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deregulation with Enhanced Partnerships, franchising and municipal ownership; except for an extremely limited and outdated 2017 study.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.


-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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‘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.

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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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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Stagecoach vs the DfT: will their high court battle lead to the total collapse of franchising?

Stagecoach and other operators began their high court challenge last week, claiming that the Department for Transport had mismanaged the bidding process for three different franchises: East Midlands, West Coast Intercity, and Southeastern. They’re seeking a multimillion compensation payout and a judicial review, which could result in the East Midlands and West Coast franchise awards being declared invalid.

The cause of the legal dispute is a change made by the DfT to pension liability, meaning that the government would no longer be the final guarantor of pension shortfalls. Last year, the Rail Delivery Group said the Pension Regulator had demanded “immediate and significant contributions worth £2.6bn or more.” The Pension Regulator has put the total railway pensions deficit at £7.5 billion, but recent analysis reported in the FT suggests it could be as high as £11 billion.

The court case is shrouded in commercial confidentiality. Yet the political fallout could be unprecedented, with the possibility of the West Coast (Avanti) and East Midlands (EMR) franchises being revoked; and the strong likelihood of a national rail strike if workers’ pensions are affected. Most worryingly of all, there are now rumours circulating in the rail and financial press that the Williams Rail Review will not be released, with its recommendations going straight into a government White Paper.

We’re forced to ask – can there be any credibility whatsoever in a White Paper that is being concocted under such legal pressures and perverse incentives? The rail franchising model is clearly in its death throes and we need to be more on guard than ever against the influence these toxic contractual relationships might be having in the writing of new legislation.

Week One: court update

1. Arriva settled their claim on the eve of the court case. The amount of compensation paid to the company remains confidential.

On the first day of the court case, it was announced that Arriva had settled a related claim regarding their disqualification from the East Midlands bid for refusing to take on pension liability. The claim included the fact that DfT civil servants sent details of Stagecoach’s bid to the other competitor Abellio, which eventually won the franchise as the last bidder standing. Arriva refused comment to the press, but told the court that it had agreed to a compensation settlement “on terms confidential to both parties.” Arriva was previously reported to be claiming £200 million for its exclusion from the East Midlands franchise bid.

2. Stagecoach lawyers said the Railway Pensions Scheme was a ‘basket case’ and that rail franchising is ‘in crisis’ with the DfT accepting ‘unbelievable’ bids.

Jason Coppel QC, acting for the train operators, said that bidders had been expected to take “disproportionate” risks and that the successful bidders did not say “how they would manage and pay for” the additional pension liability. He argued that the crisis in rail franchising is “because of risks which the department has required [franchises] to assume or because of over-optimistic bids which the department should not have accepted.” In regard to the unresolved issue of pension liability, he called the Railway Pensions Scheme a “basket case” and said it would require extra funding ranging from “bad to off the scale”.

3. There were new, shocking revelations about civil service conduct in the era of Chris Grayling.

Lawyers argued that the DfT was responsible for a “long series of missteps and mistakes” when it was run by Chris Grayling between July 2016 – July 2019. The most shocking revelation of all came at the beginning of the week, when Jason Coppel QC revealed to the court that civil servants had a solution to the pensions dispute that had been approved by the Treasury – but did not share this with Chris Grayling. Civil servants are due to be cross-examined in the trial, including the highest-paid civil servant: Peter Wilkinson, MD of Passenger Services at the DfT.

4. The lack of transparency and accountability was cited as a cause of the rail franchising crisis.

Jason Coppel QC went on to criticise the DfT over the amount of evidence that has been declared a commercial secret, accusing them of hiding information that was merely “embarrassing”, rather than confidential. He said that DfT culture was “highly resistant to openness and accountability” and that the combination of the broken franchising system, railway pension deficit and culture of secrecy in the DfT had been an “accident waiting to happen”.

The trial continues for a further three weeks, with a decision due later in the year. Follow us on Facebook and Twitter for further updates.