Relentless focus has to be maintained

John Larkinson, Chief Executive of ORR, on the need to adapt, change and grow

The Chief Executive of the Office of Rail and Road (ORR) says that the focus on the core efficiency of Network Rail should not be lost amid the ongoing impact and repercussions of COVID-19.

John Larkinson, talking to RailDirector in the week that the regulator’s mid-year report praising Network Rail’s COVID-19 response while raising concerns on capacity planning and approach to timetabling was published, said that rail should “never lose focus on the absolute essentials.”

He continued: “In 2019-20, for first time in eight years, Network Rail hit its efficiency targets which is such a big deal, and I can’t overstate how important that is for the rail industry’s credibility. We’re talking about enormous levels of expenditure and for many years those efficiency targets were not met.

Even in 2020, that most difficult of years, it looks like they’ll hit their targets. Now there can’t be any ifs and buts – there has to be relentless focus

“If you’re seeking public funding you are jeopardising your position if you do not meet your targets. You talk to the Treasury and quite reasonably they ask whether this public sector company is actually delivering efficiently.

“Why would they put more money into a business if it wasn’t? ORR has spent a significant amount of time and energy developing new indicators on delivery and getting Network Rail focused and now they are. Even in 2020, that most difficult of years, it looks like they’ll hit their targets. Now there can’t be any ifs and buts – there has to be relentless focus.”

John Larkinson

ORR

Reflecting on the first half of 2020-21, the midyear report praised Network Rail’s timetable planners for their extraordinary work in delivering four major timetable changes in six months during a very challenging time. ORR also highlighted the dedication of Network Rail’s workforce in delivering vital maintenance works to ensure the continuation of safe operations and its continued focus to deliver planned maintenance and renewals work in a challenging environment.

However, ORR raised concerns about plans to deliver 2021 timetables in a significantly more condensed timeframe than the industry’s established timescales, calling for greater assurance that it has fully considered the risks of this condensed approach, with reference to passengers being able to plan their journeys with confidence as they return in greater numbers to travel by train.

Network Rail improvements

ORR has also required Network Rail to improve the promptness, accuracy and transparency of how it conducts capacity allocation, so that operators and ORR can make informed decisions about potential new services for passengers and freight.

Despite its powerful regulatory role in rail, ORR is a relatively small-scale operation, with just 300 staff spread across six offices covering a wide remit of work. Naturally, it was also hit by the impact of COVID-19 on its day-to-day work, not least because in the early weeks of lockdown questions about the implications on health and safety, finance and requests for help, guidance and support were coming thick and fast.

Industry support

John said: “Fundamentally we support the industry and overall I was very pleased with how we were able to provide that support. The whole industry was adapting at remarkable speed and, for us, keeping up with the industry was a challenge in itself. We didn’t want to be the ones holding things up so we made some necessary changes including making a seamless shift to remote working. We were able to be pragmatic with the guidance we offered. If you have an experienced team like ours it’s possible to make some very detailed judgement calls.”

While the big issues made the headlines, ORR also carried out a lot of work behind the scenes to maintain rail’s direction of travel. The ORR’s staff’s work on safety, cost and revenue issues around ElecLink, the Getlink (Eurotunnel) project to design, install and operate an HVDC 1000MW electricity interconnector between France and Great Britain via the Channel Tunnel, continued, as did providing the essential analysis and statistics that underpin the rail industry’s every move.

ORR’s market study into the rail signalling market, a large part of Network Rail’s cost base, was paused due to COVID-19 and then restarted in November, while the hugely relied on station usage statistics, which officially records the annual total of passenger entries and exits, were published as normal, although the statistics made for unsettling reading.

Predictably, although hardly forecastable, the decline in station usage across Great Britain was partly attributed to the dramatic fall in passenger numbers towards the end of March 2020 following the impact of COVID-19. Nationally, journeys fell by 51 million (11.4 per cent) compared to the previous year, while Waterloo station topped the chart for the sixteenth consecutive year despite the decrease in numbers, with Glasgow Central (32.5 million) remaining the busiest station in Scotland. The busiest station in each region of England in 2019-20 was the same as in the previous year, while there were six stations with fewer than 100 entries.

John added: “That day-to-day work occupies a huge chunk of our time and rail relies on us to do that. Whatever the circumstances, people need analysis and that needs to continue. Naturally there’s a whole area of work around passenger information, timetabling changes and, even accepting that these are very unprecedented times, whether train operating companies are doing everything they reasonably should and could do.”

Capability assessments

ORR has carried out capability assessments in different Network Rail regions, looking at their capability in the early design stage of enhancement projects to ensure that ‘big decisions’ are the right ones, and has also provided consultancy to the National Infrastructure Commission around asset management for HS2.

It is also focused on passenger-facing conditions, particularly around improving accessibility, working with the industry on improving assistance to passengers that need it.

John added: “The industry has many initiatives around improving staff training and improving accessibility provision, but at each point on a journey the assistance can fail, causing significant inconvenience to the passenger. So how does the industry get better at that?

“We’ve been working with operators to trial a new system to improve this, and we’re pleased with that work. The industry is rising to the challenge and we will see the benefits of this as passenger numbers grow again.

“More broadly the technological innovations that are being developed across the industry present a huge opportunity to reduce costs and improve productivity. During our last periodic review of Network Rail we established a research and development fund. If you’re trying to get the focus and plan 10-20 years ahead then Network Rail needs to be funded to do that work, and it doesn’t do that work alone but with universities and research organisations. This is an area where, through the effective processes we run, we can help the innovation cycle.”

If some form of new rail body covering track and train is established, what does that mean for the role of ORR?

As attention turns to rebuilding the economy in 2021, tied to the Build Back Better agenda, ORR is looking at its role in the authorisation process for new trains and infrastructure and wants to change the conversation around reducing costs and maintaining a safe and reliable railway, debugging some of the myths that have built up around its role.

As John pointed out, there are many assumptions made that ORR always seeks the most expensive ‘gold plated’ solutions when it comes to assets, thus playing a part in driving up expenditure, which is far from the truth. As a result, ORR is reissuing guidance in an effort to improve communication and encourage proper analysis and risk assessment ahead of projects.

John added: “Detailed work on appropriate lower cost solutions that deliver required outputs more effectively is what’s needed and what we want. There’s a very good debate about building better, faster and more cost-effectively. Attention to detail is important, as is changing some of the arguments and the way we all communicate with each other.

"What we want is proper risk assessment, not assumptions. We want reasonably practical options in line with the law. So we’re trying to change the nature of the conversation with Network Rail. We have a really key role to play to be at the heart of discussions around reducing costs and changing attitudes. We’re also asking ourselves what we can do better.”

In light of rail reform, ORR is also asking even bigger questions of itself. For John, a keen runner and cyclist when away from the day job, it’s a challenge he’s moving towards.

John said: “If some form of new rail body covering track and train is established, what does that mean for the role of ORR? That’s a discussion we’ve having with Government and the conversation is good and cooperative. In some ways our role will probably expand. Our key purpose is effectively to provide oversight and assurance of an industry in order to protect the public interest while ensuring transparency. So we need to consider how we adapt, change and grow in some areas.”