Select Committee on Northern Ireland Affairs Fourth Report


NORTHERN IRELAND RAILWAYS: FINANCIAL PROVISION FOR NEW ROLLING STOCK IN 2000-01

The Portrush line

50. In mid-June, after we had taken evidence, there were reports in the press[116] that the line from Coleraine to Portrush was to close for several months to enable the track to be replaced. A substitute bus service, running to the train timetable, would operate instead. We were somewhat surprised at this development as, although the A D Little report had commented[117] on the generally poor state of the track, it was the Bangor and Larne lines that had been mentioned by NITHC as being in the worst condition.[118]

51. NITHC has informed us that services between Coleraine and Portrush ceased from 19 June for reasons of safety.[119] The Task Force had been established on the basis that NIR would remain fully operational pending any Ministerial decision and that, consequently, short-term essential expenditure to maintain safety would be permitted. The cost of relaying the line is estimated at £500,000.[120] DRD has so far agreed to expenditure of £200,000, to cover work up to 31 July, the original date envisaged for the Interim Report from the Task Force. A decision would then be taken on whether to proceed with the remaining work.

52. In 1999-2000, over 200,000 passenger journeys were made on the Portrush line and, in terms of passenger flows, Portrush itself was the eighth busiest station outside central Belfast.[121] Relaying the track will lead to a better service, with significant improvements in journey times as the severe speed restriction previously imposed, on safety grounds, throughout the branch would no longer be necessary. If the line is to be relayed in full, it is obviously better for potential users that this be completed as quickly as possible. Passengers are being advised that the rail service will be reinstated on 11 September 2000 and we understand from NITHC that the present work rate indicates that this target will be met. We therefore hope that the slightly later date now envisaged for submission of the Interim Report of the Task Force will not be allowed to delay a decision on the completion of the relaying of this line.

NIR performance

53. The General Consumer Council was critical of the standard of service offered by NIR, particularly as regards punctuality on the Larne and Bangor lines, and claimed that a survey in the autumn of 1999 showed that only 86 per cent of services on short-haul routes arrived within five minutes of their scheduled time, compared with a Passenger Charter's requirement of 95 per cent.[122] It also drew attention to the much higher passenger ratings achieved by the Enterprise service.[123] NIR has submitted the annual figures for 1999-2000, broken down by line.[124] This shows that, with the exception of the Larne and Bangor lines (which failed to meet their targets by 3 per cent and 1 per cent respectively), all lines met their targets over the year as a whole. Failure to meet the Charter standards had cost NIR just over £29,000 in discounts on season ticket renewals.[125] NITHC told us that the target in terms of services operated was being met.[126]

54. The 1999-2000 Departmental Report[127] set out performance indicators for NIR for the period 1993-94 to 1997-98 and projections for 1998-99 to 2001-02, derived from its Corporate Plan. We asked DRD to update these: DRD gave us the out-turn figures for 1998-99 and 1999-2000, but were unable to provide updates for future years.[128] A comparison of the projections and the out-turn for these two financial years are set out in the Table below.

Performance Indicators for Northern Ireland Railways

Indicator
1998-99
1999-2000
  
Plans
Outturn
Plans
Outturn
Passenger Miles (m)
137.9
135.0
139.7
136.9
Passenger Journeys (m)
6.4
5.8
6.5
6.0
Employees
617
668
630
670
Support: Revenue (£m)
7.7
8.9
7.8
9.3
Passenger Income (£m)
11.8
13.0
12.6
13.5
Other income (£m)
1.6
1.7
1.6
1.7
Total costs (excluding non PSO depreciation and grants) (£m)
20.2
23.0
20.2
25.1
RatiosIncome per £ Total Cost
0.66
0.64
0.70
0.61


55. From the data above, it appears that, for both 1998-99 and 1999-2000, NIR did not meet the targets, as published in the 1999 Departmental Report, for the bulk of its performance indicators. NITHC has pointed out that the published targets derive from the Translink Corporate Plan 1998/99-2001/2, completed in February 1998 and that the Corporate Plan is revised annually. It has also explained some of the factors involved.[129]

56. According to NITHC's Corporate Plan for 2000/2001 - 2002/2003, it is assuming no increase in passenger numbers for local services over the period and a 5 per cent increase in cross-border passengers in 2000-01 and 7 per cent in each of the next two years. Fare increases have been assumed at 4.5 per cent in 2000-01 and 2.5 per cent in each of the subsequent years. This Plan has been prepared by NITHC on the basis of what its Board considers to be the minimum level of funding required to deliver public transport services in the Province and the expenditure identified by A D Little is therefore included in full, with the exception of additional rolling stock. However, NITHC comments that "until a decision is reached on the interim train solution the outcome of the plan is not deliverable".[130] It also points out that, in the absence of additional external financial support, implementation of the plans will place the NITHC in breach of its existing borrowing facilities and thus unable to meet its financial obligations.[131]

57. There is therefore an urgent need for decisions to be taken on the future scale and direction of NIR's operations and how these are to be funded. The Minister for Regional Development announced on 21 June that he had a presumption in favour of improving rail services in Northern Ireland, commenting:[132]

    "The fact is that I have a presumption in favour of maintaining and enhancing the railway system and there needs to be an extremely strong case put forward for me to change my mind."

He added:

    "The one certainty is that more funding will be required regardless of whatever option is chosen, however, no decisions will be taken ahead of consultation with the public, the DRD assembly committee and the Assembly."

58. NIR has invited A D Little to categorise their proposed safety expenditure in 2000-01, and a summary of this is reproduced below.

A D Little's categorisation of 2000/01 safety capital expenditure recommendations

  
£000
Items for which there is a need to mitigate current unreasonable levels of risk
5,770
Items for which current risk levels are not unreasonable, but for which risk levels are increasing
13,850
Items for which current risk levels are not unreasonable and are not significantly rising, but for which there are 'reasonable practicable' control measures which should be introduced to reduce risks as part of the employer's duty of care
5,120
Total recommended safety expenditure 2000/01
24,740


59. Very recently, two additional blocks of funding have been announced beyond the £4 million previously approved.[133] An extra £3 million has been allocated specifically for railway safety in 2000-01, and an additional £6 million to meet the running cost subsidy under the Public Service Obligation, £2.6 million of which is also related to essential safety related expenditure and additional funding for rail concessionary fares.[134] We are sure that these additional resources will be welcomed in the Province. We understand from NITHC that the additional £3 million will ensure that very substantial progress is made, in the current financial year, with all the items falling within the first two categories identified above, with the exception of permanent way renewal. This latter expenditure is, of course central to the deliberations of the Railways Task Force.

Relations between NITHC and DRD

60. Given the dependence of NITHC on Government funding, and the Passenger Service Obligation (PSO) grant in particular, it is inevitable that its decisions will be subject to close scrutiny by DRD, its parent department. Nonetheless, we had been surprised that the decision[135] on a matter so apparently central to the future of the Bangor line as replacement of the Connswater Bridge was apparently taken by DRD rather than NITHC as the cost of this project is substantially below NITHC's delegated authority limit of £1 million. NITHC has since informed us that this decision must be seen in the context of a situation where DRD has not approved the latest overall Corporate Plan but, in order for essential business to continue, specific approvals are sought and given for individual items within the Plan.[136] The Assembly may wish to consider whether the present arrangements for delegation of operational decisions to Translink are both appropriate and effective.

61. Also, there are elements in the evidence of the two bodies which suggest a certain lack of liaison between them. For example, the NITHC Corporate Plan specifically states that "a separate economic appraisal has been submitted for two new trains to operate commuter services along the re-opened railway line between Belfast and Antrim, extending to Ballymena." DRD has pointed out that this has in fact not yet been formally submitted and NITHC has confirmed this, although copies have been made available informally.[137] Likewise, NITHC has claimed a 40 per cent increase in passenger numbers on the Belfast-Dublin service which it claims is "directly attributed to this investment",[138] but DRD asserts that this is starting from an abnormally low base.[139] Figures for passenger journeys on the Belfast-Dublin line[140] are shown in the graph below for the period 1992-93 to 1999-2000. NITHC points out that the improved quality of the service since September 1997, besides leading to an increase in passenger numbers, has also sustained significant fare increases in real terms. Equally, NITHC is not aware of the provenance of DRD's suggestion[141] that the Bangor rail line might be converted to a guided bus corridor; it has never proposed substituting a guided bus corridor for the railway infrastructure between Belfast and Bangor.[142] The Assembly may wish to encourage a closer working relationship, in view of DRD's pivotal role in seeking the very substantial public subvention that NIR is likely to continue to require if its operations remain, as the Minister wishes, on, or in excess of, their present scale.

Cross-border passenger journeys

Public subsidy

62. There has been considerable discussion about how the level of public subsidy given to NIR compares with that given to rail companies in Great Britain. DRD raised[143] the perception that railways in Northern Ireland receive relatively little public money compared with railways in Great Britain. The Department, sought, however, to establish that, per passenger mile, Northern Ireland's railways are more heavily subsidised than the average level of support in Great Britain. Professor Austen Smyth calculates that Translink received 5.28 pence per passenger mile in 1997- 98,[144] a figure DRD maintains is too low.

63. We have consulted the Chief Executive of the Shadow Strategic Rail Authority about the basis of calculation of subsidies per passenger mile in Great Britain and their validity as a means of comparison between operators and territories. He describes them as "a user friendly, if discrete, approach to the comparison of subsidy" and "of interest, but should be used subject to a number of caveats."[145] He also pointed out the substantial difficulties in obtaining meaningful figures on a territorial basis, although he anticipated that the figures would be likely to be higher for Scotland and Wales than for England, because of the relatively greater proportion of regional services in those areas.

64. We believe that comparison of this nature should be undertaken with extreme caution. Levels of subsidy vary markedly with the character of the service offered and, generally, main-line services have much lower subsidies than local services and lightly-used rural services clearly attract much higher levels of subsidy than better patronised services. Without a reliable comparator, misleading conclusions can all too readily be drawn.

65. However, some support is given to the perception that railways in Northern Ireland receive lower levels of financial support than those in Great Britain by research supported by the Department of the Environment (Northern Ireland), DRD's predecessor in relation to transport policy, which showed that, in 1995-96, revenue subsidies to NIR were 5.59 pence per passenger mile, compared to 12.99 pence in Great Britain.[146] On capital funding, the grant amounted to £101,000 per route mile compared to £117,000 in Great Britain.

Conclusions

66. It is a self-evident truth, agreed by all involved with the railways in Northern Ireland, that there has been sustained underinvestment. DRD witnesses implicitly agreed that, in substantial measure, this was due to the switching of resources to fund larger than expected PSO requirements. As Mr Richard Aiken, of DRD, put it:[147]

    "... many of the bids that they have made in recent years have not been successful. For example, bids for the increased Public Service Obligation, that is the running cost deficit, where it has turned out that the deficit was greater than they had forecast at the time of the Comprehensive Spending Review, and we have had to find as much as we could of the increased deficit, but we have not been able to find everything that they needed, consequently they have had what Mr Jim Aiken described as this bow wave [of underinvestment], which is the unmet portion of the PSO."

The NIAO report commented that the target set for PSO grant since 1991-92 "has simply been based on what could be afforded within the annual Public Expenditure allocations."[148] It recommended that the Department should "ensure a more accurate assessment of public expenditure funding for PSO in order to avoid the raiding of other funds in the NIR budget, such as those set aside for the ongoing maintenance of the railway infrastructure, in order to meet the PSO requirement."[149] The costs and problems of underinvestment are clear for all to see: we agree that under-resourcing of the infra-structure for short term financial reasons is damaging to NIR.

67. The Government has recently announced a major boost for public transport in England and the operation of the Barnett formula will no doubt ensure that increased provision for Northern Ireland is factored into the Block Grant. Given the enhanced importance which the Government policy is placing on public transport, the Assembly and the Executive may wish to consider whether it remains appropriate for public transport to be a responsibility of the Roads Division of DRD. There would appear to be a good case for a separation of these responsibilities, and thus enhancing the profile of public transport within the Northern Ireland Administration.

68. The publication of the A D Little report and the subsequent establishment of the Railways Task Force have generated substantial public debate and have kindled a renewed interest in the future of the railways in Northern Ireland. We hope therefore that the interim report and any further reports of the Task Force will be published. DRD has told us that, as yet, no decision on this has been taken, but that there is a presumption towards publication, barring any commercial in-confidence material. We welcome this assurance and look forward to seeing the outcome of the deliberations of the Task Force.


116  Belfast Telegraph, 10 June 2000 and 16 June 2000. Back

117  A D Little report, Vol. 2, p. 89 and Vol. 3, Appendix C2, p. 4. Back

118  Q 73. Ev. p. 25. Back

119  Appendix 11, p. 68. Back

120  Appendix 11, p. 68. In large measure, the materials to be used have been recovered from other track relaying projects, as envisaged by A D Little (see Vol. 3, Appendix C2, p. 4).  Back

121  Appendix 11, p. 69. Back

122  Appendix 4, p. 47 and 49. Back

123  Appendix 4, p. 49. Back

124  Appendix 12, p. 75. Back

125  Appendix 12, p. 75. Back

126  Q 11. Back

127  Cm. 4217, p. 129. Back

128  Q 148. Back

129  Appendix 12, p. 74. Back

130  Corporate Plan 2000/2001-2002/2003, page 12. Back

131  See Q 62 and Corporate Plan 2000/2001-2002/2003, p. 12. Back

132  DRD Press Notice, 21 June 2000. Back

133  £3.4 million for train refurbishment, £100,000 for preparatory work on the Bangor line and £500,000 for replacement of Connswater Bridge. Back

134  DRD Press Notices, 29 June and 3 July 2000. Office of the First Minister and Deputy First Minister Press Notice, 29 June 2000. See also Appendix 12, p. 71. Back

135  Report by the Comptroller and Auditor General for Northern Ireland on the Northern Ireland Transport Holding Company, May 1999, HC 390 (1998-99), subsequently referred to as the 'NIAO report', para. 7.6. Back

136  Appendix 12, p. 72. Back

137  Q 160, 167 and Appendix 14, p. 77. Back

138  Ev. p. 2 and Q 86. Back

139  Appendix 14, p. 77. Back

140  Appendix 11, p. 68. Back

141  Appendix 12, p. 76. Back

142  Q 154. Back

143  Q 169. Back

144  Appendix 8, p. 61. The corresponding Great Britain figure quoted by Professor Smyth was 8.4 pence per passenger mile. Back

145  Appendix 10, p. 65. Back

146  NIAO Report, para 6.13. Back

147  Q 150. Back

148  Para 6.11. Back

149  Para 6.15. The further increase in the PSO requirement for 1999-2000, beyond the £2 million additional public expenditure cover made available in the 1998 CSR (and referred to in the NIAO report at paragraph 6.13) was funded through a combination of additional resources arising from normal in-year monitoring arrangements, easements in the provision for NITHC pensions and Fuel Duty Rebate and a switch of resources within the Roads Service Budget. Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2000
Prepared 4 August 2000