Last month the Transport Secretary, Mark Harper, gave the annual George Bradshaw Address providing needed clarity on reinvigorating rail reform before the next General Election, Andy Bagnall, Chief Executive of Rail Partners adds his thoughts
This is essential to improve the experience for passengers and freight customers as well as reduce taxpayer subsidy and drive wider economic growth. Crucially, the proposals for a significantly streamlined new guiding mind – Great British Railways – are a welcome step in the right direction. The refined framework will give the system greater coherence but without denying train operators the freedom they need to deliver for customers. Operators need to be looking outwards, with the agility and commercial levers to respond to passenger needs, not looking inwards to seek approval from the centre.
Harper was keen to stress in his speech that there was now clear cross-government support including Treasury and Number 10 – critical to the chances of turning vision into reality. And that is exactly why industry and government must now work together rapidly to deliver, including setting out a timetable for legislation.
Of course, many reforms can be taken forward without a parliamentary process. For example, there is a clear imperative to resolve the current industrial disputes plaguing the railway. Reforms that boost productivity are key to unlocking the savings that would fund a pay increase. These reforms can also create a better customer experience – such as the example the Transport Secretary suggested of reducing reliance on rest day working to create a more reliable Sunday service.
It also doesn’t require legislation to evolve the current temporary ‘National Rail Contracts’, which pay operators a fixed fee to run specified services, but are not giving operators the commercial freedoms to attract customers back to rail, with taxpayers making up the shortfall in revenue. Harper agreed that these arrangements were appropriate for the pandemic, but are now stunting the railway’s recovery. Research for Rail Partners by independent economists at Oxera shows that Treasury is missing out on as much as £1.6 billion over the next two years due to these restrictive contracts which could be rapidly adjusted.
This contractual evolution can form the basis of the proposed long-term ‘Passenger Service Contracts’ to create a thriving and diverse rail market which meets the requirements of different types of customers. For instance, passengers on short-distance commuter lines, who need reliable turn-up-and-go services into our major urban centres, have different requirements from passengers on long-distance journeys who want to see attractive prices when booking ahead of time, just like they do when flying. It was reassuring to hear Harper reiterate that we need a
spectrum of contracts to create optimal results for taxpayers and customers – one size does not fit all.
‘Harper was keen to stress in his speech that there was now clear cross-government support including Treasury and Number 10 – critical to the chances of turning vision into reality. And that is exactly why industry and government must now work together rapidly to deliver, including setting out a timetable for legislation.’
Alongside introducing a diverse contractual system, we also need a ticketing and fares revolution, which gives the customer confidence that what they are buying represents value for money. Industry has been pushing for reform for many years so that rail fares reflect the changing ways people are travelling, accelerated by the pandemic. Harper’s announcements at the George Bradshaw Address suggest that he has persuaded Treasury that fares reform is an idea whose time has finally come.
Our railways don’t only carry people, they are also a gateway for transporting goods – and we need to be ambitious for the rail freight sector, again without waiting for legislative change. Harper recommitted to a growth target for rail freight, but if we are serious about achieving net zero, we should set that target ambitiously: to treble rail freight by 2050.
However, all these reforms will lack coherence without the new guiding mind. And, without legislation, there can be no Great British Railways. As a new arm’s length body it needs a statutory basis. And the transfer of the powers to award train operating contracts that currently sit with the DfT cannot take place without changes to the law that governs the current system. The government must include legislation in the next King’s Speech, now expected in September, to give the sector a focal point for reform.
It’s been a tough year for those who use the railways, and indeed for the businesses that rely on rail to transport their customers or their product. But the Transport Secretary has set out a clear plan to reform our railways and we now need the timetable for industry and government to deliver it.