Published 8th March 2012
Prosperity, Quality of life and Good transport = good economics
So said Justine Greening The Transport secretary this afternoon in Parliament.
In response to last may’s McNulty Report she said that the Government can and must do more for taxpayers given that £18bn of
Investment had been made or announced in the railways. This was the biggest investment in railways in modern history and will generate growth and the economy and out approach is set up for success.
Reform on The Railways is putting our customers approach and will do what it says on the tin – like Ronseal! The modern railways must be efficient and affordable and Mcnulty had said that railways were expensive despite growth and that reform was overdue. This is that reform and will bring an end to inflation busting fares.
Subsidy will be reduced and Spiralling unjustified costs must come to an end. What she didn’t say was that constant micro-management by the Department for Transport has played a significant part in these.
Investment only compete if cheaper railways.
Network Rail is spending £1.2bn less a year by 2014 and the rail industry must be less dependent on taxpayers subsidies of £2.5bn a year now.
The time is right for reform and to build on efficiencies achieved which will be done with the new round of refranchising, the biggest since privatisation.
Closer collaboration Network Rail and train operators is essential and all will be incentivised for joint working partnerships.
How this will work is anyone’s guess because of the maze of contracts linking the parts of our rail system. Train companies have a negotiated legal framework to comply with starting with franchise contracts, often running to over 100 pages.
They in turn have shareholders to satisfy and so will they reduce their potential profits voluntarily without a future promised sweetener?
They would say that wouldn’t they. Membership of this has already varied depending on the vested franchise interests so will be interesting to see how this works out. And in what timescales.
Justine Greening said that Franchises will operate with greater transparency and will be longer and more flexible as a result.
A more transparent approach to ticketing is the theme of a consultation launched today to bring ticketing from the 1970s into 21st century.
This will look at smart ticketing across the UK giving more flexibility
She agreed that many passengers value ticket offices and face to face contact but suggested that Labour approved cuts to 70% of South West Trains’ booking offices for example. It was announced that Post office, libraries and shops might sell tickets, but how they would cope with reservations and timetables was not mentioned.
We cannot duck the reform issue and everyone working in rail must make the reforms work and there is genuine potential for jobs in industry. NR has devolved decision making to route directors locally
And NR corporate governance is to be more accountable with a public interest director to be appointed.
It was suggested that the local community should get involved in train running but the Rail Regulator has put a shot across the bows by saying they will safeguard every stakeholder and their consultation was also launched today.
In short, a smarter approach and less Government interference in the future was promised giving lower costs, better services and better ticket flexibility.
Richard Price, Chief Executive, Office of Rail Regulation in response to the publication of the Government’s ‘Reforming our railways’ Command Paper said:
"Rail customers and taxpayers have high expectations of our railways and need to be sure they get a good deal for their money. We welcome the Government’s Command Paper and its clear vision with customers at its heart.
"Railways are a long-term business with investment decisions made today having implications for decades to come. That is why it is essential that all players in the industry work collaboratively to deliver a railway that delivers for customers on cost, safety and performance.
"In this context, ORR welcomes the Government’s recognition in the Command Paper of the need for a more unified regulatory structure for the railways and, specifically, that ORR should be empowered to drive improvements in efficiency and passengers’ experience across the system as a whole.
"Strong, proportionate, independent regulation across the sector has a big role to play in making this happen. The Command Paper recognises this, and ORR is ready to play its part."
The Rail Delivery Group (RDG) welcomes the Government’s support for the RDG contained in the Command Paper ‘Reforming our Railways: Putting the Customer First’, which was published today. The Paper calls on the Rail Delivery Group to provide leadership to the industry and to respond to the Government’s strategic challenges.
The Command Paper lays out the Government’s vision for an expanding and efficient railway that meets the needs of passengers, freight users and taxpayers. The Government sees the Rail Delivery Group leading the industry in driving up efficiency and demand for the railway. This is a challenge that we accept.
The Command Paper calls on the Rail Delivery Group to lead the rail industry in working together to deliver a more efficient, more affordable railway. The Rail Delivery Group is pleased that the Government has recognised that the Group is taking and shaping the industry’s agenda for a sustained programme of improved management and running of the rail network.
There are 6 key areas:
• Asset programme and supply chain
• Contractual and regulatory reform
• Technology, innovation and working practices
• Train utilisation
• A whole new system approach
• Industry planning
The Rail Delivery Group shares the Government’s desire for an affordable and efficient railway. In bringing the industry together the Rail Delivery Group will provide the leadership to capture efficiency opportunities and ensure that the railways have earned their licence to grow.