i understand there was a great deal of horse trading over the contents of the report until the last moment.

Your forgetting Shaw was commissioned by the Treasury not the Dft to advise on the longer term future shape and financing of Network Rail.

McCloughlin speech to Parliament today, seems to be kicking Shaw in to long grass and running with the CMA report saying he will study it and plan legislation to implement it.
 
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DarloRich

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but my understanding of the CMA ( Competition & Markets Authority) report indicated a focus ion generating "on rail" competition by means of changes to how open access operations are granted network access and changes to the style of franchise to allow for direct competition on WCML, ECML & GWML.

It did not deal with how the network was owned and funded beyond changes to the track access regime - at least on my scan reading.
 
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Philip Phlopp

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but my understanding of the CMA ( Competition & Markets Authority) report indicated a focus ion generating "on rail" competition by means of changes to how open access operations are granted network access and changes to the style of franchise to allow for direct competition on WCML, ECML & GWML.

It did not deal with how the network was owned and funded beyond changes to the track access regime - at least on my scan reading.

Yes, it's trains and not really track relevant. The only thing that might come out of it is a return to Chiltern style franchises, but they're a rubbish idea when government borrowing costs are so low.

Competition of the sort the CMA talk about will never happen, they're a bunch of nutters who think the railway is like the aviation sector. Franchising isn't working, nothing is really working properly, everything is varying degrees of broken and has been since the 1923 grouping.
 

Mikey C

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Have you thought the result might be the result wanted by the politicians?

Probably not, certainly as far as the more right wing Tories were probably concerned.

Either way it was buried on budget day...
 
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