EXCLUSIVE: Freedom of Information requests reveal flexi-ticket failure

On the day of the biggest rail fare increase in a decade, we exclusively reveal the first-ever proof of the astonishing failure of ‘flexi-tickets’.

The main document is the Department for Transport’s impact analysis, dated November 2021, which uses ticket sales data to predict the impact of flexi-tickets. It shows that they are expected to result in just 1.1 million additional journeys in the first year – a 0.5% increase in commuter journeys. The document also reveals the shockingly low government investment behind the scheme, which has been designed to achieve ‘revenue neutrality’ at a mere 1% increase in commuter journeys. At a time when commuter numbers are at around 50% of pre-pandemic levels, this is the clearest proof yet of the lack of aspiration behind the policy.

The document also reveals the true pricing model behind flexi-tickets. The level of discount is around 20% off a monthly season ticket and a working level of 5% off the price of an Anytime Day Return (the highest priced daily ticket). This model fits our prediction since their launch in June last year; that flexi-tickets are a manipulative pricing strategy designed to ‘upsell’ passengers back to traditional season tickets. Flexi-tickets are a high risk purchase with no system of price capping – passengers can end up spending hundreds more than they would have done if they had bought a season ticket.

However, commuters should not lose hope – there is still a chance to get a better deal. The DfT has revealed to us that flexi-tickets are under a ‘formal one year review’, and it’s clear that they expect to update the policy in June 2022. For more information see their responses to our FOI request and Internal Review.

More buried documents on the flexi-ticket scandal

  • The DfT’s impact analysis came heavily redacted, and we suspect it contains further evidence of our claim that flexi-tickets are designed to have an ‘upsell’ effect. We are now challenging their redactions with the Information Commissioner’s Office (ICO).
  • There are several other important documents that the DfT is refusing to release. Of most concern is the Equality Impact Assessment, which they claim is still part of ‘live policy’. This excuse is completely inadequate when flexi-tickets have in fact already been launched, and are already pricing part-time workers even further off the railway. There are huge equality implications for women and other lower income groups, who are significantly over-represented in the part-time demographic.
  • We’ve learned that extensive ‘quantitative and qualitative’ research was conducted prior to the launch of flexi-tickets. The DfT has refused to release these reports, and claims that they will be published at the end of February 2022.
  • Flexi-ticket sales are run through the Rail Delivery Group, which claims ‘commercial confidentiality’ on behalf of their private train company members. It is therefore impossible to access the sales data; despite this being a government policy, where all costs and revenue lie with the taxpayer.

Take action on the flexi-ticket ‘One Year Review’

  • The outrage over flexi-tickets will continue to grow as people return to the office. Passengers, campaigners, trade unions and employers should keep up the pressure from now until June; when they stand a good chance of affecting the policy.
  • Commuters from our online community recently spoke out in the Financial Times as part of an in-depth report including new research on the poor value of flexi-tickets. To join our Facebook group and discuss these issues further, click here.

[This article was edited on 01.03.2022. for clarity around the meaning of the figures involved]

Fifteen years of fraud: allegations against The Go-Ahead Group have doubled in scale

Following the release of The Go-Ahead Group’s accounts last week, the company’s alleged fraud on Southeastern has reached a new level of scandal: unprecedented in the history of rail privatisation.

The alleged fraud is over twice the scale and duration than originally thought – totalling at least £51.3 million, with discrepancies going back to the foundation of Southeastern in 2006. At the time of its renationalisation in October 2021, the Department for Transport had believed the duration to be seven years; totalling £25 million between 2014-2019 (plus active deceit when further concealing this activity between 2020 and 2021).

Having now returned most of this money to the taxpayer, The Go-Ahead Group has put aside a further £30 million for an expected fine from the government. However, by the Group’s own admission, this situation is completely unprecedented and under the powers of the Railways Act 1993, the government has the power to impose a much higher penalty. A further amount of £21.3 million is subject to an ongoing ‘commercial dispute’ with the DfT, but there is no transparency about whether this is also suspected to be fraudulent.

Ultimately, it is impossible to confirm whether these figures reflect the true extent of the alleged malpractice. A fraud investigation concluded in December 2021, but has been subject to a severe conflict of interest as it was run by the owning groups themselves. According to statements from Go-Ahead’s Chief Financial Officer last week, the company “doesn’t know” whether they’ve been investigated by the Serious Fraud Office, as originally reported in September.

Not only has the government allowed Go-Ahead to run their own fraud investigation, they are now helping the company cover up its results. Earlier this month, we revealed through Freedom of Information requests that the DfT does not intend to release the report of this investigation, nor even its ‘terms and scope’. We are now challenging their position in our legal correspondence, claiming an ‘obvious, profound and unavoidable conflict of interest’ throughout the inquiry. From what we know so far, the allegations constitute at minimum a fifteen-year knowing breach of contract – and at worst a criminal fraud.

Govia Limited: a history of failure and deceit

In January 2022, we launched a joint legal campaign with Bring Back British Rail, to bring Thameslink, Southern and Great Northern services into public ownership when Govia’s contract expires at the end of March. We believe there is a strong legal argument that evidence of fraud would taint the entirety of Govia’s operations, meaning any decision by the government to award the company with a new six-year contract would be challengeable in court. 

In response to our legal case, The Go-Ahead Group has said that the issues on Southeastern were “contained within a separate company – London and Southeastern Railway – and had nothing whatsoever to do with Govia Thameslink Railway.” Their claim is easily disproven.

Govia Limited is owned by The Go-Ahead Group (65%) and Keolis (35%). All of Govia’s directors are also on the boards of its subsidiaries, London and South Eastern Railway (LSER) and Govia Thameslink Railway (GTR). As majority owner, The Go-Ahead Group’s Chief Executive and Chief Financial Officers hold directorship roles across all four companies.

The following table shows the directorship of LSER, GTR and Govia Ltd at the time of the discovery of the alleged fraud in March 2020. CEO David Brown and CFO Elodie Brian have since been replaced by Christian Schreyer and Gordon Boyd, respectively.

Govia Thameslink Railway has held the contract for Britain’s biggest rail franchise, TSGN, since 2014. Its record is a litany of failure, including the ‘Southern Rail Crisis’ of 2016, when it cancelled almost 60,000 trains within a year. In 2018, GTR was found to be one of the main parties responsible for the 2018 timetable collapse, which caused chaos all over the UK. Since 2021, the UK’s ‘least trusted train company’ has been subject to two class action lawsuits, alleging deceit in relation to ticketing and zoning issues. Despite having the most catastrophic history of any rail franchise in the UK, the DfT has continually rewarded GTR for its failures.

Due to life-support public subsidy for GTR and its bus operations, The Go-Ahead Group has reported increased operating profits of £115.5 million for the year; boasting that 90% of its revenue is secured through public contracts. Christian Schreyer, CEO, says The Go-Ahead Group is ‘in good shape’, with ‘constructive talks and collaborative negotiations’ on the new GTR contract currently underway.

URGENT: the GTR contract must be stopped

Since the release of The Go-Ahead Group’s 2021 accounts, the Southeastern fraud scandal has doubled in scale. Pressure on the government is now at its peak, with further decisions on the financial penalty expected any day, and a decision on the GTR contract due before the end of March.

All signs suggest the Department for Transport is attempting to cover up this scandal, and the situation could not be more urgent. Please help us by writing to your MP and the Transport Minister Grant Shapps at shappsg@parliament.uk – to condemn the cover-up, and demand that Thameslink, Southern and Great Northern is brought into public ownership at the end of March.

Our legal campaign with Bring Back British Rail is now well underway, funded entirely by passenger donations. Please donate if you can.

Department for Transport hides scandalous report on Go-Ahead fraud investigation

The Department for Transport is hiding a scandalous report that could implicate The Go-Ahead Group in an alleged seven-year fraud on their former Southeastern franchise.

It follows the renationalisation of Southeastern in October, when it returned an initial £25 million to the taxpayer. An investigation into the alleged fraud concluded in early December.

As reported in the Times last week, FOI requests from Bring Back British Rail and the Association of British Commuters reveal that the Department for Transport never intends to release this report to the public. We are now challenging their position as part of our joint legal campaign to ‘Take Back Thameslink, Southern and Great Northern’ into public ownership.

Two official legal letters have now been dispatched to the Department for Transport; demanding the publication of this controversial report. We have also warned the government that they will be open to judicial review if they award owning groups, Go-Ahead and Keolis, a further six-year contract for Govia Thameslink Railway when its contract expires at the end of March.

Legal correspondence with the Department for Transport

The first letter argues that no new contract can be awarded to Govia Thameslink Railway without full transparency and robust conclusions regarding the Southeastern fraud investigation.  Based on what we know so far, our lawyers consider this to be “in the best case a serious and knowing breach of contract, but at worst a criminal fraud.”

It also presents a full history of the Govia Thameslink Railway contract, which has been widely condemned for operational mismanagement and systemic failure since it began in 2014. We are aware that the DfT is actively considering public ownership for TSGN and have demanded to know: what preparations have been made for a takeover; and whether the Department has conducted any analysis of the value of public ownership compared to renewing the contract with GTR.

The second letter provides a point-by-point rebuttal of the DfT’s responses to our recent FOI requests; in which they refuse to release the report, or even the ‘terms, scope and members’ of the investigation.

Our lawyers refer to the obvious conflict of interest behind the investigation, which was run by the owning groups themselves: “We find it extraordinary that an issue as serious and time sensitive as the determination of the veracity of allegations of fraud within a TOC have been left to the corporate owners. There is an obvious, profound and unavoidable conflict of interest.”

The letter also draws attention to comments in the press from ‘unnamed sources’ that the publicly-owned Operator of Last Resort (OLR) does not have the capacity to take over. We find this claim extremely suspicious and have asked the DfT to settle the matter by explaining in detail the preparations that have been made. We remind the government that £20 million was invested in the OLR in 2019 and that the DfT has previously confirmed these contracts are easily scalable at short notice.

How you can help

Please help by emailing your MP and demanding urgent Parliamentary questions on this matter. Despite plenty of coverage in the financial press, politicians have failed to get active on this issue, and a decision on the Govia Thameslink Railway contract is now imminent.

Donate to the Bring Back British Rail legal fund here. Your donations led to a huge success when the East Coast Main Line was brought into public ownership in 2018 – please help us do the same for TSGN.

Follow Bring Back British Rail and Association of British Commuters for updates, including our first official response from the Department for Transport – due later this week.

For further information, find a full record of the legal correspondence here, and a background to the fraud investigation here. Please direct any inquiries to info@bringbackbritishrail.org or contact@abcommuters.com

New legal campaign to take Thameslink, Southern and Great Northern into public ownership

A crowdfunded legal action launches today to take the Thameslink, Southern and Great Northern rail franchise back into public ownership. Campaign group Bring Back British Rail will challenge the government’s plans to award a new six-year contract to Govia Thameslink Railway, and demand transparency over the alleged £25 million fraud by Govia subsidiary, London and Southeastern Railway.

The action is the latest stage in Bring Back British Rail’s CrowdJustice legal fund, which had its first victory in 2018 when the East Coast Main Line was brought back into public ownership as LNER. We’re pleased to be collaborating on their new case; along with our experienced team at Devonshires Solicitors, who represented our 2017 legal challenge against the Department for Transport.

Read more about Bring Back British Rail’s legal action, and please donate if you can.

Why is this action necessary?

The Southeastern rail franchise was renationalised in October, after the Department for Transport uncovered an alleged £25 million fraud by London and Southeastern Railway (LSER). Despite the seriousness of the allegations, the government is now considering awarding a new six-year contract to Govia’s other subsidiary, Govia Thameslink Railway (GTR), at the end of March.

In a recent letter to the Transport Select Committee, rail minister Chris Heaton-Harris implied that LSER’s actions involved long-running and active deceit since 2014. He stated that the company ‘did not act transparently and in good faith’ and ‘concealed the money owed through financial reporting over several years’. DfT civil servants began asking questions in March 2020, but even then LSER continued to ‘minimise the risk of detection by the Department’.

Transport Minister, Grant Shapps, has stated that there is ‘clear, compelling and serious evidence’ that LSER ‘breached good faith’ with the government. And yet, the Department for Transport has allowed Govia’s owning groups, Go-Ahead and Keolis, to run the fraud investigation themselves, along with Deloitte (Go-Ahead’s external auditor since 2015). The investigation has been conducted under conditions of strict commercial confidentiality and our initial legal inquiries have found that the DfT never intends to release this report to the public.

We believe the investigation is highly compromised, and it’s clear that it has already hit the rocks. The Go-Ahead Group has now admitted to ‘serious errors’ and just had to delay their accounts for the second time this year, reportedly due to Deloitte refusing to sign them off. Meanwhile, their rail operations are hanging by a thread, with trading in shares suspended, and huge losses in Germany and Norway.

A staggering 90% of the Go-Ahead Group’s revenue is guaranteed by public contracts. They are the largest bus operator in London and operate around 11% of the UK’s regional bus market. In addition to the GTR contract renewal, the Go-Ahead Group is soon set to sign new ‘Enhanced Partnership’ bus agreements with local authorities all over the UK. After receiving bus and rail bailouts totalling hundreds of millions during the covid pandemic, it is now crucial to determine whether they can be trusted with any more public money.

What happens next?

Bring Back British Rail’s legal team will shortly begin official correspondence with the Department for Transport to demand full transparency on the Southeastern investigation, and determine the extent to which owning groups, Go-Ahead and Keolis, are implicated in the alleged fraud.

They will argue that Govia, the Go-Ahead Group and Keolis should be heavily penalised for any involvement in fraudulent activities, and that public ownership is the best solution for Thameslink, Southern and Great Northern.

In the event that a new contract is awarded to Govia Thameslink Railway, the lawyers will consider whether this can be challenged by judicial review.

Stay tuned for further updates, including the first official legal correspondence, due for publication next week.

Donate to the Bring Back British Rail legal fund here.

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

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

The ‘Boundary Fares’ Case

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

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

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

The Govia Thameslink Railway Case

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

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

GTR recently commented on the claim:

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

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

Government failure on rail fare reform

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

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

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

Further Information

Boundary Fares:

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

Govia Thameslink Railway:

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

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

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

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

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

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

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

We expected better from Scotland

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

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

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

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

Our message to Transport Scotland

Public control as the default position

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

Grasp economic opportunities

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

Prioritise equality and human rights

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

Take climate commitments seriously

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

Devolution and Democracy

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

Scotland’s Bus Strategy

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

Take Action Now

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

To respond in detail to the consultation, click here.

To view our full-length consultation response, click here.

The consultation closes on Wednesday 6th October.

REVEALED: The economic dangers of the National Bus Strategy

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

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

No economic case for the National Bus Strategy

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

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

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

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

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

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

Urgent action required within the next two months

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

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

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

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

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


-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 icket are highly variable across the cuntry – so far, we’ve spotted examples ranging from 7% to 15%, and we think there could be many more surprises to come.

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

A rigid and inflexible ticketing system

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

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

Here’s how the price trap works:

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

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

In conclusion…

The so-called ‘flexi season tickets’ are little more than a PR stunt from the government and rail industry. Neither cheap nor flexible, they are just another pricing trap for the captive commuter market – probably designed to ‘upsell’ passengers back to traditional season tickets.

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 two day per week commuters.

There’s now increasing suspicion that many passengers will be paying even 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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