Chairman Pip's Railway Thoughts

A gaffe, wrapped in a cock-up, inside a shambles

Posted in Business, Customer service, Great Britain, Politics by Chairman Pip on 9 October 2012

There’s no doubt that the furore over the monumental feck-up that is the award of the West Coast franchise has significant momentum to run and run. To use a turn of phrase from Malcolm Tucker, there seems little doubt that this is an “omnishambles” of the highest order, as the civil servants at the DfT gave out erroneous information to the four companies short-listed to bid. Not being either an economist or a business expert, I’m not even going to attempt to tell you precisely what the erroneous information was, or how it affected the bid process. I’ll leave that to Robert Peston, the BBC’s business editor. But the fact that First had to have the franchise removed because the taxpayer would have been horrendously exposed to financial risk, even in spite of their business model, shows what a screw-up the entire process was. Whether this whole thing is related to Richard Branson’s wild accusations about First’s bid being way over the top or not I don’t know. Given that Virgin received the same incorrect information from the DfT that First did, it’s entirely possible that had they won the bid this whole issue would have come up, and they would have had the franchise removed. Which no doubt would have led to a similar strop from Beardy.

What does this all mean? Well, for passengers, nothing. The DfT have guaranteed that services will be unaffected by their colossal blunder – after the 8th December, which is the scheduled end of Virgin’s existing franchise, services will continue as per the timetable, and tickets will continue to be accepted. Who will run the services is a question that still needs answering, with either Virgin receiving a management contract for the duration of the new bid process, or else Directly Operated Railways taking the franchise into public ownership until the new operator is due. That option though has met with a certain amount of sniggering, as it is put about that the people that caused the feck-up in the first place are now left running the service. Which obviously means that on the first day trains will start falling off the rails. Despite the fact that, although DOR is owned by the DfT, it is a separately managed organisation that is making not a bad fist of running East Coast.

Lots of people are using this incident as an excuse to once again raise the idea of re-nationalising the railways. Of course you have Mr Potato Head has been saying that all along. But now, other elements are adding their voices to it, with Wolmar questioning the whole franchising concept, and the Labour Party stating that they are ready to adopt it as official policy. The thing is, no one in the mainstream press has said anything about just why we have gotten to this situation in the first place, and why civil servants at the DfT are the ones drawing up the specifications for franchises. A situation that stems, in my view anyway, from the abolition of the Strategic Rail Authority, the public body that was responsible for oversight of the rail industry. But who was it that abolished the SRA and brought its functions within the DfT? Why, it was Alistair Darling, the then Secretary of State for Transport. Who you may recall was a member of the last Labour government. It was Labour that divested itself of the corporate experience that the SRA encompassed and decided that it (in its government form) could do better. Can we say that things have been better since? Just taking everything back into public ownership is no guarantor of quality, because you need the experience to actually do things right. If the railways were renationalised now, it would be the same people running them directly as were responsible for the West Coast mess. And then where would we be?

It was Alistair Darling that ordered the abolition of the Strategic Rail Authority and brought the oversight of the industry in house to the DfT. If you want to blame someone, start with him

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