Increasing Passenger Rail Capacity - Public Accounts Committee Contents

1   Increasing passenger rail capacity

1.  The Department published a 30-year strategy in July 2007 with the stated ambition to double the number of passengers that could travel by rail. In the strategy £9 billion was allowed for the five years to March 2014, with £7.8 billion for infrastructure improvements by Network Rail (for example lengthening platforms to accommodate longer trains) and £1.2 billion for train operating companies to provide extra carriages.[2] The intention was to allow more passengers to travel by rail into London and other major cities without an increase in average levels of crowding.[3] The investment programme to increase rail passenger capacity was put on hold in May 2010 pending the current Spending Review.[4]

2.  The Department's plans (before investment was paused) indicated that substantially fewer extra places for passengers would be delivered by March 2014 than it had originally estimated would be needed to prevent increased overcrowding. For example, those plans indicated there would be 15% fewer extra places on trains coming into London (99,000 compared to 117,000), and 33% fewer in other major cities (25,500 compared to 38,000), in the three-hour morning peak, than it had originally envisaged.[5] Nevertheless, the Department expected to avoid increases in crowding because of the forecast effect of the recession in reducing demand.[6]

3.  An underlying problem is the lack of incentives for the industry to supply extra capacity without additional taxpayer support. National franchise terms require train operators to use "reasonable endeavours" to deploy their train fleets to give peak passengers a reasonable expectation of a seat within 20 minutes of boarding. However, the national terms do not require train operators to expand their fleets or improve stations to avoid excessive overcrowding. Instead, to get extra places on trains the taxpayer has to bear much of the train operators' costs as well as providing funds to Network Rail for it to build longer platforms.[7]

4.  The Chiltern Trains franchise is an exception as it requires the operator to bear the costs of providing enough capacity, in terms of both carriages and platform lengths, to meet demand during peak hours without exceeding maximum loads. The Department is currently consulting on the appropriate terms to be included in franchise agreements in the future, including on whether obligations to avoid overcrowding, similar to that in the Chiltern Trains franchise, should be imposed more widely. The Department will need to take care, however, that the quality of information on which to base demand forecasts is improved and made available to potential bidders so they do not overprice the risk of dealing with overcrowding, due to a lack of information.[8]

5.  Despite the scale of the proposed five-year investment, the Department did not have comprehensive data on the actual numbers of passengers using each service, when it was forecasting demand and planning how best to meet it. Its principal sources of information were annual counts of passengers on a single day at a single point on each route.[9] The situation has improved since, as new carriages are brought into service, with the result that 39 per cent of carriages are now fitted with automatic counting equipment. It is not clear, however, whether such equipment is required for all new trains procured by the Department and train operating companies, or whether it is fitted as standard on new trains in any event. Moreover, the Department does not have the IT capability needed to process information on the scale produced by automatic passenger counting. It has plans to acquire a new IT system to allow it to make full use of the data but the acquisition is on hold pending the Spending Review.[10]

6.  The Department's plans relate to blocks of the country and fare increases are also set at the level of franchises. In the area covered by the Southeastern franchise, for example, fares have risen by RPI plus 3% regardless of whether the fares relate to services which have benefited from investment. So, for example, passengers using trains from Orpington pay higher fares although the increased capacity has been provided on services which do not stop there. The ability to align what the passenger pays for a ticket with the investment they see and use on their route does not exist in the British railway system at the moment, though it is a key aspiration which the Department is pursuing with train operators.[11]

2   Q 47; C&AG's Report, paras 1 and 1.6 Back

3   C&AG's Report, para 2 Back

4   C&AG's Report, para 5 Back

5   Q 1; C&AG's Report, para 3.8 Back

6   C&AG's Report, Figure 8 and para 3.8 Back

7   Q 19; C&AG's Report, para 3.11 Back

8   Qq 19-25; C&AG's Report para 3.14 Back

9   C&AG's Report, para 1.7 Back

10   Qq 29-30 and 33-37; C&AG's Report, para 1.7; Ev 20 Back

11   Q 32 Back

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