An afternoon with Parliament’s Transport Select Committee

When Gwyneth Dunwoody chaired Parliament’s Transport Select Committee she used to favour the rooms along an upstairs corridor in the Houses of Parliament themselves.

These rooms were cramped and they were hot in summer. Witnesses, journalists and visitors, perhaps even MPs too, would sweat as Dunwoody probed and questioned through a sticky, summer afternoon.

Thankfully, today’s chairman, Louise Ellman, favours the air-conditioned comfort of Portcullis House and so it was on Monday 9 June that a handful of MPs and others gathered in the Grimond Room to hear Mark Carne answer questions.

It was the Network Rail chief executive’s first appearance and I reckon he got the better of his inquisitors. He wasn’t knocked off balance by any of the questions and by the end of the session Louise had lost six of her committee who upped-sticks at various points through the 75-minute quiz.

Norwich North MP Chloe Smith opened a line of questioning about the performance of contractors and NR’s confidence in them in the light of a recent engineering overrun at Colchester. It elicited a response about NR’s move towards longer-term alliances and better investment in people. It’s a shame there was no follow-up question about contractors’ skills shortages, particularly in signalling and overhead line engineering because both are areas in which NR has large volumes of work planned over the next five years.

Carne spoke also of the need to work closely with train operators and his view that more work should be done in long blockades rather than piecemeal over weekends and nights. This is an area the MPs would have done well to probe in more detail. None appeared to know the saga of Watford Junction’s track and signalling renewals.

NR announced last summer that Watford Junction would close for 16 days over 9-25 August in a move that would sever the key West Coast Main Line (albeit during the slightly quieter summer holidays). This would then be followed by work over Christmas, over 14-22 February 2015 and 3-6 April 2015 (Easter). When this plan was revealed, no-one I asked could explain how services and passengers would work around the blockade.

It struck me that the announcement had come before the plan was properly worked through and probably before train operators had agreed to it. This feeling was reinforced when NR subsequently dropped the long blockade in favour of three weekends of work in August, followed by Christmas, Easter and two further weekends.

So Carne’s words about moving more towards work in blockades and closer liaison with train operators were open to challenge, had the Transport Committee members been suitably well-informed. (As an aside, the Office of Rail Regulation said way back in June 2008: “Network Rail believes – and we and the industry agree – that its strategy of depending so heavily on long possessions is no longer acceptable. Users need a railway which better meets customer requirements for travelling at weekends and late in the evening.”)

The MPs also appeared confused about the difference between emergency repairs and planned improvements. Why, asked Jason McCartney, could money not be found to remove bottlenecks on the network in the same way money was found to repair Dawlish (where the track and sea wall was washed away in last winter’s storms). “Are you able to do it with other projects?” he asked.

Carne had already explained that half of the money to repair Dawlish has come from insurance and the other half from NR resources. He had also explained that it’s government that decides where to make improvements from options drawn up by NR, having decided how much it’s willing to spend on railways.

“We can’t de-bottleneck a complete railway line and change our five-year investment plans because we’ve had one series of particular issues,” Carne said.

NR’s chief executive had earlier told MPs that his company was modelled on ordinary FTSE companies when it came to its governance, that is, he reported to the chairman and there was an overall board of executive and non-executive directors.

All true of course but NR is also a not-for-profit company created by the government and from September, it’s debts will count as government debts. So having modelled itself on a FTSE company, it can’t complain at the headlines that followed its Annual Report publication later that same week. According to Engineering and Technology Magazine it was ‘Network Rail profits soar as punctuality falls’.

Yet NR’s income and spending is regulated and so the concept of profits is rather flawed in this context. NR explained its 86% increase in profits after tax to £1,256 million as the result of “accounting gains on hedging instruments” (£304m) and a tax credit of £221m (up from a tax charge of £70m the year before).

The annual report revealed that performance had fallen from 90.9% to 90% which the company explained as being the result of a million more train services running each year compared with a decade ago. That may well be the case but NR has also seen its network hugely improved to cope with this increase in trains.

NR missed its five-year long-distance targets last April, managing 86.9% instead of the required 92.0%. It should find the next five years easier, having convinced the Office of Rail Regulation to scale back its target for 2014-19 to 88% public performance measure (PPM) for East Coast, Virgin West Coast and First Great Western’s long-distance trains. The overall target to be reached for all trains by March 2019 is 92.5% on time.

I had a flashback to Iain Coucher’s time running Network Rail when Carne deflected MPs’ questions about NR’s governance and structure by asking: “What’s broken? What needs to change?” This was exactly Coucher’s line when he answered similar questions and yet since then, the railway has seen McNulty’s major report about costs and reform and then the formation of the Rail Delivery Group to combat the feeling that the railway was not joined-up.