Rail Delivery Group chief Paul Plummer said the proposals to the Williams rail review are intended as ‘building blocks’ for fundamental reform

 
RDG chief executive Paul Plummer

 

The Rail Delivery Group has set out proposals for a new rail industry structure which would remove central government from day to day decision making, integrate track and train more closely, and create train operating contracts appropriate for different areas of the railway.

RDG chief executive Paul Plummer said the proposals to the Williams rail review were intended as “building blocks” for fundamental reform to replace tinkering round the edges that had characterised the government’s half-hearted implementation of numerous rail reviews in the past 10 years.

These proposals call time on short term fixes and set out the once-in-a-generation system upgrade the railway needs if it is to help the country prosper over the next 25 years

“These proposals call time on short term fixes and set out the once-in-a-generation system upgrade the railway needs if it is to help the country prosper over the next 25 years,” Plummer said. “We want to move forward with a rail system that is more focused on customers, more responsive to local communities and more accountable, letting rail companies deliver what people want in each area of the country and rebuilding trust between the industry and passengers.”

Core changes in the proposed reorganisation would see the current rail franchising system scrapped in favour of new “public service contracts”. In city regions, the RDG envisages that where the government agrees appropriate devolution settlements, democratically accountable integrated local transport authorities could specify and let contracts for mass transit commuter routes similar to Transport for London’s London Overground concession.

In the rest of the country, a new-style of train operating contracts would be let by a new strategic rail industry organising body, at arms length from government, rather than by the Department for Transport.

Key changes from the current franchising system would involve agreeing high level targets train operators should deliver, such as improvements to passenger satisfaction, and then giving operators the freedom to determine how that should be achieved. The RDG said the DfT’s current highly-specified and intrusive franchise contracts, which set detailed requirements down to the type of catering trolleys that should be used in some cases, were stifling innovation and the ability to respond to passengers’ needs. A system of clearly understood fines and bonuses would mean operators would “only be rewarded for good performance”.

In addition, the RDG said these contracts should cover smaller geographical areas and be longer term than at present to enable operators to focus on specific markets and to attract a wider range of bidders and investors to the industry. New ways of sharing risks more appropriately between the public and private sector are also proposed including the possibility of resetting contracts’ financial terms periodically to take account of, and enable the industry to respond effectively to, significant external changes such as economic downturns and changes in demand for travel. The RDG pointed out that many of these principles had been recommended in the Brown review of franchising in 2013 but the government had failed to implement them.

On major longer distance routes, the RDG envisages that greater competition between operators would create a more dynamic focus on meeting customers’ needs and improving service quality. It recommends that competition could be injected by letting a number of different types of franchises on long distance routes building on the current limited application of this approach on the West Coast Main Line. Alternatively, the RDG envisages greater competition could involve the new rail authority parcelling up co-ordinated packages of services for open access operators to bid for. The main principle is that near-monopoly, short-term franchises should be abandoned on long distance routes where competition could benefit consumers.

The RDG acknowledged that implementing the multiple different approaches from regional concessions to open access in different areas of the country would require co-ordination and trade-offs. This would be overseen by the new strategic industry body. Although no comparable international model exists for organising rail services in this way, the RDG said its proposals had been informed by experience in Sweden where open access services exist alongside public service contracts and regional authorities and central government have a ‘balanced’ role.

 
Further coverage appears in the latest issue of Passenger Transport.

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