Select Committee on Transport Appendices to the Minutes of Evidence

Memorandum by First (REN 10)



  1.1  First is one of Britain's foremost public transport companies. It is the UK's largest bus operator, running more than 20% of the country's services, and with networks in more than 40 towns and cities. It has three franchises, First North Western, First Great Western and First Great Eastern, together forming about 15% of the rail passenger market. First operates the highly successful Croydon Tramlink in South London. In the United States, First is the second-largest school bus operator, and the third-largest in Canada. The company is a major supplier of public transport contracting and management, and the largest private-sector provider of vehicle maintenance in the USA. The company's annual turnover is more than £2 billion.

  1.2  In the past few years, the group has been growing fast, bringing together new companies and cultures. Its vision is to Transform Travel using a common brand and values to become the number one public transport provider based on safety, reliability, high quality, integration, accessibility, and putting the customer first.

  1.3  Safety is its number one priority.


  2.1  The company is proud to be a major transport operator in the North, with a bus network serving many towns and cities in West and South Yorkshire, Greater Manchester and other parts of the region. This is complemented by First North Western, a rail franchise based in Manchester. It serves an area stretching from the Scottish border and Cumbrian coast to North Wales, Derbyshire, and South Yorkshire. It also runs some trains to the West Midlands from Manchester and North Wales. Many services are sponsored by passenger transport executives who set specifications including fares and frequencies. First North Western also provides longer-distance, inter-urban services, as well as links to isolated local communities, many of its services having a social, rather than a commercial, remit. Having both bus and rail companies in the North means that First is uniquely placed to develop integrated transport systems.


  3.1  The company is looking to build its business in the North. As part of the refranchising programme it is bidding with Keolis, a subsidiary of SNCF, of France, for the new Trans Pennine Express franchise which will create an inter-city network. The Strategic Rail Authority is expected to announce the name of the preferred bidder shortly.

  3.2  First is also planning to bid for Northern Rail, another new franchise, which will run services on behalf of all five of the region's passenger transport executives, plus rural and some long-distance trains.


  First North Western was formerly part of British Rail's Regional Railways sector. In February 1997, the franchise was awarded to Great Western Holdings, which had previously secured the Great Western Trains operation. FirstGroup acquired Great Western Holdings in April 1998. In March 2001, at the request of the Strategic Rail Authority, a deed of amendment was signed, putting the First North Western franchise on a more realistic financial footing, and preparing the way for creation of a new franchise map for the region. Annual losses had been up to £23.5 million. Even the increased subsidy to operate a substantial and complex network has still fallen way short of the amount needed to meet the needs of passengers and stakeholders. The franchise is due to end on 1 April 2004, or earlier, as part of the refranchising programme, and will be split up to form parts of Trans Pennine Express, Northern Rail, and Wales and the Borders. Other regional train operators have renegotiated their contracts to gain extra subsidies.


    —  A subsidy-dependent business with a cost/revenue ratio averaging 4:1.

    —  Largely a social railway.

    —  1,500 trains a day; 30 million passengers a year.

    —  307 stations; 2,300 staff.

    —  Average fare £2.19; fares highly regulated.


  6.1  First commissioned the du Pont company to carry out a safety audit and advise on future developments. As a result, the group has adopted a total safety culture embracing staff and customers. First North Western continues to put safety at the top of its agenda. In the year to 31 March 2002, there were no deaths of passengers, staff or contractors. There was a significant reduction in the number of Signals Passed at Danger—SPADs—caused by its train drivers. There were 19 SPADs attributable to drivers compared to 29 the previous year. This was a 34% improvement compared to the national improvement rate of 6%.

  6.2  Measures to further reduce SPADs are continuing as part of First's policy of eliminating them totally. The company safety plan also embraces measures to reduce trespass and vandalism.

  6.3  Each safety plan objective is supported by specific initiatives championed by a member of the executive team, and led by a senior manager. A dedicated team of security officers patrols the network, especially known trouble spots.

  6.4  Closed-circuit television, centrally monitored, has been installed at more than 20 stations. The company is spending £750,000 a year on security, the total spend being £5 million since the start of the franchise.

  6.5  Class 175 trains have CCTV surveillance of passenger saloons, to increase security, as well as from drivers' cabs showing the track ahead.

  6.6  Safety advice labels are displayed on board trains, an initiative pioneered by First.

  6.7  An Assaults Working Party is cutting the number of attacks on staff, against the national trend.


  Punctuality and reliability expressed in moving annual averages have increased steadily since the Hatfield accident and we are confident we can maintain the momentum. The latest Public Performance Measurement figures—a composite way of recording punctuality and cancellations—show that in a three-month period earlier this year, First North Western recorded scores of 83.9%, 86.3%, and 84.6%. This averaged out at 84.1%, a 16% rise over the previous quarter, and placed First North Western as the third-most reliable company in the league of 10 regional train operators.

  7.1  Greater Manchester Passenger Transport Authority published a statement praising our recent record which has been better than other regional operators in the North.

  7.2  First North Western is part of a complicated web of companies, with little control over the rail environment. Its ability to influence Railtrack is very limited, despite paying £117 million a year in track access charges.

  7.3  Many causes of delays and cancellations have been outside our control, for example, the widespread programme of temporary speed restrictions imposed by Railtrack following the Hatfield accident. The ratio showing how many minutes of delay were caused by First North Western and Railtrack changed as a result of Hatfield. The average for the year before the accident was:

First North Western 49.8% Railtrack 50.2%

  The average for the year after Hatfield was:

First North Western 42.2%

Railtrack 57.8%

  In the year following Hatfield, delays caused by track faults or maintenance rose by 142%, and those caused by signalling failures by 29%. New class 175 trains, built by Alstom, have been afflicted by a range of problems, their introduction into traffic being heavily delayed. This forced the company to continue to run class 101 diesel multiple units which are more than 40 years old, no suitable alternatives being available on the rolling stock leasing market. The class 101s are due to be withdrawn from service by the end of this year.

  7.4  Another measure taken to supplement the fleet is the hiring on short-term lease of five class 142 Pacers. Efforts are being made to make this a permanent arrangement.

  7.5  We have recently hired nine locomotive-hauled coaches to temporarily take the place of class 175s.


  8.1  The new class 175 fleet, which has been well received by passengers, represents an investment of £77 million. In addition, a dedicated maintenance depot costing £15 million was built at Chester. At the time the trains were ordered, they were the only option available.

  8.2  While most of the difficulties with the new trains are manufacturer-related, and not within the expertise of a train operator, we have co-operated closely to reduce the severe impact they have had throughout the region we serve. Staffing at the depot has increased, and a series of modifications to the trains is taking place.

  8.3  The company fleet comprises:

Numbers and formation
Year built

Class 101
7, two-car units
Class 142
50, two-car units
Class 150
29, two-car units
Class 153
12 single cars
Class 156
18, two-car units
Class 158
9, two-car units
Class 175
11, two-car units
Class 175
16, three-car units
Class 323
17, three-car units

  8.4  In 1997 at the start of the franchise, the fleet's average age was 17 years; today the average is 13 years. Many trains have been modified and refurbished, some to passenger transport executive specifications, to improve reliability and comfort including new seating, and better toilets. Fleet improvements have cost £6.3 million during the past four years.


  9.1  Although performance is improving, we recognise that much remains to be done, and we are continuing to develop new and more challenging initiatives to add to the many already underway. Measures so far include:

    —  Stronger management and control of train crews, their recruitment and retention, a critical issue.

    —  Opening of a new train crew training school.

    —  In the past 18 months, recruitment of 200 drivers and 100 conductors, against a jobs market in which other operators can afford higher salaries.

    —  Strengthening the control office team under a dedicated current performance manager.

    —  Creation of a formal internal review system for any incident causing 500 minutes of delay or more.

    —  Appointment of customer services managers and station managers.

  9.2  Line managers have significantly cut station delays. We have been striving to manage incidents more effectively. Not only are we responding more quickly, we are also reducing the effects on our services and those of other operators.


  10.1  Stations served and managed by the company range from unstaffed rural halts to major interchanges such as Manchester International Airport.

  10.2  Twenty-six have been equipped with a new real-time rail journey information system. Payphones installed at all stations have an advertised Freephone link customers can use to find out train-running information.

  10.3  The company contributed funds to the rebuilding of Blackburn station, and, at Carnforth, was a member of a consortium which refurbished the station and opened a travel centre.

  10.4  At many places, passenger information displays and signage have been improved. So far, £6 million has been spent on station improvements.


  11.1  First's business strategy is to expand integration between rail and other forms of travel, and we have introduced several attractive schemes in the North. The highlights are:

  11.2  Centreline/Metroshuttle. A free and frequent bus link from Manchester Piccadilly station to key city centre locations. There are plans to add a second route, and introduce brand-new buses. We are under contract to Greater Manchester PTE.

  11.3  City-Rail Link. First operates a similar service in Chester, under contract to Cheshire County Council.

  11.4  Oldham Urban Bus Challenge. We recently won a contract to provide a bus link, free to passengers with rail tickets, between Oldham and Broadway Business Park. This is funded by the government's Urban Bus Challenge via Greater Manchester PTE.

  11.5  Free bus travel from rail stations. We offer this from Salford to Manchester city centre, from Wigan Wallgate and North Western to Wigan bus station, and from Rochdale to the town's bus station. We charge a 50p flat fare for journeys TO each rail station.

  11.6  Add-on fares. Rail passengers travelling from anywhere in the country to Manchester can use any First bus service in Greater Manchester on the day of the outward journey for a £1 supplement.

  11.7  We proposed a range of bus add-on fares in our Trans Pennine Express franchise bid.

  11.8  Plans are being developed to offer free bus travel to rail passengers travelling between Greater Manchester and London.


  12.1  Despite facing considerable constraints, First North Western has sought to bring an innovative approach to running the business. The boldest venture was to compete with Virgin on routes between Manchester and London, with bargain fares to attract leisure travellers. Sadly, engineering disruption related to the West Coast Main Line upgrade, played a part in reducing demand, forcing us to withdraw these services. The class 175 fleet was the first in the country to provide at-seat audio entertainment. Revenue and passenger numbers have shown major growth since the start of the franchise, as the table shows:

Fiscal year
'000 journeys

Percentage increase

  However, costs, notably train leasing and track access, charges, have both risen since the start of the franchise. Revenue growth has been stifled by heavy fares regulation which has effectively restricted about half of all fares to a formula of RPI minus 1%. This has led to overcrowding in peak periods.

  12.2  Train mileage has risen from less than 15 million a year to 16.6 million. While the number of employees is currently less than at the start of the franchise, it has been rising year-on-year during the past three years. For example, there are now 746 drivers compared to 654 three years ago.


  13.1  First would like to see early decisions on the awarding of Trans Pennine Express and Northern franchises, and recognition that passengers would benefit if both were under the same management. Trans Pennine Express has taken two years of costly effort to reach a shortlist of bidders. The industry also needs stability. We call for effective direction and control of Railtrack's successor so that train operators have full knowledge of where investment is made, and are assured that the needs of safety and expansion are fully met. A welcome development would be creation of a sizeable fund of money, simply administered with minimum bureaucracy, for improving the railways.

  13.2  First has turned around the performance of First North Western, despite severe funding shortages, and improvements have been recognised by stakeholders, including Greater Manchester PTE.

  13.3  All franchise commitments have been delivered, except late delivery of class 175s, an example of an industry-wide problem blighting the introduction of new trains.

  13.4  First wants to play a larger role in the North's rail network. Its joint bid with Keolis for Trans Pennine Express will deliver short- and long-term improvements including an attractive package of investment in new trains and upgraded stations. We will be enthusiastic and ambitious bidders for the Northern Rail franchise.

  13.5  Our bus operations are a strong advantage in creating seamless travel.

  13.6  Backed by the experience of running Croydon Tramlink, First is bidding to operate Manchester Metrolink and Leeds Super Tram.

May 2002

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