RFG0026 - Evidence on Rail franchising

Written evidence submitted by North East Combined Transport Activists'

Roundtable (NECTAR) (RFG0026)

We sum up our response as follows:

A Generally, rail users value passenger services that run well, connect (if need be) reliably, are comfortable, speedy and moderately-priced.

B Competition between/among different operators along the same stretch of track is largely irrelevant to them. Co-operation between different ones

to provide a high over-all level of smooth service, with seamless transfer (train to train, train to bus, etc) is of infinitely greater importance.

C The increasing levels of air pollution call for (broadly speaking) less road vehicle use and more (electrically-operated) rail use for passengers and freight alike.

D Britain's privatised rail network, though containing much of merit, throws up difficulties and anomalies to the point where we do not believe that increasing its competitive nature would help anybody at all.

We turn now to our more detailed response.

Introduction

1. NECTAR (North-East Combined Transport Activists' Roundtable) is an open, voluntary, umbrella body, established to provide a forum in which the many organisations with an interest in sustainable transport, in all its forms, can develop a co-ordinated view on contemporary transport issues. The NECTAR area of interest covers the North-East of England, from the North Sea Coast to the Pennines, and from the Scottish Border to North Yorkshire.

2. We are pleased to have the chance to submit our comments on this Inquiry into Rail Franchising, not least because the protracted process of re-franchising both Transpennine and Northern Rail has called for a great deal of time and attention from NECTAR, Railfuture North East branch, and the Rail User Groups within the territory defined in §1 above. We add that, over 10 years ago, we also saw, firstly, how a North-East based open access operator, Grand Central Rail, went about its quest to obtain running rights between Sunderland and London, and, secondly, how these rights were challenged almost at once by GNER, the then operator of the East Coast Main Line Anglo-Scottish rail passenger services, in spite of the fact that GNER ran no train services to Sunderland, and openly declared at the time that it had no intention of doing so.

Preliminary matters

3. Before we comment on each of the Terms of Reference in which the Transport Select Committee has expressed interest, there are two separate issues that any discussion of rail franchising must look at. One is the nature of the process itself - important largely, but not exclusively, to actual and potential bidders. The other is the effect that the franchising system adopted for the UK has on the varied rail experiences offered to all users, current and potential, of rail passenger services in the British Isles.

4. On the first issue, the extent to which potential franchise bidders consult the travelling public varies enormously.We in the rail user groups are glad to help here, but that still leaves an enormous proportion of the nation's regular passengers who, by preference or by default, have said nothing to the bidders about what sort of a rail service they want. Even when we do get a chance to put our views, the nature of the process, laid down, as we understand it, by the Department for Transport, usually means that a bidder simply listens; rarely does its representative give any hint of how far what we are asking for corresponds to the bidders' own views and/or aspirations. It is not easy to see how this situation may be effectively improved; but we strongly urge that consideration

be given to doing so in future.

5. The second issue, to judge from the Terms of Reference listed, is the evident mis-match between rail users' experience of a train service and the nature of the discussions between DfT and bidders that have resulted in it. Frankly, as far as we can see, the average rail user judges his/her travel experience against a number of criteria - service-frequency, reliability, punctuality; ease of buying tickets and finding out information in general; fares levels, overall journey-length, and comfort levels on board. None of these has anything obvious to do with either the transfer of financial risk to the private sector, or the promotion of competition in the market. Indeed, talk of a 'market' seems to us to be an unnecessary and irrelevant distraction. Few are the lines on which a sudden failure of operator A's booked train to turn up leads to the virtually-instantaneous appearance of operator B's near-identical replacement train at exactly the time and place of the failure. So what, we respectfully ask, does the Select Committee mean by 'competition' in the context of day-to-day rail operation?

6. We consider that, insofar as provision of public transport may be characterised at all, e.g. as nationalised or privatised, it must be regarded in a way similar to that expressed a few days ago by the prime minister concerning broadband provision - as a "universal service obligation". [The same goes for stage-carriage bus-services, with the emphasis on "universal" as distinct from "only between the hours of 8.0 and 18.0", but that, of course, is not what this Inquiry is about.] Not everybody wishes to use trains or buses, it will be counter-argued; but what evidence has the government or anyone else that 'everyone' wishes to use broadband?

Consideration of the Terms of Reference

TR1. The extent to which the DfT's approach to rail franchising is achieving its key policy intentions of transferring financial risk to the private sector and promoting competition in the market, while at the same time improving passenger experience.

7. We strongly question how far rail franchising as a process is even working successfully on some lines. The much-prized East Coast main line has seen not one, but four, distinct operators since rail privatisation began some 20 or more years ago - GNER, National Express East Coast, Directly-Operated Railways, and now Virgin Trains. Two of these operators notably failed to abide by the agreement that they had made with the DfT, alias the government of the day, and gave up in disarray. The third (DOR) is reported to have managed the task of providing passenger rail services along the rail routes specified with most overall efficiency, as evidenced by the financial results that it achieved. What is more, DOR succeeded in transforming the demoralised workforce it inherited from National Express into a well-motivated, customer-service-focused operation. Many in the country were disappointed to see how the government, in spite of this achievement, insisted on going back to a full re-franchising process, time-consuming and expensive, regardless of whether such a process would be in the interests of rail users present and future or not.

8. See also our remarks below [§16] on the real nature of competition in transport - that between private, individually-owned means of travel and public transport in its several guises. It is not, in our view, anything to do with encouraging multiple operators on the same length of track (or, indeed, over the same road routes). All that arises from multiplying operators along the same track mileage, each with their own rules, fares levels, and range of services offered, is maximum confusion and frustration when faced with a necessarily self-contradicting list of fares and conditions of travel. Even

in the limited context of York-London services run by either VTEC or Grand Central, the warnings voiced while trains are waiting to leave London (northbound) and York (southbound) of the consequences awaiting any passenger whose ticket was not issued by that train's operator are simply tiresome, even to experienced travellers. They remind us every time of the defects of privatised rail operation. What they must do to newcomers to a rail service we do not know, but they can hardly endorse the advantages of trains over private cars.

9. We wish to draw the attention of the Select Committee to some of the more irritating anomalies that persist among the passenger rail services in the north-east at present. How far they arise from privatisation as such, never mind competition in the market, is difficult, if not impossible, to work out; but they do not boost confidence in the DfT's skill in "improving passenger experience".

(a) The impossibility of catching a train that links Stockton, Eaglescliffe, Yarm and Northallerton, despite all being quite close to each other on the same stretch of line - and paralleling a very busy A19 road that has had to be widened more than once to cope with traffic congestion. Ostensibly, this is because the first two are Northern Rail, the others Transpennine (and also VTEC in Northallerton's case).

(b) The near-impossibility of catching any one local train north from Newcastle that links Cramlington, Morpeth*, Alnmouth*, Chathill, and Berwick* (i) at all and (ii) operated by electric rather than diesel units, when the whole section has for years been under the wires. (Stations asterisked do have direct links, but these are usually Cross-Country or VTEC long-distance services. And few of them call at all 3 asterisked stations on the same journey, the point of this criticism.)

(d) The complete absence of rail access to Middlesbrough football ground (Riverside, opened in 1996 to replace Ayresome Park), despite its being next to the line to Saltburn, and that to Whitby diverging just a few yards west of it. If privately-financed rail services were the panacea that the terms of this Inquiry seem to imply, somebody would have put a rail halt alongside the ground from the day it opened. As it was, a nearby closed station, Cargo Fleet, was demolished, rather than be adapted as a (slightly less convenient) rail access for football supporters.

(e) The impossibility of catching a train connecting Middlesbrough with Newcastle along the shortest rail route, via Stillington and Durham. However, all being well, and as long as the recent Competition and Markets Authority's challenge to Arriva does not succeed, the range of Northern Connect express services should include a remedy for this nonsense as from 2019. Even so, the other opportunity to speed up rail services between Tees-side and Tyneside, by diverting some of the promised extra Transpennine services to Newcastle via Stockton and this same line, instead of sticking to the busy route through Darlington, has been discouraged, not because of lack of potential patronage (Stockton would also gain a faster direct link to York by such a diversion), but because the loss of ORCATS revenue would be an irresistible handicap. So much for "improving passenger experience" if a Tees-side station is involved.

See also §§19, 20 and 21 below for more general comments on these neglected rail lines.

(f) The complete nonexistence of any through train services from Sunderland along the Coast line to Northallerton and York that call everywhere, as distinct from Grand Central's very welcome expresses that, since late 2007, have made intermediate stops at Hartlepool, Eaglescliffe, and Thirsk. This again results from the arbitrary separation, in and from 2004, of Transpennine services from those of Northern Rail, meaning that everyone from Stockton (pop. 100,000+), Billingham (pop. 35,000+), and Seaham (pop.25,000+) has to go via Thornaby and a change of train - involving also, since May 2014, a 50-minute wait in most cases - instead of being able to ride through, as would be the case with towns of similar size on lines just about everywhere else in the UK.

(g) The similar nonexistence of a proper express service from Redcar Central (the main station of the 130,000-strong borough of 'Redcar and Cleveland') to anywhere. Local trains serve Middlesbrough for Transpennine connections, and Darlington for everyone else's. They certainly do not venture southwards along the East Coast main line towards York, Leeds or London. It is regrettable that Virgin Trains East Coast did not take the opportunity to add Redcar as another new destination when it asked the ORR for rights to extend its operations to Middlesbrough, and that Transpennine has never, as far as we know, tried to extend its Middlesbrough services to Redcar, either.

10. Whatever historical reasons lie behind these many shortcomings, we are 95% certain that it is the DfT that has so micro-managed the Northern franchises that nobody in rail operating circles has been allowed to put any of them right - at least, not yet. We await with interest the development of the devolved rail management units in North-East England that have been promised greater powers over rail operation than Northern Rail ever had. [In passing, we hope that they work better than did Network Rail's predecessor, which ruled that, after each match at Middlesbrough's Riverside football ground, all train services would stop for about 30 minutes, to allow road vehicles to leave the ground across a local level crossing instead.]

11. It might be relevant, at this stage, to talk briefly about previous efforts to introduce new rail services in and around the UK in general. Anyone proposing such innovations has to run the gamut of a whole range of doubts and discouragements, usually based on the perceived lack of any market for them. All we can do here is cite four examples of this from across several decades, and let the subsequent facts speak for themselves:

(a) reopening the disused underground lines in central London to link north and south bank rail networks. First reaction: "Show me the market." Actual result: the Thameslink network.

(b) introducing, for the first time in rail history, direct passenger services between Middlesbrough, York, Leeds and Manchester, in 1992. Reaction from a prominent transport official in

Cleveland county - "Why on earth are you introducing these?" Present state of the service - often packed out before they leave Middlesbrough, especially on Saturday mornings. See

also §13(a) below.

(c) confident claim by a Northern Rail manager, about 15 years ago: 'there is very little demand for rail travel from Hartlepool on Sunday mornings'. Reality, Sunday May 29, 2016, at 9.45: no fewer than 150 boarding the first Grand Central service to York and London there. Comparably busy loads going north to Newcastle from Hartlepool on many Sunday morning trains.

(d) several rail re-openings in Scotland, most recently that of the Waverley route from Edinburgh to Galashiels and Tweedbank: estimated passenger numbers exceeded weeks and months sooner than the official business case allowed for. Demands already for expanded facilities on this line, just 8 months after it began to run.

TR2. The extent to which the DfT's approach to franchise bid evaluation is striking the right balance between cost, service quality and deliverability.

12. We cannot find out anything directly about the relative importance given by DfT staff to any of these criteria. As rail users, however, we are more than entitled to comment on "service quality", despite the innate ambiguity, as it is the sum of our collective experiences, at stations and on trains, that judges this. On some lines, the quality is low because there are not enough trains to carry the numbers who want them (overcrowding for passengers, hence lost revenue for the operator, thanks to understandable failure to issue/check tickets because it is impossible for a guard to pass through the train). How far this arises from the franchising process and how far from individual operators' bad resource management is inevitably hard to assess. However, we do know, and vividly remember, the circumstances in which the previous "Northern Rail" franchise was set up - a compulsory no-growth policy that soon proved inadequate, in terms of rolling-stock and passenger satisfaction. It is to the great credit of Northern Rail staff that, despite their theoretical limitations, they achieved a vast amount of passenger growth during their 10-year-plus tenure of a franchise whose length was frequently extended at short notice - in itself hardly a good advertisement for the DfT's ability to carry out its franchising duties.

See also TR1 above, and TR3 below, passim.

TR3. (a) The DfT's franchise management capability and capacity, and (b) its ability to cope with high levels of planned franchising activity in 2016 and 2017.

13. (a) Once again, we are faced with ambiguity. Does "franchise management" refer purely to the task of calling for bids, assessing each one, deciding the 'winner', making a highly-publicised announcement, and then leaving the lucky operator to get on with it? Or does it still, as we have experienced in recent years with, e.g. Transpennine, imply day-to-day interference with what a rail operator does? The success of TP's new 3-car class 185 sets led them to apply for permission to strengthen them all with an extra carriage, which was repeatedly refused by a DfT whose understanding of conditions in northern England was clearly limited, to put it politely. Some of us are puzzled by the evident contradiction between claiming that rail services are in the hands of private operators, but that the DfT retains power to interfere with these operators' plans to the point of absurdity. The stated intention, of both DfT and government generally, to 'devolve' operation of rail services to newly-constituted bodies in the English regions sounds very welcome - as long as it is backed up by funding comparable to that allocated to authorities in the south of England, so that the said bodies really can finance the decisions that they wish to take to improve the travelling public's lot. We await developments here, but not all are optimistic on the outcomes. cf. also §10 and §11 above.

14. (b) Clairvoyance is frankly not our forte. Going by past form - notably, of course, the re-franchising on the West Coast main line - estimates of the ability of any government body to carry out punctually and effectively a policy that it wants to implement will rarely be accurate. In many instances this will be for reasons that are beneficial in the longer term, arising as they may well do from a simple oversight that has identified itself early in the process of implementation. Comments on anyone's ability to keep to a tight timetable, when the activity concerned is going directly to affect several million people, rail users or not, seem to us little more than speculative guesswork, and can probably never be anything much different. This 'guesswork' has now been given extra impetus by the recent challenge - uncalled for, in our view - to Arriva and the DfT from the Competition and Markets Authority, of course.

TR4. (a) The costs of bidding for franchises, and (b) the extent to which increasing costs may be dissuading new entrants to the market.

15. Here again, we almost by definition can know nothing about (a) and can only speculate about (b). However, a general point comes to mind, which is that, as a rule of thumb, the greater the number of rail operators serving a particular section of railway, the greater the potential confusion and misinformation about levels of service, types of ticket, and quality of accommodation that can arise. Consider the line between York, Darlington, Newcastle and Edinburgh, about different parts of which various of our members have different knowledge and experience. The operators to be found along it, in whole or part, are Abellio (Scotrail), Virgin Trains East Coast, Cross Country, Transpennine, Northern Rail, and Grand Central. Yet, as far as published timetables are concerned, not a single self-contained document short of the unwieldy (and, apparently, obsolescent) national Rail timetable volume shows every service that applies to a particular station or section of line. How all but the most determined potential user may be expected to navigate among the leaflets of all these operators, even simply to find out if they serve the station(s) (s)he wishes to use, is difficult to see, so that increasing even further the number of operators on any stretch of this line is hardly likely to help. The May 12 announcement from the ORR of more services to begin at various locales on this line, while welcome to the inhabitants of Morpeth, for instance, does not clarify the existing picture in any obvious way. Nor does it help those living off this main line, e.g. in Saltburn, Redcar, Bishop Auckland, or Hexham and intermediate stations, who rely on connections, be they at York, Northallerton, Darlington, Middlesbrough or Newcastle. They face the challenge of juggling fistfuls of potentially confusing (and conflicting) timetable folders each time they want to plan a journey. How this affects the number of new entrants to the market may be of interest to the DfT; how it affects the readiness of possible rail users to give up in despair and jump into their cars instead may well disappoint those of us who want to encourage higher proportions of passenger journeys to be made on rail than in cars, in the interests of reducing greenhouse gas emissions and their like.

16. This, of course, brings us to the main source of competition in the world of public transport (bus, tram and train) - that between services run for the general public and journeys laid on for a private individual providing his/her own transport, possibly with up to 4 others, but certainly not plying for hire. In our view it is far more important that all forms of public transport, rail and road, should do all they can and more to co-operate with each other at all levels, as is commonplace in continental Europe, rather than vying with each other to earn more than their rivals. [In parentheses, we do wonder exactly how many places in this country are really appropriate for linking with competing rail services, and come up with very few - London and Birmingham, for instance, are linked by two quite distinct routes, serving a very different range of intermediate towns. Technically it could be claimed that two operators compete for passengers wanting to go from one end to the other, but that still leaves vast hordes who do not.] As it is, we deplore most strongly the undoubted fact that in this country some operators actually consider it their commercial duty to compete with themselves, in that they run rail services and bus services, neither of which is allowed, as far as we can see, to show any connection with the other. This is a transport policy worthy of Alice in Wonderland - it has no place in a supposedly civilised country, especially in these days of increasing atmospheric pollution from many varieties of transport, rail as well as road. At the risk of invidiously naming names, we cite Arriva trains and buses, particularly, but not exclusively, in north-eastern England. See also our "bullet points" and Introductory Remarks above.

TR5. Actions which could be taken to encourage new entrants to the market.

17. In the light of our remarks in §16, we say nothing here, except that we do not feel that such actions are called for. Indeed, we have seen some evidence that the increasing costs of submitting a bid have put off some who might otherwise have been tempted - notably, by the recent South West Trains franchise process.

TR6. The opportunities, risks and feasibility of a significant increase in Open Access Operators on the rail network.

18. Happily, we have seen some of these in the last few weeks, with new, successful applications by First to run specially-limited-stop express trains between Edinburgh and London, ostensibly to compete with budget airlines. However, another potential new Open Access operator's bid to give Grimsby and Cleethorpes direct links to London again has been disappointed, on grounds of expected 'abstraction' from existing operators. How this can possibly apply to the section between Doncaster and Cleethorpes, on which no other comparable operator is to be seen, is puzzling, to put it politely, and betokens an unfortunate prejudice against new operators, open access or not. We would like to see a more open-minded attitude to new operators on the part of the powers that be.

TR7. Practical recommendations to manage better the effects of rail infrastructure works on rail franchisees, including through improved co-ordination with Network Rail and better management of major infrastructure projects.

19. We are not in a position to make these from first-hand experience, but this TR does give us a chance to expand on the difficulty of persuading operators and the DfT to see some sense over the direct routes between Tees-side and the rest of the network, especially those that have been dormant for decades. In a nutshell, no single operator, freight or passenger, is ever likely to be able to finance the upgradings of the direct routes between Northallerton and Stockton, and Stockton and Ferryhill, to which we refer in §§9e and 9f, above.

20. The Northallerton-Stockton passenger line is limited to 70 mph at best. The onward route, via Stillington back to Ferryhill on the main line, is limited to a top speed of 50 mph.Both of these are, of course, leisurely compared to that on the direct line via Darlington, 110mph and upward. Yet, even as they are now, each line could cut about 20 minutes off the time taken to reach Stockton from (a) Northallerton and (b) Durham (as well, of course, as onward in each direction). As pointed out above (§§9e and 9f), diverted through workings from York to Newcastle via Stockton, while improving journey times beyond recognition for those in Stockton, would delay the through passengers. But, of course, anyone wanting a fast journey from York to Darlington or Newcastle has direct alternatives that Stocktonians probably never will have. Judicious diversion, therefore, of some slower main line trains is unlikely to inconvenience more than a slightly careless handful of 'main-line' passengers.

21. It may not be out of place here to mention that, from time to time, engineering work on the 'direct' main line through Darlington has led to diversions between Northallerton and Durham, with a stop at either Eaglescliffe or Stockton in lieu of Darlington. Locals in the know would seize on these chances to cut down journey-times between Tees-side and Tyneside avidly, to the point where the rail operators made it as difficult as possible to find out their intermediate departure times - or, worse still, they ran such trains non-stop instead. Could anything be a better testimony to their guilty conscience when it comes to serving Tees-side by rail? It certainly does little to show off the merits of a privately-run rail system.

22. We repeat that no single operator can bring about such accelerations from its own financial resources. Network Rail has to do the trackwork; some rail operators (e..g Transpennine, with its newly- announced range of much higher quality, faster train sets) can and will improve the possible speeds at which they can run. Northern Rail could not, by itself, do very much at all, given its earlier constraints (§12, above); the fact that it is now prepared to have a go - so far single-handedly - at improving Tees - Tyne journey times and service quality deserves the highest praise from all in the North East region. It should also now be backed up by firm plans by Network Rail to upgrade lines as mentioned earlier. But, in a competitive atmosphere, rather than one of deliberately planned collaboration, will it? We strongly doubt it.

TR8. Lessons learned from the competition for the East Anglia franchise.....

23. We are puzzled on how to deal with this, even though some of us know something about the East Anglia rail services, and others have access to those living in that area who will in due course be able to comment from first-hand experience. But you have set our closing-date as Friday June 3 - so we can say no more here.

Concluding general comments on the whole franchising process

24. In a sentence, we consider the main thrust of this Inquiry to be inappropriate. It is a classic example, in fact, of a "category mistake" - rail services and stage-carriage bus services work best as public utilities, provided to serve the whole population, not just those who can afford to pay premium fares and/or to drive to a distant railhead to join high-quality and high-speed rail services. Many British critics of European countries' almost unanimous belief in subsidising their public transport, so that as many as possible may use it, fail to recognise that this is not (just) soft-hearted generosity on their governments' part. It stems from a hard-headed policy of reducing use of private cars, and hence avoiding the building of more and more roads, as well as reducing levels of atmospheric pollution. We realise that it does not always work; but, in terms of serving as wide a cross-section of the community as possible, it scores far more highly than the mish-mash of privatised services that remain in the United Kingdom. Increasingly, Britons travelling abroad recognise this - as well as envying continentals their much cheaper rail and bus fares.

2 June 2016