2 Performance since taking the franchise
into public ownership |
11. Punctuality on the East Coast line worsened since
handover of the franchise to Directly Operated Railways, continuing
a year on year downward trend. Most of the delays were attributable
to Network Rail and other train operating companies that run trains
on parts of the line, with 25% of the delay attributable to the
East Coast franchise itself.
12. The predominant cause of delays was an ageing
train fleet that, over the years, had not been adequately maintained.
In the last 18 months, Directly Operated Railways has been attempting
to turn things around. By the end of 2010-11 the line recorded
the lowest level of delay in the past 11 years; and the proportion
of delay attributable to the East Coast franchise while in public
ownership had now fallen to 21%. Directly Operated Railways told
us that Network Rail recognises the need for further improvements
to the infrastructure on the East Coast line and that it should
be a top priority for its management.
13. The witnesses described the East Coast Main Line
as the "jewel in the railway crown".
Directly Operated Railways informed the Committee that it is improving
revenue-forecasting technology, investing in the train fleet and
customer services to improve punctuality and generate extra revenue.
Much of the investment will benefit the franchise over the next
four or five years and Directly Operated Railways expects that
the taxpayer will see a return when the franchise is re-let in
about 18 months time.
Directly Operated Railways is working to this timescale and told
us that the Department is keen to understand the issues faced
by previous franchisees ahead of preparing the invitation to tender
for the new franchise.
14. Directly Operated Railways told us that, on the
East Coast franchise, discretionary business and leisure travellers
account for some 96% of passenger revenues. Without a large and
relatively stable revenue stream from commuters, forecasting passenger
revenues for the franchise in an economic downturn is therefore
15. The Department considered that it was getting
better at forecasting and was addressing the Committee's past
concerns about the collection of adequate data on passenger journeys,
a pre-requisite for good demand forecasting. The Department told
us it that is has always expected and allowed for shortfalls in
revenue from rail franchises. In 2009-10, the actual amount of
revenue support provided by the department had been £87 million
higher than forecast. In the following year, however, the amount
spent on revenue support was £208 million lower than forecast
and the Department had spent the unused funds on investments in
the railways such as stations and the Manchester line.
16. The Department told us it wants to develop more
sophisticated contracts that put an emphasis on the train operator
attracting passengers to trains that had spare capacity and away
from services operating at full capacity.
The Department is therefore looking to give commercial operators
more freedom to manage franchises in a way that more closely matches
supply with demand.
20 Qq 103, 104; C&AG's Report, paras 3.8-3.9 Back
Qq 75, 104 Back
Qq 106-117; Ev 13 Back