Recorded at the Accelerate Rail event in London on 21 March, John explains how rail reform and the implementation of Great British Railways will lead to significant change at ORR. He goes on to describe how things will need to be done differently because of a much bigger role for the organisation. John says:
Listen to the full interview below.
John Larkinson, chief executive, ORR: One part of our role is effectively just to provide some constructive challenge to rail reform. There are a lot of people who support rail reform, there are people who don't support rail reform. But one of the jobs of an independent regulator is to ask some of the difficult questions, to work through some of the difficult challenges that we need to face. And that's an area which we will devote resources to because there are some really big policy choices to be made.
Host Kenny Walker: Hello and welcome to the Rail and Road Pod. We are back after a short break with a 17th edition of the Rail and Road podcast and kicking off this year's series with a focus on the recent Accelerate Rail event, where ORR's Chief Executive John Larkinson gave a keynote speech on the future of regulation and joined a leaders' forum debate on rail reform. Before we hear from John, it's worth pointing out some recent work ORR has been focused on. It has been a busy start to the year, with two successful prosecutions for offences under the Health and Safety at Work Act, including a £1.4 million fine for Siemens PLC. ORR has also been supporting the Samaritans Small Talk Saves Lives campaign and Brew Monday. And train performance has been put under the spotlight with recent statistical releases on reliability and cancellations, including data on precancellation figures that hadn't previously been published. But as I said at the start, we're kicking off this year's series of Pods following the Accelerate Rail event.
Accelerate Rail returned in March 2023 during a time of significant change and focused on reform, sustainability initiatives, and how industry can work together to provide a better connected, accessible, and reliable journey for passengers.
The event brought together some of the most influential leaders in the industry and ORR's chief executive discussed the future of rail regulation.
John Larkinson: I'm really delighted to be here at Accelerate Rail today. We just had an excellent session on rail reform and one of the points I was making there is, if and when rail reform is implemented and Great British Railways is set up, that will lead to significant change at the Office of Rail and Road. We will have to do things differently because we will have a much bigger role. We'll be responsible for oversight and assurance of the whole of Great British Railways and expansion of our current role in areas like performance and efficiency. Not just a focus on Network Rail, but focus on everything that Great British Railways does. And we will rise to that challenge and we will build those capabilities. But at the conference, I've also touched on things that can't wait for rail reform like train service performance. The number of trains on time is not good for either passengers or freight. And we need to do something different. We need to work more collaboratively with government, with industry, with train operating companies, and with Network Rail to bring about change. So, in effect, what we need to do is invoke the spirit of rail reform now, this very minute, to drive improvements in train service performance and that's what we're going to be working on over the coming months.
Kenny Walker: So how did you find the event, John, and in particular what the others were saying during the panel discussion?
John Larkinson: Well, Andrew Haines kicked the session off and he gave, I think, what was a very impassioned speech about the benefits of rail reform and Great British Railways. I focused on the role, obviously, of the ORR and what we would need to do differently with rail reform because our role will expand. But what I was also trying to do is link some of these issues together because our periodic review of Network Rail connects to rail reform, it provides a settlement around infrastructure, funding and priorities which will be effectively inherited by a new Great British Railways. So I was trying to draw some of those connections together and I also wanted to focus on things that just won't wait for rail reform, things that we need to address now by working together more collaboratively, particularly around train service performance overall. I thought it was a really good session and the panel discussion was good as well because we had a bigger range of views there and we did focus in on more detail around things like the pace of reform, what things would actually need to be done now and in the coming months to bring about changes in the structure of the railway.
Kenny Walker: Are there any particular challenges for ORR at this time in how ORR works with the industry?
John Larkinson: So, if you think about our role, one of our key roles here is to provide advice. We've been asked to provide advice to the government and that's what we focused our resources on. We've been asked to facilitate change, to help bring about change. That's why we've been working closely with Great British Railways and we've been supporting the Great British Railways transition team in some of the work they've been doing on new policies around rail reform. Another part of our role is effectively just to provide some constructive challenge to rail reform. There's a lot of people who support rail reform, there's people who don't support rail reform, but one of the jobs of an independent regulator is to ask some of the difficult questions to work through some of the difficult challenges that we need to face. And that's an area which we will devote resources to because there's some really big policy choices to be made.
Kenny Walker: Okay. Thanks, John. So how would you explain rail reform to the average member of the travelling public?
John Larkinson: I think that's a really good question, because let's face it, the average person travelling around the system isn't massively interested in the structure of the railways. They're really not. They just want their train to be on time, they want good passenger information. So ultimately, rail reform needs to deliver on the things that matter to passengers and indeed to freight customers. It needs to bring about a system where we deliver a safe, high performing railway. And so in all the what you might call detailed technical debate and discussions, and there has to be some, there's a lot of technical stuff to be sorted out around legislation and things like that. But within all that, we've got to keep asking ourselves, what are we trying to deliver here? Why will it be better than the system we have now? We just can't assume it's going to be better. We have to demonstrate why it will be better. And that goes back to my point about the ORR offering what I would call constructive challenge. But other people may say, let's just do it. But we've got to ask ourselves, okay, but what are we going to do differently?
And going back to your point, why would that deliver something different to the users of the railway and indeed to the funders of the railway? I mean, railway is ostensibly backed by the government. Why would it deliver something different at the end of the day? That to me is constructive challenge and trying to facilitate change that will actually matter to users of the system.
Kenny Walker: During your session, you spoke about the timeline for PR23 and what's coming up. Can you give me a bit more detail on that?
John Larkinson: Sure. So where we are now in PR23 is that the two governments, for England and Wales and for Scotland, set out how much money is available for the periodic review, which is a really important step. We've now got Network Rail's strategic business plan. So this is Network Rail's initial plan, setting out what they intend to do with that money over a five-year period from 2024 to 2029. That's the plan that we are now assessing. And this is a really fundamental stage because the question is, how do we prioritise the spending of that money? The simple fact that we can't do all the things on the railway that we want to do, this is now about choices. It's about choices within a constrained budget when the system is under a lot of pressure, as soon as that plan is published, which we hope will be soon, when the Secretary of State approved it, we're going to be having conversations with the industry, with the supply chain, before we reach our initial conclusions in June. And that then continues. The process continues right up until next year, when a new system next April, when the new system takes effect, the new funding system, the new system around the outputs Network Rail will deliver, will take effect in April, next year.
So there's a long process from now, but we are now in the crucial stage where we're starting to debate priorities.
Kenny Walker: And a final question from a more personal perspective, as the Chief executive of ORR, how does it feel to be involved in a period of such transformation in the industry, and having to lead ORR through that?
John Larkinson: I feel really privileged to be here. Actually, it's interesting. One of the questions came from the audience, which I thought was a good question. They made a comment that a lot of the senior team across ORR, Network Rail, wherever, are similar to the people who were there before 5, 10, 15 years ago. And people ask the question, well, why should we expect change when a lot of the faces are the same? And although I could see the point of that, actually, if you look at how ORR has changed over the last three, four, five years, it's enormous. We've got a new board, we've got a new senior team, we've got new staff in particular areas where we never had skills and capabilities before. And I find that particularly exciting. I find the change that I already see in ORR over the last few years and how well we've adapted really encouraging. Because to me, it shows that we can adapt and change, and we can adapt and change at whatever rail reform requires of us. So I think it's a really exciting time and I'm very lucky to be a part of it. But within that, there's no getting around the fact that a lot of this is just around really hard, detailed work, around train performance, around the things that matter to passengers and freight users.
So amid all the sort of big strategic talk, ultimately success comes from attention to details it comes from delivering the day job well. And that's what we must never forget.
Kenny Walker: Thanks, John, for a very insightful overview of ORR's role in rail reform and on the future of the industry. And that brings us to a close for this episode, thanks to the team behind Accelerate Rail and, of course, John Larkinson, ORR's chief executive. We'll be back with another episode soon, but in the meantime, you can keep up to date with all ORR's work via its website, orr.Gov.uk, or via the social channels on Twitter, LinkedIn and YouTube. Goodbye.