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Viewpoint: Issue Issue 28 10 Apr 2012

Creative thinking needed in moves to rail localism

Government plans to divolve more responsibility for local rail services in Britain will benefit by studying innovative European solutions i

Paul Salveson

­T­­he UK Government has issued its consultation paper on options for decentralising local and regional rail services within England. It’s a hot topic and the suggested options include some potentially radical stuff, but my suspicion is that we face a fairly tortuous journey to any new responsibility framework, with an uneven response, reflecting the lack of effective regional or sub-regional government in Britain.

The UK does not have a clear federal structure like the USA or Germany, with strong regional authorities setting their own priorities. Nor is there the somewhat less devolved but equally clearly marked out regionality of the Departments of France or the Cantons of Switzerland, for example.

Scotland has full control over its domestic rail services, Wales some, the Mayor of London looks after the Tube network and some ‘Overground’ routes (and wants more) and Merseytravel is in charge of the highly successful ‘Merseyrail’ franchise. What is challenging is the sheer scale of the potential changes across England’s other major conurbations and regions.

The metropolitan Passenger Transport Executives (all but one in the North) are  whilst cash-strapped and under-resourced county councils are actually shedding non-core functions at the moment and are likely to take a much more cautious approach.

So how does it work elsewhere in Europe? Over the last twenty years there has been dramatic change in how local rail is managed and delivered across the Continent. Those countries which have retained the traditional approach of centralised state operation, such as Belgium, are the exception. Sweden, Germany, The Netherlands and Denmark have made radical reforms to the ways in which regional rail passenger services are provided. In most cases, these changes are predicated on strong devolved government, to mainly regional bodies.

The driving force behind change was recognition that local and regional rail services were under-performing in all senses – from leadership to their economic and social role. Being part of large state monopolies resulted in a lack of management attention, a sense of peripherality, and a steady decline in popularity though accelerated by many other factors.

The political imperative to ‘regionalise’, in countries like Sweden and Germany, was motivated by much wider considerations than simply cost. There was a desire to make better use of regional rail, not just to save money. Freeing up services to greater competition, with new operators entering the market and building on their own identity, was seen as a way of not only reducing costs, but driving up the quality, attractiveness and significance of rail.

The typical arrangement in several countries is for the regional authority to create a ‘transport executive’ which is accountable to its political masters on the regional council. This approach has ensured that rail has a high political profile and has led, in the vast majority of cases, to substantial investment in new rolling stock, improved station facilities and service enhancements. At the same time, productivity has improved markedly as a result of tackling detailed operational issues like de-staffing stations and introducing one person-operated trains.  Most of the regional transport authorities have responsibilities for both rail and bus, and have meanwhile ensured a very high level of integration between modes, and much better marketing.

Most of the countries where reform has taken place have implemented, to varying degrees, European law on the separation of railway infrastructure and operations. That said, there are some examples of local operations which are vertically integrated, including long-established local railways in Germany and Denmark as well as more recent examples in the Basque Country (Euskotren) and five DB rural operations in Germany which include the Isle of Usedom railway.

Franchises, mostly, but not exclusively, are let on a ‘gross cost’ basis and are for the operation of the service only. They do not include infrastructure, which is the responsibility of the state-owned infrastructure authorities. The gross contract approach gives the tendering body a high level of control, with the operator’s role confined to that of a service delivery provider. In some cases franchises include operation of both rail and bus services, giving a very high level of integration, both in terms of the actual service and routes as well as ticketing and information. There are some arrangements for the regional authorities to help upgrade the standard of rolling stock by making investment in it.

It is worth stressing too, the particular progress that has been made over many years in Germany with the city-region concept of the Verkehrsverbund ‘Public Transport Company’, in which local bus, tram and metro operators work together with the suburban rail (S-bahn) services of DB to create a seamless integrated local transport offer in often quite extensive built-up areas, including Rhine-Rhur, Berlin-Brandenburg and Rhein-Main.

Clearly, the investment which has gone into regional and metropolitan rail has come mainly from the public purse. In Germany, most of the funds come via the federal government and are allocated to the regions. This is also the case in France where the provincial councils are playing an increasing role in regional rail. In Sweden, however, funding comes from local and regional taxation with the state providing very little. Negotiations in the UK between the DfT and the PTEs are­­­ likely to focus on how to make sure there are sufficient funds allocated to maintain at least  existing service levels.

The experience across Europe does almost universally show that where local and regional rail is managed separately from other services - either as a franchise or as a business unit - the decentralised approach pays handsome dividends. It does, however, require a sizeable, accountable and distinct public body to drive the process forward and encourage innovation. In England, even the individual metropolitan PTEs are not really big enough to handle full responsibility for local services, particularly if the current franchise map with cross-boundary services is retained in broadly its current form.

The Northern franchise, for example, contains not just five PTEs, but a swathe of county and unitary councils, each with transport responsibilities. The approach being taken by the Northern PTEs is to propose a consortium of themselves and local authorities to form a ‘Northern Rail Executive’.

I suspect the most difficult part of the process will be getting the partners to agree initial arrangements, though once established it ought to work extremely well. There remains considerable suspicion amongst some of the counties that the PTEs’ agenda is completely focused on the city-regions, with the needs of rural areas  a low priority.

Yet there ought to be scope for testing out innovative approaches to more rural routes, such as the Cumbrian Coast Line between Barrow and Carlisle. This has the potential to take the ‘community rail’ approach much further than it has been able to get so far.

A partnership involving Cumbria County Council, the train operator/s and Network Rail could work well under the umbrella of the ‘parent’ Northern franchise, but bring a much stronger degree of local ownership. It’s not quite microfranchising, but could bring all the benefits, and more, of that approach.

Away from the PTE-dominated urban north, in the rural south west, there is scope for the new Great Western franchise, currently in the early stages of re-letting, to include devolved arrangements for the rural branch lines, with the pro-rail county councils of Devon and Cornwall building on the success – and expertise - of the Devon and Cornwall Rail Partnership.

In the devolved administrations, Transport Scotland has been consulting on the next ScotRail franchise with options of a split between socially-necessary and profitable services. The Welsh Government is already closely involved with the management of the Wales and Borders franchise, currently held by Arriva, and may well get the sort of franchising powers already enjoyed by the Scots to establish a future ‘Wales Rail’, either as a franchise or a concession.

The next few years should see some significant changes in how local rail services are delivered and managed across the UK and a catch-up with the rest of Europe. My money is on the North of England taking the lead, but with pockets of innovation springing up in other parts of the UK. 

Discuss rail localism in detail at our Devolving Rail to the Regions event on the 17 May.


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