Nationalising Scotrail is a useless distraction from improving rail services

Nationalising Scotrail is a useless distraction from improving rail services

by Liam Kerr
article from Wednesday 5, December, 2018

THE SCOTRAIL ALLIANCE operates around 2,300 train services each day and delivers over 93 million passenger journeys per year on about 3,000 miles of track. It is always going to be challenging to run.

Every so often, someone calls for the Scotrail franchise to be given to a public sector company i.e. nationalised, as some kind of solution. Last month, the Labour Party was the latest to have a go, setting up its argument by writing in the Scotsman that passengers across Scotland are “fed up with overcrowded, overpriced and late-running trains”. 

Therefore they suggested that ending the Scotrail franchise at the first opportunity and accelerating the process for public ownership would be in the public’s best interest. Bluntly, this is naïve and would be a facile analysis, were anyone confident that an analysis had been done. 

The question is simple: would nationalisation solve any of these three issues? Answer: “no”.

Dealing first with the overcrowding allegation. Are the trains overcrowded? Certainly… in the central belt and at certain, very specific times of the day. 

So what is the solution? One might be to put on more rolling stock to make longer sets. But Labour seems to have forgotten, or perhaps is not aware, that Scotrail’s fleet is entirely leased, almost exclusively from the three main Rolling Stock Companies.

So even if we assume that the current platforms could accommodate the larger sets (I know from personal experience that there are several stops between Edinburgh and Aberdeen where passengers are required to move to different carriages as the train is longer than the platforms), what would be the cost to rent more rolling stock? And is that rolling stock even available for lease? 

Perhaps the solution lies in running more trains at those specific times. But as anyone who knows the system will be aware, there is virtually no spare track capacity in the system. The East Coast mainline presently has no available space and Glasgow Central, for example, couldn’t handle more, or longer, trains without significant infrastructure investment.

And again, more sets means more rolling stock and drivers and crew, means more cost to the taxpayer.

Of course, Labour could propose changing the entire model and having their nationalised company purchase the rolling stock itself. The cost of which would be interesting to hear. 

In any event, change of ownership clearly fails to solve the problem of overcrowding.

So how about this idea that the break clause should be exercised because tickets are overpriced?  Let’s assume the nationalised company can solve the overcrowding without increasing the rolling stock, personnel and making any infrastructure changes so the running cost of the railway remains the same as now.

The new public owner has three basic ways to reduce ticket prices:

  1. Hike taxes and (in the unlikely event that that leads to an increased take) hypothecate the proceeds to the railway, such that even those in, for example, Fraserburgh who are the furthest in the country from a station can subsidise cheaper tickets for commuters’ journeys elsewhere;
  2. Cannibalise funds to use as subsidies from another budget such as health or education; or
  3. Cut investment.

One would assume the first two are non-starters so the only option is the third. 

Those calling for nationalisation appear not to know that the margin on running a rail franchise in the UK is around 2-3 per cent, down from around 5 per cent in the early years of franchising. Commercially, this is a less and less attractive business to be in hence why the market for franchises has weakened.

So if this nationalised railway has to cut investment further to cross subsidise a reduction in ticket prices, one cannot imagine there will be too many additions to the 26 refurbished HSTs shortly to be brought on-line, the £475m investment in class 385s and all those shiny new station improvements.

So, change of ownership has failed to deliver a solution to ticket prices.

Finally, the suggestion that nationalisation would solve reliability problems. 

Passengers are rightly angry about cancellations, delays and breakdowns.

Except that a significant reason for the delays and cancellations last year was Storm Ali. Readers may know that the contact point between a train wheel and the rail is roughly the size of a 5p piece, with, let’s say 12.5 tons balanced on it. It makes sense that those charged with our safety while using their services aren’t gung-ho when it comes to decisions around cancelling or delaying services.

Of the rest, Network Rail which runs the actual track functions bears some responsibility – and it is already nationalised.  

And of course, sometimes an engine or a set will break down. But it is difficult to see how a nationalised company can fix a mechanical issue any more quickly than a private company.

So a nationalised company would have exactly the same reliability issues as a private operator.

It would have exactly the same issues of crowding.

And it would have exactly the same pricing challenges.

Yet the nationalisation idea still seeks to shift huge risk and cost issues onto the Scottish taxpayer, for no discernible benefit.

Instead of wasting time debating break clauses and models of franchise ownership due to ideological dogma, let’s focus on those positive interventions that could actually make a difference to Scotland’s railway.

 

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