SUMMARY

  Transport 2000 campaigns, broadly, for a railway in this country that is modern and efficient, integrated, accessible to all, high quality, accountable, safe, affordable and comprehensive. Our current rail campaign calls for a rail network that is capable of handling, in terms of capacity and quality, the travel demands of twenty-first century Britain. We believe that the railways should be expanded, not contracted, and that a growing railway is critical to meeting economic, environmental and social objectives, as well as creating sustainable communities, tackling climate change and solving road congestion. Passenger rail franchising should be part of a strategy to expand capacity rather than manage demand. The primary purpose should be to provide and develop railway services, within a framework set by the Government, so as to serve the needs of passengers and to secure wider public benefit in terms of social, economic and environmental objectives.

What should be the purpose of passenger rail franchising? Is the current system achieving that purpose?

  The use of the railways has grown significantly in the last 10 years, and there are real capacity problems on parts of the network. Franchising should be part of a strategy to expand capacity rather than manage demand. The primary purpose should be to provide and develop railway services, within a framework set by the Government, so as to serve the needs of passengers and to secure wider public benefit in terms of social, economic and environmental objectives. Passenger rail franchising should not lose sight of the passenger and passengers' needs. Sadly the current policy seems to combine maximum revenue with detailed central control, neither of which is necessarily in the passenger interest. Franchising, as currently practiced, does not give enough emphasis to the railways as a national network or to the needs of local communities. We are also concerned that too little emphasis is placed on integration of the railways with other modes of transport, particularly buses and cycling. In general, the Department for Transport seems to intervene over detail, but does not get involved in developing network benefits, which is much more its role as the specifier of rail services. For example, it has been left up to the train operators themselves to develop integrated ticketing with bus services, through the "plus bus" scheme. It is a tribute to those involved that the scheme is as widespread as it is but benefits like this should be delivered nationwide rather than left up to operators. Similarly on fares policy, the SRA and the Department for Transport stood by while operators reduced the value of the network card, and as the Committee's previous report has shown, have failed to require operators to come up with an easily comprehensible fares structure.

How well does the process for awarding franchises work? What input do operators, passengers and other interested parties have into the design of franchised services? Has there been a smooth transition of franchising arrangements from the Strategic Rail Authority to the Department for Transport?

  Unfortunately, passengers and other interested parties do not have any statutory means of inputting into the design of franchised services. Consultation is far too restrictive, and has sometimes failed to take on board concerns expressed by user and environmental groups and local authorities. There is also a danger that franchising fails to take on board wider policy concerns, for example, links with spatial strategies and proposed new developments.

  Transport 2000's local groups and representatives are in many cases very involved in the franchising processes, and while they have seen some improvements, they have found it difficult to get cost effective improvements in local rail services considered and in some, cases cuts have been made in these services, for example in stopping services on main lines, to make way for longer distance services. Examples include the reductions in local services and stopping trains in the South Eastern Trains Franchise and the elimination of stations in and around Stoke-on-Trent. Some of these have gone directly against other government policies, for example reductions in trains to Hastings, which is designated as a regeneration area, and the failure to consider alternative options in Stoke-on-Trent which could have tied the railways more closely into development and regeneration in the area.

  Perhaps the biggest complaints have arisen from the Greater Western Franchise. Our local groups believe that this led to serious errors which have needed rectifying, and which could and should have been avoided. The franchise specification seemed to be driven by attempts to save rolling stock and the leasing costs, and this has driven the timetable and cuts in services. This is at a time when rail demand has been at its highest since 1959, when housing growth is imminent and when cities and towns across the South West region are suffering tremendously from the impacts of road congestion. The impression of our local groups has been that the Government has been more concerned with short-term savings than with dealing with these problems.

  For example, the Department removed stopping trains at Westbury which is a key junction where people travelling from London change to travel to Southampton, Poole, or Weymouth for example. Consequently, this service had to be reinstated.

  The Greater Bristol Strategic Transport Study showed that people wanted better rail services, and so too the Local Transport Plan highlighted the need for better rail. The Bristol, Bath to South Coast Study recommended that the hourly service between Cardiff and Southampton, be promoted to a half hourly service. However, the new timetable under the Greater Western Franchise cut the existing hourly service to a two-hourly one.

  It is unclear how the Regional Planning Assessments (RPAs) fit into the rail franchising process. In theory, the RPAs are supposed to link planning processes to rail policy. In practice, however, many RPAs are not yet published. Those that are, take a very cautious view of the railways' potential and of future demand (for example, the East of England RPA did not allow for the railways capturing significant freight traffic to ports or new passenger traffic as a result of housing development). This matters because rail franchising should reflect wider development plans. In the case of the Greater Western Franchise, the first version did not appear to take into account but seemed to even contradict two key statutory regional strategies—the Regional Economic Strategy (RES) and the Regional Spatial Strategy (RSS). The RES has very recently been submitted to Ministers for approval. Government Departments, including the Department for Transport, have all been supportive of the revised RES. Both strategies clearly set out policies for maximising the sustainable development outcomes of significant growth and change in the region. The RSS and RES are consistent with the DCLG's objectives for creating more sustainable communities. The RSS and RES support the priorities for continued growth in urban areas, with better access to jobs and services for people and businesses in smaller towns. However, the proposed timetable appears to work against these agreed national and regional priorities.

  For franchising to succeed, there needs to be greater involvement of local and regional authorities, and other bodies so that they have a key role in the franchise awarding process.

Are franchise contracts the right size, type and length? What criteria and processes are used to determine the nature and length of franchises? What criteria and processes are used to evaluate franchise bids? Do franchise holders deliver value for money to passengers and the Government throughout the duration of their contracts? Are risks suitably apportioned between the Government and franchise holders? What is the scope for improving services through franchise agreements?

  The length of franchise contracts is an important factor in delivering a thriving railway. The length of franchise contracts is currently too short and this discourages the kind of investment essential to a thriving railway and constrains franchisees as businesses. The longer franchises seem to be about seven or eight years on average, compared to the Swiss whose average is 20 years. To make a profitable system out of the railways, companies need to know that their investment will be useful not just in the short term but in the mid and long term, with the proviso that companies are monitored at checkpoints during the franchise to ensure they are performing well and to enable action if they are not. Longer franchises would also provide the incentive to buying rather than the more expensive option of leasing trains.

  Chiltern railways provides an excellent example of how a longer franchise, in this case 20 years, has produced excellent results: significant investment in stock and track, and satisfied customers, together with a profitable company.

CONCLUSION

  Clearly, a system where use has grown so much cannot be wholly wrong. However, we are concerned that the current franchising system is too concerned with maximising revenue/minimising subsidy, and with too detailed intervention. It does not take enough notice of passengers, user and environmental groups, local and regional authorities and other bodies and this has led to the downgrading of local services and local needs, to make way for longer distance services. The Department for Transport, while intervening at a detailed level, has failed to make proper links between franchising and wider policy, and to use its role in franchising to develop network benefits.

22 June 2006