4 Regional investment
28. Paul Plummer, Group Strategy Director, Network
Rail, was clear: from Network Rail's perspective, there is "one
network", covering long-distance and commuting passenger
trains, high speed rail and freight.[95]
Tracey Lee, Chief Executive of Plymouth City Council, and representing
the Peninsula Rail Task Force, questioned whether it was a national
service, asking:
What is our expectation for different cities
and areas of the UK? We talk about a national rail service,
yet we are not quite clear what those national standards are.[96]
The Minister accepted that "one of the big challenges"
was making sure "that every part of the country feels that
it is getting its fair share".[97]
David Brown, Chief Executive of Merseytravel, who represented
Rail North in evidence to us, told us: "the North gets less
than you would expect for a significant percentage of the population
of England".[98]
Treasury statistics show that there was wide variation between
different English regions for on spending on rail per head in
2012/13, as below:
Region
| Rail spending per head for 2012/13
|
North East | 52
|
North West | 89
|
Yorkshire and the Humber
| 101 |
East Midlands | 37
|
West Midlands | 50
|
East of England | 58
|
London | 294
|
South East | 69
|
South West | 41
|
29. Clare Moriarty stressed that the Northern Hub programme was
aimed at "creating a railway that will serve all of the northern
cities to maximise the potential for economic growth".[99]
The Industrial Communities Alliance argued that "nearly a
century of relative neglect now needs to be addressed" in
the cross-region and local lines in the north.[100]
Councillor Chris Shaw, Leader, North East Lincolnshire Council,
told us how the rail infrastructure in the region "cannot
cope with demand", highlighting the restrictions this has
on the amount of freight that can be carried, and on the speed
of passenger services, which he stated were restricted to only
42mph, despite having a top speed of 100mph.[101]
The Peninsula Rail Task Force stated in written evidence that
the South West peninsula railway had been "starved"
of rail investment, due to a focus from the DfT on investment
in the Paddington-Bristol-South Wales line.[102]
The West Midlands Integrated Transport Authority noted the "lack
of significant new investment" in the region for CP5, which
it warned would lead to an increase in overcrowding on services.[103]
30. The investments proposed to tackle this underfunding would,
we heard, deliver value for money for the taxpayer. Mark Pendlington
told us that the return on the Great Eastern Main Line would be
eight or nine times the investment, making the region "free
to become the California of Europe".[104]
The Greater London Authority called for "further significant
infrastructure investment" in the capital's rail network,
arguing that the Government would "get a fantastic return
on this investment".[105]
The One North projectled by the city regions of Leeds,
Liverpool, Manchester, Newcastle and Sheffieldhas called
for a £15 billion, fifteen-year investment plan for transport
in the north, including fast and frequent intercity rail network
joining the centres of the city regions, through a new 125 mph
trans-Pennine route. The economic benefits of such a scheme, it
was claimed, would far outweigh the costs.[106]
31. We welcome the substantial investment in CP5, and the commitment
to electrification and increasing commuting capacity in a time
of austerity. We support the Northern Hub programme, and welcome
the indications that the Department for Transport will listen
to the case for investment in the North and East of England. We
remain concerned that the Benefit Cost Ratio used to allocate
rail spending has failed to give sufficient weight to the wider
economic and social benefits of rail investment. Focusing simply
on passenger numbers and the short-term economic return from rail
investment will inevitably continue to focus investment in London
and the South East. Instead, we recommend the Department for Transport
adopt and publish broader criteria for allocating funding, which
consider the contribution to the Government's wider policy objectivessuch
as long-term economic regeneration, environmental policy or social
need. Rail funding must still deliver value for money for the
taxpayer, with the economic case for each project subject to rigorous
testing against the revised criteria. This approach, however,
will result in a fairer allocation of rail investment across the
country; other regions, such as the far south west, have been
"starved" of investment.
The Northern and TransPennine Express franchises
32. The tendering process is currently in progress for the two
main rail franchises in the north of Englandthe Northern
and TransPennine Express franchises, which carry some 114 million
passenger journeys each year.[107]
The last two Northern franchises were let on an assumption of
zero growth, whereas in practice there had been "significant
growth" in passenger numbers.[108]
We heard that this growth had occurred without any significant
investment in rolling stock or infrastructure, resulting in capacity
problems, significant overcrowding and people not being able to
make the journeys they need to make.[109]
33. The consultation document for the Northern franchise stated
that "trade-offs" may need to be made between different
aspects of the North's rail services. In particular it is argued
that while many fares in the Northern franchise are comparable
with those in other parts of the country "some prices are
significantly below the norm".[110]
The consultation suggested that one option for the new franchises
could be an increase in fares to help to pay for better services.[111]
The DfT officials we heard from stressed the level of subsidy
that the current Northern and TransPennine Express franchisees
received, and argued that the Government had "to look at
what is reasonable in terms of the overall money that flows into
the northern region", in terms of value for money for the
taxpayer, as well as the passenger.[112]
Anthony Smith, Chief Executive of Passenger Focus, suggested that
"trying to explain to somebody on Leeds station who cannot
get on to a 25yearold Pacer train that their fares
might have to go up for a service they might never use in the
future" would be "a tough sell".[113]
David Brown told us that Rail North had been clear that fare increases
on the Northern franchise could not considered before the frequency
and quality of services and rolling stock were improved, stating
that "you cannot expect people to pay more for a deteriorating
level of service".[114]
34. Passengers on some Northern Rail services have already faced
substantial price increases, separate from the yearly inflation
increase. Northern Rail announced last year that there would be
a change in the rules around off-peak tickets during weekday evenings,
at the request of the Department for Transport, with the aim of
reducing "the cost of the railway to taxpayers by reducing
subsidy to Northern".[115]
The subsidy paid to each Train Operating Company is published
annually by the Department for Transport, and does show that Northern
Rail receives both the largest total subsidy, and the largest
subsidy per passenger mile, at 51.5p per mile. (For comparison,
the subsidy paid to TransPennine Express was 16.8p per mile, and
12.4p to Southeastern. South West Trains pays a premium of 1.7p
per mile.) The Campaign for Better Transport has argued that the
majority of this figure is payment to Network Rail for maintenance
to rails, signalling and other infrastructure, outside the control
of Northern Rail.[116]
The Campaign argued that the subsidy figure for the Northern Rail
franchise was "misleading", as it overestimated the
costs of running the franchise; for example, by allocating the
same costs to a two car Pacer train travelling at 75mph, as an
11 car Pendolino train travelling at 125 mph.[117]
The Campaign also noted that the more profitable routes in the
north were included in the TransPennine Express franchise, rather
than Northern Railarguing that this was "highly unusual".[118]
The ORR also provides the subsidy figures per passenger mile for
each of Network Rail Operating Routes, These figures report that
the lowest subsidy figure is for the Wessex, Sussex and Anglia
routes, and the highest figures are for Scotland and Wales.[119]
The Passenger Transport Executive Group (pteg) has noted that
"virtually no part of the rail network operates without government
subsidy, once infrastructure spending is taken into account".[120]
As we have noted in paragraph 5, our evidence raised questions
over the general subsidy level, and the proportion of operating
costs paid by fares and taxpayers.
35. The consultation for the TransPennine Express franchise proposed
an end to the direct service between Cleethorpes and Manchester
Airport: a proposal Dr Ian Kelly, Chief Executive Officer, Hull
and Humber Chamber of Commerce, said would be "a failure"
of policies promoting economic growth.[121]
A local campaign, highlighting concerns about the impact on the
region's economy, was successful in persuading the Minister to
pledge to retain the direct service.
36. The franchise consultation stated that the Department expected
to require bidders for the Northern franchise to specify how "driver
only operation" may be introduced on suitable services. For
TransPennine Express services, it is expected the bidder will
have discretion to introduce driver only operation, but will not
be expected to do so. The RMT argued that guards on trains were
essential for keeping trains running efficiently, and for the
safety of passengers, particularly in the event of an emergency.[122]
In response to questioning about driver-only operation the Secretary
of State said that the way staff were deployed by operators was
"very important".[123]
37. The consultation for the Northern and TransPennine Express
franchises has been designed in partnership with Rail North Ltdthe
organisation comprising 30 northern Local Transport Authorities
"working to devolve from Whitehall the responsibility for
decision-making for railways in the North, in pursuit of better
transport and economic outcomes".[124]
Rail North will design and manage the re-franchised Northern and
TransPennine Express services, but the Secretary of State will
retain ultimate responsibility for all design and procurement
decisions, including the final decision on the franchise.[125]
The transparency of the process was questioned by some witnesses.
Councillor Chris Shaw, Leader of North East Lincolnshire Council,
told us that he was concerned that the "smaller areas [in
the North] do not have a voice and are not sitting around the
table making the decisions".[126]
We heard that Rail North's meetings with civil servants were only
attended by officers from the core cities, who were then forbidden
by a confidentiality agreement from discussing the content of
the meetings with the smaller authorities.[127]
This had resulted in a "two-tier level of involvement [
]
those who are in the know and those who do not get to know".[128]
Councillor Liz Redfern, Leader of North Lincolnshire Council,
described the situation as "not collective" and "not
fair".[129] Rail
North accepted that the confidentiality agreement it had signed
with the Department was a "constraint" on keeping all
the local authorities informed on progress.[130]
Rail North is currently formalising its operational structure.
38. Councillor Shaw told us that these concerns were shared by
local authorities including Derbyshire County Council, East Riding
of Yorkshire, Hull, Lincolnshire County Council, North East
Lincolnshire, North Lincolnshire, North Yorkshire and Nottingham.[131]
He called for "a more open and transparent partnership in
Rail North", and warned that, without this, the outcome of
the Northern and TransPennine Express franchises could be "detrimental"
to parts of the north.[132]
The Industrial Communities Alliance warned against focusing investment
solely on the cities in the north, noting that "only 20%
of the population of the three northern English regions lives
in the North's five 'core cities' (Leeds, Liverpool, Manchester,
Newcastle and Sheffield)".[133]
In our Rail 2020 Report we stated that there was "scope
to devolve control over some rail franchises to local or regional
bodies", and suggested that the Northern franchise was a
"prime candidate for this approach".[134]
We warned, however that that the interests of rural communities
and towns "must be taken into account alongside those of
the big cities".[135]
39. We are disappointed that the consultation proposals for
the Northern and TransPennine Express franchises have not focused
on increasing capacity and improving rolling stock, but instead
suggested that passengers in the north must make trade-offs between
fares and decent journeys. While the devolution of the franchises
to Rail North is welcome, it stops well short of devolution. The
consultation document suggests that the body's powers will be
limitedindeed, the Secretary of State will retain the final
decision-making powers. Rail North was clear that fare increases
on the Northern franchise could not be considered prior to improvements
in rolling stock and services. If devolution is genuine, Rail
North's stance should be reflected in the Invitation to Tender.
The Department must also set out how the interests of rail passengers
outside the North's city regions will be protected under the devolution
to Rail North. Network Rail must also set out why its paymentwhich
makes up part of the stated subsidy to each Train Operating Companyallocates
the same costs for maintaining the rails to much smaller Pacer
trains, as it does to the larger and faster Pendolino trains.
95 Q54 Back
96
Q274 Back
97
Q477 Back
98
Q195 Back
99
Q62 Back
100
Industrial Communities Alliance (IRW 62) para 17 Back
101
Q196 Back
102
Peninsula Rail Task Force (IRW0027), para 14 Back
103
West Midlands Integrated Transport Authority (IRW0021), para 2.1 Back
104
Qq306, 307 Back
105
Greater London Authority (IRW0042) Back
106
Manchester City Council, One North: Region's cities unveil joint plan for improved connections,
5 August 2014, accessed 15 January 2015 Back
107
Department for Transport, Growth and Opportunity: TransPennine Express Prospectus,
June 2014, p 22; Department for Transport, Transformation in partnership: Northern Prospectus,
June 2014, p 20 Back
108
Merseytravel (IRW0030), para 4,Q213 Back
109
Q213, Department for Transport, Transformation in partnership: Northern Prospectus,
June 2014, p 36 Back
110
Department for Transport Rail Executive, Stakeholder Consultation: TransPennine Express Rail Franchise Northern Rail Franchise,
June 2014, para 2.32 Back
111
Department for Transport Rail Executive, Stakeholder Consultation: TransPennine Express Rail Franchise Northern Rail Franchise,
June 2014, para 3.41 Back
112
Qq78, 81 Back
113
Q150 Back
114
Q242 Back
115
Northern Rail, "Changes to off-peak tickets", 11 August
2014, accessed 15 January 2015 Back
116
The Campaign for Better Transport, North of England rail services: Busting the myths,
August 2014 Back
117
The Campaign for Better Transport, North of England rail services: Busting the myths,
August 2014 Back
118
The Campaign for Better Transport, North of England rail services: Busting the myths,
August 2014 Back
119
Department for Transport (IRW0071) Back
120
pteg (IRW0036), para 2.8 Back
121
Q208 Back
122
National Union of Rail, Maritime & Transport Workers (IRW0011)
para 7.2 Back
123
Q487 Back
124
Rail North (IRW0016) para 1 Back
125
Q77 Back
126
Q203 Back
127
Q256 Back
128
Q256 Back
129
Q265 Back
130
Q257 Back
131
Q206 Back
132
Qq203, 206 Back
133
Industrial Communities Alliance (IRW 62) para 11 Back
134
Transport Committee, Seventh Report of Session 2012-13, Rail 2020,
HC 329-I, para 65 Back
135
Transport Committee, Seventh Report of Session 2012-13, Rail 2020,
HC 329-I, para 65 Back
|