Examination of Witnesses (Questions 260-279)
MR CHRIS
AUSTIN AND
MR DAVID
HIBBS
10 NOVEMBER 2004
Q260 Chairman: Good afternoon, gentlemen,
you are most warmly welcome. Can I ask you firstly to identify
yourselves?
Mr Austin: I am Chris Austin,
I am the Executive Director for Community Rail Development at
the SRA, and my colleague with me is David Hibbs who is my Assistant
Director.
Q261 Chairman: Mr Austin, do you have
something you wanted to say to us?
Mr Austin: No, I do not, chairman;
thank you.
Chairman: In which case I shall launch
Miss McIntosh forth.
Q262 Miss McIntosh: I am very grateful,
madam chairman. Mr Austin, can I welcome you to the Committee
and can I ask you first of all on the matter of inter-modal integration,
how do you believe that the integration of bus and rail services
is best going to be achieved?
Mr Austin: There is quite a lot
of good practice to build on. Around the country, for example,
there are around 500 examples of through ticketing schemes between
bus and rail, whether it is simple add-ons like Bus Plus or whether
it is the good example in Cornwall of the Virtual Branch Line,
with Trurorian providing, as it were, a rubber-tyred version of
the branch line to the Eden Project and Helston. So there is quite
a bit of good practice to build on and, clearly, the intention
behind establishing partnerships is to build on that. A number
of the partnerships have worked actively on that and the Penistone
line in Yorkshire, for example, actually runs its own connecting
bus services at certain times of day and runs a community car
service as well. So there are lots of opportunities there. Underlying
it though is the question of competition and how this is seen
by the Competition Commission—this is something you raised
with the earlier witnesses—and that clearly is an issue
for us. We did consult both the OFT and the Competition Commission
on it when we put the consultation paper out earlier in the year,
although we have no response from them.
Q263 Chairman: Excuse me? No response?
Mr Austin: No response, no.
Q264 Chairman: No indication of their
attitudes?
Mr Austin: No, chairman, and we
will need to take that up if there are any particular issues relating
to competition that we identify for the future.
Q265 Chairman: Mr Austin, I do not want
to stop you, but I want to be quite clear; you as the SRA with
responsibility, very specifically, for rural railways, you raised
with the Office of Fair Trading and also with the Competition
Commission?
Mr Austin: Yes.
Q266 Chairman: The possible clash of
interest if you were to require an integrated service to be developed
in a particular area; you received no reply, is that what you
are telling us?
Mr Austin: To be clear, we sent
them the consultation paper which invites people to comment. I
have not gone beyond that with this statement.
Q267 Chairman: So you received no comment
on a detailed position paper which you sent.
Mr Austin: No.
Chairman: Thank you.
Mr Stevenson: I wonder if I could just
pick this up—
Miss McIntosh: Can I just continue with
my line of thinking? How will train and bus operators and the
community-run partnerships—
Chairman: I do not want to come off that.
Mr Stevenson.
Q268 Mr Stevenson: I am sorry for interrupting
but it is an observation on the questions here, because I recall
we took evidence in this committee from the OFT and we had long
sessions on this very issue, because witness after witness was
saying that through ticketing, co-ordination of bus services,
co-ordination of integration was being effectively stopped because
the OFT and the Competition Commission would not allow it on competition
grounds. The OFT I recall was very clear; they said that is not
the case and if they had a submission from operators or authorities
then they would consider that submission, but to date, I recall,
they said they had not received a single submission. I wonder
if I could ask the question, are you aware of any direct submission
that has been made in this regard to the OFT and the Competition
Commission?
Mr Austin: I am aware of a number
of through ticketing schemes and indeed intra-available ticketing
schemes and scheduled connections, which are working very satisfactorily
now, so in that sense clearly the OFT is right.
Q269 Mr Stevenson: I am not sure whether
the OFT is right because this is the second time today we have
heard from witnesses that they have been barred from pushing this
line because of the attitude of the OFT and Competition Commission.
My question is, are you aware of any submission that was made
to the OFT and Competition Commission in this regard that actually
was refused by them?
Mr Austin: I am not, but then
the submission would be made by the operators and not by us. I
am not aware of any, no.
Mr Stevenson: Thank you.
Chairman: Miss McIntosh.
Q270 Miss McIntosh: How will the operators
in the Community Rail Partnerships be able to implement service
enhancements if it is Network Rail which has responsibility for
publishing the timetable?
Mr Austin: The responsibility
for service specification clearly needs to go with the funding
authority, so at this stage it is us, in the future it will be
the Department for Transport that will set the overall level of
service provided through the timetable, because they will be planning
for it. There are plenty of opportunities for local authorities,
for example, to purchase additional services, and there are some
good examples of that where local authorities fund, for example,
evening services or Sunday services over and above the basic service
provided with Government support. That is the area of opportunity.
The way I would envisage it happening in the future under the
strategy that we have been developing is that we would need to
agree, or our successors in the Department would need to agree,
the overall level of service to be provided, because that is what
the public subsidy is paying for, but the detail of the timetable
would be worked out by the operator in conjunction with the partnership.
Particularly on branch lines, self-contained services, that is
going to be much easier to manage because you are not interfering
with mainline services or long distance ramifications, so it would
be quite possible for the CRP and the local authority to be much
more closely involved in timetable setting than it is, for example,
today.
Q271 Miss McIntosh: Will it be available
on the internet?
Mr Austin: What, the timetable?
Q272 Miss McIntosh: Will the timetable
be available on the internet?
Mr Austin: Timetables are available
on the internet now through Journey Planner, yes.
Q273 Miss McIntosh: Is it true that the
SRA has encouraged bus substitution options to be put forward
in the new franchise bids?
Mr Austin: On two of the franchise
bids, for Greater Anglia and Northern, bidders were asked to put
forward ideas on where bus substitution might help to reduce the
cost of franchises, but in neither case were those followed up
in the franchise agreements that were subsequently signed. In
terms of the strategy I have been working on in community rail
development I think we see the opportunities for buses there as
a feeder service or to supplement the train service, maybe to
substitute for it at certain times, and there are some examples
of that happening now, for example, the Severn Beach line and
the Conwy Valley line in North Wales, but not substituting for
the complete service involving the closure of stations and lines.
Indeed, the response we had from the public consultation was overwhelming
support for that approach, there was no support for the substitution
on a permanent basis of complete services.
Q274 Miss McIntosh: Where you did go
for that option what was the main aim of the strategy, was it
to save money?
Mr Austin: Yes, it was to reduce
the franchise costs to the taxpayer.
Miss McIntosh: When you mention in your
paper that there is potential to increase the number of larger
stations with independent ticket agents, does that mean that the
TOCs are to reduce the amount of commission paid to agents from
the sale of rail tickets, and was this a decision from ATOC?
Q275 Chairman: Train Operating Company
and the Association of Train Operating Companies. Do not worry,
I am my own walking lexicon.
Mr Austin: Yes, we have had discussions
with ATOC on how we might encourage and continue to develop independent
agencies and they are quite keen to do that. It is governed by
the Ticketing and Settlement Aggreement, but we have established
that there is a degree of flexibility there which we will try
and develop and exploit as we roll the strategy out. There are
also ways in which the train operator can work directly with independent
agents on a local basis, and there are a couple of examples in
Cornwall where the local train operator has supported the establishment
of an independent agent and allowed him to become established
on a simpler and cheaper basis, so we will be pursuing that opportunity
as well.
Q276 Miss McIntosh: Have you worked out
what the implications are though for the actual travel agents
when the commission is going to be reduced by up to 20%?
Mr Austin: Yes, the arrangements
I referred to in respect of the train operator working with the
agents were predicated on a rather different basis, so they are
supporting some of the set-up costs. I am not sure of the detail
of the commission rates and so on that are payable, but I am pretty
sure that that would be different in that context. The purpose
of the strategy as a whole is to import a degree of flexibility
into this process and allow you to adopt different solutions from
that that applies as the national standards, and that would apply
to ticketing settlement as well as everything else.
Chairman: Mr Lucas on this.
Q277 Ian Lucas: We went to Gobowen station,
which is a very good example of an excellent additional service
being supplied to the local community and the operator there told
us that there had been a substantial reduction in the commission
paid by the train operating companies, and that that would threaten
the viability of what had been a very successful project. How
on earth is that sort of approach going to assist local stations?
Mr Hibbs: I do not know the details
of Gobowen. I am aware that there have been difficulties with
some station agents and the changes in the financial payments
from ATOC, but I am not familiar with the details. I am familiar
with one station down in the South West where, taking into account
the problems that the agent was having, they have changed the
payment system and the way that the train operating company works
with the agent to enable the agent to have a financially viable
continuing business. As with quite a lot of things on community
railways, the blanket application of a single approach, a reduction
in commission to agents—which I think is probably coming
partly from the general trend towards telesales and internet sales
of tickets—applied in some particular circumstances may
be unhelpful to the community railway. We have to find ways around
that, perhaps similar to what has happened in the South West.
Q278 Chairman: I hope you have made that
clear to some of the partnerships involved because it would be
awful to lose a really viable service which is being maintained,
frankly, by a load of volunteers, by just removing a very small
percentage of the ticket.
Mr Hibbs: One example is Looe
station which had not been staffed, probably for 30 years, and
a voluntary organisation has now set up an agency at the station,
under the aegis of Wessex Trains who bought the equipment, helped
them with training and now it is run on a voluntary basis. I know
that is different to Gobowen where it is a proper business as
opposed to a volunteer basis, but there should be a way through
given the number of passengers.
Chairman: Thank you, Mr Hibbs. Mr Donohoe.
Q279 Mr Donohoe: I am not so sure when
answering Mr Lucas if you were partly talking of the grants that
were available, that is the Rail Passenger Partnership grants.
If you were, was it not very short-sighted to withdraw them?
Mr Austin: We were certainly very
disappointed that we were not able to continue with the Rail Passenger
Partnership funding. If you recall, it stemmed from a cut in the
budget in December 2002 and with so much expenditure already committed
we were quite limited on the discretionary expenditure that we
had, it was really project development, freight grants and the
Rail Passenger Partnership funding.
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