As the year draws to an end, we reflect on the past 12 months and identify some of its key moments

 

reading_winnerReading Buses was crowned UK Bus Operator of the Year

 

JANUARY

DfT in dock over GTR failure

The quality of the Department for Transport’s management and the rail franchising process came under scrutiny following poor performance at the new Govia Thameslink Railway franchise. In the first 12 weeks of the franchise, which started in September 2014, GTR cancelled 3-4% of services due to driver shortages.

London bus staff strike

Bus workers in London staged a week of strike action as trade union Unite stepped up its campaign for a collective bargaining agreement across the capital’s bus operators.

Bus cuts revealed

Campaign for Better Transport published research showing that half of local authorities had cut funding for buses in the current financial year. The period saw local authority funding for bus services slashed by 15% (£44m) with more than 2,000 routes being reduced or withdrawn entirely.

DfT reviews franchising role

The DfT sought to enhance its understanding of bus market dynamics with the appointment of consultancy KPMG to determine if franchising might be an appropriate model for buses and whether candidate locations exist.

Scottish Labour seeks public sector ScotRail

The Scottish Labour Party announced plans for a ‘People’s ScotRail’ run by a not-for-profit public sector organisation if it wins power in the 2016 Scottish Parliamentary elections.

 

FEBRUARY

Osborne floats devolved Rail South West

Chancellor George Osborne announced that the government was exploring the case for creating a dedicated Devon and Cornwall rail franchise. The announcement was part of the government’s economic plan for the south west of England and would see a devolved Rail South West organisation created to manage the franchise.

TOC profit margins hit low

Train operating companies’ profit margins hit a new low, falling below 2%, according to the Office of Rail Regulation’s annual analysis of the rail industry’s income and costs. It revealed that Northern Rail was the most profitable company, despite profits falling from £34m to £29m. Meanwhile, sister Serco/Abellio TOC Merseyrail retained the highest profit margin, which rose to nearly 10%.

Labour turns up the heat on private sector

The Labour Party indicated that it would begin the process of reforming bus and rail industry legislation to provide options for greater public control if it won the general election in May.

UK Bus Summit returns

The first UK Bus Summit in 15 years heard contributions from four transport ministers and a host of senior industry figures. At the event, transport secretary Patrick McLoughlin urged bus operators to view the devolution of transport powers in Greater Manchester as an opportunity rather than a threat.

 

MARCH

Virgin starts East Coast as FirstGroup challenges

With the launch of the new Virgin Trains East Coast franchise, Stagecoach and Virgin announced plans for a £3m innovation fund to implement ideas suggested by communities and passengers served by the new operator. Meanwhile, FirstGroup announced plans to run 10 new open access rail services per day from London to Edinburgh on the East Coast Main Line. The proposal was designed specifically to take passengers from budget airlines, with standard class seating only and average fares “significantly lower” than current fares offered on cross-border services between the two capitals by Virgin trains East Coast, EasyJet and Ryanair.

NatEx leads on Living Wage

National Express became the first private sector UK transport group to commit to paying all of the group’s employees the Living Wage. The pledge covers all staff employed by the company and its contractors.

SWT deal enables £50m of improvements

South West Trains and the DfT agreed a £50m package of customer service improvements under an amendment to the Stagecoach-owned operator’s franchise. The new deal will see additional weekend and evening trains, 1,400 additional station car parking spaces, a new online booking system and improvements to customer information.

First swoops as limping Greyhound closes

FirstGroup announced a major expansion of its bus operations in Cornwall, just days after local independent bus operator Western Greyhound collapsed following difficulties in securing adequate insurance for its fleet.

 

APRIL

Network Rail ‘not good enough’

A huge fall in train operators’ satisfaction with Network Rail was set out in the company’s latest annual customer survey. It revealed that only 40% of senior staff from passenger and freight train operators were satisfied with the infrastructure controller’s overall performance during 2014, down from 57% in 2013 and 66% in 2012.

Pilot corridor for ‘New Bus for Yorkshire’

First West Yorkshire announced plans for a pilot corridor of its New Bus for West Yorkshire concept, subject to a partnership framework being agreed with the region’s Combined Authority. The move would see a package of measures introduced that are designed to achieve a radical transformation of bus services in West Yorkshire, proposed as an alternative to the controversial NGT trolleybus scheme promoted by Metro, the West Yorkshire PTE.

Tram users 90% ‘satisfied’

Survey work by watchdog Transport Focus revealed that nine out of 10 tram passengers were satisfied with their journey according to this year’s Tram Passenger Survey. It saw 4,900 tram passengers questioned in Blackpool, Greater Manchester, the West Midlands, Nottingham, Sheffield and Edinburgh.

Parties promise action on rail value for money

With the general election approaching, new measures to improve passengers’ perceptions of the value for money of rail travel were set to be introduced by the new government with both Labour and the Conservatives pledging reforms in addition to freezing fares.

 

MAY

Hendy accused of cynical rail power grab

Transport for London commissioner Sir Peter Hendy was accused by the RMT union of a “cynical attempt to drag [further] commuter rail services into TfL”, after outspoken criticism of the quality of the capital’s suburban rail services. Hendy had criticised the “awful” quality of London’s suburban rail operations in an interview with Management Today, but later apologised for the “unjustified
and excessive” remarks.

Cardiff Bus competition

Council-owned Cardiff Bus faced its most significant competition in decades after local independent New Adventure Travel launched a new cross-city service. Kevyn Jones, NAT’s managing director, said that the new routes were not designed to attack Cardiff Bus, but to increase the bus market overall.

Souter ‘tech stock’ warning

Stagecoach chairman Sir Brian Souter urged the passenger transport sector to embrace technology, or risk being sidelined by a new ‘tech stock’ entrant. Addressing the annual ALBUM bus conference in Cheshire, he said that Uber-style entrepreneurs could remould the sector.

‘Agree to mayor and get bus powers’

In the wake of the Tories’ general election victory, chancellor George Osborne opened the door for cities in England to gain greater powers over local transport if they agreed to an elected executive mayor. He said that last year’s devolution agreement with Greater Manchester would become a template for other cities.

 

JUNE

Uber-style ‘nuclear bomb’ heading for transport

The chief executive of Transdev’s business in the UK and Ireland warned that a tech-inspired “nuclear bomb” was heading for the public transport sector. Nigel Stevens told Passenger Transport that the entire public transport sector will face threats and opportunities from taxi app Uber and a host of other new entrants in the coming years.

Bus investment threatened

Giles Fearnley, the managing director of FirstGroup’s UK bus division, warned that future investments in the country’s bus fleet could be jeopardized by moves to re-regulate the bus industry. His comments came as the Aberdeen-based group announced orders for 385 new buses, worth £77.7m, for delivery over the course of 2015/16.

Abellio boss sacked

It was announced that Jeff Hoogesteger, Abellio’s chief executive, had been dismissed because of “irregularities” over the capture of a £1.4bn contract to run bus and regional rail services in the Dutch province of Limburg. Timo Huges, chief executive of Abellio’ sparent company, Dutch state railways NS, was also sacked.

London in UITP spotlight

Sir Peter Hendy, Transport for London’s commissioner and president of UITP, the international transport association, took centre stage at the UITP World Congress in Milan. During the three-day event, UITP hailed London’s achievements for being among a select group of cities that have achieved a 10% increase in public transport’s modal share since 2009.

 

JULY

Cornwall’s devo-deal surprises bus industry

The bus industry was caught by surprise by the government’s decision to give Cornwall control of its bus services as part of a new devolution deal. Cornwall Council had expressed ambitions to take on control of the county’s bus network several times in recent years, but government support for the move was unexpected.

Transport for the North to be transport superpower

Chancellor George Osborne announced that Transport for the North would be established as a statutory body over the summer with a remit to create a new regional transport superpower. The organisation would take on statutory duties to set out transport policies and investment priorities as part of a long-term transport strategy for the north.

Hendy joins Network Rail

The DfT moved to remedy long-standing weaknesses on Network Rail’s board with the appointment of London transport commissioner Sir Peter Hendy as non-executive chairman and former Eurostar chairman Richard Brown as the government’s special director. Transport secretary Patrick McLoughlin said that the new arrangements had been put in place to address spiraling costs and poor planning of the company’s electrification programme.

Shaw reviews Network Rail

HS1 chief executive Nicola Shaw was tasked with undertaking a review into the “longer term future shape and financing of Network Rail” in a move that followed speculation that the government was considering breaking up the company. Shaw would work closely with Sir Peter Hendy, Network Rail’s new chairman, on the analysis.

 

AUGUST

New ORR test boosts open access prospects

The prospect of further open access services being approved on the East Coast Main Line appeared to increase significantly as a result of new methods of assessing applications developed for the Office of Road and Rail. It followed approval by ORR of the first open access competition on the West Coast Main Line by Arriva-owned Alliance Rail, which will introduce services between Blackpool and London from 2018.

QCS Board hears of Tyne & Wear scheme risks

The Quality Contract Scheme Board established to scrutinise plans for a QCS in Tyne & Wear began its nine-day public hearing. It saw one senior manager at Nexus, the region’s transport executive, admit that he was horrified to discover that the organisation had hugely under-estimated the risk of the scheme running out of money.

Fare rise lowest in six years

The government announced that regulated rail fares would increase by 1% in January. As well as being the lowest increase since 2009, the DfT said that it would be the first time since 2003 that increases in average earnings would outstrip rises in rail ticket prices.

Nottingham tram extends

Nottingham’s tram network doubled in size with the opening of two new lines to Chilwell and Clifton. The £570m extension of the tram network was part-funded by the UK’s only workplace parking levy. The extended 32km network, operated by Keolis, now has the capacity to serve up to 20 million passengers a year.

 

SEPTEMBER

Bus lanes benefits revealed

Research for campaign group Greener Journeys by KPMG revealed that every pound spent on local bus infrastructure could generate up to £7 of benefits. The study found that measures, such as bus lanes, busway schemes and better interchange systems to speed up journeys, when implemented in the correct places and properly enforced, delivered significant benefits.

Borders Railway reopens

The Queen officially reopened the 31-mile Borders Railway, linking Edinburgh and Tweedbank. It marked the culmination of the £294m project, which was heralded by the Scottish Government as the longest domestic line to be built in the UK in over 100 years.

Hitachi opens Newton Aycliffe assembly plant

Hitachi Rail Europe opened its new assembly plant at Newton Aycliffe in County Durham. The £82m facility will employ 730 workers assembling Intercity Express trains that will be introduced on the Great Western Main Line from 2017.

Baker – Osborne treating buses as a ‘plaything’

Chancellor George Osborne is treating buses as a pawn to be sacrificed for his own political advantage, according to Norman Baker, his former coalition colleague told Passenger Transport. The former transport minister expressed concern at the “pretty terrible” direction in which bus policy has headed since May’s general election and said that Osborne was wrong to include powers to permit bus franchising in new devolution deals.

DfT goes on the road to inform Buses Bill

The DfT announced a series of stakeholder roadshows around England that aimed to shape the content of the forthcoming Buses Bill. They explored methods by which franchising could be introduced and partnership powers enhanced.

 

OCTOBER

Electrification resumes

Network Rail published final route studies recommending options for major infrastructure enhancements to meet medium and long term demand. The studies were designed to inform government of the choices available to meet forecast patronage growth. Meanwhile, the government announced the resumption of the Midland Main Line and TransPennine electrification schemes, but with completion put back by several years. The schemes were ‘paused’ in June by transport secretary Patrick McLoughlin to enable Network Rail to review the projects amid cost increases, delays and re-evaluation of the TransPennine project.

Adonis infrastructure role

Former transport secretary Lord Adonis was given the task of drafting proposals for Crossrail 2 and High Speed 3 infrastructure schemes in time for the next budget as part of a new role as chair of the independent National Infrastructure Commission. The body will be charged with offering unbiased analysis of the UK’s long term infrastructure needs.

Sheffield gains bus powers

The government confirmed plans for a devolution deal with the Sheffield City Region that once again placed the regulation of bus services in the spotlight. It will see a directly-elected mayor take office in 2017 who will oversee a range of devolved powers, including responsibility for transport.

Stagecoach and Virgin call for ‘in market’ rivals

Stagecoach and Virgin urged the government to scrap franchising on intercity rail routes and instead adopt a new system that allows train operators to compete. They claimed that ‘in market’ competition would give a better deal to customers and taxpayers.

Alexander Dennis BYD deal

Bus builder Alexander Dennis announced a new partnership with Chinese electric bus manufacturer BYD that could potentially be worth £2bn as part of the state visit to the UK by Chinese president Xi Jinping.

 

NOVEMBER

Reading Buses crowned

Council-owned operator Reading Buses was named as Operator of the Year at the UK Bus Awards. The operator struck quadruple gold by winning not only the top award, but also being named as Top Shire Operator, and gold winner in the Marketing Excellence and Marketing Initiative contests.

Mixed messages on north east bus regulation

The North East of England received mixed messages as the Quality Contract Scheme Board, instigated to scrutinize plans for a QCS in Tyne & Wear, found that the scheme failed three out of five required public interest tests. Meanwhile, chancellor George Osborne concluded a devolution deal with the region that included powers to introduce bus franchising.

Chiltern aims to lure Oxford commuters with quality

Chiltern Railways launched its new Oxford Parkway-London rail service with plans to attract 250,000 return commuter journeys each year. The train operator said that while ticket prices were identical to existing London-Oxford services offered by Great Western Railway, Chiltern planned to win business with superior customer service.

Partnership powers for Bill

Transport minister Andrew Jones hinted that the forthcoming Buses Bill would include new powers that aim to support stronger partnership working between councils and bus operators. He said that “franchising was not the only thing on the table”.

Shaw Report sets agenda for investment

The Shaw Report set out an agenda for attracting new investment to the rail industry in an effort to fill the rail funding gap left by Network Rail’s reclassification. It led the Treasury and DfT to publish a consultation and scoping report into the future shape and financing of the infrastructure controller, setting out options from full privatisation to full state control.

Greater Manchester operators take smart step

Just over a year since Britain’s ‘big five’ bus groups pledged to launch “London-style” smart ticketing across England’s largest city regions before the end of 2015, bus operators in Greater Manchester launched the first scheme as part of that commitment.

New dawn for New Street

The Queen officially reopened the transformed Birmingham New Street station. The new station, including the new Grand Central shopping complex, was unveiled in September after a five-year, £750m upgrade.

 

DECEMBER

DfT budget cut by 37%

Concerns were raised after Chancellor George Osborne cut the DfT’s operations budget by 37% in the spending review from £2.6bn this year to £1.8bn in 2019/20. However, spending on transport infrastructure will rise 50%, with a total £61bn allocated in line with existing commitments to fund HS2, Network Rail enhancement projects and new roads. The cuts will also see London become the first major European city to fully fund operations of its transport network when TfL’s resource grant from DfT, currently £685m a year, is withdrawn in 2019.

Bus alliances formed

Merseytravel announced plans for a bus alliance that aims to create ‘quick wins’ that boost patronage by 10% by March 2017 before assessing options for the potential introduction of bus franchising in the future. Meanwhile, in the West Midlands, operators and the region’s Integrated Transport Authority sign a bus alliance deal that will see £150m invested over five years.

Go-Ahead enters Singapore

Go-Ahead Group secured a place in Singapore’s bus market with the capture of a major contract to operate 25 bus routes in the city state. The new five-year £230m contract will commence in late 2016.

Arriva wins Northern, First wins TransPennine

Transport secretary Patrick McLoughlin announced that Arriva has won the new Northern franchise while FirstGroup has won TransPennine. The new franchises are due to start on April 1, 2016.

 

COMMENT: Alistair Gordon, Chief Executive Officer, Keolis UK

2016 looks set to be another busy year

No one involved in the transport sector will be in any doubt that 2016 looks set to be another busy year, bringing change and challenge in equal measure.

The chancellor’s Autumn Statement and Spending Review brought 2015 to a close with an announcement of a 37% reduction in the Department for Transport’s budget during this parliament.

The available information on how the department plans to tackle this points to some new challenges ahead, particularly in rail franchising. The subsidies paid to franchisees will be reduced as the DfT looks to “reap the efficiency benefits of competition”. This, coupled with mooted new penalties for delays, will present bidders with additional considerations when preparing bids. And 2016 will not be short of those, with rail franchise competitions for the West Coast, West Midlands and South Western all set to kick off and discussions beginning over a possible new dedicated franchise serving Devon and Cornwall.

Keeping on the rail theme, we can expect a continued focus on the future of Network Rail in the coming year. The recent publication of the Bowe and Hendy reports provided us with a reassuring starting point to the government’s review of Network Rail.  However, it will be Nicola Shaw’s final report and its recommendations in the summer of 2016 that will provide the possible framework for the future financing and reorganisation of the business. If Shaw does make bold recommendations (and I hope she will) then she must really make a clear and unequivocal case for any change, if all of the industry’s stakeholders are to be satisfied.

There are, of course, other transport issues to be excited about. Events this year signalled that the UK could be on the cusp of achieving greater integration across its regional transport networks.

Indeed, it’s fair to say 2015 was the year of devolution, from the advent of Transport for the North to new transport powers forming a key part the devolution deals secured in Greater Manchester and Sheffield City Region. Possible new powers for local authorities over buses were eye-catching features of both of those deals and, with a new Buses Bill forthcoming in 2016, it certainly looks like the sector to watch.

We know that businesses and local authorities in the regions are demanding greater transport integration – casting an admiring eye at the success of Transport for London. And it’s clear that better integration will also provide the foundations for the idlands and North to exploit the benefits offered by HS2. If we are to achieve the kind of intermodal benefits that makes many regional networks on the continent such a success, some regulation will be necessary.

From my perspective, it continues to be an exciting time in UK transport and 2016 looks set to bring new opportunities both in rail and beyond.

 

This article appears inside the latest issue of Passenger Transport.

DON’T MISS OUT – GET YOUR COPY! – click here to subscribe!