The government has complete disregard for the needs of rail passengers

The Coalition’s decision to return East Coast Trains – currently run by the government owned Directly Operated Railways – to the private sector highlights its complete disregard for the needs of rail passengers. The fact that the re-tendering of this franchise is being fast tracked while virtually all the others are being delayed highlights the true motive behind the move, that the Government is terrified of allowing a well-run, nationalised service to continue to show up the inadequacies of its private rivals.

Since East Coast was taken over by the Department for Transport (DfT) four years ago, it has been a great success. Its first class has been revamped and attracted increased numbers, and it paid back nearly £200m in premium payments to the Government last year. The refranchising process will now cause uncertainty on a route which has had three operators in the past six years. A guard told me after the announcement: ‘We will now have two years of uncertainty till the new incumbent takes over. Words on maintaining service quality etc. will be issued but the managers will be looking to securing their futures. Developing the service and maintaining quality will be less important than protecting their backs and ensuring they have a job to go to.’

Tuesday’s announcement followed the publication of two reports into the franchising process commissioned by the Transport Secretary, Patrick McLoughlin in light of the West Coast debacle. The first, by Sam Laidlaw, a non-executive director of the DfT and the boss of Centrica, revealed a picture of Premier League level incompetence surrounding the franchising programme, including a lack of qualified staff and the crucial absence of a person with ultimate responsible for the process. The DfT was shown to be reeling from the turmoil wrought by the huge level of cuts and structural changes that have been imposed under the Coalition.

The second report, by Richard Brown a veteran and railway manager, set out recommendations for the wider franchise process. Crucially, however, it did not assess whether franchising itself was a good idea for fear of rocking the boat. In an uninspiring report it recommended a set of obvious improvements such as strengthening the management team and creating a clear programme of letting only three or four franchises per year.

McLoughlin, however, has taken Brown’s banalities as gospel with the result that, at best, only two franchises will be let by the time of the general election. That would give the Coalition a grand score of just three franchises tendered (out of 20) in five years. This paralysis has had serious negative impacts on the industry, creating uncertainty over investment and postponing many potential benefits to passengers such as the introduction of new rolling stock and improvements to stations.

It should be remembered, that when the railway was first privatised, the whole process of letting 25 franchises took just 18 months and was undertaken by a body, the Office of Rail Passenger Franchising, separate from the Department. The recent franchising chaos demonstrates the extent to which the franchise process has run out of control. Ministers have tried to tinker with it to make it, in that ghastly bit of management jargon, ‘fit for purpose’ but it never will be. The idea is simply unworkable because it fails to successfully transfer risk to the private sector. It is also exceedingly expensive, as demonstrated by the £50m plus cost of the collapse of the West Coast bidding process.

Labour should state that, in government, it would allow the franchises to run their course and then hand operations over to a publicly owned company, along the lines of the East Coast model since 2009. This would have the additional advantage of forging a closer relationship between the operators and the not-for-profit Network Rail. The result would be an integrated railway run at arms-length from the state by experienced railway managers. All those expensive claims and counterclaims for compensation could be done away with. Labour would win votes and save money by finally setting right this franchising folly.

Christian Wolmar is the author of On the Wrong Line, how ideology and incompetence wrecked Britain’s railways