Memorandum by Save Our Railways (IT 58)
INTEGRATED TRANSPORT WHITE PAPER
1. WHITE PAPER
Overall the White Paper is to be welcomed
as it provides a good framework for integrated transport. However,
it lacks the mechanisms necessary to achieve many of its goals.
It is also essential that legislation is brought forward as soon
as possible to enact those parts of the White Paper that require
In order to provide focus for the policy the
Government should adopt a target for a reduction in CO2
emissions from the transport sector. The Government should also
adopt a national traffic reduction target consistent with that
We support the White Paper's proposals on transport
taxation and in particular the Government's decision to allow
local authorities to spend income derived from new transport charges
on local transport. We urge the Government to set a timetable
for the early introduction and implementation of legislation on
the new revenue streams. We would like to see the Government reinstate
earlier proposals to extend private non-residential (PNR) parking
charges to include food superstores and leisure complexes. New
PNR charges should be levied on a national basis to ensure their
2. THE GOVERNMENT'S
We welcome the Government's commitment to
a Strategic Rail Authority. However, the text of the Government's
proposals leaves much still to be defined. The nature of the SRA
will, to a great extent, determine the nature of the railway in
the decade ahead. Our evidence therefore focuses on the importance
of creating a powerful, proactive and dynamic Rail Authority.
2.1 The Strategic Rail Authority: the scale of
the task ahead
The rail privatisation era has been characterised
by confusion, conflict and profiteering. Although the public strongly
supports rail in principle they are highly dissatisfied with the
fragmented, expensive and often poorly performing rail network
that is currently available to them. Present provision falls well
short of the public's aspiration for a quality, affordable and
easy to use public transport network. The SRA has a big job ahead
of it if public confidence is to be restored in the railways.
Given rail's importance to the Government's desire to tackle road
congestion, the SRA's role is also pivotal to the success of the
Government's wider transport strategy.
That is why we need an SRA which is at the heart
of the railway, able to reintegrate the network and push forward
its expansion. It needs to be far more than a development of the
existing reactive regulatory bodies. These bodies facilitated
privatisation and then failed to ensure that the privatised railway
delivered a cost-effective, quality railway. We need a break with
the past. We need an SRA that is proactive, dynamic and imaginative.
We need an SRA that is seen by the public as being "in charge"
of the railway.
The key challenges the SRA faces are:
reintegrating the network;
promoting rail's role within a "seamless"
public transport system;
driving up performance;
opening up the network to all; and
the expansion of services and the
network as rapidly as possible.
If the SRA is to be a "fresh start"
then it will need to have a Board and senior officials that reflect
that intention. The SRA Board should include people with rail
industry experience, academics and user representatives.
Directors could also be given responsibility
for the key areas of the SRA's work. There would then be a clear
focus for the industry, the public and the politicians on which
individual was responsible for pushing through programmes for
expanding the network, opening up the network, improving integration
and so on.
2.2 The SRA and Railtrack
Railtrack has been widely, and rightly, criticised
for: under investment in maintenance and renewals; lack of responsiveness
to operator's needs; and a shortage of ambition for the network.
If the railways are to develop then the infrastructure
needs to be well maintained and subject to a realistic long-term
strategy for its development. It also needs to be well managed
so an ambitious but reliable network of services can be operated.
Maintaining and improving the network
We welcome the Government's proposal that the
question of targets for growth in rail traffic should be addressed
by a new Commission for Integrated Transport.
The Government proposes that the SRA shall be,
"under a duty to formulate and keep under review a strategy
for the operation of the development of railways in Britain".
We propose that this strategy include an independent
assessment of the condition of the network and the consequent
spending requirement on maintenance and renewal. Without such
an independent assessment it is not possible to know whether or
not Railtrack is complying with its fundamental duty to maintain
the network at modern equivalent asset value. In the current absence
of any such independent evaluation we rely on the views of the
Health and Safety Executive, ASLEF and the train operators which
all point to under-investment in maintenance and renewals.
The strategy should also include a network development
plan. Currently there are many major routes for which there is
no long-term strategy. These important arteries include the Midland
Main Line, the Great Western Main Line, the North Wales Main Line,
the Scottish internal main lines, and the Trans-Pennine routes.
All these key regional main lines should be electrified and overhauled
with line speeds increased. It cannot all be done at once but
the SRA needs to draw up an ambitious but manageable programme
for tackling these vital projects.
Expanding the network
Since privatisation, the programme of line and
station reopenings instituted by British Rail, in collaboration
with local authorities, has largely ground to a halt. This is
mainly due to Railtrack's lack of ambition for the network and
consequent massive increase in the costs of reopening projects.
Neither the White Paper nor the rail policy
paper address the line and station reopenings issue. We believe
that this is a mistake. We want to see the SRA responsible for
a "Beeching into reverse" programme which would give
every town in the country, with a population of 23,000 or more,
access to the rail network. All these towns are either near to
the existing network, or are served by lines which are either
"freight-only" or disused but intact. This relatively
low-cost programme would bring rail services back to towns like
Ebbw Vale, Dunstable and Corby. It would be a fitting symbol of
the ambition of the SRA; it could capture the public imagination;
and of course give access to the rail network to tens of thousands
We welcome the proposed rail investment fundsthe
infrastructure investment fund and the rail passenger partnership
scheme. However we question the reasoning behind the remit of
the infrastructure investment fund. That remit currently suggests
that the fund will, "support strategic investment projects
aimed at addressing capacity constraints at key infrastructure
`pinch points' on the existing rail networks". There is a
grave danger that Railtrack will see this fund as substituting
for parts of their existing investment budget. If there is a "pinch
point" on the network then this means that there is significant
traffic. This will be generating income for Railtrack which in
turn should be used to generate the investment funds to tackle
that pinch point.
The Deputy Prime Minster has suggested that
the budget for the Funds will be £100 million. There is speculation
in the railway press that most of this budget has already been
allocated: two-thirds for the Channel Tunnel Rail Link and some
for freight grants. This leaves around £30 million. Given
the high cost of major infrastructure projects, one or two "pinch
point" schemes could easily soak up the remaining budget.
It is essential to the SRA's credibility that
new rail investment funds should be genuinely additional, and
that the sums involved are significant and meaningful. We also
propose that the remit of the infrastructure investment fund is
changed so that it is devoted primarily to pump priming line and
station reopenings. It could also be retitled, the "Network
Calling Railtrack to account
We strongly disagree with the proposals to make
Railtrack primarily responsible to the Regulator rather than the
SRA. If the SRA is to be seen to be in charge of the railway,
and if its strategy for the network is to have force and credibility,
then the SRA, rather than ORR, needs to be in charge of Railtrack.
The Regulator's failure, so far, to enforce Railtrack's duty to
maintain the network at modern equivalent asset value should also
be taken into account.
A more appropriate role for a Regulator would
be to supervise the relationship between Railtrack and the SRA
in order to ensure fair play.
We do however welcome the proposal that some
subsidy should be routed direct of Railtrack rather than via the
operators, and that the SRA should have responsibility for the
The combination of these two measures would
have major advantages:
In future, payment to Railtrack would
be dependent on their ability to deliver the timetable drawn up
to the SRA. That timetable would be based on the plans put forward
by operators (which would be subject to consultation with user
groups and local authorities) The SRA's task would be to produce
an integrated, realistic and ambitious national timetable. Railtrack's
job would be to provide the capacity necessary to deliver that
timetable. Payments to Railtrack would, for the first time, be
directly related to their ability to manage the network efficiently
and deliver agreed enhancements to capacity.
Subsidies paid direct to Railtrack
would substitute for trace access payments by operators. If as
as consequence track access charges are reduced then it becomes
cheaper for operators to run trainsa major incentive for
operators to provide more services.
With direct payment of subsidy to
Railtrack it would then be practical to acquire a public stake
in the company. That stake would be a way of guaranteeing that
Railtrack fulfils its dutiesrenewing and expanding the
network in return for the subsidy it receives from the taxpayer.
2.3 The SRA and franchising
Towards quality contracts
We welcome the Government's intention that
the SRA will have the "opportunity to specify service levels
and passenger benefits which fully reflect our integrated transport
We share the view of Transport Select Committee,
and the Government, that the "SQUIRE" system (already
successfully employed by some PTAs) shows the advantages of moving
from OPRAF-style franchising to higher specification contracts.
If we are to continue with the policy of franchising
rail services then we need to move to "quality contracts"
which contain exacting standards designed to guarantee high quality
services for passengers.
We believe that one of the primary reasons for
the failure of privatisation was the way in which services were
franchised. By and large protection for service standards in the
contracts has been both weak and poorly enforced. letting the
contracts, by and large, to the lowest cost tenderer has compounded
those basic errors.
We should learn from the example of the commercial
franchising industry (in areas such as retailing and fast food)
where franchise contracts ensure uniformly high standards. These
principles should be extended to rail, but contain scope for operators
to innovate and develop their business, where their plans are
of demonstrable net benefit to the travelling public.
In practical terms that means that "quality
contracts" should specify:
minimum service levels at least equal
to those currently provided and preferably better;
strict limits on overcrowding;
enforceable standards for cleanliness,
facilities at stations, information provision, station staffing,
wages and conditions for staff;
a requirement to co-operate with
other operators to provide integrated and seamless regional public
transport networks within a national network; and
active participation in regional
and national fares structures.
This should not mean that operators are expected
merely to fulfil the requirements of a rigid and inflexible central
plan. The quality contracts would ensure an integrated, expanding,
high quality rail network. Within that framework operators would
be free to use their insight and drive to further to improve services.
Quality contracting should also be based on
value for money, rather than lowest cost. The lowest bid should
not automatically win. Tenders need to be both realistic and ambitious.
In evaluating tenders, value for money and quality should be the
We welcome the Government's rejection of the
Connex bid for a franchise extension for South Central. We believe
that until the SRA has been created it would be premature to grant
any franchise extensions. Given its wide powers and remit the
SRA would be able to consider franchise extensions within the
context of wider but closely related issues of infrastructure
and rolling stock development. Franchise extensions on current
terms would also preclude the benefits of quality contracting
for the franchises concerned.
For example GNER is currently pressing for a
franchise extension for the East Coast Main Line. If that extension
were to be granted now it would effectively prevent the SRA from
bringing that route within a `quality contract' regime. It would
also hinder the SRA in its task of developing the network. In
particular the opportunity to extend the benefits of high speed
electrification into Scotland would be lost.
The role of the public sector
We welcome the Government's intention to retain
BR's ability to operate services. However we contend that BR should
be more than `an operator of last resort'. In the initial round
of franchising BR was banned from bidding because they would have
won many of the contracts and thus would have undermined the rationale
behind privatisation. But if the public sector can provide a higher
level of service at less cost to the taxpayer it's difficult to
see why they shouldn't be allowed to do so.
We therefore recommend that the public sector
should be allowed to compete with the private sector to provide
It is widely considered that dividing the network
up into 25 franchises resulted in fragmentation and the loss of
economies of scale. Consolidation is now taking place as large
combines group together the franchises they control. These groupings
are logical to the corporations involved but have little geographical
logic for the travelling public. With many of the franchises elapsing
at the same time there is the opportunity to create new, larger
and geographically logical franchise areas. For example most of
Network South East could be put back together again in the early
years of the next Century. A coherent regional network for the
north could be established by creating a new operating region
out of the current Merseyrail, Northern Spirit and North West
Trains franchises. All these options should be considered by the
Enforcing existing franchise contracts
We strongly support the Government's proposals
to strengthen the sanctions available to the SRA when train operators
fail to meet their commitments.
However, we would go further and propose that
the SRA should seek to should examine ways of improving conditions
for passengers by renegotiating existing contracts. For example
licences for franchisees could be changed to give them a new duty
to co-operate, rather than compete, with other operators. Unprotected
fares, such as SuperSavers and Cheap Day Returns, could be given
protection, and protection for services could be stepped up by
revising the Passenger Service Requirements.
There is also a case for giving RUCCs responsibilities
for contract enforcement in order to give rail travellers more
direct influence over the operation of the services they use.
Section 2.8 explores this proposal more fully.
Dealing with unviable franchises
An issue the Government fails to address is
the long-term unprofitability of a number of the franchises. These
franchises tended to be those let late on the franchising process
when speculative interest in rail privatisation was at its height.
At that time a number of bids were accepted for franchises which
are widely considered to be unviable: the reduction in subsidy
over the seven years of franchise being too great. This has obvious
and serious implications for rail users as the franchise contracts
allow for significant fare increases, service reductions and low
performance standards. Some of the holders of these franchises
have, or will, attempt to sell on the franchise to one of the
large transport combines. North West Trains has already been sold
by its original owners to First Group. MTL (operators of the Northern
Spirit and Merseyrail franchises) are currently looking for a
buyer. However, the experience of North West Trains suggests that
the large combines will not be prepared to cross-subsidise weak
franchises from profits generated elsewhere within their business.
First Group Executive Chairman, Trevor Smallwood, has described
the NWT franchise as of "no value" (source: Rail 26
August 1998); reliability of the service has collapsed with significant
sections of the network suffering a cancellation rate as high
as one in every 20 trains; station and cleaning staff have been
cut back; major service cuts are being planned for the 1999 Summer
timetable; and unprotected fares like Cheap Day Returns are being
increased by more than three times the inflation rate. The Greater
Manchester PTA has described the service as "diabolical"
and is threatening to withdraw payments to the company.
The experience of North West Trains should be
taken as a warning of what we can expect on other parts of the
network as subsidies for fundamentally unviable franchises are
reduced year-on-year. It also shows that its the franchise contracts
that to a large extent will determine the service the passenger
receives, which company is running that contract is a secondary
It is for this reason that we propose that the
SRA should be prepared to terminate fundamentally unviable franchises
and either return the operation to the BRB or relet on the basis
of quality contracts with the public sector allowed to bid.
Higher quality contracts which are let on a
viable basis will almost certainly require more subsidy than was
previously budgeted for by OPRAF. We therefore welcome the Government's
decision to review whether fines levied against rail companies
should be recycled back into the industry rather than lost to
the Treasury. If the SRA could retain the fines it levied, this
money could then be used to help fund any additional costs attributable
to the introduction of viable, higher quality contracts.
2.4 The SRA and Local and Regional services
We are disappointed that both the White Paper
and the rail proposals fail to fully address the potential for
local and regional authorities to take more control over local
rail services. We believe that in the eighties it was local authorities,
and particularly PTEs, that spearheaded the revival in local rail
services. The achievement of both the West and South Yorkshire
PTAs in nearly doubling the use of their local rail networks is
a powerful reminder of their success.
Different levels of local and regional government
may be appropriate in different regions:
There is considerable scope for creating
a number of new PTAs (East Midlands, South Wales, South Hampshire,
Lothian, Avon have often been suggested) or extending the regions
covered by existing PTEs;
In Scotland and Wales the assemblies
need overall power over their national networks although there
is a good case to be made for a second tier of PTEs;
Giving the London Authority more
powers over London's local rail services will be crucial if the
Mayor is to tackle the Capital's transport crisis effectively;
In other areas of the country powers
over local rail services could be delegated to County level, or
to joint boards covering a number of Counties and/or unitary authorities.
2.5 The SRA and Fares
According to a survey by the Union Bank of Switzerland,
Britain now has the most expensive rail fares on the planet. We
probably also have the most complicated fares structure in the
If we are to attract more passengers then the
fares structure has to be a key issue.
Given its role in refranchising there is a strong
case to be made for a root and branch review of rail fares. The
aim if which should be to make rail fares more affordable and
to create integrated regional and national fares structures which
are both coherent and attractive to potential rail users.
Among the ideas the SRA could consider would
more regional multi-modal Travelcard
getting an appropriate balance between
book-ahead and walk-on fares on long distance routes;
increasing the discount levels on
the existing railcards (currently a third off);
introducing a national discount railcard;
introducing Dutch-style "strippenkaarts"
which can be used on local public transport services throughout
2.6 The SRA and competition
We welcome the proposal that the SRA should
contain head-to-head competition on the network within a longer
term policy framework to ensure continuing safeguard against erosion
of a properly integrated rail network.
We believe that existing competition, and the
threat of the extension of competition is already having a detrimental
effect for passengers. Rail companies should not be competing
with each otherrail already has more than enough competition
to deal with in taking on the plane and the car.
2.7 Opening up the network to all
Fourteen per cent of the population have some
degree of disability, yet too many stations and trains are difficult
to use. In addition many people are deterred from using rail by
the fear of crime. Recent research by the British Transport Police
showed that only 40 per cent of passengers and 22 per cent of
staff felt safe on stations at night while 61 per cent of passengers
felt safe on trains at night compared with 31 per cent of staff.
By excluding such a large proportion of the
population from the rail network, rail operators are missing out
an enormous market. The network needs to be opened up to all members
of society. At present there are "islands" of good practice
but no sense of a coherent plan for opening up the network as
a whole. Pushing forward a network plan for opening up the rail
system for all, should be a key role for the SRA.
We therefore advocate that the SRA should be
given a rolling programme of target dates for progressively increasing
the percentage of stations and interchanges which are both accessible
and meet "safe station" criteria for eliminating both
crime and the fear of crime.
2.8 Creating a seamless network
We advocate a stronger role for the SRA in reintegrating
the rail network.
Recent research by Transport 2000 ("Blueprint
for Quality Public Transport", 1997) shows how important
it is to develop a "seamless" and integrated public
transport network if people who have a choice are to be attracted
back to public transport. Detailed focus groups surveys revealed
that six out of 10 people do not like using public transport;
eight out of 10 people find it difficult to get where they want
to go with public transport; seven out of 10 find that using public
transport doesn't come naturally to them and almost five out of
10 admit to problems understanding timetables.
In practice bringing about integration and the
Providing accurate, comprehensible
and easily available information about services.
Ensuring that services connect with
Making stations safe, pleasant and
easy to use.
Introducing straight-forward and
Privatisation has taken the rail network in
the opposition direction. Companies promote their own branding
and services at the expense of their role within a national network;
the national rail enquiry service has a reputation for being unreliable;
the use of information technology for the benefit of passengers
is underdeveloped; and national advertising for the "rail
brand" has disappeared.
The SRA should be given responsibility for bringing
about a "seamless" and integrated rail network. Its
duties should include:
Requiring all parts of the industry
to co-operate in providing passengers with an integrated and seamless
Reinstating BR's "Informed Traveller"
project. This was a major initiative to use information technology
to provide accurate, real-time information for passengers at all
stages of their journey. In the Netherlands a single computer
programme provides door-to-door public transport information.
A similar system here could be a significant factor in increasing
the use of public transport.
Drawing up an enforceable connections
Taking over the management of the
National Rail Enquiry Service as well as travel centre and booking
Reinstating national advertising,
marketing and promotion of rail travel.
Responsibility for the national timetable.
2.9 Improving Passenger representation and consumer
We welcome the Government's proposals to reform
the Rail Users Consultative Committees. We fully support their
intention to "make more use of the committee network".
However, if the RUCCs are to become more effective
advocates for the travelling public then they will need a new
image, more resources and more powers.
At present the RUCCs are so stretched
they can do little in the way of original research into passengers
concerns (for example new service proposals or station facility
Many passengers are ignorant of the
existence of the RUCCs. The RUCCs need a higher profile, and "rebranding"
and relaunching, perhaps as "passengers panels".
They should be given the power to
require disclosure of evidence and attendance of witnesses.
They should also be given a duty
to foster the development of genuine local user groups, from whose
ranks in due course the majority of their own members could be
recruited. Their outreach and enabling role should extend to users
forums, passengers, surgeries and the like.
There is also a case to be made for extending
the remit of RUCCs to more direct supervision of TOC contracts.
The RUCCs could be given a duty to hold regular public hearings,
preferably quarterly to tie in with reporting cycles of operator
performance. These hearings could have the power to affix a scale
penalty if performance falls below commitments, and to reduce
this penalty in the face of convincing explanations (e.g., other
providers' responsibilities) or increase it (in the absence of
any action plan or where franchises are close to the end with
no prospects for renewal).
2.10 The Rolling Stock Leasing Companies
Given the current levels of under investment
in rolling stock renewal we urge the Government to regulate the
ROSCOs as soon as possible.
According to figures from ORR, in the first
four years since the ROSCOs were created in 1994, 745 new vehicles
have been ordered of which 625 will be leased from ROSCOs (source:
ORR report to GovernmentReview of the Rolling Stock Market,
In its last five years prior to privatisation,
BR delivered nearly 400 new vehicles a year. Independent assessments
of the rate at which new vehicles need to be ordered if the fleet
is to be maintained at "steady state" vary from 500
a year (Rail, 11/2/98) to "more than 300 a year" (Labour
Finance and Industry Group evidence to the Transport Select Committee).
The ROSCOs receive public subsidy, indirectly
via the TOCs, in return they should ensure that the rolling stock
fleet is properly renewed and maintained. This is clearly not
happening now, and until the ROSCOs are brought within the regulatory
regime, we believe it is highly unlikely to occur in the future.
2.11 The SRA and rail freight
We welcome the Government's intention to give
the SRA major responsibilities for the promotion of rail freight.
This should enable freight to get a far better deal from Railtrack
than it has hitherto enjoyed,
In passing, we also note the contrast between
the success and reputation of privatised rail freight and privatised
rail passenger services. Rail freight is largely run by one company
owned by a combine whose sole business is rail. Rail passenger
services are fragmented and are run by a variety of combines who
see rail as one element within their wider commercial strategies.
The long term success of rail freight is dependent
on wider Government transport policies. Although the Government
has yet to publish its sustainable freight strategy, the likely
contents have been indicated and lead us to advocate the need
for a tougher set of proposals. These should incorporate a weight
distance charge, a properly enforced lorry route network and significant
restrictions on access to non-trunk roads by the biggest lorries
within two years.
We welcome the creation of a Strategic Rail
Authority. Given the scale of the task it faces, the legislation
for the SRA needs to be enacted as soon as possible.
The Government's rail proposals set out a logical
remit for the SRA but if it is to be an effective body many of
its proposed powers and responsibilities will need to be amplified
In particular the SRA needs more direct control
over Railtrack in order to step up investment and performance
levels; and it needs to be able to bring in "quality contracts"
with operators as soon as possible.