Beeching, Serpell, McNulty and the Future of Britain's Railways

Apparently, and I am not entirely sure how this passed me by, there is a ‘value for money’ review being undertaken on Britain’s railways. The man at the helm is Sir Roy McNulty (shown) who apparently is an air transport specialist and was the former head of the Civil Aviation Authority. Exactly, therefore, how worrying his appointment is, is uncertain, as McNulty’s career history includes both public and private activities. The reason for my confusion stems from the fact that those who have previously tried to get more ‘value for money’ out of the railways, namely Sir Richard Beeching (the Railway Satan as he has been called) and the more forgotten Sir David Serpell, had two different backgrounds that clearly shaped the way they conducted their reviews of the costs of the network. Therefore McNulty’s mixed career history means that his report could be anything from fair and even handed to a massive axe-swing in the direction of Britain’s railways.

So how should Beeching and Serpell’s reports be judged in light of their career histories? First, let us turn to Beeching. Beeching, who came to British Railways from ICI, doesn’t really have a good reputation amongst the public. But then again I have always felt that the man has been treated unfairly in that he was brought in to do a job and he did it. In 1963 he wrote his famous report, The Reshaping of British Railways. His proposals rather cheesed people off as he proposed closing 6000 miles of railway (out of 18,000) and shutting 7000 stations. This would make it possible for British Railways to lose 70,000 employees over three years. But then again it was the Secretary of State for Transport, Ernest Marples, who brought Beeching in, and Marples was the one who actually implemented the report’s recommendations. Additionally, Marples was a fan of road transport given he had owned road-building company (Marples-Ridgeway) who had just got the contract for the M1. Therefore, it is clear that the prism through which Marples saw the railways was simply as a wasteful, inefficient business, and it is unlikely that he acknowledged its social or economic benefits to the nation, especially as he was so married to road transportation. Simply put, the railways were only a drain on the nation’s finances. Therefore, in response to the profitability problems of British Railways, he brought in a businessman (Beeching) to solve a business problem and once his recommendations were implemented they did irreparable damage to the network. Beeching was, however, not a railway professional and didn’t have experience in network industries. As such he simply looked at the railways as a business and not its social or economic benefits. Therefore, was the outcome really that surprising? I think not.

While the Beeching cuts are well known about because they actually occurred, the Serpell report, released in March 1983 has largely sunk into the bog of history because none of it got implemented. On a backdrop of a suffering economy, British Rail’s revenues decreasing and the lowest number of passenger journeys taking place in the network’s history, it was ordered by the Thatcher Government to look at the long-term role of Britain’s railways and make British Rail pay. After much work Sir David Serpell, a long-term civil servant, recommended a range of ‘options’ to change the network. The first, Option A, would reduce the rail network by 86% and the passenger train miles by 56%. In short, all that would be left would be the East, West, Great Western and Great Easter main lines, as well as a number of main lines to the south coast (the plan is shown). Yet, while everyone has focussed on this option, principally I presume because it looks so horrible, people forget that he presented three others. In Option B the cuts proposed in Option A would be implemented, but with the suburban network remaining. Option C kept much of the network in place, but with the removal of loss-making services (however there were three sub-options that can be looked at on Wikipedia if you so wish). Lastly, option D ignored the main goal to make the railways profitable and retained lines to populated areas with over 25,000 people. However, many small stations would be closed.

Serpell I think has also got a bad reputation, however I think he was a better man for the job he was asked to do than Beeching was for his. If I listed his civil service career between 1937 and 1982 it would take a whole paragraph. However, some of the major departments he had worked in were the Ministries of Food, Fuel and Power and Trade, the Treasury, the Department of Education and the Board of Trade. He also had worked for National Conservancy Council, the Ordinance Survey Review Committee and had been a member of the British Railways Board (BRB) between 1974 and 1982. In sum, Serpell had had a varied career that brought him a lot of experience in many government departments and plenty of these dealt with social, rather than economic, issues. He also had some (unquantifiable) experience of railways being on the BRB. Therefore, given the cost cutting nature of the Tory Government of the early 1980s and the tremendous economic constraints that government put the nation under, I feel that perhaps Serpell did well given his circumstances. Everyone screams and shouts about the first option, however the range of options that he presented does suggest that he was thinking more deeply than Beeching about the rail network. Firstly, in the age of austerity of the early 1980s he satisfied his brief of presenting different options to make Britain’s railway network pay. Fair enough, that’s what he was asked to do. However, the mere fact that he presented Option D, that defied his brief, suggests that despite being constrained by his environment of economic stringency and a cost-cutting Conservative Government, he did have an eye on the social and economic implications of rail transport. This, I would suggest, may have in part stemmed from his varied civil service background that showed him that how a range of different government agencies added to the nation’s health indirectly. I think, for Serpell, he had to show that railways were not just about the ‘bottom line’ as they were for Beeching, Marples and many in the Thatcher Government.

Thankfully, the Serpell report was dropped quietly because of the outcry. Indeed, throughout the mid and late 1980s passenger numbers rose and the issues confronting the network seeped away. However in the current climate we face new challenges and the coalition has deemed it necessary to commission another report looking at the ‘value for money’ of the rail network. As stated this will be under Sir Roy McNulty, the former head of the Civil Aviation Authority. He will also be assisted by some unspecified ‘rail professionals.’ Considering his background alone, McNulty has some of the attributes of both Beeching and Serpell. Firstly, like Beeching, he has had an extensive career in business, working at Chrysler UK, Harland & Wolff, Peat Marwick Mitchell & Co., Short, Bombardier Aerospace, Norbrook Laboratories Ltd, and the Ulster Bank Ltd (amongst other things.) Yet, in his more recent years, like Serpell, he has worked for the government on the Olympic Delivery Authority, the Steering Group for UK Foresight Programme, the Northern Ireland Growth Challenge, the Technology Foresight Defence and Aerospace Panel and the Department for Trade and Industry’s Aviation Committee. Admittedly, these were consultancy and committee posts, and not like Serpell’s career in the Civil Service, yet, it does mean he was engaging with governmental activities of a social and economic nature. Lastly, very much like Serpell, he had his spell on a high-profile transport body as he was head of the Civil Aviation Authority.

Therefore, with this résumé it seems that the impending report could go one of two ways. He possibly may do a Beeching and recommend cuts to services, lines and the suspension any new developments. However, he could, and I think this is more feasible given the record rail usage at the moment, recommend cuts and efficiencies within Network Rail (which has infrastructure costs 30-50% higher than those on the continent), the suspension of any large capital investment, changes to the franchise structure and the cutting of some of the most unremunerative services. Thus, this would in part be like of some of the less violent options put forward by Serpell. One thing is for certain, the cost of maintaining and running the British railway network has to come down, and McNulty’s background and experiences will in some part shape the outcome of the review like those of who were tasked with the same job before. On the flip side, we don’t know what part of his past will have the greatest effect on the report and therefore we wait…biting our nails.

Moving a Locomotive Works and the Power of Knowledge to stop it Happenning

In the recent few days I have been thinking about the idea of control of policy with the London and South Western Railway (L&SWR). On Tuesday I will be presenting a paper at a magnificent place, the Institute of Historical Research's Postgraduate Group's, Summer Conference. The theme of the conference is politics, and hence why I have opted for a paper on policy control within the L&SWR. While not an traditional political topic, the study of internal organisational politics has many commonalities with the study of government departments interact. For example, these common themes include the control of the organisation, conflict for resources between stakeholders, such as department heads, and the complex range of issues that surround principals (voters/stakeholders) and agents (Government/Directors or managers). Therefore, this is why, as a business (or railway) historian, I get into the conference. I am trading similar ground as those political historians.

My paper surrounds the process of moving the L&SWR's Locomotive, Wagon and Carriage Works at Nine Elms (near Battersea) to Eastleigh. This happened in stages between 1891 and 1909, however the process of took a long time, with considerations for moving the Nine Elms works 'into the country' being found in unofficial capacities in the 1840s. The first official mention at committee level came in 1860. I won't want to give the game away regarding my entire paper, especially as some of the people who hear it may read this Blog (I mean you Simon and Peter). But I would like to focus on one event that will be covered in the talk regarding the power of a department head to completely stop a major policy proposal in its tracks.

By the 1880s railway companies were the biggest organisations within Britain. They had developed managerial hierarchies that, while highly populated with managers and supervisors, were relatively easy to understand. All business historians will agree that most British railway companies by the late 19th century had developed the 'Functional Department Structure,' in which each department controlled a different function of company operations. Therefore, the three main departments within most railway companies were 'Traffic,' administering the transit of goods and passengers along the line, 'Locomotive,' maintaining and building the rolling stock and 'Engineering,' maintaining and constructing all the infrastructure. These were supplemented by a range of other departments such as Audit, Accounts, Docks (if the company owned any) and Stores. I take it that you have got the theme now, so I won't need to explain what these departments did.

The problem with this structure was that as the departments became larger over time, they separated from each other within the company. Therefore, these departments became institutions in their own right, giving the department heads control over ever-expanding multi-layered and complex dominions. Subsequently, departments separated organisationally, allowing the heads to run them as they wished. But this, in many cases meant that they prioritised operational effectiveness, over economic responsibility, allowing them to loose sight of the overall revenue position of the company (see an earlier post on Dugald Drummond, Locomotive Superintendent of the L&SWR for an example.)

This problem was also exacerbated by level of oversight that department heads received. Directors on the sub-co committees of the board, each of which covered different areas of operation (such as the Traffic Committee, Locomotive Committee etc.) had to meet with the different heads of department, to ratify or deny his proposals. However, the Committees only met twice a month and therefore could not possibly have hoped to obtained full knowledge of the departments that they were discussing and this made them reliant on information provided by the department head. Thus, the department heads could decide what information to provide or deny the committee, allowing them to shape company policy towards their own desires.

It is this relationship, between manager and committee, that forms the crux of my post. Nine Elms, had been the home of the London and South Western railway since its opening in 1838. However, by 1882 the site was getting cramped because of the increased traffic and operations of the company. Originally the site on the north side of the line housed the passenger and goods terminals, as well as the Locomotive, Carriage and Wagon works. As traffic grew, and the scale of all these functions increased, the company required more and more room to accommodate them. This was partially alleviated in 1848 when the company's London terminus moved to Waterloo. Further, in 1860 it was decided to move the works to the south side of the main line and convert the entire site on the north into goods facilities. However, by the 1880s, the northern site was again coming under the pressure of traffic and more space was needed. Further, the Locomotive, Carriage and Wagon works were also suffering due to lack of space.

The company sprang into action and the Engineering Committee, which had responsibility for rolling stock affairs at that point, asked the opinions of the General Manager, Archibald Scott, and the Locomotive Superintendent, William Adams (Shown). But, there would be a disagreement over what was to be done as the directors and Scott wanted to take one course of action, whereas Adams wanted to take another. The directors and Scott both wished for the locomotive works to be moved into the 'country,' wherever that may be, so the Traffic Department could occupy the space on the south side of the line. Both parties also recognised that this would mean a 'new start' for the Locomotive, Carriage and Wagon Works as the new facilities could be built in a more efficient manner. The previous works buildings had been built-up in an ad hoc fashion when required. This had made them inefficient for operations.

Once decided on a course of action Scott and the directors referred the matter to Adams for his take on the situation. Adams comprehensively rejected their idea to move the works into the country. In a letter to the Engineering Committee of the 12th September 1882, he laid out 11 reasons why he did not advise the move. He had put up fierce resistance, and in consultation with the General Manager the directors subsequently dropped the plan. However, I believe that Adam's rejection of the idea had little to do with the reality of the company's situation. Rather, I feel that all he wished to do was protect his own power and control over the works. At the time the letter was sent I have identified a number of reasons for this.

Firstly, Adams did not put forward anything positive within the report for the move. Indeed, all the 11 points are negative. This, to me, has always seemed illogical. He did not mention that a new set of buildings could be built 'fit for purpose,' possibly saving the company money in terms of staffing, engineering considerations, or time in the production and maintenance of rolling stock. Secondly, in 1881 Scott as General Manager had been given more general control of the company. He had held the post since 1870, however up until that point he still had control of the Traffic Department. However, with the increasing business of the L&SWR, in 1881 it was deemed that he should have more time to coordinate the departments better. As a result he lost immediate control of the Traffic Department and was given more general control of the company. It is, therefore, quite possible that Adams felt that his own power was under threat because of the change, as Scott's interference in Locomotive matters was now greater. Lastly, as Adams noted in his letter, the buildings would be built away from the Locomotive Department headquarters at Nine Elms and would require a separate superintendent of high standing to administer them. This would mean that Adams' control of the works would be devolved to a new manager, from whom he would be geographically separated . This too would diminish his power.

My suspicion that Adams objected to the move to retain his power, is confirmed by events that happened shortly after. After the plan to move the works was rejected, Scott complained to the Engineering Committee that he felt that the work of Carriage Department was 'not sufficiently attended to' and that because of inappropriate inspections carriages had run in a poor state. He had been alerted to this fact when one had been complained about. His suggestion was that Mr Adams be given assistance in the carriage department at Nine Elms by an independent carriage supervisor. Adams did not like this idea and suggested that the best way to solve the problem was to extend the repair shops to accommodate 50 more extra carriages and rearrange the existing staff more advantageously. In his opinion, the General Manager's suggestion should be acted on only if his proposed rearrangement did not work out.

Adams' reactions to the two proposals described show his reluctance to loose any power within the department. In the first, he implied that a separate carriage and wagon construction facility would require a separate superintendent and this was a negative thing. Then, shortly after, he also stated that at Nine Elms there was no need for any assistance. Clearly, Adams disregarded doing what was best to resolve the L&SWR's operational problems in favour of satisfying his own concerns.

The truth was, however, as head of the Locomotive, Carriage and Wagon Department Adams could control the information that his superiors were able to see. In the first case, he provided the directors and Scott with an overwhelming case against the move of the works into the country, effectively killing the project. In the second, he was able to use his knowledge to presumably show that the works could be better managed. Thus, the senior management and directors did not have the information available to contradict him, allowing him to effectively control policy at both departmental and corporate levels. Therefore, the failings of functional department structure, the control that stakeholders had to shape policy and the different agendas that can form with the 'principals' and the 'agents,' can be clearly illustrated within the L&SWR in 1882 in a single case.

Conservative transport policy...time to be scared?

I have been thinking a lot about the new Conservative Secretary of State for Transport, Philip Hammond. As someone interested in having better railways in Britain, I instinctively worry about Conservative Governments. They have in the past been about as useful as a bacon slicer in a cheese shop; it may do something, but ultimately you'll end up gooey and with half your finger sliced off.

This fear isn't irrational though. It doesn't automatically stem from a loathing of all things Tory, (however I do have to confess that as a disgruntled Lib-Dem I am quick to condemn them) nor does it come from a default loathing of the fee market, which history tells us they love, cuddle and, given the chance, would have coitus with. It doesn't even originate from erroneous idea that since the beginning the Conservatives have always historically been the ones to mess up the railways. Indeed, some of the greatest policy errors, including the Railway and Canal Traffic Act of 1894 and parts of the Railways Act of 1921, both of which restricted the way that railway companies could charge for their services and therefore damaged their profits, were both enacted by Liberal governments.

My worry, profuse in nature and massive in my head, is that over the last 50 years Conservative Governments have persistently damaged Britain's rail network. Now, I'm not saying that that's what Conservative Governments set out to do, but I can't help discerning a pattern of destructive policies and loathing towards the railways that was ongoing. It is my hope, however, that the new Conservative-Lib Dem Government doesn't go the same way.

The first real pain that the Conservatives inflicted on Britain's railways was installing one Richard Beeching as chairman of British Railways (BR) in 1961. He was appointed by Ernest Marples (shown), the Conservative Minister for Transport, who brought him from his position as Technical Director at ICI. It is in his new position that Beeching came to be considered a 'Railway Satan.' He was tasked with moving BR into profitability. He shared the view with the Government that BR should be run like a business and not solely in the public interest. In his 1963 report, The Reshaping of British Railways, he proposed closing 6000 of the country's 18000 miles of railway, most of which were rural and cross country lines. This would also mean shutting 7000 stations and allow BR to shed 70,000 jobs over three years. He estimated the recommended changes would make BR profitable by 1970 and as a result Marples implemented most of them.

The Beeching Report, as we now know, was terrible for many reasons. Firstly the report did not take into account the social benefits of railway lines serving communities that had no other transport links. These small communities, that still shape our view of the sleepy little English village, had existences that revolved around their railway lines. Suddenly, like a whirlwind, these services were gone. Secondly, Beeching's cuts were based on traffic figures that were gathered in the spring when some places that had heavy tourist traffic were at their quietest, such as lines on the North Cornwall coast. Therefore when these lines were closed it destroyed industry and tourism in these regions. North Cornwall, to this day, still has a failing economy. Thirdly, there was no attempt to decrease cost through other means, such as modernisation, (despite the failed BR modernisation plan of the 1950s) that would have allowed some lines to stay open. Beeching's sole cost-cutting policy was to apply the axe when a line failed to pay its way. Lastly, the cuts went too far. The plans did not foresee that roads would fill up and did not anticipate any future transport needs. These are just some of the many criticisms of the plan, and in the end Beeching's goal of profitability was never reached. What it most certainly did do was cost many people their livelihoods.

Now I am not automatically going to knock Beeching himself and I have always though that it was Marples particularly that was at fault. Firstly, Marples was a man who's background looked a bit suspect. Marples co-owned a construction company, Marples-Ridgeway, that was heavily into road building. Indeed, surprise, surprise, it was Marples that authorised the M1 be built from London to Nottingham and it was Marples-Ridgeway that built it. Further, and this is important, Beeching only made recommendations in his report, it was Marples who actually gave the order to close the lines. Therefore, when the line between London and Nottingham closed, forcing travellers onto the M1, the fishiness is plain to smell. Marples evidently used his position, and the Beeching report, to further his own business interests. Secondly, Marples brought in a businessmen in Beeching and that in itself was going to mean harsh cuts were going to be proposed. My point is that if you place a wolf in a chicken coup, don't expect that it'll imitate the chickens. Businessmen will act as businessmen if they are simply told to make something profitable. Indeed, it was Beeching's narrow terms of reference, simply to bring BR into profit, that meant he looked at things simply in terms of profit and loss. Thus, he acted accordingly. Overall I feel that it was Marples who was the man to blame for the cuts, as he was driven by a pro-road agenda. Beeching, I feel, simply did his job, even if he did it badly.

So where to next? Oh yes, the privatisation of British Rail in the early to mid 1990s. This is, in some ways, a more erroneous action by a Conservative Government that the Beeching cuts. Beeching, effigies of which railway enthusiasts still stick pins into, at least was brought in to solve a specific problem. British Railways was unprofitable, its cost tax payers money, Beeching was tasked with reversing this. However, John Major's Government of the 1990s broke up British Rail because of ideology. The free market was their God, and they worshipped it to the max. Their goal was to make Britain's railways efficient and innovative by the introduction of competition. Silly arses.

By the early 1990s British Rail was actually running very efficiently. Maggie, bless her cotton socks, had restricted BR's budget quite considerably. This had had the effect of scaring its bosses so much that the aim of Beeching, railway profitability, actually became a reality in some parts of the organisation. Certain services, such as intercity and Network South East, actually started to make money. The Thatcher Government also shocked everyone when it authorised the electrification of the East Coast Main Line and purchased new rolling stock. Everyone involved stood back and applauded. BR was, by 1994, at its most cost-effective. Then Thatcher was out and Major came in.

Thatcher, it may surprise everyone to know, was actually against the privatisation of the railways. However, Major, under the influence of the 'Adam Smith think tank,' pushed forward with privatisation in the Railways Act 1993. This created an infrastructure company, Railtrack, that maintained all the working parts (track, signals, major stations etc.), three ROSCOs that owned the rolling stock and who leased it to the 25 Train Operating Companies (TOCs) who actually ran the trains. Further, BR's engineering department was split up, as was the freight services that were now under the control of 6 private companies. This is the very basic version of how BR was split up. To go through the number of companies that were involved and the cack-handed way that BR was destroyed, would take endless Blog posts that would make me into a hermit.

The split up of BR caused many problems, and what follows were the key ones. Firstly, the track ownership was separated from the trains. This currently causes problems as there are conflicts between the operators of trains and the Network Rail. Secondly, the infrastructure maintenance was privatised , leading to cost cutting, sloppy maintenance and a string of crashes. The Southall accident in 1997, Ladbroke Grove in 1999 and Hatfield in 2000 all contributed to Railtrack's downfall. In 2001 it was placed in administration and in 2002 all of its assets were transferred to the state owned, not-for-profit company, Network Rail. Thirdly, the railways now cost the taxpayer far more money than is necessary. Because in the privatisation process someone forgot to flag up that railways don't make profit, it means that many franchises, such as South West Trains and National Express East Anglia are subsidised simply so that they have profits high enough to pay their shareholders dividends. Yet at the same time many Train Operating Companies still have to pay money back to the government as part of their contracts, and failure to do so sees them stripped of their franchises, for example National Express East Coast last year. Overall, these weird arrangements mean that we pay over the odds as taxpayers for the train services. In 1994 government funding for BR was £1,627m, approximately £2,168m in 2005 terms. In 2005 government support came to £4,593m. I could list more faults, but the general consensus is that a Conservative Government privatised the railways very badly, when they were at their most cost-effective, simply because it sat well with their ideology.

What, therefore, does the future hold with this government? Are those who, like me, are interested in having good railways quaking in their boots? Railway commentators were shocked and worried last week when the new Secretary of State for Transport, Philip Hammond (shown), laid out a possible change in direction for the Department for Transport. I wrote a few Blogs back about how I felt that Lord Adonis was probably the best Secretary of State for the railways in a long while, and how his enthusiasm for railways should be continued. However, Hammond was quoted last week as saying that Labour's "war on the motorist" was going to be ended. Is there a war? I didn't hear gunfire. All I heard were Clarksonesque individuals who like to feel victimised mouthing off. Hammond was referring to an illusory conflict and it was a worrying portent. I read this statement as meaning the new government was taking a pro-roads stance and could hear Marples' footsteps in the background. If he was going to view transport policy through a prism of pro or anti different forms of transport then he was simplifying a complex issue.

As I speak the Government's 'Programme for Government' is being unrolled through the news outlets. In the transport section there is a lot of good news for those interested in better railways. There will be longer franchises, Network Rail will be more accountable to it customers (i.e. us), high speed rail is supported, with options to expand it beyond the basic plans already drawn up, there is support for Crossrail, support for electrification (which I honestly didn't think would still be on the cardsunder the new Government), the rail regulator will become a strong passenger champion and, lastly, there is a commitment to fair rail pricing. Some things have been left out, such as improvements to Thameslink, re-opening closed lines and the Intercity Express Program. However this plan for the next 5 years is, on the surface of things, a very good result for the railways given the financial constraints of government.

History has taught me to fear Conservative transport policies when it comes to the railways, that they are essentially a destructive party in this respect. Therefore, naturally, I suspect that many of the above policies have the Lib Dem's fingerprints all over them. Yet if the Government adheres in the next 5 years to what it has set out today, then I might start to change my opinion. I wait and see...