Memorandum by the London Transport Users
Committee (PRF 34)
PASSENGER RAIL FRANCHISING
1. The London Transport Users Committee
(LTUC) is the statutory watchdog established under the Greater
London Authority (GLA) Act 1999, representing the interests of
users of transport provided, procured or licensed by Transport
for London, the Underground, the national railways in and around
London, Heathrow Express and Eurostar.
2. In respect of the national railways LTUC
acts as the Rail Passengers Committee for London and is part of
the Rail Passengers Council/Committee (RPC) network. For most
purposes LTUC's geographical area is the same as the GLA's. However
for the national railways its boundary extends to include most
of Hertfordshire and Surrey, large parts of Kent, Essex, Bedfordshire,
Buckinghamshire and parts of Berkshire, Oxfordshire and West Sussex.
These include towns such as Epsom, Dartford, Bishops Stortford,
Stevenage, Bedford, Slough and Bicester. All London's main airports
ie Heathrow, Gatwick, Luton, Stansted and London City are included
within this area. LTUC's interest on behalf of national railways
passengers also extends, in co-operation as appropriate with the
regional Rail Passenger Committees, to ensuring that the London
area has satisfactory links with all parts of Great Britain.
3. The problems listed or implied in the
terms of reference for this enquiry affect rail passenger services
throughout the country. However their impact in London and on
the commuter routes to London is particularly severe. The sheer
size of population of London and its environs, together with its
substantial dependence on the rail network as the only practical
means of travelling to work, means that very many people are adversely
affected by rail's shortcomings. The duration of the rush hour
is long, so to meet demand services are operated at high intensity
for extended periods. This affects performance because there is
little headroom for recovery from incidents. Significant delayssome
of which are inevitable given that the system is operated and
used by human beings and affected by events outwith railway controlcan
quickly mushroom to destroy an entire peak service.
4. It also means that overcrowding is extensive,
both geographically and through time, so the option of easing
conditions by changing route or time of travel is open to few.
The historic call was for people to stagger their hours. This
is exactly what people have done, but this has served only to
allow more people to travel, not to make the journey more tolerable.
5. Because of the huge pressure of demand,
London suffered less than other parts of the country when British
Railin response to the Transport Act 1968reduced
infrastructure capacity by simplifying track layouts and signalling
systems. Paradoxically this means that major solutions to London's
problems are much more difficult and expensive. If a four track
line was reduced to two and the land is still available, then
widening to four tracks again is relatively easy. However if a
four track line was always four track and is hemmed in by urban
infrastructure, then expansion to six tracks, or even just five,
is an altogether different proposition. There are major issues
of cost, environment and planning time, to which Thameslink 2000
stands as eloquent witness.
6. Again because of the demand, London routes
are operated by much longer trains than elsewhere. Outside London
few commuter services are longer than six cars and many are much
shorter. As their tracks can often accommodate trains of eight
cars or more, overcrowding can be addressed relatively easily
by ordering extra rolling stock and lengthening the trains. In
London, however, most commuter routes operate trains of eight
to 12 cars. Lengthening these would require track and station
alterations on a major scale, with the same problems as described
in paragraph 5.
7. This portrayal of the severity of the
London problem does not mean that there is no scope for short
or medium term improvements. LTUC believes that the present mind-set
of the industry regarding, for example, timetabling, localised
capacity improvements and what should be achievable in day to
day operating performance, is very conservative. With a more "can-do"
approach we believe that many services can be improved. However
these will only be changes at the margin. Whilst they can and
must be pursued, it would be a disservice to London's rail users
to suggest that there can be any dramatic improvements in peak
travelling conditions in the near future.
8. We have deliberately gone into some detail
on the London perspective, because we believe it is important
to understand that the Government's new approachindeed
any new approachcannot change the world overnight, or even
over the lifetime of a parliament. Our response to the questions
posed by the Committee must be understood in this context.
Will the new approach ensure that rapid improvements
in the safety, punctuality, reliability, comfort and frequency
of services are achieved?
9. The broad answer must be no. Partly,
for the reasons already discussed, this is because of the stark
reality of present demand and the railway we have inherited.
10. More importantly, however, it is because
the Government seems to have seriously misunderstood the situation.
Judging by its public statements, the Government seems to think
that the Midland Mainline (MML) franchise extension agreement
shows what a two year extension can achieve. However MML is a
franchise which was extended in 2000 to expire in 2008 instead
of 2006. It is a franchise which would have made premium payments
to the SRA towards the end of its original term, and part of the
agreement was to convert these payments into new investment. Finally,
it is an inter-city franchise in which service quality improvements
can generate additional passenger journeys at relatively high
fares per head and thus provide worthwhile investment opportunities
for the operator.
11. For most other operators, and certainly
in London, the picture is very different. Many of these franchises
expire in 2004. No extension dealshowever quickly negotiatedare
likely to be achieved before 2002, so the maximum remaining life
span would be only four years. Given that most railway investments
take at least two years from planning to fruition, this gives
no prospect of operators achieving a return. Also, few of these
franchises feature premium payments which could be converted into
investment. Finally, the improvements being sought by the Government,
such as reduced overcrowding, extra drivers, spare trains for
emergency use and enhanced maintenance cover (all highly desirable)
are ones which impose extra costs on the operators but will do
little to generate extra revenue. We are therefore concerned that
no-oneleast of all policy makersshould be under
the illusion that franchise extension is likely to be a mechanism
for achieving any substantial easement of the difficult (in some
cases almost intolerable) travelling conditions experienced by
many London rail users.
12. In discussions with SRA staff we have
been told that the mismatch between a short term extension and
major investment (eg in new rolling stock) might be bridged by
the SRA underwriting residual values beyond the life of the extended
franchise. They also told us that there is a possibility that
four year extensions may be permissible. However this is all "ifs
and buts". It is entirely typical of the SRA that they floated
the four year extension question some two months ago and said
that their legal people were looking at it; we asked to be kept
informed (on what is a pretty important issue) but have since
13. Despite our grave doubts that the new
approach can achieve both rapid and substantial improvements,
at the margin (and more generally for off-peak services which
are very important for London if traffic congestion throughout
the area is to be seriously addressed,) there is some scope for
improvement. The new approach can assist, because it calls upon
the SRA to pay more attention than hitherto to making operators
focus on the day to day delivery of their services, and to developing
services to meet ridership and environmental targets. Whether
or not this is actually achieved depends on how the SRA actually
14. Some of the outputs listed in this question
are worth specific consideration. The first of these relates to
punctuality and frequency of services. Faced with demands for
improved punctuality, the general industry response is to suggest
that there is a direct trade-off with more frequent services and
that we can't have both. There is a contrary view, namely that
a service level which is not a challenge leads to complacencyif
a train is late it doesn't really matter because there is little
knock-on effect on other trains. Put another way, the greater
challenge of a high frequency service is a stimulus to managers
and staff to pay closer attention to minute by minute operational
detailbecause failure to do so will result in the service
collapsing. LTUC inclines to the view that up to a certain ceiling
the "more trains is a challenge" concept is the right
one, and that on many London routes the ceiling has not yet been
reachedcertainly in the off-peak and evenings and on some
lines not even in the peaks. Even where the ceiling is reached,
there may well be cases where quite small track or signalling
adjustments could raise it by easing a pinch point.
15. It is also worth a reminder, because
the industry (including the SRA and DTLR) tends to be rather coy
about it, that the official definition of punctuality is that
a train is only recorded as late if it arrives at its destination
five minutes after its publicly advertised time. This means that
a train can be as late as you like during its journey, but so
long as it arrives no more than four minutes 59 seconds late at
destination, then it's on time. Add to this that at least some
operators inflate the running times prior to the terminus and
that some advertise their public arrival times to be two minutes
later than those shown in the working timetables, also that for
inter-city operators the official threshold is 10 minutes rather
than five, and the much vaunted new target for 93.75 per cent
(15 out of 16) of trains to be on time does not look very impressive.
16. Paragraphs 14 and 15 above were written
on the assumption that the issue of punctuality and frequency
of service relates to the question of whether existing services
can and should be increased. However just as this memorandum is
being finalised we have received strong signals from the SRA and
from some operators that in order to progress towards the new
punctuality targets the industry believes that it will be necessary
to reduce some existing services. By inference this would reduce
passenger convenience and increase crowding. This is plainly a
very different matter from debating whether or not services should
be increased. LTUC members have not yet had the chance to consider
this question, but it is vital that the industry clearly explains
the issue to the public and promotes public debate before any
service reductions are made.
17. On safety it is important to understand
that, despite the recent very regrettable high profile accidents,
rail travel is very safe and has been getting steadily safer.
Maintaining and improving that record is to substantial degree
a matter of grinding attention to detail by all players in the
industry but it is not something for which the SRA has statutory
responsibility. However the SRA obviously needs to take account
of safety issues and paragraph 2.3 of the draft Directions and
Guidance adequately covers this point.
18. Insofar as safety can be improved cost-effectively
by investing in new systems, the introduction of TPWS is now under
way and should not be affected by the Government's new approach.
However there is an important question regarding the introduction
of ATP. If Government adopts the Uff/Cullen recommendation that
this should be installed on all high speed lines sooner than would
be achieved by waiting for re-signalling as per normal planning
criteria for renewals, then this may impose heavy additional costs
on the industry for little commercial return. Unless Government
funding were increased commensurately this would greatly reduce
the ability of the SRA to fund improvements in the many other
aspects of rail services which an informed public would probably
regard as more important.
19. In addition to the general safety issue,
there is a specific trade off between safety and comfort which
particularly affects the London area and which may be worth investigating
in relation to short to medium term relief of overcrowding. This
is fully detailed in Annex A.
Will the new approach secure investment in additional
network capacity and other improvements to meet both the long
and short-term needs of the railways and whether the sums allocated
to rail investment remain adequate in the light of events since
the publication of the Government's 10-year plan for transport?
20. The new approach can secure short-term
investment only if the SRA either:
(a) negotiates franchise extensions very
(b) specifies and funds projects directly
with Railtrack and negotiates with operators on a specific case
by case basis for the improved infrastructure to be utilised for
the intended purposes.
Option (a) runs the risk of doing extension
deals which are too favourable to the operatorshaste and
value for money do not sit comfortably together. Option (b) is
not actually dependent on the new approach; it has always been
open to the SRA to act in this way.
21. The new approach should be capable of
securing the necessary long-term investment, provided the SRA
seizes the opportunity in its strategic plan to spell out a co-ordinated
national network plan aimed at achieving a coherent and agreed
set of outputs (based on proper consultation), and then specifies
new franchises so as to secure delivery of those outputs.
22. Whether the sums allocated in the Government's
10-year plan are now sufficient is quite another matter. We do
not see how the figures can now possibly add up. The plain fact
is that as a result of Hatfield public funds intended for new
investment are now being diverted into maintenance of the existing
assets. At the same time the reduced financial standing of Railtrack
means that their ability to contribute to the funding of future
developments (which was a major plank of the 10-year plan) has
evaporated; already the SRA has had to commit public funds to
keep important project development work (such as the East Coast
upgrade) on course. Thus the Government's £29 billion is
being used for purposes which formed no part of the plan, and
the capability of the private sector to raise its expected £34
billion is reduced. If, as referred to in paragraph 18 above,
additional safety expenditure is necessary, then the picture is
made even worse.
23. It is a great fear of this Committee
that the Government and the industry might try to bridge the gap,
at least in part, by reverting to the policy of financing investment
by imposing real fares increases (either directly and/or by tightening
the restrictions on the use of cheaper tickets) before improved
services are actually delivered. This policy, popularly (or rather
unpopularly) known as "jam tomorrow", was often used
under British Rail as a means of financing investment and is still
used today by at least one train operator. It was and is widely
resented and LTUC regards it as totally unacceptable.
Will the new approach provide the framework for
major infrastructure enhancement projects to be taken forward
now that Railtrack is to focus on the maintenance and renewal
of the existing network?
24. There is no reason why it cannot provide
the necessary framework. Paragraph 21 above covers the point.
Will the new approach transform the SRA's leadership
of the industry, its day to day management of franchises and the
way in which it assesses and awards new and extended contracts
for passenger services?
25. The manner in which this question is
phrased implies that the SRA has so far been a major disappointment
in all these areas. We would not dissent from this view, although
in our response to the Government's consultation on the new approach
we did acknowledge that things might be looking up. We wrote that
"It has to be said that on performance to date, although
there are emerging signs of improvement, we are not yet confident
that the SRA is adequately resourced in terms of number, quality,
balance of professional expertise or commitment to achieve its
26. The new approach certainly provides
the framework for the SRA to be suitably transformed. Whether
this happens depends entirely on the quality and commitment of
the new chairman and the support given by Government to change
the culture of the organisation and to take tough decisions about
Will the new approach improve the poor state of
industrial relations in the railways?
27. In fairness to the industry we would
question whether industrial relations can really be said to be
poor. True there have been problems, not least in the London area
where since privatisation two operators have suffered overtime
bans by drivers and one currently has a dispute with guards.
28. However compared with BR days, when
there was generally a major national disputeincluding strikesevery
two years or so, the industrial relations scene has been very
quiet. It is a matter for speculation as to whyperhaps
the private operators look at the immediate cash flow impact of
a strike whereas BR tended to be more concerned with avoiding
the long-term cost impact of conceding too much. What is notable
is that the present guards dispute relates only to one operator,
as all others involved settled before the strike dates.
29. We would also question whether there
is anything that the SRA can do directly. Industrial relations
are a matter for employers, staff and unions, not for what is
in effect a service procurement agency.
30. None of this is to diminish the importance
to passengers of reliable service. Any instances in which industrial
relations issues spill over into service disruption are to be
deplored. LTUC and its predecessors have long advocated that disputes
in the industry should be settled by arbitration and not by industrial
action, but this call has fallen on deaf ears. If the SRA, perhaps
assisted by ACAS, could open a debate as to why arbitration has
not been used by the railway industry for many years, this could
well be a useful means of seeing if there is a way forward.