The Friends of the Far North Line
Cairdean Na Loine Tuath
the campaign group for rail north of
Inverness - lobbying for improved services for the local user, tourist and freight
operator
Service Group Management on the A2I in the last days of British Rail, by Paul Hadley
When the business sectors were being properly established in the 1980s I moved from a classic operations job as Area Operations Manager (Thanet) in North Kent to become Resources Manager for the Strathclyde profit centre in what was then commonly called ScotRail Provincial. Subsequently I became the Profit Centre Manager with my own 'bottom line'. Unlike the task facing some of my colleagues this was focused on minimising the scale of the Section 20 'claim' on the Strathclyde PTE. Optimising revenue was a relatively minor aspect as the fares were set by the PTE, which also specified the timetable and controlled marketing and branding activity. At this time British Rail sent me to Strathclyde Graduate Business School to do an MBA. So I developed a very strong 'business' orientation.
As the sectorisation of BR continued the old Scottish Region was broken up. Most of the staff went to what had become Regional Railways although some did end up with InterCity, Freight or Parcels. Cyril Bleasdale became the head of a single ScotRail profit centre that directly employed all of its own staff. For 'business' purposes there was a Planning & Marketing function, under Dr Paul Prescott. This essentially undertook service specification that was then delivered by the Operations, Retail, Fleet and Infrastructure functions (which employed the bulk of the staff) supported by Human Resources, Finance & IT and Quality & Safety. Within Planning & Marketing there were only two service groups - Strathclyde and 'everything else'. I was lucky enough to get the 'everything else' group and thus became the only person before or since to have been 'Service Group Manager' for every route within Scotland at some point. The previous distinctions between smaller service groups - ScotRail Express, East Coast Locals, South West, North Highland and West Highland were lost, making it easier to consider deploying resources and optimising connections across the whole network. The main introductions of the Class 150, 156 and 158 units in Scotland had already been set in train (if not completed) by this time.
Sectorisation had established some key financial expectations. InterCity was expected to be profitable, hence certain activities with poor economic prospects such as sleepers, Motorail and certain styles of catering were heavily rationalised. Freight and Parcels were also expected to be profitable, albeit helped by the fact that they were only charged with the incremental costs of their activities on a network and at stations that was accepted as being primarily for passenger traffic. Network SouthEast was obviously not relevant to Scotland.
It was accepted that Regional Railways routes were likely to require subsidy indefinitely, so the emphasis was on cost minimisation. This was particularly the case on routes where revenue was low and even a significant proportional increase from either service improvement or marketing activity would make a relatively small difference. Cost minimisation could take many different forms. The switch from locomotive-hauled operation of slam-door trains (with high track wear, high maintenance costs, poor fuel efficiency and the need for shunting staff, run-round loops and so forth) to multiple units had been going on for years. Installation of continuously welded rail, along with lighter trains could lead to a dramatic reduction in track maintenance costs (almost to the point of 'fit and forget' in the medium term on lightly used lines with no freight).
Signalling rationalisation from power boxes or with RETB could also save a lot of operating costs but required significant investment. A particular problem after the Clapham Junction crash on 12 December 1988 was that the processes of signalling design and installation were subject to massive change. This created an enduring shortage of resources for any but the most urgent and important projects on a national basis.
Another area of cost saving came in the retail activity. Although the internet still lay in the future, the advent of SPORTIS ticket machines for use by on-train staff provided the scope for reductions in station staffing in many cases.
As Regional Railways got into its stride the understanding of its services became more sophisticated. As is often the case the findings seemed blindingly obvious once they were written down and circulated but were nevertheless radical at the time. This was particularly the case when it came to understanding why some services did better than others and which ones had the best potential for revenue development.
After Gordon Pettit had taken over the reins of Regional Railways and put a new headquarters senior management team in place a major strategic review was undertaken by consultants - Mercers. Although the Central (Midlands of England) sub-sector had been the focus of study the findings were of general application. They were briefed out from May 1991 although sadly were never properly written up. Managers were left to pick the bones out of packs of viewfoils.
The most significant conclusion of the review was that there were two 'viable positions' for Regional Railways. The first of these was termed 'distance-at-speed'. This type of service typically demonstrated the following characteristics:
Clearly these attributes had to be supported by factors such as good origin-station access and parking; large destinations (that in contrast to journey origins were preferably congested and had poor parking); well located stations at the destinations (or good interchange onto local networks); and a large proportion of longer journeys.
The second viable position was 'door-to-door', generally in the context of urban commuting. The characteristics here were:
Here it was also necessary for the cities to be congested and with limited and expensive parking. The centres had to be concentrated and populations along the rail corridor had to be high, with housing close to stations.
Routes that could not provide either distance-at-speed or door-to-door risked falling into what was termed the 'hole in the middle'. There were plenty of Regional Railways routes in this category that typically demonstrated:
This may seem straightforward but the concept of 'viable' needed to be understood. For distance-at-speed, which loosely corresponded with what we used to think of as ScotRail Express, it was reasonable to expect a train service to cover all of its direct movement costs. These were fuel, train maintenance, depreciation of the capital value of a new train, cleaning and train crew. If these costs were covered the service could be said to be 'Gross Margin 1 positive' (GM1 positive). In other words it was making some contribution towards track, signalling and stations costs as well. If a service made so much money that it fully covered its infrastructure costs it would have been described as Gross Margin 2 positive'. It would then be able to contribute towards overheads and even enhancement. However, no Regional Railways services anywhere fell into this category.
Although some urban services were GM1 positive there were plenty that weren't. This was due to a variety of reasons including high degrees of peakiness and low fares (especially in Passenger Transport Executive (PTE) areas or where bus competition was fierce). However, such a large proportion of Regional Railways total business was in the urban sector that it could not be neglected. Door-to-door was often only a viable position in the sense that the government or local PTEs were willing to continue paying grants.
To cut a very long story short, the principal business aims of a service group manager were to get as many routes as possible to be GM1 positive, to maximise that positivity and to avoid slipping into the hole-in-the middle. The key to this was generally maximising rolling stock utilisation. Although fuel and maintenance costs increased with speed and distance travelled, revenue could often increase faster. Train crew costs tended to be relatively fixed as staff have to be paid even if they are sitting around during a lengthy turn-round, waiting in loops or whatever. Back in 1991 the general rule of thumb on Regional Railways was that each vehicle had to earn at least £200,000 per year to cover costs. In the absence of single-car units in Scotland this meant that each two-car diesel unit had to earn £400,000. Not every unit could be in traffic all day, every day either. So a hypothetical route with annual revenue of £2m could 'justify' five units.
Not only did rolling stock have to earn quite a lot of money, it was also in very short supply. The original aim had been to replace the ageing Modernisation Plan DMUs and expensive locomotive-hauled stock with the various Sprinter variants but the plan had not gone smoothly for two main reasons. Firstly there had been many technical problems, from gearboxes and brakes on Pacers, through doors on Class 155s, to track circuit operation and welds on Class 158. These manifested themselves in stock withdrawn for modification, poor reliability of what was actually operating and late delivery of new designs as production methodology was changed. Secondly there was less of it than expected. The UK economy had gone into recession in the third quarter of 1990 and public spending was under severe pressure. As part of its share of the pain BR had to see Network SouthEast give up its plans to develop a new long-distance DMU design for the Waterloo-Exeter line. Around 60 vehicles from the final Class 158 order were diverted to become Class 159s and basically 'lost' to Regional Railways.
A further factor was that some Regional Railways 'Express' routes had been doing extremely well following introduction of modern rolling stock and there was additional revenue to be had by increasing or lengthening those services even if this came from de-resourcing less lucrative routes.
The outcome of these pressures was that certain routes retained an element of locomotive hauled operation for far longer than had been hoped for. Aberdeen-Inverness (A2I) was one of these.
Having spent quite a long time setting the scene, it is hopefully clear what my business priorities for A2I had to be. Although seen (and indeed promoted) as part of the ScotRail Express network, the line was at risk of falling into the hole-in-the-middle. Most distance-at-speed routes had hourly services or better. Practically none had anywhere near as much single track, with all the timetable limitations that that imposed. In many cases average end-to-end speeds were materially higher. For example, even the fastest Aberdeen-Inverness trains took 2h 10m for 108&189; miles; an average of just under 50mph. A more typical schedule of 2h 20m is around 46mph. My 'best' routes - Glasgow to Edinburgh and Glasgow to Aberdeen - could offer trains averaging around 57mph.
Applying this thinking to A2I, my dream was of an end-to-end journey time of 108 minutes (and 12-minute turn-rounds). This might allow a mile-a-minute hourly service with only four units although clearly there would have to be dynamic crossings at three places en route. Sadly this would be ruinously expensive. Partial re-doubling between Aberdeen and Keith might be possible but finding somewhere for brand new double track sections several miles long somewhere on the Keith-Elgin and Forres-Nairn intervals would be impractical.
Scaling back my ambitions it was more straightforward to at least avoid sliding into the 'hole'. Yet more stations, such as Kintore or Dalcross, were definitely not welcome from a strategic perspective. Elsewhere in Scotland I was proud to have been involved in the development of no fewer than 35 new stations but there is a world of difference between door-to-door stations such as Paisley Canal or Drumgelloch and the smaller settlements of North East Scotland.
For the record, when the Mercer methodology was applied to A2I it showed that the service represented 4% of ScotRail unit miles and generated 4% of the revenue. (By way of comparison, Edinburgh-Glasgow was 6% of the unit miles but 12% of the revenue. The Stranraer line was 3% of the miles but only 1% of the revenue.) The resource requirement was assessed as six diagrams (one locomotive hauled at the time), including maintenance cover. So, using the rule of thumb of £400,000 per unit, it needed to generate at least £2.4m per year to cover movement costs. Revenue in 1991 was around £3.7m, so the route was comfortably GM1 positive. It earned a larger GM1 surplus for ScotRail than Glasgow/Edinburgh-Inverness (although revenue on that route was obviously shared with InterCity at the time).
Sadly there seemed to be little that could be done with A2I in the short term. Signalling rationalisation was obviously highly desirable, both to reduce staffing costs and to tackle some the inflexibilities of loop location at Forres and Keith as well as completing the elimination of token working and the Nairn bicycle. But in the post-Clapham environment this was impossible. Track upgrades for faster running made little sense if trains then had to wait around at loops. Although rolling stock availability did improve gradually Regional Railways remained desperately short of units through to privatisation. Hence Modernisation Plan DMUs remained in service around Glasgow and Edinburgh (as well as other places, like Manchester) for far longer than anybody wanted. Pockets of locomotive hauling also remained for years.
Aberdeen to Inverness was a route that always fascinated me. I well remember my first ever trip, from Inverness to Elgin whilst on holiday with my parents back in 1970. It was the only place that I ever saw automatic token exchange used in anger. Subsequently, once I worked in the industry and had a precious annual allocation of free tickets, a grand round trip on something like a Portsmouth-Elgin return enabled trips on both the East Coast and West Coast Main Lines as well as a mini-tour of Scotland. It was fantastic to have the chance to get to know it better but so frustrating that it was impossible to change anything. The renovation of Inverurie station was probably the highlight on my 'watch' and it wasn't even one of my ideas.