Was reading about National Express having their East Coast franchise taken back by the government for underperforming or something. Everyone blames everyone else. Government blames the company, the company blame the lack of people due to recession, the people blame the government for privatising it. I'm sure a lot of people don't actually understand the theory of privatisation and why it was done like it was so here goes:
Railways are expensive to run. Governments don't like spending money on anything other than expenses, hospitals, schools and the army so when people in the Tory government went over the papers, they didn't like the amount of money it cost to run them, especially since the public had to pay to use them so why were they still costing a few hundred million per year? Of course, it is because to provide a service, you have to have regular trains even when not many people are travelling. You hope that the rush hour pays for these ghost services but what if they don't? What do you cut? You cut a service and some people will stop using your trains which is even less income albeit with less services to pay for (ignoring the fact that you are probably still employing the driver and own the train). In order to avoid this, the government helps prop it up. Also the Tories thought (apparently incorrectly) that the railways were inefficient and wasteful. I have read however that for the level of subsidy from the government, good old BR were the most efficient in Europe and this despite the ups and downs of government investment. Logical conclusion? Run it all privately, the private companies can run stuff for zero government investment, charge whatever they need to (but kept in check) and then use their private initiative to make cost savings so everyone is happy. There were loads of problems with the system however, the assumption that it is possible to run a service that is both cost effective and convenient, both of which were required, is at best ambitious and at worst simply untrue. This is what happened in the 60s when the government decided that underused lines simply had to close to the chagrin of those affected. Secondly, to get competition to force people to keep costs down, you need capacity on the lines, something we basically don't have in many places, the monopoly of services on most routes means that there is little competition. Also, in order to tempt people who would not have invested the massive amounts required, everything was sold off cheap to the private companies and because they wanted competition, the government decided that they needed Railtrack to own the infrastructure and lease it back to the operating companies. Of course, they could charge whatever they needed to and since the level of safety etc was down to Railtrack, their costs were huge and the operating companies were paying hundreds of millions per year. It doesn't end. Buying trains is hugely expensive for someone on a 5 or 10 year lease so they get hired from leasing companies who again can make large profits without much come back.
What do I think? I don't know. Re-nationalise it and you risk government interference like you get in schools and the NHS (and the railways in fact) and you get variable investment year-on-year depending on the governments priorities. You also get that sad but true fact that public companies are generally unaccountable for waste and are difficult to keep productive. Not sure why but they are. What do we do? We need to look at it and decide what is the one best model for our situation and decide whether it will always be the best model so we can stop changing it all the time, we have had 4 eras of railways plus the war years and every change is incredibly expensive. Perhaps the government need to accept the thing is expensive and just pay for it.
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