Transport committee: Keep east coast rail line in public ownership

July 28, 2009 at 1:23 pm Leave a comment

A committee of MPs has called for fundamental reform of the rail franchising system.

In a report published this week the Transport Select Committee said recent fare increases, service reductions and staff cuts are “unacceptable practices which the government must take steps to prevent.”

The current system of rail franchising is a “muddle,” they concluded.

“Within just three years, two franchise operators have had to abandon a major franchise—both of them on the East Coast Main Line.

“Whilst we fully support the Secretary of State in his decision to take back responsibility for the East Coast Main Line franchise, we remain convinced that these two high profile failures are indicative of the underlying problems in the current franchising model.”

The committee said it is unacceptable that National Express, who dumped the East Coast Main line franchise last month, may be able to retain its remaining franchises through the use of a ‘special purpose vehicle’.

“The misuse of legal instruments, such as ‘special purpose vehicles’, to insulate parent companies from potential losses and legal problems as a result of the failure of subsidiaries is sharp practice.”

The committee also recommends different forms of franchising.

“Now is an ideal opportunity to keep the lucrative East Coast franchise in the public sector.

“The service could then be used as a comparator for other types of franchises, both in terms of financial viability and passenger service quality.

“The current length of franchises does not encourage train operators to plan on a long-term basis.

“It discourages investment in the services, and contributes to train operators taking short-term cost-cutting measures that reduce passenger service quality.

“The needs of passengers have not always been properly catered for within rail franchising contracts.

“The government must ensure that franchises are more passenger-focused, and that commitments within existing franchise contracts are also enforced.”

Louise Ellman, chair of the Transport Select Committee, said that fare rises in 2009 were “excessive.”

“We are pleased that Transport Secretary Lord Adonis has decided to tighten the rules and to hold firm in the face of pressure from operators,” she said.

“The system which allowed quite unreasonable fare rises this year will be kept in place next year when it will be disadvantageous to train operators.

“This means that the price of regulated fares should go down next January, giving a little respite to long-suffering passengers.”

The Secretary of State has said that the RPI+1% formula will apply for 2010 fares.

“It is only right that passengers, who have borne the brunt of unacceptable increases in recent years, should gain some respite during these difficult financial times,” the committee said.

The committee raised the complexity of rail fares, a subject they reported on in 2006.

“Some changes have been made since, but fares are still complex, and even passengers who understand the system often have to spend considerable amounts of time finding the best deals, often only available on the internet,” they concluded.

“Although train operators were at pains to tell us that up to 15% of their seats were sold at the lowest fares, and that they were easily available, we have heard serious concerns that passengers have to go to extraordinary lengths to secure the best value fares.

“For example, the TSSA Union explained to us how it was almost invariably cheaper to buy split tickets where passengers had to undertake complex research and buy numerous tickets in order to minimise their fares.

“The complexity of the fares structure still remains an issue for passengers. Information on, and access to, the complete range of fares must be available and easily accessible to all passengers.”


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