Major class action lawsuit to go forward against Southeastern and South Western rail franchises

A £93 million class action lawsuit against the Southeastern and South Western rail franchises will proceed to trial at the Competition Appeal Tribunal. The long-awaited permission for the ‘boundary fares’ case was granted on Tuesday, and it’s likely to lead to further lawsuits against the railway’s complex fares system.

The ‘Boundary Fares’ Case

The claim relates to an alleged ‘abuse of market dominance’ by Southeastern and South Western, in failing to make cheaper ‘boundary fares’ available to London Travelcard holders. It argues that the train operators have been overcharging passengers who travel outside the Zone 6 boundary; effectively charging double for the portion of the journey already covered by their Travelcard. The claim for damages goes back to 2015 and includes: The Go-Ahead Group/Keolis (Southeastern); First/MTR (South Western Railway); and Stagecoach (South West Trains).

Claimant Justin Gutmann and his legal team have waited over two and a half years for the ‘Collective Proceedings Order’ (CPO), after a similar case against Mastercard caused long delays to the process. The Merricks vs Mastercard case was granted a CPO in August, making it the first ever US-style class action lawsuit to go forward in the UK – and clearing the way for a much faster process in future.

The ‘boundary fares’ class action has long been considered to be a test case for consumer rights on the railway, and the CPO announcement is sure to send shockwaves throughout the industry. Though this particular case is confined to the Southeastern and South Western rail franchises, the issue of ‘boundary fares’ relates to multiple train operating companies running out of London; presenting a further risk of litigation in this area alone.

The Govia Thameslink Railway Case

The new legal cases are ‘opt-out’ class actions, first made possible in the UK by the Consumer Rights Act 2015. Previously, such cases took place on an ‘opt-in’ basis, requiring the sign up of a group of claimants. Now, it’s possible to undertake an action on behalf of a prospective class, where passengers will be included by default and entitled to compensation if the case is successful.

A second rail fare lawsuit of this kind was launched in July against Govia Thameslink Railway and is now awaiting the Competition Appeal Tribunal’s decision on whether to grant a CPO. GTR is the only train company in the UK to have ‘sub brands’ within the same company, and the case alleges that it has used Southern Rail, Gatwick Express and Thameslink to ‘unlawfully’ control ticket options on the Brighton main line.

GTR recently commented on the claim:

“We dispute the allegation that we have breached competition law, and do not believe the claim should be allowed to proceed. We work in a highly regulated industry and fully comply with the terms of our franchise agreement with the Department for Transport. We will make our submissions to the tribunal in due course.”

Their statement raises wider questions about the government’s responsibility in these cases. For example; if GTR were only ‘complying with the terms of their franchise agreement’, could the taxpayer be left on the hook for potential damages?

Government failure on rail fare reform

The government’s promises on rail fare reform go back seven years, and yet they have repeatedly failed to fix our broken system. Initially, they delegated the task to the Rail Delivery Group (Association of Train Operating Companies Ltd.), who were supposed to reform Britain’s notoriously complex rail fare system while keeping it ‘revenue neutral’. After this attempt failed, further promises were made by the ‘Williams Rail Review’; which has yet to produce any detail on fare reform, despite being underway for three years already.

Serious questions must be raised about the government’s failure to act on fare reform, and to what extent they might have exposed the taxpayer to liability. Legal commentators note that the new class action regime is ‘potentially franchise-ending territory’ – but who will be footing the bill? And how much will this new legal pressure add to the contractual risks around covid ‘emergency contracts’ – as highlighted in a recent report by the Public Accounts Committee?

Most importantly of all, when will passengers finally get the simple, fair and affordable ticketing system they deserve? The controversy around ‘boundary fares’ and GTR ‘sub brands’ will come as no surprise to commuters on these services, many of whom have been complaining about these issues for years. It should not take class action lawsuits to finally put them under the spotlight.

Further Information

Boundary Fares:

  • Justin Gutmann v London & South Eastern Railway LimitedCase history including CPO Judgement (19/10/2021)
  • Justin Gutmann v First MTR South Western Trains Limited and AnotherCase history including CPO Judgement (19/10/2021)

Govia Thameslink Railway:

  • David Courtney Boyle & Edward John Vermeer v Govia Thameslink Railway Limited & OthersApplication for Collective Proceedings Order, 27/07/2021

Last Chance for Scotland’s Buses? A Call For Solidarity from all over the UK

The future of Scotland’s bus services hangs in the balance as a vital consultation on the Transport (Scotland) Act 2019 closes this week.

Transport Scotland is about to implement new bus legislation, which is supposed to give local authorities the right to choose between bus partnerships, franchising and municipal ownership.

It’s a once-in-a-lifetime opportunity to build a world class bus network, capable of meeting climate change targets and fixing chronic social inequalities. But Transport Scotland has already thrown a huge obstacle in its path with the ‘Bus Partnership Fund’, which makes forming a deregulated ‘bus partnership’ a condition of access to £500 million bus infrastructure funding.

This is a brazen attempt to revive the failed policy of bus deregulation, and a clear imitation of England’s National Bus Strategy, which is also coercing local authorities into signing up to an accelerated ‘bus partnership’ program despite the overwhelming economic case for public control and ownership instead.

There are just two days left until the consultation closes and there is something you can do to help, wherever you are in the UK. Please take a few seconds to respond through the Scottish TUC’s email action here.

We expected better from Scotland

On the surface, the Scottish government seems to have a more enlightened view of public transport than England. In March this year, they acted decisively to bring their railway into public ownership, stating the need for integrated, stable and secure services; especially in the post-covid context. Scotland has repeatedly gone further in equality legislation too, for example by implementing the socio-economic duty of the Equality Act (the Fairer Scotland Duty).

At first glance, their bus legislation also seems to be superior, offering the choice for local authorities to run their own municipal bus companies (still banned in England).  But these powers were inserted at the last minute due to the relentless campaigning of Get Glasgow Moving, who achieved cross-party support for this amendment, despite the resistance of the Scottish government. Take a closer look and you’ll see that it’s a near-identical copy of England’s Bus Services Act (2017). This legislation has already been proven to be inadequate to the task, and has been widely condemned by organisations such as Centre for Cities, the CPRE, the Transport Select Committee and the National Audit Office.

The new powers for municipal ownership have so far been completely neglected, while Scotland’s bus franchising process is actually even more dysfunctional than England. While the Bus Services Act (2017) improved the democratic process by giving the final say to elected mayors, Scotland intends to repeat the process used for ‘Advanced Quality Partnerships’, which relies on an arbitrary and unelected panel instead. It’s the exact approach behind Tyne and Wear’s notorious failed attempt to franchise their buses in 2015 – which means Scotland will now be relying on an outdated, wasteful and undemocratic process that even England has long since rejected. Meanwhile, Transport Scotland’s ‘Bus Partnership Fund’ has been pressuring local authorities to sign up to deregulated ‘bus partnerships’ since long before the consultation even began, reflecting the coercive approach of England’s ‘National Bus Strategy’.

However, there is still time for Scotland to get off England’s track and carve their own path for bus services – now their only hope of achieving their social, economic and climate goals.

Our message to Transport Scotland

Public control as the default position

With the £500 million ‘Bus Partnership Fund’, the Scottish government has effectively committed to continued bus deregulation as their default position, with no possible economic case behind it. Their stance completely rules out the possibility of cross-subsidy; as well as the integration and growth of Scotland’s bus networks. In an era where bus deregulation has been shown universally to have failed, the only acceptable defaults for such vast sums of public spending are public control and ownership. These are the only models through which local authorities will be able to meet the National Transport Strategy’s four strategic goals: reducing inequality, taking climate action, delivering inclusive economic growth, and improving health and wellbeing.

Grasp economic opportunities

Public ownership is the only model that is able to actually generate wealth for communities, therefore providing the strongest possible incentive and return on all future bus funding. A 2016 report by Transport for Quality of Life estimated that this would bring back over £500 million per year to the British taxpayer. Scotland already boasts one of the most successful municipal bus companies in the UK – Lothian Buses, which because it survived the process of deregulation is now able to return £6 million to the City of Edinburgh Council per year. Serious, large scale programs of public ownership could bring huge opportunities for bus manufacturing, engineering, digital technology and employment, especially in the context of a ‘Green New Deal’. It’s not just the existing wealth that needs to be captured for local communities – it’s the value of all emerging technologies.

Prioritise equality and human rights

Scotland’s policy on bus partnerships is now the source of international controversy, after being condemned by the former UN Rapporteur for Extreme Poverty, Philip Alston, earlier this year. His report concluded that partnerships are a ‘tried-and-failed’ approach and that continuing with this ‘extreme form of bus privatisation’ will leave Scotland in breach of at least three human rights obligations. Rural and low income populations are among the worst casualties of bus deregulation, and yet their needs are being entirely neglected due to a ‘Bus Partnership Fund’ that is almost entirely focused on the urban context and restoring bus companies to profit. As the Equality and Human Rights Commission warned in 2019, local authorities, Regional Transport Authorities and Transport Scotland are failing to embed their Public Sector Equality Duty into their decision-making on transport.

Take climate commitments seriously

Scotland’s National Transport Strategy commits to reduce car use by 20% by 2030. With less than a decade left to achieve this goal, the long-term approach to modal shift should be required to be every local authority’s first consideration. However, the restrictions of ‘bus partnerships’ actively work against this goal in every possible way. Continued deregulation gives local authorities a duty to maintain and grow the deregulated market, preventing them from cross-subsidising, growing and integrating their bus networks. Only through public control and ownership is it possible to explore the policies that have a chance of achieving long-term modal shift; such as guaranteed hourly bus services to every village, free public transport, or even generally reducing fares.

Devolution and Democracy

Though the new legislation offers three options for bus services, local authorities have already been pushed into beginning the bus partnership process. This means they are currently being denied the free and fair choice between these options – an injustice that must urgently be addressed by Transport Scotland in its guidance on the new powers, as well as the Bus Partnership Fund. This entire episode is a standout example of the over-centralisation that has held back and chronically underfunded the seven Regional Transport Partnerships, which should be a key tool in helping to deliver better models of bus services and bringing these decisions into increasing democratic control.

Scotland’s Bus Strategy

It’s time that Scotland’s bus policy was brought into line with the goals of the National Transport Strategy, which commits the Scottish government to prioritising climate and equality in all their transport decisions. Transport Scotland should urgently provide practical and financial support to every local authority who wishes to pursue public control and ownership, restoring them with the choice that has been denied through the ‘Bus Partnership Fund’. Though the Fund’s £500 million capital investment is welcome, its value must be captured and protected for the public benefit, as these investments are worth significantly less within a deregulated system. In judging all bus funding and governance decisions, the limited and outdated idea of a ‘business case’ should be replaced with a ‘public sector value’ test that accurately reflects the huge range of socio-economic and climate benefits delivered by bus services.

Take Action Now

It takes just a few seconds to support the STUC’s email response to the Transport Scotland consultation.

To respond in detail to the consultation, click here.

The consultation closes on Wednesday 6th October.

REVEALED: The economic dangers of the National Bus Strategy

As Parliament comes back into session, there is an urgent need to raise the alarm on the National Bus Strategy. As further detail has emerged this summer, it is clear that the Strategy is in fact an accelerated program of ‘Enhanced Partnerships’ – the purpose of which is to revive the failed policy of bus deregulation. Nearly every local authority in England has now been coerced into starting this path, by the threat of losing access to all future bus funding.

In July, the National Bus Strategy became a source of international controversy when the former UN Rapporteur for Poverty, Philip Alston, accused the UK government of ‘doubling down’ on its ‘extreme form of bus privatisation’, despite already being in breach of multiple human rights obligations. He also raised serious doubts whether the Strategy has any cost-benefit analysis or evidence-based policy behind it. Our investigation now confirms his suspicions that the government has no economic case to offer.

No economic case for the National Bus Strategy

In a recent FOI response, the Department for Transport confirmed to us that they have not conducted any cost-benefit analyses or demand forecasts comparing deregulation with Enhanced Partnerships, franchising and municipal ownership; except for an extremely limited and outdated 2017 study. This is further confirmed by the Department for Transport’s new ‘areas of research’ corporate report, which includes at least a dozen questions relating to unresolved issues in the National Bus Strategy; strongly emphasising the need for economic research, as well as private vs. public operation and the barriers for devolved transport policy. Indeed, the National Bus Strategy itself points out multiple areas requiring further policy work, including the ban on municipal ownership, which it says is ‘ripe for review.’

The truth is that the public control of buses was never intended to be a realistic option for local authorities. Despite promising to update ‘incompatible’ 2017 guidance on Enhanced Partnerships and franchising in Spring, the government failed to meet this commitment in time for the initial deadline of June 30th. This means that nearly every local authority has now been coerced into making a statutory declaration towards an Enhanced Partnership (EP), without the facts in front of them. To add insult to injury, the EP guidance was updated just one day after the deadline, and the guidance for franchising remains to be updated.

‘Bus Service Improvement Plans’ are a public investment giveaway to bus companies

The second stage of the Strategy is now underway and local authorities must complete a ‘Bus Service Improvement Plan’ (BSIP) by October 31st to remain eligible for funding. BSIPs are ‘joint funding proposals’ between councils and bus operators, due to be judged by criteria that revolves almost entirely around short-term measures. As this is an extra, non-statutory stage to the Enhanced Partnership, public consultation is strongly discouraged, despite the fact that BSIP content is expected to be almost fully replicated in the form of an ‘EP Plan’.

The primary condition of BSIP funding is for councils to commit to ambitious public investments – especially an increase in bus priority – while bus companies are encouraged to form a ‘collective joint position’ and a ‘shopping list’ of demands from the earliest possible stage. Invitations for ‘reciprocal investment’ are to be ‘heavily weighted’ towards what local authorities can provide, to allow for the commercial uncertainty felt by bus operators as they emerge from the pandemic. Only minor improvements are expected from bus operators in return, as competition law prevents councils from imposing anything but ‘indispensable’ restrictions on the deregulated market. The ability for councils to cross-subsidise services, set prices or generally lower fares will also be banned by law.

Under these circumstances, the level of profit leakage from public investments has now reached a greater level than ever before. For example, Greater Manchester’s 2019 case for franchising found that it offered almost three times the economic value of the bus companies’ partnership proposal. Under the funding conditions and strict deadlines imposed by the National Bus Strategy, we can expect the disparity to be even greater.  In addition to the £3 billion pledged for bus services, this will have a knock on effect on all public transport, cycling, and walking schemes – preventing the ability to make an integrated plan, or optimise the value of investments.

Urgent action required within the next two months

Having failed to offer any economic case for Enhanced Partnerships, the government’s only justification is that the process is quicker than public control (franchising). However, it is their own legislation that makes the franchising process so difficult, and there is now a near-unanimous consensus that the Bus Services Act (2017) is inadequate to the task. This includes a wide range of respected organisations, including NYU Law School, Centre for Cities, the CPRE, the Transport Select Committee, and even the National Audit Office.

The ultimate solution is for the government to pause the National Bus Strategy and urgently review the legislation behind it, including the ban on municipal ownership. The economic dangers of continuing with bus deregulation are in no doubt, and there is an urgent need for Parliamentary intervention before the BSIP deadline of October 31st. If the Enhanced Partnership program goes forward next April, councils will be locked into bus deregulation for the long-term.

However, this should not let councils off the hook. There are just two months left to complete the BSIP process and it is absolutely vital that they resist pressure from bus companies and create ambitions that can be shown to bring long-term economic value to their communities. Due to the ban on cross-subsidy under deregulation, this will only be possible under public control or ownership (estimated to bring back £340 million or £503 million per year to the British taxpayer, respectively.)

In turn, the government must come through on its promises to update and strengthen the franchising process. Currently, only mayoral combined authorities even have access to the powers to franchise their buses. However, the government has committed to supporting access to these powers ‘for local authorities with the capacity and intention to use them’ and it’s now a priority to call them in on that promise.

In both the BSIP and EP guidance, the government has advised councils to limit the length and scope of public consultation as much as possible. Since the next two months will be crucial to negotiations, local campaigners should do all they can to raise fundamental issues and long-term objectives in relation to bus services. This means putting long-term social, economic and climate justice at the top of the agenda, and demanding that councils incorporate these goals.

References:

-NYU School of Law (2021) Public Transport, Private Profit

-Centre for Cities (2021) Get on board: bus franchising

-CPRE, the countryside charity (2021) Every village, every hour

-Transport Select Committee (2019) Bus services in England

-National Audit Office (2020) Improving local bus services in England

-Transport for Quality of Life (2015) Building a World Class Bus System

This article was edited on 09/09/2021 to include a link to the Bus Services Bill: Impact Assessments (2017). This is the only cost-benefit analysis conducted by the Department for Transport, comparing franchising and enhanced partnerships.

The ‘Great British Rip-Off’ – why new ‘flexi-tickets’ are an insult to passengers

The Department for Transport’s new ‘flexible season tickets’ are an absolute insult to passengers. Neither cheap nor flexible, they are just another pricing trap for a captive commuter market – and in some cases, could see passengers paying even more.

The ‘flexi-tickets’ exclude London travelcard, Merseyrail, and journeys within Wales and Scotland (including all cross-border journeys originating outside England). Hardly the integrated and comprehensive new ticketing system we’ve been promised. As the first significant policy rolled out from the Williams Rail Review, it’s a really bad sign of what’s yet to come from ‘Great British Railways’.

Bulk buy tickets with highly variable discounts

The new ‘flexi-tickets’ are packs of eight ‘one-day season tickets’ for use within a 28 day period (excluding free weekend travel). The discounts when compared to the price of an anytime day ticket are highly variable across the country – so far, we’ve spotted examples ranging between 7% and 20%, and we think there could be many more surprises to come.

Because the new system replaces existing carnet tickets, this may even lead to price rises for some commuters. Ironically, Grant Shapp’s own constituency of Welwyn Garden City is one of these anomalies, where commuters will see an 18.5% rise on carnet tickets under the new system. Previously, there was no evening peak on that line, so a carnet ticket came in at £14.80 per day – under the new system of ‘flexi tickets’ this has risen to £17.55 per day

A rigid and inflexible ticketing system

In many of the cases we’ve seen the new flexi-ticket only makes financial sense if you know for sure you are going to travel two days a week (or eight journeys per month). Three-day per week commuters are likely to be better off on a weekly or monthly season ticket. And even two-day per week commuters would only need a couple of extra trips for a monthly season ticket to have been more cost-effective. Whereas we’ve spotted a few examples of local journeys where flexi-tickets are cheaper for three days per week, the discount level seems to get radically worse the longer the commute.

This is a rigid, bulk buy form of ticketing with no price-capping that will actually disincentivise additional rail travel for those who use it. And let’s not forget, if you choose the ‘flexi-ticket’, you’re missing out on free weekend travel too.

Here’s how the price trap works:

A £45.23 Brighton to London Victoria flexi-ticket provides a 20% discount on the anytime return of £56.40. At three days per week the daily cost becomes £39.27 on a weekly season ticket, £34.83 on a monthly, and £30.23 on an annual.

From Reading to London terminals, the £43.90 per trip flexi-ticket provides a 12.5% discount on the £50.20 anytime return. At three days per week the daily cost on a weekly season ticket is £40.53 per trip, on a monthly £35.92 and on an annual £30.23.

In conclusion…

The so-called ‘flexi season tickets’ are little more than a PR stunt from the government and rail industry. Neither cheap nor flexible, they are just another pricing trap for the captive commuter market – in other words, an absolute con.

It’s no wonder then that the government is being so obscure about the exact level of discount involved in the flexi-season tickets, attempting to claim “20% off a monthly season ticket” as their comparator and neglecting to mention that this applies only in the most rigid of circumstances for a two day per week commuter.

There’s now increasing suspicion that some could even be paying more under this new system. No doubt further pricing anomalies will emerge as commuters flock to National Rail Enquiries to figure out the value of a flexi-ticket for their area.

At a time of recovery from covid, commuters need more convenience and flexibility than ever as workers and businesses figure out what’s right for them. The new so-called ‘flexi-tickets’ are only going to impede this process, and may even discourage people from returning to rail at all.

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‘Every village, every hour’ – a bus strategy we can believe in

After the disappointment of last week’s National Bus Strategy, transport campaigners will be delighted to see the Campaign to Protect Rural England (CPRE) launch a transformative new vision for buses.

‘Every village, every hour’ presents a complete solution to the rural bus crisis and a sure means of reversing the cuts to 3,000+ bus routes made over the last decade. It’s a fully-costed model of a Swiss-style transport network for England; providing guaranteed hourly services to every village from 6am to midnight, 7 days a week.

A Swiss-style model would be transformative for bus services, also ‘levelling up’ the economy, environment, health and community all over the country. And all of this could be achieved with just £2.7 billion diverted from the annual roads budget.

A universal basic right to transport

Underpinning CPRE’s strategy is the need for transport to be treated as a universal human right, with guaranteed minimum service levels enshrined in law. This should be backed up by permanent, ring-fenced funding that puts transport on an equal footing with health and education.

Thirty years of deregulation combined with austerity has meant a huge decline in the number of ‘socially necessary’ bus routes, with bus companies competing and duplicating services on the profitable routes instead. CPRE recommends further legislation for franchising powers to ensure comprehensive coverage; as well as lifting the ban on new municipal companies, which would allow councils to run services and reinvest profits in the network.

Public transport in the era of climate change

Transport is the UK’s biggest emitting sector, and it’s estimated that decarbonisation will require traffic levels to drop by 20-60% in the next ten years. This will only be possible through radical strategies for public transport.

Examples in Europe show the overwhelming success of cheap and free transport schemes. For example, free transport in Dunkirk has led to a doubling of bus journeys, with half of new users switching from cars. Research shows that real behaviour change only occurs over time, when there is an attractive public transport offer that passengers can trust will be there to support them.

The CPRE report provides full costings of these future visions for transport, which are completely achievable right now:

A bus strategy we can believe in

CPRE’s report brings home the weakness of the government’s plan for rural buses, which received little mention in the National Bus Strategy last week.  The only concrete suggestion was the piloting of more on-demand, Uber-style services; which will do little to increase ridership. By contrast, the Swiss model of comprehensive bus coverage boasts over six times the number of passenger journeys than the English average outside London.

The National Bus Strategy has taken little account of the problem of transport poverty; promising only to expand the definition of socially necessary services, without any clear commitment to strengthen the statutory requirement. This speed of change is vastly insufficient, and it’s long past time that bus services were taken seriously as an essential human right (as recommended by the UN in 2019.)

CPRE and Transport for Quality of Life should be applauded for their bold and transformative vision, which has been published at exactly at the time it’s most needed.

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Five Reasons the National Bus Strategy will FAIL to deliver… and what we can do about it

Grant Shapps finally unveiled the National Bus Strategy this week – and what a disappointment. Its call for action may sound good, but the National Bus Strategy is in fact laying out the red carpet for bus companies, through ‘Enhanced Partnerships’ with local authorities. After 30 years of failure, it’s shocking to see the government continue with the broken policy of bus deregulation, which will only hold back our progress towards an integrated and affordable transport system.

The National Bus Strategy is not just unambitious, it’s deeply flawed and illogical – here’s why:

  1. It’s based on failed legislation.

The Bus Services Act 2017 has preserved a huge imbalance of power between local government and private bus operators, resulting in just one Enhanced Partnership in the last four years. The process of bus franchising is even harder and has so far only been attempted in Greater Manchester – a lengthy and difficult process that Stagecoach is now challenging in court.

As the National Audit Office reported last year, the Bus Services Act has ‘made little difference’. In 2019, an extensive, UK-wide study by the Transport Select Committee concluded that franchising powers should be provided to all local authorities, as well as the option of setting up their own municipal bus company. However, this advice has been ignored, and the new National Bus Strategy will now go forward based on failed legislation.

2. It continues the failed policy of bus deregulation

The National Bus Strategy itself warns of the difficulties of the current legislation, noting that franchising could ‘take years’. Instead it points local authorities clearly in the direction of ‘Enhanced Partnerships’, which maintain the deregulated model and make it more difficult to introduce bus franchising at a later stage.

Enhanced Partnerships are a trade-off. In return for a small say in services, local authorities will give the private companies what they’re really looking for: bus priority measures. This is nothing but a continuation of the deregulated system, promising even bigger streams of profit for bus companies as they benefit from increased road space.

3. It keeps local government under-resourced and in a weak negotiating position

The decimation of local authority funding for bus services has been a major cause of the UK bus crisis; a 40% drop in council funding has led to over 3,000 routes being cut in the last ten years. There’s still no reliable ring-fenced funding to plug the gap, and transport planning departments are weak and under-resourced.

The crisis in rural buses is particularly bad, and bus deregulation in rural areas has even been called out by the UN as being ‘incompatible with human rights requirements’. However, the National Bus Strategy’s weak offer of more on-demand bus services shows little to no vision about fixing this. If a city with the powers and resources of Greater Manchester can’t franchise its buses without a major legal challenge, what chance do smaller local authorities have?

4. It fails taxpayers and local democracy by preventing public ownership

Failed legislation on buses has made the process of franchising difficult enough, despite the fact that it would return an estimated £340 million per year. Public ownership would return even more – an estimated £506 million – yet the Bus Services Act bans councils from setting up their own municipals.

The UK’s few municipally owned bus companies have been incredibly successful. Lothian Buses in Edinburgh returns £6 million in dividends to the city, Reading Buses £3 million and Nottingham City Transport £2 million per year. The National Bus Strategy acknowledges these examples and even says it will consult on the issue. Yet it is still going ahead without this option: depriving local authorities of a huge opportunity for wealth creation, and entrenching the £1.5 billion per decade in dividends currently paid to bus company shareholders.

5. It will fail to reduce fares and restore services

Bus fares have rocketed even faster than rail fares – an increase of 403% since 1987. It’s a huge cause of transport poverty, but the National Bus Strategy will do little to solve it because Enhanced Partnerships are defined by competition law. This means that local authorities will have no power to set fares; and though multi-operator ticketing schemes can be agreed among companies, single-operator tickets must remain competitive.

Enhanced Partnerships also fail to give the local authority any control over fare income, preventing the cross-subsidy so badly needed to restore lost services. Nor is the local authority allowed to lower bus fares through a direct subsidy. Competition and duplication on key routes and with other forms of transport are sure to remain, preventing an integrated transport system.

Let’s be under no illusions – public control is the only way to create a London-style transport system.

What can we do about it?

The race is on for public control. Local transport authorities must commit to a course of action by the end of June 2021, and it’s clear that the DfT expects the majority to opt for Enhanced Partnerships. Campaigners and passengers need to make their voices heard ASAP and push for public control (franchising) in their local area.

The National Bus Strategy includes a few opportunities for more significant change:

  • It recognises the strong examples of municipal bus companies and says it will consult on the issue.
  • It points out a loophole in the Bus Services Act, whereby councils can create a municipal by purchasing a pre-existing bus company.
  • It promises to expand the definition of socially necessary services to include economically necessary services, and says it may consider making these a statutory requirement.
  • It commits to reform and devolve the Bus Services Operators Grant.

Local transport authorities must commit to a course of action by the end of June, and publish a local Bus Service Improvement Plan by the end of October 2021, detailing how they propose to use their powers. Actual delivery of the ‘Enhanced Partnerships’ is expected by April 2022.

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EXCLUSIVE: Accessibility under threat due to increase in driver only trains and unstaffed stations

New research from the Disabled Persons Transport Advisory Committee (DPTAC) indicates a significant withdrawal of rail accessibility since the beginning of lockdown in March. It compiles detailed information on 2556 stations to provide a complete staffing profile; demonstrating the impact of station destaffing and driver-only trains on accessibility.

The data shows that up to 54% of stations are completely unstaffed, with as few as 12% staffed at all times. Most shockingly of all, the ‘toxic combination’ of driver-only trains and unstaffed stations could now be preventing accessibility at up to 16.8% of Britain’s stations (up from 12.1% of stations in February.)

Reductions in assistance capability at stations, DPTAC May 2020 – DOWNLOAD HERE.

According to the data, Govia Thameslink Railway is by far the worst offender for the combination of driver only trains and unstaffed stations. In February, this prevented assistance capability at 126 locations. By May this figure had increased to 215 due to the removal of ontrain staff as well as ticket office closures/reductions.

According to May’s figures, train operators are running unstaffed trains through unstaffed stations at 430 locations: GTR (215), Southeastern (73), Greater Anglia (58), Great Western Railway (32), Chiltern (26), c2c (23), Heathrow Express (3), and Stobart Rail (1).

Our Freedom of Information request to DPTAC

This data was released to us after an FOI request to DPTAC, the Department for Transport’s statutory advisors on accessibility. DPTAC has consistently raised strong objections to the ‘toxic combination’ of driver only trains and unstaffed stations since the beginning of the Southern Rail guards dispute of 2016. The ‘urgent’ and ‘unmet’ need for detailed data on staffing was the headline demand of each of their submissions to the Williams Rail Review, so the release of this information is sure to be highly controversial within the Department for Transport.

In May, the Chair of DPTAC defended their data collection to Rupert Furness, Head of Active and Accessible Travel at the DfT. To view the email, click here.

Another email chain confirms that the Department for Transport has sought legal advice on driver-only trains and unstaffed stations, after warnings from the Equality and Human Rights Commission. To view the document, click here.

Urgent Action Now Required

DPTAC’s research shows that the staffing model on Britain’s railway is not fit for purpose. In particular, it demonstrates the discriminatory effect of driver-only trains and how rapidly they can affect accessibility when there are reductions to the already low levels of station staffing.

With Govia Thameslink Railway once again firmly in the frame for withdrawing assistance capability at stations, it is vital that the Go Ahead Group and the DfT’s Peter Wilkinson are asked to respond to this data at the Transport Select Committee on Wednesday. They were the architects of the removal of guards on GTR, and it’s now clear that this is having a regressive effect on equality of access.

With further cuts to railway staffing being rumoured, we will be calling on the Transport Select Committee and Office of Rail and Road to ensure that this data continues to be published regularly, as the best way to monitor what on-the-ground changes are being made to stafffing. Train operators must already provide this information under the ORR’s new Assisted Travel Policy, so it should require few resources to collate the information in a transparent and centralised manner. This has been a headline demand from DPTAC to the DfT for years, and they have made clear that accurate, up-to-date data is the only possible basis for a ‘whole system’ overview of railway accessibility.

For further information on DPTAC’s demands for data and accessibility see their January 2019 and May 2019 submissions to the Williams Rail Review.

For a background of our FOI requests to DPTAC, click here.

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CLUELESS: Chaos at the DfT as Shapps evades scrutiny on government plans for rail

As predicted in our last blog, it is now clear that the government has no idea what to do when the ‘Emergency Measures Agreements’ run out in September.

After news hit the press that train companies are seeking a 12-18 month extension to their bailout, Grant Shapps was able to bury the story at last week’s Transport Select Committee by ‘strongly hinting’ that the Williams Review will recommend a concession model later in the year.

But since the TSC session, anonymous ‘rail industry insiders’ have been going to the press in droves, claiming that the government is actually in contractual chaos over the ‘Emergency Measures Agreements’. The Railway Gazette had previously reported that there were concerns over a breach of competition law, and their latest article suggests the government is ‘stumbling their way’ towards a concession model, with multiple variations of the EMAs under discussion. It’s also now clear that the option of public ownership via the ‘Operator of Last Resort’ is on the table, with South Western Railway most likely to be next in line for renationalisation, and Transpennine Express and Transport for Wales also reportedly under discussion.

A failure of scrutiny from the Transport Select Committee

Last week, Grant Shapps managed to evade scrutiny on all these issues after a disappointing level of questioning from the Transport Select Committee, which failed to ask about the option of public ownership via the ‘Operator of Last Resort’. With the rail industry well-known to be in crisis over the EMAs, and multiple train companies facing financial collapse, the TSC should have asked about the preparedness of the government’s back up option.

The Transport Select Committee also missed their chance to challenge Shapps on his non-credible promise of the Williams Rail Review, especially his claim “had it not been for coronavirus we would have released a White Paper already.” In fact, the Williams Review was already at a stalemate directly before the lockdown in March. The Treasury had refused to agree funding for William’s plans, due to concerns that they would pose too big a risk to the taxpayer. No money for rail or fare reform had been included in the budget, and on March 14th, the Times reported: it is feared that any national reform of the system may now be years away.

This missed opportunity for scrutiny has allowed Grant Shapps to hide once again behind the promise of the ‘Williams Rail Review’ which he now ‘strongly hints’ will recommend a concession model. But the truth is that the review had long since hit the buffers. Now, rumours persist in the industry press that the Williams Review will never be released at all.

The future is uncertain – we need flexibility and accountability

As passengers, we fear an uncertain future under extended ‘Emergency Measures Agreements’, which lock us into a dysfunctional and fragmented structure for the long-term. Under EMAs, this dysfunction is likely to become even worse. New Parliamentary questions from Karen Buck MP indicate that the contracts will be riddled with perverse incentives – train companies are required to cut costs and raise revenue wherever they can, including rail fares.

If the EMAs stay in place, we’ll be sure to see an overly bureaucratic process, with no single point of accountability. Government and rail industry squabbling over contracts, finances and liability are sure to delay any serious rail reform for years. From the smallest commercial or operational issue to the UK’s ultimate transport policy, the railway will be riddled with arguments and perverse incentives of exactly the kind that had ruined passenger trust long before the corona pandemic.

As a case in point, we spent the first two months of the EMAs battling simply to get fair refunds for passengers, a promise made by Grant Shapps on which he later reneged. Controversy over the lack of a pro-rata refund for season ticket holders went on for two months before he was finally required to answer for his initial promise that ‘no passengers would be left out of pocket”. Though the Transport Select Committee highlighted there was only a ‘relatively small amount of money’ at stake, Shapps refused the request in May. He said: “changing the season ticket refund policy now to offer full pro-rata refunds or to allow passengers to pause their tickets would have significant additional cost implications for the rail industry.”

Public health and passenger trust are the first priorities

From 4th July, social distancing will be reduced to 1 metre. There is still no clarity on how this will apply to rail, but even under 1 metre social distancing, the intended full rail service would be limited to 21% to 35% capacity. A leaked briefing from the Department for Transport has warned there is ‘a significant risk that demand will outstrip capacity’.

It’s clear that this situation will require careful and agile management on an ongoing basis, and it’s vital that this is made as accountable as possible. Economic recovery will rely on a flexible, co-ordinated and integrated response to the changing needs of public health and passenger numbers. This needs to happen as part of an integrated transport policy run in the clear and overriding public interest. Accountability must be clearly located with the government and Public Health England/SAGE advice, and without the additional baggage of the train companies’ precarious finances.

The government continues to evade transparency just when action on our failed franchise system is so badly overdue. Meanwhile, the rail industry continues to lobby furiously for a reduction in social distancing, with their long-term future entirely dependent on how soon passenger numbers become profitable again. It’s no way to run a railway – especially at the time of a public health crisis.

A real opportunity to ‘build back better.’

There is one reason to take heart from Grant Shapps’ statements at the Transport Select Committee last week. He did commit to the fact that it is now much easier to begin the process of rail reform than before, stating: ‘There is now the opportunity to move things along a little bit faster.’ It’s vital that the government now acts decisively on the railway, which needs proper funding, structural reform, and an integrated long-term strategy fit for the twenty-first century.

Public ownership presents the best solution to rid the system of perverse incentives at a time when a clear, coherent transport policy is so urgently needed. It would not only save public money, it would also be the quickest way to create cost-efficiency in the system, in turn securing better commitments from the Treasury on railway funding. Making the government fully responsible for the railway would force them to finally take action on rail reform when they clearly have the means and opportunity to do so.

We have no more faith in the Williams Rail Review and believe that public ownership is the best way to expedite the ‘twenty first century railway’ we have so long been promised. Nearly twenty-thousand people have now emailed Rishi Sunak and Grant Shapps urging them to take the railway back into public ownership, part of our campaign collaboration with Bring Back British Rail and We Own It.

To support the email campaign for public ownership, CLICK HERE.


 

 

 

 

 

 

 

Secret bailout talks exposed: Shapps and Sunak must bring the railway into public ownership

Last week, the government’s secret bailout talks were finally forced out into the open. Parliamentary questions revealed that at least £3.5 billion has been spent on ‘Emergency Measures Agreements’ since the beginning of the lockdown in mid-March.

It is now common knowledge that train companies are demanding a 12-18 month extension to the £900 million per month bailout. If the government signs up, this will lock passengers and taxpayers into the dysfunctional franchise system for the long-term.

Transport Secretary Grant Shapps is due to face the Transport Select Committee on Wednesday, so these discussions are about to become extremely high profile. A decision is expected at the end of this month.

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To support public ownership, click here.

Around 75% of the public supports renationalisation, yet they’ve been excluded from discussions like this for years. That’s why Grant Shapps and Chancellor Rishi Sunak are now being flooded with thousands of emails, demanding they act decisively and bring the railway into public ownership instead.

CLICK HERE to support the email campaign for public ownership.

Supported by: Bring Back British Rail, We Own It, Association of British Commuters, Northern Resist and Norfolk for the Renationalisation of Rail.


Public Ownership is the only way forward

The ‘Operator of Last Resort’ is ready to go

The government has already prepared sufficient back up operators to take over every franchise in the country. They spent at least £20 million on the ‘Operator of Last Resort’ last year, and used it to renationalise Northern back in March. Directly before the lockdown, several other franchises were also on the verge of financial collapse, including South Western Railway, Transpennine Express, West Midlands Trains and Greater Anglia. The OLR had been ready to step in on these franchises too, which means it is currently better resourced than it has been in years.

Experts are now saying that most franchises would go bust on even 80% of the passenger numbers they had before the lockdown. So, extending the EMAs would lock us into a fragmented, wasteful and inefficient system for the long-term, with train companies demanding that the taxpayer guarantees their profits until passenger numbers become profitable again.

Public ownership via the Operator of Last Resort would immediately allow the flexibility and innovation needed to adjust services in response to the needs of public health and a sustainable economic recovery.  Then, the long-overdue work of building an integrated, efficient and accountable railway could finally begin.

The Williams Review has failed

The Williams Rail Review was supposed to fix the fragmentation that led to the chaos of the 2018 timetable collapse. However, despite 20 months work, it has failed to reach a conclusion. Disagreement between the Treasury and Department for Transport had reached a stalemate even before the lockdown. And since the EMAs came in, the Railway Gazette has reported there are fears that its recommendations would breach competition law. Earlier this month, the government stated that they are holding the Williams Rail Review back for ‘further work’.

It’s clear the government has been unable to find any acceptable commercial and legal model for the reform of privatised rail, and it’s now possible that the Williams Review will never be released at all. So, extending the EMAs for 12-18 months means the government will be treading water, with no idea what to do. It would lock us in to a dysfunctional and unworkable system for the long-term, delaying the systemic change that was urgently needed even before the corona pandemic.

On both sides of the argument, most agree that the railway needs to be ‘vertically integrated’ under a single, publicly accountable body at arms-length from government. However, the only successful attempt to theorise this has been under a public ownership model – see this Opposition White Paper on Rail published by the Labour party in April.

Passenger trust has never been so important

We are facing the biggest public health and economic crisis in a generation and the railways are undoubtedly an essential public service, now fully funded by the taxpayer. The government has no choice but to properly fund public transport if they want the economy to recover, and supporting rail services over the next 12-18 months will cost billions. It is vital that every penny of this is spent efficiently, with clear lines of accountability to ensure public health and sustainable economic recovery every step of the way.

Making the government fully responsible for the railway would immediately end the blame-shifting and contractual squabbling that have held back the railway for years. This bureacuracy, dysfunction and fragmentation would only get worse under an indefinite extension to the EMAs, or a system of management contracts.

Instead, the government should grasp this opportunity to act decisively and take the railway back into public ownership. The social, economic and climate challenges ahead require a properly integrated, accountable and cost-efficient system, run in the interests of the public, not profit.


CLICK HERE to support the email campaign for public ownership.

Supported by: Bring Back British Rail, We Own It, Association of British Commuters, Northern Resist and Norfolk for the Renationalisation of Rail.


 

Transparency Now: no more secret talks about the future of our railway

Secret talks between government and train companies have been underway for the past two weeks. There is a crisis over the future of the railway and big decisions will be taken imminently – including the question of public ownership.

The Department for Transport had been hoping to convert the rail franchise agreements to long-term concession models; the rumoured conclusion of the Williams Rail Review. However, according to sources in the Railway Gazette, this option may now be off the table due to a potential breach of competition law. This leaves the government with an urgent dilemma – extend the ’emergency measures agreements’ (EMAs) indefinitely, or renationalise the franchises via the ‘Operator of Last Resort’ (OLR).

With some train companies reportedly asking for 18 month extensions, the government is now under huge pressure to make a decision on what will happen when the EMAs run out in September. And it’s possible that a decision could be made as soon as next month.

Panic in the corridors of Whitehall

At the beginning of 2020, the rail franchising system was already collapsing along legal and commercial lines. Several ‘zombie franchises’ were thought to be on the verge of financial failure, including West Midlands Trains, South Western Railway, TransPennine Express and Greater Anglia. And a major legal case about railway pensions had already cost tens – if not hundreds – of millions of taxpayers’ money. Details about the outcome of the Stagecoach court case remain shrouded in secrecy, but it was reported in March that the switch to EMAs means that the government may now be responsible for the entire £8 billion pension deficit.

The ’emergency measures agreements’ have led to an extremely precarious contractual situation, because any return to previous franchise agreements would see the train companies go bust within days. According to an industry source in the Railway Gazette, if only 85% of passengers returned to rail travel after the covid crisis, then most franchises would go bust on that basis alone.

The only alternative to EMAs is to bring some or all franchises into public ownership. The government has been quietly preparing for this ‘plan B’ since the beginning of April, setting up enough ‘Operators of Last Resort’ (OLRs) to take over every rail franchise in the country. At least £20 million was invested in OLRs last year, which was the solution used to renationalise Northern back in March.

Our urgent call for public scrutiny

The corona pandemic has pushed public transport into a long-term crisis in terms of patronage, with an instant drop of 95% in passenger numbers. And huge limits on capacity are now required for reasons of public health, with most of the network running at less than 20% capacity.

The railway costs about £14 billion per year, and the majority of this is paid for by passengers (£10.4 billion from ticket sales and £4.1 billion taxpayer subsidy in 2018-19). With ticket revenue now forecast to be just £2 billion per year, we are shifting rapidly to a railway where the vast majority of costs will be paid for by the taxpayer, the drop in passengers creating an £8 billion shortfall.

This completely upturns the balance of funding that had been increasingly weighted towards fare revenue for decades. In return we must see transparency and accountability from the government about transport policy, and the guarantee that we are getting the best possible value for money and social/economic benefits from the public transport system.

Help us demand transparency

In the era of corona virus and recovery, transport has become an essential public service and there is absolutely no excuse to allow decisions on transport policy to remain shrouded in this much secrecy. It is on the government to explain how their decisions are in the best interests of the public and every MP should be doing their job and demanding transparency on this issue before these decisions are made.

The Williams Review was supposed to restore ‘trust’ in the public and solve the strucural chaos that caused the 2018 timetable collapse. However, the review was never published and as a result we are two years overdue some government accountability and a solution that urgently restructures the railway. In the context of a global health pandemic these issues are now doubly important and conversations about 1) railway structure and 2) funding must be had urgently and with full public involvement and scrutiny. It is up to the government to explain and justify the policy they go forward with, and it’s every politician’s job to urgently demand this.

We’re sharing our concerns with the Transport Committee, Public Accounts Committee and National Audit Office. We’ll also be calling on MPs and opposition parties to more actively scrutinise the government’s decisions on transport.

Please help by writing to your MP and submitting your concerns to the Transport Select Committee, who are requesting submissions from the public until Monday 29th June.

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