Railway Services for Rural Areas

S Rural Railways

pecial Feature Railway Services for Rural Areas

John Welsby

Railways in Britain were nationalised in ous 50 years or more, with steam trains, Early Days 1948, and the British Transport Commis- full signalling and even the smallest sta- sion was established to plan and coordi- tions being staffed, often with four or more The railway network in Britain was at its nate transport by rail, road, sea and ca- men. Timetables reflected pre-war travel most extensive in 1912 when 23,440 nal. At this stage, the only problem with patterns and services tended to be slow miles of route (37,504 route km) were the rail network was perceived to be un- and infrequent. open and every city, town and most vil- der-investment, and a major moderniza- The Great Western Railway had intro- lages were served by train. At this stage, tion programme was drawn up in 1955 duced a small fleet of diesel railcars in the railways were the dominant mode of for electrification of key routes, new sig- 1934 and British Railways introduced the transport in the country, with little com- nalling at major stations and replacement first of its DMUs in 1954, initially on the petition from road or the canals, which of steam locomotives. Carlisle-Silloth branch (now closed). The they had superseded. The railway was a With relatively few cars on the roads, and modernization programme, was imple- general purpose “common carrier” and, limited availability of new cars in post- mented before any decisions were made as well as passengers, the country station war Britain, the competitive threat from about the future of rural railways, or of would have handled the freight traffic of the explosion in car ownership in the the overall size of the rail network. In the area, including perhaps cattle or 1960s was not foreseen. As a result, no fact, in the period from 1948-1962, 3,318 sheep, bales of hay, milk in churns and policy was developed to replace uneco- route miles, (5,309 km) were closed to wooden boxes of fish packed in ice, none nomic lines by bus or lorry, and the dif- passengers. of which has now been transported by rail ferent modes were managed separately. Consequently, some of the investment was in Britain for over 20 years. Until 1955, British Railways operated put into routes that were destined to be The railway network had grown quickly without subsidy, so that the losses on ru- closed within the following 10 years, from the opening of the Stockton & ral lines were masked by profits on the while the programme as a whole pro- Darlington Railway in 1825, but line clo- main lines. Indeed, most railway manag- duced a wide variety of locomotive types, sures had started early too, as demand ers saw them as essential feeders to the designed to replicate the steam engines changed or failed to reach expectations. main lines as well as performing an im- they replaced. A number of these classes The earliest closure to passenger traffic portant (but unquantified) social function. performed poorly and were withdrawn was probably part of the Stanhope & Tyne In the mid 1950s, rural railways were within a few years. railway in Northumberland in 1846. Fur- operated as they had been for the previ- ther south, in Cambridgeshire, 11.5 miles (18.4 km) of the Newmarket and Chesterford railway was closed in 1851, when the Eastern Counties Railway built its own line direct from Cambridge.

Competition

There was strong competition with the railway’s monopoly of rural services from buses and cars in the 1920s. No less than 3,500 route miles (5,600 km) of railway lost their passenger services between 1923 (when Britain’s railways were grouped into four large companies) and 1939. During WWII, the railways were taken into government control, and huge demands were made on them to transport troops and equipment, while renewals

and investment were cut back. Scotland: Air-conditioned Class-158 Two-Car Unit Crossing Forth Bridge (B.R.)

The problem of loss-making rural lines was first addressed by a committee set up by the Transport Minister in 1960 (the Stedeford Committee). One of the committee members was Dr Richard Beeching who became Chairman of the newly- formed British Railways Board in 1962. His report, The Reshaping of British Rail- ways (1963), was the first coherent plan for the railway network, and the first to consider the national railway as a business rather than as a social service. He InterCity Land Cruise on West Highland Line (B.R.) identified that one third of the network accounted for only 1% of the total pas- were political rather than economic. At railway—the bulk of the rural network senger and freight tonne miles carried. It this stage, information on costs—and par- became passenger only. was this third that he proposed to close. ticularly their allocation between services The report was debated and approved by using the same line—was limited, and the Parliament, but railway closures became subsidy calculations were complex, costly Efficiency Measures a political issue in the General Election and unreliable. of 1964 when the Conservative govern- In the early 1970s, high inflation pushed Until the mid 1960s, many branch lines ment was replaced by Labour. Neverthe- costs up, while fares were held back as were closed with little prior attempt at less, Beeching acted quickly to implement part of an attempt by government and in- making economies in operation, other his report, and consultation on a major dustry to reduce inflation. By 1973, the than the introduction of DMUs. However, programme of closures was initiated, and grant allocation system had effectively in the 1970s, the costs of operation of the implemented throughout the 1960s. collapsed, and deficit financing had been remaining lines were reduced significantly resumed. through measures such as: Under the Railways Act 1974, line subsi- The Basis of Subsidy dies were consolidated into a single block G More efficient use of rolling stock; grant for the whole railway—a compen- G Simplification of track and signalling, In 1965, Barbara Castle (now Baroness sation payment for operating a rail pas- including singling of lines; Castle), a Labour Member of Parliament, senger service “broadly similar to that op- G Withdrawal of station staff and collec- was appointed Transport Minister. She erating on 31 December 1974”. This was tion of fares on trains. recognized that the full closure also consistent with requirements of the programme would not be acceptable po- European Community on state subsidy for litically and that some form of subsidy the railway. The last significant group of External Environment would be required for “socially necessary” passenger closures occurred in 1974 and services. The Transport Act of 1968 pro- the network stabilised—as intended by Meanwhile, big changes were taking vided this framework for subsidy which Barbara Castle—at “around 11,000 miles place in the external environment, with was calculated for each line and awarded (17,600 km)”. the rapid extension of the motorway net- for 1 year or 3 years based on a formula This policy change had little effect on the work and growth in car ownership. Road developed by accountants, Cooper Bros. withdrawal of freight trains from rural lines access to many towns served by branch (now Coopers Lybrand). Both operating which had continued in line with the lines improved dramatically, and overall ratio and subsidy per passenger mile were Beeching Plan throughout the 1960s. mobility increased, while rail’s share of used as a broad yardstick to judge value Only those routes which carried bulk the market shrunk. for money, although in marginal cases, de- freight such as coal, aggregates, chemi- New housing estates, business parks or cisions on closure or retention of lines cals or oil continued to be a mixed traffic industrial estates were established away

the most extreme being to leave only 3,000 route miles (4,800 route km). Pub- lic reaction was hostile and these plans were not developed further, and although the Transport Act 1985 did allow substi- tution of buses for trains on rural routes, these provisions have never been used. I worked throughout this period in the Department of Transport, and was in- volved in drafting the White Paper. The rejection of the conclusions of the Serpell Report on network size marked a turning point for the rural railway, as it signalled that a system of around 11,000 route miles (17,600 km) would remain. It therefore Wales: Single-Car Class-153 Train at Dolau, Award-Winning Station on Central Wales Line (B.R.) required effective management to reduce from the railway, or were of low density the cost base and to maximize social value and difficult to serve by public transport. Policy Reviews by encouraging greater use, even though Traditional patterns of travel changed in it could never operate profitably. line with the decline in manufacturing In 1977, the Labour government pub- By this time, I had moved to British Rail industry. lished a White Paper on transport policy to take charge of the rural, cross country The railways responded to this with the which for the first time looked at the role and commuter services outside London development of the InterCity network, of railway subsidy in terms of national and the South East. This group was known where the strengths of speed, reliability transport policy, rather than in terms of as “other provincial services”, a title that and city centre terminals could be ex- wider social issues and the effect of the says a great deal about the low level of ploited. Access was improved with the consequent taxation on redistribution of importance attached to them at that stage. opening of ‘park and ride’ stations (the first wealth. For the first time, the paper made Plans were drawn up for new investment at Bristol Parkway in 1971). Commuter a clear distinction between the “commer- in the rural railway for the first time in railways too were improved, with further cial railway” (InterCity and freight ser- many years, and a team was set up to electrification and new rolling stock, and vices) which should operate without sub- manage the services as a business, which new extensions were built or reopened in sidy, and the “social railway” (commuter subsequently became Regional Railways. Glasgow, Newcastle, Liverpool and Bir- and rural passenger services) where sub- mingham during the 1970s. sidy would be paid if it offered value for With low volumes, relatively-low speeds, money compared with alternatives such A Test Case and little road congestion outside the as buses. The British Rail Chairman, Sir major conurbations, the rural railway had Peter Parker, saw this arrangement as a One major test case following the Serpell few advantages to exploit. Despite the contract payment for local rail services Report was the proposed closure of the introduction of a structured grant regime, rather than a subsidy, and set out a posi- Settle & Carlisle line in the north of En- there was a general view amongst politi- tive agenda for development, encourag- gland. Originally built by the Midland cians, officials, managers and passengers, ing community involvement. Railway to compete for rail traffic to and that much of the rural network was un- Proposals to change working practices from Scotland, the line served few major sustainable in the longer term. Against and reduce staff numbers led to long and centres of population, and its role as a that background, management attention damaging strikes in 1982 underlining that trunk route disappeared with the electri- was concentrated on developing the the temporary loss of many rural services fication of the West Coast Main Line to InterCity network, which also received the had little short-run effect on the commu- Glasgow in 1974. However, the route lion’s share of investment. Few resources nities they served. At the same time, a passed through fine scenery, and had were devoted to the rural railway. government inquiry under Sir David many enthusiastic supporters who cam- Serpell, examined options for major re- paigned vigorously against its closure. ductions in the size of the rail network, After 4 years of protests, and attempts by

14 Japan Railway & Transport Review • November 1996 Copyright © 1996 EJRCF. All rights reserved. the Government to sell it to private op- ten using second-hand rolling stock and erators, the closure proposal was with- Marketing always taking second place to the require- drawn, and the line continues operation ments of main line services. BR was split today as a popular, if unprofitable, tourist The pattern of train services has changed into six geographical regions, with many route. Its value to the area it serves has significantly too, with several short route functions delegated to 16 divisions re- been enhanced by reopening local sta- sections joined to provide new direct sponsible for operations and infrastruc- tions, several of which provide access to travel opportunities. For example, a num- ture, marketing and planning of both pas- a national park, and ridership is three ber of local services were joined to pro- senger and freight services. From 1982 times what it was when closure was first vide a regular through service between onwards, a “provincial” railway sector proposed. Liverpool, Manchester, Sheffield, was established, putting management fo- Nottingham, Peterborough and Norwich, cus on a distinct part of the passenger crossing the country from west to east. market—separate from ‘InterCity’ and Investment New travel opportunities, new trains and ‘London and South East’. While this de- imaginative marketing have led to more veloped into a ‘Regional Railways’ busi- However, this was a special case, and the significant increases in travel in what was ness in 1992, management remained lo- most significant changes to rural railways previously a static or declining market. cally based in five profit centres with during the 1980s reflected my determined At the same time, changing patterns of headquarters in Glasgow, York, Manches- attempt to reduce operating costs and residence and employment provided new ter, Birmingham and Swindon. improve the attractiveness to passengers travel demands, and a number of local These five businesses became the basis through replacement of the rolling stock stations were reopened and several of the train operating companies formed introduced some 30 years previously un- freight-only lines were upgraded for pas- in preparation for privatization, although der the Modernisation Plan. Most strik- senger services. This process was encour- two additional smaller companies were ing was the introduction of lightweight aged by the Transport Act (Amendment) created to cover the 750 V DC Liverpool Sprinter trains—two-coach DMUs replac- of 1982, which allowed new services to suburban network (Merseyrail Electrics) ing older and heavier three-coach DMUs be introduced for an experimental period and the South Wales valleys (Cardiff Rail- or locomotive-hauled trains of four or five without the need to go through the lengthy way). coaches. Better availability and more in- and complex statutory closure process if tensive use of the trains allowed a signifi- they were unsuccessful. In fact, only one cant reduction in fleet size and the gen- of the 15 services introduced under this Privatization eral rule on replacement was two new Act was withdrawn, and some, such as vehicles for three old ones. Results were Edinburgh-Bathgate, have been very suc- Apart from this, railway privatization has impressive, and the total BR coaching cessful. In total, 250 new stations have led to major changes in the structure and stock fleet fell from 16,963 in 1983 to been opened over the last 20 years. funding of railways in Britain. Ownership 11,802 in 1993/94. At the same time, ser- Many sections of the rural network have and control of track signalling and stations vice frequencies were increased on many been slowly and lovingly restored by rail- has passed to Railtrack—since May 1996, routes and this, coupled with the higher way enthusiasts as preserved steam rail- a company quoted on the London Stock quality of the new trains, led to some cross ways. Although few of these contribute Exchange. Ownership of trains has passed country routes registering increases of in any sense to local transport needs, sev- to three private rolling stock leasing com- 50% to 60% in ridership. eral are significant “heritage” tourist at- panies (ROSCOs). Trains are operated by At the same time, radio signalling was tractions, and the huge number make 26 train operating companies, and the developed and introduced on several long them a uniquely British phenomenon. In franchises to run 25 of these (typically for distance rural lines, particularly in Scot- total, 90 small companies operate some 7 years) are being offered for sale by the land and Wales, while lower axle loads 400 miles of track and over 300 stations. Director of Rail Passenger Franchising— and shorter trains reduced the require- a non-departmental government agency. ments for track maintenance. Local sta- Such a structure means that local man- tions have become unstaffed and the ticket Management agement attention to rural services is pos- issuing machines used by conductors al- sible, concentrating on marketing and low a comprehensive range of tickets to Traditionally, branch lines had been man- customer service, without the responsibili- be issued on the train. aged as part of the main line network, of- ties of ownership of either rolling stock or

infrastructure. Other advantages are a guaranteed subsidy level for (typically) 7 years, at a level sufficient to pay for the maintenance or renewal of assets during this period. However, the way in which services have been grouped for franchising means that responsibilities are usually divided between operators of main line services and those of their connecting branch lines. This calls for a higher degree of coopera- tion between the parties (in a competitive process) to ensure a coherent timetable as well as comprehensive train service information. Coordination on through- ticketing is a requirement of the operating licence. The Franchising Director sets out the ‘passenger service requirement’—a guaranteed service specification based on (but not identical to) the timetable offered by BR. Bids are then invited to operate these services and, in general, the company offering to provide the specified service, perhaps with some improvements, for the lowest subsidy, or the highest contribu- tion, wins the franchise. At the time of writing, none of the ‘Regional Railways’ franchises has yet been sold, but those for Scotland and the West of England and South Wales are at an advanced stage in the bidding process. The South Wales & West Railway, and the Cardiff Railway franchises were transferred to the private sector on 13 October 1996.

Subsidy UK Railway Network Source: Railway Gazette

The new financial structure of the railway use. Rail subsidy can help to redress this mental and accident costs, amounted to in Britain means that the majority of rail— balance and is a crude proxy for the so- a staggering 4.6% of the combined GDP including all the rural railways, require cial value of the external benefits which of the countries concerned. Of this 4.6%, subsidy. Rail operates under a competi- rail offers. road transport accounted for 92% of the tive disadvantage in most countries, in that In an ideal world, external costs of each cost, while rail was just 1.7%. its full costs are transparent and, in the transport mode would be identified and Only when all these costs are properly absence of Government measures, fall as charged to users on the ‘polluter pays’ internalised to users of each mode can we a charge on the users. However, the road principle. A recent study covering Euro- really expect a framework in which we system is paid for through general taxa- pean countries suggested the total exter- can make informed choices about the tion and is generally free at the point of nal costs of transport, including environ- journeys we make or the way goods are

16 Japan Railway & Transport Review • November 1996 Copyright © 1996 EJRCF. All rights reserved. carried. Such a policy would, in general, bring considerable advantages to rail operators, but we should recognize that this would be the case only where rail is used for the purposes for which it is best suited —inter-urban or commuter passenger services, or freight. There is little environ- mental benefit in retaining 100 miles of rural railway for three railcars a day, each carrying an average of 40 passengers. Equally, there are no resource benefits in using an 80-tonne locomotive of 1,750 hp to haul two or three wagons to remote destinations and returning empty. In a few cases, the railway has a focused role to play in reducing traffic in a national park or a historic town, which may justify a England: Older DMU (since replaced) from Marylebone approaching Little Kimble near Aylesbury (B.R.) special subsidy, but in general, this level of business would be better handled by tourist market. They are offering better most scenic parts of Britain—they are well other modes. value to both passengers and taxpayers worth a visit. The Britrail pass gives ac- Currently, there is no way of judging value than for many years. cess to all these lines and is highly rec- for money for the subsidy paid to the ru- However, the problem remains that many ommended to anyone visiting Britain from ral railway. The public service obligation lines are still very expensive to operate in abroad. grant has been replaced by a subsidy to relation to the number of passengers they franchise operators based on the costs of carry. In the worst cases, passenger in- service provision, without reference to come covers only 5% of the costs in- value to the community. The Franchising volved. In terms of subsidy and invest- Director is required to set out his criteria ment, they impose a disproportionate for payment of grant, and when he does claim on the resources available in total so, is likely to renew the debate on value to the railway industry. Nevertheless, the for money, and the cost of the rural rail- new structure of the industry guarantees way, particularly in the remoter parts of their continuation into the next millen- Great Britain. nium. The franchise agreements (typically of 7-years duration) guarantee the continuation of service levels, while track Conclusion access charges are set at a level sufficient to pay for maintenance and renewal of Over the last 30 years, there has been a the infrastructure. revolution in patterns of demand, operat- Many of these lines serve the remoter and ing practice and in the management of rural railways in Britain. The rolling stock fleet has been largely renewed in the last John Welsby ten years, with consequent reductions in costs and in increased attractiveness for Mr John Welsby, CBE, was appointed Chairman and Chief Executive of the British Railways Board passengers. Many of the routes have mod- from 1 April 1995. Before becoming Chief Executive in 1990, he was responsible for private-sector initiatives, and the Channel Tunnel project. ern signalling systems which have also After studying at Exeter and London, Mr Welsby joined the Electricity Council as an economist and helped to reduce the cost of operation. then moved to the Ministry of Transport as an Economic Adviser in 1966. From 1969 to 1971, he was Apart from local transport, many lines Assistant Professor at the Business School of the University of British Columbia, Canada, before have found a new role in serving a new returning to the Department of Transport as a Senior Economic Adviser.