04.01.13
MPs call for different approach to fares
The DfT should create a more modern and flexible ticketing system and rule out further fare rises for commuters who must use peak-time trains, MPs have recommended.
The Transport Select Committee has published its Rail 2020 report, examining Government proposals to reform the railways. While the committee supports Sir Roy McNulty’s general approach to achieving savings, it calls his £3.5bn savings target by 2018/19 “challenging”.
On franchises, there is “merit” in continuing with longer contracts, but the report suggests that Government should explore options for reviewing contracts every five years, looking at spreading premium payments over the full length of each contract.
The DfT should also consider delegating the letting and management of rail franchises to an arm’s length body with more commercial expertise, and franchises should be designed to deliver wider policy objectives, such as the promotion of sustainable end-to-end journeys, or quality of passenger experience.
A separate report is planned on the lessons to be learnt from the West Coast case.
The report recommends that the government vision must include clarity of purpose and effectiveness of rail subsidies, with a clear link between rail policy and other aspects of transport policy.
Additionally there should be a strategic approach to policy making, greater transparency about costs, more modern and flexible fares, ruling out rises for commuters, and devolution of some franchises – such as Northern – to local or regional bodies.
Louise Ellman MP, chair of the Transport Committee said: “The number of rail passengers has increased but train companies’ unit costs have not come down. The Government wants to reduce the cost of the railway to taxpayers, but it must not do so by ramping up fares which can be complex and are often very expensive. Ministers must urgently set out a long-term policy on fares and rule out using higher fares to reduce peak demand for train services.
“There are good economic, social and environmental reasons for the Government to provide a £4bn subsidy to the railway, but to drive efficiency savings across the sector the Government and the regulator must shine a light on complacent management, waste and profiteering by ensuring greater transparency in the finances of the rail industry.
“It is vital we know far more about how public money is spent so that there is confidence it does not leak out of the system in the form of unjustified profits. The Government should publish and consult on a clear statement of what the subsidy is for and where it should be targeted. Commercial confidentiality should not be used to block legitimate requirements for information.
“If train operating companies do not realise substantial efficiency savings over the next five years, then the case for more far-reaching structural changes to the industry will become compelling. Changes to the numbers and duties of station staff should not be pursued solely to reduce costs or at the expense of passenger safety or service quality. The Office of Rail Regulation (ORR) should also monitor safety where Network Rail and train operating companies have formed alliances, ensuring these arrangements reflect the interests of taxpayers and passengers.
“Confidence in the DfT has been badly shaken by the collapse of the West Coast Main Line franchise. We are not convinced that the DfT as currently structured is best placed both to set rail policy and deliver the detailed work required to run each franchise competition. A new arms-length franchising body could employ staff with the appropriate specialist and commercial skills required to let and manage effective franchise contracts. However, ministers must remain fully accountable to Parliament for the railway.”
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