I’m one of the 100 plus members of Network Rail. Technically, between us, we own the railway infrastructure. Though we are not personally liable for it! Broadly speaking we have the power to sack the Board of Network Rail – but they can also sack us! When Network Rail was first created I was one of the Public Members then, and I’m now on my third term (though I’ve had a period when I wasn’t a Member). I also used to run the Save our Railways campaign which castigated NR’s predecessor -Railtrack – as part of the campaign against rail privatisation.
So given this long involvement I’ve had time to give the way in which NR is governed a bit of thought. And was doing so again at a recent day and a half set of meetings and presentations in London for the Members.
What do you mean Network Rail governance isn’t hopeless?
It’s always puzzled me how few friends the principles behind the current arrangements for governance of Network Rail seems to have. Indeed such is the derisive consensus about NR’s governance structure that people don’t even bother to justify it. It’s taken as read that it’s an irretrievably hopeless way to run a company like Network Rail.
The media don’t like it because they like dealing with a cast of recognisable names that they can build up and knock down (100 plus members doesn’t work for them)
The operators don’t like it because – guess what? They think they should have more power
The unions don’t like it because NR offers them the uncomfortable choice of being on the inside of the governance of the railways – when they also want to be free to take management on unencumbered by any responsibility for management decisions (which NR membership implies)
Now I’m not saying that Network Rail’s current governance model is perfect – no governance model is – but it does seem to have some significant advantages over other possible alternatives that are too readily passed over.
Firstly, it’s not full nationalisation (which in the UK means too much interference by a civil service driven by short term considerations and policy flip flops). Can you imagine what would now be happening to the funding of the railways right now if the civil service was able to turn off the taps as it was with BR? It’s also not a private sector company (PLC status doesn’t work for something like Network Rail because it’s in the business of long term protection and development of long term assets – not be distracted by whatever its share price might happen to be at 3.30 tomorrow afternoon).
Network Rail is accountable to the public interest and to Government through various indirect mechanisms but at the same time its governance structures mean that it is not beholden to either the short term interests of the DfT or of private companies. It’s governance provides a buffer against both.
Crowd versus clique
The other accepted wisdom about Network Rail is that how can anything possibly be effectively governed by something with 100 plus decision-makers with a very limited range of powers at their disposal other than nuclear options like sacking the Board.
Views on this tend to break down between those who think that they should have a role in managing the company, and those who see themselves in the Trustee role. The ‘shadow managers’ are endlessly frustrated because what are they sitting around at meetings for unless it should be to exercise their own views and wisdom on what Network Rail should be doing. The ‘Trustees’ don’t think it’s down to them to second guess the details of what the company does – as this is a complex engineering outfit with safety critical aspects to it. Instead the ‘Trustees ‘ see themselves as giving the company a steer on the big decisions rather than the detail, and only seriously intervening when the company is in danger of getting the big strategic decisions seriously wrong.
I’m on the Trustee end of the debate. Although in some ways its easier for me than it is for some public members as pteg has other dialogues and other ways of interacting with Network Rail at all sorts of levels. I can see why many of the individual public members get frustrated because they don’t have those other channels open to them.
And the large number of members? Well here there are some advantages too. It means it is very difficult for vested interests to take control over the company and start shadow managing it (as might be the case if a bloc of interests were to work together within a smaller number of members – such as the operators). Instead there is something about the wisdom of the crowd in NR governance, something akin to jury service. When something goes really wrong (as I suspect might be happening on bonuses) then the crowd starts to move. The problem with the number of members issue is that it tends to drive the debate about reform – whereas the number of members should be a function of what you are trying to achieve rather than an end in itself. This is where the Members Review Group blew it big time as they started with a determination to reduce the number of members – and ignored completely some more important issues such as who the members should be made up of. Should they represent interests (and if so which ones?) or be individuals (if so who and why?) or should it be a balance between them (and if so what should the balance be?). And once you’ve determined that how do you guard against capture by blocs of vested interests (if members are to represent interests) and what is the number of members that you would need to get these balances right?
None of this is to say that there might not be a better model of governance – or that the current number of members within the existing model is right – just that in any search for a new model should recognise that there are strengths in the existing model which should be acknowledged.
The other thing that struck me at the last NR members meeting was the amazing legacy that London now has from the good times on transport spending.
We were given a tour of the works at Kings Cross station – which will be another wonder of the transport world to add to London’s list alongside London Overground, the best bus service in the world, fully integrated smart ticketing, HSL One and St Pancras International, the refurbishment of the entire London Underground, East London Line, Thameslink and Crossrail and so on. In fact what significant element of London’s public transport network hasn’t been improved?
For the first time (ever?) the roof is being given a proper overhaul and when the clutter is cleared away from the front of the station (a new ticket hall is being built at the St Pancras side of Kings Cross) the clean lines of Lewis Cubitt’s Kings Cross station will give the gothic excesses of St Pancras a run for its money.
Whatever happens next London has skillfully acquired a legacy of transport investment from the boom years of transport spending which will stand it in good stead for a few decades to come.
Here’s my pix from the tour of the Kings Cross works.
Down the platform – up and back along the roof – down the unchanged since built (or if it wasn’t it looked like it) interior of the clock tower and re-entering 2010 back onto the concourse in our Health and Safety orange spacesuits…