Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Memorandum by Transport 2000 (PRF 11)


  Transport 2000 welcomes the opportunity to comment on this issue and on the Government's draft instructions and guidance and draft franchising policy statement. Our comments are as follows.


  We welcome the recognition in the draft Instructions and Guidance (para 5.6) of the contribution that the railway can make to meeting wider transport targets from the 10 Year Plan. We are however extremely concerned by the general thrust of the document, which gives primacy to three specific rail targets—50 per cent growth in passengers, 80 per cent growth in freight and reductions in overcrowding—over everything else. Indeed, the draft franchising statement only mentions these targets, and ignores all other Government objectives and targets. We believe that this will result in a strong bias in rail investment and development towards London and the South East, and a neglect of the railways in the rest of the country. This is because 70 per cent of passenger journeys start and/or finish in London and the South East, and—it is argued—that this is the area where investment to achieve these targets, especially the passenger growth and overcrowding targets, must be concentrated. Transport 2000 strongly rejects this approach. It is based on extrapolating past trends, and ignores the very strong case for rail investment and the potential for growing rail business in other parts of the country. For example, local rail services in the cities outside London have a potentially large role to play in reducing road congestion and promoting less car-reliant regeneration in those cities. Rural railways can act as spines of economic and social development in the countryside. Cross-country regional and inter-city services can support business and leisure travel to the regions.

  This narrow approach also ignores and indeed runs counter to the range of other Government objectives and targets, some of which are recognised in the rest of the document. It will also indirectly result in priority being given to large road schemes in the various multi-modal and roads-based studies, since any rail options identified are unlikely to be delivered. This will therefore run directly counter to the objectives and targets in the 10 Year Plan to reduce road traffic growth and congestion.

  Instead, the SRA should be explicitly instructed to contribute to other Government policies, and we urge the Select Committee to recommend this. The instructions and guidance should set achievement of the 10 Year Plan and other Government objectives alongside and equivalent to the specific targets. The SRA should be required to develop a strategy for maximising the contribution of the railways to meeting these wider objectives. Such a strategy should form a key part of the strategic plan and of the franchise policy, and should inform the full range of SRA activities. It should furthermore be explicitly required to implement the passenger and freight growth targets, and to franchise the passenger railway, in ways that maximise the reduction in road traffic, congestion and pollution.

  The SRA should also be explicitly required to consider the needs of all parts of Great Britain, and the needs of urban and rural areas. The Instructions and Guidance list of 10 Year Plan objectives (para 5.7) make no reference to regional or rural railways. We would like to see a requirement here for the SRA to promote and improve rural and local railways and establish and support community rail partnerships so that they become spines of economic and social development.

  The implementation of these targets should also explicitly maximise the contribution of the railways to meeting other key Government objectives and targets which are not mentioned in the instructions and guidance. These include:

    —  Social inclusion: improved rail services and facilities, and reduced fares, could increase the ability of excluded groups to participate in society, especially people with disabilities, low income groups, the unemployed, and, in some circumstances, older people, young people and women.

    —  Safety: A shift of passenger and freight traffic from the roads to the railways—which remain one of the safest forms of transport—would contribute to reducing road casualties. This needs to be considered alongside the need to reduce railway casualties, which we support.

    —  There are also targets in the 10 Year Plan which are not mentioned in the Instructions and Guidance and to which the railway could contribute, notably the quadrupling of cycling by 2012; we return to this below.

  The Government's current approach also has a very narrow financial emphasis. Value for money is a clear priority in the draft instructions and guidance and in the draft franchising policy statement, and this is understandable. However, this must not be the only priority. In the Instructions and Guidance (para 6.4), the Authority is not supposed to override the commercial judgement of train operators "unless it considers that public finances would otherwise be at risk". The nature of the current railway operations, and indeed the rationale for establishing the SRA, is that the public benefit will not always be reflected in commercial decisions. The Instructions and Guidance should therefore be amended to reflect this, perhaps by requiring the authority to develop a framework within which train operators' commercial judgement can deliver defined public benefits.


  The points made above mean that we want to see the strategy, which we strongly support in principle, set out the contribution that the railways can make to wider transport policy, and the way in which the SRA proposes to increase rail use in the different regions and nations of the country.

  We are also concerned that a concentration by the SRA on making the existing railway run better and with more capacity and trains will ignore the need to serve new developments and allow rail to meet new demands and flows. The strategy needs therefore to give a central place to:

    —  land use planning: the SRA needs to have clear processes in place to ensure (a) that new developments can be served by passenger and freight services, or links to them, through franchise modifications and funding and (b) that more "travel generators", such as airports, shopping centres, business parks, new housing developments and leisure attractions such as football stadia and theme parks are served by rail or by high quality public transport links to the rail network;

    —  regeneration and social inclusion: areas designated for regeneration under European or national programmes need to be linked to the railways for both passengers and freight. The SRA should develop existing liaison arrangements with the regional and local authorities with a view to active participation in these initiatives. Similarly, fares policy needs to reflect social inclusion priorities (see below).

  All this points to the need for the SRA to ensure, as a principal priority, that the rail network serves all the main existing and developing centres of population and economic activity. This requires a coherent approach to and programme of new and reopened railway stations and lines, and we would like to see a specific requirement put on the SRA to include such a programme in its strategy. New and expanding business parks, airports, ports, shopping centres and housing developments need to be actively connected to the rail network, either directly or with high quality bus or light rail links. Many of the places which lost their rail services in the 1960s are now expanding towns and merit rail links; there are also completely new developments or corridors where new rail services could be justified. The case for reopening has been developed in more detail in "Beeching in Reverse" (TR&IN, September 2001). This publication highlights the success of previous reopenings in regenerating declining communities, promoting tourism and extending access to jobs and training opportunities, especially in rural areas. It argues that all towns of over 20,000 population should have a rail link or dedicated bus link, and gives examples of strategic reopenings that should have priority. One of these, the East-West rail link from Oxford to Cambridge, has recently been rejected for funding by the SRA, despite a strong case made by local authorities, regional bodies and a number of train operators. The SRA's Strategic Agenda and subsequent freight strategy show that the freight section of the SRA has started to develop in this direction. The approach on the passenger side has however been about franchising or refranchising the current railway, with additions suggested by local, regional and devolved authorities, rather than any pro-active work to identify new demands and ways of meeting them. "Beeching in Reverse" suggests that the SRA should act as promoter, not just the "gatekeeper" for reopenings, with a specialist unit to progress them.

  We believe that as part of this approach the SRA should be able to reach agreements with bus operators, or include in franchises a requirement for operators to reach agreement with them, to provide high quality rail link services. There has been some doubt in the Wales & Borders franchise discussions as to the SRA's role and powers in this, despite a clear view that such links are essential to maximise the value of that franchise.

  A further gap in the requirements for the strategy in the Instructions and Guidance (para 7.4) is electrification. The SRA has so far been uninterested in further electrification and seems to be relying on diesel and gas propulsion. This needs to be revisited in the light of the Government's review of energy policy, which is concerned with the increasing reliance on imported oil and gas. The SRA should be required to look at future energy requirements and supply for the railways.


  Having identified the missing elements in the strategy, we very much welcome the requirement in the Instructions and Guidance and in the franchise policy statement to set out clear proposals to raise standards of train services

  We welcome the government's commitment that in ". . . all new franchises, the SRA will invite bids against a clear specification of core outputs. Our purpose is to ensure that in negotiations everyone can be clear what the Government is trying to achieve.' (para 10, DTLR's Passenger Rail Franchising Draft Policy Statement) and the commitment to clear outputs (on performance, station facilities, personal security, information and so on) as set out in para 11 of the same document. Although in some areas the SRA has moved to ratchet up standards—most notably on performance (ie punctuality and reliability) and related compensation for passengers—in other areas the standards remain low.

  Transport 2000 has long argued that contracts should set demanding and consistent standards in all the major areas of concern for passengers. The failure to do so is a key reason why performance since privatisation has been so patchy—and why the rail network as a whole fails to provide a consistent standard of service. For example, when arriving at an unfamiliar railway station the prospective passenger can have little idea of what to expect—both in terms of passenger service and station facilities. A town of similar population may have a good train service, with a clean, well-maintained station complete with "secure station" accreditation and a wide-range of facilities. On the other hand it could be a run-down and semi-vandalised station with very few facilities and a poor service. Both stations would comply with the low standards set out in existing franchise contracts. Transport 2000's rail campaign and information network—Platform—has been taking up the issue of station standards, and recently wrote to SRA Chief Executive, Mike Grant, calling for a "stations guarantee" which would set out demanding minimum standards for stations based on a system of categorising stations by importance. The letter was signed at a senior level by 15 national charities and NGOs, including RNIB, RNID, Sustrans, Suzie Lamplugh Trust, RADAR, MENCAP and the Pedestrians Association. The station guarantee included:

    —  meeting the requirement of the Disability Discrimination Act to remove barriers to travel for older and disabled people;

    —  "Secure station" accreditation; demanding standards for information provision; well-trained and "visible" staff;

    —  good quality and well-managed interchange with other modes, which reflects a general hierarchy of priorities giving the highest priority to orange/blue badge holders, walking and cycling, and other forms of public transport;

    —  safe and accessible walking and cycling routes to stations;

    —  adequate quantity of secure and convenient cycle parking at all stations;

    —  high standards for station maintenance and cleanliness backed up by effective enforcement;

    —  a range of facilities (toilets, catering and so on) commensurate with the importance of the station.

  If contract standards for stations are low (with no absolute requirement for basics like clocks or toilets) then the contract standards for facilities on trains are lower still. With the exception of provision for disabled people train operators have a relatively free hand on train facilities—which explains the increasingly restricted legroom on a number of new trains and why a number of modern trains have less capacity for bikes than the trains they replaced.

  The Service Quality Incentive Regime (SQUIRE) indicates the benefits of being more prescriptive in specifying standards. SQUIRE is operated by Passenger Transport Executives and requires checks by PTA-appointed staff on a host of issues, including litter, graffiti, vandalism, staff appearance, cleanliness of stations, information provision, cleanliness of trains and so on. Fines and bonuses attach to the operator's ability to meet those targets. Although SQUIRE isn't perfect, feedback to Transport 2000 suggests to us that stations in PTE areas are generally better kept than those in neighbouring non-PTE areas. Unfortunately the SRA is critical of SQUIRE and is attempting to remove it from future franchise deals in favour of surveys of passenger opinion. Whilst surveys of passenger opinion are important, they cannot pick up significant problems at specific stations—as specifics are lost in a general average and passengers using a particular station may not even have been surveyed. Furthermore the SRA has not produced any hard evidence in public to justify its opposition to SQUIRE when what evidence there is suggests it is has proved effective in ensuring higher standards than exist in non-SQUIRE areas.

  In 1997 the House of Commons Transport Select Committee took evidence on SQUIRE and concluded: "We were impressed by the Service Quality Incentive Regimes operated by the Passenger Transport Authorities and recommend similar schemes be developed for other franchises where operators have monopoly powers", London commuter lines would be prime candidates for benefiting from such regimes.

  A more rigorous approach to franchise standards can also be found at London Buses (where growth in bus use has beaten the national trend) and at the Docklands Light Railway. On the DLR, Serco Docklands operates the service to a franchise from Transport for London. The franchise has targets for reliability, availability of station facilities and customer satisfaction—all of which rise over time and bring with them fines and bonuses. The DLR extension to Lewisham goes further with payments made on a daily basis depending on "availability" of the service. Since the imposition of this form of franchising performance has improved and the reputation of the network has been transformed.

  Any informed discussion and debate about franchise standards will require a more open approach from the SRA. For example there has been no consultation on franchise contract standards and it required a parliamentary question to get the template franchise contract into the House of Commons library. Wider distribution is still considered by the SRA to breach commercial confidentiality. This is hard to justify given the level of public money being invested in franchise contracts and because all bidding companies will, presumably, already have had access to the template.

  In developing clear outputs for franchises, the SRA should be required to consult widely, including with local rail user groups, local authorities and other interests. As a Government Agency, it should be required to comply with the Cabinet Office Code of Practice on Written Consultation (as indeed the DTLR has had to in consulting on the draft documents).

  While the commitments in the Instructions and Guidance and in the franchising policy statement are welcome, a clear requirement to implement them and to consult on the outputs is missing. The SRA should be instructed to draw up and consult on the consistent and demanding standards that it expects to include in future franchises in the areas of:

    —  station and train facilities;

    —  personal security;

    —  information;

    —  service protection;

    —  integration with other modes;

    —  provision for disabled and older people,

    and should be required to put in place an inspection and monitoring regime to ensure that operators maintain these standards.

  We do not accept the proposal in the Instructions and Guidance (10.3) that the scope of the specification that will be acceptable for new franchises "will be determined primarily by the availability of funding". Our view is that many of the standards that need to be set for franchises are matters of attitude and judgement rather than funding, and that very small sums of money can achieve significant progress in raising standards. We would like to see this deleted, or at least the words "determined primarily" replaced by "influenced".

  The requirement in Annex B 2.8 to promote the use of bicycles should be strengthened by requiring the SRA to develop a strategy for contributing the Government's target for quadrupling cycle use by 2012 and to explain how it proposes to increase cycle use.


  We welcome the requirement for clear guidance to local authorities and others on rail investment in the Instructions and Guidance (para 8.4), but there needs to be specific reference here, not just in Annex B, to assistance with local transport plans and multi-modal studies. The Instructions and Guidance should make clear that, where extra funding is made available for rail investment, the SRA will have a duty to work with the authorities making this funding available to deliver this investment. Such extra funding may come from local transport plans, from the use of congestion charging and workplace parking powers (as is in fact envisaged in London) and from S106 planning agreements for new developments. Without such a duty, there is a danger that such investments will be given a low priority by the SRA and the railway industry and will not in fact be delivered.

  In the light of the above comments, we believe that there is a case for revisiting the planning criteria for appraising passenger rail services referred to in 8.3 and ensuring that it takes account of the full range of passenger and wider benefits.

  We welcome the requirement in 8.7 for the SRA to build in accessibility in its investment decisions, and we would like to see the SRA required to spell out how it intends to do this in practice. The DDA sets a demanding 2004 deadline for opening up the railway to all. Transforming a railway built largely in the 19th century into a fully accessible system will be a major task but as yet there is no agreed strategy or clear priorities for the industry.

  However, delivery of improved rail services will also, we believe, require some reform to the structure of the railway industry. This is now accepted by almost all parts of the industry itself, including the SRA; there is however no consensus on the direction of reform. Transport 2000 published a set of papers suggesting and outlining some options ("The Railways: Where do we go from here?" March 2001). Since then, the financial position of Railtrack has worsened and it is unlikely that it will be able to fund much of the renewal and enhancement needed for the rail network. The organisation has also not delivered good services to those closest to rail users—the train operating companies—or to local and regional authorities. Users find that on a day to day basis Railtrack is not responsive to their needs.

  Some of these problems will be addressed by the Rail Regulator's track access proposals. In particular, Railtrack will have incentives to increase rail use and will be rewarded for doing so. However, we believe that further structural reform will be needed in three ways

    1.  Financial strength. As a listed company, Railtrack is weak and at the mercy of investors. This results in the need for Government support for almost any rail project or spending, including routine and small projects, which are not appropriate to Special Purpose Vehicles. This will ultimately cost the Government more than if Railtrack were to raise its own funding. For this reason, the Government needs to find ways to strengthen Railtrack financially, and we suggest it examines the option of vesting ownership of the track in a Trust, similar to the model adopted for Welsh Water. The operation of the track could remain in private hands, but the assets themselves would be owned by the Trust. The Railtrack Trust could borrow against those assets and let contracts for managing them. Trustees should include Government representatives, but also representatives of operators, passengers and unions.

    2.  Less fragmentation. There needs to be greater integration between train operators and Railtrack. This is needed both to improve day to day operation and co-ordination and also to allow better planning and delivery of new services and projects. A number of suggestions have been made on ways in which integration can be improved, including bringing maintenance of track and signalling into train operating franchises and alignment of Railtrack Zones with train operating company boundaries.

    3.  Regionalisation. Any moves towards directly elected regional assemblies should be accompanied by giving more control to regional and local authorities. The SRA's strategic agenda was dismissive of PTEs and their demand for high standards; the SRA's approach should be reversed, and the system, common in other countries, should allow regional and local authorities to specify local rail services.

  In practice the three areas for reform overlap: the creation of a Trust would allow the second reform to take place and could also, if TOC MDs and regional representatives are among the trustees, promote better integration of train and track operations and national and regional integration. The reforms have the merit of avoiding large-scale reorganisation, with consequent disruption and delays.

  Even if these reforms succeed in levering in at least some of the private financing envisaged in the 10 Year Plan, there will still be a need for extra public funding. This can be linked to the multi-modal studies and other processes designed to examine key transport problems. We have criticisms of these studies, and one of the potential problems with them is that the rail and public transport projects identified in them will be difficult to deliver, especially compared with roads. We would therefore like to see the 10 Year Plan money that is allocated to roads used to pay for rail projects coming out of the multi-modal studies, wherever such projects are the best way to achieving the 10 Year Plan objectives.


  One of the main issues not addressed in the drafts is that of fares and ticketing. The franchising policy does not mention this; the Instructions and Guidance (Annex B, para 2.2, and 6.1-6.4) merely continue current policy and aim to prevent things getting worse.

  The nature of the fares structure is key to the strategic development of passenger rail services. At present the fares structure is an uneasy mix of regulation and an open market. Whilst some of the key fares that BR offered are now preserved indefinitely and are subject to some degree of capping others have been allowed to wither and to be replaced by operator-specific offers.

  This arrangement does bring with it some advantages: the cost of some capped fares has fallen in real terms and a number of the discount book-ahead tickets now offer some of the cheapest rail travel ever seen in the UK. However, the cost of standard rail travel remains amongst the most expensive in the World; national walk-up discount tickets have generally become more costly; and overall rail fares are perceived by the public as too complicated and generally uncompetitive with the car.

  The current fares structure is built on layers of incrementalism rather than the result of a considered strategy. There is a need for a review of fares regulation and for a debate about its objectives. A balance needs to be struck between the roles of fares regulation. These include: protecting captive markets from exploitation; managing demand in conditions of limited capacity; funding investment; encouraging modal shift; and tackling social exclusion. There is also a need to rebuild the public's confidence and trust in rail fares through providing a structure which is simpler and more transparent.

  In principle, we believe that fares are too high. In practice, we recognise that reducing fares on already overcrowded routes is simply unrealistic. However, this does not apply on much of the national network for much of the time. Realistic short term options for reducing fares, which need to be tested through consultation and modelling of their impacts, include:

    —  a new national railcard—providing discount travel for an annual fee. Such railcards are already available to sectors of society including families, young people, older people, members of the armed forces and rail users in the South East (via the "Network Card"). National railcards are a common feature of many national European railways;

    —  reducing and standardising the range of tickets currently available as part of an overall strategy to reduce the real cost of rail travel;

    —  rolling out nationally the "car-equivalent" fare (where four people travel together at a discount) which a number of operators already offer.

  The SRA should therefore be instructed to take a much greater lead on fares, to progress these options and:

    —  to simplify the confusing range of tickets and fares available;

    —  to protect and enhance national walk-on discount fares;

    —  to develop network wide or multi-operator fares and ticketing offers;

    —  to improve ticket inter-availability and also tickets involving the use of other modes—train-taxi tickets (as in the Netherlands) and more bus-rail tickets.


  The draft policies do not, in our view, set sufficiently clear standards and guidance on service levels. In the short term, we would like to see a thorough review of the protection for minimum service levels which are currently in place. These Passenger Service Requirements (PSRs) were written into franchise contracts and afford a degree of protection for services—with generally higher protection for commuter and regional services than for InterCity routes. The PSRs were by and large a proportion of the then BR timetable. At present the intention of the SRA is to roll forward these PSRs into new contracts backed up with an additional requirement to operate at least a similar overall operational mileage.

  We would prefer the SRA to review current levels of protection and to correlate service protection with the overall objectives of its strategy rather than on the British Rail timetable of 1995. This would also offer the opportunity to raise service levels on routes currently subject to frequencies which are unattractive to passengers, in particular on a host of rural and secondary routes which now run at worse frequencies than fifteen years ago. 48 per cent of rural routes saw major service cuts between 1988 and 1991—those service cuts have been effectively "set in stone" by basing the PSRs on the BR timetables of the mid-nineties. As an alternative to the prospect of raising the PSRs the SRA has chosen to use the Rail Passenger Partnership (RPP) fund to buy in extra services. Whilst in the short-term this might be the only option, we would argue that it makes more sense to look to raise PSR levels rather than pay franchisees twice for the same service—once, via general subsidy payments based on a low PSR, and again via RPP.

  The current PSRs also do nothing to protect connections between services, and fail to take into account changes in journey patterns which are taking place. For example many cities now experience a "third peak" as people return from enjoying an evening in Britain's increasingly vibrant city centres, yet many key urban routes shut down relatively early. Travel on Sundays is also on the increase, particularly with Sunday trading, yet the PSRs are still based largely on an era when Sunday was considered by the railways to be largely a day of rest. If the railway is to respond to these fundamental changes then service specification and protection needs to give a strong lead.

  Service levels cannot however be divorced from the allocation of capacity. We note the proposal in Annex A for the SRA to develop a policy for the allocation of capacity among users. This falls far short of what is needed. In the long term, we believe that the SRA should specify a national strategic timetable, with broad frequencies and connections on each route, and should take responsibility for planning such a timetable and reflecting it in franchises. This would have two advantages:

  First, it would allow the creation of an integrated national timetable, with proper cross-country links and guaranteed connections to all main centres. The current structure, which required 79 iterations of the timetable planning process to deliver the new Cross-Country clockface timetable, is simply unable to deliver such an output. More central direction is required.

  Second, it would allow capacity to be allocated on the basis of public benefit rather than commercial bids. We have described above a range of public policy objectives to which railways can and should contribute: a fully commercial railway, and in particular commercial allocation of track capacity, will not always reflect and maximise this contribution. High frequency urban "metro" services, which may well contribute to urban regeneration and hence the Government's emphasis on brownfield rather than greenfield development, will not be able to bid as strongly for capacity as can the more directly profitable longer distance commuting and inter-city services. Passenger and freight services also compete for track capacity, especially where it is scarce, as is the case currently in many parts of the network. The SRA, as the guardian of the public interest in the railways, should take the lead in allocating track access, with clear and transparent criteria on access priorities. These will need to take account of local and regional plans, objectives and targets and the national policies mentioned above. These criteria should also point to situations where new capacity is justified and allow the appraisal and prioritisation of projects to enhance capacity.

  SRA leadership on track access will need to be backed by appropriate powers to enforce decisions, through franchises and through powers to direct Railtrack. We believe that the Government should explore the possibility of the SRA entering into a direct contract with Railtrack specifying the quality and quantity of capacity required. Railtrack's income would then vary according to the level of capacity it provides and the quality of service it offers. The better and bigger railway Railtrack runs, the greater will be its income.

Transport 2000

September 2001

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