How could the DfT cut the costs of providing rail services?

[dk1]

Journey time and probably also unreliability if they pass through congested areas. I suspect it's probably also quite difficult to use a laptop on a road coach, unless it's going steadily on a motorway or very slowly, and the extra journey time means there is more need to make productive use of it.

Not to mention feeling as sick as a dog. Train every time. Many parts of XCs network are pretty fast.

 

[RT4038]

I don't think that, within reason, the interior decor of railway carriages will send many to road coaches. Bearing in mind there is really little chance of new rolling stock being purchased during and post Covid being downgraded sufficiently to make a major difference in the cost of providing rail services (the subject of this thread).

 

[Starmill]

There's a few things to note, firstly others may think differently especially when they have been working from home for a bit longer and in more normal times (so when their children have been doing extracurricular activities).

Others may also be more price sensitive and/or have other things which are seen as needed, as I've suggested £3,000 isn't a lot for a car, but for a household with an income of £40,000 that's ~10% of their earnings for that year when you consider the taxes paid on that £3,000.

Even spread over a fairly typical 3 year car ownership it could still easily be ~10% of households income each year when you've included other car costs and a slightly higher purchase cost.

Some things which they may feel that they need are things like their accommodation isn't big enough (which could be fairly critical to their ability to work from home), they could wish to go in a nice holiday which they otherwise couldn't afford of they had a second car, they could have hobbies or interests that they would rather spend the money on.

That's before you consider that if the economy takes a hit that some are likely to be out of work and so price could be very sensitive to them. Even when they then get another job they may need to rebuild their savings and so continue to be price sensitive for a while, especially if there's other spending which has been put off for a while and/or are concerned about the stability of their job.

Finally, as you've pointed out it's about revenue and with free rail travel you are actually likely to be a revenue liability.

Sounds like driving is stonking value for money to me? I've been spending much, much more than that on rail travel for the past few years?

 

[edwin_m]

Sounds like driving is stonking value for money to me? I've been spending much, much more than that on rail travel for the past few years?

I think the £3000 is intended to be the fixed (or nearly fixed) annual costs of depreciation, excise duty, servicing, insurance etc. When the vehicle actually moves there is cost for fuel, parking, and some allowance for wear and tear.

 

[The Ham]

Sounds like driving is stonking value for money to me? I've been spending much, much more than that on rail travel for the past few years?

That depends on where you're traveling and the distances traveled.

 

[Horizon22]

In any business, to save money you look at the largest costs and see what is best saved from there. Over 50% of the cost of the railway is a) staff and b) leasing and maintaing trains.

There are lots of nice options to reduce small amounts of expenditure but if ultimately demand is at 30% and hardly rising currently and let's say only reaches 50% in the next 6 months, there need to be some quite radical decisions. These may include in my view (not saying I agree).

• A return to looking at DOO/DCO schemes across the country.
• In London & SE removing most peak trains (on a case-by-case basis) and running a "Saturday+" timetable.
• Another evaluation of ticket offices around the country.
• A refocus of marketing and supply towards the leisure market.
• Cut out pointless duplication between TOCs, and cut down on the level of "consulting".
• Control Periods for NR to be better regulated, similar to how they work for Highways England.
• A flexible ticketing system / carnet for peak workers coming in 2/3 times a week which doesn't lose the TOCs / DfT vast amounts versus season tickets.
• A frank look at what jobs are required at TOCs. Those in some franchise / performance / delay attribution roles may be lost due to a lack of requirements.
• Slashing the cost of a season ticket to encourage a return to work for those not keen to remain WFH.

HS2 doesn't cut operational costs which are the problem. Or you have a massive push towards getting commuters back but the cultural shift has happened and while 2021 may see more regular commuting, I doubt it will be near the levels of pre-Covid ever again. Society, employers and employees have seen the benefits, many commuters won't accept the old service any more so it requires a reshaping and soon.

 

[Dr Hoo]

In any business, to save money you look at the largest costs and see what is best saved from there. Over 50% of the cost of the railway is a) staff and b) leasing and maintaing trains.

There are lots of nice options to reduce small amounts of expenditure but if ultimately demand is at 30% and hardly rising currently and let's say only reaches 50% in the next 6 months, there need to be some quite radical decisions. These may include in my view (not saying I agree).

• <SNIP>.
• Control Periods for NR to be better regulated, similar to how they work for Highways England.
• <SNIP>.

HS2 doesn't cut operational costs which are the problem. Or you have a massive push towards getting commuters back but the cultural shift has happened and while 2021 may see more regular commuting, I doubt it will be near the levels of pre-Covid ever again. Society, employers and employees have seen the benefits, many commuters won't accept the old service any more so it requires a reshaping and soon.

This is an interestingly novel suggestion.

Noting that both NR and Highways England have 5-year Statements of Funds Available set by the DfT and both organisations/modes are regulated by the same organisation - the Office of Rail and Road - could you flesh out this idea a bit more, please?

 

[Bletchleyite]

A flexible ticketing system / carnet for peak workers coming in 2/3 times a week which doesn't lose the TOCs / DfT vast amounts versus season tickets.

There's lots of talk of this. How about instead just making Anytime tickets less outrageously expensive - that's the true "keep it simple".

Sounds like driving is stonking value for money to me? I've been spending much, much more than that on rail travel for the past few years?

If you travel enough, a car is a very good value investment, yes.

 

[Horizon22]

This is an interestingly novel suggestion.

Noting that both NR and Highways England have 5-year Statements of Funds Available set by the DfT and both organisations/modes are regulated by the same organisation - the Office of Rail and Road - could you flesh out this idea a bit more, please?

My (albeit brief) exposure with HE was that it seemed tighter regulated that the way NR dealt with their CP. I understand they are fairly new for HE so perhaps this is more of a cultural problem than anything else.

There's lots of talk of this. How about instead just making Anytime tickets less outrageously expensive - that's the true "keep it simple".

Works for me. I mean these are the people the railway is missing at the moment anyway. I understand why - to price people off packed peak trains - but as that is (currently) not an issue it is worth considering a substantial reduction of 25-50%. Somehow can work out the ideal price point no doubt.

 

[Bletchleyite]

Works for me. I mean these are the people the railway is missing at the moment anyway. I understand why - to price people off packed peak trains - but as that is (currently) not an issue it is worth considering a substantial reduction of 25-50%. Somehow can work out the ideal price point no doubt.

As things stand I'd apply Sunday pricing on weekdays - perhaps until Easter? However, once things pick up again, I'd give you a couple of ones I think would be reasonable (Anytime (Day) Return -
Bletchley-Euston perhaps £25-30 (current Off Peak Day £20.80, current Anytime Day £41)
Manchester-Euston perhaps £150-200 (current Off Peak £92.10, current Anytime an absolutely outrageous £360)

It used to be the case "up north" that the peak fare was typically about a quarter to a third higher than the "after 9:30". That's probably the way to go to make them actually reasonable and not effectively penalties for not booking an Advance.

This of course wouldn't "cut costs", but it might get some bums on seats rather than running empty "peak" trains around while everyone drives!

 

[edwin_m]

In any business, to save money you look at the largest costs and see what is best saved from there. Over 50% of the cost of the railway is a) staff and b) leasing and maintaing trains.

Train leases are generally on contracts that align with the franchise periods of the TOCs involved. Penalty clauses for early termination are likely to be not far short of what it would cost to pay for the rest of the term, so there's little short-term opportunity for a big cost saving except in franchises that were going to end soon anyway. It may be that SouthEastern;s Networkers could go off-lease for example, with Electrostars re-allocated from Southern that are similar to the rest of their fleet thus minimizing re-training costs. But I don't know what the rolling stock lease terms currently are, with the myriad extensions of that franchise. The government could take the gamble that the trains in question would be mothballed rather than scrapped or sold overseas, and hope to re-lease some at bargain rates if demand came back.

Staff can obviously be made redundant, but I imagine that's difficult for traincrews. If demand comes back they are probably more difficult to replace than trains, as they will need a period of training even if they are returnees.

 

[JonathanH]

It may be that SouthEastern;s Networkers could go off-lease for example, with Electrostars re-allocated from Southern that are similar to the rest of their fleet thus minimizing re-training costs.

The interesting thing about that is how re-training costs are spread across the operators. Taking your example further, it would make more sense from a fleet point of view to use any surplus in the Southern Electrostar fleet to remove their 313s and 455s as the Electrostars are probably universally known and replacement of 313 / 455 surely trumps Networker replacement. That leaves Southern out of any traction retraining.

The Networkers could be backfilled by release of 450s from the South Western division. Alternatively, the 450 fleet could be used to release the 455s alongside the 701s and the rest of the 701 fleet sent to the South Eastern division to remove the Networkers BUT that spreads training costs across two areas rather than one.

Introducing a new fleet is obviously a cost for whichever business has to do that and presumably would be recognised in the ERMA costs. Minimising the number of new fleets being introduced would make some sense.

 

[edwin_m]

The interesting thing about that is how re-training costs are spread across the operators. Taking your example further, it would make more sense from a fleet point of view to use any surplus in the Southern Electrostar fleet to remove their 313s and 455s as the Electrostars are probably universally known and replacement of 313 / 455 surely trumps Networker replacement. That leaves Southern out of any traction retraining.

The Networkers could be backfilled by release of 450s from the South Western division. Alternatively, the 450 fleet could be used to release the 455s alongside the 701s and the rest of the 701 fleet sent to the South Eastern division to remove the Networkers BUT that spreads training costs across two areas rather than one.

Introducing a new fleet is obviously a cost for whichever business has to do that and presumably would be recognised in the ERMA costs. Minimising the number of new fleets being introduced would make some sense.

It obviously depends on the numbers of units considered surplus, but also on the lease periods. When do the leases run out on the 313s and 455s versus the Networkers? We probably don't know.

I don't think my suggestion of moving Electrostars to replace Networkers would involve any extra training in either operator, unless there are SouthEastern staff who are only familiar with Networkers.

 

[Horizon22]

It used to be the case "up north" that the peak fare was typically about a quarter to a third higher than the "after 9:30". That's probably the way to go to make them actually reasonable and not effectively penalties for not booking an Advance.

This of course wouldn't "cut costs", but it might get some bums on seats rather than running empty "peak" trains around while everyone drives!

Quite. I mean any more paying passengers is better than nothing. Either that and/or a critical look as to whether every peak train need to run.

 

[yorksrob]

It used to be the case "up north" that the peak fare was typically about a quarter to a third higher than the "after 9:30". That's probably the way to go to make them actually reasonable and not effectively penalties for not booking an Advance.

This of course wouldn't "cut costs", but it might get some bums on seats rather than running empty "peak" trains around while everyone drives!

That sounds like a very sensible way forward.

 

[Starmill]

That sounds like a very sensible way forward.

By contrast though, Super Off Peak fares which are generally available in the former NSE area and generally not in other parts of England (such as "the north") usually offer a better rate per km. There can be some significant benefits to accepting quite tight time restrictions. Of course, the view might now be that this is all unnecessary, but as I keep saying, it's very dangerous to assume there's any more yeild out there that can be hunted. Or to put it another way, a cheap leisure product needs to actually be cheap, not used as a decoy.

 

[yorksrob]

By contrast though, Super Off Peak fares which are generally available in the former NSE area and generally not in other parts of England (such as "the north") usually offer a better rate per km. There can be some significant benefits to accepting quite tight time restrictions. Of course, the view might now be that this is all unnecessary, but as I keep saying, it's very dangerous to assume there's any more yeild out there that can be hunted. Or to put it another way, a cheap leisure product needs to actually be cheap, not used as a decoy.

I must admit, on my trips to Kent, I've usually got a choice between off peak/anytime and period/day return. I've not really come across the super off-peak.

I suppose the main aim is not to end up with half an IC service empty and waiting for non-existing expense account passengers. We perhaps need a first class which is a proportion more expensive than standard, which can entice ordinary passengers to upgrade (much like some advanced purchase fares do).

 

[Starmill]

I must admit, on my trips to Kent, I've usually got a choice between off peak/anytime and period/day return. I've not really come across the super off-peak.

Ashford to London has three Super Off Peak tickets (Via Haywards Heath, Not High Speed One and Plus High Speed), so I'm not sure what's happened there.

 

[Meerkat]

I used super off peak tickets on Saturdays for months before I found out even Saturdays have time restrictions - I had been wondering why they got rejected by ticket machines so often!
But the gate staff always let me through so it being a validity issue didn’t cross my mind.

 

[JonathanH]

Ashford to London has three Super Off Peak tickets (Via Haywards Heath, Not High Speed One and Plus High Speed), so I'm not sure what's happened there.

The Haywards Heath fare only exists from Ashford, not to. They are also only day tickets.

 

[yorksrob]

Ashford to London has three Super Off Peak tickets (Via Haywards Heath, Not High Speed One and Plus High Speed), so I'm not sure what's happened there.

I usually get the cheapest I can anyway.

 

[The Ham]

In any business, to save money you look at the largest costs and see what is best saved from there. Over 50% of the cost of the railway is a) staff and b) leasing and maintaing trains.

There are lots of nice options to reduce small amounts of expenditure but if ultimately demand is at 30% and hardly rising currently and let's say only reaches 50% in the next 6 months, there need to be some quite radical decisions. These may include in my view (not saying I agree).

• A return to looking at DOO/DCO schemes across the country.
• In London & SE removing most peak trains (on a case-by-case basis) and running a "Saturday+" timetable.
• Another evaluation of ticket offices around the country.
• A refocus of marketing and supply towards the leisure market.
• Cut out pointless duplication between TOCs, and cut down on the level of "consulting".
• Control Periods for NR to be better regulated, similar to how they work for Highways England.
• A flexible ticketing system / carnet for peak workers coming in 2/3 times a week which doesn't lose the TOCs / DfT vast amounts versus season tickets.
• A frank look at what jobs are required at TOCs. Those in some franchise / performance / delay attribution roles may be lost due to a lack of requirements.
• Slashing the cost of a season ticket to encourage a return to work for those not keen to remain WFH.

HS2 doesn't cut operational costs which are the problem. Or you have a massive push towards getting commuters back but the cultural shift has happened and while 2021 may see more regular commuting, I doubt it will be near the levels of pre-Covid ever again. Society, employers and employees have seen the benefits, many commuters won't accept the old service any more so it requires a reshaping and soon.

Current rail use is about 40% (link to spreadsheet download):

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/919223/COVID-19-transport-use-statistics.ods

The tube is a bit behind at about 35%.

Whilst rail hasn't changed a lot since the start of September it did rise about 10% during August.

There's currently still a lot of measures which limits numbers traveling, such as colleges limiting pupil numbers on site each day, offices still being mostly WFH, and other measures to limit the spread of Covid-19. Once they ease further (something which could be possible within 6 months) it's entirely possible that demands could be higher than 50%.