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Re: Dr Beeching
On Mon, 11 Jan 1999 18:43:42 GMT, news@nospam.freeserve.co.uk (Tony Polson)
wrote:
>On Mon, 11 Jan 1999 06:00:26 GMT, in uk.railway R.J.Drew@lboro.ac.uk (Richard
>Drew) wrote:
>
>>A more reliable source for you this time: BTC report and accounts for 1948 and
>>for 1960:
>
>Thank you for posting these, Richard. I hope you didn't have to type them all
>out manually. I appreciate your effort in putting this together because it
>gives a very good picture of what was happening.
Manual I'm afraid, much snipped here.
>> 1948 1960
>>Route mileage (total) 19630 18369
>>Freight ton miles 21456842 18650261
(x1000 -correction)
>>Increase in year .45% 5.3%
>>Passenger miles 21259000 22270000
(x1000 - correction)
>>Increase in year -7.6% 3.4%
>>Freight Reciepts 181696313 247320163
>>Increase in year 16% 1.9%
>>Passenger Receipts 122572809 151274093
>>Increase in year 4.2% 8%
>>Total Receipts 337314996 478571057
>>Working Expenses 311057259 546223137
>>
>>From this it can be seen the market changed little in size between 1948 and
>>1960, and the indications were that traffic levels were on the increase in 1960,
>>and likely to return to the levels before the poor yeas of 1958 and 1959.
>
>Freight ton miles were down by 13%.
>Passenger miles were up by just under 5%.
>
>Freight receipts up 36% in cash, rate per ton-mile up 18%.
>Passenger receipts up 23% in cash terms, rate per passenger-mile also up 18%.
Size of network was reduced by 7%.
>Profit in 1948 £26.2 million (7.8% of turnover).
>Profit in 1960 (£67.6 million) (loss) (-14% of turnover).
>
>The 1948 bottom line figure (7.8% profit on turnover) is not at all bad for what
>was still effectively a private enterprise (nationalisation having taken place
>at the start of that year) but the 1960 figure (14% loss on turnover) clearly
>shows how desperate things had become in 12 years.
>
>Taking figures from lower down your posting, the wage bill in 1948 must have
>been of the order of 648,740 x 137s11d (£6.90) x 52 = £232 million ....
>and in 1960 of the order of 514,500 x 285s (£14.25) x 52 = £381 million
>Increase in the total wage bill was 64% in cash terms. Increase in pay per
>employee was 107%.
>
>Here was a business that was *rapidly* going down the pan. With freight
>ton-mileage dropping (especially wagonload, whose massive reductions were partly
>balanced in the overall figure by increases in other freight traffic) and
>passenger miles essentially static (rising at only 0.4% per annum) the railways
>managed to more than double wages paid per man yet reduced staff by only 1.7%
>per year. A lamentable record on productivity if ever there was one. Herein
>lay the seeds of Beeching's appointment.
It is fine saying there was a 13% drop in freight traffic over a twelve year
period, but this means little when the last of those years saw a 5% increase.
Freight tonnage goes through cycles. In 1957 it was peak of about 274m tons,
with receipts of over £280m. Comparing with the 1955 figures, 1960 saw small
declines in Mechandise, livestock and mineral movements, but a fall in coal
traffic of no less than 2086666000 ton miles (about 20%). In 1960 things were
again looking up, all the markets were carrying more traffic (minerals were up
11.7% - road constrction?). However, post Beeching (1971) a far condensed report
gives a traffic level 13458 million ton miles, a decrease of over 10% on the
figure for the previous year.
>(large snip)
Including the pre-Beeching BTC explanation. Manpower costs increased beyond
justification. The 1960 report shows traffic levels were picking up after a
slump. The finances are poor, partly due to a failure by the BTC to get
agreement from the government to keep fares in line with costs, partly due to
modernisation (which was sanctioned with the knowledge there would be losses of
around £50m for the first few years), and partly due to the BTC underestimating
the pay increases imposed on them. This provided enough ammunition for Marples
to put Beeching in charge of the BTC in mid 1961.
>>And from the 1961 report:
>>
>"5. The year 1961 was not a good year financially for the Commisssion's
>>undertakings as a whole... £87m working deficient of the railways...
>
>By now things were getting desperate. In 1998 terms £87 million may sound like
>not very much money, but I suggest we should multiply it by at least 20 to bring
>it to 1998 values giving £1740 million. I do not have figures for the Gross
>Domestic Product of the UK economy in 1960 but this £87 million loss must have
>been a significant proportion of it.
It is £17m more than the losses predicted by the modernisatiion plan. By your
figures, the payout for BTC stock for that year was £820m, a very significant
drain on the BTC's resources.
BTW. I recall reading in "Todays Railways" the Italian railways are running at
with losses of this kind of magnitude today due to government limits on fare
rises.
>Given that the nationalised coal and steel industries were also having major
>problems it is not surprising that Government needed to appoint Beeching to act
>extremely effectively to stem these losses. That they took so long to do so is
>a direct result of the determined, if wholly misplaced optimism of the
>BTC/Railway Executive (I apologise for referring in previous posts to the
>British Railways Board which was not set up until Beeching arrived) that the
>operation could be brought into profit. Their continuing blandishments in the
>annual accounts must have been a source of much irritation to the Government in
>view of the hundreds of millions of pounds that were being invested via the
>Modernisation Plan to no avail - just look at the figures!
OTOH it is easy to see from the 1960 report the problems in the coal and steel
industries resulted in the poor performance of the railways.
>The following text from the 1961 report is significant because it demonstrates
>that the branch line closure agenda was well established long before Beeching
>was appointed.
The reason for quoting the 1960 and 1961 reports (other than these are two I
have copies of) Is that the 1961 is the first Beeching was responsible for. IIRC
my 'other' posting gave the dates of appointments. Reading the reports with this
in mid shows how negative influence his appointment must have had.
>>20. It must again be empasised that stopping trains have long ceased to be the
>>must suitable form of transport for the traffic for which they cater. In the
>>interest of the railways as a whole, most of these services should be
>>discontinued as quickly as possible....
>>
>>The modernisation plan resuted in significant intestment, and thus depreciation.
>>But levels of maintenance were also significantly improved:
>>
>> 1948 1960
>>Expenses include (in part)
>>Rolling Stock Depreciation 11353884 25509241
>>Civil maintenance 47974348 132077896
>>
>>The increase in spending on maintaining the track, structures and signalling is
>>interesting considering recentcritism of the lack of spending by Railtrack.
>
>This is a point well made, but unfortunately I believe that distortions make the
>figures meaningless.
>
>Rolling stock depreciation in 1960 at 125% greater than in 1948 showed only a
>small increase over wage inflation at 107% over the same period. Assuming the
>policy on estimates of depreciation remained the same over the period, this
>would not seem to indicate a huge increase in investment. A mystery, unless the
>overall rolling stock fleet had been reduced, or possibly the majority of the
>investment went into infrastructure? Can anyone confirm (using facts please)?
Book value of rolling stock in 1948 was £224938587 net, £510247925 gross and
£672096724 net, £974898267 gross in 1960. Book value of civil works increased
from £709228629 to £1012687837. The modernisation plan was a 15 year plan. The
figures indicate a spending of about £100m per annum, split evenly between
rolling stock and civil works.
>On civil maintenance, the nationalised British Railways inherited huge
>maintenance backlogs from the "Big Four" companies largely as a result of the
>lack of asset replacement (1990s term) during and after the Second World War.
>The 1948 figures for asset renewal will be artificially depressed to a very
>significant degree by (1) the shortage of steel as a result of wartime damage to
>steelworks and (2) the after effects of the devastating 1947 Winter which
>decimated coal and steel production and brought the economy to a standstill.
In 1948 over 2000 miles of track were renewed - restricted by the Governent
White Paper to "about the same aas pre-war, without overtaking arrears."
Expenditure in 1960 included over 340 miles of CWR, approx. 700 track miles of
colour light signalling, including new boxes at Birmingham (Snow Hill),
Plymouth, and Glasgow Central. Also 790 route miles of AWS were installed. For
many years, the railways were restricted in their investment. In 1955, only
£5.6m capital expenditure was spent on track and structures.
>For these reasons I think it's virtually impossible to interpret these
>particular figures.
Difficult, but these figures were chosen to show where significant increases in
expenditure were to be found.
>That is perfectly true, and I have no doubt that some lines could have remained
>open given new Diesel trains and de-manning of most stations. But it is *not*
>true to say that the majority of the lines would not have closed, because so
>many of them had *virtually no traffic at all*. There could be no economic case
>for keeping those lines open except for reasons of sentiment, because they could
>not carry on as they had, with time expired locos, rolling stock and
>infrastructure and fare/freight/parcel income measured in fractions of a
>percentage point of the costs of running the services.
Most of the "virtually no traffic lines" had already be closed by the Branchline
Committee.
>>The extracts from the 1961 report show the powers that be had already decided
>>branches were to close.
>
>Yes, and that decision was made by the railway, not by Beeching. That clearly
>explains why railway management were completely indifferent to the closures.
>They would have happened anyway. Yet people still blame Beeching.
Sorry, the 1961report has Beeching's signature at the front. It proves he was
appointed with the intention of downsizing the railways.
>>But [did] Beeching make the promised savings? Under hte 1968 Transport Act, revenue
>>grants were made to retain services on loss making lines. According to the 1961
>>report, it would be reasonable to assume commuter lines would not require this
>>subsidy. However the 1971 BRB annual report lists services receiving grants.
>>These include the Glasgow Suburban network, Fenchurch St - Shoeburyness via
>>Tilbury and Liverpool St to six commuter terminals (however, there are few
>>services south of the Thames listed). Desipte a grant of over £67m, profits were
(£63m - correction)
>>only £30.2m before interest (the bottom lines was £15.4 in the red).
>
>£30.2 million profit is a very, very good result, in view of the astonishing
>losses we have discussed in pre-Beeching years.
Without the grant, it would have be a loss of £33m. Ignoring the grant, the loss
was 6% of income
>So yes, Beeching achieved what he had set out to do. As a railway enthusiast I
>mourn the closures that his report instigated (although we have now agreed that
>the branch line closure agenda was in place and being implemented well before
>Beeching arrived) but I thank God that he kept the railway alive and, for the
>first time, truly forward looking to the great extent that he managed.
Branch lines were closing before Beeching was in charge, but up to Beeching the
outlook was good. The quotes show that in 1961, WHEN Beeching was in charge, the
management view changed. Not before.
>>Political expediency may have allowed the loss of many lines in Beeching's day,
>>and this continued until the concept on revenue grants was accepted. If the idea
>>of grants had been accepted in 1960 (when suggested by the Select Committtee),
>>they lines would still be open.
>
>Economic rather than political expediency, and certainly not party political.
>The nation, whether governed by the Tories or Labour, could not possibly
>withstand losses of the kind being generated by BR, with hundreds of millions of
>pounds of taxpayers money being squandered on "investment". And, as the figures
>you kindly provided have proved beyond doubt, the investment was making no
>headway towards reducing losses precisely because *nothing* was being done to
>improve productivity or efficiency.
You want some efficency figures?
In 1960 the average wagon load had increased by 27%, the average tonage had
increased by 21%. The passenger train miles per train hour increased by 18%, and
for freight by 11%. Total train miles incresed from 365572000 to 375442000 with
the number of locomen etc. falling from 98153 to 70075. The number of guards,
signalmen, shunters, porters, etc. fell from 123243 to 98689.
Ecconomies were also to be seen. In 1948 over 39000 wagons were built, in 1955
almost 59000 were built, but 1960, only 6803 were built. It is also worth noting
the Guillebaud pay award in 1960 resulted in the BR Productivity Council
reviewing work practices, which, in the 1961 report, mentions single manning,
and the abolishon of brake vans.
>And here is the crux of the matter. If economies had been made in manning, the
>figures would have taken on a different hue. However, under the Modernisation
>Plan, money was thrown at the railways in obscene quantities (£30 billion at
>1998 prices) without even a thought being given to the corresponding efficiency
>savings that were equally desperately needed, and that would have kept some
>lines open.
Over the 15 year timescale, this makes it £2b per year. How much are we
subsidising the far smaller railway network these days?
>By the time Beeching was called in, it was too late. The money had been spent,
>but the savings had in no measure been achieved. Beeching had no alternative.
>What annoys me is how he has somehow been blamed for having to sort out a
>desperate situation which was not of his making, while the faceless and grossly
>incompetent top management of BR got off scot free. How adept they must have
>been at pointing the finger at Richard Beeching.
>
>Just as some people on this newsgroup still do.
By 1961, less than half the money had been spent. Recession, and Government
interferance (restricting fare rises) resulted in losses greater than planned.
What annoys me is how desperate a situation the Government made it out to be, to
justify Beeching's appointment. The losses in trafic can be seen to be in the
heavy freight markets, whilst the introduction of DMUs was improving the
performance of slower trains. Of the fifteen members of BRB in 1963, only three
part time and two full time members were to be found on the BTC in 1960....
--
Richard Drew