London Midland offers Government imposed £7m Christmas Present to its long suffering Passengers

Published 21st December 2012

London - Transport Minister Announces Free and Reduced Rate New Year travel deal imposed.

Transport Minister Norman Baker MP announced on December 20 a £7 million package of benefits for London Midland passengers. This was to compensate for the disruption caused by cancelled services and delays due to a shortage of drivers.

The disruption has been reported on by and this package of benefits is not the first time London Midland has had to offer bargain travel to passengers as a result of poor performance.

Tough action announced

London Midland’s passengers have been inconvenienced since August with service disruption which ended on December 8 with the introduction of a new timetable. Mr Baker announced that free travel passes and cheap tickets would be offered to passengers thanks to tough action taken by the government.

Void Days and Performance Figures

If many trains are cancelled for whatever reason on a given day, that day’s performance will be declared void and therefore not drag down the annual Public Performance Figures (PPM). Season ticket holders will be given a free day in lieu and this works out cheaper than triggering a 5% or 10% reduction for poor performance on renewal of the season.

London Midland season ticket holders will be given 5 days’ worth of free travel passes but it was silent on if this would affect the PPM. The PPM measure tracks performance in terms of train running reliability (what percentage of trains are run measured against the trainplan) and punctuality (how each train actually operates against its timetable).

The announcement is in interesting language as it says The Government has also secured 500,000 additional cheap advance tickets for passengers on key network routes serving London, Birmingham, Northampton, Crewe and Liverpool and a commitment to invest in infrastructure improvements.

Whether these cheap tickets would have otherwise been offered as previously contended by London Midland to is not known. Either way, bookings open on Christmas Day for the first tranche of tickets. The infrastructure enhancements are not specified and it is not known if the commitment is an aspiration or legally binding.

They said:

Norman Baker said: “London Midland has cancelled or delayed hundreds of services in recent months. On repeated occasions, they were not able to provide enough drivers and some services had to be cancelled, with severe delays to services, and they have fallen short both of everyone’s expectations and their franchise obligations.

Securing these benefits for passengers represents a firm yellow-card for London Midland and some financial benefit for those who have been hardest hit by their poor performance.

I am confident London Midland has now rectified their driver shortage but the company needs to be clear that we will continue to monitor their performance closely and take firmer action if necessary.

The free tickets will be available to all monthly and annual season ticket holders, as well as to weekly ticket holders who have been affected by disruption, while the additional Advance tickets will be available over the next two years to passengers planning to travel on key London Midland routes.

The deal that has been struck will also confirm the end date of the franchise as September 2015, ensuring that London Midland is given sufficient time to resolve these problems on a permanent basis.

London Midland will also spend millions of pounds improving the resilience of their trains and will invest at least £2.25 million on a range of measures to benefit passengers - primarily in the West Midlands, where the worst disruption was experienced.

Golden Spanner

The London Midland Class 350 did win last years ‘Golden Spanner’ award made by Modern Railways and it was not made clear what was meant by train resilience’ in the announcement.

Human Resources Failure?

The shortage of drivers can be seen as a failure by the company to predict the level of retirements and ‘defections’ to other train companies who may offer higher pay. Drivers earn between £40k and £50k a year and training takes a year from starting and as a highly important job. The Unions are against rail privatisation but ignore the question when asked about the huge pay rises achieved by drivers in the last 15 years!

So once qualified, a driver can give say, three months notice and join another train company offering better pay and conditions. Given that London Midland has operated this franchise for over five years, it should have been able to resolve such issues by now.

Free Five Days’ travel

The free 5-day passes will enable annual and monthly season ticket holders to make additional journeys outside of their regular commute, or as an extension to existing season tickets. The downside of this is that if a season ticket holder extends their ticket by five days, it could carry them over past the 2014 fares rise date in January 2014 and actually cost them a lot more than they perceive they are being offered.

The 500,000 additional cheaper advance tickets will be issued over and above those issued in the last year and will be for travel during 2013 and 2014. The tickets will be available on key routes including London-Birmingham, London-Crewe, London-Northampton and Birmingham-Liverpool.

Why was the Franchise not taken away from London Midland?

The answer here is probably because with the franchising problems, who would run the trains? Directly Operated Railways could in theory step in but the handover would take up to two months to arrange.

It is well known by industry insiders that bidders currently have the advantage at the moment while franchises are being extended and this will probably remain so for the next year or so. So the, what was described as tough action, is probably the best that can be achieved and gives the appearance of being in control by the DfT and acceptance of the deal by London Midland.

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