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Thursday, July 25, 2024

Rail 2020: MPs worried about McNulty savings target

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MPs have raised concerns about the savings target set by Sir Roy McNulty in a report outlining recommendations to reform Britain’s rail industry by 2020.

Members of the Transport Select Committee said they supported the approach outlined in the McNulty Report but worried that the £3.5 billion figure could have a negative impact on “safety, staffing and the protection of passengers’ interests”.

Launching Rail 2020, the report of the Transport Committee’s inquiry examining government proposals to reform the railway, Louise Ellman MP, chairman of the committee, said: “If train operating companies do not realise substantial efficiency savings over the next five years, then the case for more far-reaching structural changes to the industry will become compelling.

“Changes to the numbers and duties of station staff should not be pursued solely to reduce costs or at the expense of passenger safety or service quality.

“The Office of Rail Regulation (ORR) should also monitor safety where Network Rail and train operating companies have formed alliances, ensuring these arrangements reflect the interests of taxpayers and passengers.”

The report sets out the need for a long-term policy on fares to avoid higher fare increases on peak services to reduce demand.

Campaign for Better Transport’s chief executive, Stephen Joseph, said the government should listen to the report and rule out the introduction of ‘super-peak’ fares.

The committee recommends that the Rail Delivery Group (RDG), which is led by FirstGroup chief executive Tim O’Toole, should spearhead the introduction of new ticketing technology and work with Passenger Focus to develop a strategy for improving retail facilities at stations and on trains.

Ministers have also highlighted a need for greater transparency, allowing passengers and taxpayers to understand where their money is being spent.

Ellman added: “There are good economic, social and environmental reasons for the government to provide a £4 billion subsidy to the railway, but to drive efficiency savings across the sector the government and the regulator must shine a light on complacent management, waste and profiteering by ensuring greater transparency in the finances of the rail industry.

“It is vital we know far more about how public money is spent so that there is confidence it does not leak out of the system in the form of unjustified profits.

“The government should publish and consult on a clear statement of what the subsidy is for and where it should be targeted. Commercial confidentiality should not be used to block legitimate requirements for information.”

Short of analysing the West Coast Main Line case itself, the report makes recommendations about the future of rail franchising, including setting up a body outside of Whitehall with more commercial experience to oversee the letting and management of franchises.

Future franchises should be judged on passenger experience and ‘sustainable end-to-end journeys’ not just the financial return, the report concluded.

Ministers backed the use of longer franchises but suggested introducing periodic reviews and spreading premium payments across the life of the contract.

MPs also recommend that franchises which need to be re-let soon should be tendered on the basis of medium-term franchises of seven to 10 years to avoid further delays.

“Confidence in the DfT has been badly shaken by the collapse of the West Coast Main Line franchise,” said Ellman.

“We are not convinced that the DfT as currently structured is best placed both to set rail policy and deliver the detailed work required to run each franchise competition.”

The report also supported the devolution of some rail franchises, such as the Northern franchise, to local or regional bodies.

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