The problem wasn't with the train service itself, it was due to lack of accountablity for those involved and the lack of foresight and management. Also, the way the train service operated with funds and budget from government itself was always an issue. There are many factors but it is quite different from the way it should be done, and the ways it was done by our international friends. Also our current rail service is a joke and it is very far from "modern" go to railway and board the first 'Northern Rail' train, you will quickly agree, it is exploitation by private firms out for a quick buck, while paying no attention to the state of the system or any investment in its infrastructure.
For the final deathnail, have a look at France's rail. It is arguably the best rail service in the world, and it is publicly owned and ran. When I talk about public owned, better examples would be like France's very successful public enterprises, etc opposed to the joke systems we used to have.
I am all for modernisation and progress. I think government giving "budgets" is a fundamentally inefficient process. I am for government subs and investment into a good and working system, however.
Edit: Being honest, Louis is probably best to comment with my France examples. Can you shed any light on this for the benefit of us?
Edit2: I randomly found this link, I hope this is true, and I would love to see the system expanded into a North-South route running all the way from London to Edinburgh.
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