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deregulation with Enhanced Partnerships, franchising and municipal ownership; except for an extremely limited and outdated 2017 study.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 scale of economic risk presented by bus deregulation 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 off-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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Grant Shapps and the Season Ticket Refund Rip-Off

In a significant victory for our campaign, the Chair of the Transport Select Committee, Huw Merriman, has publicly supported our demand for pro-rata refunds on season tickets. In an interview with BBC South East, he called the current arrangements a “rip-off” and said he would be calling on the government and rail industry to give full refunds.

We welcome Huw Merriman’s statement and call on the Transport Minister Grant Shapps to act decisively and follow through on his promise to ensure that “no-one is unfairly out of pocket for doing the right thing.”

[Update: on 24th April, the Chair of the Transport Select Committee wrote to Grant Shapps urging him to ensure: 1. pro-rata refunds 2. the option of a ticket suspension and 3. a waiving of the £10 admin fee. A response is due on 30th April.]

Mixed messages from the government on season tickets:

Since the lockdown began, the government and rail industry have changed the refund arrangements several times, leading to widespread confusion among passengers. On 25th March, Grant Shapps assured the Transport Select Committee that he had arranged pro-rata refunds. In fact, the rail industry’s unfair refund system remains in place – and commuters have been losing out on hundreds of pounds.

shapps tweetThe Season Ticket Refund Rip-Off:

The government is bailing out train companies to the tune of £600 million per month. And yet, the rail industry has so far refused to give pro-rata refunds on season tickets; instead relying on a vastly unfair refund system. The whole process is shrouded in mystery for passengers, so we created a graph to show exactly how much people could be losing:

season ticket graph

The graph shows that the less time you had left on your season ticket at the time of the lockdown, the more value you’d lose. In this example, a Brighton to London commuter who had held their annual for 1 month would lose £83 compared to pro-rata. After 3 months, they’d lose £370; after 6 months they’d lose £744; and after 9 months, £1,118.

We’re demanding full refunds for all passengers:

It’s clear from our recent discussion on BBC Radio Four’s ‘You And Yours’ program that the rail industry will not budge on this issue – refusing to give pro-rata refunds OR the option of a season ticket suspension. But, under new corona virus legislation, the Transport Minister Grant Shapps is now in full control of the railways – and he has already promised pro-rata refunds. So, why won’t the train companies do what Grant Shapps told them to do? And who is really in charge here?

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Better Buses in Greater Manchester could help us fight injustice across the UK

The Greater Manchester bus consultation closes at midnight tonight, and we’re calling on friends and allies all over the country to join us in writing in before the deadline to urge Andy Burnham to re-regulate the city’s buses.

The consultation is open to those who visit the city as well as residents of GM, so if you care about Greater Manchester as much as we do, please join us in dropping a few lines ASAP: gmbusconsultation@ipsos-mori.com

The Fight for Greater Manchester’s Buses

In Spring 2019, we made a documentary about Better Buses for Greater Manchester, the campaign at the centre of a coalition of transport, anti-poverty and environmental activists calling for bus regulation in the city. In the process, we spoke to a range of passengers and campaigners, who argued that Manchester would benefit from a London-style bus system, including multi-modal ticketing and more local power and accountability over transport. Check out our 14-minute documentary for all the benefits bus regulation would bring, or read more on Better Buses for GM’s website.

Is the government’s bus legislation strong enough?

If Andy Burnham goes ahead with the decision to re-regulate, he will be the first Mayor to do so under powers in the 2017 Bus Services Act. But even getting this far into the process has been done with great difficulty and cost to the Greater Manchester Combined Authority. So, why is the process so complex?

Currently, only the elected Mayors of Combined Authorities have the powers to regulate buses, and to do so they have to get through a process that includes a series of business cases, consultation with bus operators, an auditor’s report and, finally, a public consultation. For local authorities outside these areas, the path to bus franchising is even more complex and they must submit extensive reports and proposals to the Department for Transport before they can even access these powers. You can read more about the legal process here.

Local authorities need MUCH more power & resources

Buses are the most popular form of public transport, used by 59% of all passengers. They are also the passengers most severely affected by regional inequalities; through the combination of ten years of austerity and a completely deregulated bus market. Yet bus fares are rising at a faster rate than rail fares, and over 3,000 routes have been cut in the UK since 2010. The situation is so bad in rural areas especially that the deregulated bus market was directly called out in the UN report on poverty last year, arguing that “abandoning people to the private market is incompatible with human rights requirements.”

After a staggering 45% cut in their funding over the last ten years, it is therefore unrealistic and actually irresponsible of the government to expect local authorities – especially those outside the big metro areas – to undertake the difficult and expensive process required to introduce bus regulation in their areas. The social, regional, and environmental need for action is obvious and urgent, but the simple fact is that current legislation isn’t strong enough to be of any significant use in changing the power balance that lies between passengers and major international transport corporations.

Bus passengers urgently need a seat at the table

Bus passengers have been the hardest-hit by austerity and change cannot come quickly enough. But there is little chance of that under the government’s current legislation. Local authorities need much more power and resources to even have a chance of beginning the process, and it shouldn’t be left to bus passengers to raise that demand. Our view is that the Bus Services Act 2017 has failed to achieve what the government promised it would, and that the most important priority for all bus passengers right now is to come together on a national level and demand further powers and resources for local authorities.

Private transport companies should have no right to fill our public space with political messages, as happened earlier this year when Stagecoach ran adverts against regulation on the side of their buses in Manchester. Though early threats of legal action from Stagecoach over bus franchising seemed to pass, the anxiety among campaigners and local authorities is very real and we’ve noticed it throughout years of talking to passengers all over the country. It is now a matter of public interest that the private transport companies are brought in line across both rail and bus services, as there is no hope of seeing an integrated transport system without this.

We note that bus companies have already created obstacles to Transport for the North’s plans for smart-ticketing, as reported by the Yorkshire Post last year. It is clearly the case that metro areas in the North will not get the multi-modal ticketing system they deserve without bus regulation. The current deregulated bus market not only disincentivises companies to collaborate, it actually prevents an Oyster-style ticketing system under competition law!

ABC’s submission to the GM bus consultation

We have sent our comments to the bus consultation, and urge you to contribute before the deadline at midnight tonight. A few lines to gmbusconsultation@ipsos-mori.com will be enough, to help make a real change that could set a precedent for bus services all over the country.

In our submission to the Greater Manchester consultation, we have strongly supported Andy Burnham’s plans for a regulated bus network, which will be the start of meaningful change to the GM economy, society and environment, through the necessary infrastructure of an integrated transport system. We have asked him to speak up for other local authorities and bus campaigners facing the same process.

The example of Greater Manchester shows how hard passengers have to work to challenge and reform this country’s failing public transport policy, where the power balance between passengers and transport companies is all wrong and absolutely riddled with private interests.

Write to us at contact@abcommuters.com

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No More Rail Reviews: It’s time to declare a National Crisis in Public Transport

At a time when rail francising is quite clearly collapsing, today’s 2.7% fare rise is an outrage. It’s another sign that the government and industry will continue to treat us like a captive market, meaning that we’re continually paying more while constantly receiving less. Today, we’ll be joining with passengers around the country to demand a nationwide fares freeze, in recognition of the fact that UK public transport is now at the point of social, economic, and environmental crisis.

Protests kick off at London Kings Cross at 8am and you can view the full schedule here.

A National Crisis in Public Transport

For the last ten years, rail fares have been rising at twice the speed of wages. For many commuters on a lower income, this is more than just a matter of yearly injustice – they are being priced off the railway altogether.

And for bus passengers, things are even worse. Bus fares are rising at an even higher rate than rail, according to government statistics published last month – a shocking 3.3%. Unlike rail fares, bus fares outside of London are completely unregulated, meaning that bus companies can put up fares as and when they choose and do not even have to give a warning to passengers. Alongside the withdrawal of local investment and routes, this is pricing thousands of people out of bus travel, if they even have a service left at all.

Transport is the UK’s biggest polluting sector and the modal shift from car to public transport is a matter of urgency; not just for climate change but for public health, social equality and regional development.

No faith in the Williams Rail Review

The Williams Review was launched by the government soon after the timetable collapse of 2018, promising a ‘rail revolution’ and an end to the failed and fragmented franchising system. The government used this promise to evade a response to their leading role in the catastrophe; meaning that – to this day – they have not answered for the 2018 timetable crisis.

The reality of the Rail Review was nowhere near the ‘rail revolution’ promised. It had a narrow, ideological remit that excluded public ownership from the very start, and was also required to be ‘fiscally neutral’. The Rail Review that had begun by promising to ‘scrap franchising’ gradually lost all credibility as the government continued to award franchises regardless – East Midlands Trains and the West Coast Partnership.

Since the launch of the review in September 2018, Keith Williams has failed to report back. It is therefore without any public scrutiny that he approved the West Coast Partnership award to FirstGroup as ‘Williams compliant’ back in August. First Group shareholders, meanwhile, have been assured in the financial press that their future in UK rail looks more lucrative, thanks to an arrangement that protects the company from risk. The Financial Times has said that this is ‘the first time in ten years that a rail company has had financial protection.’

In a further twist to the tale, the government is being taken to court early this year over the by three different train companies over its franchising practices: Stagecoach, Virgin and Arriva. If it doesn’t go the government’s way, the cost to the taxpayer could be tens of millions – so how can we possibly trust the government to make further changes to the franchising system in the meantime?

Finally, we are extremely concerned about the excessive influence of the rail industry lobby on the outcome of the rail review. The Rail Delivery Group is calling for a mix of management contracts, concession-style models, and competitive intercity franchising, along with the proposal of an organising body resembling the ‘Strategic Rail Authority’ that was abolished in 2006. With franchising failing, it stands to reason that private train companies will be seeking to keep franchising alive, and the example of the West Coast Partnership already does not bode well for the promised ‘rail revolution’.

Passengers and taxpayers are being denied a proper, democratic conversation about the future of our public transport system, which, in the era of Brexit, is now at the point of a national emergency if we are to build the equitable country we want to see now, and in the future.

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South Western Railway: passengers fight back on compensation

It is now Day Nine of the longest-running rail strike in UK history and South Western Railway passengers have been abandoned by the government. The guards dispute has been going on for almost four years across multiple UK rail franchises, and yet we are no closer to seeing a resolution. In fact, the situation is getting even worse, with passengers on SWR being expected to pay for the latest strike out of their own pockets.

If South Western Railway gets compensation for the strikes – why can’t passengers?

Season ticket holders are currently being denied compensation by SWR, despite the fact that its majority owner FirstGroup has been in negotiations with the Department for Transport for ‘strike amelioration’ compensation all year. Last week, the government again refused to clarify this amount, but the RMT union claims that SWR could be receiving as much as £86 million in strike compensation to date.

SWR out of our control

Any compensation for lost revenue paid to SWR by the government would be part of an agreement where industrial action is considered ‘outside of the train company’s control’ (force majeure):

SWR franchise agreement
From page 524 of the SWR franchise agreement, available to view here.

Any such arrangement would mean that SWR has been disincentivised to end the dispute and that the government is using taxpayers’ money to fund it. It would also suggest that passenger compensation has been treated as an afterthought by both rail industry and government- implying that nine days into the strike, they have not bothered to factor it into their negotiations.

The following tweets prove that SWR is sending mixed messages on compensation – even to the point of giving passengers false hope, and then retracting it a few days later:

SWR comparison tweets

Season ticket holders fight back!

Govia Thameslink Railway season ticket holders received a month’s compensation for industrial action in 2016, and again after GTR caused a major timetable crisis in 2018. There’s also a precedent on Northern, where season ticket holders were invited to claim compensation proportional to the daily price of their ticket during industrial action.

We urge SWR passengers not to accept the following excuse given out by the train company and would seriously question the validity of SWR’s advice on this issue:

SWR delay repay.PNG

Demand compensation under the Consumer Rights Act

  • Passengers are self-organising, with mass compensation claims to South Western Railway citing the Consumer Rights Act. There’s a template letter for season ticket holders here, and claims should be sent to customerrelations@swrailway.com. (Credit to @HSLcommuter for the template letter.)
  • If you bought your season ticket on a credit card, it is worth attempting to claim back a proportion of your season ticket using Section 75. Back in 2017, one of our members succeeded in doing this, and got a £2,400 refund on his season ticket through his Amex card. To find out more, check out Parts One, Two and Three of our guide, which is based on the method he used. The advice relates to Southern Rail, but the templates can be adapted to any train company.
  • If you’ve encountered additional expenses, such as taxis or hotel costs, be sure to make a claim to SWR under ‘consequential losses’. A Telegraph article from last week confirms that SWR will be considering these – despite the fact that the rail industry has been shown to be highly resistant to the idea of reimbursing passengers for their expenses in the past. Last year, it took an intervention from the consumer rights charity Which? to force the rail industry to include ‘consequential losses’ in the National Conditions of Carriage.
  • We hope to hear of many new consumer rights precedents being set in this area – please share your success stories via contact@abcommuters.com

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**Good luck to all passengers and please note the following disclaimer:

All sample letters provided by ABC are templates only. Any person using them does so at their own risk and is responsible for the content and the accuracy of the claim. ABC is not a party to any claim made in accordance with these guide or otherwise, and accepts no responsibility or liability for the content and/or the accuracy of any information included in any such claim. ABC does not guarantee the outcome of any claim and accepts no liability whatsoever in the event of a claim being unsuccessful.

 

 

 

 

 

Three consumer rights issues every rail passenger needs to know about

Last week, we learned that the Rail Delivery Group failed to communicate changes to penalty fares legislation to train operating companies, leading to the overcharging of up to 10,000 passengers. The overcharging follows a similar scandal revealed in 2018, when the Rail Delivery Group failed to update changes to the Consumer Rights Act regarding ‘consequential losses’. On that occasion it took an intervention from Which? for the Rail Delivery Group to incorporate consumer rights legislation that had changed eighteen months earlier.

The Rail Delivery Group (Association of Train Operating Companies Ltd.) is now presiding over a major fares and ticketing restructure, and is by far the loudest voice in the Williams Rail review. So, it is up to passengers to get ahead of the game and call for real change, which can only start by addressing the train operating companies’ financial incentives. It is long past time to demand a structure that guarantees honesty and ethics in the railway’s approach to consumer rights – and impossible to see how progress can happen when the current structure incentivises precisely the opposite behaviour.

With this in mind, here are the top three consumer rights issues we think every rail passenger needs to know about:

1. Delay Repay: the rail industry’s ‘perverse incentives’

The good news is that the Office of Rail and Road (ORR) is now advocating for a new compensation ‘code of conduct’; to become a train company licensing condition within the next twelve months. Among the ORR’s recommendations in their July submission to the Williams Rail Review is that Williams should consider the issue of ‘perverse incentives’ – a reference to train operating companies retaining the ‘revenue risk’ from claims, meaning they are able to profit from unpaid compensation. Though not mentioned in the ORR’s submission, there is also the matter of Schedule 8 compensation payments made to train operating companies by Network Rail for problems with infrastructure (totalling £328 million last year). According to a recent Telegraph investigation, only 20p in the pound is being passed on to passengers  – and where the rest of Network Rail compensation goes is strongly disputed.

Unfortunately, the issue of perverse incentives features only as a ‘long-term’ aspiration in the ORR submission. This is too slow a timescale to address the incentive structure that is quite logically the root cause of the problem. Despite several interventions by the consumer rights charity Which? compensation payout rates have not significantly improved since 2016, and only about a third of passengers are currently claiming the delay repay they’re entitled to. The payout on small value claims is even worse, with only 18% of passengers claiming under Delay Repay 15 schemes, and only 25% claiming when the value of their ticket is less than £5.

All available research shows a huge ‘compensation gap’ when it comes to delay repay. But it’s the cause of this – the ‘technology gap’ – that is even more shocking. A Which? investigation earlier this year showed that train operating companies demand between 10 and 24 pieces of information for claims. And Department for Transport research shows that over 1 in 4 passengers cite the time and complexity as their reason for not claiming. The cause is obvious: train operating companies have been disincentivised over many years to make claiming easier, which could easily be done through the innovative use of technology.

2. Third Party Apps: how the rail industry is standing in the way of twenty-first century technology

Most passengers are unaware that train operating companies can refuse delay repay requests submitted through third party apps – an area which remains entirely unregulated. This issue first came to our attention in April 2018 when we were contacted by a wave of Govia Thameslink Railway passengers who’d been asked to repay 30 – 100% of their compensation, simply because they had been using a third party app to expedite their claims. While there was no public response from GTR or any rail agency at the time, we noticed that a few months later, the Office of Rail and Road quietly began a market review into the use of third party apps.

The results of this review were due in Spring 2019, but have not – even now – been publicly announced by the ORR. After months of waiting, we have now discovered that there is a copy of the report in Annex A of their submission to the Williams Review. The report confirms our story about delay repay, and shows that there are currently at least six train operating companies who refuse to deal with third party compensation claims (page 4):

TPI panel snip.PNG

To the ORR’s credit, they have said in their submission to the Williams Review that they intend to consult immediately on a ‘Third Party Intermediary’ (TPI) code of conduct, which would open up the market for third party apps and online retailers to process compensation claims. However, we believe more urgent action is required. For example, why shouldn’t the ORR and Transport Focus demand that the Rail Delivery Group makes a clear statement committing to the immediate acceptance of third party claims? The tech market would respond promptly and this would provide train operating companies with a much-needed incentive to improve their own technology if they wish to remain competitive. Anything less is to allow a market monopoly to continue to stand in the way of innovation – a technology gap which has already become a national embarrassment.

3. Class Action Lawsuits: will the floodgates open for new consumer rights precedents?

In February this year, a £100 million class action was launched at the Competition Appeal Tribunal on the issue of ‘boundary fares’; alleging that train companies have been making passengers with travelcards pay double when crossing a TfL boundary. The overcharging around ‘boundary fares’ has been an issue of concern to commuters for years. ABC campaigner Martin Abrams brought this to the Rail Delivery Group’s attention as early as 2015, but still nothing has been done to correct the practice; demonstrating the slow rate of change and weakness of regulation in this area.

We have long been arguing that the floodgates will open concerning new consumer rights precedents in rail; and we can expect to see further legal challenges of this kind while the industry’s reactive approach to consumer rights continues. Recent examples of ‘passenger power’ include the successful attempt of one of our members to claim back the value of his season ticket through his Amex credit card, Seth Pochin’s successful small claim against Greater Anglia, and this in-depth guide to small claims against train companies by Simon Tilley. The only remaining question is whether change will come through the government and rail regulator, or whether legal actions from passengers will lead the way.

Follow us on Twitter and Facebook for further updates.

Write to us at contact@abcommuters if you’d like to share your thoughts.

[This article was edited at 12:30pm on 28th August 2019, to reflect the fact that where schedule 8 Network Rail compensation goes is still strongly disputed.]

 

 

 

 

 

 

 

 

 

No justice and no responsibility: exposing the truth about Govia Thameslink Railway

Following our blog post last Thursday, the Office of Rail and Road (ORR) has confirmed GTR’s £5 million fine for its breach of licence relating to passenger information during last year’s May timetable crisis. As a result of our intervention, the final decision was announced on the day of the Williams Rail Review deadline (31st May).

It is the first time the ORR has imposed a fine for breach of licence, meaning that an important new precedent has been set for holding train operating companies to account. Their final penalty notice finds that GTR’s conduct around passenger information was “towards the negligent end of the spectrum” and says that the fine will provide a “transparent signal to the industry” about passenger information standards. After a full review of the documents we’ve discovered that the ORR went forward with this penalty despite submissions from GTR, the Department for Transport, and even Transport Focus, to accept a lower figure.

ORR graphics

After reviewing their final penalty notice, we believe that the ORR has not only succeeded in imposing a precedent-setting fine, but has also chosen to “show its teeth” in an extremely difficult context; where the Department for Transport was already complicit in the failure of GTR’s management contract. Could this decision be a sign that the Office of Rail and Road is getting stronger and fighting for passenger rights while every other rail agency and passenger watchdog is still letting us down?

GTR’s £5 million fine: what went on behind the scenes?

The £5 million fine was announced on 14th March, and followed by a 21 day consultation period, during which the ORR had the power to ‘reduce the fine to zero’ or ‘increase it several fold’ (according to paragraph 139 of their penalties policy).

The ORR had categorised the breach of licence in the ‘moderately serious’ category, and their decision to choose a £5 million ‘starting point’ was also moderate in this context (the ‘moderately serious’ category of offence has a starting point of up to £10 million). During the 21 day consultation period that ran until 5th April, submissions could be made to the ORR in to have the amount reduced, or for the train operating company to make an offer of “reparations”.

GTR completely refused responsibility

GTR made no offer of reparations and maintained the position throughout the consultation that the £5 million penalty should not be imposed at all, and that if it were imposed, that it should be a lower amount. The ORR’s final penalty notice makes clear that GTR has not acknowedged reponsibility:

there is a lack of evidence that GTR undertook a significant lessons learnt exercise relating to passenger information and have focused instead on the wider industry failings. GTR have not acknowledged responsibility for its failure to provide adequate information to passengers.” (paragraph 39)

The only other submission within the consultation period was made four days before the consultation deadline by Transport Focus, who encouraged the ORR to consider an offer of reparations, “assuming an offer is put forward”. As GTR had not made any offer of reparations, the ORR judged Transport Focus’ submissions to be ‘inapplicable’.

The Department for Transport supported Govia Thameslink Railway

The ORR’s final penalty notice also shows the Department for Transport advocating on GTR’s behalf. After news broke of GTR’s £15 million “fine” for the 2018 timetable collapse in December, the DfT wrote to the ORR suggesting they show restraint in imposing any penalty. They said in the letter that they had already “entered into an agreement” that GTR would “make an additional £15 million available” to “develop and implement initiatives” that would benefit GTR passengers.

After December’s letter, the ORR asked the DfT to further explain December’s £15 million “fine”. In a further letter on 20th February 2019, the DfT said the following.

“On the level of the fund I suspect all we could say is that we took all the facts and circumstances into account including the level of the previous payment made by GTR in relation to the 2016 problems on Southern, the desire to create a fund which could provide meaningful benefits for passengers and the financial position of the TOC: pointing out that with the fund set at this level GTR will make no profit at all this year in recognition of their role in the disruption.” (paragraph 59)

Considering the full history of the management contract between the DfT and GTR – especially the fact that the Department had already allowed GTR to buy out their liability for the timetable collapse – it is not clear whether this was in fact a “fine” or simply a “fund”, ie. just another “remedial measure” of the kind that the DfT has been making since 2016 to bolster the GTR contract – and with zero scrutiny.

What is the Passenger Benefit Fund?

Here’s the part where it gets interesting in relation to ongoing passenger information issues. Many commuters have expressed outrage about the £15 million ‘Passenger Benefit Fund’ posters that they have started to see all over the GTR network; which state that “GTR is contributing £15 million in tangible passenger benefits” and completely erases the true history of the company’s failure, without even a hint of an apology. It is clear to us that the advertising materials are an attempt to derive PR value and ‘reputational capital’ from what is essentially a false political communication in a public space. Several of us have already reported this issue to the Advertising Standards Authority, and we encourage you to join us by submitting your own complaint.

And after reading the ORR’s final penalty notice last Friday, it seems the situation is even worse than we thought:

  • “As for the Passenger Benefits Fund, ORR notes that it has not been provided with a copy of the agreement between GTR and DfT pursuant to which the fund was set up or any clear explanation of its purpose and scope.” (paragraph 58)
  • “ORR have become aware of a new website that has been set up in recent weeks in relation to the Passenger Benefits Fund which sets out how the funding will be allocated to the stations affected and how passengers can propose local or wider passenger benefit schemes. Under “wider passenger benefit schemes”, the site suggests some examples of possible schemes that would lead to passenger information improvements.” (paragraph 62)
  • “ORR recognises that the operation of the fund could result in some improvement to the provision of passenger information at specific stations (e.g. an additional CIS screen,) but only if a significant proportion of passengers support such an improvement. Further,it is not sufficiently clear whether the fund will go towards making passenger information improvements for it to have any, or any significant, weight in the penalty assessment. Finally, it is in any event highly doubtful whether any such forward-looking information improvements as may be brought about by the fund would constitute “reparations” to those who were affected by the breach [of passenger information rules].” (paragraph 63)

Join us to make an unstoppable passenger watchdog:

Since the start of their disastrous management contract in 2015, no existing watchdog has been good enough to represent passengers’ interests on GTR, or ensure accountability. The ORR’s final penalty notice shows that the Department for Transport is, even now, advocating on GTR’s behalf, and proves that oversight is urgently required on the Passenger Benefit Fund.

As always, we have noone to rely on but ourselves – a grass roots network of passengers. If you’re as shocked as we are about the standards of dishonest communication on our railways, then please make a complaint to the Advertising Standards Authority and include a link to this blog post. Please also do all you can to alert press, local councillors and MPs, as very little of this story is reaching the mainstream media.

Our submission to the Williams Rail Review is coming soon! It covers the full GTR story and will explain all the barriers to justice and accountability that we’ve encountered throughout this investigation. If you would like to help us, please donate here.

Follow us on Facebook and Twitter for further updates.

 

 

Could a new £100 million legal case mean the end for privatised rail?

Today has been another shocking day for rail – a damning report from the Public Accounts Committee about the DfT, Keith William’s statement that franchising has failed and – most significantly of all – a £100 million class action launched this morning against several major train operating companies.

The legal claim has been launched with the Competition Appeal Tribunal against the following rail operators:

South Western Trains (up until Aug 2017):  Stagecoach Group.

South Western Trains (current): FirstGroup plc and MTR Corporation.

South Eastern: Govia – The Go Ahead Group and Keolis.

The “Boundary Fares” Case

The £100 million claim relates to train companies overcharging millions of passengers because of the issue of “boundary fares” where they purchased tickets for travel beyond the zones covered by their Travelcards. The claim argues that they should have been offered the chance to pay “boundary fares” for the “gap” between the outer limit of their zone coverage and their destination. However, passengers have ended up paying twice because these fares were not promoted, made available online, at ticket machines and rarely offered at ticket counters. You can read more in today’s Evening Standard.

We believe this case will send a shock wave throughout the entire rail industry, and may even open the floodgates for more of these claims – after all, it is not just South Western and South Eastern passengers that suffer from the “boundary fare” issue around London.

The rail industry and the government have been aware of this problem for a very long time – but have made no serious attempt to fix it. The exact issues constituting the legal claim today were discussed in the press by our spokesperson Martin Abrams as long ago as September 2015. Click here to read what he had to say at the time.

We must take action: Transparency Now!

Representatives from ABC have a meeting with Keith Williams on Monday 18th March and will report to him all the transparency, justice and consumer rights issues we’ve encountered – especially on Govia Thameslink Railway.

Please write to us at contact@abcommuters with the subject line “Transparency Now” if you would like to submit your opinions, experiences, facts or new evidence to our submission to Keith Williams.

Our crowdfunding page “Exposing the Truth about GTR” is still open – please donate if you can – all funds will go towards helping us make the biggest impact possible on the Williams Review and the cause of passenger justice.

Follow us on Facebook and Twitter for updates.

 

 

 

 

Today’s Gatwick Rail Meltdown: all you need to know about the state of GTR’s contingency planning

Today’s events at Gatwick were an entirely predictable outcome of a company and management contract that have never been fit for purpose. Govia Thameslink Railway is clearly to blame for the situation; given that engineering works were scheduled six months in advance, a heatwave was forecast, and the launch of the Brighton Fringe and Brighton Festival happens at the same time every year. There can be no excuses for today’s events and we call on journalists, MPs and the Office of Rail and Road to hold GTR properly to account.

What makes this situation even more appalling is the fact that it happened just two months after the Redhill rail replacement bus disaster. At the time, we were not satisfied with the excuses given by GTR senior management and so revealed the facts behind the story, in response to Angie Doll’s explanation to the BBC, and just as Charles Horton gave his own version to the Public Accounts Select Committee.

The Redhill experience showed us that if we don’t dig up and reveal the facts behind these incidents, nobody will. We have been attempting this voluntarily for two years now, and it is frankly now beyond embarrassing that a small group of commuters can provide the transparency that GTR and the Department for Transport will not. We’re not happy with this state of affairs and frankly, we want our lives back! We will now be writing to the ORR and urging them to step in and ‘show their teeth’.

Here’s the full story of what happened today. All internal memos are presented in the public interest and journalists requiring any further information are welcome to contact us at contact@abcommuters.com.

Not just a crisis of planning – a crisis of communication:

  • According to our sources, initial advice came through at 12.15 from Network Rail as part of a ‘Gold Alert’ informing GTR senior management. At this time, there were queues of up to 4,000 people at Gatwick and plans were being drawn up to procure an additional 40 buses to assist with the situation:

core memo redacted

  • Despite the scale of the situation described above, at 12:34 Southern Rail tweeted out this advice to passengers:
  • 1234 Southern tweetBy 13:08 we had become extremely concerned that Southern Rail was not communicating accurate and up-to-date advice to passengers. So, we tweeted this:

ABC tweet 1308

  • Southern Rail responded immediately to our intervention, and (slightly) strengthened the message with this tweet one minute later:

1309 Southern Rail

  • We were well aware that this advice was still inadequate, and that the only acceptable message in such an extreme failure of planning was “Do Not Travel”. So, we published the initial Network Rail memo at 13:12 – advice which would have been communicated to the GTR’s senior management at least an hour earlier.

ABC tweet 1312

  • It then took until 13:31 for Southern Rail to repeat our advice and finally warn passengers what they should have warned them much earlier: “Do Not Travel.”

1331 Southern Rail

Network Rail and ongoing engineering works

Our latest update (as of 7pm on Sunday 6th May) is that four extra trains have been laid on from Brighton to Victoria this evening, and four extra trains from Victoria to Brighton. This was achieved by the rapid lifting of engineering works between Horsham and Dorking. Now, if this could be so quickly achieved by Network Rail in light of the emergency caused by GTR’s failure of planning, then this begs a serious question: should these Horsham to Dorking works have taken priority in the first place on a day that would completely predictably be so busy?

This question is particularly important when one considers that the Department for Transport claims to be improving co-operation between GTR and Network Rail. The rapid lifting of engineering works at the last minute suggest extremely inadequate communication/contingency planning ahead of today’s emergency. We note the relevant conclusion of the Public Accounts Committee report last month:

PAC Committee on NR

At the time of the last ‘rail replacement bus crisis’ at Redhill in February, we called for the Office of Rail and Road to intervene in GTR. We now repeat that call and ask the regulator to step immediately; an action that is seriously overdue.

We are extremely concerned about what kind of management practices passengers will fall victim to in the upcoming nine-day blockades of the Brighton line in autumn 2018 and new year 2019. It is essential that all future rail/bus replacement plans are independently audited and checked for their robustness and realistic understanding of passenger numbers.

Delay Repay and ‘Consequential Losses’

It is vital that senior GTR management are asked to take a proactive role in meeting passengers’ consumer rights regarding ‘consequential losses’ and delay repay for their experiences today. Any attempt by GTR to assume no delay over and above the times calculated by Journey Planner (ie assuming people have walked onto buses with no queues) will be completely unacceptable, and ABC will follow this up even if our MPs and the Office of Rail and Road do not.

We would call on members of the press to ask GTR managers explicitly whether Delay Repay will take into account the extended journey times in this situation; so that a clear commitment to accurate Delay Repay will be on record if customers should experience problems later.

 

Will there be another ‘rail meltdown’ tomorrow?

We are concerned that there will be further trouble tonight at Three Bridges, and other locations where people are attempting to return to London from the coast. And that’s not to mention Redhill, where passengers had their service reduced from 4 trains per hour to just 1 train per hour today; leaving many people unable to board.

Tomorrow is likely to be a difficult day to travel – even in a ‘best case scenario’ – so we strongly advise passengers to avoid using Southern Rail unless absolutely necessary. If you do end up caught in a similar situation, please stay safe/hydrated and remember that this is not the fault of frontline staff. The lack of foresight and planning from GTR senior management is to blame – whether this be through accidental incompetence or a deliberate ‘heads in the sand’ mentality.

Whoever said “Lessons will be learnt” after the Redhill debacle needs to be shown the door – without a parting bonus.

To keep up to date with our campaigns and investigations, follow us on Twitter and Facebook. You can email us at contact@abcommuters.com