Category: Consumer Rights

Despite four years work on the Williams-Shapps Plan, the government has failed to come up with any credible answers for the complete market failure of the railway.

Its promise that Great British Railways (GBR) will be an integrated guiding mind “maximising social and economic value in the public interest” is fundamentally unachievable while privatisation remains in place.

Grant Shapps knows this. That’s why he’s deciding the future of essential passenger services such as fares, ticketing, staffing and station management in backroom talks with private train companies; exempting these areas from consultation. Meanwhile, the Williams-Shapps Plan offers a set of incoherent legislative proposals, which fail to clarify which essential services will be run by GBR; and which will remain in the hands of train companies.

The Williams-Shapps Plan for Rail consultation is clear about just one thing – the reasons for market failure. In the government’s own terms, this has been caused by: 1. Moral Hazard – where profit motivations conflict with the public interest, also known as “perverse incentives”; and 2. Information Failure – where inferior decisions are made due to fragmentation and lack of accountability.

However, both of these problems are certain to remain. Here’s why the Williams-Shapps Plan will fail to deliver:

1. Competition law prevents integration

While rail privatisation remains, the restrictions of competition law will permanently prevent the integration of cross-industry functions such as timetabling, ticketing and passenger data. Competition law also requires a ‘level playing field’, meaning that decisions must not cause an adverse financial impact to private train companies.

The Williams-Shapps plan has failed to find a solution for ‘track access’, the process by which train companies negotiate their use of the timetable. The government has suggested a slightly heavier weighting on public interest factors when timetabling, but this suggestion is likely to be impossible under competition law. Integration will be impossible, with timetabling dominated by private interests, thus minimising the influence of devolved and regional governments.

As the ORR has emphasised in its new consultation response, the government’s proposals actually unleash even more competition concerns, likely to conflict with multiple existing regulations. It even suggests that GBR might have to be split into two distinct parts – to avoid the possibility of breaching competition law by collaborating across retail and operations within itself.

2. Incoherent legislation will prevent reform

Given the undisputable fact that privatisation leads to market failure, the government wants to amend the Railways Act 1993 to make it easier for ‘direct awards’ to publicly-owned operators when private companies fail. However, it wants publicly-owned operators to remain banned from actually competing for contracts because the better value they provide is seen as an ‘unfair advantage’ over private train companies.

The government also wants to retain EU Regulation 1370/2007; making it easier to navigate issues around state aid. These changes are welcome and could greatly increase the ability of local and national governments to directly award contracts to publicly owned companies. However, this approach is logically in conflict with the Bus Services Act 2017, which bans municipal ownership and severely limits the powers of local authorities to regulate their buses. Unless these changes are taken together holistically, it will be impossible to achieve integrated, multi-modal travel across bus and rail.

Finally, the government wants to sign up to the Luxembourg Rail Protocol; a way of liberalising and globalising the Rolling Stock Companies (ROSCOs), making it easier for the big banks to get involved. However, the leasing of trains under the ROSCO system is already one of the most dysfunctional areas of the railway; as well as the biggest site of profit leakage.

3. Accessibility proposals will fail to deliver

According to the submission made by the Disabled Persons Transport Advisory Committee (DPTAC), the government’s proposals will be “insufficient to achieve real cultural change.” The government had previously ignored DPTAC’s recommendation for a £6 billion investment for full station accessibility by 2060, offering just a ‘nationwide station audit’ instead.

Last week, we published a confidential DPTAC report that suggests investment in station accessibility is being jeopardised by the “perverse incentives” of train operators. It is important to note that publicly-owned operators such as LNER are directly subject to the public sector equality duty, whereas private operators are not.

One positive suggestion in the Williams-Shapps plan is to expand the role of DPTAC, which has proved itself to be a competent and independent advisor to the government; never failing to oppose “toxic” and “illegal” policies of railway destaffing. However, there is now an urgent need to ensure DPTAC is sufficiently resourced to guarantee its independence, and has clear guidelines around its publishing and transparency policies. This is the only way to avoid the potential for political interference – especially in relation to the controversy around railway destaffing.

4. Passenger representation – a new role for Transport Focus

The Williams-Shapps Plan suggests that all passenger representation should be conducted by Transport Focus, part of a planned expansion of the organisation. Though it is an excellent research organisation, Transport Focus does not have the independence or credibility required to perform the function of a “passenger champion”; especially as relates to its new role representing disabled passengers. The inflation of Transport Focus to perform all of these vital roles appears to be a quick and cheap way to tick the ‘passenger rights’ boxes without any real consideration of what it would take to gain passengers’ trust and actual representation within the railway.

We Own It and Bring Back British Rail have published an excellent guide to the consultation, which calls for a ‘passenger board’ including representatives from every region of the country, as well as rail workers. Such a model is common in Europe and would greatly increase passenger involvement and trust.

How to respond to the consultation

The Williams-Shapps Plan for Rail consultation closes at midnight tonight, and we urgently need your help. The online response form is complicated, but the information in this blog, plus this excellent guide from We Own It, should help you to demand public ownership with just 15 minutes of your time.

Despite four years work on ‘reinventing the wheel’ of railway privatisation, the government has: 1. Failed to consider public ownership and 2. Failed to provide any proper economic analysis or predictions in support of its plans.

It’s vital to demand that legislative changes work holistically, creating the conditions necessary to “maximise social and economic value” – only possible under public ownership. However, legislative changes alone will not be enough. We’re also demanding a new ‘public sector value test’ to enshrine the benefits of: economic and social value, levelling-up, equality, decarbonisation and modal shift as determining factors in all government contracting decisions. These aims should never be compromised by competition law, especially the duty to avoid ‘financial impact’ on operators.

Any private train companies continuing to operate on the British railway must at minimum be treated as public sector bodies, and made subject to the Freedom of Information Act and the public sector equality duty – as the publicly-owned operators are already.

For more information: contact@abcommuters.com

A groundbreaking new report on ‘Rail Workforce Reform’ has concluded that inadequate railway staffing is undermining the value of billions of public investments. It also finds that destaffing policies are creating “perverse incentives” for train operators; jeopardising further investment in station accessibility and step-free access.

The confidential report was drafted in February 2022 by the Disabled Persons Transport Advisory Committee (DPTAC): statutory advisors on accessibility to the Department for Transport (DfT). DPTAC has been warning the government about the “toxic combination of driver-only operation and unstaffed stations” since 2016; insisting that railway destaffing breaches multiple areas of equality law.

DPTAC’s new report uses the ‘Sutton loop’ in South London as a case study to “provide real-world examples of the consequences of policy options” as well as analysing the “current and future impact of staff roles and availability”. Its groundbreaking conclusions on financial impact represent a whole new economic argument for the full staffing of Britain’s railways.

“The toxic combination of driver-only operation and unstaffed stations”

The “Rail Workforce Reform Case Study – Sutton Loop” assessed 20 stations served by the Thameslink (GTR) service from London Blackfriars to Sutton. 11 of these stations also have regular services on other routes, provided by Southern (GTR), South Western and Southeastern. Except for South Western, all services are driver-only operated, so boarding assistance is entirely dependent on station-based staff. The report concludes that:

“Assistance and/or auxiliary aids cannot routinely be provided at all times trains are running, at 14 of 20 stations on the Study Route, even if requested in advance – and certainly not on a ‘turn up and go’ basis…. It is clear that the current staffing levels on this route are completely inadequate to deliver an accessible railway, and to ensure disabled people can use train services on the same terms as other passengers….As things stand, the toxic combination of Driver Only Operated (DOO) trains and unstaffed stations means many disabled people are excluded from using the route to access employment, services, leisure and health facilities.”

Of the 20 stations on the Study Route, 10 have no step-free access from street to platform; and only 5 have step-free access to modern standards (consistent with the national situation.) Only London Blackfriars has level access between the train and platform, so wheelchair users rely on a staff member for boarding assistance at every other station on the route. DPTAC concludes that:

“The ability of staff to provide assistance is the only effective way of mitigating the continued partial physical inaccessibility of many of the stations on the loop, which will take many years to address fully. However, the toxic combination of inadequate station staffing and Driver Only Operated trains in particular, undermines the ability of staff to mitigate physical inaccessibility on a reliable basis, and leads directly to the exclusion of disabled people from the Study Route.”

Railway destaffing undermines the value of investments

The Sutton Loop is part of the Thameslink network, which has received over £6 billion in public investment since 2009, as part of the ‘Thameslink Programme.’ This includes a fleet of modern, accessible Class 700 trains; and platform-train level access at London Blackfriars and St. Pancras. DPTAC argues that railway destaffing has devalued these accessibility investments: as well as over a hundred million invested in 30 other stations directly served by the Study Route stations; and indirect implications for multi-billion investments on the wider network.

“A current lack of adequate staffing renders much of the Study Route inaccessible to many disabled people for much of the time, significantly undermining the investment in accessibility already made, depriving rail of an important market, and perpetuating the exclusion of many disabled people from a vital public service to the detriment of both their lives and the wider economy.

“It is impossible to divorce consideration of operating costs from the return on investment in station infrastructure…any reduction in staffing then has the potential to undermine the business case for future investment in accessible facilities, where these are dependent on staff presence – as by definition their benefit reduces as staffing reduces. It may also undermine the willingness of rail management to seek accessibility improvements.”

DPTAC suggests that further investment in station accessibilty is already being jeopardised due to this conflict of interest; recommending that the short to medium term priority is to ensure there are no “perverse incentives” for train operators that would discourage the development of step-free access schemes.

DPTAC’s recommendations:

DPTAC’s “Rail Workforce Reform Case Study” concludes that:

“The benefits of staff presence are widespread and include not only the provision of assistance, but e.g.: personal security reassurance; ensuring toilets and waiting rooms are available; provision of information; and management of disruption etc. Poor staffing levels are likely to suppress demand at a time when the success of the rail nework depends on attracting more customers.

“Any reductions in current staffing levels will result in the Study Route becoming even less accessible with both direct (e.g. the provision of assistance) and indirect (e.g. the opening times of waiting rooms) impacts on accessibility.

“Such reductions in accessibilty will undermine (and in some cases virtually eliminate) the benefit of both previous and potential future investment in the physical accessibility of stations and rail vehicles, and of connecting accessible transport modes…Until radical improvements in physical accessibility can be implemented, staff will remain the key way of ensuring that accessibility is maximised.”

The Rail Workforce Reform Case Study was released to us via a Freedom of Information request. For more information: contact@abcommuters.com

While everyone’s talking about the Tory leadership contest and RMT industrial action, we’re about to lose our last chance to save Britain’s railway from its most dangerous privatisation project yet.

A government consultation on the new public body Great British Railways– including major changes to legislation – is about to be rushed through without any public awareness. It’s a key part of the government’s secret plan to cut billions in public spending, including a massive destaffing project allegedly involving the closure of every ticket office in England.

Today, we’ve demanded that Grant Shapps extends the 4^th August deadline and starts publicly promoting the consultation – in a joint letter with campaign group Bring Back British Rail. The consultation is far too short for a holiday period and has been completely hidden from view by the “National Headquarters Competition for GBR”. If he refuses, the Williams-Shapps Plan will lose even more credibility with the public.

However, this is only the first of the weaknesses in the consultation. The private rail industry has been in backroom talks with the government for months; making vital decisions on all the most important areas affecting passengers.  Most of these areas – such as timetabling, fares, and accessibility – have been exempted from the consultation (2.14) and are being negotiated as part of a market engagement process with train companies. They are now set to be decided without any public input whatsoever.

Great British Railways and the public-private power struggle:

Beginning in 2018, the purpose of the Williams-Shapps review was to fix the fragmentation that caused the nationwide timetable collapse of that year. The process has concluded that the railway experienced complete market failure; caused by the perverse incentives of private companies within the system.

Consequently, the main commitment of the 2021 Williams-Shapps White Paper was to bring all “critical cross-industry functions” under a new public body, Great British Railways, including: timetable planning, fares and ticketing, open data, and station management. This commitment requires the removal of the operational role of the Rail Delivery Group, which currently controls the National Rail Enquiries ticketing system and many other cross-industry functions – as well as acting as a powerful trade association for private companies.

In October 2021, a secret market engagement process began, to decide the details of the new style of GBR contract – Passenger Service Contracts (PSCs). The Rail Delivery Group simultaneously published their own report on behalf of the private train companies; demanding that GBR should be scaled down to set only “base level requirements” and that train operators should retain most of their critical cross-industry functions, including: “active or leading roles in all three phases of the timetable specification;” key roles in marketing and ticket retailing; maximum autonomy over fare pricing; and the commercial and operational management of stations.

Essential passenger services are now under greater threat than ever, and all the details of these policies have been hidden from public view.

1. Fare Reform

There has been no proper consultation on rail fare reform for Great British Railways. A major ‘Pay As You Go’ smart-ticketing consultation was held in 2019, but this never reported to the public. Nor was there any consultation behind Great British Railway’s first policy rollout – ‘flexi-tickets’, launched in June 2021. The Department for Transport even ignored their own focus group research, which shows a strongly adverse reaction to the flexi policy they eventually chose – giving just a 5% discount on the price of a daily ticket.

A ‘formal one-year review’ of the flexi-ticket scheme is currently underway, but this is being hidden from the public due to train companies’ demands for commercial confidentiality. For the same reason, the Rail Delivery Group refuses to release any flexi-ticket sales data, despite the scheme being a government policy and fully funded by the taxpayer.

Most shockingly of all, the Rail Delivery Group has been put in charge of implementing a whole new smart ticketing system on behalf of Great British Railways.

2. Accessibility

Disabled people’s equal right to travel has been under threat for years, due to a compromised relationship between government and industry in which they have secretly developed long-term destaffing programs – previously revealed by whistleblowers on this website. The plan to close every ticket office in England is the latest example of this cover-up.

The Williams-Shapps Plan’s proposals for accessibility have never been consulted on, and essential advice from the government’s accessibility advisors has been ignored. The National Disability Strategy was recently declared unlawful by the high court for its failure to properly consult, and it seems that many of the same weaknesses are now being repeated in the Williams-Shapps consultation.

3. Workers’ rights

Currently, Grant Shapps refuses to step in on the strikes, and the blame for the industrial relations crisis has landed on the government. But this does not mean that the private rail industry is any more sympathetic. As reported in The Times, the industry is pushing for ‘minimum service levels’ legislation; which would virtually end the effectiveness of industrial action and trade union negotiating power.

In its lobbying on Passenger Services Contracts, the Rail Delivery Group has said that the industry wants more control over stations, and the development of automation technologies.  One of their central demands is for the new contracts to directly incentivise them to cut costs – which will ensure permanent conflict in industrial relations, with the government continuing to negotiate by proxy.

What happens next?

We are still only scratching the surface of the ‘Great British Cover-Up’ and the Williams-Shapps Plan for Rail consultation. The Department for Transport has refused to comment.

It’s vital that we get Grant Shapps to agree to an extension within the next few days, so that passengers, campaigners and trade unions can prepare their responses. Please join us by writing to him at shappsg@parliament.uk

The private rail industry’s ‘perverse incentives’ have stood in the way of passengers’ rights for much too long. We are now gathering evidence of the industry’s many conflicts of interest, to show that this is the true cause of the crisis in passenger trust – as well as the failure to modernise.

For more information, or to share your comments: contact@abcommuters.com

[This page was updated on 03/08/2022 to better reflect changes to the consultation principles in 2018]

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.