“A deficient performance”: The regulation of the train operating companies in Britain's privatised railway system

Abstract

This paper focuses on the performance and regulation of the train operating companies in Britain's privatised railway system. It places regulation in context by examining rail privatisation, with particular scrutiny given to the franchising process which established these companies. The record of the regulatory authority is assessed according to its five main objectives, and the financial and non-financial performance of the train operating companies is examined. The paper concludes that, while regulation was inconsistent and often ineffective, the fundamental problem was the flawed concept of fragmenting and privatising a loss-making industry.

Neoliberalism, consultants and the privatisation of public policy formulation: The case of Britain's rail industry

“…Four major fatal accidents between 1997 and 2002 originated in the ''the industry's fragmentation and the neglect of safety considerations between organisational boundaries'' (Jupe & Crompton, 2006, p. 1060). In the Southall accident soon after privatisation in 1997, where seven people died and over 100 were injured, a Great Western passenger train smashed into a goods train crossing its path in West London.…”

“…The problem of full cost recovery meant that throughout Europe rail services required government support (Jupe & Crompton, 2006, p. 1038. In Britain, this came partly in the form of subsidies to cover the operating costs of loss-making passenger services and capital grants which, in theory, were available to facilitate investment.…”

‘A Poll Tax on wheels’: Might the move to privatise rail in Britain have failed?

“…In 1997/98, the first full operating year for the privatised rail industry, the total costs of the TOCs for passenger operations amounted to £4.8 billion. Thus, privatisation brought an initial £3 billion increase in costs (Jupe & Crompton, 2006, p. 1053. While a small part of the increase reflected increased passenger numbers, the most important cause was the interface costs introduced by privatisation.…”

Accounting for producer needs: The case of Britain's rail infrastructure

“…Shaoul examines (2004) the performance of the franchised train operators and Railtrack up to 2001 and (2006) the levels of subsidy and costs of operating the various component business sectors of Britain's privatised railways; Jupe (2003a, 2003b) analyse the privatised industry and the collapse of Railtrack; Jupe and Crompton (2006) focus on the performance and regulation of the train operating companies; Jupe (2009, p. 175) evaluates how Network Rail has provided a 'fresh start' for the privatised railways; and McCartney and Stittle (2012) analyse the role and profitability of the Rolling Stock Companies (ROSCOs). These papers all use information extracted from published accounts of the entities concerned, but do not analyse the accounting policies therein.…”