Transport Committee publishes Rail 2020 report

7 Jan 2013 12:32 PM

In a report setting out their vision for the railway by 2020 Transport Select Committee endorses quest for a more efficient railway but raises concerns about safety, staffing and the protection of passenger interests.

Launching Rail 2020 (HC 329-1) the report of its inquiry examining government proposals to reform the railway, Louise Ellman MP, Chair of the Transport Committee said:

“The number of rail passengers has increased but train companies’ unit costs have not come down. The Government wants to reduce the cost of the railway to taxpayers, but it must not do so by ramping up fares which can be complex and are often very expensive. Ministers must urgently set out a long-term policy on fares and rule out using higher fares to reduce peak demand for train services.

“There are good economic, social and environmental reasons for the Government to provide a £4 billion subsidy to the railway, but to drive efficiency savings across the sector the Government and the regulator must shine a light on complacent management, waste and profiteering by ensuring greater transparency in the finances of the rail industry.

“It is vital we know far more about how public money is spent so that there is confidence it does not leak out of the system in the form of unjustified profits. The Government should publish and consult on a clear statement of what the subsidy is for and where it should be targeted. Commercial confidentiality should not be used to block legitimate requirements for information.” 

The Committee supports the McNulty Report’s general approach to achieving substantial savings.  But it considers his target to save £3.5 billion by 2018/19 to be challenging and expresses specific concerns about safety, staffing and the protection of passengers' interests. Commenting on this Louise Ellman added:

“If train operating companies do not realise substantial efficiency savings over the next five years, then the case for more far-reaching structural changes to the industry will become compelling. Changes to the numbers and duties of station staff should not be pursued solely to reduce costs or at the expense of passenger safety or service quality. The Office of Rail Regulation (ORR) should also monitor safety where Network Rail and train operating companies have formed alliances, ensuring these arrangements reflect the interests of taxpayers and passengers”.

The report does not focus on the lessons of the West Coast Mainline
Franchise debacle* but the MPs make some recommendations about rail franchises, to influence the current government review. In particular, the Committee sees merit in continuing with longer rail franchises but suggests the Government explores options for reviewing contracts every five year and looks at spreading premium payments over the full length of each franchise contract. MPs also recommend that franchises which need to be re-let soon should be tendered on the basis of medium-term franchises of seven to ten years’ duration, to avoid holding up the whole process.

The Committee calls on the Department for Transport to consider delegating the letting and management of rail franchises to an arms-length body with more commercial expertise than the Department has at its own disposal. It also suggests that franchises should be designed to deliver wider policy objectives such as the promotion of sustainable end-to-end journeys, the quality of the passenger experience, or economic development.

Speaking about future franchising,  Louise Ellman said, “Confidence in the DfT has been badly shaken by the collapse of the West Coast Main Line franchise.  We are not convinced that the DfT as currently structured is best placed both to set rail policy and deliver the detailed work required to run each franchise competition. A new arms-length franchising body could employ staff with the appropriate specialist and commercial skills required to let and manage effective franchise contracts. However, ministers must remain fully accountable to Parliament for the railway.”  

The Transport Committee has set out its own vision for the railway, including: