Written evidence submitted by the National Union of Rail, Maritime and Transport Workers (RMT) (ECR0006)

 

  1. The RMT is Britain’s largest specialist transport union.  The RMT has more than 80,000 members from almost every sector of the transport industry. RMT is by some distance the largest rail union and represents all grades of rail workers. Many of its members are employed on the InterCity East Coast (ICEC) rail services. The RMT is recognised by Virgin Trains East Coast, the operator of those services as entitled to conduct collective bargaining on behalf of employees. Operators consult and/or negotiate with the RMT over any changes affecting workers’ terms and conditions of employment, such as staffing and rostering changes.

 

  1. RMT welcomes the opportunity to submit this written evidence to the inquiry.

 

  1. Summary: 

 

  1. In 2005 the franchise for the ICEC line was awarded to the Great North Eastern Railway (GNER), for a term of seven years starting on 1 May 2005, extendable to ten years if performance targets were met. GNER committed to paying £1.3 billion to the Government over the life of the franchise. At the time, many industry commentators including the RMT believed that GNER had massively overbid. In December 2006, the DfT terminated GNER’s franchise after its parent company, Sea Containers Ltd, filed for Chapter 11 bankruptcy protection in the U.S., and GNER indicated that it would default on its franchise commitments.

 

  1. The DfT held a competition for a new franchise, and in August 2007 it was announced that the franchise had been awarded to National Express East Coast (NXEC), a subsidiary of the National Express Group (National Express). National Express committed to pay £1.4 billion to the Government over the life of the franchise. Again, we and many others were of the view that National Express had overbid for the franchise.

 

  1. GNER continued operating the line until the new franchise started on 9 December 2007. On taking over operation of the ICEC line, NXEC made substantial cuts to staff and services. For example, catering cars on trains were removed or downgraded, resulting in a number of job losses. Staff contracts were changed from a 35-hour working week to a 37.5-hour working week, on the same pay. The size of the work force was also reduced further through natural wastage, with NXEC not replacing staff who left or retired.

 

  1. However NXEC remained unprofitable. On 1 July 2009 National Express announced that it planned to default on the franchise and would withdraw financial support from NXEC, allowing it to become insolvent. National Express forfeited just £72 million in guarantees when it defaulted on the franchise: a sum which, although it may sound large, is tiny compared with the total value of the contract. Services were cut, including the direct passenger service between London King’s Cross and Glasgow.

 

  1. The Government took over the running of the ICEC services from 14 November 2009, establishing the East Coast Main Line Company Ltd (ECML) as operator. ECML was a subsidiary of Directly Operated Railways Ltd (DOR), which in turn was owned by DfT. The ICEC line was then the only publicly operated service in the UK.

 

  1. In 2010 the government published a paper called The Future of Rail Franchising which set out the direction in which the Department was considering amending the existing franchising process and discussed the key challenges that emerge as a result of the recent economic downturn, as well as their broader experience of letting and managing franchises. It went on to say “In particular there are lessons to be learned from the experience of the failure of the National Express East Coast franchise. Further changes to franchise evaluation and contract structure that are still being carefully considered, since the interactions between different proposals need to be assessed together. These include a revised system for bid evaluation, and potential changes to the current risk sharing mechanisms”.[1]

 

  1. It further stated “The issue of how financial risk is predicted and managed has been highlighted by the default of National Express East Coast (NXEC) and the subsequent termination of that franchise. The operation of the services operated by NXEC has passed smoothly to the interim public sector operator, East Coast. However the effects of this recession have been considerable for the rail sector, especially where franchisees were previously basing their plans for the business on significant passenger growth as a result of ongoing economic growth”[2].

 

  1. In January 2011 the Government published a response to this consultation in which its revised government policy was now stated at paragraph 12.3 as “The Government believes it is important to clearly set out how a franchise contract will be awarded. It is imperative that each franchise competition makes clear how bids will be judged. This will ensure that the taxpayer receives good value from competitions and bidders know what they need to do to win”. It then went onto say in 12.4 “The key principles for franchise award will be value for money, financial robustness, subsidy/premia and the additional quality offered by bidders (where this is above and beyond the level required by the Department as the core). The exact balance of these factors will vary, however, and the mechanisms for judging between bids will be designed to fit the individual franchise[3] .

 

  1. Needless to say, and the RMT has at every opportunity made this point to Government, the process is neither transparent nor clearly understood by the passengers, public or the staff involved.

 

  1. It also said at paragraph 12.7 in the response to the consultation “Where appropriate, we will redefine points so that they are available only as a reward for additional benefits. In addition, the way in which they are used in assessment will be refined. If more than one bidder meets the wider bid criteria and is offering a good price to the taxpayer, the quality score will be decisive. A wider materiality threshold will typically be used than has been the case in previous competitions. As a result bidders will not have to be so close on price before a significant improvement in quality becomes a determining factor. Consequent changes will be made to the way in which quality and price are traded off in the decision. This will prevent a situation where the process results in DfT paying a relatively high cost for a relatively minor improvement”.[4]

 

  1. In March 2011 the National Audit office also completed its report into East Coast in which it stated as part of its recommendations “The Department announced in January 2011 that changes would be made to the rail franchising system, including the introduction of longer franchises of up to 22 years. In this context, the successful resolution of problems with the InterCity East Coast franchise illustrates a number of key lessons. A Robust stress testing of bids and franchises in operation, against stressed economic scenarios similar to the recession experienced in 2008-09, will identify potential weaknesses in the assumptions that underpin future franchises (report’s emphasis). With a gradual move to longer franchises of up to 22 years, winning bidders and the Department will be taking on much longer-term risks. Bidders should, therefore, be required to set out the effects of a severe economic downturn on their finances and what they would do to ensure the franchisee remains viable. Such a requirement may result in more conservative bids and additional costs for all parties, but the risk to the taxpayer of reduced premium payments can be partially mitigated by the introduction of profit share arrangements in longer-term franchises. Regular updates of stress testing, across all franchises, would also alert the Department at an early stage to the possibility that a number of franchisees might seek to renegotiate contracts at the same time and the size of any additional support that might need to be provided by the taxpayer.”[5].

 

12    The information below from the ORR portal on the East Coast line shows that there was a slowdown in East Coast passenger journeys during 2010-2013 rising only half a million, which was the time that the bidders would have been preparing their bids and information like this would have been shared with the bidders. Whilst the figures are improving gradually there would be no obvious reason to believe a huge increase in numbers was about to take place.

 

                              East Coast Passenger journeys (millions)[6]

 

13    In June 2011 the House of Commons Committee of Public Accounts published its detailed report into the Department for Transport: The InterCity East Coast Passenger Rail Franchise. The conclusions and recommendations are very important and are reproduced in full below;

 

1.  The Department did not undertake sufficient due diligence on the bid by National Express for the East Coast franchise. National Express promised the largest ever payment for a passenger rail franchise, but then failed to meet its profit forecasts from the start of the contract and, following the economic downturn, quickly started to accumulate losses. Crucially, the Department did not test any of the bids for the franchise against the impact of an economic downturn. The Department should always test bids in future against different economic conditions. This becomes more important with the move to much longer franchises of up to 22 years. The Department should improve its arrangements with franchisees to remove any incentive on bidders to make forecasts which are either too optimistic, thereby increasing the risk that the franchise might fail, or be deliberately pessimistic, thereby increasing their expected profits. For instance, the Department should have been more rigorous in questioning National Express on its assessment that it could grow passenger revenue by 5%-12% per annum. By any measure, this appears to be an over-optimistic assessment of the business.

 

2.  In public ownership, the franchise is now performing better than expected but the Department has still foregone some £330 million - £380 million of expected revenue. Unlike other train operators, which continued to bear losses during the economic downturn, National Express did not have the resources or the inclination to fulfil the terms of its contract. The holding company had accumulated more than £1 billion in debt and needed to refinance this debt following the downturn. Part of the company's solution to this was to avoid heavy forecast losses on the East Coast franchise by negotiating with the Department to leave the contract. The Department should in future take greater care when assessing the financial strength of a company to ensure it will be able to support any of its franchises that get into financial difficulty. Specifically, the Department should avoid letting franchises to heavily indebted holding companies.

 

3.  The Department entered into negotiations demanding the surrender of National Express's other two franchises when they could not legally demand they do so. After National Express sought changes to the terms of the contract, the Department offered a deal requiring a payment of £200 million and the surrender of the company's other two franchises. However, legal advice indicated that the Department did not have a right to terminate the company's other two franchises and so ended up leaving them in place. Contracts should give the Department a clear right to terminate a holding company's other franchises.

 

4.  National Express paid £120 million to get out of a contractual obligation to pay the taxpayer £1.4 billion. The penalty National Express paid to the Department amounted to less than 9% of contract value, which leads one to question whether the taxpayer has been adequately compensated. This compensation is further reduced by the extension granted to the other two franchises and the additional revenue support given by the Department. The Department should ensure that there are stronger financial penalties in contracts for failure to meet contractual obligations.

 

5.  The Department turned down an offer from National Express of an extra £30 million for a "no fault" exit. It judged that accepting such an offer would have increased the risk of other franchises seeking a similar settlement, costing the Department and the taxpayer £140-£280 million in the long run, according to the NAO. The Department wanted the reputational damage for National Express, of having one of its franchises terminated, to act as a clear warning signal to others. But the Department undermined that position by telling National Express just over a year after the termination that the failure would not be held against the company if it bid for future franchises. Since the East Coast termination, other franchises have been in financial difficulty, and the holding companies have not sought to hand them back. However, the Department has potentially incentivised other holding companies with loss-making franchises to terminate, rather than renegotiate, their contract with the Department, as they know doing so will cost them less and will not affect their ability to compete for other contracts. The Department should make it clear to holding companies that failure to deliver obligations will have serious lasting implications.

 

6.  Following a period of deterioration, punctuality on the line is now beginning to improve and investments are being made in new technology, fleet maintenance and customer service. The unfortunate recent history of the franchise may well have caused under-investment in a service described to us as the "jewel in the railway crown". The investment of taxpayers' money while the franchise has been in public ownership should help to secure a good deal when it is retendered to the private sector in 2012. We expect the Department to ensure that this investment is fully recovered.

 

7.  Forecasts of future passenger revenues across the rail network have frequently proved inaccurate. The high proportion of discretionary business and leisure travel on the East Coast line offers commercial opportunities to attract new passengers but makes revenues susceptible to changes in the economy. Forecasting is not straightforward as it depends on assumptions about the number and types of future journeys as well as the prices charged. However, such complications are hardly new and we have in the past highlighted the poor quality of data on passenger journeys. As more sophisticated data on passenger journeys becomes available, the Department should validate the assumptions that lie behind passenger revenue forecasts for each franchise. These should feed this into its wider budgeting for the amount of support that may be required from the taxpayer.[7]

 

14    The Report clearly stressed in point 1 “The Department should have been more rigorous in questioning National Express on its assessment that they could grow passenger revenue by 5%-12% per annum. By any measure, this appears to be an over-optimistic assessment of the business”.

It also published the following graph which clearly highlights the problems the bid evaluation had not been able to see or refused to address.

 

Figure 1: East Coast franchise cumulative profit and loss December 2007 to October 2009

 

east coast

 

15    In Oral Evidence to that committee the transcript shows that the scale of the DfT failure was a shock to even the members of the committee

 

Chair Margaret Hodge MP: Page 20, and you see, from the word go, they never met any of their projections. So, something leaves me thinking, “What on earth were we doing signing this contract at this level with these guys?”— Their level of indebtedness, their failure right from the word go to meet the projections, and this may have been different circumstances but our knowledge that this was a line where we had already had a failure.

 

Permanent Secretary, Department for Transport Lin Homer: I think there is a very appropriate challenge from the NAO and from you overall about whether, as we go forward, we stress-test differently and against different scenarios. I think that the judgments made at the time were tested against deliverability, and your point about the level of indebtedness was dealt with by both the size of the performance bond that was taken and by the requirement of a subordinated loan. So, certainly, judgments were made about the level of indebtedness that the company was seeking to carry. I think it is possible, with hindsight, to say that we could and should have tested against a less successful outcome of the general economic position, but I think most of the Committee and most observers will be aware that, at that stage, it was not generally predicted, and your suggestion that we might in future require bidders to test themselves against a much more severe economic downturn is something I think we need to give thought to. The difficulty that you have got and the balance you have got to strike here is, if you do mitigate against what seem to be unlikely circumstances, by the nature of this process you are going to limit the commercial advantage of testing it competitively, so I think we do feel we have got to take your challenge seriously about looking at our stress-testing, but I think we made a reasonably sound assessment of what they were doing at the time. And I think you are right: there is a degree to which you can always use hindsight to look backwards, but I think the provisions put in place were reasonable in the circumstance[8]

 

16    The InterCity East Coast franchise competition, which began in October 2013, was the first the Department carried out from start to finish under its revised objectives and processes.

 

17    The National Audit Office when it reviewed the Department for Transport ‘Reform of the Rail Franchising Programme’ in November 2015 was pleased with the outcome of the process. The key findings stated “The Department has addressed the issues that contributed to the cancellation of the InterCity West Coast franchise competition in 2012 and has made progress in rebuilding its reputation within the rail industry. In particular, the Department has established a Passenger Services team to focus on franchise letting and management; improved the transparency, consistency and clarity of information provided to bidders and the public; and strengthened the assurance and governance of franchising. To continue to improve the programme the Department has started to apply lessons learned from completed competitions and feedback from bidders”.[9]

 

18    It stated in these findings at point 8 “The competitively awarded franchises, if managed well, could increase returns to the taxpayer. Overall, for the three completed franchise competitions, operators are contracted to pay the Department 82% more than the Department’s estimate of what would have been paid under the terms of the previous franchises. This does not necessarily mean that it will achieve similar returns in all future competitions. To mitigate the risk that franchises fail because operators’ bids are overambitious, the Department challenges bidders’ assumptions about forecast costs and revenues. The Department also requires bidders to provide guarantees in the form of parent company support that returns to the taxpayer will be protected if costs turn out higher and revenues lower than forecast”[10]

 

19    The NAO also reported in a Box 1 headed:

The Department’s process for testing the financial robustness of bids “The Department carries out risk adjustments to elements of a bid which it feels present a significant risk of a materially different financial outcome to that proposed by the bidder. The Department requires bidders to provide underwritten guarantees of financial support from their parent companies. This aims to protect the taxpayer from the risk of lower premia or higher subsidies than had been contracted. This support is also intended to discourage bidders from submitting overambitious bids. Bidders are required to commit a minimum level of financial support, but can increase this if they feel it would improve the financial robustness of their bids. Bidders are not allowed to offer additional finance during the competition. The Department tests whether the risk-adjusted bids and levels of parent company support result in the bid remaining within a defined set of financial ratios for the duration of the franchise. The Department then assesses the overall risk of default of each bid. Bids that are judged ‘high’ risk are disqualified.”[11]

 

The results from that process are shown below.

 

           East Coast comparitor

[12]

 

 

20    Any rational examination of the projected income and scope for premia on East Coast in the economic climate at that time would have had to seriously question why the ‘anticipated’ is so widely at variance with the comparator. The answer has to lie in the assumptions made by the company in its bid and the Department for Transport in its comparators. Clearly the Departments long term forecast model which projects current performance into the future needs to be urgently assessed.

 

21    Based on the figures provided in deposited paper Dep 2015-0247 on the 3rd February 2015 showing the franchise payment profile for all train operating companies until 2023 the figures for East Coast the show some remarkable increases on the previous year’s premia payment, which many commentator’s again found unrealistic. For example in 2019/20 the payment of £337 million increases in 2020/21 to £440 million. This is an increase of more than 30%. Other increases are equally bizarre.

 

 

 

22    In comparison the achievements of Directly Operated Railways were impressive but grounded in a reality that reflected a commitment to quality service and not just profit. As can be seen below the payments made to the government by DOR increased by nearly 7% a year until the last two years which were about the same. There has never been any explanation as to how VTEC intended to achieve after one year an increase of nearly 35%.

 

 

23    It was something RMT commented on at the time, warning that “the ‘fantasy figures’ mirror the predictions from the previous private East Coast operator National Express which never materialised - they promised to pay £340 million in 2013/14 but walked away in 2009 when even the reduced sum of £133  million was too much for them. Virgin’s promise of £623 million is just a hairs breadth under a whopping 200% increase on the £210 million that they plan to pay this year. Such an increase is something no other franchise is predicted to achieve”.[13]

 

24    Using the above report as its reference The Public Accounts Committee on the 26th February took oral evidence on Rail Franchising in the UK Martin Griffiths Chief Executive of Stagecoach who tried to explain why, in the words of Meg Hillier MP, the Chair of the Committee “you got your forecasts so wildly wrong for the franchise?”

 

25    Martin Griffiths (MG) at one point (Q59) says “To make sure you understand the process here: we started putting this bid together at the back end of 2013; the shortlists were around the beginning of ’14; the invitation to tender came out in March ’14; we put a bid in in June ’14; and we were told that we were going to be awarded the contract six months later, in December, with the franchise to start the following March. We all know that bidders are on risk from the time you submit your bid—you are on risk for revenue.

 

26    The Chair asks at Q61 “So you didn’t know the revenue issues until you actually took” and MG interrupts to further explain “Not fully, until you are fully taking charge of the business. There clearly were signs of things starting to slow down—we run other railways. But it got much more pronounced thereafter. As I said, the base we inherited was lower than we had assumed when we bid”.

 

27    That is surprising to say the least as in Directly Operated Railways Annual report up to 31 March 2015 the Chairman in his section states “DOR’s obligations to the DfT have been met in full, and as a consequence, responsibilities for the East Coast franchise seamlessly passed to its successor, Inter City Railways Limited on 1 March 2015. It followed a period of close cooperation with the new incoming management team, and the DfT has indicated that such was the transparency and detail of the information provided through this arrangement, it was a model handover.” [14] 

 

28    Subsequently to the above meeting Stagecoach also submitted written evidence to the Committee on the 5th March “The Committee raised the issue of how extensively we tested downside scenarios in preparing our bid.  I can confirm that Stagecoach and Virgin undertook numerous sensitivity analyses on possible revenue outcomes and we were satisfied that our revenue projections were robust. As part of the bid evaluation, the DfT undertook extensive risk adjustment analysis. This included detailed independent assurance by the DfT's external advisers. In the formal bid evaluation which the DfT provided to bidders, our bid was classed as "low financial risk". As I mentioned in my evidence, we used the best information available at the time in preparing our plans, including the same economic indices forecasts used and provided for the bid process by Government. Unfortunately, several factors have worked against our growth targets since taking over the business, as well as the drop in the financial performance of the business we inherited between submitting our bid and starting to run the franchise”.[15]

 

29    Given that at Q75 when the Chair said at the Select committee “But in any other business, where there are a number of variables, especially in third parties”- Martin Griffiths again interrupted to say “But this is hundreds of millions of pound. You could never have priced that back in. This is a fundamental change to the franchise contract”. Anyone watching his performance can sense his frustration and anger that the revenue projections were not what they expected them to be. All this is a sad echo of the previous public accounts committee in 2010 and its words could be used to form the basis of the conclusions in 2018 when it said “The Department did not undertake sufficient due diligence on the bid by National Express for the East Coast franchise. National Express promised the largest ever payment for a passenger rail franchise, but then failed to meet its profit forecasts from the start of the contract and, following the economic downturn, quickly started to accumulate losses. Crucially, the Department did not test any of the bids for the franchise against the impact of an economic downturn…..the Department should validate the assumptions that lie behind passenger revenue forecasts for each franchise……For instance, the Department should have been more rigorous in questioning National Express on its assessment that it could grow passenger revenue by 5%-12% per annum”.

Clearly someone has again got their figures wrong.

 

30    Staff attitudes to the contractor are important especially when, as with Directly Operated Railways, their model was predicated on the concept that it had to look after its customers. To achieve that objective they knew they had to invest in its people, especially as employee morale was so low in 2009. Employee satisfaction had dropped to 56% and sickness was at an average of 14 days per year. DOR’s 2015 Annual report stated “The management team at East Coast understood the underlying passion in the ‘railway’, and realised that the turnaround would depend on the re-kindling of the passion, and to do that would require an investment to change the culture and provide the right tools to do an excellent job. This was undertaken through more visible leadership, a closer relationship between leaders, management and staff – and a faster pace of change. The changes required for the May 2011 launch of the new timetable and introduction of the new First Class proposition galvanised focus and helped to restore a sense of pride. East Coast’s people were able to believe in themselves once again – and to understand clearly the role each would play in driving improved performance across the whole of the business”. This was reflected in the results of the annual employee survey (measured independently by VaLUENTiS). In 2010 the response was just 52%, but this increased year-on-year, to 88% in 2014. Similarly, the engagement score stood at 62% in 2010, and increased to 74% in 2014 – which is extremely high for the rail sector.

 

31    It is surprising that the DfT evaluation of the Virgin / Stagecoach bid could neither see the problems inherent in VTEC figures or the lack of substance and clarity within the bid to build on and enhance existing staff morale. These were the overwhelming concerns identified by staff when we conducted a RMT member’s survey.

 

32    RMT members of VTEC staff were invited to answer questions and submit comments via SurveyMonkey. Within 72 hours of the 9th March 2018 over 35% of them had responded. The results produced some illuminating statistics about how they felt:     

 

Q 5 Did VTEC staff the contract at an appropriate level to efficiently run the service? 83.59% of our members said NO

 

Q6 Do you believe VTEC submitted a bid that was impossible for the company to deliver? 86.76% of our members said YES

 

Q7 What is your preference for the future? 90.66% of our members said it was for East Coast be taken back into public ownership

 

Q9 If you worked for East Coast when it was in public ownership would you agree customer service was better or worse than under private ownership?

81.23% of our members said it was BETTER

 

Q10 How well do you think the Government has handled the current East Coast crisis. Only 2% of our members thought they had handled it WELL

 

33    RMT received over 286 detailed observations from members of East Coast staff. A separate pamphlet is available to show some of the wide range of comments[16] .This one is similar to many of the other comments but it sets out clearly the full scale of the problem:

“At the time of joining, I felt valued, the customers were well looked after, and the overall service ran well and efficiently. When stagecoach and Virgin took over, they promised staff that they would help us provide a better service for the customers and would help 'take us to amazing'. It became clear very early on that this was never going to be the case. First came the voluntary redundancies and severe cutting of numbers of staff working onboard. They forced through a change in the train guards role, and told the train crew that the train guard was now called the train manager and would form part of the numbers. They paid them an extra £1000 for this, yet it was never going to be realistic. In reality all it meant was that they left the catering crew short and put us in terrible positions, both unsafe (one person with one train manager at times) and made the customers angry as we couldn't provide the service they wanted. Morale started to go down, the company appeared to be top heavy with managers and little pockets of new teams being formed yet the front line service was suffering. There are so many issues we all face on a daily basis now, unsafe staffing numbers, cheap tickets being sold as the franchise try to get more customers on board, yet are only selling them a dishonest service. We don't have the staff to be able to run many of the services that the customers think they are going to be getting. Staff sickness is at an all-time high, there are virtually none of the managers around to talk to about concerns or get help. No staff supervision to help staff. Breaking up train crews so we can't support each other. Poor management styles. One of the most shocking things I've noticed is the state of many of the trains, nothing (unless it's considered strictly a safety issue) gets fixed, no matter how often the problem is raised. We have had buckets on seats catching leaks, the ovens leak constantly with streams of water running from the kitchen into vestibules. Fly infested trains etc etc. I think the Government should step in immediately and take ownership of the East Coast Main Line. Approximately 1500 staff are currently in dispute with Stagecoach/Virgin as they have broken the law, and are also paying the same grade of staff at different rates of pay, and withholding back pay from some staff. The Franchise is a shambles. The managing director sends out a weekly email saying everything   is wonderful, constant talk of Azuma trains, yet this couldn't be further from the truth. I think if the Government allows the continued incompetent running of this service, they are in danger of it reflecting upon them too, and I'm sure many tax payers will be demanding answers. One of the flagship services the East Coast Mainline is being ruined everyday this is prolonged. End this now and hold Stagecoach/Virgin accountable for their appalling mishandling and greed”.

 

34    In conclusion RMT believe that, as with previous East Coast failures, not only was there a seriously deficient gap between the bids predicted revenue and reality, but that the whole franchise model is dangerously flawed and unfit for purpose.

 

35    The House of Commons Committee of Public Accounts previous report into the Department for Transport: The InterCity East Coast Passenger Rail Franchise has been ignored given it clearly said “The Department should improve its arrangements with franchisees to remove any incentive on bidders to make forecasts which are either too optimistic, thereby increasing the risk that the franchise might fail, or be deliberately pessimistic, thereby increasing their expected profits. For instance, the Department should have been more rigorous in questioning National Express on its assessment that it could grow passenger revenue by 5%-12% per annum. By any measure, this appears to be an over-optimistic assessment of the business”[17].

 

36    It is clear that when the National Audit office claimed three years ago “In particular, the Department has established a Passenger Services team to focus on franchise letting and management; improved the transparency, consistency and clarity of information provided to bidders and the public; and strengthened the assurance and governance of franchising” this was simply wishful thinking.[18]

37    This is because the rail franchise ‘market’ is a sham, competition is non-existent, failure is endemic, private company standards are poor and instead of ending this dreadful ideological experiment in privatisation, the Department desperately persists in seeking private sector face saving solutions. This is completely unacceptable to staff, passengers and taxpayers.

 

38    Only a permanently renationalised UK railway operating in the sole interest of passengers is the answer to a problem wholly of this governments making. East Coast would be much more efficient if franchising was ended now and the industry was taken back into public ownership, re-integrated and democratically accountable. Until that happens the passengers, workers and taxpayers should not be made to pay or continue to suffer the avarice and short termism of the privatised rail industry.

 

March 2018

 

 

[1]http://webarchive.nationalarchives.gov.uk/+/http:/www.dft.gov.uk/pgr/rail/passenger/franchises/futureoffranchising/pdf/report.pdf foreword

 

[2] Ibid 1.7

[3] http://webarchive.nationalarchives.gov.uk/20110130190356/http:/www.dft.gov.uk/consultations/closed/2010-28/govresponse.pdf

 

[4] Ibid 12.7 page 32

[5] https://www.nao.org.uk/wp-content/uploads/2011/03/1011824.pdf  para 24

 

[6] http://dataportal.orr.gov.uk/displayreport/report/html/07f49939-36f3-4901-8332-a36f72342fe8

 

[7] https://publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1035/1035.pdf

 

[8] https://publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1035/1035.pdf EV2

 

[9] https://www.nao.org.uk/wp-content/uploads/2015/11/Reform-of-the-rail-franchising-programme.pdf page 6 point 6

 

[10] Ibid page 7 point 8

[11] Ibid page 23

[12] https://www.nao.org.uk/wp-content/uploads/2015/11/Reform-of-the-rail-franchising-programme.pdf page 22

 

[13] https://www.rmt.org.uk/news/fantasy-figures-at-heart-of-new-east-coast-franchise/

 

[14] http://webarchive.nationalarchives.gov.uk/20151215172651/http://www.directlyoperatedrailways.co.uk/PDF/DORReportAccounts2015.pdf

 

[15] http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/rail-franchising-in-the-uk/written/79967.html

 

[16] http://bit.ly/rmtecoast

 

[17]https://publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1035/1035.pdf

[18] https://www.nao.org.uk/wp-content/uploads/2015/11/Reform-of-the-rail-franchising-programme.pdf page 6 point 6