Is It Time For Nationalisation to Keep the UK’s Railways on Track?

Avanti West Coast is the latest UK rail company on the brink of collapse. Severe staff shortages following the rapid increase in passenger numbers since the pandemic has led to what the government describes as “major operational issues”, seen by the forced closure of three of the company’s train routes. Avanti West Coast’s increasingly disorientated workforce has begun to work overtime shifts to keep the trains on schedule, and strikes have been called for 5th November and 9th November by the TSSA union. The leader of the RMT union Mick Lynch described Avanti as “one of the worst operators we have ever tried to negotiate with”, while former Transport Minister of 49 days, Anne-Marie Trevelyan, admitted the service was “unacceptable” and that the UK needs trains that “are reliable and resilient to modern day life”. And yet, amid this abject failure, the UK government has chosen to extend the licence of Avanti West Coast until April 2023, a costly measure that saw £17 million in government contracts handed to the company in the previous two years. High expense for incompetence encapsulates the running of Britain’s crumbling rail network, described by the Boston Consulting Group as in the “second tier of European nations” in 2017.

The introduction of the private franchise system by the John Major government in 1993 was promised by Transport Secretary John MacGregor to deliver “more competition, greater efficiency and a wider choice of services more closely tailored to what customers want.” It was the logical progression of Margaret Thatcher’s neo-liberal economic policy which had dominated the 1980’s and was touted to re-energise clunky state-owned services with the dynamism, efficiency, and rigour of the private sector. However, 25 years since the full privatisation of the railways in 1997 and things are worse than before.

Firstly, the trains have become more expensive for the customer, as ticket prices have risen by 48% in real terms since 1997. This can be partially explained by factors outside of privatisation, demand having almost doubled in the run-up to the pandemic; 950 million annual passengers in 1999 compared to almost 1.7 billion passengers in 2019. But promised efficiency savings associated with privatisation have not materialised, and taxpayers continue to dish out £2.6 billion in 2015 and £5.1 billion in 2019 in government contracts towards rail franchises. Crucially though, the neo-liberal concept of competition does not even operate in the UK’s rail market, as companies are routinely handed private contracts via a ‘direct award’ rather than through a competitive auction. Furthermore, once the franchise obtains a contract, they bear no financial risk, meaning taxpayers must pick up the bill if a company fails. This happened in 2018 when the East Coast Line had to be bailed-out and again in March 2020 when the Northern franchise did too. Just to top off the damage to the public purse, the state paid £12 billion during the pandemic to save the railways from collapse.

Secondly, promises of greater efficiency since privatisation have not transpired. Daily UK train schedules are rife with delays. Indeed, in 2018 the UK  ranked 20th in the EU-27 plus Norway for punctuality. The range of companies available also serve to complicate the system of train times, ticketing, and prices, with a melee of different systems for different journey’s that is far off the promise of a “wider choice of services more closely tailored to what customers want”. The Department of Transport admits that franchise agreements typically cover 1,000 pages, meaning an incredible amount of detail to mull over for every franchise. Additionally, there are too many wasted resources with 400 full-time staff known as “train delay attributers” whose sole job is to assign blame for train delays via an expensive adjudication process, that refers to a 199-page document.

Reforms introduced by former Transport Secretary Grant Shapps, which are set to be implemented in 2023, may see the worst of these issues addressed. Described by the some pundits as a “halfway house between private and public”, the new ‘Great British Railways’ system centralises the diffused train system ran by a single public body, an upscaling of the Transport for London model that had been introduced in 2007 that stops trains and tracks being run under two separate systems. While the move is broadly welcomed, there are concerns the reforms do not target the root of the issue. Unions like Aslef are concerned the changes could see job cuts and fare rises, as the reforms do little to address the reduced levels of passenger numbers since the pandemic. Questions also arise over its promise to make efficiency savings of £1.5 billion in 5 years which is difficult to square with the six-month extension of a multi-million-pound government contract awarded to a failing operator like Avanti West Coast.

Japan has shown that a privatised railway system can work, and Europe is seeking to liberalise in an orderly fashion, however, the UK’s chaotic railway privatisation suggests complete structural change is required. Scotland brought its railways under public ownership in April this year, perhaps it is time the rest of the UK did too.