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David Brown, chief executive, Go-Ahead Group

GO-AHEAD Group's chief executive David Brown can't ignore politics. As he explains to Peter Jackson, it goes with the territory.

David Brown, chief executive, Go-Ahead Group

DAVID Brown is accustomed to walking down the street and being pursued by cheering crowds.

That is to say, in his previous role as managing director of Surface Transport for London, he occasionally accompanied the Mayor of London on his walkabouts.

He says: “Both Ken (Livingstone) and Boris (Johnson) are very public figures.

“My more recent experience was with Boris and if you went down the street with Boris, you didn’t do that on your own, it attracted a lot of attention. You realise what it must be like to live in the public eye.”

But Brown, head of a group which runs buses and trains, has spent his career in public transport and, while he personally may not be of interest to the public, he concedes that Go-Ahead Group, and the sector in which it operates, certainly are. Public transport, by its nature, is political.

“Most transport operators would like to be able to just get on and run the transport and provide a good service to passengers and not have interference, but the reality is that transport receives public funding and it’s something that can improve or not improve people’s quality of life and on that basis it becomes a political issue.”

Not that it seems to faze him. He comes across as collected and humorous. He’s 53 and married with a wife and two children, a 14-year-old boy and an eight-year-old daughter. A Londoner, he has a noticeable accent but it’s hardly what you’d call broad cockney.

He has been chief executive of Go-Ahead Group since July 2011. The Newcastle-based business employs 23,000 people and carries over one billion passengers a year. It has a fleet of about 4,600 buses around the UK, including those of Go North East, has about 24% market share of the London bus market and owns 65% of rail operator Govia, which has three franchises responsible for nearly a third of all UK passenger rail journeys.

Brown’s CV would seem to qualify him for the role. He describes himself as “a career transport guy”, who started 30 years ago as a trainee with London Transport.

He was born in West London where he attended the local high school. He tells me that, at one stage in his career, he was managing a bus depot in the area and found that two of his drivers were former classmates.

He went on to read geography at Reading University and specialised in transport planning. But he denies any particular childhood interest in buses and trains.

“You find a lot of geographers end up in transport, it’s the spacial awareness issues – either that or we can’t find jobs anywhere else. I’m not a train-spotter or a bus-spotter,” he says.

Throughout his career he has moved between public and private sector. During the privatisation process at London Transport he was one of a number of managers who bought a bus company, Centre West, in London in 1994, followed by another outside the capital, of which he was managing director.

He recalls: “It was an incredibly exciting time to be part of a small management team running a big bus company under a different ownership.

“When you’re running something you have a vested interest in it raises the stakes.”

He then became chief executive of Go-Ahead’s London bus division before rejoining the public sector as managing director of Surface Transport for London, responsible, as the regulator, for all London’s buses, all the strategic road network, river transport, transport policing, light rail, taxis, private hire and urban rail.

Under Livingston, he introduced the Western extension of the congestion charge and, two years later, under Johnson, removed it. He also personally introduced the Boris Bike scheme. He was also behind the transport preparation for the London Olympics, which included moving three bus depots.

“That was a fascinating period because I either worked directly for Ken or for Boris. Both are very charismatic people and very strong-minded about what they want to do,” he says.

He is still operating in a political environment at the helm of Go-Ahead Group. In the North East, the company, along with other bus operators, is embroiled in intense debate with the Passenger Transport Executive, Nexus, and the Integrated Transport Authority, ITA, over quality contracts.

In brief, such contracts would see the ITA, through Nexus, taking back direct control of route times and prices and contracting with the operators to provide a specified service on each route at a specified profit margin, with common ticketing.

This would be to address what the ITA perceives as buses being infrequent and expensive.

Unsurprisingly Brown doesn’t see it this way. Indeed, for such a relaxed character he becomes quite forceful.

He says: “We think the local authorities can get the benefits that they want through partnership working and we don’t think quality contracts are the right way forward.

“Quality contracts are, in essence, forcing me to bid for something I already do commercially.

“It would be under the control of the local authority, but I cannot understand why any public authority would want to take on that level of risk at a point at which public sector funding is under so much threat.”

He points out that the operators take the commercial risk. Go-Ahead has invested £14m in new vehicles in the North East and £8m in a new depot in Gateshead and has customer satisfaction rates of more than 90%.

“If we’re investing, if we’ve got good customer satisfaction, if we’re talking revenue risk, why on earth would you want to undertake this as a local authority, when, by your own admission, you are going to have to increase fares to pay for it?

“What it is it you want to do that we’re not already doing? I seriously think it’s a huge waste of public money.”

He adds: “Basically, it’s nationalisation without compensation. If it happened to a British company in Argentina or Venezuela, for instance, there would be outrage. That’s basically what’s being described here.

“People seem to think it’s acceptable to take what we’ve invested in the commercial world away from us and then get us to bid for it. I remain rational, but it could make you go mad if you think about it.”

Turning to rail, but not away from politics, the West Coast franchise fiasco has delayed the awarding of three new franchises: Great Western, Thameslink and Essex Thameside. Thameslink, running north to south through London, will now be a seven-year management contract and the invitation to tender has been put off – probably until the end of this year at the earliest.

This is the one Brown wants to go for, a £1.2bn contract which will probably be the biggest rail franchise in the world.

He says: “I have no problem with the management contract decision. I think it’s a pragmatic solution to a very complex programme management.

“Thameslink is going to introduce 24 trains an hour north-south across London and my opinion is that that’s as transformational as Crossrail will be.”

He argues it will be a highly complex project integrating new infrastructure and rolling stock and the rebuilding of London Bridge Station.

“This is a project that has to be got on with and the issue of the rolling stock that has still to be resolved needs an operator and infrastructure provider to be saying the same things and working together. You can’t build the rolling stock and then say, ‘How are we going to fit this on the track?’”

One franchise he already operates through Govia is Southeastern, which, for the past three years, has been operating the UK’s first high-speed domestic rail service between Kent and London. What has he learnt for HS2?

He argues that something has to be done to increase passenger capacity between London and Birmingham and that the present rail infrastructure cannot be shut down for few years while improvements are made.

“You can’t just keep patching it up. In some places it’s still Victorian infrastructure so you have to seriously consider what you do to cater for the capacity increases.”

He also points to the benefits of economic regeneration and of bringing the North closer to the South.

“In terms of lessons to be learnt from HS1, there is a premium that we charge that was set by the Government and the lesson is that people are prepared to pay a premium for a premium service. We have had continual growth on that service for the last three years. For instance Canterbury to London has seen a 50% increase.”

Go-Ahead recently worked with Passenger Focus to commission a study to explore potential social, economic and technological changes and they might influence passengers in their relationship to transport.

“It came up with some conclusions, nothing earth-shattering but it does make you start thinking about things,” says Brown. “One of them is having a society that the research has described as ‘always on’, which means personalised communication of what people want and how they want to do it.

“Some of this stuff is happening in our lives now, you can programme your TV remotely, but it’s about having personalised information about your journey patterns and that’s going to be in the forefront of how we communicate with people.

“It’s happening as we speak. We provide apps for our bus services.”

I put it to him that what most seems to concern people in the here and now are high fares.

He begins by explaining that there are 120 million fare combinations on our rail network and one-size-fits-all is not practicable. He also points out that the Government sets regulated fares – commuter fares – according to the RPI+1 formula and that represents about 60% of all the fares on the network.

“We set the unregulated fares and they have to be married with the regulated fares in some way. There are much cleverer people than me that do this and working it out so you don’t have anomalies within the system is a bit like 3D chess.”

People notice fare rises more when times are hard. How does the recession affect his business?

He tells me it’s push and pull. On the one hand people might get rid of the second family car, which means more travel on public transport.

“At the same time we don’t want fewer people in employment because transport is a derived demand.

“People travel by public transport to get somewhere to do something, so I want an economic vibrancy which means people want to travel,” he says.

“But all in all, we are still getting passenger growth on our buses and trains, and on trains as a whole there’s been a 45% growth in passenger numbers over the past 10 years.

“Trains, for all the criticism, are a success story. In the past 10 years we’ve had more passenger journeys on trains than at any time since the 1920s.”

So where does he see the future growth for Go-Ahead? Overseas?

“Our core business is in the UK, that’s what we understand and where our strengths are. It’s hard enough understanding the UK market at times, let alone trying to understand somewhere else in the world!”

Working day

Take the tube into central London

Stop at Victoria station where Southern is holding its monthly Meet the Manager session and talk to passengers and staff

Arrive at Go-Ahead's office in Westminster. Check the real-time train-running information screen in the office to see how Go-Ahead's and other UK train companies are running during the busy morning peak. Deal with emails, check the daily media summary and prepare for the day ahead

Bus business steering group meeting. Quarterly meeting with bus company MDs to discuss business progress and strategy

One-to-ones with managing director, rail development, to discuss rail franchising, and managing director bus development to discuss acquisitions

Working sandwich lunch with group finance director and a few investors to keep them up to date with company progress

Head to St Pancras for a photocall with Paralympian Dame Sarah Storey. Southeastern, which played a major role in providing transport during the Olympics through the Javelin shuttle service, is this year naming its high-speed trains after Team GB Olympic athletes. Chat to staff and media at the event

Head back to the office for a conference call with DfT regarding rail franchising

Monthly Go-Ahead Forum: update HQ staff in both Newcastle (via Skype) and London on key business issues. Q&A session at the end of the update

Spend time on emails and preparing work for the following day

Depart for home in West London or head to an industry event, reception or awards function to meet and network with industry colleagues. I’m a keen advocate of industry awards which recognise the work and achievements of Go-Ahead’s 23,000 staff.

 

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