Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 60 - 79)

WEDNESDAY 11 MARCH 1998

Mr Jamie Mortimer, Treasury Officer of Accounts, further examined.

  60.  But for general theoretical terms, not necessarily reactive, are you going to set out and define what is a minor breach, what is a serious breach, what is a significant breach?

   (Mr O'Brien)  The response to how can you tell is that we have as a matter of statute to keep a franchising directors' register which lists them all out, it is a matter of public record and they are available.

  61.  So there is a list?

   (Mr O'Brien)  Yes.

  62.  Could we maybe have a note of that? I would be interested to see the definition of what is minor and what is significant. [6]

   (Mr O'Brien)  Sure.

Mr Page

  63.  Mr O'Brien, the Chairman and Mr Wardle have asked the question which I believe lies at the nub of the NAO's Report and their concerns and that is, namely, how far and how right is it for the Franchise Director to rely upon the information coming from the two sources. So I would like to ask one question and as far as I am concerned it will help put the whole thing into context. Could you say whether you feel the overall level of service being provided now is better or worse compared with what it was under BR before privatisation? Could you say the same about subsidies and could you say the same about the number of passengers being carried?

   (Mr O'Brien)  The objective response to each of those objectives is, first of all, in terms of the number of passengers being carried, in the last 12 months it has gone up by about eight per cent across the network; in terms of the number of train miles now running on the network, that has gone up by approximately five per cent in the last year; in terms of the amount of money which the taxpayer is putting towards the subsidy of the passenger railways, as you can see in the accounts this year it is £1.8 billion. If you take out an item which is in one year and not the next you reduce that by £75 million, so you would come to a comparative figure of £1.73 million for the year in question. This year I would expect our figures to be about £300 million less than that and the following year less than that again.

  64.  I was asking back compared to when BR were running it.

   (Mr O'Brien)  The year in question here was the transitional year when British Rail were running the services for a lot of the year. Within that year, if you compare the amounts that BR were looking to the government for subsidy for, the services which were privatised, there is a saving, as reported in the C&AG's Report, of £30 million and in the following year it goes down hundreds of millions year by year. In terms of service being provided since privatisation and just to give you a place to start from, I am assuming as a base point April 1996, in the first year, the year in question here, the level of service in terms of punctuality and reliability increased quite dramatically. In the last six months the level of punctuality has actually slipped back.

  65.  My question was related to when BR was running it in its entirety without the transitional periods.

   (Mr O'Brien)  In terms of finance, it is cheaper. In terms of the service being provided at the moment, the services are more reliable. By reliable I mean when you get to the station there is a train there to get you to your destination and by punctual I mean you get to the other end when you expect to. In the first few months after privatisation that did increase significantly but it has dropped back in the last six months, but it is still above the levels prior to privatisation.

Maria Eagle

  66.  I want to follow up on an aspect of that to ask you a little bit about GEMINI. I will not ask you to define it and I have not looked up any dictionary definitions, but this seems to be an element of your assurance that is controlled totally by the franchise companies, by the companies who you are supposed to be regulating. That is correct, is it not?

   (Mr O'Brien)  Yes, that is correct.

  67.  And you rely on GEMINI not for details on punctuality and whether or not the trains are running on time or there are enough of them but for looking at quality of service indicators.

   (Mr O'Brien)  The system is a safety critical system.

  68.  A what?

   (Mr O'Brien)  It is important for safety. It tracks how long trains are running for and it is part of their maintenance programme because they have to be maintained in a certain period of time. We use the system to identify which trains are running with shorter trains than we are expecting to get.

  69.  So GEMINI is not a system that is being run by the companies to check on the quality of service, whether or not particular services have got First Class compartments, buffets, heating, it does not do that. I was led to believe from reading the notes to the accounts that it had something to do with the quality of service. You are telling me it is all to do with the safety of trains. Its objectives, the reason why it is run, are to do with safety not to do with quality indicators?

   (Mr O'Brien)  It measures how often trains are running. It also measures how long trains are.

  70.  Is that not what TRUST does? You rely on TRUST to tell you how many trains are running and how punctual they are, do you not?

   (Mr O'Brien)  We rely on the TRUST data to give us the information about punctuality. We rely on the GEMINI information to tell us about the capacity of trains and how long trains are.

  71.  But when you say "capacity" what do you mean-the number of passengers who can get on it?

   (Mr O'Brien)  How many carriages there are on the train. The reason we use this system is that, as part of their franchise--

  72.  Because it is there and you do not have any systems of your own?

   (Mr O'Brien)  No. The reason we use it at all is that there is an incentive. As part of our performance incentives the operator has to provide trains of a certain length. If they do not they pay us money. We do not pay them money, they pay us money, and the system we use to extract that information is the GEMINI system.

  73.  When in paragraph 23 in the notes to the accounts the C&AG says that "GEMINI provides OPRAF with data on train capacity and facilities", what is that word "facilities" referring to?

   (Mr O'Brien)  I believe that what it refers to is maintenance facilities. [7]

  74.  So you have lots of information from Railtrack through TRUST and from the franchise operators themselves through GEMINI that tells you about how many trains run, how many carriages there on trains, whether they are punctual or not and what the maintenance and safety procedures are?

   (Mr O'Brien)  GEMINI is how long the trains--

  75.  How do you assure yourself of the quality of service that is being offered on these trains?

   (Mr O'Brien)  GEMINI, as I said, relates to the length of the trains.

  76.  How do you know that there is no buffet on the train and how do you know that the heating is not on or the lighting is not on?

   (Mr O'Brien)  You will not find that information from the GEMINI system or the TRUST system.

  77.  How do you find out that information as the Franchising Director?

   (Mr O'Brien)  The obligation that the operator has is to provide the level of service specified in the franchise agreement.

  78.  Are you telling me that there is nothing in the franchise agreement about comfort for passengers and level of service, the things that somebody who gets on a train and travels on it would expect?

   (Mr O'Brien)  No, we do not specify, we let the customers do that. We let the customers specify what is important to them.

  79.  You do not think that is important to you as the Franchising Director?

   (Mr O'Brien)  No, I think it is important that I let the customers tell me what they think is important rather than my telling them.


6   Note: See Evidence, Appendix 1, page 22 (PAC 236). Back

7   Note by Witness: GEMINI provide OPRAF with incentivised train details relating to capacity. These are the type of stock and class used, the number of units forming the train and the number of seats on that train. GEMINI also contains details relating to maintenance. "Facilities" also relates to the class of train. Back


 
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