Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Memorandum by the London Regional Passengers Committee (IT 133)


  1. The London Regional Passengers Committee (LRPC) is a body established under the London Regional Transport Act 1984, to represent the concerns and further the interests of bus and rail travellers in and around London. Its remit embraces the users of all services operated by or for London Transport (LT), Docklands Light Railway Ltd. (DLR) and Heathrow Express Railway (HER), together with those provided by the train operating companies (TOCs) and Eurostar within an area extending roughly 30 miles around London. Its functions include complaint handling, performance monitoring, liaison with operators on service innovations and future developments affecting passengers, and lobbying central and local government to safeguard the interests of public transport and its users. Members of the Committee are appointed (after consultation) by the Secretary of State for the Environment, Transport and the Regions, and are chosen to provide a broad cross-section in terms of age, gender, ethnicity, occupation, physical ability or disability, and place of residence and work. As a non-departmental public body, LRPC has no political affiliations, and its sole concern is for the well-being of London's travelling public.

  2. This memorandum is addressed solely to a number of policy fields (particularly relevant to public transport in London) in which the Government's proposals remain unclear, or to which the White Paper arguably gives too little consideration.

Pricing signals to encourage modal shift

  3. The Government's policy, rightly, is that encouraging greater use of public transport is desirable in pursuit of wider economic and social policy goals. It follows from this that fares on public transport cannot be considered in isolation, but must reflect matters such as environmental and health effects, and the economic condition of an area—and that where the necessary funds cannot be obtained from the private sector or the farebox, the Government must provide them or arrange their provision. Yet the White Paper contains no specific statement of the Government's overall fares policy.

  4. In a section headed "Sending the right signals", the White Paper acknowledges that "the use of economic instruments, such as pricing measures and taxation, is an important way of influencing travel choice" (paragraph 4.118), alongside a graph showing trends over time in the relative cost of travel by different modes. The graph shows that the cost of motoring has remained level (or fallen slightly) in real terms since 1980, whereas the cost of travel by rail, bus or coach has risen sharply. If the Government is serious about using economic signals to influence modal choice, it should aim to eliminate this disparity which presently encourages the use of private cars over public transport. This can be done either by increasing the cost of motoring (through changes to the tax system, and/or by extensive road or parking charging, and or by further measures to discourage company car use), or by reducing the cost of public transport (by capping fares and/or by changes to the tax system), or by both means at once. The important point is that the pricing levels and structures of each mode should be brought onto a common footing, to enable users to make modal choices based on true marginal cost comparisons.

Pricing signals to manage peaks

  5. The White Paper aims to make more efficient use of the transport system (paragraph 2.20 of the White Paper). One major problem at present is that the need to accommodate peaks in demand (mainly arising from commuter traffic) results in facilities (such as trains, buses, tracks or roadspace) which are under-occupied outside the peaks, yet stretched to capacity during the peaks. In a more efficient system, the demand would be more evenly spread across the day, so as to eliminate the need for large amounts of infrastructure or other capacity that are wasted for most of the time.

  6. If the Government wishes to use these resources more efficiently, it will need to send pricing signals, and/or impose regulatory controls, aimed at making demand more evenly spread across the day. Local authorities may be able to help with road congestion in due course, as road pricing can involve varying levels of charges according to the level of congestion at any time. However, this may not be enough to drive people out of their cars at peak times; work habits, and restrictions on the hours that people can do their work in, die hard. Nor does this cover peaks in rail or bus travel. If the Government's wishes to use economic instruments to further the aim of efficient usage of resources, then it must grasp some difficult nettles in attempting to manage demand.

New funding streams and their impact on public transport

  7. The LRPC welcomes the intention to allow local authorities to charge road users and to charge for workplace parking, and also welcomes the intention that the revenue generated would be hypothecated to support local transport improvements. The LRPC hopes to see this legislation introduced at an early stage.

  8. Nevertheless, this set of proposals will not, of itself necessarily deliver the "double whammy" of modal shift and reduced road congestion that is claimed for it. Studies have consistently shown that for motorists to be attracted out of their cars and onto public transport, there must be not only the "stick" of charging but also the "carrot" of an adequate public transport system, of sufficient reliability, quality and comfort to be attractive to the hoped-for users. Drivers must have a realistic public transport alternative available to them before charging can begin to have the desired behavioural effects. The Government's intention is that public transport improvements (particularly light rail schemes and other large projects) should, to a great extent, be funded from the new revenue streams. There will inevitably be a period of hiatus, after charging has been implemented, but before the revenue has been able to produce discernible improvements to public transport. It will therefore be necessary for a different (interim) source of funding for public transport improvements to be identified which could, if necessary, later be repaid from the proceeds of charging (but not LT's preferred option of higher charges to existing users, which would merely depress usage further).

Railway fare regulation

  9. The Government's intention to strengthen the fare regulation system on the national railways (i.e. the former British Rail network) is welcome. However, it remains unclear exactly how the Government will expect the SRA to strengthen the system, although the brief discussion in the White Paper focuses on the omission of many popular fares from the regime, and the complexity of the conditions for newer fare types.

  10. There are several ways in which the system could be strengthened. Some would involve extending the present system, e.g.:

    —  An overall reduction in the capping levels, from the present RPI-minus-1 per cent.

    —  Restricting operators' ability to vary the conditions governing capped fares (as distinct from their price).

    —  Bringing more categories of ticket into the capping regime—for example, to address the erosion of "walk-up" tickets (those that do not require advance purchase) by operator-specific tickets requiring advance purchase and the use of specific trains. There is deep concern at the extent to which some operators' approach to yield management has restricted the availability (or sharply increased the price) of the popular, flexible, inter-available SuperSaver ticket in particular.

    —  Bringing the new operator-specific fares into the capping regime—although this may limit operators' willingness to introduce or offer them.

    —  Regulation of the purchasing availability and the conditions of the new operator-specific fares, in an attempt to make them more comprehensible to passengers—although, again, this may dissuade operators from introducing these fares, which are essentially targeting specific markets and spare capacity.

    —  Bringing the non-commuter operators into the regime under which performance affects the level of the fare cap; they are presently not part of this.

  Others would involve tweaks to the present system in an attempt to remove some of its less comprehensible aspects, e.g.:

    —  Fare increases permitted, but not taken, in one year may instead be taken in a later year. Thus it is possible for a fare to be held for several years in succession, and then be increased greatly at one stroke.

    —  The periods used to decide the performance element of the fare cap run from July to July, and are reflected in the new fares in the following January. This means that it is possible for poor performance in the second half of a calendar year to be followed by a fare rise which reflects better performance in the preceding period. (This was the situation in which some Connex passengers found themselves in January 1998; the problem then was compounded by the addition of a fare increase held over from the previous year).

  11. At present, increases in fares on franchised train operators which are regulated (which is by no means all fares) are, broadly, capped at 1 per cent below RPI. However fares on London Transport (i.e., both the Underground and buses) follow the previous Government's directive, which has not been rescinded, that fares should rise by 1 per cent above RPI, (in order to help fund capital investment). The two fare systems are linked, however, by virtue of the multi-operator Travelcard—indeed, for many main line journeys within London, a Travelcard is the fare. The existence of these diverging regimes is clearly a problem that should be rectified. It is already leading to anomalies in the zonal pricing of Travelcards, because revenue is apportioned according to each operator's share of each zonal market. LT's share is greatest in central London and least on the perimeter, so that travel in the inner zones (which include some of London's most economically disadvantaged areas) is tending to become progressively more costly relative to the outer zones.

Performance standards

  12. The Government's intention to make train operators' performance standards more demanding, through the franchising process, is welcome. There are two OPRAF-sponsored performance regimes in operation. One is purely contractual; the train operator makes penalty payments to the Franchising Director for performance below a benchmark figure, or vice versa for performance above the benchmark. The penalty payments go to the Treasury, rather than being re-invested (through OPRAF's budget) in railway services; there may be a case for consideration of this arrangement. The other regime relates to passenger redress; passengers are entitled under the terms of the companies' passenger charters (which are not mentioned explicitly in the White Paper) to a certain level of refund for individual delays (or, for season ticket holders, for performance below a (different) benchmark figure). Independently of these, the track access agreements between Railtrack and train operators include a system of reciprocal incentives and penalties based on the concept of "lost minutes" relative to timetabled movements.

  13. It is unclear as to how the Government wishes to make the performance standards more demanding. One way is to simply make the existing targets more exacting, by raising the benchmark figure (which divides good from bad performance). The other, however, is more subtle. At present, the London commuter operators' punctuality figures relate only to peak trains in the peak direction (except for LTS Rail, which has a unique regime). An extension of the performance regime to cover off-peak times (as is the case for all the other franchises, which are assessed all day on Mondays to Saturdays, or Mondays to Sundays in the case of Gatwick Express) would provide a more comprehensive picture of performance. There would probably have to be separate peak and off- (or counter-) peak targets because it is peak performance which impacts most directly on most passengers and which is most vulnerable to disruption, because it is at these times that available technical and staff resources are under greatest pressure.

  14. A major source of passenger complaint arises from the arrangements for compensation to season ticket holders for poor performance. At present, season tickets holders, unlike other passengers, cannot obtain refunds for specific delays to trains, but instead receive discounts off their next season tickets, under an arcane formula that has led to unfair and capricious results. Season ticket holders have to wait for up to a year before they can receive compensation in the form of a discount on their next tickets; people who do not renew season tickets can receive no compensation; and season ticket holders are less well compensated than those who hold tickets for single journeys. Entitlement to rebates is based on a moving annual average of train performance; so people with (say) monthly season tickets would only receive the compensation appropriate to performance in the whole of the previous year, rather than in the relevant month. This also means that people renewing their season tickets on different dates can have significantly different entitlements to compensation. Entitlement is based on performance over an entire franchise area, or at least a large part of it; poor performance on one line may be cancelled out by good performance on another, and the average result may bear little relationship to the actual travel experience of any individual passenger. Holders of weekly season tickets (as opposed to monthly or longer validity) are not covered by these arrangements at all (but can be compensated for individual delays as if they held non-season tickets). Passengers find the system incomprehensible and unacceptable.

  15. Following repeated representations from LRPC (endorsed by the House of Commons Public Services Committee), OPRAF has made belated moves to encourage train operators to bring season ticket holders within the standard "delay-repay" arrangements applying to holders of ordinary tickets (and to all Underground passengers). Unfortunately, it has no power to compel this, except as (e.g.,) part of a package of improvements negotiated in lieu of a fine for poor performance. A deal of this kind has recently been concluded with Chiltern Railways, which has also adopted the formula (a 50 per cent fare refund for a delay of 30 minutes, and 100 per cent for a delay of an hour) proposed by LRPC. Happily, this has set a precedent which other train companies may now be willing—or induced—to follow.

  16. But the performance regime in the franchise agreements takes account only of train service delivery and capacity. The passenger's charter compensation arrangements relate to timekeeping and cancellations alone, since although train companies are required to conduct user satisfaction surveys there are no set targets against which their success is measured. The "SQUIRE" regime developed by the PTEs includes a wide range of service attributes (e.g., lighting, cleanliness and information), and there is no reason in principle why something similar should not be applied more generally on the rail network.

Consumer Representation

  17. The LRPC welcomes the Government's recognition that passengers, through the network of Rail Users' Consultative Committees (RUCCs), should have a real say in the railway system. There are three principal ways in which the Committees carry out their duty: by being consulted, by handling complaints, and by raising issues which they believe to be important to passengers.

  18. The recognition that appropriate consultation with the RUCCs is needed is welcome. The LRPC has been concerned in the past that it was given an impossibly short period to comment on documents such as preferred franchise bidders' proposed passenger charters. Furthermore. the LRPC has not in the past been consulted on changes to Franchise Plans, on the grounds that OPRAF sees itself as an adequate guardian of the passenger interest. It is to be hoped that the consultation arrangements will improve when the SRA takes over both these arrangements and sponsorship of the RUCCs.

  19. Nevertheless, for the RUCCs to be effective, their views must be taken seriously, rather than sought merely as part of due process. The committees' effectiveness is limited by the lack of any power to require that its recommendations are complied with by operators; many complainants in particular find this "toothlessness" unacceptable. Some contend that the Committees' existence is pointless in the absence of such powers, although others are appreciative that they do the best that they can in the circumstances. In any event, there is a need for their terms of reference to be clarified and the purpose of their role in complaint "handling" to be defined. At present it is an uncomfortable mix of postbox, detective, advocate, arbitrator and apologist, and is satisfactory to neither the Committees nor those who seek their help. Much clearer guidance is needed, for the benefit of all concerned, both (a) on the extent to which the Committees are expected to champion each complainant's case regardless of its intrinsic merits, and (b) in cases where a Committee finds in the complainant's favour, on the extent to which its opinion must be regarded as binding by the operator in question.

  20. One of the LRPC's predecessor bodies held the right to seek a direction from the (then) Greater London Council to London Transport to act on specific recommendations of the Committee. The GLC could only exercise this power of direction when so requested. This may be a useful model for adoption under the proposed arrangements for the RUCCs, the request being addressed to the SRA (or, in the case of LRPC's successor, to the GLA when appropriate). There would be two principal sets of circumstances in which the Committees would be likely to exercise such a "last resort" right in the face of unjustified obduracy on the part of an operator. One would be with redress in individual cases, where the Committee felt that a complainant had not been adequately recompensed by an operator. The other would be on policy issues where the Committee felt that passengers in general were being ill-served (such as with compensation schemes for poor performance of a service).

  21. It is not yet clear how the Government's desire for a wider cross-section of passengers to be represented on the Committees is to be achieved (or, indeed, which categories of user are perceived to be under-represented at present). This proposal gives rise to a number of important questions relating to the recruitment process, the appointments criteria, the number and timing of meetings, the workload borne by members, remuneration arrangements, etc. There are also many active and well-informed members of local transport user groups and other voluntary bodies who have a potentially valuable contribution to make, but whose circumstances do not necessarily enable them to accept all of the commitments which stem from full membership of such Committees. To harness this resource, the Committees' "outreach" public liaison function could and should be strengthened, but must be adequately resourced. LRPC will welcome any opportunity to explore these matters further in concert with the Government, the Rail Regulator, the Select Committee, or any other appropriate body.

  22. The proposed extension of the RUCCs' remit to open access operators is right; this addresses a criticism of the present system which the Committee had pointed out. However, it is unclear whether this remit will extend to the same range of matters as in franchised operations—for example, as to whether the Committee will have any remit with respect to fares charged by open access operators such as Heathrow Express, or to monitoring the performance of unfranchised services. This may be linked to the extent to which the SRA itself is able (and wishes) to regulate these matters. Again, the detailed implications need to be properly explored.

  23. The proposed inclusion of a consumer representative on the SRA board raises a number of difficult questions. Will this appointee be treated as an ordinary board member who happens to have a consumer background; as a board member representing the consumer interest; or as a person who is there simply as "licensed opposition" and can be safely ignored? In addition, will there be a relationship between the consumer representative and the existing (Central) RUCC network (or any other consumer body)? If so, could there be a conflict between his/her duty to the board on which he/she serves and his/her duty to the consumers which he/she represents? If not, there is risk of conflict between the views of the (C)RUCCs and those of the consumers' voice on the board. Hitherto, LRPC has resisted suggestions that it should itself be directly represented on the managing boards of transport operators precisely because of the conflicting loyalties and obligations to which the occupants of such seats would almost certainly find themselves exposed. The Committee has preferred to draw a clear line between itself and the transport suppliers with which it deals, and any such proposal which might blur this distinction needs to be treated with due caution.

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