The Department for Transport has not delivered the original ambition of the South East Flexible Ticketing Programme – of improving the experience for passengers and reducing costs to Toc’s – according to the National Audit Office.
The NAO has today published findings from its investigation into the Department’s Programme, which was set up in January 2012 to improve coordination, speed up delivery and increase take up of smart ticketing. The Department was the sponsor and funder of the Programme; and the Rail Delivery Group, which represents and coordinates the interests of passenger and freight operators, was the primary delivery agent working with train operating companies to develop and roll out the necessary infrastructure.
The Department has paused and reconsidered its approach to the Programme, and changed its scope and objectives on a number of occasions said the NAO. In April 2017 the Department transferred day-to-day management of the Programme’s technology and assets to the Rail Delivery Group.
The key findings of the investigation are:
- In 2011, the Department concluded it needed to intervene to accelerate the implementation of smart ticketing schemes because progress by train operating companies to implement such schemes was slow and take up low. The Department decided to initiate the Programme to provide a more coordinated delivery approach and provide funding for the infrastructure and the development of a central back office system to process ticket purchases and journeys using smartcards.
- The Department has not delivered the original ambition of the Programme as set out in 2012, which wasto improve the experience for passengers and reduce costs to train operating companies of selling tickets. An original aim, when the Department established the Programme, was to have flexible ticketing including discounted, part-time season tickets to passengers in place on 11 franchises running services into London by 2014. By April 2017, the Programme has enabled five of the 11 train operating companies running services into London to offer season tickets on smartcards. Only one of the five train operating companies currently offers flexible, part time season tickets.
- The Department has now completed the Programme based on the reduced scope agreed in 2016.It has handed over responsibility for managing the central back office, which processes rail journeys by passengers using smartcards to the Rail Delivery Group. The central back office can now be used by other train operating companies, to operate their own smart ticketing schemes, and to process a wider range of ticket and fare types. The Rail Delivery Group has estimated that the central back office is currently using around five per cent of its capacity and can handle more smart ticketing schemes. The Rail Delivery Group is promoting the capability of the central back office system to train operating companies across the country. By March 2017, two franchises outside the south-east of England are using the central back office.
- The Department had assumed high levels of take up of smart ticketing.Achieving the economic benefits of smart ticketing stated in the 2014 business case depended on eventually achieving 95 per cent of take-up of smart season tickets The Department’s latest data shows that eight per cent of all season ticket sales in the 12 months up to March 2017 on participating train operating companies were on smartcards. The Department attributes low levels of take-up to early problems with passenger experience and lack of promotional and marketing activity.
- The Department has spent £54 million on the Programme, compared to the original budget of £45 million. This was spent on developing a central back office to facilitate smart ticketing systems, installing or upgrading infrastructure such as ticket validators, ticket barriers and ticket vending machines, with £26 million (44 per cent) spent on the Department and Rail Delivery Group’s management of the delivery of the programme.
- In total, the Department has spent at least £120 million to achieve the current level of smart and flexible ticketing on the national rail network in the south east of England.The £54 million spent on the Programme builds on previous departmental expenditure. Before the Programme was initiated, the Department agreed to provide £60 million to Transport for London (TfL) to upgrade its ticket gates and back office systems to read train operating companies’ smartcards, so that passengers could use smartcards provided by these operators at stations operated by TfL. This upgrade cost £66 million on completion in 2014 following changes to the scope of the work.
- In April 2016 the Department estimated that it would cost a total of £96 million including the £54 million already spent on the Programme, to deliver the full scope as set out in the 2014 business case. To deliver its original objectives for smart ticketing in the south east of England, such as providing part-time season tickets, the Department would need to either pay for the additional ticket barriers and validators needed to support smart tickets for more flexible fares, itself, or require train operating companies to do so through franchise agreements.
- Early in the Programme the Department identified concerns about the feasibility of the timetable and the Programme team’s capacity to deliver the Programme.In 2013, the Department commissioned consultants to carry out a review of the Programme which found that the Rail Delivery Group had too few people managing the programme, which meant that timetables would have to be extended.
- The Programme was paused three times and reset twice, and each time the scope was reduced and the budget revised.It was first paused in December 2012, when train operating companies disagreed with proposals for the central back office and following concerns raised by the consultants’ 2013 review the Department reset the Programme and increased its budget to £80 million, largely to cover the cost of increased programme management capability. In April 2016, the Department reset the Programme again, with £61 million to deliver a substantially reduced scope, following a ministerial decision that the rail industry should take the lead in innovating smart ticketing solutions.
RMT General Secretary Mick Cash said: ‘This report is yet another shocking indictment of the state of Britain’s privatised railways. A scheme supposed to be delivered by the organisation that represents the private rail companies has been delayed repeatedly and has soaked well over £100 million in taxpayers money. It is an absolute shambles which has cost us dear.
‘The take up of the scheme has been simply pitiful as the travelling public simply do not trust the train operators and many would recognise that these automation plans are part of the racket to bring in a faceless railway and to axe station and platform staff under the cloak of ‘modernisation’.
‘The solution to the crazy ticketing arrangements on Britain’s railways is not smashing up ticket offices and axing staff it is public ownership under one organisation to end the nonsense of fragmentation and division which have given the green-light to the great rail fares rip off.’