Alan Whitehouse: This rail route deserves more than a cheap political gesture

The East Coast Main Line – or more accurately – the train service that runs over it between Leeds, York and London has been through some turbulent times over the past few years, with two private rail companies throwing in the towel after making promises they were unable to fulfil.

The upshot was that going on for four years ago the East Coast was handed back to the public sector and run by a little-known government arm called Directly Operated Railways.

If you believed all that Sir John Major had to say about state-run railways in the run up to privatisation 20 years ago, you might expect this to have been an unmitigated disaster. But that is not how things have turned out.

Far from being “deeply inefficient” as Major claimed of British Rail (which was either an outright lie or a piece of towering ignorance on his part), East Coast has turned into a quiet success story.

It emerged earlier this year that East Coast has returned more money to the Government in premium payments that any other franchise holder on this line. It amounts to £540m, which can be used to either subsidise other loss-making but socially important rail routes – like Yorkshire’s commuter services – or handed back to the Treasury.

East Coast trains can point to other achievements too. Employees take an average of 9.5 days off sick every year, the best ever achieved. The company has also been picking up railway industry awards for its performance.

These achievements are even more remarkable because East Coast’s management and workers have not known from one month to the next what their future might be. And that lack of certainty is known as a destabilising factor in all industries.

Until just a few weeks ago, East Coast was to remain in the public sector for as far ahead as anyone could see. Suddenly, it is up for grabs. Can it be mere coincidence that the Transport Secretary Patrick McLoughlin announces a re-franchising plan that would see East Coast trains returned to the private sector by the time of the next election? Or a piece of blatant electioneering?

It all smacks of a similar desperation to that of the Major government’s “scorched earth” policy of making rail privatisation a fait accompli before an election he knew he would lose. The evidence?

It is circumstantial, but as late as the beginning of this year, East Coast managers seem to have had no inkling that their fortunes were about to change. Indeed, managing director Karen Boswell was putting the finishing touches to a medium term plan for the future of the company, working on the assumption that she and her team would be around for some time. It seems inconceivable that she did not check with the Department for Transport before putting pen to paper.

In fact, she was planning for the 
next five years, including a major decision about the future of the electric train fleet. Not the actions of a caretaker manager. Somehow it all doesn’t quite fit.

And, what is happening on the East Coast line is opening up a set of fundamental questions about the way the whole railway system is run, the most fundamental of them all being whether the current franchising system delivers true taxpayer value for money. The answers are not encouraging.

Whoever wins the franchise will find it almost impossible to equal East Coast’s record on handing money back to the government. With shareholders to satisfy, the privatised franchise holder will have to either run the railway more efficiently, or cut the quality of service to free up the necessary cash. And, as we have seen, there is little evidence that East Coast is being run like one of the cash-wasting state behemoths of the 1970s. So it looks like cuts.

Franchising itself is also a hugely wasteful process. Bidding for a major franchise like East Coast now costs anywhere between £10m and £13m per bidder. A colossal sum of money and the bill ultimately comes back to the passenger in the shape of higher fares – needed to make sure shareholders get their money back.

So, is this simply short-sighted political dogma? There is plenty of evidence of it. Mr McLoughlin’s hapless junior, Simon Burns MP, entered the fray with a selective reading of the punctuality statistics when he told the House of Commons that East Coast’s punctuality record was the worst of all 19 franchises, justifying the need to get it back into private hands.

This was a travesty. Mr Burns 
was looking at one month’s figures,
a notoriously poor yardstick 
because they can be distorted by just one major incident which may be out of the train operator’s control – anything from a signal failure to a suicide.

The official measurement of punctuality allows trains to be 10 minutes late and, using this 
yardstick over a complete year, 
East Coast came out ahead of 
Virgin Trains on the West Coast route from London to Manchester and Scotland.

But, mining the data a little more deeply, we find that, looking at trains which are actually on time – ie less than one minute late – East Coast managed 61.1 per cent punctuality. Virgin was on 49.4 per cent. Looking at other annual measurements produces a similar result.

There have always been major doubts about rail privatisation. It brought some benefits – you could make strong argument that GNER’s time on the East Coast route was one of them, bringing innovation and quality.

But, overall, privatisation has cost a king’s ransom and the annual subsidy to the private railway has consistently been several times higher than the subsidy awarded to British Rail. What BR delivered for less than £1bn and falling, the private railway has needed never less than £3bn and at times over £5bn per year.

East Coast trains should have given our politicians pause for thought. It might, for example, have been kept as a “public sector comparitor” to give both the politicians and transport officials some sort of handle on what it really costs to run a rail franchise and hence, a handle on whether franchising is really delivering the value for money that Mr Burns and his boss claim.

But it seems that keeping a well run company on the rails is less important that a cheap political gesture. Both the railway industry and its passengers deserve better.

• Alan Whitehouse is a railway author, broadcaster and former chief reporter of the Yorkshire Post.