Holding a position because you genuinely believe something to be true is admirable. Advocating something simply because it will secure you a modicum of publicity is both cheap and cynical. It is into this latter category that London TravelWatch’s recent call for First Great Western to lose its franchise falls.
In actuality, London TravelWatch stopped short of recommending that First Great Western be stripped of its franchise. That would have been too definitive and too decisive a statement. Rather, in a carefully worded comment, it said: “we believe now is possibly the time for the government to consider firm action on the future of the franchise.” Such ambiguity is cowardly. It is also very deliberate: it allows the media and public to interpret the statement as being tough with First Great Western but is sufficiently vague as to absolve London TravelWatch from the responsibility of actually having said anything definite at all.
In addition to saying very little, it is clear that London TravelWatch has no opinion of its own regarding Greater Western. It makes no recommendation as to what it believes the future of the franchise should be, but merely passes the buck to the government who it claims should ‘possibly’ (that’s a maybe!) look into the matter. Herein is a further problem. While London TravelWatch is keen to point to First Great Western’s failures, it does very little to address any government failings - many of which are central to the problems with today's railways.
Despite what London TravelWatch say, or don’t quite say, the franchise will not be removed from First Great Western. For a start, the terms of the agreement have not been broken. For another, the situation on the ground is improving. Even the irascible MP for Maidenhead, Theresa May, recognised this when she told the Maidenhead Advertiser that she was “keen to give them [FGW] another chance first before bringing the axe down.” The bottom line is that from a purely practical point of view, removing the franchise now would bring nothing but disruption and uncertainly and would do virtually nothing for passengers – the very passengers that LTW claims to represent.
London TravelWatch has generated some good publicity from its vapid press release. Unfortunately, it has come at the very expense of an attribute desperately needed by organisations of its kind: credibility. A Pyrrhic victory indeed.
Saturday, 30 June 2007
Thursday, 28 June 2007
All change
“That's it. The end.” Tony Blair’s final words to the House of Commons yesterday may well have been true for his premiership, but for the government, and indeed the rest of the country, life continues to go on as normal. No one will be more acutely aware of this than Gordon Brown, who has, this morning, announced his new Cabinet.
Among the many changes, the transport brief has passed from the less than competent hands of Douglas Alexander to the, well, less than competent hands of Ruth Kelly. While it is unfair to judge Ms Kelly in advance of her tenure at transport, from her past performance as Secretary of State for Communities it is safe to say she is not renowned for her capability. The farcical introduction, then withdrawal then re-introduction of Home Information Packs (HIPs) is a testament to this fact. Ms Kelly presided over, but never quite accepted responsibility for, this dismal mess of a policy.
It is an error she must not repeat at the DfT, and especially not with the railways. The railways need three main things from politicians – vision, stability and honesty – and these must be Ms Kelly’s immediate priorities.
The vision part has nothing to do with spin. It is, in fact, a highly practical task of deciding how best our railways should be organised to deliver for the consumer and all of the other various industry stakeholders. Such a task is not easy, but it is desperately needed. A fundamental reappraisal of how the railways are structured and run is the one real change that would give, over the longer term, a much more responsive and successful railway network. As the holders of much of the power on the railways, such a reappraisal can only come from politicians and it is here than Ms Kelly must take the lead.
The stability part of the equation is less to do with long term strategic plans and more about leaving private train operating companies like First Great Western alone so that they can get on with delivering their franchise commitments. Under Douglas Alexander, the DfT not only set the terms of franchises agreements but also engaged itself in day-to-day activities such as setting timetables. The department has no business being involved in such tasks and is, in any case, notoriously bad at undertaking them. Ms Kelly must change this culture of micro-management at the DfT.
Honesty is an obvious one. The Department for Transport is a great stretcher of the truth: it makes decisions that cause problems on the railway network and then lets others, like First Great Western, take the blame while pretending it has nothing to do with situation on the ground. Not only is that dishonest, but it is unacceptable. Ms Kelly must ensure that the Department is transparent in its aims and objectives and that it takes full responsibility for its own actions. This is clearly something that Ms Kelly found difficult as Communities Secretary, but at Transport she has an ideal opportunity to make up for her past mistakes.
Standing outside Number Ten yesterday, Gordon Brown said, “…change cannot be met by the old politics.” Nowhere is this truer than at the Department for Transport: a better railway requires a new approach. Whether Ruth Kelly is the best person to deliver it is a question only time can answer.
Among the many changes, the transport brief has passed from the less than competent hands of Douglas Alexander to the, well, less than competent hands of Ruth Kelly. While it is unfair to judge Ms Kelly in advance of her tenure at transport, from her past performance as Secretary of State for Communities it is safe to say she is not renowned for her capability. The farcical introduction, then withdrawal then re-introduction of Home Information Packs (HIPs) is a testament to this fact. Ms Kelly presided over, but never quite accepted responsibility for, this dismal mess of a policy.
It is an error she must not repeat at the DfT, and especially not with the railways. The railways need three main things from politicians – vision, stability and honesty – and these must be Ms Kelly’s immediate priorities.
The vision part has nothing to do with spin. It is, in fact, a highly practical task of deciding how best our railways should be organised to deliver for the consumer and all of the other various industry stakeholders. Such a task is not easy, but it is desperately needed. A fundamental reappraisal of how the railways are structured and run is the one real change that would give, over the longer term, a much more responsive and successful railway network. As the holders of much of the power on the railways, such a reappraisal can only come from politicians and it is here than Ms Kelly must take the lead.
The stability part of the equation is less to do with long term strategic plans and more about leaving private train operating companies like First Great Western alone so that they can get on with delivering their franchise commitments. Under Douglas Alexander, the DfT not only set the terms of franchises agreements but also engaged itself in day-to-day activities such as setting timetables. The department has no business being involved in such tasks and is, in any case, notoriously bad at undertaking them. Ms Kelly must change this culture of micro-management at the DfT.
Honesty is an obvious one. The Department for Transport is a great stretcher of the truth: it makes decisions that cause problems on the railway network and then lets others, like First Great Western, take the blame while pretending it has nothing to do with situation on the ground. Not only is that dishonest, but it is unacceptable. Ms Kelly must ensure that the Department is transparent in its aims and objectives and that it takes full responsibility for its own actions. This is clearly something that Ms Kelly found difficult as Communities Secretary, but at Transport she has an ideal opportunity to make up for her past mistakes.
Standing outside Number Ten yesterday, Gordon Brown said, “…change cannot be met by the old politics.” Nowhere is this truer than at the Department for Transport: a better railway requires a new approach. Whether Ruth Kelly is the best person to deliver it is a question only time can answer.
Friday, 18 May 2007
Foolish consistency
If Bob Crow, General Secretary of the RMT union, were to be granted one ‘political’ wish he would probably opt to see the railways renationalised. Ever since the rail system was ‘privatised’ Mr Crow has been of the opinion that private companies have no right to be involved in the running of the rail network. It is easy to admire someone who sticks to their beliefs but, as Ralph Waldo Emerson once so sagely noted, foolish consistency is the hobgoblin of little minds. And Mr Crow’s consistency on this issue is extremely foolish indeed.
Some of the points Mr Crow makes in relation to the state of the rail network are actually valid. For example, he identifies that the franchising system is a mess. Indeed it is: as has been discussed elsewhere on this blog, the franchising system is at the root of many problems. However, Mr Crow’s assertion that re-nationalisation is required because of these problems is logically flawed. First and foremost, the government is in charge of the franchising system and it is fully responsible for the state of that process. To suggest that control of the railways should be handed back to the very people who are incapable of designing and running a sensible franchising process is a highly specious argument. What is actually required is a better franchising system based around principles that will enable the railways to deliver for passengers in the way that most other private companies deliver on the needs of their consumers.
Mr Crow also bemoans the fact that private train operators like First Great Western make a profit. This is an old argument which is based on nothing more than sloppy thinking and narrow-minded bias. Of course, what Mr Crow and his ilk rarely mention is the fact that the government takes far more money from franchises like Greater Western than the private companies take in profit. But even if this were not the case, Mr Crow is guilty of a double standard: it is perfectly alright for him to campaign for his own members to receive higher salaries; but it is wrong for train companies to work hard to make more profit. Where exactly does Mr Crow think salary increases come from? They can only come from companies making a profit – a company making a loss is hardly in a position to increase the salaries of its staff.
In a recent press release, Mr Crow casually commented: “when passengers are expected to endure overcrowding, service cuts and inflation-busting fares hikes and rail staff are left to pick up the pieces, First Group’s profits are simply obscene.” What he fails to mention is that overcrowding, service cuts and fare rises have very little to do with First Group’s (or First Great Western’s) profits. They are all functions of government interference in the network: the very same government that Mr Crow wants to control our trains.
The simple truth is that the call for re-nationalisation is not a call for a better railway. It is an ideological position that both ignores the real cause of the problems on today’s railways and all of the very real benefits that private involvement, in whatever its form, has brought over the past ten years.
Some of the points Mr Crow makes in relation to the state of the rail network are actually valid. For example, he identifies that the franchising system is a mess. Indeed it is: as has been discussed elsewhere on this blog, the franchising system is at the root of many problems. However, Mr Crow’s assertion that re-nationalisation is required because of these problems is logically flawed. First and foremost, the government is in charge of the franchising system and it is fully responsible for the state of that process. To suggest that control of the railways should be handed back to the very people who are incapable of designing and running a sensible franchising process is a highly specious argument. What is actually required is a better franchising system based around principles that will enable the railways to deliver for passengers in the way that most other private companies deliver on the needs of their consumers.
Mr Crow also bemoans the fact that private train operators like First Great Western make a profit. This is an old argument which is based on nothing more than sloppy thinking and narrow-minded bias. Of course, what Mr Crow and his ilk rarely mention is the fact that the government takes far more money from franchises like Greater Western than the private companies take in profit. But even if this were not the case, Mr Crow is guilty of a double standard: it is perfectly alright for him to campaign for his own members to receive higher salaries; but it is wrong for train companies to work hard to make more profit. Where exactly does Mr Crow think salary increases come from? They can only come from companies making a profit – a company making a loss is hardly in a position to increase the salaries of its staff.
In a recent press release, Mr Crow casually commented: “when passengers are expected to endure overcrowding, service cuts and inflation-busting fares hikes and rail staff are left to pick up the pieces, First Group’s profits are simply obscene.” What he fails to mention is that overcrowding, service cuts and fare rises have very little to do with First Group’s (or First Great Western’s) profits. They are all functions of government interference in the network: the very same government that Mr Crow wants to control our trains.
The simple truth is that the call for re-nationalisation is not a call for a better railway. It is an ideological position that both ignores the real cause of the problems on today’s railways and all of the very real benefits that private involvement, in whatever its form, has brought over the past ten years.
Friday, 11 May 2007
Unfair dismissal
In my opinion, David Drew the Member of Parliament for Stroud does a dreadful job. Quite frankly, I don’t think he is fully capable of discharging the duties of an MP and, in all honesty, he should be removed from his post forthwith.
These are not really my views. Neither are they necessarily true. For all I know, Mr Drew probably does a very good job of representing his constituents. Statements of the type above are extremely easy to make and they are excellent ways, for those in positions of responsibility, to capture a piece of the limelight. Yet they are both ill considered and thoughtless.
For one thing, unless he does something completely illegal, Mr Drew has, through his election, a contract with his constituents. The majority voting for him agreed to elect him for a full term of office. You don’t have to agree with his election, of course, but the way the electoral system is structured is such that Mr Drew has an absolute right to serve for a full term, as does any Member of Parliament.
I am sure that Mr Drew would agree entirely with the above logic, which is why it is a pity he is unable to apply it to the commercial world. For those not aware, Mr Drew is the latest MP to call for First Great Western to lose its franchise. Such a manoeuvre – which could be known as 'doing a May' (after the ever disagreeable Theresa May, the first to employ the strategy) – is highly cynical.
Unless it breaches the terms of its contract, which it hasn’t, First Great Western can’t simply be ‘sacked’ from the Greater Western franchise; just as Mr Drew can’t be removed from office. Mr Drew should be well aware of this fact, and if he isn’t then he clearly isn’t qualified to make comments on this matter and should keep his views to himself. The likelihood is, of course, that Mr Drew is aware and that, despite this, he is trying to score some cheap political points to curry favour with the electorate of Stroud. This is nothing more than the politics of irresponsibility and it's one of the reasons MPs are held in such low esteem.
This is not to say that Mr Drew can’t, or shouldn’t, criticise First Great Western. With just cause, he has every right to. But he should be open and honest with the electorate and not call for things he knows are impossible.
If Mr Drew sincerely wanted a better service his time would be better spent applying pressure to the Department for Transport to ensure that First Great Western is able to keep the class 180 Adelante trains and that the Department stops its meddling in the rail system which is making life a misery for passengers.
These things may not be dramatic and exciting headline grabbers, but they represent a far more realistic and honest approach to the debate over the future of the Greater Western rail franchise.
These are not really my views. Neither are they necessarily true. For all I know, Mr Drew probably does a very good job of representing his constituents. Statements of the type above are extremely easy to make and they are excellent ways, for those in positions of responsibility, to capture a piece of the limelight. Yet they are both ill considered and thoughtless.
For one thing, unless he does something completely illegal, Mr Drew has, through his election, a contract with his constituents. The majority voting for him agreed to elect him for a full term of office. You don’t have to agree with his election, of course, but the way the electoral system is structured is such that Mr Drew has an absolute right to serve for a full term, as does any Member of Parliament.
I am sure that Mr Drew would agree entirely with the above logic, which is why it is a pity he is unable to apply it to the commercial world. For those not aware, Mr Drew is the latest MP to call for First Great Western to lose its franchise. Such a manoeuvre – which could be known as 'doing a May' (after the ever disagreeable Theresa May, the first to employ the strategy) – is highly cynical.
Unless it breaches the terms of its contract, which it hasn’t, First Great Western can’t simply be ‘sacked’ from the Greater Western franchise; just as Mr Drew can’t be removed from office. Mr Drew should be well aware of this fact, and if he isn’t then he clearly isn’t qualified to make comments on this matter and should keep his views to himself. The likelihood is, of course, that Mr Drew is aware and that, despite this, he is trying to score some cheap political points to curry favour with the electorate of Stroud. This is nothing more than the politics of irresponsibility and it's one of the reasons MPs are held in such low esteem.
This is not to say that Mr Drew can’t, or shouldn’t, criticise First Great Western. With just cause, he has every right to. But he should be open and honest with the electorate and not call for things he knows are impossible.
If Mr Drew sincerely wanted a better service his time would be better spent applying pressure to the Department for Transport to ensure that First Great Western is able to keep the class 180 Adelante trains and that the Department stops its meddling in the rail system which is making life a misery for passengers.
These things may not be dramatic and exciting headline grabbers, but they represent a far more realistic and honest approach to the debate over the future of the Greater Western rail franchise.
Thursday, 3 May 2007
One variant of Dives and Lazarus
Over the next ten years the Department for Transport will receive over £1bn from First Great Western in franchise premium payments. That money can come from only once place: your pocket.
The payment is approximately the equivalent of a 15% tax on every ticket sale. If your season ticket costs £3,500 then £525 of it will go to the government; if your ticket for a weekend away costs £85 then £12.75 of it will go to the government. The question every customer of First Great Western should be asking is: what value am I getting from this charge?
So how will the money be used? No one but the Department for Transport knows; there is next to no transparency in how the government intends to use your money.
One thing it could be used for is to fund additional capacity. The Department has made much of its announcement of 1,000 additional carriages. But it has not detailed where these will be going or exactly when they will be introduced; and, it is quite possible that Greater Western will receive none of this new rolling stock. The point is that, at the moment, this is a promise with no credibility. It’s jam tomorrow.
Yet, the Department could, if it wanted, take action right now. It could set aside some of that £1bn and use it to allow First Great Western to keep its fleet of Adelante (class 180) trains. These are due to be withdrawn from service on Greater Western in December 2007 when additional capacity has been introduced through a combination of the HST fleet modernisation programme and additional HSTs entering service.
Keeping the 180s would help to reduce overcrowding even further than the planned capacity increases. It may also permit a cascading of rolling stock which would mean some of the older carriages in the former Wessex region could be replaced by newer trains – possibly class 165s from the Thames Valley routes. Having more stock to play with would also act as a buffer against disruption from train failures. All regions, from Maidenhead to Menheniot would feel the benefit.
This is a real and feasible solution to an increasingly frustrating problem and, most importantly, it is something that can be implemented by the end of this year – not at some unspecified point in the dim and distant future.
However, it is a solution that only the government can provide. But to ensure that the government gets the message it will take the commitment of passengers: each and every fare paying customer who funds the £1bn pouring into the government’s coffers needs to write and demand that their money is used to help provide a better service for the Great Western region and to keep the class 180s. They must make it clear that their suffering can no longer be ignored.
----------
You can contact the Department for Transport by emailing the following people:
douglas.alexander@dft.gsi.gov.uk (Secretary of State)
tomharrismp@parliament.uk (Undersecretary of State)
mike.mitchell@dft.gsi.gov.uk (Director General DfT Rail Group)
peter.west@dft.gsi.gov.uk (Franchise Manager)
Do be polite in your communication but do not be afraid to express your views; remember Civil Servants and Ministers are there to serve the public and are funded by the taxes you pay!
The payment is approximately the equivalent of a 15% tax on every ticket sale. If your season ticket costs £3,500 then £525 of it will go to the government; if your ticket for a weekend away costs £85 then £12.75 of it will go to the government. The question every customer of First Great Western should be asking is: what value am I getting from this charge?
So how will the money be used? No one but the Department for Transport knows; there is next to no transparency in how the government intends to use your money.
One thing it could be used for is to fund additional capacity. The Department has made much of its announcement of 1,000 additional carriages. But it has not detailed where these will be going or exactly when they will be introduced; and, it is quite possible that Greater Western will receive none of this new rolling stock. The point is that, at the moment, this is a promise with no credibility. It’s jam tomorrow.
Yet, the Department could, if it wanted, take action right now. It could set aside some of that £1bn and use it to allow First Great Western to keep its fleet of Adelante (class 180) trains. These are due to be withdrawn from service on Greater Western in December 2007 when additional capacity has been introduced through a combination of the HST fleet modernisation programme and additional HSTs entering service.
Keeping the 180s would help to reduce overcrowding even further than the planned capacity increases. It may also permit a cascading of rolling stock which would mean some of the older carriages in the former Wessex region could be replaced by newer trains – possibly class 165s from the Thames Valley routes. Having more stock to play with would also act as a buffer against disruption from train failures. All regions, from Maidenhead to Menheniot would feel the benefit.
This is a real and feasible solution to an increasingly frustrating problem and, most importantly, it is something that can be implemented by the end of this year – not at some unspecified point in the dim and distant future.
However, it is a solution that only the government can provide. But to ensure that the government gets the message it will take the commitment of passengers: each and every fare paying customer who funds the £1bn pouring into the government’s coffers needs to write and demand that their money is used to help provide a better service for the Great Western region and to keep the class 180s. They must make it clear that their suffering can no longer be ignored.
----------
You can contact the Department for Transport by emailing the following people:
douglas.alexander@dft.gsi.gov.uk (Secretary of State)
tomharrismp@parliament.uk (Undersecretary of State)
mike.mitchell@dft.gsi.gov.uk (Director General DfT Rail Group)
peter.west@dft.gsi.gov.uk (Franchise Manager)
Do be polite in your communication but do not be afraid to express your views; remember Civil Servants and Ministers are there to serve the public and are funded by the taxes you pay!
Thursday, 26 April 2007
Building the model railway
Download the Building the Model Railway booklet by clicking on this link. It works best if you right click and than use the ‘Save As’ option rather then left clicking on the links. Alternatively, you can request a copy by emailing fgwtruth@gmail.com and a copy will be sent to you by returnThe way some sections of the media portray it, you would think that Britain’s railways were in an awful state. In reality, they aren’t. The picture is actually a lot more mixed. Yes, some parts of the railway are dreadful but other bits are actually pretty good. What does hold true across the network, however, is that our railways could be a great deal better.
With so many economic and social forces favourable to rail travel, the era in which we live should be the new age of the train. At a time of increasing environmental consciousness, trains are an eco-friendly way of moving both passengers and freight. At a time of increasing house prices, trains allow people to live further out from expensive urban locations and still easily reach their places of work. And, at a time when people are looking to simplify their lives and strike that elusive ‘work-life’ balance, trains provide method of getting from A to B which, unlike driving, requires very little effort from the passenger and should, in theory at least, be relaxing.
Yet, this is not the golden age of the train. This is the age of cynicism about rail travel. Why? Part of the answer lies in the fact that the railways have actually been successful. The socioeconomic factors mentioned above have resulted in an upswing in demand: more and more people are now travelling by train. Unfortunately, supply has not kept pace with this demand and, as a result, conditions have been created which have both annoyed and frustrated passengers. The reports of overcrowding, lack of seats, timetable anomalies and so forth, all neatly demonstrate this fact.
The laws of supply and demand are fundamental; they are the only laws which cannot be repealed! So, when supply doesn’t keep pace with demand there has to be some reason as to why the economic mechanism is prevented from working. In the case of rail, the reason is the restrictive system or parameters within which the network has to operate. The system is not a natural one found in most functioning market systems; it is an artificial creation which hinders progress and development. The designer, implementer and enforcer of this system: the government.
Talking about the system in this way is not an excuse; it is not about absolving First Great Western, or any other train operator, from any blame. It is actually about trying to find proper and lasting solutions to the issues which face the railways. The challenge is to let the forces of supply and demand bring about what everyone in the industry, and everyone who travels, wants to see: an efficient, effective, successful and admired railway.
The booklet published today details three key changes which are required if the system is to be made more responsive and if rail travel is to significantly improve over the longer term. They are the cornerstones of policy. They are not the only solutions and nor are they fully fledged plans. What they are is a start. They are the first steps that need to be taken if we are to build, for our future, a model railway.
Monday, 23 April 2007
Too high a price?
Even in a capitally intense industry such as rail, a billion pounds is a lot of money. It’s not, therefore, surprising that eyebrows were raised when it was announced that First Great Western would pay the government a £1.1bn premium for running the Greater Western franchise for ten years.
Can First Great Western meet their financial obligations to the government? The broad answer is: yes, they can. From an external perspective, the financials do stack up. Admittedly, they are not easily attainable: the business model relies on consistently high levels of revenue growth, say 5-7% per annum, and a tight management of operating costs. Nevertheless, the bottom line is that they are within the realms of feasibility.
That’s all well and good, but asking whether First Great Western can meet its obligations is actually the wrong question to ask. The thing the commentators should be asking is: what value are travellers going to get from the £1.1bn being paid to the government? And let’s be clear on one thing: the £1.1bn will come directly from the pockets of travellers; it is the equivalent of a 15% tax on ticket sales.
One of the problems with the current rail system is that it simply isn’t transparent. Most people don’t realise that a large part of their travel costs go directly to the government’s coffers. As such, they don’t hold the government to account as they do when it comes to discussions of how more visible forms of taxation, such as income tax, are spent. Yet, First Great Western customers, especially regular travellers and commuters, should hold the government accountable. They should ask questions. And they should demand that part of the ‘travel tax’ they pay is spent to improve their travel experience.
Over the past ten years, and over the next ten, the Greater Western franchise region has been, and will continue to be, financially transformed. Back in 1996/7 when rail was first privatised all constituent parts of what is now Greater Western received an operating subsidy. Great Western mainline services were given £61.9m a year; Thames Trains received £43.7m a year; and, Wessex, received a subsidy of £84.6m. By the end of the last franchise which ended in 2006, both FGW mainline services and FGW Link services were paying the government a premium. Wessex still received a subsidy, albeit one that was much reduced. All of this is testament to the private involvement of the train operating companies which dramatically improved efficiency.
Over the next ten years, the amalgamated franchise will more than pay its way. Even including the former Wessex operation, it will be a net donor to the government. It is, therefore, right that travellers should expect something back for the money they pay. Exactly what they should get is a matter for debate, but extra capacity would be a good starting point. What wouldn’t be fair is for the premium payment to be used exclusively for the benefit of other projects or franchise regions. At the very least, the government should be honest and let people know how they are intending to spend the money and how much of it will benefit Greater Western.
In reality, of course, the whole system is completely the wrong way around. The government, which has instilled and explicitly built into the franchising system a culture of high premium paying tenders, should actually have done something else entirely. They should have created a system where bidders were encouraged to maximise investment into their own operations, not the amount they pay to government. That way, money would find its way directly into front line benefits without being eroded away by Whitehall bureaucracy.
The point, then, is not whether the price of the franchise is too high; the point is whether or not the price will, ultimately, be of any real benefit to Greater Western customers.
Can First Great Western meet their financial obligations to the government? The broad answer is: yes, they can. From an external perspective, the financials do stack up. Admittedly, they are not easily attainable: the business model relies on consistently high levels of revenue growth, say 5-7% per annum, and a tight management of operating costs. Nevertheless, the bottom line is that they are within the realms of feasibility.
That’s all well and good, but asking whether First Great Western can meet its obligations is actually the wrong question to ask. The thing the commentators should be asking is: what value are travellers going to get from the £1.1bn being paid to the government? And let’s be clear on one thing: the £1.1bn will come directly from the pockets of travellers; it is the equivalent of a 15% tax on ticket sales.
One of the problems with the current rail system is that it simply isn’t transparent. Most people don’t realise that a large part of their travel costs go directly to the government’s coffers. As such, they don’t hold the government to account as they do when it comes to discussions of how more visible forms of taxation, such as income tax, are spent. Yet, First Great Western customers, especially regular travellers and commuters, should hold the government accountable. They should ask questions. And they should demand that part of the ‘travel tax’ they pay is spent to improve their travel experience.
Over the past ten years, and over the next ten, the Greater Western franchise region has been, and will continue to be, financially transformed. Back in 1996/7 when rail was first privatised all constituent parts of what is now Greater Western received an operating subsidy. Great Western mainline services were given £61.9m a year; Thames Trains received £43.7m a year; and, Wessex, received a subsidy of £84.6m. By the end of the last franchise which ended in 2006, both FGW mainline services and FGW Link services were paying the government a premium. Wessex still received a subsidy, albeit one that was much reduced. All of this is testament to the private involvement of the train operating companies which dramatically improved efficiency.
Over the next ten years, the amalgamated franchise will more than pay its way. Even including the former Wessex operation, it will be a net donor to the government. It is, therefore, right that travellers should expect something back for the money they pay. Exactly what they should get is a matter for debate, but extra capacity would be a good starting point. What wouldn’t be fair is for the premium payment to be used exclusively for the benefit of other projects or franchise regions. At the very least, the government should be honest and let people know how they are intending to spend the money and how much of it will benefit Greater Western.
In reality, of course, the whole system is completely the wrong way around. The government, which has instilled and explicitly built into the franchising system a culture of high premium paying tenders, should actually have done something else entirely. They should have created a system where bidders were encouraged to maximise investment into their own operations, not the amount they pay to government. That way, money would find its way directly into front line benefits without being eroded away by Whitehall bureaucracy.
The point, then, is not whether the price of the franchise is too high; the point is whether or not the price will, ultimately, be of any real benefit to Greater Western customers.
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