Memorandum by the Department for Transport
(REN 44)
RAIL SERVICES IN THE NORTH OF ENGLAND
INTRODUCTION
1. The key roles of Ministers in relation
to passenger rail services in the north of England are: to set
the broad policy framework within which the Strategic Rail Authority
(SRA) manages and awards passenger franchises; to allocate funding
to the SRA from their department's budget in accordance with the
Ten Year Plan; and to approve SRA recommendations for the award,
extension or modification of franchises.
2. The policy framework within which
the SRA operates is set out in:
— its statutory Directions and Guidance
(D&G) published by the Secretary of State on 11 April 2002;
and
— the Government's statement of policy
"Passenger Rail Franchising" published on 19 December
2001.
These documents refer back to the Government's
wider transport policy, as set out in:
— "Transport 2010: the Ten Year
Plan" (the 10 Year Plan); and
— "A New Deal for Transport: Better
for Everyone" (the White Paper).
3. This memorandum focuses on the Government's
role in relation to the issues identified by the Committee. It
complements the memorandum prepared by the SRA, which addresses
operational and franchise-specific issues.
EXISTING SERVICE
STANDARDS
4. Service standards comprise a number of
factors including, in particular:
— the service patterns provided for
in the timetable (including train frequency and the times of the
first and last services);
— the operator's performance including
the extent to which they provide these services; and
— customer care and journey quality
experienced.
5. Service standards are affected by a range
of factors including passenger demand, franchise obligations (including
PTE specifications), network capacity, timetable flexibility,
rolling stock condition and availability, and network maintenance
requirements. The minimum contractual service patterns are set
out in the passenger service requirement (PSR) for each franchise.
These are at least broadly equivalent to the services operated
by British Rail before privatisation. Operators in the north of
England are currently operating services in excess of the PSR
requirements.
6. The D&G[25]
state that:
"The Authority must secure that minimum
levels of service remain at least equivalent to those specified
in the current Passenger Service Requirements or which are otherwise
contractual obligations. However, services should be developed
to reflect passenger demand and best use of capacity."
It should be noted that "equivalent"
here does not mean "identical". Circumstances change
over time, and what was appropriate at the time of privatisation
may be less than optimal today. PSRs will need to evolve and hard
choices about capacity may need to be made.
7. Ministers are concerned by the recent
poor levels of operational performance, including by train operating
companies (TOCs) in the north of England. The latest available
rolling annual average Passenger Performance Measure (PPM) statistics
are set out in the table below:
Table 1: PPM annual rolling average, up
to quarter 4 2001-02
|
| TOC | PPM
|
|
| Arriva Trains Merseyside (ATM) | 81.3%
|
| Arriva Trains Northern (ATN) | 75.7%
|
| North Western Trains (NWT) | 78.6%
|
| Average for regional operators | 79.1%
|
| Average for all operators | 78%
|
|
8. As well as being at an unacceptable level in absolute
terms, the majority of train services in northern England fell
below the average performance for regional operators. They were
also below the regional average in relation to customer satisfaction
(although often above the national average), as set out in the
table below.
Table 2: National Passenger Survey (NPS), Spring 2002,
% "satisfied" or "good"
|
| Aspect of survey | Northern average[26]
| Regional average |
National average |
|
| Overall opinion of journey | 75%
| 77% | 73%
|
| Station ticket buying facilities | 68%
| 71% | 65%
|
| Punctuality/reliability | 67%
| 69% | 65%
|
| Amounts of seat/standing space | 67%
| 68% | 60%
|
| Information about train times/platforms |
66% | 69%
| 67% |
| Connections | 60%
| 62% | 63%
|
| Comfort of seats | 57%
| 63% | 55%
|
| Upkeep/repair of train | 54%
| 60% | 51%
|
| Appropriate environment to catch a train |
49% | 54%
| 53% |
|
9. The Government recognised the Committee's earlier
concern at the use of buses to replace train services because
of shortages of rail staff. This is not acceptable and it is entirely
appropriate that TOCs who fall short in this regard should be
subject to enforcement action from the SRA. The penalty that the
SRA levied in respect of Arriva Trains Northern (published in
draft on 25 October 2001) made use of new powers provided by the
Transport Act 2000.
10. The D&G make it clear that the Government expects
the SRA to take a more active role in the management of franchises,
and where necessary in the enforcement of franchise obligations,
than in the past. One of the SRA's two priority objectives, set
by the D&G[27], is
to "work with the rail industry to achieve substantial
lasting improvements in performance". Ministers recognise
that this will require the SRA to work on a range of issues across
the industry and have therefore set a number of further objectives[28].
These include objectives to:
— "achieve a significant improvement in the
resilience of railway operations" (which will have performance
benefits);
— "provide leadership for the rail industry
and ensure that different parts of the industry work co-operatively
towards common goals" (including performance improvements);
— "secure progressive improvements in the performance
of franchised rail services and improved levels of customer satisfaction
with the quality of stations and services";
— "manage passenger franchises actively so
as to ensure that commitments on performance and investment are
delivered and that the standard of service to passengers is improved
in accordance with franchise terms"; and
— "take opportunities to achieve improvements
in the terms of existing passenger franchises, both in relation
to performance".
11. The particular opportunity to address performance
and customer satisfaction issues through the award of franchises
is reflected in the policy statement "Passenger Rail Franchising",
which defines the Government's overall objective for franchising
as:
"to secure the earliest possible delivery of better rail
services for passengers while providing value for money for the
taxpayer. We are seeking continuous improvement in safety and
operational performance, as well as better customer service."
12. The SRA's Strategic Plan sets out its proposals for
improving performance and translating this policy framework into
real improvements for passengers. The Government particularly
welcomes the development of the SRA's £400 million Rail Performance
Fund (RPF), for which bids were first formally invited on 14 May.
13. The Government has not sought to prescribe how the
SRA should seek to deliver performance improvements or monitor
performance requirements in franchises. However, through the D&G
and regular discussions, it has encouraged the SRA to address
the underlying problem of skills shortages. The SRA is doing so
in a number of ways-not least through its work on the National
Rail Academy, by supporting the Rail Industry Training Council
and the terms of individual franchises (the GNER franchise extension,
for instance, included a programme of driver recruitment).
INVESTMENT
14. Government provides support to the railway industry,
primarily through the SRA , in recognition of the benefits that
rail services bring. Traditionally, and helpfully, passenger rail
services have been divided into three main sectors: long distance
travel, London and south east services, and regional services.
The regional sector is itself made up of different types of services,
ranging from commuting services around major conurbations to longer
distance rural services. The benefits that services bring differ
among these sectors, as does the level of government support currently
provided. Table 3, below, provides some key facts.
Table 3: Key statistics by sector, 2001-02
|
| Net subsidy
(£m)
| Subsidy per
passenger km
| Passenger km
(bn)
| Passenger journeys
(m)
|
|
| Regional | 839
| 10.9p | 7.7 (20%)
| 227 (24%) |
| Strategic Routes | 307
| 2.4p | 12.9 (33%)
| 74 (8%) |
| London and SE | 142
| 0.8p | 18.5 (47%)
| 655 (68%) |
|
15. The 10 Year Plan establishes an unprecedented forward
funding framework for the railway industry. Within the 10 Year
Plan provision, it is primarily for the SRA to establish revenue
support and investment priorities that are consistent with the
policy framework set by Ministers. It has done so, at a high level,
in its Strategic Plan.
16. The Strategic Plan recognises that revenue support
for rail is heavily focused on regional services and makes it
clear that current levels of support should not be diverted from
regional networks in order to achieve the key 10 Year Plan targets.
It identifies three main channels for further investment:
— major enhancement projects;
— investment programmes eg Rail Passenger Partnership
(RPP) scheme, RPF and Incremental Output Statement (IOS) schemes;
and
17. There are constraints on both the physical capacity
of the railway network, and on the ability of the SRA and the
railway industry to deliver major enhancements to it. In particular
there are skills (especially in signalling design) and financial
limits on the number of major enhancements that can realistically
be made to the national network over any given period. Given this,
it is reasonable and realistic that the SRA's Strategic Plan concentrates
on its highest priorities; safety and those areas where demand
for passenger and/or freight services is greatest. Nevertheless,
the programme of major enhancements identified in the Strategic
Plan will deliver significant benefits across the network. Of
the seventeen "major projects"[29]
identified in the Strategic Plan, seven[30]
will have a direct impact on services in the north of England.
18. The Strategic Plan allocates over £800 million
for RPP and RPF over 10 years, and £700 million by 2007 through
IOS schemes. All of these schemes have the potential to make a
real difference to the experience of passengers in the north of
England, by addressing those areas (such as the station environment)
where quick results are possible. Generally these are also areas
in which the National Passenger Survey has identified particular
weaknesses. Examples of RPP schemes include:
— £3.4 million for additional capacity on Leeds
Metro services;
— £2.8 million for new rolling stock and extended
platforms at Wakefield; and
— £2.5 million for additional fast and local
stopping services between Sheffield and Hull.
A full list of current RPP and IOS projects, grouped by franchise,
is included in the Strategic Plan.
19. The SRA is currently in the process of awarding new
TransPennine and Northern franchises, following statutory consultation
with the relevant Passenger Transport Executives on their content.
In doing so, it will take account of the Government's policy statement,
"Passenger Rail Franchising". This states that one of
the Government's aims for franchising is to deliver the following
sorts of benefits:
— better punctuality and reliability eg extra drivers,
spare trains for emergency use, better arrangements for dealing
with disrupted services;
— reductions in overcrowding eg extra rolling stock,
longer trains;
— better service and facilities eg refurbished or
improved rolling stock; improved station signage, information,
waiting rooms, and ticket offices;
— improved safety, personal security and accessibility
eg more CCTV at stations and on trains, secure parking, extended
staffing hours; and
— integrated transport measures.
20. The Government is aware of comment from stakeholders
that the Ten Year Plan's use of passenger kilometres to measure
passenger growth focuses investment on long distance routes and
services in London and the South East. The department believes,
however, that passenger kilometres is a more appropriate measure
than passenger journeys, which would (as table 3 above illustrates)
focus investment even more on south east commuter services, at
the expense of longer distance services which benefit different
parts of the country.
EXTERNAL BENEFITS
OF RAIL
INVESTMENT
21. The Government believes that the railway has a key
role to play in delivering its objectives for economic success,
social development and environmental sustainability. The extent
to which it will do so in any particular line, route or region,
however, will depend on the circumstances. Proposals for Government
support for rail projects will be looked at on their merits using
an assessment process that is common to all modes of transport.
This will present wider benefits of rail in a consistent and fair
manner so that the SRA can take them into account when coming
to an investment decision. The methodology does not presume that
the benefits on offer could best be secured through rail funding.
22. As set out in paragraph 14, above, it is primarily
for the SRA to establish funding and investment priorities within
the policy framework and appraisal criteria set by Ministers.
The D&G make it clear that the SRA should appraise investment
opportunities on a case by case basis, but within a consistent
framework. They state[31]
that, whilst having regard to value for money, the SRA should:
"give particular encouragement to schemes which support
the Government's integrated transport policy and broader sustainable
development objectives" and
"consider whether direct public financial support . .
. would be justified" where a scheme appears to secure "significant
wider, economic, social or environmental benefits".
23. The D&G also require[32]
the SRA to apply the appraisal approach described in "Planning
Criteria: a Guide to the Appraisal of Support for Passenger Rail
Services"[33]. This
is consistent with the Department's "New Approach to Appraisal"
used in the appraisal of all other major transport projects, including
the Multi-Modal Studies. It draws together a large amount of information
collected as part of the appraisal process and assesses it against
the following five key criteria: environment, safety, economy[34],
accessibility and integration.
CONCLUSION
24. The Government believes that rail services in the
north of England are part of a national network and have an important
role to play in delivering its policy objectives—including
in relation to social and economic development. In recognition
of this it provides, through the SRA and PTEs, significant revenue
support funding for these services.
25. The Government has established, primarily through
the documents set out in paragraph 2, a policy framework within
which the SRA will take the lead in the management and award of
passenger rail franchises and the prioritisation of investment
in the industry. The SRA has set out how it will do this in its
Strategic Plan.
Department for Transport
19 June 2002
25
Paragraph 5. Back
26
weighted average of NPS results for ATM, ATN and NWT. Back
27
paragraph 6.2. Back
28
set out in Annex A to the D&G. Back
29
as set out on page 53 of the Strategic Plan, excluding RPP and
IOS schemes. Back
30
Train Protection Warning System, Midland Mainline upgrade, West
Cost upgrade, Cross Country upgrade, TransPennine upgrade, East
Coast Main Line upgrade, other freight projects. Back
31
paragraph 8.7. Back
32
paragraph 8.6. Back
33
Issued by the Office of Passenger Rail Franchising on 24 May
1999. Any changes must also be agreed with the Secretary of State. Back
34
The assessment of the economy criterion includes consideration
of any regeneration impacts. Where significant regeneration benefits
have been identified they are described in the assessment but
not included in the value for money assessment. Revised appraisal
guidance covering this issue is expected to be issued in early
2003. Back
| 
