ePolitix.com reports on the latest Commons public accounts committee evidence session on rail franchising.
Witnesses:
Dr Mike Mitchell - director general for national networks, Department for Transport
David Payne – acting finance director
Jack Paine - director of procurement
The committee opened discussions with the issue of passenger numbers and whether the current economic downturn may weaken the transport department's optimistic predictions of 'strong increases'.
Mitchell responded by accepting that it was a major concern and that the downturn would undoubtedly have an effect. He reassured the committee the situation was being closely monitored and claimed that reports from some franchises suggest that season ticket renewals were actually on the increase.
In response to questions regarding the department's 'traffic light' evaluation on the performance of rail franchises, Mitchell refused to publically reveal the number of franchises 'showing red', due to a concern for company share prices.
But he admitted that a small number of companies were "of concern" and agreed to provide a specific figure in a private session.
Mitchell admitted that the taxpayer is somewhat exposed to the possibility of a rail franchise failure but insisted that most companies have a revenue share agreement with the government which minimizes the risk to the public.
He insisted that National Express's replacement of the failed GNER East coast line would see an enhanced passenger service and that any revenue gained from subsidy reductions would be directly invested into service improvements.
Mitchell stated that it was important to achieve a balance between government involvement in the running of franchises on the one hand, and companies being allowed to exercise normal commercial activities on the other.
Faced with the suggestion that various passenger and franchise growth predictions were conflicting and would inevitably exacerbate overcrowding, Mitchell was "confident as can be" that overcrowding would be reduced - but was under no illusion of the size of the task.
Mitchell reiterated the department's ambition of stabilizing overcrowding by 2014 but stated that the biggest challenge was rolling out the 1,300 new vehicles that were in the process of being ordered.
Moving on to the subject of fare increases, Mitchell was keen to point out that 60 per cent of all UK train fares are regulated and therefore subject to the department's price control measures. He admitted to concerns over unregulated franchises monopolizing fares and urged such companies to bear in mind their regulations when setting prices.
Mitchell also emphasized that the department does not set train station car parking prices but that it is part of government policy to 'rebalance the situation'.
He pointed toward the fact there is a huge difference in current fare prices, with 'anytime' full-price tickets only constituting 20 per cent of all fares. Mitchell added that the process of increasing train capacity was a drawn out one - estimated to take two to three years before new rolling stock is in use.
Mitchell described the ways in which operating companies provide evidence to support their 'self certification' on meeting contractual obligations. In response to the suggestion that operators were able to allow their service to decline without any consequence, Mitchell stated that the department has consulted with Passenger Focus on ways in which services can be better regulated and improved. He also stated that the department has monthly meetings with train companies to discuss performance.
In addition, Mitchell outlined plans for the implementation of a new quality evaluation model – but that the model may take three to five years to function properly.
Mitchell insisted that there was no evidence to suggest that rail transport was now a form of travel 'for the rich' and that there had been no noticeable decline in passenger numbers in recent months.
He also refuted any claims of complacency from the department and insisted that they were working alongside Passenger Focus to pressurise companies and to ensure higher levels of passenger satisfaction.
On the issue of assessing capability of franchises to deliver on service timing, Mitchell stated that they regularly consult with Network Rail on whether proposed timetable services from bidders are viable.
The committee closed by discussing new ticket types, including the 'anytime' ticket in replacement of an open return. Despite strong suggestion to the contrary from members of the committee, Mitchell insisted that the new tickets provided a 'simplification' of the old system and was good value for money.
