Rail Delivery Group submission to the Williams Review

[Mike@Raileasy]

I also think on-rail competition is a fallacy and should be banned, not encouraged.

Interested to hear why you think so.

RDG have this to say:

Value for money Where there is competition in the market, evidence shows the customer benefits from better value for money and in some cases lower fares

Stronger passenger growth: Competition on the East Coast Main Line showed that stations where there were directly competing services saw 42% growth in passenger journeys as opposed to 27% for those stations without a competitive offer.

I must admit I don't get the "case study", does this imply this new competition will introduce cheaper fares than current walk up fares? Isn't this the idea behind the current advances on the day options?

Example case study: Easier fares, more choice on intercity routes Amy works for a tech start-up in Newcastle. She regularly travels back to London, where she went to university, to see her friends, or to Peterborough to see her Mum and Dad. Her work is flexible – there’s no nine-to-five and work comes in peaks and troughs. Amy finds it hard to make plans too far in advance and so, under the current system, she finds herself paying a large part of her disposable income in rail fares bought the day she travels. In a reformed system, with a choice of intercity operators and an easier to use system of fares, Amy would be able to use her smartphone to shop around for the service which suits her best and costs her the least. As with airlines, companies on intercity routes would fight for Amy’s business with offers, discounts and more options. Amy would have more control, and she would be spending less each month.

 

[yorkie]

Interested to hear why you think so.

I would disagree with what @Bletchleyite says but I would say that excessing a TOC-specific ticket should be possible; there is no compelling reason why it isn't allowed case today.

I must admit I don't get the "case study", does this imply this new competition will introduce cheaper fares than current walk up fares? Isn't this the idea behind the current advances on the day options?

In the case study given, Advance fares on the day are available with many operators right now, and there is nothing to prevent all TOCs issuing them now if they wanted to.

 

[hwl]

Interested to hear why you think so.

RDG have this to say:



I must admit I don't get the "case study", does this imply this new competition will introduce cheaper fares than current walk up fares? Isn't this the idea behind the current advances on the day options?

My view is that RDG et al. want to avoid mentioning that a significant amount of long distance travel isn't really that flexible timing wise and hence is very profitable for them!

In the case study example the increase TPE capacity between Newcastle and York, LNER IEP introduction (and more seats) and the new First Open Access services should increase ECML capacity with beneficial effects on the LNER pricing mode for passengers. Allowing the existing OA operators to stop at Peterborough to reduce LNER passenger numbers would also help (leaving more seats for Newcastle to Peterborough or Kings Cross for "Amy").

 

[DerekC]

I think their report is just suggesting further tinkering with a system that doesn't cope with change and breaks when it gets stressed. There are two main points for me:

Put a new independent organising body in charge of the whole industry

As somebody else said, we tried that - it was the SRA and it was abolished as soon as it seriously challenged DfT. The body in charge has to control spend, otherwise it isn't in charge.

Make sure track and train are all working to the same customer-focussed goals

This is just management guff - the management of track and train needs to be integrated otherwise the industry will remain organisationally resistant to change and cost per unit output won't come down.

I am not a fan of nationalisation, but it could fix the above two problems, which I think are fundamental. But so could vertically integrated geographically separated railways (the Big 6?). What's difficult if these are kept in the private sector is regulating the level of subsidy.

 

[squizzler]

Make sure track and train are all working to the same customer-focussed goals

This is just management guff - the management of track and train needs to be integrated otherwise the industry will remain organisationally resistant to change and cost per unit output won't come down.

I am not sure why this ought to be so important. Surely the infrastructure provider is the wholesaler and the train operator is the retailer: a relationship no different to any other supply chain.

 

[jfollows]

There was some data on season tickets and the railway planning assumption was something like people would make 280 return trips a year with an annual season ticket but the actual figure people were doing was around 240.

A very recent study (https://assets.publishing.service.g...e/790966/journeys-per-season-ticket-study.pdf) says that 240 is the assumed figure ("LENNON") whereas the measurements made for the study imply around 190 to be more accurate. Assuming I'm reading the report correctly of course!

 

[sprunt]

Value for money Where there is competition in the market, evidence shows the customer benefits from better value for money and in some cases lower fares

Stronger passenger growth: Competition on the East Coast Main Line showed that stations where there were directly competing services saw 42% growth in passenger journeys as opposed to 27% for those stations without a competitive offer.

Correlation, as I'm sure we all know is not causation. Does the report suggest any causative mechanism more detailed than "There's competition"? Like, for example, have fares also increased less than for journeys with no competition?

 

[DerekC]

I am not sure why this ought to be so important. Surely the infrastructure provider is the wholesaler and the train operator is the retailer: a relationship no different to any other supply chain.

That's the assumption that underpinned privatisation and I think it's a fallacy. The railway is an interactive system. The relationship works OK as long as everything stays the same, but once you try to change it, the problems start. The extremely complex contractual relationships between infrastructure provider and train operator mean that a disproportionate amount of industry brainpower and effort goes into handling them and costs go up. We have seen some good examples in the past few years - timetable change screwed up, electrification costs escalated out of all proportion. And the fact that nobody has been able to rationalise the fare structure is associated with this too. I could go on for pages ….

 

[hwl]

Correlation, as I'm sure we all know is not causation. Does the report suggest any causative mechanism more detailed than "There's competition"? Like, for example, have fares also increased less than for journeys with no competition?

Agreed competition might actually primarily involve adding capacity (which can have the knock on effect of lowering fares on average e.g. Grantham - KGX)

 

[whhistle]

If the cost of Season tickets reduces for people who work fewer days, then it is pretty much guaranteed that the cost will increase for those who work 5 days a week and get an average amount of holiday, as any changes are going to be "revenue neutral"

I hope the idea of the 3-day/5 day season ticket is dropped.
Yet another layer of ticketing to make it more complicated.

Why not just get rid of the weekly ticket and replace it with a "carnet" style - you buy an amount of journeys instead of a fixed set of days? Solves the problem of having a weekly ticket + 3 day season + 5 day season.

 

[Bletchleyite]

Why not just get rid of the weekly ticket and replace it with a "carnet" style - you buy an amount of journeys instead of a fixed set of days? Solves the problem of having a weekly ticket + 3 day season + 5 day season.

Or instead of an amount of journeys, a "book" of day tickets for any journeys on your chosen route?

 

[RLBH]

A very recent study (https://assets.publishing.service.g...e/790966/journeys-per-season-ticket-study.pdf) says that 240 is the assumed figure ("LENNON") whereas the measurements made for the study imply around 190 to be more accurate. Assuming I'm reading the report correctly of course!

240 sounds reasonable as a planning figure - 52 weeks a year, less five of holidays, is 47 weeks of 5 days. That gives 235 days, plus a few leisure trips. Of course the modern worker doesn't spend all their time in the main office; assume an average 4 days/week and 47 weeks, and you get 188.

 

[hwl]

240 sounds reasonable as a planning figure - 52 weeks a year, less five of holidays, is 47 weeks of 5 days. That gives 235 days, plus a few leisure trips. Of course the modern worker doesn't spend all their time in the main office; assume an average 4 days/week and 47 weeks, and you get 188.

The last time I did a detailed count a few year ago I got 192.

 

[CyrusWuff]

And for old school Passenger's Charter "void day" refunds (which now amounts to just Chiltern and GWR), the assumption is you'll use a weekly for 5 days, a monthly for 22 days, "odd period" seasons for appropriate multiples of same (e.g. for 5 months 17 days you'd assume ( 5 x 22 ) + ( 3 x 5 ) + 2 or 127 days) and an Annual for 260 days.

Under Delay Repay, it depends on the TOC as to the notional value of a Single journey. For GTR, for example, it's 1/10th the cost of a weekly, 1/40th for a monthly and 1/464th for an Annual.

 

[Class 170101]

I believe that the power to even out the passenger loading already lies with the TOC concerned if they wished to. Virgin Trains in particular could easily balance passenger load with less onerous off peak ticket conditions in the evenings but chooses not to do so for revenue reasons. It is interesting to compare loadings on a Friday evening between VTWC and LNER whose off peak evening restrictions are shorter. Removing such restrictions only on Fridays could easily reduce the crush loading seen on the first off peak trains leaving Euston.

Haven't these restrictions just recently been eased / withdrawn?

Make sure track and train are all working to the same customer-focussed goals

This is just management guff - the management of track and train needs to be integrated otherwise the industry will remain organisationally resistant to change and cost per unit output won't come down.

Not sure its just management guff there is a need at times for both operators and NR to work together though in my experience it can be hard going when one side or the other is set on a particular way of working or goal and the other side doesn't agree.

 

[Randomer]

Haven't these restrictions just recently been eased / withdrawn?

Indeed as was pointed out to me earlier in the thread they were eased on Fridays from Euston, I haven't travelled from there on a Friday for a couple of years (having actively avoided it previously due to the loading issues with tickets that allowed earlier departures whilst still being "off peak"). Having done some more research some articles would seem to indicate that this was done at the insistence of the Dft rather than the TOC as part of the last VTWC direct award.

However, I think my point still stands that the power to regulate loadings on services already lies with any TOC who can set off peak time restrictions and advance fare quota's for ticket flows under its control. The RDG submission seems to tie this to a reform of the ticketing system without acknowledging that it could already be done but isn't due to revenue reasons.

My point is not tied to Virgin Trains, more locally to me TPE consistently sell advance tickets for services that are already likely to be crush loaded at busy times (even when considered off peak e.g. Sunday evenings) and other posters here have made similar comments about other TOC like WMT (operating as London Northwestern Railway.) This allows them to maximise there revenue perhaps to the dissatisfaction of customers but may very well be necessary for the operator to be financially viable due to the franchise terms.

Effectively I think my basic point is that there needs to be a conversation at a larger scale about the structure or the railways (which the Williams review is supposedly doing) and about the level of funding the government is prepared to put into public transport (with railways, buses, light rail and other novel modes all being considered.) The two are intrinsically linked but I can't see the Williams review going against present government thinking in terms of cost liability.

Would for example the RDG submission to the review have been fundamentally different if it was accepted that ticketing reforms did not have to be cost neutral?

For that matter would the RDG submission about giving back control of some railway function to local or regional bodies have more weight if those bodies were empowered with greater funding, control of services (e.g. able to control bus transport like TfL or some regional areas like Greater Manchester) and autonomy in rail franchising in whatever form that takes from the DfT?

The Williams review has the potential to be a great thing for the railways and travelling public at large but in many ways its scope is too small without reference to public transport (or indeed transport in general) as an integrated whole. Having read through the RDG submission for a second time it has some kernels of potential good ideas particularly points 2 and 6 but this is tempered with potentially disadvantageous proposals for travellers in fares reform and competition.

 

[Dave1987]

Isn't Paul Plumber of the RDG usually the one who seemingly deliberately starts confrontation with the unions? I've seen numerous column inches from him in various publications that get left around in which he seems to seek confrontation with the unions rather than seeking cooperation.

 

[DerekC]

Make sure track and train are all working to the same customer-focussed goals

This is just management guff - the management of track and train needs to be integrated otherwise the industry will remain organisationally resistant to change and cost per unit output won't come down.

Not sure its just management guff there is a need at times for both operators and NR to work together though in my experience it can be hard going when one side or the other is set on a particular way of working or goal and the other side doesn't agree.

I agree there is absolutely a need for management of track and train to work together. However unless they share the same objectives and commercial incentives under the overall control of somebody who can manage the budget between the two and make changes which affect either or both without having to worry about contractual claims, the co-operative approach breaks down as soon as the situation gets stressed. That (to me) is why we need an integrated railway.

 

[HH]

I agree there is absolutely a need for management of track and train to work together. However unless they share the same objectives and commercial incentives under the overall control of somebody who can manage the budget between the two and make changes which affect either or both without having to worry about contractual claims, the co-operative approach breaks down as soon as the situation gets stressed. That (to me) is why we need an integrated railway.

Except that NR don't all pull in the same direction and neither did BR. When organisations get so big there is an almost inevitable silo effect.

 

[HowardGWR]

Except that NR don't all pull in the same direction and neither did BR. When organisations get so big there is an almost inevitable silo effect.

That would seem to plead for the re-institution of something like the size of the pre-Grouping companies. I suppose there would have to be a separate organisation that would promote cooperative behaviour. I am thinking about what we now know as XC. The old GWR used to compete with MR on North - South West services via Shrewsbury and Birmingham respectively. Perhaps that was a good thing though.

 

[Bletchleyite]

That would seem to plead for the re-institution of something like the size of the pre-Grouping companies. I suppose there would have to be a separate organisation that would promote cooperative behaviour. I am thinking about what we now know as XC. The old GWR used to compete with MR on North - South West services via Shrewsbury and Birmingham respectively. Perhaps that was a good thing though.

For its faults that size of franchise seems to work quite well with GWR, particularly integration of local and IC services.

 

[HH]

The fact is that some franchises are too small - TPE for instance. If you met their managers and compared them to say GWR (part of the same group) you would see a clear difference. However, beyond a certain size inefficiencies of scale creep in. What that size is depends on a number of things, including senior management. But when you have to explain to people what it is that their own company does, you know that company is too large.

 

[Bletchleyite]

The fact is that some franchises are too small - TPE for instance. If you met their managers and compared them to say GWR (part of the same group) you would see a clear difference. However, beyond a certain size inefficiencies of scale creep in. What that size is depends on a number of things, including senior management. But when you have to explain to people what it is that their own company does, you know that company is too large.

To me taking TPE out of Northern was the definition of madness. That said, given how Northern is so badly-run and TPE now far better-run, perhaps it wasn't all *that* bad a thing...

 

[Jorge Da Silva]

To me taking TPE out of Northern was the definition of madness. That said, given how Northern is so badly-run and TPE now far better-run, perhaps it wasn't all *that* bad a thing...

TPE is more InterCity style now, except for the Hull-Manchester and Manchester-Huddersfield-Leeds

 

[Bletchleyite]

TPE is more InterCity style now, except for the Hull-Manchester and Manchester-Huddersfield-Leeds

It is, but like GWR or EMT or ScotRail there is no reason there couldn't be a more prestigious Northern franchise including IC work.

The split was engineered at a time when it was felt that Northern would be a rump basket case high-subsidy franchise ripe for closures and service cuts. Things didn't turn out that way, so to me it'd be a good time to recombine.

 

[Jorge Da Silva]

It is, but like GWR or EMT or ScotRail there is no reason there couldn't be a more prestigious Northern franchise including IC work.

The split was engineered at a time when it was felt that Northern would be a rump basket case high-subsidy franchise ripe for closures and service cuts. Things didn't turn out that way, so to me it'd be a good time to recombine.

I hope devolution happens and have TfN run Northern (at least) and maybe TPE. Having decisions made locally is much better for the North i think. I see your point, Labour let Northern run on a no-growth basis but instead the complete opposite happened as the franchise grew dramatically leading to a lot of overcrowding.

 

[thedbdiboy]

Isn't Paul Plumber of the RDG usually the one who seemingly deliberately starts confrontation with the unions? I've seen numerous column inches from him in various publications that get left around in which he seems to seek confrontation with the unions rather than seeking cooperation.

Doesn't sound like him. Are you thinking of Pete Wilkinson (DfT)?

 

[DerekC]

I agree there is absolutely a need for management of track and train to work together. However unless they share the same objectives and commercial incentives under the overall control of somebody who can manage the budget between the two and make changes which affect either or both without having to worry about contractual claims, the co-operative approach breaks down as soon as the situation gets stressed. That (to me) is why we need an integrated railway.

Except that NR don't all pull in the same direction and neither did BR. When organisations get so big there is an almost inevitable silo effect.

That would seem to plead for the re-institution of something like the size of the pre-Grouping companies. I suppose there would have to be a separate organisation that would promote cooperative behaviour. I am thinking about what we now know as XC. The old GWR used to compete with MR on North - South West services via Shrewsbury and Birmingham respectively. Perhaps that was a good thing though.

I absolutely agree - my wording wasn't very good. What we need is a set of geographically based integrated railways, with running powers (or whatever newspeak somebody comes up with) to allow XC-type services to operate. But how to handle TfL, TfGM etc areas?

 

[jayah]

Interested to hear why you think so.

RDG have this to say:



I must admit I don't get the "case study", does this imply this new competition will introduce cheaper fares than current walk up fares? Isn't this the idea behind the current advances on the day options?

Nobody really knows what they want!

Competition means lower fares which also means less surplus ultimately for government and more uncertainty for franchises.

It also motivates the scourge of even more, short trains with low off peak load factors to defend against incursions.

More frequent trains worsens performance and leads to more demands to increase track and station capacity. Of course the OA operators are also using pint sized trains causing poor use of capacity on routes like the ECML deemed to be 'full'.

But yes, the fares are lower!

 

[RLBH]

But how to handle TfL, TfGM etc areas?

That's easy - give the major conurbations (i.e. PTEs) their own geographically-based railways with local control. And some kind of running powers agreement one way or the other over main lines in their area. The difficulty is in the interfaces, much as it would be between the geographically-based integrated railways.