Rail timetable changes: Government and Office of Rail and Road Responses to the Committee’s Seventh Report

Appendix 1: Government Response

The Department would like to thank the Transport Select Committee for their inquiry into the rail timetable changes: May 2018 and welcomes the Committee’s report. The Department’s responses are set out below.

Why did the system fail?

Recommendation 1 (paras 62–65)

It is incumbent on all parties to accept in full the ORR’s, and our, findings and work together quickly to learn the lessons and restore trust in the industry. They must not continue to pass the buck.

The Government agrees with this recommendation in respect of the findings of the ORR’s Timetabling Inquiry. We have welcomed the publication of the ORR’s Interim and Final Reports. The former sets out a thorough and accurate account of the factors that led to unacceptable disruption to passengers in May 2018, while the latter sets out a credible set of actions to be taken by parties across Government and industry to ensure that these failings are not repeated and that passengers get the full benefit of the Government’s major investment in improving the railway.

We have begun the work to implement the findings of the ORR’s work which falls to Government and we will set out in more detail on how we will do this when we formally respond to ORR’s final report early in the year. We look to Network Rail and the wider industry to act swiftly on implementing those findings that fall within their remit.

The Government agrees in principle with this recommendation in respect of the findings of the ORR’s Timetable Inquiry where the full implementation of any of the ORR’s findings requires significant changes to industry structures to ensure they are working to the benefit of users. In these instances, we think it is right that the Rail Review — which is tasked with a root and branch examination of the industry’s structure — considers them as part of its work. But we will also take action to bring forward interim measures where appropriate to protect the interests of passengers. We will set these out when we respond to the ORR.

What happens next?

Recommendation 2 (para 69)

The Secretary of State is responsible for putting in place suitable governance and decision-making structures for the rail industry. A key lesson of the timetabling crisis is that an independent system operator needs to take charge. We are content, in the short term, for that person to be the Chief Executive of Network Rail, but if he is to assume responsibility the Secretary of State must make clear the extent of Mr Haines’ decision-making power over whether and when the next timetable change goes ahead.

The Government agrees that it is essential the risks around the implementation of new timetables are managed proactively through appropriate governance and decision-making structures. We want to ensure that as many passengers as possible continue to see the benefits of our long-term investment in the railway, which responds to the increasing demand for rail services (doubling from 735 million in 1994–5 to 1.73 billion in 2016–17). We have been clear that Network Rail is responsible for the production and publication of timetables, and that the timetable assurance must be robust and fit for purpose.

The Government also agrees that roles need to be clarified and further improvements to the process need to be made. Accordingly, we are committed to working with Network Rail and the ORR to improve the timetabling system, taking into account the recommendations of the ORR’s review into the May 2018 timetabling issues.

The industry is already addressing some of the issues that the ORR has identified. For instance, the December 2018 timetable changes were scaled back in favour of a phased approach. The December 2018 change was largely a May 2018 rollover with some performance fixes to further improve reliability. The timetable was implemented without any significant problems.

The Government considers the role of the System Operator to be essential but notes that the function is relatively new and its systems and processes are developing as lessons are learnt.

The Government welcomes the findings of this report and is committed to working with the industry to ensure disruption similar to what passengers experienced in May 2018 never happens again.

Recommendation 3 (para 70)

We await the ORR’s final recommendations, but our clear view is that the national rail timetabling process requires genuinely independent oversight, following accepted principles of professional project management, including the appointment of an independent Project Sponsor or Senior Responsible Owner for the whole national timetabling project. We believe this role would need to be located outside of Network Rail, so that it is more effectively insulated from commercial and political pressures.

The Government partly agrees with this recommendation. Network Rail is accountable for delivery of the national rail timetable and this function is delivered by the System Operator (SO). The Programme Management Office (PMO) is a new function that has been set up to complement the SO by providing a project environment to manage the SO’s delivery of the timetable. The PMO works with operators to ensure that timetable proposals submitted to Network Rail are deliverable and that system-wide risks and interdependencies are properly taken into account. The PMO’s process is further supported by independent industry experts to provide a further level of assurance on risk areas. Ultimate independent oversight is provided by the ORR as industry regulator.

The Government agrees that further improvements to the process need to be made and is committed to working with Network Rail and the ORR to implement the recommendations of the ORR’s review into the May 2018 timetabling issues, which include reform of the Network Code that underpins the timetable development process.

As part of the Final Determination for CP6, the Network Rail System Operator has been funded to deliver significant enhancements to its capability. This includes provision for recruiting and retaining more expert planners as well as upgrading technology to provide higher quality and more timely advice to decision-makers.

Recommendation 4 (para 81)

Putting in place adequate contingency plans to assist disabled people if timetable changes do not go plan must now be a central part of train operating companies’ timetable planning processes. We recommend the Office of Rail and Road take a proactive approach to ensuring such plans are in place and, in response to this Report, it should set out how it intends to do so.

The Government agrees with this recommendation. As a condition of their operating licence, train companies must have a Disabled People’s Protection Policy (DPPP) in place which the ORR has responsibility for approving. The ORR is currently reviewing the Guidance on DPPPs which includes a public consultation. This review offers an opportunity to strengthen the provisions for contingency planning to assist disabled people in times of disruption. We would welcome the ORR giving particular focus to working with train operating companies (TOCs) to identify and share good practice across the rail industry.

Recommendation 5 (para 82)

Our judgement is that the ORR can no longer rely solely on the publication of data, and the reputational effects on train operating companies’ behaviour, to ensure compliance and the provision of assistance that disabled rail users need and deserve. The Regulator must prove its effectiveness in this policy area, including by acting swiftly to implement the outcome of its DPPP consultation and stepping up its enforcement activity, including using its powers to levy fines on train operating companies.

The Government agrees with this recommendation. In July 2017, the Secretary of State issued Guidance to the Office of Rail and Road setting out his wish for the ORR to use its powers to hold the industry to account for its obligations to passengers under licences and wider consumer law. As a result of the issues with the May timetable change, the ORR is currently formally investigating two TOCs for the information that was provided to passengers to enable them to plan and make their journeys with a reasonable degree of assurance, specifically acknowledging issues for disabled passengers. These formal investigations have the potential to result in enforcement action such as a financial penalty.

In addition, the Government would welcome the ORR elaborating on its existing enforcement policy in respect of compliance and enforcement specific to key consumer protection obligations including DPPPs, as set out in operator licence conditions.

This will sit alongside a number of measures being introduced by the Government to improve access to the rail network for disabled people, as set out in the Inclusive Transport Strategy1 published in July 2018. These include requirements on future franchise holders to improve the assistance provided to disabled passengers and, either through franchising or through DPPPs following the ORR consultation, to provide compensation where booked assistance is not delivered.

Recommendation 6 (para 88)

We urge the industry and Government to consider all options to keep any regulated fares increase in 2019 to a minimum, particularly on parts of the network worst affected by the timetabling crisis. We further recommended that 2018 Northern, TransPennine Express, Thameslink and Great Northern season ticket holders receive a discount, equivalent to any increase announced in December 2018, on renewed season tickets in 2019.

The Government is clear that the disruption suffered by passengers across the rail network following the May 2018 timetable change was completely unacceptable. The large number of cancellations, delays and long gaps between services meant that it was absolutely right for passengers to be compensated for the disruption they experienced.

Government therefore worked with Transport for the North, Northern, TransPennine Express (TPE) and Govia Thameslink Railway (GTR) to set up and promote a special compensation scheme to compensate the most affected passengers with a payment equivalent to up to four weeks’ worth of season tickets and equivalent compensation for regular passengers who travelled three days or more in at least one week during the period of disruption. Over 14,000 claims from season and non-season ticket holders travelling on Northern and TransPennine Express services were submitted and over £1 million paid out in compensation. The GTR scheme has so far paid out around £17 million to over 72,000 passengers.

These special compensation schemes were in addition to the usual Delay Repay scheme that Government encouraged passengers to claim if they experienced eligible delays or cancellations following the introduction of new timetables in May 2018. At the time of this disruption, Northern passengers whose journeys were delayed were eligible to claim Delay Repay compensation worth 50% of the ticket price for a delay of 30 minutes or more and 100% of the single ticket price for a delay of one hour or more.

The previous Rail Minister, Jo Johnson, subsequently announced that Delay Repay 15 would be introduced on the Northern franchise from December 2018. This came into effect on Sunday 16 December and now entitles Northern passengers whose journeys are disrupted by 15–29 minutes to claim compensation worth 25% of the single ticket price.

The Government agrees in principle that the industry and Government should consider all options to keep any regulated fares increase to a minimum. The Government completely recognises that the cost of rail fares impacts people’s budgets and day-to-day lives. That is why we have ensured, since 2014, regulated rail fares rise by no more than inflation. We of course continue to monitor how rail fares and average earnings change, and the Secretary of State has made clear his ambition to move away from using the Retail Prices Index for the annual fares increase, and has since written to the rail industry and unions to seek their support. This is important because industry has a role to play in reducing costs and generating savings which could be passed on to passengers.

The Government disagrees that Northern, TransPennine Express (TPE), Thameslink and Great Northern 2018 season ticket holders receive a discount, equivalent to any increase announced in December 2018, on renewed season tickets in 2019. Any such changes to fares increases require commercial negotiations with TOCs, including compensation for revenue foregone and a formal variation to the franchise agreement. Any fares freeze, even for one year, would have a long-term, ongoing, cumulative impact on franchise payments and require taxpayer contributions to increase in order to offset this impact.

Further to this, Government believes that compensation for poor service should be treated separately from general changes to fares. The Government responded to the disruption on GTR, Northern and TPE by taking immediate action to work with the rail industry to ensure that special compensation packages for passengers who faced disruption were introduced. These generous schemes provided the equivalent of up to 8% of the cost of an annual season ticket for those most severely impacted. Compared to a hypothetical fares freeze this is worth more to affected passengers if they claimed for more than a week’s special compensation. This compensation was also targeted at those most impacted by the disruption unlike a general fares freeze.

The Rail Review, led by Keith Williams, is considering how passengers’ interests can be prioritised in a reformed industry structure and commercial model for passenger services. As part of this work, the Review is looking at how a future fares system could better meet passenger needs and deliver value for money for both taxpayers and passengers.

Recommendation 7 (para 107–109)

We acknowledge that the Government acted reasonably quickly to ensure train operating companies put in place additional compensation schemes over and above existing Delay Repay arrangements. We do not, however, accept the Secretary of State’s assertion that the additional schemes have ensured passengers were compensated straightforwardly and quickly. The schemes have complicated eligibility rules and place the onus on passengers to make a claim through relatively complex processes. Non-season ticket holders were not able to apply to Thameslink’s and Great Northern’s schemes until 30 November, more than six months after 20 May.

Although the special compensation schemes were complicated for the rail industry to design, season ticket holders have been able to use the claim processes provided. On GTR, for example, 84% of season ticket holders who were known to the TOC and sent information by email about the claims process, successfully claimed the special compensation. According to a survey by Transport Focus, 89% of passengers who had used Thameslink and Great Northern services during the period of disruption following the May timetable changes had at least heard of the special compensation scheme (www.transportfocus.org.uk/news-events-media/news/watchdog-urges-thameslink-great-northern-passengers-claim-compensation/).

A similar survey by Transport Focus of the special compensation for season ticket holders on Northern and TPE found that amongst eligible passengers, 87% had heard about the special compensation. The majority of these passengers who believed they were entitled to compensation had already made a claim; and the majority of those who had made a claim said they found the compensation process easy (https://www.transportfocus.org.uk/research-publications/publications/additional-compensation-offered-northern-transpennine-express-season-ticket-holders-transport-user-panel-survey/).

The special compensation scheme for regular travellers who were non-season ticket holders was completely novel in its design, which is why this was introduced after the scheme for season ticket holders.

While it may be the case that it would be theoretically possible for the worst-affected passengers to claim around 10% of the cost of their annual season ticket, this would require them to navigate the additional compensation scheme and make individual claims for each delayed service. In the chaos of this summer, when at points it was not clear that significant portions of the railway were operating to any timetable at all, this would have been virtually impossible. Even if passengers were able to make the claims, in many cases the level of reimbursement would be insufficient to compensate for additional costs incurred, such as for taxis and additional childcare, and unmonetised costs to working and family lives.

The Government encouraged passengers who were disrupted on GTR, Northern and TPE following the introduction of new timetables in May 2018 to apply for Delay Repay compensation in the normal way in addition to the special compensation scheme – and many did so successfully. For example, GTR proactively contacted season ticket holders whose information they held to inform them of the special compensation scheme, with a pre-populated claim form. In each case, the eligible delay was measured relative to the arrival time in the timetable.

The events of this year demonstrate an overwhelming case for automated, or automatic, compensation schemes. We therefore welcome the Government’s announcement of stronger obligations on future train operating companies within the franchising system, including the provision of simple, one-click automated schemes enabled via smart card registration or smart phone apps. The key to this is successful roll out of smart ticketing technology across the network, which the Government has committed to achieve by the end of 2018.

The Government agrees that compensation schemes should use automated processes to expedite the claims process and the processing of those claims. The introduction of simple and speedy “one-click” automated claims systems, available via smartphones and smartcard registration, forms part of stronger obligations for train operators under future DfT-awarded franchises, ensuring that passengers are more aware than ever of their right to compensation. An advantage of the “one click” claims process over automatic compensation schemes is that it involves a check to ensure that the person claiming the compensation experienced the delay, thereby avoiding payments being made to people who weren’t in fact affected.

The Government must now set a measurable target for implementation of “one click” automated compensation schemes on commuter rail routes. These schemes must be written into contracts as they are re-let. Those who suffered most in the timetabling crisis should also benefit from automated compensation schemes as soon as possible.

As announced on 1 October 2018, the Government will mandate new DfT franchises to introduce a simple “one click” automated claims system, available via smartphones and smartcard registration, to make claiming compensation easier for customers. The introduction of this system forms part of stronger obligations for future train operators under DfT-awarded franchises, ensuring that passengers are more aware than ever of their right to compensation.

Passengers who were disrupted on GTR, Northern and TPE following the introduction of new timetables in May 2018 were encouraged by Government to apply for Delay Repay compensation in the normal way in addition to the special compensation scheme – and many were successful in doing so. In each case, the eligible delay was measured relative to the arrival time in the timetable.

We recommend the Government ensure, through franchise renegotiations if necessary, that smart automated compensation schemes are piloted are on Govia Thameslink Railway, Northern and TransPennine Express commuter routes by the end of 2019.

The Government is currently working to encourage automated or “one click” compensation across all English franchisees, taking into consideration the technology in place in each and the requirements of the relevant franchise agreement — a number of which already require significant automation of compensation processes. GTR, Northern and TPE have made good progress in relation to one-click compensation. GTR introduced “one click” compensation for smartcard holders in summer 2017. Northern provides automatic compensation for holders of advance tickets that are purchased from the operator and is planning a similar scheme for season ticket holders; and TPE is also currently developing comparable schemes.

Meaningful consultation and proper impact assessment

Recommendation 8 (para 127)

A key lesson from the May 2018 timetable change is that a significant proportion of rail users do not feel the industry is listening to them and taking proper account of their needs. If trust in the railway is to be restored the rail industry must substantially improve its engagement with passengers, including through ongoing and meaningful consultation on proposed service changes. Good practice, such as Govia Thameslink Railway’s active engagement with Rail User Groups on the design of some its services, exists but the broader approach to passenger consultation is patchy at best and perfunctory at worse. The Department for Transport’s rail franchising teams must more actively ensure that all passenger rail franchisees adopt best practice and innovative approaches and adhere to their contractual obligations to consult on all significant service changes.

The Government agrees with this recommendation. The Government agrees that GTR’s active engagement with rail user groups over a sustained period of time, both before and after the timetable change, should be held as a model of good practice that it will encourage other operators to follow. The Government notes that Northern followed a similar model of good practice, consulting widely with stakeholders and user groups across the north of England. However, due to reasons outside its control, Northern was not able to deliver the timetable that passengers rightly expected and instead had to deliver a very different timetable that does not meet the needs of many passengers, particularly in western parts of Northern’s network. The timetable that Northern consulted on is now planned to be delivered in May 2019 following completion of infrastructure works.

Whilst it is not always possible or practical to consult widely on short-term changes, the Department will actively encourage operators to build on the good practice displayed by GTR and Northern, and encourage more innovative methods to engage more passengers.

Recommendation 9 (para 128)

Future national rail timetable changes must adhere to agreed timescales and allow sufficient time for meaningful consultation with passengers.

The Government agrees that national rail timetable changes must adhere to agreed timescales and allow sufficient time for meaningful consultation with passengers. In preparation for the timetable changes that at the time were planned to be phased in over the course of 2018, GTR carried out the most comprehensive consultation exercise ever undertaken by a train operator with nearly 30,000 individual responses and hundreds of local stakeholder meetings. Feedback from this exercise had a material impact on the timetable plans and led to many changes for the benefit of passengers.

However, the Government also accepts that consultation was not carried out for the temporary changes affecting East Midlands and Thameslink passengers at peak times on the Midland Main Line. This is because the need for these changes became apparent too late in the process to allow time for meaningful consultation. Government instead focused the industry on delivering meaningful mitigation and ensuring that, where possible, capacity was maintained.

Recommendation 10 (para 129)

As set out earlier in this Report, the industry and Network Rail have now adopted a more cautious approach to national rail timetable change in December 2018, and possibly beyond. We recommend the Department for Transport use this period of relative stability to re-assess the effects of the May 2018 timetable change, identifying stations that have lost a significant number of services, particularly at peak times. The Department and Network Rail should work with the operators and engage with passengers to design mitigations that better meet the needs of people travelling to and from the worst-affected stations. Evidence to our inquiry suggests these will include Sheffield, Hitchin, Harpenden, Luton Airport Parkway, Leagrave, Harlington and Flitwick

The Government agrees that it should work with operators to assess the effects of the May 2018 timetable change. Since the timetable stabilised in July, the Government has been actively engaged with operators to identify stations that have had a material degradation in service or indeed an improvement that is not working as efficiently as it could, in order to ensure that future timetable changes continue to build improvement into the system.

Of the stations identified by the Committee:

The operators are best placed to lead engagement with passengers or their representative user groups to ensure that timetable changes meet the needs of the travelling public. The Government agrees that, where appropriate, operators should be supported by Network Rail and the Government to develop appropriate and effective mitigations where these are practical.

Published: 18 February 2019