Does Scotland have an answer the Britain's railway woes?

Network Rail and operator Abellio share a chief executive in Scotland. It sounds sensible, but the jury's out on whether it's worked.

by Adam Gale
Last Updated: 14 Jan 2019

It’s easy to think Britain’s railway system is broken, when you’re wedged between three burly men in the vestibule of the 0752 from Woking to London Waterloo. The headlines tend to agree. Mostly they focus on punctuality issues (‘Northern Rail Chaos’ - Manchester Evening News; ‘Worst Train Delays In 12 Years’ - Metro) or prices (‘UK Rail Fares In HUGE Price Hike TODAY - Will YOU Be Affected?’ – Daily Star), though occasionally they venture helpfully into policy suggestions (‘Renationalise Our Railways NOW’ - Daily Mirror).

It’s a matter of debate whether the railways are actually the national embarrassment we all seem to think they are, but what’s clear is that a lot of passengers are unhappy with the service they’re getting, and a lot of politicians and commentators place the blame firmly on the privatisation of British Rail in the 1990s.

The argument goes like this: private ownership does not bring free market innovation and efficiencies, because the railways do not and cannot operate as a truly free market. Instead, they are natural monopolies, without meaningful competition, which means private ownership simply lines investors’ pockets.  

At the same time there’s a lack of operational coherence due to the fragmentation of the network – with publicly-owned Network Rail running the track and privately-run train operating companies (TOCs – many of whom are divisions of public sector operators in Europe) bidding for highly specified route franchises.

Opponents argue that those who pine for the supposedly halcyon days of British Rail must have perilously short memories.

The stakes are high, with Oxford Economics stating last year that the rail industry supports £36bn of UK GDP, and Oxera calculating that the railways bring £10.2bn in productivity improvements to the wider economy. In practical business terms, fast, efficient, regular trains cut costs, widen talent pools and ultimately boost demand.

But the choice may not be as simple as nationalisation vs the status quo. In Scotland, a new model is being trialled, which attempts to get the best of both worlds.

Network Rail and the TOC Abellio ScotRail teamed up in 2015 to form ScotRail Alliance, a partnership with unified objectives and a single Managing Director. The idea was to improve service by co-ordinating track and train. We went over the border to find out what we can learn from it.

One head is better than two

Management Today’s meeting with ScotRail Alliance’s MD Alex Hynes was delayed by about ten minutes, owing to an overrunning conference call. His staff apologised for any inconvenience caused. I took the opportunity to look around the office. Six floors of railway people here in central Glasgow, the sign said, with Network Rail’s logo adorning each one. The name ScotRail was conspicuous in its absence –Abellio’s HQ is 10 minutes down the road.

Nonetheless, communication is far easier under the alliance structure, insists Hynes, who joined the board of Network Rail in April 2017 after a career in the private sector, including a three-year stint running the Northern franchise.

"You only need three things to run a rail network: track, trains and crew. In England those three things are delivered by two organisations. Here’s it’s all under the control of my team, so it’s easier to align them."

He likes the word alignment. There are all sort of problems that can occur when you’re not aligned, Hynes explains, with operating companies planning for electrification then finding out the track or trains aren’t ready, or Network Rail working on the assumption a TOC will operate two trains a day on a particular route, only later finding out there aren’t enough drivers.  

As Alliance MD, he points out, he is "all over" the ongoing electrification of lines in Scotland.  "In my previous role I wouldn’t have been, because electrification would have been delivered by a different organisation. Getting the builders and the infrastructure team and the TOC team all in the same room is a damn sight easier here than anywhere else." 

On top of closer communication, Hynes also points to the importance of shared objectives. Network Rail Scotland and Abellio ScotRail both have the same 92.5 per cent punctuality target, Hynes says, making it far easier to form a common plan.  

Despite this, there have been culture clashes that need bridging - although Abellio is itself owned by the Dutch state, it is used to operating as a private sector business across Europe.

"In the public sector there are rules about how to spend money. I’ve said to Network Rail colleagues that it would be good if they could come to [Abellio] team meetings and explain what those rules are, so the people in the cut and thrust of the private sector can understand the constraints that their colleagues have to work under."

Is the proof in the pudding?

It all sounds very sensible, though whether it’s actually worked is a different matter. Reading the Scottish papers, or listening to the Scottish government, you’d get the impression that the railway system is in crisis - and it’s ScotRail’s fault.

There have been extensive delays, cancellations and significant overcrowding due to the electrification of the lines, the extension and renovation of numerous stations, notably including Glasgow Queen Street, and the introduction of new trains (and delays training drivers and conductors for them). Punctuality dropped to 87.3 per cent for the year to November 10 2018, nearly five per cent below target, which has led to calls to end the franchise, with the Scottish Government issuing an improvement order before Christmas.

Hynes was quick to point out that ScotRail is still among the best performers in the UK according to its scorecard of reliability and customer satisfaction metrics, the ongoing disruption notwithstanding. Besides, as he puts it, "Every single morning we have to provide safe, clean, reliable environment for our customers and we’re upgrading it at the same time –that’s bloody hard work."

Fair or otherwise, the criticism shouldn’t be surprising. When you’re stuck in traffic, late for a meeting, your ire is more likely to be directed at the car in front of you than the Department for Transport. But when it comes to trains, we look for someone to blame. And where there is blame and government money, the situation quickly turns political. Bureaucrats and businessmen alike make easy targets. (Hynes demurs when Management Today suggests this.)

Ultimately it’s impossible to judge from the outcome whether the alliance structure has benefited the railways in Scotland. It could be that under a traditional TOC franchise agreement – or a nationalised provider – the network’s recent problems would actually have been worse. The proof, perhaps, will be in the franchise renewal. Will whoever wins the next bid for the ScotRail franchise – which is due for tender in 2025, though Transport Scotland has the right to cancel next year if Abellio fails to live up to its performance targets – continue the arrangement?

Even if the alliance does become an enduring feature of the railway system in Scotland, it may not be possible to copy and paste it into the rest of the country.

Scotland benefits from having significant overlap between its Network Rail route (one of nine in the UK) and its operators, with 95% of Scotland’s passenger trains run by ScotRail.

"South of the border it gets a damn sight more complicated. Take the lines out of Euston, the West Coast mainline – it’s the busiest mixed traffic railway in Europe," explains Hynes. "My view is that the learnings from ScotRail are nuggets of gold when deciding how to run the railways in England, but it’s not a template."

This interview took place in late August 2018.

Image credit: Messala Ciula/Pexels


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