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March 31, 2004
Trains
Another £26 billion is to be poured into the railways in an effort to improve punctuality by 2009. That's £14 million a day for the next 5 years, and will restore punctuality to the levels prior to the Hatfield crash in 2000. Personally I can't see any real, substantial improvements being made to the rail network as long as it remains in its current fragmented state. And while any loss of life is tragic, Hatfield should have been put into perspective. At the time of the Hatfield crash, deaths per billion passenger kilometres were running at about 2, while on the roads fatalities were running at 10 per billion vehicle kilometres. In other words, Railtrack's reaction (or rather overreaction) to the Hatfield crash effectively wiped out any progress in railway improvements, in spite of being in line with trends.So lets take a look at how privatisation was meant to improve matters.
Reduce cost to tax payer
Just consider the amount of money that has been thrown at the railways since privatisation, and compare it with the largest ever subsidy given to British Rail of £1.9 billion (in todays terms) in 1982. In fact the initial targetted increase in subsidy was intended to be 150%, from £908 million to £2.3billion. And while some may counter that BR was chronically under-funded, and the legacy is the current state of the network, a significant portion of the increase was due to placing all transactions on a formal contract basis, and factoring in to the contracts a profit-markup. In fact it can be shown that on a like-for-like basis, any given piece of work will cost 2.5 times as much under privatisation than it did under nationalisation. Now compare that with the original estimates that cost savings and revenue increases would result in a subsidy to the entire network of only £771 million by end of fiscal year 03/04. So the original plans regarding decreasing the subsidy have been comprehensively missed.
Improve productivity
Now cost savings were supposed to help improve the finances of the various companies, especially the TOCs. And some progress was made, with productivity improving by 4.6%, although this has been achieved by reducing staffing levels by 4%. So in order to meet future targets, the TOCs are going to have to find alternative methods for improving productivity. And if you compare the productivity improvements with the same figures for British Rail of 6.7% (1980-1985) and 4.6% (1995-1998) then privatisation has done nothing for productivity improvements.
Better rolling stock
One of the touted benefits was that increased investment would allow for improved rolling stock. Unfortunately, Railtrack introduced an entire new layer of overhead, especially with regard to train acceptance procedures. As a result, the introduction of new rolling stock has been running nearly 60% below target.
More passengers
The other aspect of reducing the cost to the tax payer was by increasing the number of passengers carried. And certainly up until 2000, passenger growth had reached unprecedented levels. Unfortunatelt, more passengers required more trains, resulting in an infrastructure overload where trains were blocking each other thus increasing delays and therefore public dissatisfaction. And the complicated nature of finance, charges and penalties effectively became a revenue choke.
Conclusions
The public were always sceptical of a privatised rail network, a position shared with Labour in opposition. Thus in spite of any improvements in the early years, there was always public hostility to contend with. Ironically the public would have supported re-nationalisation at a time when the Labour government was effectively paying the least attention to the railways, most likely because at the time everything seemed to be working out ok. With Hatfield and Railtrack's over-reaction resulting in the government taking a more interventionist approach it would seem that Labour have squandered one of the few opportunities available to get things right with the railways.
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Posted by Clive on March 31, 2004 3:26 PM in the category Old Stuff