The ConDem Coalition government is set to publish its long delayed Command Paper in response to the McNulty Report, “Realising the Potential of GB Rail.”
“So what?” you might think. ”Why should that bother me?”
Well, I have to say, it should bother you because it has the potential to introduce radical change to the railways that will have an impact on everyone who travels by train as well as those who work in the industry.
At the end of the last Labour government the former CAA Chairman, Sir Roy McNulty, was commissioned to look at “Rail Value for Money,” a title that gives an indication of the remit to look at costs associated with supporting Britain’s privatised railways.
The ConDem Coalition Government decided to continue with the RVfM project in pursuit of their austerity objectives and when McNulty finally published his report in May 2011, the government promised a response which they scheduled for November, only to see that delayed, ostensibly with the change of Secretary of State.
Almost before the words were out of the then Secretary of State’s mouth, the rail industry had set up the Rail Delivery Group (RDG), made up of industry employers. McNulty had recommended the creation of the RDG but thought it should include a mechanism for dialogue with the trade unions but it was very noticeable that General Secretaries failed to receive any invitation to the party.
I shouldn’t think that bothered any of them very much – only being taken as a sign of what was to come – because the RDG went onto publish its Initial Industry Plan in September. Any reading of it will make you quickly realise that virtually all of McNulty’s many recommendations have now been turned into industry wide goals.
“Yeah, so what?” I hear you say again, amidst yawning and thoughts about reading a more interesting blog.
Well, let me just summarise a few of McNulty’s Recommendations:
- Close all tickets offices at small stations and reduce the opening hours of many others
- Remove the current public consultation arrangements that means train operating companies have to ask for your views before they change ticket office opening hours, including closing them altogether
- Cut out guards, conductors and train managers on many trains
- Give the train operating companies more freedom around ticketing, including introducing the possibility of “shoulder” peak fares (ie reducing the off peak period)
Of course, many of these recommendations will meet with hostility in local communities. Just take ticket office closures. The plan is to replace the member of staff with a Ticket Vending Machine but experience elsewhere shows that many new machines don’t take cash, ruling out increasing sections of the community without access to cards – the unemployed – not to mention those who don’t want to use cards.
It also means that you have to be able to interrogate the machine to find the correct fare – and many people end up paying a fare higher than they need to.
And who gives travel advice – or provides for disabled access – or is there in case of an emergency – or when someone is threatened, robbed or worse?
These recommendation, and a variety of others, demonstrate the ideas that McNulty’s team came up with in order to cut £1 billion from the costs of the subsidy provided to the railway industry in the period up to 2019.
Now, the heart of the cost issue for the government is that Europe’s railways are as much as 30% cheaper but one of the most noticeable difference about UK railways and those of our European neighbours is that of ownership. In Europe, the railways are owned and run mostly by the governments of those countries whilst in the UK railways are operated by the private sector.
McNulty, however, denied the link even though a report by Just Economics showed how the £1 billion saving was exactly what the private companies extract annually as profit from the railway industry. No wonder they are so keen to capitalise on higher fares and to seek greater commercial freedom. After all, profit and not customer service, is what drives them.
And from McNulty’s denial (was he told to say that?), you can see the direction that the government’s response is likely to take.
Because in parallel with McNulty’s deliberations, the ConDem Coalition also embarked on a review of Passenger Franchising aimed at cutting subsidy by securing greater investment from private operators who would be offered, in return, longer franchises and greater commercial freedom.
The government wants to move away from the DfT being very prescriptive about train services and, instead, allow the train operators more freedom. This is worrying for travellers because it means that the train operators will focus on the money-making routes with the option of cutting or minimising services elsewhere.
An indication of the commercial freedom is already being seen through the new franchises that are out for consultation where references are made to fare increases of RPI+3% in 2013 and 2014 - as well as questions about trains skipping stations to get to a larger station more quickly.
So, what will the government’s announcement bring? I think we have a fair guess.
