Select Committee on Transport Appendices to the Minutes of Evidence

Memorandum by Transport for London Rail Services (SRA 09)


  The committee has invited the submission of evidence in relation to the Strategic Rail Authority (SRA) by 21 November 2002 and on other aspects of the inquiry by Monday 2 December. This submission relates only to the aspects of the inquiry concerning the SRA. In this evidence TfL sets out its objectives, in respect of evidence relating to this inquiry and how TfL work with the SRA at the present time. This submission underlines the need for stronger local policy direction with a London focus in order to support the SRA in fulfilling its objectives and to meet the objectives of the 10-year Plan.

  In Britain, London is uniquely dependent on national rail services. More than 70 per cent of journeys by national rail begin or end in London and, daily, 500,000 people use national rail to commute to work in London. Rail services, and therefore the activities of the SRA, are extremely important to the lives of people who live in, work in or visit London. TfL therefore welcomes the opportunity to submit to the committee evidence on the policies and activities of the SRA. TfL believes that the work of the SRA in London can be assisted if we are given a stronger voice, specifically with regard to the franchising process, an ability to directly fund services and an improved ability to co-ordinate integrated transport initiatives.

  In addition, TfL believe there is a need for the adoption of common business appraisal methods for London rail to provide a more cohesive strategic regional policy direction.

  It should be noted that in recent times a good professional relationship has been established between the SRA and TfL which forms a sound basis on which the parties are building to develop improved co-operative working in order to develop and enhance London's rail services. However this is only a voluntary working relationship and TfL would submit that a firmer, more formal structure be established in due course to build upon the voluntary agreements now being set up. TfL believe this is an essential development if we are to provide the right strategic direction for London's transport network as befits a world-class city.


  Transport for London (TfL) is the integrated body responsible for the capital's transport system. It is directly responsible to the Mayor of London. Its role is to implement the Mayor's Transport Strategy for London and manage the transport services across the capital for which the Mayor has responsibility. TfL has responsibility for both the planning and delivery of transport facilities, which enables it to take a truly integrated approach to how people, goods and services move around London. The rail objectives in the Mayor's Transport Strategy are summarised in Annex I.

  TfL is governed by a 15-person Board appointed by the Mayor and is directly responsible for:

    —  London Buses, Croydon Tramlink, and the Docklands Light Railway;

    —  managing London's network of major roads, known as the Transport for London Road Network (TLRN) and all traffic signals in London;

    —  regulating taxis and minicabs; and

    —  overseeing London's River services and Victoria Coach Station.

  The London Underground is currently under the control of the Government but is planned to transfer to TfL once arrangements for the PPP procurement are concluded.

  The provision of national rail services is currently outside TfL's direct responsibilities despite their importance in bringing commuters into London. The Mayor, through TfL, may give Directions and Guidance to the Strategic Rail Authority (SRA) on the development of national rail passenger services in London but not rail freight services.

  The key role of National Rail to the London economy and the rapid growth in demand in London—projected by the London Plan to continue increasing over the next 15 years (transport capacity permitting) means that planning needs to maximise efficient access by London's workers to its jobs and supporting development and regeneration priorities in the London Plan. TfL must have a more formal process with SRA to develop an acceptable and reasonable balance between National Rail suburban services designed to meet the specific needs of London and longer distance passenger and freight services, where they compete for scarce resources or funds.

  The point of regional government is to ensure that local needs are properly taken into account including matters such as transport. The paradox is that national rail is much more important to London than any other part of the country. At present the Mayor and TfL have very limited powers to influence national rail services. Control instead rests primarily with the SRA. This stands in marked contrast to the arrangements for local rail services in other major European cities such as Paris, Rome and Berlin. It also contrasts with the arrangements elsewhere in the UK where other major conurbations have Passenger Transport Authorities and Executives with greater influence over their local rail services than presently exists in London.

  The conclusion from this is that there needs to be an improved method of integrating all London's transport if we are to see a step change in the quality of services offered and their development.


  Under the GLA Act 1999 the Mayor is able to give Directions and Guidance to the SRA. Whilst this gives the Mayor an opportunity to have an input into the development of London's rail services, the terms of the Act restrict the ability of the Mayor and TfL to require either the SRA or train operators to make changes to or develop services. The outcome of this is that TfL's ability to develop integrated public transport to best meet the needs of Londoners is restricted in a key mode, rail.

  In order to facilitate a better method of securing a voice for London in the strategic development of rail in London and in the development of the relevant franchises, TfL are at present working with the SRA on the development of a Memorandum of Understanding that will provide a robust framework for improved working arrangements between the two authorities. The MOU will act as a subset to the Mayor's Directions and Guidance, with the agreement setting out obligations on both parties and dealing with such issues as consultation, joint funding, development of franchise outputs and fares.

  Whilst this is a productive step in the right direction the agreement is voluntary and may have limitations in its application. TfL believe that there needs to be a more sound basis, probably established through legislation, in order to secure a proper voice for London to influence the development of its suburban rail network. TfL believes that London's transport needs a strategic body which has comprehensive influence over all modes including national rail services in London. TfL would contend that in large parts of London and the South East, particularly in Essex, Kent, Sussex and Surrey the rail network is predominantly a London commuter based network and for that reason it is believed that a London-based body should be established, with membership which includes representation from TfL, the SRA and adjacent Counties. This body would be able to develop a strategic policy for all local public transport in the Capital and surrounding travel to work area, thus allowing proper input by the Mayor, TfL and the Counties and would not rely on the sole direction of the SRA, which at times may be dictated by national interests rather than taking full account of regional interests and requirements. Arguably TfL's present responsibilities suggest that such a body should be administered by TfL. However the purpose of this paper is to draw the Committee's attention to present inconsistencies in the management of London's transport and to make the case for change. The exact structure of any future London-based transport body is a matter for further detailed discussion.


  London has a high demand for commuter services with, each day, around 500,000 people travelling into Central London on national rail services. Overall demand remained constant after the crisis at Hatfield and has since been increasing despite poor performance on many routes. London is dependent on national rail for commuting due to road traffic congestion and lack of coverage by the Underground particularly south of the Thames.

  The structure of the railway industry post privatisation has failed to deliver improvements in service reliability or provide additional capacity where it is most needed in the context of London and the South East. While there has been considerable growth in services, in London, these have not been during the peak commuter times when the network is already operating at close to capacity.

  The need for change has been recognised by Government both through:

    —  the decision to seek to place Railtrack into administration and replace it with Network Rail; and

    —  previously, the creation of the Strategic Railway Authority.

  TfL supports these changes but the performance of the railway industry and the effectiveness of SRA and Network Rail in improving the quantity, quality and reliability of rail services needs to be carefully monitored. TfL believes that further changes, in the strategic management structure and approach, are likely to be needed to ensure that local rail services are also improved and in order to meet the needs of London and the economy of the South East as a whole.

  TfL operates one railway franchise—the Docklands Light Railway (DLR). This is now acknowledged as the most reliable rail service in the UK.

  The key success of the DLR has been the careful and detailed specification of the franchise contract and its subsequent management through a review structure involving the franchisee at Managing Director level. Financial incentives are part of this process. Responsibility for upgrades and extensions to the network have been retained by DLR allowing the franchisee to concentrate on day-to-day operations. By implication the vertical integration inherent on the DLR has enabled consistent performance to be delivered and suggests that further review of the arrangements on national rail are needed.


  TfL's role is to implement the Mayor's Transport Strategy, however these objectives are inhibited by section 201 of the Greater London Authority Act which prevents TfL from entering into agreements to directly fund rail services. Any funding must be channelled through the SRA and requires their agreement. This therefore leaves the Mayor and TffL in a weaker position concerning rail services than county, borough, or district councils.

  Additionally, there is a lack of transparency under the terms of the present franchise agreements that makes it difficult to independently gauge the level of additional funding required from TfL to procure additional commuter rail services. TfL does not have the powers to obtain the information necessary to make value for money judgements. This has to be obtained in agreement with the SRA and, whilst sharing of information does take place, the lack of any formal rights for TfL limits its ability to operate an independent decision making process for investment in London's public transport.

  A further difficulty is that the SRA has different appraisal methods that are narrower and more cost based than those used by TfL. TfL has adopted common appraisal methods for transport schemes in London that take greater account of external benefits including regeneration and social inclusion. These are applied to buses, DLR and roads and will be applied to London Underground. TfL is strongly of the view that public funds can be more effectively targeted using common appraisal methods and would wish to see the SRA adopt such methods in the future for further London rail investment.

  Partly as a result of this different approach to appraisal, TfL is also concerned that the SRA's approach to capacity utilisation, its fiscal priorities and the problems with the overall financial requirements of the railways may result in greater priority being given to long distance services, which generate more income per passenger mile, at the expense of local services. It is possible that the value of local services in revenue generation terms may be lower than long distance services, but in terms of regeneration and social inclusion benefits they are often higher.

  It might be considered that at least some of the problems could be remedied through the Mayor's powers to issue Directions and Guidance to the SRA. However as noted earlier the SRA can disregard the Directions and Guidance in many circumstances.

  Such inconsistencies in funding arrangements and powers, particularly with regard to London results in a fragmented approach in procuring the development of rail services in the Capital and undermines the ability of public funding to deliver efficient, economic transport operations. TfL advocates the development of a new body, as set out in section 3, with appropriate funding powers for London's suburban rail services in order to address these regional issues.


  TfL believes there is a need for franchise rationalisation to optimise the utilisation of network capacity. The SRA's policy of consolidation of franchises at most London termini is therefore welcome so long providing local service needs are adequately safeguarded. The competing demands of long-distance and suburban services need to be managed both strategically and operationally.

  The fragmentation of powers between different authorities means it is not possible for TfL to fully integrate national rail services with other transport modes in London, in spite of the good progress on co-operative working. Trying to apply the South London Metro concept of frequent turn-up-and-go services has been illustrative of the difficulties. The required changes have been seen as difficult and in some areas cost prohibitive. TfL is not able to drive these changes through unless consensus can be achieved with all parties and this can often result in a reduction in the overall benefits for end users.

  The more prescriptive approach being considered by the SRA to manage service specifications and the outputs of franchising is likely to make it even more difficult to modify service patterns after a re-franchising deal has been concluded. It is therefore essential for TfL to have an early voice in the franchising process and the resultant service specification. TfL does not oppose a move away from the existing set of Passenger Service Requirements that establish minimum service levels. These have effectively fossilised many rail services while London is a changing and growing city with changing and growing transport needs. TfL believes that franchise specifications must take account of present and future needs. TfL believes it would be beneficial to develop a group of London and South East franchises or London and South East business units within larger franchises governed by an agreed framework of common standards for London. In franchises that combine longer distance and commuter services there should be a discrete business unit to manage the interests of commuter services and provide accountability to supporting public authorities. TfL would hope to have a formal relationship with such a grouping within franchises and this may be an appropriate arrangement which would enable TfL funding to be effectively channelled into London and South East rail services.

  None of the above need be detrimental to longer distance rail services for which the SRA must remain responsible. TfL recognises their strategic importance both to London and to the towns and cities they connect with London.


  The SRA has taken over responsibility for major upgrades leaving Network Rail to concentrate on the day-to-day management of the existing railway network. Requiring Network Rail to focus on day-to-day operations is a welcome change as Railtrack was highly deficient in its stewardship of the network. TfL also believes that it is sensible not to place responsibility for upgrades on train operators as they too need to concentrate on day-to-day operational matters.

  However, TfL is concerned that the SRA has been unable as yet to commit to many infrastructure upgrades and the resultant improved growth targets. These are needed to support the requirements of the London Plan and to enable a co-ordinated and integrated approach across London's different transport modes. Existing services utilise nearly all London's rail capacity at peak periods and demand is growing. Providing additional capacity is essential to the London economy.

  Whilst co-operation between the SRA and TfL has so far been good (eg developing the Crossrail schemes), the absence of powers for TfL in the wider sense is a concern. More formalised arrangements for TfL to have an input into the smaller infrastructure schemes are highly desirable.

  A key element of TfL's plans involves the creation of effective interchange facilities away from central London to facilitate orbital journeys and alleviate pressure on London termini. These will involve a mixture of heavy rail, underground, light rail tram and bus services. The ability of TfL to specify and co-ordinate the national rail elements elements of these interchanges is essential if the policy is to be effective.


  At privatisation, rail freight was wholly privatised rather than franchised. As such the Mayor's powers to issue Directions and Guidance do not apply to the rail freight sector. However, the Mayor does have responsibilities for freight transport through the transport, waste, economic development and other strategies that must be developed and applied.

  At present, public support for the strategic development of freight routes, new terminals, etc, is largely channelled through the SRA. This is another area where TfL believes there is a strong need for national rail to be properly integrated with local transport and other policies. TfL would wish to see formal structures that enabled it to influence the SRA and, where appropriate, supplement SRA support in order to meet local objectives.

  The conclusion here is that the Mayor needs to have additional powers of Direction over the SRA with a specific reference to freight.


  In Conclusion Transport for London contends that the strategic planning of rail in London and the South East could be substantially improved by the formalisation of working arrangements between the SRA and TfL. The key areas which remain to be addressed are:

    —  Reviewing the restrictions currently in place relating to the Mayor's Directions and Guidance, and strengthening his powers to provide providing a firm legal foundation for the development of improved and structured co-operation between the parties.

    —  The ability of TfL as the regional authority to fund appropriate rail improvements in London and to obtain access to the relevant information to facilitate the required judgements on the progression of schemes.

    —  The development of common business appraisal methods for all public transport schemes, to include wider social benefits.

    —  Further rationalisation of the franchise map, or development of London-based operating units within the existing franchise framework to provide a focus for strategic development within London.

    —  TfL as the regional authority to have formal involvement in franchise development. This should include:

      —  involvement in production of baseline output requirements;

      —  the review of prospective bids and enhanced outputs;

      —  a method of jointly agreeing, with SRA, the specifications for London, similar to the powers enjoyed by PTEs.

    —  A greater focus on development of an organisational authority for all London's public transport which will allow an improved, integrated approach to transport by its ability to develop complementary strategies for all modes.


Annex A


  The Mayor's Transport Strategy requires improvements to both the quality and extent of London's rail services. In setting up TfL's organisation the Mayor requested a report designed to ensure that TfL can influence improvements to rail services within London. The active progression of major rail infrastructure schemes for the capital is also essential.

  There are a number of critical areas where improvements are urgently needed in the quality and quantity of commuter rail services in London. These are:

    —  More and better services on London's orbital rail network—including the West and North London Lines and also the dense suburban network South of the Thames, which largely complements the Underground network.

    —  Improvements to the capacity of radial routes that have no or poor inner suburban services including Stratford to Lea Valley and the Chiltern routes.

    —  Augmenting capacity on existing routes into London by reducing operational complexity and multiple London terminals on individual routes. Replacement of irregularly timed services and increasing train length is also essential.

    —  A sensible interchange policy whereby people can change from National Rail to the Underground and between mainline routes on the approaches to London so providing access to the congested inner suburbs around central London and particularly relieving overcrowding on the Underground at London terminals such as Victoria.

    —  Proper fares integration. National Rail fares need to be aligned with fares on the Underground and the buses. Travelcard tickets do exist but many day fares are out of line within London.

    —  Improved accessibility.

    —  Unified marketing for London commuter services as opposed to separately branded rail companies.

    —  A code of standards on security that are actually adhered to.

    —  A realistic and complementary plan for the routing of rail freight in and around London that is consistent with an increased level of passenger services.

    —  An immediate start on major rail projects in the form of regional metro services including the East London Line Extension, Thameslink 2000, Crossrail 1 and Crossrail 2 (Hackney to South West).

    —  National Rail must be developed so that access to the regeneration areas of London is improved. A 50% increase in capacity over the next 10 years is required by a combination of service improvements and new projects in order to meet increased demand as a result of dramatic population growth and also to reduce overcrowding. This is complementary to the Secretary of State's overall UK requirement that franchises deliver 50% more journeys.

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