What a way to run a railway

It’s as bad as the old days of full nationalisation. The railways run at a huge loss. They fail to serve the commuters well, the main body of high fare paying passengers. They sell large numbers of very cheap off peak tickets to try to fill the unpopular inter city services at off peak times. Now we see it will cost taxpayers at least an extra £40 million to compensate private sector companies who took part in a competition to run trains that was badly managed by the Transport Department. In many ways Whitehall has more control over the partially nationalised railways than it had when they were fully nationalised. People forget that all the tracks and signals are nationalised, and the other companies using them are highly regulated and controlled by government imposed contracts.

I feel sorry for the incoming new Transport Secretary. It is certainly not his fault that the west cost franchise competition was bungled. He has the unwelcome task of trying to pick up the pieces. He has to find a way of running the services on expiry of the current franchise. He needs to lead his Department to higher standards of administration and adjudication on contracts.

What is curious is the attention the Opposition and media will give to this relatively minor losss – a mere £40 million – when they conspire to ignore the much larger losses I have been talking about revealed in the nationalised Network Rail accounts through dealing in derivatives. Why is a £40 m bungle on contract award a scandal, and another £560 million loss last year on derivatives all part of good management? I have released the information about the losses on local radio (BBC) and through the Wokingham Times, as well as on this site. The national media is not interested.

The reason is simple. The contract award can be attributed to Coalition Ministers. Justine Greening can be dragged into a difficult debate about responsibility. The losses at network Rail are losses from an arms length company set up by Labour, so they have to be ignored or explained away.The media will either ignore it or accept the company’s view that it was necessary because they chose to borrow in foreign currencies. Quite why a company earning its money from the UK wanted to borrow foreign currency money has never been explained satisfactorily.

So was Justine Greening responsible for the bungled contracts? The Opposition will claim she was. They can say that Secretaries of State are responsible for all the decisions taken in the department in their name. In theory they can challenge all advice and overturn all recommendations, as long as they stay within the law, so they are ultimately responsible. In office, of course, Labour Ministers often had reasons why this tough doctrine did not apply to whatever mistake their department had made at the time.

In practise I suspect Miss Greening was assured the complex homework had been done well. She would have received a high level submission summarising the findings on all the bids. She probably signed off on that, wishing to trust her senior officials who had supervised the work. She would have been briefed to claim the process had been “robust”.

I suspect the establishment will decide this was one of those unfortunate errors made owing to an imperfect system. The suspended staff will be allowed back to work. Lessons will be learned. The storm will be ridden. Meanwhile the railways will continue to lose far bigger money than the odd £40 m error with a wonky calculator.

Some will perversely think the answer to all this is even more government intervention in the railways, as they deliberately duck difficult questions about the mounting losses at Network Rail. I don’t suppose they will rush to re-examine the assumptions and figures on HS2, which remain far from convincing to many.

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  1. Alte Fritz
    Posted October 4, 2012 at 5:35 am | Permalink

    RMT officials chant a mantra that it is time to renationalise. This drip drip will begin to leave its mark, especially since the infrastructure is already there.

    • Jerry
      Posted October 4, 2012 at 7:50 am | Permalink

      In this instance they are correct, bearing in mind just how much money government still has to give the train operation companies (TOCs)s, failing any re-nationalisation we need s a totally different method of rail operation, the franchise model has failed.

      • outsider
        Posted October 4, 2012 at 1:48 pm | Permalink

        The model certainly needs to be rethought Jerry, from “ground zero”. I would start by removing the assumption that the same model should be used for all the railways. Why should it? Some are profitable and pretty separable. Many others make losses and run on tracks that are all mixed up.
        My suggestion? For the big profitable lines, transfer the tracks from Network Rail to competent existing companies as their franchises come up, in exchange for a big state shareholding in these permanent operating companies. Put the state shareholdings, along with bank holdings and a state shareholding in privatised Royal Mail), into a Strategic Investment Fund ( a la France) which can eventually be used to fund a lot of currently unfunded public sector pensions. (ie the reverse of the Royal Mail scandal).
        Then the state and Network Rail can concentrate their efforts on the loss-making parts of the rail network, where the competitive franchise model seems to make more sense.

    • Disaffected
      Posted October 4, 2012 at 8:30 am | Permalink

      Her atitude is symptomatic of todays politicians, they want the kudos and money but not the responsibility when it goes wrong. Like Greening, they do not have a clue of what is actually being done in their name in their own department. Clueless. The same with Labour and the £12 billon computer cock-up in the NHS. This is our money being wasted. The next time a politician says fairer taxation, remind yourself how they wasted your money last time. There is nothing fair about the taxation in this country with incompetent ministers in charge of departments that they do not have a clue about. The worst offender being the Chancellor.

      We have John Prescott putting himself forward to be a police commissioner when he was responsible for the regional fire brigade communications centres which are empty and still costing us all a fortune to be empty. Why would the people of Hull vote for him on his track record of wasting public money? Where are the personal consequences for these politicians?

      • lifelogic
        Posted October 5, 2012 at 7:50 pm | Permalink

        Indeed “The next time a politician says fairer taxation, remind yourself how they wasted your money last time.”

        Anyone who cannot think of something better to do with their money, than pay it in tax, clearly lacks any imagination – almost anything is better.

        • alan jutson
          Posted October 6, 2012 at 7:13 pm | Permalink


          Just back from a week in Cornwall.

          Its not just the taxation, its the other charges imposed by many local authorities as well.

          Just spent over £70.00 in car park fees this week.

          Played the game :
          Guess how long you are going to stay ?
          How are you supposed to know if you have never been before !
          Now have to log in your registration number at many sites (so you cannot pass unused time on to someone else).
          No change given, must have correct money !
          Overstay then its a £100 fine.

          Do these people really want people/customers to visit their Towns and sites of interest.

          Avoided car parks if at all possible, by parking further away and walking, but on occassions this was not posible, thus we spent over half of the basic State pension for a week on Parking !

          Contrast with Europe a couple of weeks ago.
          For 2 weeks total car use, Car Park fees 4 Euro’s.

          Once again UK rip off.

          • alan jutson
            Posted October 6, 2012 at 7:17 pm | Permalink

            The railways bid process

            SIMPLY A FARCE.

            Time and time again I have highlighted on here the total incompetence of Government officials and their lack of skills at negotiation and the writing and agreement of commercial contracts, yet it still goes on.

            How many more £ millions/billions will be wasted in the future, let alone the past.

            A shambolic disgrace.

    • Electro-Kevin
      Posted October 4, 2012 at 8:32 am | Permalink

      Bob Crow is after a restoration of union powers from the EU.


      • lifelogic
        Posted October 4, 2012 at 8:36 pm | Permalink

        And Miliband is Unison’s man – watch Even worse than Cameron – it starts in 2015.

  2. Adam5x5
    Posted October 4, 2012 at 5:47 am | Permalink

    Another example of how the public sector is badly run.

    Not accounting for inflation correctly in a contract of this nature?
    Basic error. Whoever is responsible for that should lose their job for incompetence.
    It would be the same as a crane designer failing to account for the force of lifting the load when considering the strength of jib arm.

    Privatise the lot, or at the very least stop subsidising the companies. It should be one or the other privatised or nationalised. This half-way is a mess.

    • lifelogic
      Posted October 4, 2012 at 6:40 am | Permalink

      Indeed a basic error, the crane design if anything is a rather more complex problem. But it is not Greening’s money. She probably pays far more attention to her checking her expenses claims and her appearance and learning her lines for the press statements than she does to checking this huge contact.

      But checking it is her job, she is in the end is the only protection the taxpayer has.

      • Bob
        Posted October 4, 2012 at 8:40 am | Permalink

        I feel very sure that our host would have done a proper job given the chance.

        More evidence if it were needed that the Tory leadership is not fit for purpose.

        • lifelogic
          Posted October 4, 2012 at 9:28 am | Permalink

          Indeed so many ministers think their job is just to present what the civil servants have written for them. That is the job of a weather girl not a minister. Democracy depends on ministers looking after the interests of the voters they (and MPs) are, after all, the only tiny input the voters actually have.

      • Disaffected
        Posted October 4, 2012 at 8:53 am | Permalink

        Douglas Carswell MP asked Cameron about the Sir Humphrey syndrome in parliament and Flashman used a typical bullying condensing reply. It was a sensible question and required a proper response. Maude is now making noises about civil servants blocking policy from ministers- he too should have listened and acted earlier. Carswell was right and Cameron hopeless wrong, once again.

        Good blog by Arch Bishop Cranmer who sums it up pretty well.

        • lifelogic
          Posted October 4, 2012 at 9:29 am | Permalink


    • Alan
      Posted October 4, 2012 at 7:39 am | Permalink

      I don’t think they failed to account for inflation. I think they failed to run sensitivity tests to see how sensitive the results were to different assumptions on inflation and passenger numbers, or maybe they did that and failed to assess the probabilities of different outcomes correctly (which is not straightforward). In crane building it is cheap to over-design and build in a big safety factor; in running railways it is not.

      It is not just the public sector that cannot assess risk – the banks did exactly that. It is actually very common.

      Reply : The banks got risk wrong, but they had competent sums and models which they could have stood up in court at the time, when they and the regulators all made the same conceptual mistakes.

      • lifelogic
        Posted October 4, 2012 at 8:01 am | Permalink

        It was the inter relationship global picture of the banks risk that they got wrong. They failed to understand the full systems of the interconnections between the banks, customers, insurance companies and the rest, as did the ratings agencies.

        There is quite an incentive to get valueless paper graded at AAA. Just as there is to label a painting as being a Rembrandt. They will usually find a way.

        • Bazman
          Posted October 4, 2012 at 7:17 pm | Permalink

          I thought it was because they just cared about the share price which in turn decided how much bonus they got. They understood alright. Make no mistake.

      • Disaffected
        Posted October 4, 2012 at 9:08 am | Permalink

        NHS fiasco where the world gets free health care at huge cost to the taxpayer, Railway fiasco where ministers do not have a clue and it is okay to be incompetent at huge cost to the taxpayer, DFiD wasting billions of taxpayers’ money on consultants, Ministers insult police officers and wonder why society does not respect the police or norms of behaviour (soft on crime approach by Clarke might be a clue), Qatada still in the UK at huge cost to the taxpayer after it was ruled he could be deported, PMs appointments question his judgment ie Coulson, Hunt and the sordid media scandal, Cruddas scandal cash for policy influence, scandal of dinners at No.10 for wealthy donors to the Tory party, Laws back in cabinet and a Chancellor who prefers to visit the president rather than go over the budget details and then face ridicule for making U turns on tax issues that anyone could see would be a mistake. When does the incompetence, poor judgment, scandals and wasteful use of taxpayers’ end?

        Why is Clegg claiming a fairer share of tax when he and the rest of the government waste so much of our money? A clue Mr Clegg, stop spending and wasting our money. Get real on energy, we cannot afford your stupid incoherent ideas on this subject either.

        Cameron will follow Brown in history as a one term PM who was not elected outright to run the country. Bothe proved incapable of doing so.

      • Lindsay McDougall
        Posted October 4, 2012 at 3:09 pm | Permalink

        Regarding First Group vs Virgin bids for the WCML franchise:

        Not the least of the risks is forecasting risk, so you have to do sensitivity tests on all the inputs to the forecast (population, demographic profile, GDP per capita growth, competition from other transport modes, home working etc.) and produce a range of scenarios and consequential revenue estimates.

        However, assessors of bids eventually have to pick a winning bid. The only way to do this is to place probability distributions on key input parameters and outcomes (this involves subjective judgement). There is software around, e.g. @Risk, to help. It is a bit crude but does the basics.

        • stred
          Posted October 5, 2012 at 7:12 am | Permalink

          Much of the incredible £40m plus the civil service costs wasted on these tendering procedures must come from the over complex assessments, cerated by management consultants employed to design the absurd system.

          When deciding which contractor to appoint, it is only necessary to specify the task and make sure that they tender on the same basis. It is not possible to forecast inflation or passenger numbers as these parameters are unknown. The tender document should therefore set these, as guesstimates, in order that the companies compete on management and running costs alone. Then the millions would not be wasted and the tendering process would be fair.

          It would even be possible to ignore inflation, as the running costs and income would increase together. The companies use the same stock of trains and pay the same for track access. Only the management and staffing is involved and, as proved by the re-nationalisation of the East Coast line, this is not something that needs highly paid financial slickers. It is simply necessary to find which management offers the cheapest deal, and then stick to it, so that they cannot claim extras.

          • Lindsay McDougall
            Posted October 5, 2012 at 11:38 am | Permalink

            Which concessionaire offers the cheapest deal depends on cash flow, which in turn depends on inflation and interest rates. The whole point about the First Group bid is that they proposed to pay the government peanuts for the first (say) 13 years of the franchise and lots of money in the last 2 years of the franchise.

            To assess the bids from the point of HM government, based on revenue for the taxpayer, you have to know what the value of a £ 15 years hence is compared with the present £.

            You can specify that the winning concessionaire cannot claim extras but then you have to assess the risk of bankruptcy. On the 3 PPP contracts for London Underground, all 3 contracting consortia walked away from their contracts, leaving TfL to pick up the tab. They were able to do this because the contracts TfL signed were with shell companies, with little of the parent companies’ (Bombadier, WS Atkins etc) capital at risk.

          • stred
            Posted October 5, 2012 at 1:27 pm | Permalink

            Reply to L.MacDougal. So the various tenders depend on guesswork and the most advantageous guess wins. How absurd!

    • Adam5x5
      Posted October 4, 2012 at 8:34 am | Permalink

      Lifelogic, Alan,

      Indeed, the crane analogy is possibly more complex and easier to overcome using a large safety factor (industry standard practice).
      It was aimed at being a rough analogy and apparent increase in load mass under acceleration was the first my half-asleep brain could come up with at that time in the morning. 😉

      • lifelogic
        Posted October 4, 2012 at 11:07 am | Permalink

        Clearly Virgin group got their heads round the figures without too much trouble why could all the people at the Dept. of Transport not do so. They even created the bidding system in the first place.

        Breathtaking incompetence even by the very low standards of this government.

        • Disaffected
          Posted October 4, 2012 at 1:31 pm | Permalink

          This point does not seem to feature in the reporting. The DoT and minister made the rules for the biding process, so they ought to know what they were looking for in the bids and which ought to be successful. Minister Greening, it was your responsibility. Have the good grace and honour to resign, you are not up to the job. Failing this Cameron ought to sack her.

        • zorro
          Posted October 4, 2012 at 2:09 pm | Permalink

          And why did they get their heads around it….? Because if they didn’t they would have lost the contract and lost business. It was in their financial interest to get the figures right…..unlike the civil servants who had set up the bidding process and supposed monitoring of tenders. They would have got paid anyway.


          • Adam5x5
            Posted October 5, 2012 at 1:59 am | Permalink

            Exactly the point.
            It should be in the civil servants’ interests to get the process right and value for money for the taxpayer or lose their job.
            Chance would be a fine thing…

    • Leslie Singleton
      Posted October 4, 2012 at 12:47 pm | Permalink

      It’s a mess all right, big time. Theoretical baloney dreamt up on this occasion I believe by home-grown British “Merchants” (both actual and Cockney rhyming slang). Hope you had nothing to do with it, John. All these silly names and train colours. What happened to KISS theory? It’s a bit like derivatives: brilliant in concept in a D. Phil. perhaps but impossible to control in practice. And have I gathered correctly that what we can do about it is now, naturally, constrained by the EU? Wouldn’t exactly be surprising would it?

    • uanime5
      Posted October 4, 2012 at 6:18 pm | Permalink

      Surely those who are responsible for this error shouldn’t lose their job it they hadn’t been properly trained.

      • Lindsay McDougall
        Posted October 5, 2012 at 11:54 am | Permalink

        Who is up to doing the training? The First Group bid was back loaded, so that the taxpayer would get peanuts in the early years, with heavy late payments relying on a bullish forecast. So among the abilities needed is assessment of the risk of a First Group bankruptcy in those late years of the franchise. Do you think that anyone in the public sector – whether Minister or Civil Servant – has that ability?

    Posted October 4, 2012 at 5:55 am | Permalink

    Regarding the West Coast Rail Franchise debacle. Of course, Labour Ministers; never ones to miss an opportunity to stick it to their opposite numbers are jumping up and down calling the Government inept and incompetent and calling for all sorts of inquiries.
    But of course which ever political party is governing the country; the unelected mandarins who pull the strings within the civil service are exactly the same whether they are led by Tory or Labour or a coalition and therefore the blame for any mistakes lie squarely at their feet. One can only hope that those responsible for the costly errors are held to account and dealt with appropriately and not as you suggest, allowed back in!
    My biggest fear is now that the West Coast rail franchise mistake has been exposed; an even bigger worry suddenly looms into view. Because presumably these are the self same civil servants who we are relying on to get the figures right when spending tens of billions of pounds on a vanity project like HS2?
    So it might be opportune for Labour Ministers to attack their political opponents but they should remember that no party has a monopoly on wasting vast sums of taxpayer’s money. The NHS ill-fated £11.4 billion National Programme for IT, set up in 2002, for instance.
    Not forgetting the Passport Agency’s new computer system which was supposed to cost between £80 million and £100 million. Unfortunately, the final bill for the contract with hi-tech firm Siemens was £365 million – more than four times the initial quote.
    These examples are just the tip of the iceberg! – If those whose task it is to place government contracts could occasionally stop pouring taxpayers money into huge bottomless pits, this country’s economic woes could be halved.
    The basic problem with this once great nation is that now, the power resides with the political class, and the civil service which only seems to serve its own interests and objectives. It should reside with the people. That is what democracy is supposed to be about.

    • lifelogic
      Posted October 4, 2012 at 6:59 am | Permalink

      “The basic problem with this once great nation is that now, the power resides with the political class, and the civil service which only seems to serve its own interests and objectives. It should reside with the people. That is what democracy is supposed to be about.”

      The UK it is not, by any objective standards, a democracy. The chance to vote once every five years for candidates who are constrained by the EU laws, who will say one thing before and election and do another in office. This, in a first past the post, party system is clearly not even close to democratic accountability. Then we have the BBC dripping its lefty, fake green, pro EU drivel on the nation too and paid so called “consultancies” for many MPs.

      Only the BBC could present it as being democratic.

      • Jerry
        Posted October 4, 2012 at 7:54 am | Permalink

        I was wondering how long before the BBC was dragged into this debate…

        • lifelogic
          Posted October 4, 2012 at 11:09 am | Permalink

          Not long as they distort every debate in the big government, more regulation, green tosh, more EU, and higher taxes direction.

          • Jerry
            Posted October 4, 2012 at 1:44 pm | Permalink

            In your opinion lifeloghic, but they simply reported the facts in this case as you would understand if you actually knew anything about railways…

          • Bazman
            Posted October 4, 2012 at 7:26 pm | Permalink

            What about other sources of information? Many young people do not watch TV never mind the BBC. How do other sources distort your ‘facts’ and how can they be brought around to your way of thinking. Your propaganda of explotation of the poor by no employment rights, minimum wage or benifits. To help them of course. Tax cuts for the rich in the hope we will get some scraps.Shale gas that is cheap and clean, but much evidence says different.Cuts to everything even private companies employed by the state in order to boost that private sector. Minimal health & safety for all industries despite the related human and finacial cost to all, and so on? No BBC. What other source would be next and for sure there would be a next. Ram it.

      • lifelogic
        Posted October 4, 2012 at 8:04 am | Permalink

        The BBC was once again repeating the mantra these (state sector) people could earn far more in the private sector. When will the BBC catch on that the state sector, including pensions, is already about 50% better paid than the private sector on average.

        • Bazman
          Posted October 4, 2012 at 7:27 pm | Permalink

          Who? The average worker? Name some specific jobs carried out by thousands across the country. More propaganda

          • lifelogic
            Posted October 5, 2012 at 10:33 am | Permalink

            Average pay in the state sector, when you include real costs of pensions is about 50% higher than the private sector. It is just a fact, like it or not. Just look it up.

            Most in the private sector have no pensions at all and the rest have had them mugged by G Brown.

          • lifelogic
            Posted October 5, 2012 at 10:34 am | Permalink

            They also take more days off, have more sick leave, have better conditions, better pay offs, and more social working hours.

          • Lindsay McDougall
            Posted October 5, 2012 at 12:07 pm | Permalink

            Never mind the pensions. The last time that it was seriously measured, wages and salaries in the public sector were running 8% ahead of those in the private sector. At all levels of educational achievement, with the sole exception of degree level (the public sector wastes its best brains), public sector wages and salaries were higher.

            The difference was greatest outside of the south east and at the bottom end of jobs content (clerks etc).

            Efforts by HM government to freeze public sector salaries have not been totally effective because seniority payments agreed with Unions have been declared inviolate by tahe courts. You can get a salary increment simply bcause of an extra year of service, even without a promotion. As a result, the public vs private gap may not be closing.

        • Mark
          Posted October 5, 2012 at 9:12 am | Permalink

          They’re only gong on their personal experiences: BBC Presenter Ltd earns much more and pays less tax than BBC employee presenter.

        • Bazman
          Posted October 5, 2012 at 5:02 pm | Permalink

          We are going need a specific job or work carried out by these state paid workers who earn 50% more. Foe example street sweepers, benefit staff and so on. Not you unsubstantiated propaganda and fantasy. You cannot just feel something is right as you often point out. How are you getting on with your demographic spread of UKIP theory?

          • lifelogic
            Posted October 6, 2012 at 4:15 pm | Permalink

            It is true that much of the 50% comes in pensions which they do not get until they retire but the 50% figure is right whether you like it or not. Just look it up.

            With low annuity rates an inflation linked state sector pension can be worth 40%+ on top of the wages.

        • Bazman
          Posted October 6, 2012 at 7:03 pm | Permalink

          Specific jobs. Should be easy if they are paid 50% more and 40+ on top of wages. No answer. No credibility.

  4. lifelogic
    Posted October 4, 2012 at 5:56 am | Permalink

    Justine Greening is an accountant with an MBA (and note Miliband she went to a comp) so one might have expected better. Had I been signing of such a huge financial decision I think I would have looked at the figures and asked for a full explanation report and spreadsheet of them from the staff responsible. Indeed I do so on any contract.

    I would also have looked very carefully at the risk rewards, to the taxpayer, of any new contract not being properly properly performed and ensured that these risk stayed largely with the providers. The contract was rather substantial financially after all. Ministers often just seem to think they a PR announcers reading out statements prepared for them like silly weather girls. In reality they are the only protection against exploitation of the tax payer by the civil servants. In practice they are no protection at all.

    Of course it is the usual state sector problem, it is not the civil servants’ money being spent and it is not they who will, in the main, be using the rail service anyway. They simply do not care very much at all on way or another.

    The government should not really be subsidising rail anyway. Rail should compete, on a level playing field, with cars, coached, buses, the telephone and the internet. After all it has few “green” advantages, in reality, despite all the green claims. In needs far more staff to run it. Why should rail get subsidy and cars get taxed through the roof?

    It often takes longer to work out which ticket to buy than it does to make the journey, due to the vast confusion marketing of tickets and routes. Often buying three tickets for part journeys actually costs less than the whole journey, it is absurd. The inherent problem of trains is that most people want to travel at the same directions and at the same times. So the trains spend much of the time returning empty or sitting about, that and the high costs of under used tracks and the high number of staff needed mean they are inherently inefficient and always will be.

    • Adam5x5
      Posted October 4, 2012 at 6:45 am | Permalink

      Why should rail get subsidy and cars get taxed through the roof?

      Because the car is evil and kills people.
      Railways are on the side of rainbows, kittens, bunnies and good.

      More seriously, it’s a misguided belief that cars are more polluting than railways and the use of the car as a cash cow to fund the government in an attempt to stave off the inevitable collapse under its’ own weight.

      • Simon George
        Posted October 4, 2012 at 9:47 am | Permalink

        The toll of death and injury on the road is hardly a matter for dispute. The tax paid by motorists does not cover the costs of the roads, pollution and NHS bills so they are certainly not over-taxed. It would be preferable to tax motorists more so as improve sustainable transport options and reduce traffic congestion.

        Reply: Motoring taxes cover all those costs several times over.

        • Adam5x5
          Posted October 4, 2012 at 11:12 am | Permalink

          Motoring is actually a very safe activity when you consider the number of miles travelled per year by the nation. Far safer than quite a few other recreational activities we partake in.

          For example motorcycling is often viewed as a very dangerous activity from road safety viewpoint. Yet a motorcyclist can expect serious injury at a rate of 1 per 7000 hours of riding.
          Horse riding expects serious injury at a rate of 1 per 350 hours.
          To compare these numbers, there were approximately 2.87m horse riders in 1992, and in 2010 there were 1.3m motorcycles registered on the road.
          Who costs the tax payer more in medical care and who pays more in tax?


          • Simon George
            Posted October 4, 2012 at 12:17 pm | Permalink

            Of course the motorist is relatively safely protected but motorists are implicated in the KSIs of more vulnerable road users.

          • Credible
            Posted October 4, 2012 at 3:25 pm | Permalink

            Am I missing something Adam5x5. Has the government just announced we should all be riding our horses to work? Wouldn’t surprise me though.

          • Credible
            Posted October 4, 2012 at 3:28 pm | Permalink

            One Neightion

          • Adam5x5
            Posted October 5, 2012 at 2:10 am | Permalink

            Actually the horse riding was something that was merely of the same kind of level of participation as motorcycling. It also happens to be very dangerous. Motorcycling is also quite a dangerous activity. It makes the activities comparable.
            It was more just a showcase that, by comparison, driving is very safe to a lot of things and we have better things to do than excessively penalise people for driving a bit more by taxing them more.

        • lifelogic
          Posted October 4, 2012 at 11:14 am | Permalink

          This is nonsense, bikes (in London) are 30 time more dangerous than cars and are untaxed, government encouraged and even uninsured. They also do not save C02, even if you believe the Carbon exaggeration scam.

          Taxes on cars also hugely over pay for these costs you list.

          • Simon George
            Posted October 4, 2012 at 12:07 pm | Permalink

            Bikes are 30 times more dangerous than cars? Cyclists kill a couple of people every year and motorists kill about 45 pedestrians just on the pavement.

          • Nina Andreeva
            Posted October 4, 2012 at 2:33 pm | Permalink

            Where is your proof that “bikes (in London) are 30 time more dangerous than cars” and that “They also do not save C02”? These claims are as questionable as your one yesterday about EU students milking the UK taxpayer with “soft loans” to pay their tuition fees.

          • lifelogic
            Posted October 5, 2012 at 10:42 am | Permalink

            Just from the published figure for deaths per mile in London.

            They do not save CO2/greenhouse gases as they are fuelled by extra food intake. Food, especially meat is a very, very, inefficient fuel indeed. Needing manufacture, packaging, transport, refrigeration, cooking and much waste. When you take this into account it is very clear that they save nothing compared to a full small car or even half full car. Just do the sums. Nothing questionable at all. Even the BBC used the 30 time figure.

          • lifelogic
            Posted October 6, 2012 at 4:17 pm | Permalink

            @Simon George

            30 times more dangerous to the user.

        • Electro-Kevin
          Posted October 4, 2012 at 9:25 pm | Permalink

          Motorists are over-taxed. As a car driver I agree.

          Part of that tax goes to subsidising railways. It is unfair but at least that part of the tax goes towards making the roads clearer for the car driver and they see some benefit from it.

          Road tax is diverted away onto lots of things in fact – the vast majority of them of no benefit to the car driver whatsoever. However, road tax always gets mentioned when the subject of railways is discussed but none of the others. Why ? This is understandable because we’re talking about transport. At least railways help the car driver and he sees some benefit in the form of clearer roads.

          There is no logicial reason to juxtapose the two when car tax is, in fact, being diverted onto lots of other things as well.

          By all means – complain about car tax being spent on railways but let’s be consistent. Let’s complain about car tax whenever we’re discussing welfare costs, NHS costs and other govt costs.

          Let’s mention car tax every time we discuss expenditures which are paid for from it.

    • Bazman
      Posted October 4, 2012 at 7:34 pm | Permalink

      The railways could not compete on cost so all the extra people would be on the roads. You seriously think we could build enough roads? The country would be at such a serious disadvantage by this lack of infrastructure it would be an economic catastrophe. Look at the railway system across Europe. More silly right wing fantasy from short distance car drivers who do not have the skill or aptitude to ride a bike or a motorbike. I live a twenty minute walk from my job so you I’m alright Jack with my car, bike, motorbike and middle class train journeys. Ram it.

  5. matthu
    Posted October 4, 2012 at 6:11 am | Permalink

    So the civil service can’t get their sums right on the Train franschise. Put this alongside Peter Lilley’s devastating analysis of the mistakes in the Stern Report and we see government can’t get their sums right on energy investment. They certainly didn’t get their sums right on ID cards. Do we have any faith they have the numbers right on HS2?

    • oldtimer
      Posted October 4, 2012 at 7:55 am | Permalink

      You are right to draw attention to Peter Lilley`s devastating critique of the Stern Report. He has also pointed out and the fact that at the time of the vote on the Climate Change Bill, MPs deliberately ignored the official Impact Assessment which revealed that the potential costs were nearly twice its maximum benefits.

      It is obvious that double standards apply in public discussion of private and state sector affairs. It is clear that HS2 data has been manipulated to make its case – being based on unlikely assumptions. Comparisons with alternative solutions have been ignored.

      It usually boils down to two considerations – they are spending other peoples money and they are pursuing a cause promoted by single issue pressure groups.

      reply Some of us read the report and disgreed with it at the time. I did not vote for the Climate Bill for that reason.

      • lifelogic
        Posted October 4, 2012 at 12:39 pm | Permalink

        Peter Lilley certainly did a good job on the absurd Stern Report. I see he went to Clare College, Cambridge and read Economics and Physics. May we have a few more of these sensible, numerate and logical people in the house to replace all the Oxford PPEs and endless Lawyers.

    • forthurst
      Posted October 4, 2012 at 12:58 pm | Permalink

      “mistakes in the Stern Report”

      There were no mistakes in the Stern report, only ‘mistakes’.

  6. barnacle bill
    Posted October 4, 2012 at 6:57 am | Permalink

    Whilst the Fat Controller(s) just gets fatter on whoever is in charge of our piggy bank.

  7. Pete the Bike
    Posted October 4, 2012 at 6:58 am | Permalink

    Get government involved with anything and you can look forward to incompetence, bad service, poor management, bungled contracts, enormous losses, loads of bureaucrats and politicians running around telling everyone it’s someone else’s fault.
    That is because any state run scheme does not have to answer to it’s customers. It gets it’s money from state theft (taxation) and therefore has no real need to offer a decent service. Instead it spends it’s time thinking up stupid rules, engaging in internal politics and just about anything except it’s actual business. If railways cannot survive in the free market they are a liability and a drag to the economy. Privatize them totally, remove subsidies and let them stand or fall on their real merits.

    • Alan
      Posted October 4, 2012 at 7:24 am | Permalink

      “Privatize them totally, remove subsidies and let them stand or fall on their real merits.”

      I rather agree with you, but bear in mind most of them would almost certainly fall, and the chaos whilst and just after that is happening would be considerable. Just imagine all the commuter lines into London ceasing, for example. After 10 years we might end up with a more efficient system – better use of telecommunications, offices away from London, home working, better use of buses, etc – but it would be unpleasant until all that came about.

      • Bazman
        Posted October 4, 2012 at 7:38 pm | Permalink

        There would be no railways other than the most profitable lines being plundered with no health and safety. When asked about this lack of safety and infrastructure the railways would reply that they have a railway to run. How would London be serviced? By contractors including the travel costs into the bill. How would cheap labour be serviced? Are you less than 12 years old?

  8. A.Sedgwick
    Posted October 4, 2012 at 7:40 am | Permalink

    In opposition I thought Miss Greening was outstanding from the back benches. Her decision and glowing support for HS2 and now this situation are less encouraging. Hopefully she will learn a lesson and take apart the Aid budget herself and in great depth.

    • lifelogic
      Posted October 4, 2012 at 8:07 am | Permalink

      No one honest, numerate, with a pencil, an envelope, a calculator and half an hour could think HS2 was a good plan.

      • A.Sedgwick
        Posted October 4, 2012 at 1:08 pm | Permalink

        Not to mention a political brain given the Conservative Party constituencies involved.

    • Bob
      Posted October 4, 2012 at 8:50 am | Permalink

      Let’s not have any expensive public inquiry about this, just sack the people responsible and get some in who is able to evaluate a bid based on more than just it’s cost.

      We need a proper shake up in the civil service, there’s just too much dead wood.

      • Glenn Vaughan
        Posted October 4, 2012 at 5:12 pm | Permalink


        I agree with you.

        The first person to be sacked should be the Permanent Secretary at the Department of Transport and sacking does not mean a “golden goodbye” plus a seat in the House of Lords!

  9. Brian Tomkinson
    Posted October 4, 2012 at 7:44 am | Permalink

    The point is that this incompetence would not have come to light only for Branson’s legal challenge. The complacent incompetence in government is appalling. Greening is supposed to be examining the way overseas aid money is spent, given her performance in this case what hope is there that she will do that properly? We have ministers who like to strut about showing how important they are whilst leaving everything to civil servants who are unsackable. Government in this country is incompetent and riddled with people who think our money is their money to do with what they will. If they waste it who cares? Certainly none of those in Whitehall. I hope you don’t pull your punches at the Conference next week. Remember to put country before party despite the pressure you will be under from those who have no intention of listening to your generally sound advice.

    • lifelogic
      Posted October 4, 2012 at 11:18 am | Permalink

      Indeed three cheers for Richard Branson. There is much to be said for dyslexics. At least they concentrate on the numbers, reality and logic rather than the mere notation, spelling and presentation – as seems to be this governments approach.

      • Bazman
        Posted October 4, 2012 at 7:39 pm | Permalink

        How are you getting along with your fantasy of changing railay lines into roads or have you given up on that nonsense?

        • lifelogic
          Posted October 6, 2012 at 4:21 pm | Permalink

          Many tracks would be better as roads as cars are more flexible, not being limited to certain fixed rails. Also they can go door to door and stop off at the supermarket/grandmas/school on route.

          • Bazman
            Posted October 7, 2012 at 10:34 am | Permalink

            The short answer is that in general railways are to narrow and the cost of widening bridges and viaducts is not feasible. No doubt some way of carrying out your plan could be done on the cheap ignoring any health and safety aspects, but what cannot?

  10. Jerry
    Posted October 4, 2012 at 7:45 am | Permalink

    For how many times does the Tory government (of ANY leadership) have to be told that they bungle public transport and especially railways, even the modernisation plan of 1955 had many faults although it was better than most. A fragmented railway system was identified as a problem as far back as the 1920s -hence the Railway Groupings of 1923 – but now the railways are more fragmented than they were in 1920.

    But why indeed not divert attention away from the minor bungling of the DfT, to Network Rail, after all that is a nasty not-for-profit company (not nationalised) set up as a direct consequence of the bungles 1994 privatisation and creation of Railtrack after the latter company had to admit that it’s bungling maintenance processes lead to the deaths of passengers…. Oops!

    Funny how our host hasn’t seen fit to mention East Coast Trains, run by the default (state owned) TOC after the previous private TOC had to hand back the ECML contract because it had overbid on the franchise, but then (if I remember correctly) it is actually running at a profit and some are suggesting that it should absorb other failing, failed or problematic franchises when/if it is put up for franchise. Some are already suggesting that the WCML should be dealt with in a similar way to the ECML for now, even more so as the whole bidding process -put in place buy this government- needs to be investigated to see if it is fit for purpose.

    As for the fault of the Minister(s), I bet our host would not have penned what he did had he been doing so from the opposition benches and it was a Labour Minister in the sights of the metaphorical firing squad.

    The real problem with UK railways is fragmentation (as I said above), governments since before 1992 have been told that such fragmentation is bad and unworkable but the Major government didn’t listen and nor has any government since, the rail unions may well have their faults but on this they really should be listened to if for no other reason than it is their members who work with the current system of rail operation and thus know both good and bad points. Also, don’t assume that because rail passenger figures have increased since 1994 that it is because of private train operators, remember that governments ‘war on the motorist’ has been going on almost as long and who in their right minds would choose to take a car into a city centre these days -especially London- what with petrol prices and parking etc.

  11. Bryan
    Posted October 4, 2012 at 7:46 am | Permalink

    I read that No. 10 says that Ministers cannot be held responsible as the complex spreadsheets could not be understood by a layman!


    So now we know, we are governed by intelligent (fools-ed).

    But do not fear. Ed Milliband on the Labour party political broadcast last night sounded more and more like Tony Blair. Even the voice cadence is there.

    We are saved.

  12. The PrangWizard
    Posted October 4, 2012 at 8:19 am | Permalink

    What’s at the heart of oppostion to HS2? Is it just the cost, or do you not want a modern fast railway system in England at all? Do you use HS1 bythe way? Would you be ok with it if it were to cost say £15 billion? Do you use the existing railway system and motorways? Or is it you just don’t want any of these things near enough to you that you can hear or see them? Come clean now! I hear that many road routes are to be widened, but people don’t want that either. Many of us have a ‘death wish’, or would rather live in a country of long long ago, which most people at the time wanted out of of course.
    And, for the record, I’m suspicious about the high cost with government’s track record on managing these big projects. But I can’t blame the Ministers entirely, they just can’t be expected to get into and understand every detail of these things every time. They should be accountable if they just waive them through or are vanity projects which go wrong, but what power have they got over senior incompetent bureaucrats? Who is going to be sacked for this West Coast issue? Surely it is a sacking issue? Just what can they do when they are dropped in it by them? Or will it just be absorbed into the great bloated bureaucracy and blamed on ‘the system’, ie. the out of control system.

    Reply: The issue is the lack of benefits for all the costs. extra capacity can be provided at a fraction of the cost on the existing railway. HAve you seen the stretch applied to the figures to try to get some kind of return? Do you realise the massive extent of the subsidies planned? Many of the proposed passangers will be diverted from the fairly fast existing railway to try to make up the numbers.

    • Jerry
      Posted October 4, 2012 at 9:59 am | Permalink

      @The PrangWizard: “Who is going to be sacked for this West Coast issue? Surely it is a sacking issue?

      Hopefully not some poor civil servant who was just doing as instructed, perhaps there is a MP somewhere who should fall on their sward, after all this (new) bidding process was put in place by this government, not the last, not the civil service…

      If passenger numbers and inflation etc. has been wrongly calculated on the WCML franchise it is not unreasonable to start wondering if the same basic mistakes have been made to the HS2 modelling.

      • Nina Andreeva
        Posted October 4, 2012 at 2:42 pm | Permalink

        Jerry, Unfortunately ethical MPs such as Sir Thomas Dugdale disappeared from the HoC years ago, so I would not hold your breath on any MP falling on his sword over this one or any other scandal http://en.wikipedia.org/wiki/Sir_Thomas_Dugdale

    • Lindsay McDougall
      Posted October 4, 2012 at 1:49 pm | Permalink

      Disruption costs during any upgrading of the existing West Coast Main Line would be very great. A major upgrade planned by Railtrack was cancelled for that reason and there was a renegotiation with franchisee Virgin Railways. So any method of investing in new capacity would be expensive.

      Here’s a heresy: for the next 10 or 20 years, sweat the existing assets and build up a fund for future rail investment. In the interim, provide extra capacity along M1/M6/M74 by widening as needed, financed by tolls.

  13. Matthew
    Posted October 4, 2012 at 8:19 am | Permalink

    Well there are worse things happen than the line is re nationalised – and this goes against the grain for me.
    I travel on East Coast Newcastle – London once or twice a week and it’s a great service – good staff, good food –
    The best that I can remember it.

    What the finances are like though I don’t know.

    • Mark W
      Posted October 4, 2012 at 10:11 am | Permalink


      Aren’t many of the staff the customers sees still left over from the GNER days. They are excellent. As was GNER. Far better than British Rail before it.

      I’m not a big traveller along the east coast but I have found the servcie still good under its nationalized status as it currently is.

      • Matthew
        Posted October 4, 2012 at 3:30 pm | Permalink

        yes Mark the same staff as GNER and National Express – both were great

  14. Electro-Kevin
    Posted October 4, 2012 at 8:22 am | Permalink

    I think privatisation could have worked if done on a regional basis – infrastructure and train operators all-in perhaps. The competition should never have been operator against operator … or (incredibly) operator against infrastructure provider (delay penalties.)

    Layer upon layer of non-productive legal professionals and consultants have been introduced to this industry.

    Nothing could get away from the fact that BR was badly under-invested and the policy shift had long been away to road by the time of privatisation.

    I was working for a lot less under BR and was happy to have taken a large pay cut from my police career to do so. The only thing is that no-one else wanted to do the job (the shifts are worse than any I know – 3.10 am book on ???) and there were massive staff shortages when the privateers took over. They had no choice but to put the wages up.

    For all our faults (there were many) BR were highly productive and doing it on a shoe string compared to today.

  15. Acorn
    Posted October 4, 2012 at 8:23 am | Permalink

    I mentioned the other day about our MPs leaving the too difficult decisions to the Civil Service and the Corporate – profit and monopoly seeking – lobby. The results now exposed by a company that knows how to use a calculator.

    The trouble with not understanding what you are doing is you get mugged by smarter people. The Coalition Ministers demanded a fifteen year franchise without understanding, that no business will ever attempt to make a fifteen year revenue projection. If it did, nobody would insure that level of risk. Justine Greening has an MBA and an economics degree, so you would have thought she would have known better. I doubt she was put on the front bench for a bit of window dressing, like Caroline Flint claimed before her? And where is JG now?

    Now if we had elected our Prime Minister separately from the MPs; and, he appointed his own cabinet on private sector type money, he could probably tempt Nicholas Petrovic, Chief Executive, Eurostar, and Pierre Messulam, Rail Strategy and Regulation Director, SNCF, to cross the channel and take over the whole kit and caboodle. I think I posted this link last year. The French guys come in at about 2 hrs 2 min. They give me the impression they know what they are doing. Note the answer to the question “were the predictions about expansion correct”. http://www.parliamentlive.tv/Main/Player.aspx?meetingId=8661 .

  16. Richard1
    Posted October 4, 2012 at 8:29 am | Permalink

    It is extraordinary – well actually I suppose its predictable – that the BBC chose this trivial story as its lead item yesterday. The political bias of the BBC is completely unacceptable in a democracy. We also witnessed this in the plaudits from BBC commentators for Ed Milliband’s speech at the Labour conference and in the extraordinarily soft ride he has had in interviews.

    • Jerry
      Posted October 4, 2012 at 10:15 am | Permalink

      I bet if the headline had been ‘Virgin cancels High Court action against DfT franchise award’ (and not “DfT cancels Franchising process”) you and others would not be complaining that it was the lead on the BBC…

      • Richard1
        Posted October 4, 2012 at 5:05 pm | Permalink

        Its quite clear the reason it was given such prominence, given the small amounts involved, is to attack the Govt. Its certainly a cock-up – someone should be fired, as responsible managers at G4S were in the Olympics. The choice of news illustrates the BBC’s bias on this as on many other things.

        • Jerry
          Posted October 5, 2012 at 7:41 am | Permalink

          @Richard: You are entitled to your opinion but considering that even the DT was making much of this….

  17. a-tracy
    Posted October 4, 2012 at 9:58 am | Permalink

    From an article in the Guardian http://www.guardian.co.uk/uk/2012/oct/04/west-coast-rail-whitehall-brain-drain

    “O’Donnell said. “They get taken back to the private sector, who pay them vastly more.” He added that for procurement officials remuneration is “a measure of how much they are valued.” Three unnamed civil servants involved in the west coast procurement process have been suspended following the west coast reversal. ”

    Can we ask what the full remunerations package was for these three civil servants? Following O’Donnell’s comments I’m curious. The information needs to include gross salary, holidays, sick leave arrangements, pension arrangements including if they get a discount on employees NI and contribution years, lump sum payments, age available to claim the state second pension element, their hours of work, duvet day allowance, training days, any medical provisions, bonus schemes, car allowances, expenses allowance.

    • a-tracy
      Posted October 4, 2012 at 12:38 pm | Permalink

      Sue Cameron in the Telegraph noted that the most senior of the blamed officials was three down in the departmental hierarchy. That doesn’t seem right does it? I wonder how much each of the higher pay grades were also on to back up O’Donnell’s statement.

  18. Mark W
    Posted October 4, 2012 at 10:05 am | Permalink

    Maria Eagle (Shadow Transport) was blaming Justine Greening, for civil servant errors. Unfortunatley she didn’t offer a suggestion.

    Should the Secratary of State check all the minute detail themselves. This would be cost effective as there would obviously be no need for any civil servants in the department at all.

    I’m assuming she was just point scoring. Labour favour the franchise system. In 13 years in office they never scrapped it and made several attempts to introduce it to other areas of public transport, although no local authorities took this option up.

    The big error here was First Group. The franchise system allows a predator to put in a bid to confiscate the business from the incumbent. Like National Express did to GNER on the east coast. Then go crying when they can’t make it pay, but the quality service provided by the incumbent is then lost.

    Maybe a clause in these circumstance should make the directors of the bidding companies have restrictions on their limited liability status in the event of suicide bids to remove an incumbent. The risk of their own personal assets might make the bidding more realsitic. However, I would prefer not to put limited liability status at risk, and this would be a dangerous first step. Also I believe franchising is not a good system.

    Renationalising the railways is a difficult one. British Rail was awful. Some private companies have been far better. No railway in the world operates without subsidy. State ownership proves time and again not to work. Who really believes that Tesco would be better as a state company.

  19. Neil Craig
    Posted October 4, 2012 at 10:11 am | Permalink

    Lessons are always learned.

    That is why the civil service are able to repeat their mistakes with such accuracy.

    The basic problem is that railways are technologicallt so backward compared to road traffic. That is wht they cost more, need subsidy & cannot be fully privatised.

    As John has said several rimes here, light trains built in the style of buses would be far cheaper to run and because they could stop more easily, tou could have more of them onm the lines. and as i have said automating the entire system so that it is driverless would now be a trivial problem in terms of computer capacity & would allow single carriage units 24/7 greatly increasing capacity and flexibility while cutting running costs.

    If cars can be run by computers (Nevada has recently made wholly automated cars road legal) trains are a far simpler matter.

    • Electro-Kevin
      Posted October 4, 2012 at 9:04 pm | Permalink

      Neil – It is my belief that automation will happen sooner or later. This will happen in many other jobs too in fact. That’s progress and it should not be opposed where it is proven to be safe.

      However, I cannot see the case when there will not be the need for riders to deal with technical problems (both on the train and the infrastructure) – this forms the main part of a driver’s job and training.

      The nearest fitter can be two hours away when things go wrong and the delay minutes inflicted on other services can add up to hundreds of thousands of pounds in costs. Trains cannot just be moved aside like broken down cars. Passengers cannot just de-train themselves willy-nilly in mid section and stand on a ‘hard shoulder’ and organise their own recovery.

      • Electro-Kevin
        Posted October 4, 2012 at 9:36 pm | Permalink

        “You don’t have a steering wheel ? Err – what do you do all day then ?”

        I get asked that every time.

        I can see a time when the driving part of the job gets automated, however, on a mainline system covering hundreds of miles there needs to be someone on the spot who knows when to pass failed signals at danger, isolate defective brakes, suspension, doors, automatic safety systems – and then apply the relevant rules and regulations to re-start the service safely (or decide to cancel) but with degraded equipment.

        • Electro-Kevin
          Posted October 5, 2012 at 4:23 am | Permalink

          Additionally there is the issue of low rail adhesion which applies to conditions other than leaf season – frost, dew, salt water (coastal areas.)

          This is a serious problem which has not been remedied yet. Presently it can only be dealt with by having an operative at the front of the train who can see rail contamination and react to it.

          Even Docklands Light Railway has operatives riding the circuit – this can be done because it is a slow and localised service. I hear that their pay is in the order of £25-30k. The saving per ticket on staff wages that you propose would come from automation not be total in fact.

          However, I’m sure it will happen. As with lots of things. That’s progress as they say.

          I do wonder what most of us will do for a living though.

  20. John Eustace
    Posted October 4, 2012 at 10:51 am | Permalink

    I did post on here at the time my opinion that ten minutes spent looking at the numbers was enough to see that the original decision was badly wrong and asked whether ministers or civil servants would be held responsible.
    If the answer turns out to be both then justice will have been done for once.
    If the coalition is really so short of numerate people with a level of commercial experience then give me a call. The former head of the Civil Service seems to think that anyone competent needs to be paid more than the Prime Minister and uses this as an excuse for not having the talent required – I will happily run rail franchising for a pound a year below the Prime Ministers salary!

  21. RDM
    Posted October 4, 2012 at 11:05 am | Permalink

    Is it true DC wanted a Red Conservative Party? Help! stop the training, I want off!!!!

    Labour are now the One Nation Party?

    We have had no real solution to the Banking crisis? I have re-read Hayeks’ “Price and Production” again recently, the one he wrote after the RtoS. The one where he considers Long term Money, and the short termism of today’s System. Or how we match longer term Money to new “Production”. The seeds of a solution, one thinks?

    It seems to me that independent Contractors’ (I’ve was one for 12yrs before crisis) are now being persecuted, or it just for me?

    The only employment growth we have is Part-time or Self-Employed, but only within London? – I wish I had the money to move back to London!

    On the one hand; There seems to be a lot of People trying to turn the clocks back, and not solving today’s problems? But on the other, there seems to be a lot of positioning going on?

    Why on earth would you want to be a Politician?

    • Credible
      Posted October 4, 2012 at 2:41 pm | Permalink

      It’s the One Nation Party
      against the
      One’s Nation Party

  22. David John Wilson
    Posted October 4, 2012 at 11:50 am | Permalink

    Having been involved with government contracts for many years, negotiating from the private company side, the civil servants don’t stand a chance using their current procedures. Although a little more complex what they actually do is issue a set of requirements that are effectively a tick list. What the private companies do is provide a response that ticks as many boxes as possible and the winner will be the company that ticks the most boxes.
    In parallel the private companies produce their own internal response that works out how they can maximise their profit. The major element in this, beyond their own internal efficiencies, is the identification of all the shortfalls in the requirements that can be taken advantage of. In the case of rail getting out of the back end payments would be to the forefront. The other major one that affects all government contracts is the ease with which civil servants can be persuaded to change the requirements after the contract is signed thus invoking massive extra costs.

    • forthurst
      Posted October 4, 2012 at 5:04 pm | Permalink

      It would be interesting to know what mix of skills actually goes into the civil service, apart from the ability to write essays incorporating the pejuduces of tutors on topics of little practical interest.

      What you are implying is that there are substantial savings to be made quite apart from headcount reduction by employing civil servants who knew how to construct a requirements specification and to vet responses.

      I was amazed to read about a PFI school where the lights blazed continuously; did someone forget to incorporate a light switches tick box? By requiring a proposal to meet reasonable expectations in undefined areas would put the onus back on the proposer; what court would say light switches were unnecessary?

  23. Martyn
    Posted October 4, 2012 at 12:07 pm | Permalink

    I suspect that, ultimately, no person or persons will be held directly accountable for this debacle and definitely none will fall on their sword through guilt. In fact, the loudest noise I can detect in Whitehall this morning is the sound of a number of umbrellas going up.

    Why should we be surprised at this? Our Mandarins are simply following the stunning example set by their masters in Brussels…

  24. Martin
    Posted October 4, 2012 at 12:39 pm | Permalink

    It is all very well advocating the private sector but Ms Greening was a main player in stopping a private company building a runway a Heathrow. Now it turns out while she was busy blocking the private sector runway she was in charge of a major public sector contract that has gone badly wrong.

  25. Credible
    Posted October 4, 2012 at 1:03 pm | Permalink

    This is another example of the complete ineptitude of this government. And, yes the Labour party will take advantage, wouldn’t you in the same position?
    You complain about derivatives and you are right to, but you are a member of parliament for the government in power. Stop winging that the local radio station won’t listen to you. Go and bang heads in government – especially if the train companies have government imposed contracts. This type of activity should be stopped if it squanders so much money.
    The train into London from Reading in the morning has spare seats in 2.5 first class carriages while everyone else getting on at Reading (many from your constituency) has to stand and pay a fortune. You say you’ve talked to the train companies about capacity and prices but they don’t listen (a common theme). That’s what happens with private companies, their priority is to make money not to be accommodating. Then you argue that the problem really is because the tracks and signals are nationalised. What rubbish. Why were the tracks re-nationalised?

    Are you also suggesting that the cheap off-peak tickets should be made more expensive or the unpopular services removed. Perhaps you think there should only be first class and first class prices. That way the companies make lots of money without the need for subsidy. Then the plebs can find another way to travel.

    Reply I do regularly complain about the conditions and seat prices on commuter trains and will continue to do so. I do raise the issue of Network Rail losses in London as well as locally!

  26. Lindsay McDougall
    Posted October 4, 2012 at 1:39 pm | Permalink

    There are two ways that will work. One is to denationalise Network Rail to restore Railtrack. It will also be necessary to allow Railtrack to charge whatever it likes for track access charges, in accordance with market forces, so it has good revenue. The original Railtrack failed because of government suppression of track access charges in order to increase use of the railways (Prescot and Byers). As a result, they skimped on track maintenance and we know the outcome.

    The second is vetically integrated privatised regional rail monopolies that can run services in house or put them out to tender as they wish. Competition would come – as it always has – from road and air based services. Revenue from long distance rail services running through more than one region would have to be split.

    The first method would continue the bonanza for bankers (who invest in the companies that own rolling stock), lawyers and administrators. The second method might not to the same extent.

  27. peter davies
    Posted October 4, 2012 at 2:07 pm | Permalink

    It is well known that anything run by civil servants/govt rarely runs well. My approach would be to outsource the running of the railway infrastructure to someone who can – Deutchebann?

  28. Dagney Taggart
    Posted October 4, 2012 at 4:56 pm | Permalink

    I know how to run a railway.

  29. Iain Gill
    Posted October 4, 2012 at 4:59 pm | Permalink

    Labour threw away about 5 billion quid on failed nhs IT systems that were obviously never going to work from the beginning (I was there and saying so at the time), to say nothing of the massive waste on national id card systems. a few tens of millions is nothing in comparison.

  30. merlin
    Posted October 4, 2012 at 5:32 pm | Permalink

    I’m getting very repetitive but no government should be allowed to run anything and the present railway debacle is just another example, going back 30 years the history of the private and public sector is littered with government nationalisation disasters. How long will it take for the idiots in government to learn that most projects should be run by the private sector.

    • uanime5
      Posted October 5, 2012 at 3:17 pm | Permalink

      Given how many disasters have occurred because the private sector wasn’t able to run itself it’s better than the state remains in control of the essential services.

      • Lindsay McDougall
        Posted October 5, 2012 at 7:55 pm | Permalink

        We haven’t got too many examples of the private sector running things without state meddling. What do you think regulators do? Government is the problem, not the solution.

        Ronald Reagan was fond of saying that the most terrifying words in the English language were: “I’m from the government and I’m here to help.”

        You are aware, I trust, that Railtrack skimped on track maintenance because Stephen Byers wouldn’t let them charge the market rate for track access charges. Still, Mr Byers’ political career is well and truly stuffed; revenge is a dish best served cold.

  31. merlin
    Posted October 4, 2012 at 5:35 pm | Permalink

    To quote once again one of the greatest american presidents ever, the most terrifying words inj the english language:-

    I’m from the government and I’m here to help

  32. Jon
    Posted October 4, 2012 at 5:41 pm | Permalink

    Interesting how Labour were not fussed about the 10s of billions wasted on bad mod contracts under their watch but get animated about this.

    Whilst the decision to take the contract away from Virgin must have been surprising can a minister do much more than as them to check the data which they did I understand. The problem is the ongoing issue of contracts and procurement in the civil service. They don’t take responsibility. I read Francis Maud suggesting that they also ignore ministers (voters) requests to enact policy. They seem to have become detached from our democracy and lack job accountability and ability.

    I don’t trust TFL or the DFT to work efficiently or to look after our taxes and fares. It costs 40% more to run our railways and yet the answer seems to raise fares always. Proper private companies continue investment as well as keeping costs and prices down. Its all very badly run in many areas.

    As for the derivative loss no doubt that was made up by the taxpayer under the guise of rail investment . I expect those investments were placed during the Labour administration as well.

  33. waramess
    Posted October 4, 2012 at 5:54 pm | Permalink

    Quite extraordinary that you try to excuse this by citing an even greater loss incured by the other side. It was quite disgraceful and it beggars belief that a minister might think that he or she is paid a vast salary to enquire of Civil Servants whether everything is OK.

    This post just goes to show how out of touch the party is and how tribal instincts have become.

    The Minister is all that exists between us ,and the Civil Servants subjugating democracy, and she should acknowledge her error and resign her current post.

  34. Steven Whitfield
    Posted October 4, 2012 at 7:45 pm | Permalink

    The railways are run no more incompetently or wastefully as the rest of the activities that this Coalition government are involved with. It’s just that the effects are more noticeable.

    The country is still on the same track as New Labour and the Argentinians followed..


  35. peter geany
    Posted October 4, 2012 at 11:00 pm | Permalink

    I worked and lived transport for the first 25 years of my working career. Rail is old tech, it is inflexible and it is hugely capital intensive for it given ability to move things. It is uncompetitive cost wise with more modern and flexible forms of transport and will never break-even let alone be profitable again anywhere in the world. We need to accept this and live with it. I think most thinking people understand this.

    The one area where rail is useful is moving bulk, and Coal and aggregate are the only bulk items I can think fit the bill these days, or for moving people who are commuting.

    No one could suggest there is a better way of getting people in and out of our cities to work as quickly as rail. But far too often we use the wrong equipment and are looking to invest in the wrong systems to get us through the next 20 years or so.

    HS2 is a dead duck as the numbers from the existing hi speed link from Dover to St Pancras have shown. I travel the Great West route every day from Gloucestershire to London. Let me say the service is OK but hideously expensive. Now they want to electrify it, but only the part from Paddington to Wales. What of the lines to Exeter and Bristol or Gloucester and well everywhere? Indeed!

    We don’t need an expensive InterCity replacement. We need more of what we are excellent at building and were world leaders at, diesel Railcars. Despite the ignorance of the media some of the most advanced diesel engines in the world are manufactured in Britain. These are engines that dominate the mining industry because they are clean, fuel efficient and robust outlasting the competition. They also dominate the railcar world.

    John until rail chiefs and politicians understand the place of rail and what it’s for, they will continue to invest in the wrong equipment. I reckon we could half the direct operating cost of the equipment by using trains that can detach half the carriages for off peak and for feeder routes. For and until there is some modern thinking our rail system will be a laughing stock.

    • uanime5
      Posted October 5, 2012 at 3:21 pm | Permalink

      If you go to mainland Europe of Japan you’ll soon find that rail is a very effective way of getting to work or school.

      Reply Japan has most of its people living along a flat coastal strip, which is ideal for railways. The UK has to face many bends, hills and dispersed settlements which is much more difficult for rail travel.

      • Lindsay McDougall
        Posted October 5, 2012 at 7:48 pm | Permalink

        Japan has one of the highest population densities in the world, added to which 80 of its terrain is mountainous. So they don’t have much alternative to running commuter and high speed railways on the flat bits.

        Beware the terms ‘effective’ and ‘efficient’. You can always make a public transport service look good if you throw enough taxpayer’s money at it and run the trains or buses half empty.

  36. Derek Emery
    Posted October 5, 2012 at 12:17 pm | Permalink

    Productivity in the public sector has not improved for over a decade whereas in the private sector it has improved by well over 20% see http://www.taxpayersalliance.com/bettergovernment/2010/07/public-sector-productivity.html
    This tells its own story. There is no pressure to improve in the public sector so you cannot expect the public sector to be efficient and up to date as there is no drive to strive. It’s impossible for the public sector to have experienced experts in all the areas needed to contracts in today’s technological world. They should employ ouside experts relative to he contracts as a matter of course.

    In the private sector contracts and bids are always walked though by others not directly involved to reduce errors. People make errors and only closing the loop can reduce them. If TfL did a walk through how come the errors still got past them? If they did not do a walk though what is their excuse for not doing one?

    Trains are a 19th century technology concept when labour was cheap so high maintenance requirements were not an issue. Trains are one of the most expensive it not the most expensive forms of travel. Capital costs are huge as are maintenance requirements. Even the cheaper light rail (trams) is so ridiculously expensive that on a purely financial basis none would ever be built. Mainline train systems are far more expensive and high street trains are the most expensive there is. Without subsidies they would be no trains as the true costs are more than passengers can bear.

    A pretence is maintained that Europe can do it much cheaper. This is totally ridiculous as all it means is they have even more subsidies even if some are hidden. All train operators in Europe have to pay European wages, they have to pay the same prices for equipment and the train systems will require the same levels of maintenance. Real differences in costs can only amount to a few percent.

    Technology associated with road vehicles and planes is changing drastically more rapidly than can ever happen with train systems simply because the market is far bigger and far more are sold. It would not be surprising to find that within a decade or so the rising efficiencies of these counter the energy efficiency of rail. Driverless road vehicles are already licensed in parts of the US and will further reduce costs. Commercial vehicles will not require drivers and the automated driver will be far more fuel efficient than any human could be as well as haivng lower accident rates.

    The UK has structural problems due to aging demographics where around half the population will be retired by 2050. This has to mean in the longer term train travel will reduce as the old and retired travel and spend less.

    There is talk of a boom in train passenger traffic but this is inconsistent with UK aging demographics. Already baby boomers are retiring in mass which will leave a smaller working population supporting a larger body of retired. Is this ever taken into account or is it compulsory to assume booms in the working population to justify future projects?

  37. Lindsay McDougall
    Posted October 6, 2012 at 1:41 pm | Permalink

    Can the bids for the West Coast already submitted not simply be reassessed?
    (1) Correct all the errors in the assumptions, particular forgetting about inflation and interest.
    (2) Repeat the analysis and come to the correct conclusion.
    (3) Publish in full the list of errors and omissions corrected, together with the revised analysis and assessment, in full.

    That’s open government for you. If the revised assessment goes against First Group, they will probably sue. However, they are going to do that anyway, so nothing will be lost.

    That way, there would be no need to ask for bids to be resubmitted and no need to return the £40 million of bid costs. Don’t institutions of government EVER put taxpayers first?

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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