Taken for a ride - UK rail privatisation

I always try to be fair on this blog – even to Sarah Palin! One subject, however, on which it is difficult for me to remain objective is the privatisation of the UK railways – now costing the British taxpayer some three times more (allowing for inflation) than did state ownership and costing the passenger some 4 times more (and greater inconvenience) than equivalent travel in the rest of Europe. It is a marvellous case-study of, variously, policy development (on what evidence was the policy brought in and discussed?); democratic accountability (who wanted it – and has supported it?);  civil service management (skill preparation) and neo-liberalism.

It was a mad scheme from the start (in 1993) – totally against basic economic theory (or what remains of it). Rail is a natural monopoly. Services cannot run against one another. So sections of the system are put out for tender by the State for 10-15 year “franchises”. About 2,000 companies are involved in these contracts and sub-contracts – with all the bureaucracy (let alone profit-taking) this involves. And that is before we bring into play the new regulatory systems set up to monitor targets and ensure that the customers and government were not being “taken for a ride” (excuse the pun) by the private monopolies. I do not pretend to understand the complex (and ever-changing) process by which public assets were sold up, franchises awarded and regulatory systems managed. A 2004 paper by Prof Stephen Glaister seems to give a lot of the detail – if you have the patience to follow it all.

The last 19 years have seen a lot of problems – train collisions; bankruptcy of RailTrack; huge rise in complaints – but they are small beer compared with the scandal which has now erupted over the contract for the West Coast line (London to Glasgow) which has just been cancelled due to irregularities (so typical for procurement processes). Three senior civil servants in the Ministry of Transport have been suspended (one intriguingly an ex-employee of a merchant bank) – and the Government seems to be using this is a once-in-a lifetime opportunity to shake up the civil service (again).  

Even ex-civil servants are playing the government’s game of faulting the civil servants rather than the crazy system they are forced to play in.

What I have never understood is the reluctance of the Labour Party while in power to honour the clear and detailed statement it made in 1993 to renationalise – despite the strength of public opinion against the mess of privatisation and of the intellectual argument for renationalisation.