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MPs condemn government for ‘woeful’ franchise monitoring

The government’s handling of its contract with Govia Thameslink Railway (GTR) to operate the Thameslink, Southern and Great Northern franchise since it was introduced last year has been sharply criticised in a new report by the Transport Select Committee.

GTR had the lowest performance and punctuality measure (PPM) of any company for four consecutive months this year, and was forced to cancel Southern 341 services a day to try to gain control of the franchise.

The committee criticised the DfT for showing a lack of foresight in its franchising deal with GTR.

It welcomed the department’s admission that it had been a mistake to amalgamate the Southern, Gatwick Express, Thameslink and Great Northern franchises into “one huge, diverse and highly complex rail franchise” at a time when the network was undergoing substantial development through the Thameslink Programme, particularly works at London Bridge.

However, it said that the department’s failure to question “wildly inaccurate” planning assumptions from about how it would deal with the London Bridge works “raises serious questions about the department’s competence to run an effective franchising programme”.

It also found that GTR discovered it had insufficient staff to run services as soon as it took over the franchise, with 607 drivers instead of the 650 needed. The report said this was “unacceptable” and revealed “serious inadequacies in the process for handing over a franchise from one franchisee to another”.

GTR attributed the shortages to higher than average driver turnover and lower than average driver productivity.

The committee said the DfT, in collaboration with Network Rail, the Association of Train Operating Companies (ATOC) and a passenger group, should carry out a review of lessons to be learned from the Thameslink Programme by summer 2017, and that the government should carry out an assessment of the problems with the handover of the franchise.

Southern strikes

Regarding the ongoing RMT strikes in protest at plans to expand driver-only operated (DOO) services, the committee said that GTR, RMT and the government were all “to some extent culpable”.

It said that the DfT, given its “unusually direct” involvement in the franchise, should play “a greater role in fostering negotiations”.

It expressed concern that strikes are ongoing despite DOO being approved by the RSSB and ORR, but also said an assessment of its safety for disabled passengers is needed.

Louise Ellman MP, chair of the committee, said: “The individual voices of customers suffering woeful service on Southern Railway, in particular, came through loud and clear during our inquiry.

“GTR, RMT and the government are all culpable to some extent for the prolonged dispute, but passengers have borne the brunt.”

DfT should make ‘clear and credible threat’ to terminate agreement

Furthermore, the committee found that the department had failed to demonstrate that it has a firm grip on monitoring GTR’s contractual obligations.

The department amended GTR’s cancellations benchmark in November 2015 and in a remedial plan introduced in February 2016, but did not publish this information transparently, which the committee called “completely unacceptable”.

The committee said the department should require GTR to publicly report its performance against each of its contractual performance measures in each reporting period since the commencement of the current franchise and on an ongoing basis.

GTR has applied for force majeure, where a contractor says it is not meeting its contractual obligations for reasons beyond its control, on the grounds of ‘official and unofficial strike action’.

The DfT has indicated it will not assess this claim until the industrial dispute is resolved, despite RMT threatening strikes until December.

The committee said this could “disincentivise” GTR from resolving the dispute, and that the DfT should begin a thorough assessment as soon as possible.

Charles Horton, chief executive of GTR, said: “GTR has submitted claims for force majeure to the DfT caused by the unprecedented industrial action and we have co-operated fully with what’s been asked of us at all times.  We have been in discussions with the DfT to agree what and how they wanted to allow them to assess and evaluate our claims.  It’s an extremely detailed process which the report accepts is “complex and painstaking”. These claims are currently being reviewed by the Department.

 “We will now fully review the report in detail and consider its contents.  We remain committed and determined to modernise the railway and deliver a better service for everyone.”

The committee also said the DfT should be able to give a “clear and credible threat” to restructure or terminate GTR’s franchise agreement if it cannot meet its contractual obligations, and develop contingency plans, for instance for a takeover by Transport for London.

Mick Cash, general secretary of the RMT, said the report was “an indictment of the failure of rail privatisation” and repeated the union’s calls for Southern to return to public ownership.

In the meantime, the committee recommended giving Southern passengers automatic compensation for delays. It also said the DfT should provide further detail on whether the promised £20m for the franchise is new money and what it is intended to achieve.

Ellman said: “We welcome government's decision to launch an enhanced rail compensation scheme on GTR. It's taken ministers some time to acknowledge the difficulties faced by passengers, but the Delay Repay 15 scheme will offer compensation when trains are more than 15 minutes late.

“Now ministers need to be more hands-on with monitoring franchises, and sort out the Southern Railway mess in particular.”

A DfT spokesperson said: “We monitor closely the performance of all rail franchises and each franchise agreement contains clear penalty regimes for repeated poor performance.

“Improving rail services for Southern passengers is a priority for the government and for the operator, and we are committed to a railway that delivers the modern, accessible and reliable service passengers expect.

“Simply changing the management or taking the franchise from GTR would not address the issues and would only create uncertainty and cause further disruption. It could also delay the introduction of modern, more spacious trains by Southern.”

More generally, the committee criticised current methods of assessing TOC performance. It said that the National Rail Passenger Survey is inadequate because it only represents a narrow snapshot of passenger experience, and that PPM is an inadequate measure because it encourages train companies to miss stations in order to make up time.

It also criticised the rail industry’s failure to address concerns about the ticketing system, saying it “raises questions around the adequacy of governance and regulatory structures, and consumer protections”.

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