The MT interview: Network Rail's Iain Coucher

The rail boss and former missile designer is determined to champion an unrecognised UK success story.

by Andrew Saunders
Last Updated: 31 Aug 2010

Who on earth would want to run the railway these days? Talk about a thankless task. If there's one thing that the Great British Public never tires of moaning about, it's the state of the trains. Gripes over delays, signal failures, engineering overruns, overcrowding, rip-off prices, bad food and worse lavs have been part of the national conversation for years.

Add in safety concerns after fatal accidents such as the one at Grayrigg, Cumbria, in 2007, rows over the size of rail bosses' salaries and now worries over the financial viability of the entire system's business model since the failure of National Express East Coast, and it's no wonder smart kids no longer grow up saying they want to be train drivers. Things have got so bad there has even been talk of renationalising the whole lot, a return to the bad old days of British Rail. Surely anything is better than that?

This is the unsympathetic world Iain Coucher inhabits, like a ticket inspector facing an entire nation of angry passengers demanding money back. He's chief executive of Network Rail, the government-backed organisation responsible for track, signalling and the majority of stations on the UK's extensive, overcrowded and ageing network. A lot of signals to be kept from failing, points from freezing, lines to be swept free of leaves and stations to be refurbished.

Network Rail emerged from the ashes of Railtrack, following the Hatfield disaster of 2000, in which four lost their lives. Employing 35,000 staff across 850 sites, it's a company limited by guarantee that ploughs any profits back into the rail network. Train operating companies, which hold franchises bought from the Government to run services on particular routes, pay Network Rail for the use of its assets, but most of its dosh comes in the form of a substantial government grant for each five-year Control Period.

Still with us? Coucher started there as number two to his predecessor, strongman John Armitt, before stepping up to the top job in July 2007 on Armitt's retirement. Coucher has a total of about £30bn to spend over the next five years, and he earned a basic salary of around £540,000 last year for the privilege of running the business - not including bonuses, of which more anon.

He thinks his firm is doing a pretty good job. 'We carry 1.3 billion passengers a year and it's increasing. We run 24,000 trains a day - a record. It was 16,000 in the days of British Rail,' he says. And it made efficiency savings of £4bn over the past five years, as well. What's not to like?

Others disagree. Network Rail is rarely out of hot water, whether with the train operators that are its direct customers or the travelling public. It doesn't work hard enough to keep maintenance work out of peak travel hours, it doesn't listen to what train operators want, it abandons travellers in the middle of nowhere on Sunday afternoons, forcing them to either get in their cars or face the dread monotony of the rail replacement bus service ... The list goes on.

Success on the railways is even more subjective than elsewhere - it really does depend which side of the tracks you are observing things from. Coucher realises that weekend work is a problem, but says it's the least worst time for it to do its stuff. 'We accept that at some weekends we do deprive people. But we are running more trains and fewer buses; we know people don't want to get in buses, so we are looking at alternatives to keep trains running wherever we can.'

And it is improving its processes and works planning: 'We can now replace a bridge over a mainline railway overnight.' It's a long-term business, he stresses. Much of the network is 150 years old; of course it has got to be looked after.

And that is just the day job. What makes the Network Rail gig so challenging, apart from the huge level of public scrutiny, is the variety of ways it can be thrown off-track by events. Take the furore over the flagship East Coast franchise, the fast, modern, all-electric mainline route between London and Edinburgh.

With capital cities at either end and Leeds, York and Newcastle en route, this should be one of the most lucrative numbers on the railway. And yet two companies in rapid succession have been unable to make it pay. GNER gave up the ghost in 2007, and National Express has followed suit two years later, announcing it will hand back the franchise at the end of this year.

The news has reopened the debate over the nature of our privatised rail industry, a factor Coucher has no real influence over but cannot ignore. It's a signal of deep flaws in the franchising system, say some. Others suggest railways simply aren't meant to make a profit, and should be run instead as a publicly owned utility. Either eventuality could be bad news for Network Rail.

'I take issue with the people who say railways are inherently not profitable and unsuitable for private enterprise,' says Coucher. 'The railway was privatised after decades of decline and low passenger numbers. Since privatisation, passenger numbers have sky-rocketed, as have satisfaction, punctuality and all the other indicators.'

So what went wrong on the East Coast? Did National Express pay too much - £1.4bn - to secure the franchise? He doesn't think so. 'When operators bid for a franchise, they bid against future growth, which depends first on general economic growth, and, second, what they as operators can do to increase revenues through improving services, marketing and so forth.

'What's happened on the East Coast is simply that economic growth has declined.' And the East Coast route is a long-distance route, not a commuter route, so it is more dependent on discretionary travel and even more exposed to the downturn, he adds. This sounds a bit like saying that it's the economy's fault for not growing fast enough, but you know what he means.

That's not to say things can't be improved, though. 'There is an argument there should be fewer operators here in the UK, with larger geographic patches and longer franchises,' he says - more like the French and German systems. But the current model works, he says; it shouldn't be written off simply because one or two franchisees have hit the buffers, thanks to a recession that hardly anyone in any industry anywhere around the globe managed to see coming.

Angular, serious and with a touch of the ascetic, Coucher is a tough and self-motivated individual who has come to terms with the fact that he won't get much public praise or recognition in his line of work. All the same, he clearly finds the quality of public debate over the rail industry frustratingly low - in particular, the obsession with pay, both his own and that of his top team.

'Whenever we try to talk about our success, the story has been dominated by the size of our bonuses,' he says in world-weary tones. 'I want to stand up and talk about our successes without the issue of my bonus getting in the way.'

So he has made the extreme move - although fashionable in a hair-shirt, executive-denial kind of way - of forgoing a £400,000 performance bonus, but will still receive another of £200,000. Although he has hit his targets and is clearly entitled to the dosh, the gesture is no last throw of the dice from a beleaguered boss trying to cling onto his job. 'We have had a record year - record punctuality and train frequency, and have taken out millions in costs from our expenditure.

'People have turned down bonuses in the past, but I would suggest that it is unique for someone to turn down a bonus when their company is successful. By any measure, Network Rail is a successful and profitable British company.'

This is fighting talk, especially from someone who has been accused by a number of the rail industry's more vocal critics of pulling the wool over its regulator's eyes, lobbying hard for not-very-taxing targets and then cleaning up when they are relatively easily achieved. But Coucher knows that if he doesn't stand up and shout loudly about Network Rail's achievements, nobody else will. His key message is that there is a lot more right with the UK rail network than there is wrong with it, and he marshals an army of facts, KPIs and statistics in support of his case.

The firm has met or exceeded all the targets bar one set by the Office of Rail Regulation over the past five years, he says, and passenger numbers - the most straightforward indicator of success - are rising inexorably. It has more or less caught up with the 4,000-mile backlog in rail replacement it inherited from Railtrack, and has even learned lessons from the PR disaster of the engineering overruns on the West Coast route over Christmas 2007 that made it impossible for many travellers to get the train to work until well into the new tear. The firm was fined £14m.

'We have changed our priorities and the way we work. We have made a lot of improvements,' he says. 'Yes, there is more to do, but we have delivered several billion pounds' worth of works since without a single issue with the regulator.'

And it does all this on one of the oldest and most maintenance-intensive rail systems in the world. He is relentless, and it all adds up to the fact that he and his team are getting a quart out of a pint pot, if we did but realise it.

Coucher joined Network Rail as MD in 2002, rising quickly to deputy chief exec. He and Armitt made a formidable team - Armitt the charismatic, grisly front man setting the route, Coucher the brainy, analytical, ruthlessly effective backroom boy making sure it runs on time.

Since Armitt's retirement in 2007, Coucher has had to prove that he's not just a powerful intellect, he can play the front man role, too. And he can - it may not come naturally but, pushed on by his considerable ambition, he has acquired the necessary skills. 'I had a 10-year career plan from the age of 25,' he reveals. 'I followed it pretty closely. I thought about the experience I would need to get where I wanted to go, and I forced myself to go out there and get it - such as addressing large crowds, terrifying the first time you do it. I actively sought out chances to do that because I knew it was a key part of success.'

He's surprisingly softly spoken and unfailingly courteous - not least, one suspects, because he knows it is important for the boss not to appear overbearing. But he remains straight-talking and driven, someone who likes to get things done. He expects a lot from his team and himself, reputedly quick to show his impatience with those who don't live up to these high standards.

And yet electing to go without his bonus demonstrates a shrewdness and degree of political sensitivity that bely the tough exterior. It's the kind of thing that plays well with today's cash-strapped travelling public, and helps to position Network Rail as a thrifty and thoughtfully run outfit that deserves to be considered favourably in the gathering storm over spending cuts.

'We are conscientious about getting value from every pound we spend, and I am always concerned when people start talking about cuts. The recession will be limited, it will last a few years at most. It would be to take an incredibly short-term view to make cuts in railway spending. In the railways, we make investment decisions that last decades or even centuries.'

But that is precisely the problem - when a government's back is against the wall, no-one sees further than the next election. Cutting spending on the railways doesn't show for years, so it's likely to be a target.

He is persistent in pushing the tide of good news uphill. Aren't foreign railways better run, I ask? He can hardly wait to scotch that old chestnut. 'We run more trains in Kent than they do in the whole of Switzerland; more in East Anglia than in the whole of Holland.' Even the much-vaunted Japanese Bullet trains - the 186mph Shinkansen - only manage 350 trains a day on their dedicated high-speed tracks ... 'the same number we do on the Chiltern route'.

We've moved on to the thorniest topic of all: punctuality. Yes, he knows that more work needs to be done, but the figures are better than ever - a 30-year high of 90.8% of all services arriving on time for the year to May 2009. Of course, 'on time' is a relative term, which for statistical purposes means within five minutes of timetable for commuter trains or 10 for long-distance services. The way in which punctuality figures are calculated has always been controversial, and Network rail has been accused of obsessively managing its targets, to the exclusion of almost everything else.

Coucher vigorously rejects this. 'We've seen huge growth, and we are trying to build a railway for the future. We have to do so working around a very heavily used existing system. It's tricky.'

It's hard to resist the barrage of facts as they fly at you, rat-a-tat-tat - an effective if brutal machine-gun approach to dissent. What about the budget - how is that £30bn broken down? '£20bn is for routine maintenance, track renewals, new signalling and so on. That's £3bn-£4bn less than for the previous five-year spell, because of our success in meeting efficiency targets.'

That leaves roughly one third - £10bn - of what could be termed fun money, to be spent 'expanding the railway, making the network bigger and better, increasing the length of trains and their frequency to reduce overcrowding - a whole package of benefits to the customer.'

That package doesn't include any high-speed links, or electrification. Electrification of more mainline routes could have a significant impact on running costs, as well as bolstering the railway's pretty spiffy green credentials. Coucher is a big fan, although he admits there's no money for it at present. 'Electrification will happen - electric trains are cheaper, faster and lighter and the rails last longer. It's a win, win, win.'

He loves all this operational detail and is master of it. But he has faced challenges he must find less easy. The huge political element of the job, for starters. Political interest in the railways is rising. 'There are 650 MPs and all but four of them have stations in their constituencies. But I think it's a good thing, it helps us to get the correct level of funding for what we need to do.'

Less helpful have been the sexual harassment allegations directed at his HR director, Peter Bennett, accused of harassing female members of his team, and of paying them off handsomely to avoid publicity. Figures of up to £800,000 have been mentioned, leading to questions in the House over this use of public money.

Visibly tense, Coucher defends his colleague in measured tones. 'We never condone bullying or prejudicial activity. We investigate thoroughly and we have done so in this case. The allegations are only one side of the story, and the sums reported are not amounts we recognise.' Bennett remains in post, and the row rumbles on.

Coucher admits he's a detail man, but he has to be. The railway is complicated, technical and stuffed full of pinch points - tiny faults in one part of the network can have hugely disproportionate consequences. Another Greyrigg is only ever a maintenance failure away.

'Our customers expect me to know the detail,' he says. 'I start the day with a message that tells me what's happening on the network. I don't micromanage, I just need to know what's going on in order to understand the big picture.'

The walls of his office are covered in whiteboards filled with graphs, charts and hand-written notes, and a TV screen displays a real-time summary of service disruptions across the network. It's spacious, but entirely unshowy, a place that speaks of work done rather than status. 'A simple analogy of my world is a football pitch covered with spinning plates. I have to be able to look at the pitch as a whole to spot the wobbly plates and give them a tweak,' he says.

Tucked away at the back of the swanky new Kings Cross HQ, Coucher has even denied himself the boss's privilege of a room with one of the best views in London. The prime front corner spot overlooking the huge Kings Cross redevelopment site is occupied instead by rows of ordinary open-plan desks. It's more important to inspire the troops than to comfort their general.

He studied aeronautical engineering at Imperial College, and his approach to the job is essentially that of an engineer: to improve a system, you first take it apart and examine it piece by piece, then you redesign it using fewer and better components, reassemble it and Bob's your uncle - you've built a better railway.

After university, he intended to go into aviation, but ended up designing missiles. 'When I started university, there was an aeronautical industry in this country. But when I came out there was not. So I spent three or four happy years firing off rockets in places like Kirkcudbright.'

There was so much computational analysis and mathematical modelling that he was drawn further into IT. So he moved into the tech sector, spending time as consultant for EDS, where his last job was the hugely successful Oyster smart ticketing system for London Underground.

On the back of Oyster, he became chief exec of Tube Lines, one of the two engineering consortia upgrading the Tube, before moving to Network Rail in 2002. He had rediscovered the value of his education. 'I didn't use my engineering background for 15 years, but I genuinely believe that to run a business such as Network Rail you need an engineering approach. It would be very difficult to do this job without it.'

Coucher is a dogged problem-solver, and his penchant for unflinching analysis extends to his own strengths and weaknesses - not something you can say of every chief exec. Married with two kids, he lives in Banbury and is emphatically not a train-spotter. 'In fact, I was more of a plane-spotter.' He doesn't quite say so, but he clearly thinks his industry is too backward-looking - there are no pictures of the glory days of steam to be seen anywhere in Network Rail's HQ.

He is an inveterate planner, who mentally follows every alleyway and cul-de-sac in a strategy before deciding on his preferred route. Once he has made up his mind, it stays that way, but he always allows people their say - he knows it is bad form to appear too dogmatic.

'I manage my time very precisely, I regularly purge my diary of meetings and I spend no more than 50% of my time in routine board and review meetings. I spend 25% of my time with customers, and the other 25% is used up handling the stuff that just happens. You have to be very careful with your time, it is precious.'

A sentiment that train travellers, grumbling on the platform as the 8.15 is late for the third time this week, would doubtless endorse.

THREE CHALLENGES FACING COUCHER

1. To hang onto Network Rail's budget in what promises to be the worst public spending crisis in a generation

2. To manage industry and public expectations of what Network Rail can and can't achieve

3. To figure out a way of being able to take his bonus next year without sparking another pay row

COUCHER IN A MINUTE

1961: Born 22 August, St Albans. Educated at Ashville College, Harrogate

1982: Graduates from Imperial College, London with degree in aeronautical engineering. Starts work as a missile designer for Hunting

1985: Joins EDS as consultant working on outsourcing and IT projects

1997: Seconded to head TfL consortium TranSys, responsible for the London Underground's Oyster smart ticket system

2002: MD, then deputy chief executive, Network Rail

2007: Chief executive, Network Rail

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