Transport Select Committee report confirms “unacceptable” lack of transparency from the DfT

In their report today, the Select Comittee for Transport confirms what ABC has been arguing for months: that rail passengers have been badly let down by the Government’s failure to structure, monitor and enforce rail franchise agreements.

The report is dominated by the problems faced by Govia Thameslink Railway passengers for more than a year, including poor management of the franchise from the start; inadequate staffing; rolling stock issues; mismanagement and prolonged industrial action, complicated by the huge Thameslink infrastructure programme.

In examining whether GTR is now in default of its contractual obligations, the Committee makes clear that, under normal circumstances, there would already be grounds for the termination of its contract. The complication to this is GTR’s claim of force majeure (forces beyond its control); a claim based in part on the alleged ‘unofficial strike action’ relating to staff sickness levels.

Regarding the issue of force majeure, the report states that crucial processes have been delayed by the “tardiness” of GTR in suppling the necessary information to make its claim. It also finds it “unacceptable” that the DfT does not intend to conclude its assessment of GTR’s force majeure claims until the current industrial dispute is resolved, stating: “it is essential that the Department provide clarity about whether GTR is in default, as a matter of urgency”.

The Comittee expresses “complete dissatisfaction” with the DfT’s answers to its questions, going so far as to say that “the Department’s evasive and opaque answers to our questions hindered our inquiry and delayed publication of this Report.”

On this issue, it is worth highlighting points 72 and 73 in full:

72. The DfT has a duty to hold train operating companies to account for poor performance; passengers expect and deserve this. The answers provided to us by very senior officials in oral evidence, and the Department’s subsequent written submissions, however, give us little confidence that it has a firm grip on the monitoring of GTR’s contractual obligations.

73. Until we recently managed, after several attempts and considerable time and effort, to extract information from the Department, GTR’s contractual performance benchmarks, and data relating to GTR’s performance against them, were entirely opaque. It is completely unacceptable that changes to the contractual benchmarks were not published in an open and transparent way. It is also unacceptable that the data required to scrutinise GTR’s performance against its contractual benchmarks are not made readily available. The Department’s evasive and opaque answers to our questions hindered our inquiry and delayed publication of this Report.

The report also emphasises the lack of information about the £20 million ‘improvement fund’ announced on 1st September 2016:

81.We ask that the Department, in response to this Report, set out in detail: how the recently announced £20 million will be allocated to address the problems on Southern Railway; whether the £20 million is new, additional funding, or from what part of the Department’s budget it has been reallocated; the precise outputs it expects the £20 million to achieve; and a more precise timetable for the publication of the project board’s plan and the implementation of its actions. This money should ultimately be recovered from the operator.

**ABC’s legal team have been informed that the £20 million ‘improvement fund’ is not in fact ‘new money’, but has been taken from Network Rail’s existing budget for Control Period 5. This is a budget that has already considerably overspent.

Further to the matter of terminating the contract, the report makes clear that it is “simply not credible for the DfT to continue to claim that “no other operator” could improve the situation” and, notably, that “if [this] is the case, it is a consequence of the structuring of the franchise, for which the Department is ultimately accountable.”

For the full report, click here.