Should we get rid of the ORCATS revenue allocation system?

[Bletchleyite]

Moderator note: Split from https://www.railforums.co.uk/threads/east-coast-trains-is-this-still-going-ahead.213226

Even simpler than that - if the Government are to be taking revenue risk on all the franchises going forward as seems to be the case, why would you need ORCATS? It all goes into one pot, and TOCs are paid for what they operate.

Very little point pratting with the fare system as it is before that fully becomes the case.

 

[Ianno87]

Still useful for internal accounting for what revenue is allocated to service groups to be married up against costs, as any business would.

No different to how Tesco needs to know not just how much revenue each store makes, but the revenue each individual product sold achieves.

 

[Bletchleyite]

Still useful for internal accounting for what revenue is allocated to service groups to be married up against costs, as any business would.

No different to how Tesco needs to know not just how much revenue each store makes, but the revenue each individual product sold achieves.

Did BR have an equivalent for those purposes?

 

[Ianno87]

ORCATS was developed by BR. Previously it was the Railway Clearing House.

 

[Simon11]

ORCAT wont be going anywhere in the future! As well as the point above, it is also needed for open access operators!

 

[Bletchleyite]

ORCAT wont be going anywhere in the future! As well as the point above, it is also needed for open access operators!

Though an interesting question is whether OAOs should be able to "ORCATS raid" or if they should have to stand on their own feet.

 

[pdeaves]

For as long as you have ticket interavailability on non-government-supported services (open access), you need some way to apportion the correct revenue. A system already exists that seems to work well enough.

If open access is own fare only, it's a bit different, but do we really want to lose the interavailability?

 

[squizzler]

With more tickets allotted a specific seat and service, I would expect the role of ORCATS to be greatly diminished, even if it needs to remain to deal with a minority of "open" tickets likely to remain.

The coming great "Fares Reform" should determine what ends up replacing ORCATS. The tail of today's fare allocation should not wag the dog of a clean sheet fares system.

 

[Ianno87]

With more tickets allotted a specific seat and service, I would expect the role of ORCATS to be greatly diminished, even if it needs to remain to deal with a minority of "open" tickets likely to remain.

But ORCATS still has a purpose even then, for Advance tickets that involve a non-reservable connection (for example). How much of a slice goes to the applicable connecting operators?

 

[quantinghome]

It has been said [citation needed] that if anyone works out exactly what ORCATS does, it will instantly disappear and be replaced by something even more bizarre and inexplicable.

 

[Ianno87]

It has been said [citation needed] that if anyone works out exactly what ORCATS does, it will instantly disappear and be replaced by something even more bizarre and inexplicable.

AIUI its workings are a bit of a "black box", but it is a stable one, so people generally have a good understanding of how train service changes affect revenue apportion.

Changing the workings of the "black box" risk some quite dramatic (and unpredictable) effects on what revenue goes where. For every TOC that gains another TOC will lose out. Which is all completely arbitrary when, even with pre-Covid franchises, it is generally the same ultimate bottom line (DfT).

 

[Dr Hoo]

AIUI its workings are a bit of a "black box", but it is a stable one, so people generally have a good understanding of how train service changes affect revenue apportion.

Changing the workings of the "black box" risk some quite dramatic (and unpredictable) effects on what revenue goes where. For every TOC that gains another TOC will lose out. Which is all completely arbitrary when, even with pre-Covid franchises, it is generally the same ultimate bottom line (DfT).

Not actually quite that simple. Some of the 'pot' has to be fairly divided with TfL, Transport Scotland, Transport for Wales or Merseytravel, let alone dealing with some multi-modal passes in various areas.

 

[JonathanH]

Clearly for so long as the existing fare structure exists then the ORCATS allocation needs to remain but in a future where all local journeys are on bank cards or smartcards and everything else is book in advance electronic tickets for a specific train, and everything involves 'touching in' it would seem possible to allocate revenue much more closely to the train actually used.

The much vaunted change to the fare structure, while not at all welcome by some people, will facilitate this.

 

[squizzler]

But ORCATS still has a purpose even then, for Advance tickets that involve a non-reservable connection (for example). How much of a slice goes to the applicable connecting operators?

The railway needs as much realtime data as it can get, passenger behaviour included. ORCATS (as I understand it) represents something of a failure in that it is not based on hard date, rather it allocates revenue based on guesswork as to what trains and routes passengers are likely to have taken.

The industry is keen to move towards passengers nominating a specific train when they buy a journey.

Perhaps the revenue can be divvied out by modern methods for finding out how many people are on trains, like using the weight sensors or CO2 measurement, or mobile phone beacons of some sort that detect how many mobiles (and presumably passengers) are on board.

 

[tbtc]

Why would a ten billion pound a year industry *not* want to know which stations/ services/ lines are bringing in a particular share of the "pot"?

It's surely easier and easier to calculate/allocate monies nowadays - IMHO the only people who would be against ORCATS are:

1. People who can only understand the railway based on what they learned in Thomas The Tank Engine - so other than drivers/ firemen, they can't appreciate any other roles for people (other than the job of fat bloke wearing a top hat who manages to control everything and everyone without the need for "pen pushers" / "bureaucrats"/ "desk jockeys" or any other negative term given to people who aren't doing the kind of jobs that they did on Sodor)

2. People who are scared of The Powers That Be having evidence of just how lightly loaded a particular station/ service/ line is, because they worry that it'd be very hard to justify them if there was proof that passenger numbers were in single figures (we can all argue about how "socially necessary" something is, but it's a lot harder to justify if the evidence showed that there really was just one man and his dog using it)

Nothing to do with nationalisation/privatisation though - any large organisation (and one taking in billions of pounds a year fits that bill) needs internal cost codes, needs some kind of mechanism to manage expenditure... the company I work for requires me to allocate my time to different cost centres even though it's all one united company as far as any outsider would be concerned. The idea that ten billion quid would just "go in one pot" seems rather naive... we're not in Sodor anymore.

 

[Bald Rick]

Did BR have an equivalent for those purposes?

I was using ORCATS nearly 30 years ago, and it wasn’t exactly new then.

 

[Dr Hoo]

As a former BR Resources Manager, Profit Centre Manager and Service Group Manager how was I supposed to do my jobs meaningfully without knowing how much the activities were 'worth'? Plenty of other revenue-related systems like MOIRA, CAPRI, PDFH alongside ORCATS of course. (And as I have posted before, the way that SAFGABS concertina-fold computer print-outs superseded clerks working with manual/mechanical calculators, round rulers, 'ledgers' and so forth in the early 1970s was transformative.)

 

[RT4038]

Why would a ten billion pound a year industry *not* want to know which stations/ services/ lines are bringing in a particular share of the "pot"?

It's surely easier and easier to calculate/allocate monies nowadays - IMHO the only people who would be against ORCATS are:

1. People who can only understand the railway based on what they learned in Thomas The Tank Engine - so other than drivers/ firemen, they can't appreciate any other roles for people (other than the job of fat bloke wearing a top hat who manages to control everything and everyone without the need for "pen pushers" / "bureaucrats"/ "desk jockeys" or any other negative term given to people who aren't doing the kind of jobs that they did on Sodor)

2. People who are scared of The Powers That Be having evidence of just how lightly loaded a particular station/ service/ line is, because they worry that it'd be very hard to justify them if there was proof that passenger numbers were in single figures (we can all argue about how "socially necessary" something is, but it's a lot harder to justify if the evidence showed that there really was just one man and his dog using it)

Nothing to do with nationalisation/privatisation though - any large organisation (and one taking in billions of pounds a year fits that bill) needs internal cost codes, needs some kind of mechanism to manage expenditure... the company I work for requires me to allocate my time to different cost centres even though it's all one united company as far as any outsider would be concerned. The idea that ten billion quid would just "go in one pot" seems rather naive... we're not in Sodor anymore.

Spot on post.

 

[squizzler]

Why would a ten billion pound a year industry *not* want to know which stations/ services/ lines are bringing in a particular share of the "pot"?

For don’t think this is being suggested. Rather I think the OP is suggesting a new regime that has fewer “perverse incentives”, here perceived as causing operators to game the system and run many small trains.

The other option is simply to force customers to allocate themselves to specific services - single leg pricing - as we understand to be one of the proposals for the forthcoming fares reform

 

[tbtc]

For don’t think this is being suggested. Rather I think the OP is suggesting a new regime that has fewer “perverse incentives”, here perceived as causing operators to game the system and run many small trains

I thought that the OP was talking about a world where the billions of pounds of fare revenue "all goes into one pot"

That would mean we had no idea how different lines/ services/stations were performing compared to others - whether the introduction of a different type of train had had an impact upon passenger numbers - whether introducing advanced tickets on a line had seen sufficient passengers paying the lower price to mean an overall gain in revenue - whether cuts to the First Class offering had turned more people away than expected - whether an improvement on one line had increased passenger numbers and revenue but partly by cannibalising journeys from a broadly parallel route - that kind of thing.

If we just put all of the money in "one pot" then we'd have no idea what works what didn't work and where lessons could be learned.

I'm sure that there are similar things to ORCATS in any large industry - supermarkets will want to know how their "local" stores are doing compared with their "hypermarkets" - they'll want to assess the revenue that comes in during the final hour of operation each day to assess whether it's worth opening later of closing earlier - they'll want to see whether the "three for two" offer saw a sufficient rise in consumer spend - whether an advertising campaign sees a boost to sales over the next fortnight - they even offer us discounts on "loyalty" cards so that they can collate this data, that's how important it is.

Having franchises run on a management contract (with no revenue incentives) is different to getting rid of ORCATS - I'm certainly against the trend of squeezing short DMUs through bottlenecks and would welcome a better balanced timetable rather than what we have on lines where competition has encouraged too many trains like York to Leeds - but you still need something like ORCATS to be able to manage where your income is coming from - even under a "monolith" operator you'd need statistics to evidence what worked/failed - if only so you could go to the Government and use the figures to justify why you thought investment in a particular line/station would pay off.

IMHO, ORCATS feels a bit like the data collected for delay attribution or the entire HS2 project or the original IEP - it's easy to pick holes in but a lot harder to come up with something better

 

[DorkingMain]

IMHO, ORCATS feels a bit like the data collected for delay attribution or the entire HS2 project or the original IEP - it's easy to pick holes in but a lot harder to come up with something better

I'm definitely a critic of the delay attribution system, but less because of it providing information that is valuable to the running of the service, and more because it's turned into a blame game where the grade responsible for timekeeping (control, guards, drivers etc) are encouraged to try and pin responsibility for delays on other people, and placing undue pressure on staff when they're told they're personally responsible for losing the company X thousand.

ORCATS obviously doesn't run into these issues so much, because frontline staff are generally fairly removed from the whole system unless there's a specific revenue protection issue.