/ Travel & Leisure

New rail recommendations – who picks up the bill?

Train

Today sees the biggest rail news for years – the McNulty review on value for money on trains (or, as it turns out, the lack of it). So what exactly are the recommendations – and is it realistic to expect them to be met?

The review said tickets were already too high and the cost of running the network should be 30% lower to bring it in line with other European railways.

As a result, there’s to be a ‘full review of fares policy and structures, aiming to move towards a system that is seen to be less complex and more equitable’.

There’s also to be ‘management of peak demand and more efficient matching of demand with capacity’ with a fares ‘rebalancing’ – but no overall increase. It remains to be seen what this involves, but there’s no getting around the fact that there are only so many people you can fit onto a network at a given point.

The true cost of privatisation

And the train sector in Britain is surely in dire need of cost-cutting. Since so-called privatisation, the real-terms cost to the public purse is about five – yes, five – times what it was under British Rail, when the system’s only income was from the taxpayer.

Small wonder there are newer, safer trains and more frequent services – you’d expect it for that kind of cash.

So, it’s nice that McNulty reckons Britain’s 30% ‘efficiency gap’ can be closed by 2019, but with savings of £1 billion per year, that’s still only about a sixth of what the railways cost to the public purse/taxpayer each year.

Farepayer vs taxpayer

The Government has said it wants the farepayer to make up more of the cost of the railway, rather than the taxpayer.

‘User pays’ sounds like a good idea, but taken to extremes rapidly becomes complete gibberish. Some commentators on a previous Convo about non-drivers didn’t agree that taxpayers should subsidise trains. But in reality, we must have a rail network – Britain can’t function without it. So claiming that your taxes shouldn’t pay towards it if you don’t use trains makes little sense.

Plus, trains never make money – something other countries’ governments have long recognised, so extra revenue has to come from somewhere.

What sticks in my throat is that nobody – neither taxpayers nor farepayers (or the 48% of us who are both) – voted for costs to soar like this. So it seems very hard and distinctly ungreen to want farepayers to make up for it on their own.

And in all this rebalancing and efficiency gap closing I don’t detect much ‘let the train take the strain’ attitude. Where’s the actual encouragement to use public transport rather than the car? Instead we get demand management. Perhaps now it’s time to start focussing on supply management.

Comments
Member

Well, call me old fashioned and stuck in a time warp, but something is really wrong with this, but from actually where? For me who can go back to 2d halves and 7/6d weekly returns both pre and post Beeching! British Rail that was, to now, is a farce and day by day gets worse. Surely the whole idea of this invention was to provide a mass travel system which was affordable for all and get goods and services on that basis.

Belting Joe Public with more hikes seems to defeat the logic of affodable transportation! It is very much somewhat relative to those who just can’t afford the choice of getting the train in the first place. Very soon if not already that choice has gone.

So it gets political as opposed to practical, no comment here, but just what would be the better road/…..rail!… to take? Hope this one runs and runs, dare I say, more than the trains sometimes.

Member
Phil says:
20 May 2011

I didn’t notice any mention of ROSCOs, the train leasing companies who own the rolling stock, lease it to the operators and make huge profits for essentially doing nothing. There again it was a previous Tory government that invented them and big party donors who own some of them.

Member

see what Phil says….

The TOC’s (Train Operating Co’s) do not actually make that much profit, the profit, that we are subsidising, is related to the ROSCO’s but NO-ONE mentions this at all, apart from Phil of course 🙂

As a result we often get trains that are unsuitable for the routes they are running on, and more importantly, we don’t get ENOUGH carriages for the routes that they are working on. This flagrant disregard for the taxpayer has to stop.

Is it really fair that HSBC owns our trains? I think not. Also don’t forget how much the private ROSCOs are charged MORE by private trainbuilding companies than was charged under BR. Under BR, they selected what was the best carriage design, they then implemented differing vaiants of that design specific to the route they were on (Thameslink (25kv + 3rd rail DC) or London Midland (Diesel) ) all which used the same bodyshell but different traction motors.

Every train built for Britain now is 100% bespoke. Just look at the new Intercity Express Programme, more bespoke trains unique ONLY to britain, how can this be cost effective?

Please can we get the government to remove the elephant in the room? ROSCOs

Member

The ROSCOs have indeed made huge profits out of the rail sector, particularly in the early days. Hopefully the value for money emphasis will not just fall on extracting more from the farepayer but also on getting better value from players such as the ROSCOs.

On the point about shortages of carriages, it’s my understanding that this is frequently down to the specifications of the franchise and negotiations needing to be entered into with the Department for Transport – rather than the ROSCOs not supplying stock.

On TOCs not making much profit – this is determined by the government, revenue figures and the specifics of each franchise. But First Group, which has 5 TOCs in the UK, did make £108m profit from its rail operations in 2010-11, according to ‘Modern Railways’. Somewhat ironically, First Great Western receives subsidy because revenue has fallen below predictions, while First has announced it will step away from the franchise at its 2013 break point and so avoiding paying £1bn in premia to the government.

The IEP seems to me to be an entirely Dept for Transport driven programme, not a ROSCO one.

Member

Thanks Richard, I think we could probably discuss this one for hours 🙂

IEP will be bought by Porterbrook or HSBC (or others) and leased out regardless of where the ridiculous specification came from. The Bi mode is just the biggest waste of money I have ever heard. The government are talking about austerity yet they try to specify a train with the most profligate spec I have ever seen. Absolutely hypocritical and short sighted is being polite 🙂

And with capacity, I refer to the lack of carriages being suppressed by the cost for TOCs to hire another carriage that is compatible with current trains and the route.

Maybe TOC’s don’t make too much of a profit, but there still has to be a full management structure in every single TOC. Same with Network Rail outsourcing and sub-sub contracting. The companies themselves probably don’t make too much profit, it’s just that for every sub contract, there is all the admin that goes with it and the management structure that are associated.

Massively massively inefficient

Member
W.S.Becket says:
5 June 2011


Mr Dilks says: “But in reality, we must have a rail network – Britain can’t function without it. So claiming that your taxes shouldn’t pay towards it if you don’t use trains makes little sense.”

Which, frankly, is absolute eyewash. If the railways – which the exception of a handful of suburban networks – were to be stopped tomorrow, we would have adjusted within six months. For long distance travel we have roads and airlines aplenty whilst the introduction of the electric car – twenty years away, perhaps – will allow a great deal of urban roadways to be constructed underground with adequate parking which should eliminate the bottlenecks that cause traffic jams. Withdrawal of subsidy-ridden commuter lines would also provoke many to start working from home; a facility that has yet to be taken full advantage of.

Mr D adds: “Plus, trains never make money – something other countries’ governments have long recognised, so extra revenue has to come from somewhere.”

Perhaps he should have a look at the balance sheets – or even buy shares in – of most American railways. Our railways also used to make a profit until 1956 when the cost of modernisation plus the loss of goods traffic put them in the red.

Member
W.S.Becket says:
5 June 2011

It seems to me that we have been taken for quite a ride. I have no axe to grind for BR but had we left it alone, the public subsidy would be one-fifth of what it actually is whilst fares would have been one-tenth of what they now are. In addition, the passenger market for rail travel has shrunk to an unbelievable level: for every 100 passengers there were when BR came into being, there are now 36!