Andrew Haines and the future of UK rail

Andrew Haines recently joined Network Rail as its new chief executive, replacing Mark Carne who had held the post since January 2014. In his last role, Andrew had been a board member and chief executive of the Civil Aviation Authority (CAA) since August. Prior to this, he had a wide-ranging career in the rail industry, both as managing director of South West Trains, and then as managing director of the Rail Division for First Group plc. Andrew received the OBE in 2016, for services to transport.

For his first external speaking engagement, Andrew Haines spoke on the future of UK rail – structures, timetabling, renewals, enhancements, cost control – to the All-Party Parliamentary Rail Group at Westminster.

Having interviewed Mark Carne on his departure from Network Rail’s top job (issue 168, October 2018), Rail Engineer went along to meet the new ‘boss’ and hear what he had to say.

On a very warm early-October evening in Committee Room 18, Andrew looked relaxed. With shirtsleeves rolled up, he was both casual and focussed. He clearly knew several of the parliamentarians around the table from his former role at the CAA.

Speaking from notes, he appeared well informed and covered topics that others might have shied away from. He did, on occasion, seem to be choosing his words with care, but that was unsurprising considering his newness in the role and the audience in front of him.

So here are Andrew Haines’ views on the railway today, and where it needs to go:

It’s great to be back – it’s a really bizarre sensation to be back in the rail industry. I was at the CAA for nine years, so it’s almost 10 years to the day since I left the railway, and I’m one of those guys who doesn’t spend the whole time looking back, so I’d moved on.

However, when this opportunity came up I thought long and hard about it. I’m very passionate about what the railway can do for the economic prosperity of this country – what it can do for people’s lives – and so it was an opportunity that was too good to be missed.

Having been away for ten years, a lot has changed. But there’s a lot that hasn’t changed as well, and I thought that it would be useful to consider some of the things I observe as being quite different now, and then also look at some of the residual issues that remain unresolved, some of the old chestnuts if you like, which I think the events of the last year or so really compel us to tackle head-on.

What’s changed?

The first thing is, let’s not forget the sheer scale of growth, particularly in the passenger railway.

Every year, passengers make 100 million extra journeys compared with 10 years ago. Something like 430 million people made journeys between April and June this year – in the same period 10 years ago that would have been around 300 million.

That is a very significant scale of change.

Now safety. The record on safety is one we ought to be proud of. We are now pretty clearly the safest large railway in Europe. That has come, not through fluke, not through providence, but through some basic disciplines which are now fundamentally different to what they were when I joined the railway some 30 years ago.

Actually, they are also different from what they might have been just 10 years ago, not just in terms of workforce safety but also passenger and public safety.

Investment – it’s been pretty staggering, actually, whatever the colour of your political cloth. It’s hard to deny that something like £74 billion has been invested in the UK rail network in the last 10 years, over the course of CP4 and CP5.

We’re still spending around about £130 million every week on renewal and upgrade projects. Alongside the big schemes, Reading, King’s Cross, London Bridge, Birmingham New Street, the Thameslink Programme and Borders Railway, one of the big surprises for me has been the amount of resignalling that’s been done, the rationalisation of signalling to regional operating centres (ROCs). A surprise, because it’s gone largely unnoticed.

For all the big schemes people hear about having gone wrong or been delayed, there are many, many more that have actually been delivered very smoothly and very seamlessly and, I think, in a transformative way – something we’ve not historically been able to accommodate. Now there are downsides to that, we can talk forever about the costs and the value for money, but we should at least recognise the scale of the change that’s taking place around us. Not least, because I think that leads us to some thoughts on the future.

Franchising and the DfT

I want to make a positive pitch for some of the benefits of franchising. I’m not here as an advocate of franchising or to defend it, but if we are going to have a real debate about today’s railway we should recognise that the passenger railway has grown very significantly but has also driven very significant value to taxpayers.

Bluntly, franchises are now delivering a lot more, for a lot lower burden on the taxpayer, compared with the costs of the system 10 years ago.

In addition, we’re in the midst of one of the biggest rolling stock changes in my lifetime, and at prices that look like extremely good value. If you look at the cost of bringing a new piece of rolling stock on to the railway today, it’s actually considerably cheaper than it would have been for a generation.

My last observation about what has changed is the level of DfT (Department for Transport) involvement. I think I can say this without too much consternation from our Secretary of State, because I think he himself has recognised this.

Sometimes people talk to me about the foolishness of this policy, but I don’t think it’s a policy at all. I think a lot of it has happened by chance.

It was a policy decision to abolish the Strategic Rail Authority. But I don’t think the change in franchising that took place following the West Coast franchising issue was a policy intention – I think it was something we slipped into. And, frankly, the reclassification of Network Rail was actually a consequence of the work of the Office of National Statistics, not something I suspect the Treasury welcomed with open arms.

But the net effect of those three different characteristics has meant that we now have ministers taking decisions at a very, very granular level, and I know they wouldn’t disagree with that. We have a level of proximity that I don’t think is helpful in terms of good governance, good decision making or indeed good politics.

Lack of progress

So, I think we’ve made huge progress in some areas in the last 10 years, but I want to move on now to some of the areas that I think we haven’t really tackled and indeed some areas where I think we’ve gone backwards.

The timetable difficulties of the summer, and the Stephen Glaister review for the ORR (Office of Rail and Road), have shown that, despite huge ambition and commitment, the railway has not been sufficiently focused on the needs of rail users, both passengers and freight.

When the railway was being broken up and privatised, I was a very junior middle manager. I was sad enough to do my MBA thesis on “Incentivisation in the privatised railway”. This summer, I took some time to read it for the first time in 24 years.

Back then, I was enthusiastic about the benefits that competition for franchising could bring, the ability of clear incentives to drive efficiency and performance improvement and the power of breaking away from annual spending cuts that had been the almost relentless reality of BR for a generation. The big question I flagged was, what would happen if, against all the odds as it seemed then, the railway was to grow again, how would we deal with the investment that would be necessary?

I don’t mention that now because I’m some sort of ‘smart Alec’ that identified these issues all those years ago, but because my most fundamental observation of what hasn’t changed in my time away is that, as an industry, we have not adapted our model to cope with the level of change that is necessitated by the phenomenal growth that we have seen.

We have timetable procedures that were designed before privatisation to facilitate a model of operation that has never seriously materialised.

We have incentive regimes that are, in essence, operating exactly as negotiated in 1994, without any real review to see whether or not they drive and reward the right behaviours. We have not collaborated to build the industry mechanisms to ensure that system change can be dealt with effectively and efficiently.

We have not regulated the pace of change to reflect our collective capacity to deliver, nor have we regulated our capacity to reflect the necessary pace of change. We have to do one or the other, but, in doing neither of those things, we have ended up with a disconnect.

We have underestimated the impact of imposing change on a congested, leaner operation and, in doing so, we have devalued the fundamental task of running the railway for passengers and freight users whilst rebuilding it for tomorrow’s users.

And, if I could be very blunt, I think we have come perilously close to creating an industry of victims where it is too easy to obsess about the speck in our neighbour’s eye. And for neighbour read TOC, or Network Rail, or DfT, or ORR or ROSCO, than deal with the log in our own eyes. All the time you have a log in your eye, then it’s rather hard to focus your sight on the end customer.

So those are some of the key reasons why I believe that train service performance has declined for the last seven years consecutively, why we have had electrification schemes whose costs and delivery targets have been missed, why some of our costs and behaviours have made innovation prohibitive, and why we appear to sleepwalk into impending problems.

Some brilliant work

Now they are all really sweeping generalisations and, day after day, operators and Network Rail buck this trend. There are parts of this country delivering best in class, best ever performance in that context. Routes have been generating exceptional growth in customer satisfaction and organisations have been working collaboratively to build a better railway.

I’ve seen genuinely brilliant work in the last eight weeks, by route and project within Network Rail, and by operators. If ever you feel depressed about the state of Britain’s railways, then I’d encourage you to join me for a day out to meet some of the fantastic people committed to doing their very best, day in day out. I had honestly forgotten how inspirational they are. There is a huge, tremendous loyalty and passion to do the right thing in the railway still. They compel us, as industry leaders, to configure our system better.

I am really excited to be re-joining this industry at this juncture, because it is a time of real opportunity. There is consensus that we must change, even if there is not yet consensus on what that change should look like. And I don’t believe that many, if any, of the problems we face are impossible to solve. Sir Peter Hendy, Network Rail‘s chair, I and our board are committed to participating fully and transparently in the rail review which Keith Williams will lead.

One of the benefits of reclassification is that Network Rail has no agenda, other than doing what is best for rail users and taxpayers.

It was interesting to hear Andrew Haines set out his stall on this way. Rail Engineer wishes him good fortune in carrying these ideas through the five years of CP6.

Read more: Derby station: 79 days later