Office of Rail Regulation: nationalised rail firm is most efficient in the country

East Coast gets a net subsidy of just 1 per cent, ORR reports.

The Financial Times, that most fervently socialist of newspapers, reports that the East Coast franchise – the only one of the British rail franchises owned by the state – is outdoing the private sector. Mark Odell reports:

The state-run East Coast mainline has emerged as the most efficiently run rail franchise in terms of its reliance on taxpayer funding, raising questions about a recent government decision to privatise the operation.

The ORR found that among the rail franchises that make net payments to the Treasury, the East Coast mainline, which has been run by the state since November 2009, is reliant on just 1 per cent of government funding once cost of infrastructure is taken into account.

The reliance on state funding of the other nine franchises that make net payments to the government ranges from 3 per cent to 36 per cent.

The news comes shortly after the government announced plans to refranchise East Coast to the private sector. Odell reports that those plans were "designed to draw a line under the months of chaos in the UK rail industry triggered by the West Coast fiasco", but they were widely seen as a spoiler for Labour's plans for the railway system, which would have kept the franchise in public hands.

As Railnews writes, "a new East Coast franchise, once let, would be difficult and expensive to reverse until it had run its natural term, which could be ten years or more." That's quite a long time to bind the country into a style of management which seems to be sub-par.

Maria Eagle, Labour's shadow transport secretary, used the report to double-down on that position:

Considering the East Coast service makes one of the highest annual payments to government, receives the least subsidy and is the only route on which all profits are reinvested in services, it makes no sense for the government to prioritise this privatisation over getting the rest of the industry back on track.

Of course, even "privatising" East Coast might not be quite what it sounds like. As Christian Wolmar wrote in 2011:

In a way, it’s funny. The Brpitish railway system is slowly being renationalised, but not by our own government. Rather, it is being taken over by foreign state-owned railways that now have an interest in almost half the franchises, and in one of the three open access operators as well.

That's as true now as it has ever been. Not one of the three companies bidding to run the privatised parts of Crossrail – operations will still be run by the nationalised Transport for London – is privately held. Instead, the largest transport project in decades will be run by a partnership of a British state-owned firm and either the French, Dutch or German national operator.

The free market: it's a funny place, sometimes.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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David Cameron's prisons speech could be the start of something good

If the Prime Minister puts his words into action, then this speech could mark the beginning of a big shift on prisons policy. 

David Cameron’s speech condemning prisons as violent and failing could herald a seismic change in policy. He is absolutely right to point to the waste of money, effort and lives that characterises today’s prison system. He is also right about the direction of travel that needs to be taken and some of his ideas are at the very least worthy of discussion. The most important reform was missing, as none of his aspirations can happen unless the sheer number of men, women and children in prison is cut, and cut radically. Sentencing reform is the lynchpin.

The detailed proposals will be scrutinised as they are rolled out over the coming months, but the urgent over-riding challenge is to cut the prison population. Last week the number of men in prison increased by 185, and in the last four weeks the prison population has gone up by 684 men and women. Prison overcrowding is not standing still, it is rapidly deteriorating.

Chris Grayling closed 18 prisons and wings, reallocating the population into the shrunk estate. He cut prison staff by more than a third in each prison. The result was overcrowded, understaffed, violent prisons full of drugs and very disaffected staff trying to control frustrated prisoners on restricted regimes.

I was expecting some thinking on who we send to prison and what we do with them when they are incarcerated to create the conditions for radical reform. I was disappointed as the proposals were oddly reminiscent of things that Labour tried and contributed to this mess in the first place.

Labour was very proud of building lots of new prisons, hoping that they would build their way out of an overcrowding crisis. What happened of course was that new prisons were filled even before they were completed so the old prisons couldn’t be closed. Today we hear that £1.3 billion will be spent on building ‘reform prisons’ that will pilot new ways of working. My worry is that they will become warehouses unless the sheer number of prisons is restricted and resources are allocated to allow for just the sort of flexibility being proposed.

Giving governors more autonomy sounds good, and I support it in principle, but they always used to have their own budgets with discretion to choose how to spend it, including commissioning education and other services. It is no good having increased autonomy if they are constantly firefighting an overcrowding crisis and not given the resources, including well trained prison staff, to implement new ideas.

We already have league tables for prisons. Every few months assessments of how prisons are performing are published, along with regular inspections and independent boards monitor conditions. Reoffending rates are published but this information is less robust as prisoners tend to move round the system so how can one establishment be accountable.

I was pleased to hear that work inside prisons is going to be a key reform. But, the Prime Minister referred to a small project in one prison. Projects with desultory training in the few hours that men get to spend out of their cells will not instil a work ethic or achieve work readiness. Prisoners get a pack of cereals and a teabag at night so they don’t have breakfast, are not showered or clean, are wearing sweaty and shabby clothes.

Every day men and women are released from prison to go to work in the community as part of their programme of reintegration. This is extremely successful with incredibly few failures. So what is the point of adding extra expense to the public by tagging these people, unless the purpose is just to feed the coffers of the private security companies.

There are imaginative ways of using technology but what was being suggested today looks as though it is just adding restrictions by tracking people. That would be neither creative nor effective.

David Cameron is looking to his legacy. I fear that I could be listening to a Prime Minister in five or ten years bewailing the dreadful prison conditions in institutions that are no different to today’s overcrowded dirty prisons, except that they were built more recently. He will have achieved a massive investment of capital into expanding the penal estate but, whilst there will be more prisons, even the new jails could be overcrowded, stinking and places of inactivity and violence.

I want the Prime Minister to look back on today’s speech with pride because it achieved humanity in a system that is currently failing. I would like to see a prison system in decades to come that is purposeful, with men and women busy all day, getting exercise for the mind, body and soul. I would like to see prisons that only hold people who really need to be there because they have committed serious and violent crimes but whose lives will be turned around, who achieve redemption in their own eyes and that of victims and the public.

My job is to hold him to account for this vision. If what he announced today achieves radical reform and changes lives for the better, I will cheer. I will be watching.

Frances Crook is the Chief Executive of the Howard League for Penal Reform.