Recommendations & Conclusions
26 items
2
Conclusion
Tenth Report - Overview of the English …
In recent years, we have identified serious failings in the rail system, and the Department must now overcome significant long-standing issues to bring about complex reform. We have previously reported on the problems inherent in the rail system, such as: poor performance and reliability of the network; the lack of …
Government response. 2: PAC conclusion: In recent years, we have identified serious failings in the rail system, and the Department must now overcome significant long-standing issues to bring about complex reform. 2: PAC recommendation: By December, the Department should write to the …
HM Treasury
3
Conclusion
Tenth Report - Overview of the English …
Published information from the Department and the Office of Rail and Road on whole-system costs and revenues is not sufficient to inform proper oversight of the rail system, given the extent of taxpayer exposure. The arrangements for delivering rail services in England involve complex financial flows and contractual obligations between …
Government response. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 3.2 The government will write to the Committee in December 2021. The government’s financial support for the railway has increased sharply since the start of the COVID-19 …
HM Treasury
4
Recommendation
Tenth Report - Overview of the English …
It is not yet clear that the interim National Rail contracts fairly distribute risks between government and operators, or provide incentives for operators to deliver efficient, high-quality, and value-for-money passenger services. In previous reports the Committee highlighted failings in the Department’s previous commercial model of rail franchising. The COVID-19 pandemic …
Government response. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2021 4.2 National Rail Contracts (NRCs) require train operators to deliver against annually- agreed business plans (ABPs) and performance targets. This allows these contracts to evolve as the …
HM Treasury
5
Recommendation
Tenth Report - Overview of the English …
We are disappointed at the lack of progress in agreeing a specific and funded plan for the electrification required to achieve the government’s own net zero targets. Electrification of the network is the key mechanism for delivering rail decarbonisation. It will require a significant level of investment (estimated between £18 …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 5.2 The government will write to the Committee in December 2021. In July 2021, the government published the Transport Decarbonisation Plan, which outlines how it will achieve …
HM Treasury
6
Conclusion
Tenth Report - Overview of the English …
It is not clear to us how Network Rail expects to achieve the remaining efficiencies planned in Control Period 6. In Control Period 5 (2014–15 to 2018–19), Network Rail failed to achieve its efficiencies target as agreed with the Office of Rail and Road (ORR). In the first two years …
Government response. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 6.2 Network Rail will write to the Committee in December 2021. Network Rail remain committed to delivering the committed efficiency improvements in Control Period 6, and Network …
HM Treasury
1
Conclusion
Tenth Report - Overview of the English …
On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department for Transport (the Department), Network Rail and the Office of Rail and Road on costs in the English rail system.1 We also received written evidence from a number of stakeholder bodies and …
HM Treasury
20
Conclusion
Tenth Report - Overview of the English …
Net government funding increased 99.7% in real terms between 2015–16 and 2019–20 from £2.6 billion to £5.1 billion. This reflects increases in expenditure on operating and maintaining rail network infrastructure and the pre-COVID-19 deterioration in the passenger rail market as growth in rail passengers plateaued.3 In addition, the Department told …
HM Treasury
7
Conclusion
Tenth Report - Overview of the English …
As well as providing critical revenue for the rail system, passenger rail travel supports wider government objectives around transport decarbonisation and achieving net zero. We asked the Department how they planned to encourage people out of their cars onto rail. It outlined current activities by the Rail Revenue Recovery Group, …
Government response. 2021. This is the government’s response to the Committee’s report. Relevant reports • NAO report: Overview of English Rail System – Session 2021-22 (HC 1373) • PAC report: Overview of English Rail System – Session 2021-22- (HC 170)
HM Treasury
8
Conclusion
Tenth Report - Overview of the English …
The Department referred to its recently published strategies on bus travel18 and cycling and walking19 and told us that integration between modes of transport is “critical” to make public transport an attractive and practical choice for passengers.20 However, in these documents we can see only limited reference to integrated travel …
Government response. 1.3 The government agrees with the Committee’s recommendations. Target implementation date: December 2021 1.4 The government will write to the Committee in December 2021. The UK already has a well-developed and integrated public transport system. In 2019, 81% of rail …
HM Treasury
9
Conclusion
Tenth Report - Overview of the English …
We have previously reported on the problems inherent in the rail system which have led to poor performance and reliability of the network. Even before the pandemic, we and the Transport Committee had reported on the Department’s franchising model and concluded that it was a broken model.21 We reported in …
HM Treasury
10
Conclusion
Tenth Report - Overview of the English …
We were interested to hear the Department’s views on the main issues caused by the rail system’s current structural organisation. The Department recognised that problems have emerged over a number of years, partly the result of poor alignment between Network Rail, responsible for rail infrastructure, and operators, responsible for delivering …
HM Treasury
11
Conclusion
Tenth Report - Overview of the English …
After our evidence session, on 20 May, the Department published its long-delayed Rail white paper, which outlines its “once-in-a-generation” reforms planned for the rail system, including replacing franchising and better integrating infrastructure with passenger services.25 The Department acknowledges that it must overcome a “complex and…deep-rooted set of issues” to improve …
HM Treasury
12
Conclusion
Tenth Report - Overview of the English …
Since privatisation in the 1990s, cash flows in the rail system have become increasingly complex. Although the rail system is privatised, government still provides significant funding for infrastructure operations, maintenance and renewals, and ongoing subsidy for passenger service operations. The National Audit office’s report identifies that the lack of a …
HM Treasury
13
Conclusion
Tenth Report - Overview of the English …
The Rail white paper outlines government’s plans for a new rail system, with one body responsible for overseeing infrastructure and passenger services and with less complex financial transactions.32 The Office of Rail and Road told us that such a “guiding mind” could add much needed accountability for the whole system.33
HM Treasury
14
Conclusion
Tenth Report - Overview of the English …
Specifically in relation to passenger service operations, prior to the COVID-19 pandemic, private sector companies operated passenger services under a franchise model but still received some level of government funding. The amount of government funding provided to train operators has increased in recent years, changing from a net surplus paid …
HM Treasury
15
Conclusion
Tenth Report - Overview of the English …
The Department acknowledged that there were significant challenges inherent in its franchising model used prior to the pandemic. It told us that the previous surplus in franchising costs had become a deficit prior to the pandemic.37 During the final four years of Control Period 5 (2015–16 to 2018–19), net government …
HM Treasury
16
Conclusion
Tenth Report - Overview of the English …
Our previous reports have covered some of the commercial difficulties caused by the Department’s franchising model. In the worst-case scenarios, issues such as over- optimistic assumptions of passenger growth led to severe operator losses and early contract terminations.39 These contract terminations accelerated the Department’s exposure to the commercial issues in …
HM Treasury
17
Conclusion
Tenth Report - Overview of the English …
The Department updated us on the Emergency Recovery Measures Agreements (ERMAs), which it put in place as an overlay to franchising agreements in response to the dramatic loss in passenger revenue caused by the COVID-19 pandemic. The ERMAs transferred all cost risk and revenue risk from operators to the Department …
HM Treasury
18
Conclusion
Tenth Report - Overview of the English …
Following our session on 13 May 2021, the Department told the Transport Committee that negotiations with all train operators have concluded around terminating the underlying franchise agreements, which is necessary to enable the transition of operators 37 Qq 19, 31 38 C&AG’s report, pp 8, 15 39 Committee of Public …
HM Treasury
19
Conclusion
Tenth Report - Overview of the English …
We were concerned that the short-term nature of these new contracts could fail to incentivise operators to make cost savings and improve performance, and asked the Department to explain how operators would be incentivised to keep costs down. The Department said that the annual business planning approach will help identify …
HM Treasury
21
Conclusion
Tenth Report - Overview of the English …
The Department told us that electrifying the rail network is a key part of decarbonising and achieving net zero on the railway and that to ensure success, a steady long-term plan for electrification is needed. However, the Department acknowledged that its approach to electrification in recent years has reflected a …
Government response. 5: PAC conclusion: We are disappointed at the lack of progress in agreeing a specific and funded plan for the electrification required to achieve the government’s own net zero targets 5: PAC recommendation: In its December letter to the Committee, …
HM Treasury
22
Conclusion
Tenth Report - Overview of the English …
The Department acknowledged that long-term, strategic direction on electrification is needed to provide market certainty for operators, rolling stock companies and the procurement of trains that will be able to operate on the network and to drive innovation. It also recognised that its erratic approach had resulted in “some extremely …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 5.2 The government will write to the Committee in December 2021. In July 2021, the government published the Transport Decarbonisation Plan, which outlines how it will achieve …
HM Treasury
23
Conclusion
Tenth Report - Overview of the English …
The Office of Rail and Road told us that in Control Period 5 (2014–15 to 2018–19), Network Rail became less efficient and failed to meet efficiency targets.58 Indeed, in contrast to assumptions made by the Office of Rail and Road that Network Rail could improve the efficiency of its core …
Government response. 6.2 Network Rail will write to the Committee in December 2021. Network Rail remain committed to delivering the committed efficiency improvements in Control Period 6, and Network Rail will continue to be held to account for doing so by the …
HM Treasury
24
Conclusion
Tenth Report - Overview of the English …
In the first year of Control Period 6 (2019–20), Network Rail exceeded its planned efficiency savings; achieving £385 million compared to £316 million expected.61 The Office of Rail and Road told us that Network Rail has improved its efficiency through the development of a bottom-up business plan which routes and …
Government response. 6.2 Network Rail will write to the Committee in December 2021. Network Rail remain committed to delivering the committed efficiency improvements in Control Period 6, and Network Rail will continue to be held to account for doing so by the …
HM Treasury
25
Conclusion
Tenth Report - Overview of the English …
But Network Rail recognised that there “is still a mountain to climb” to achieve the full efficiency improvements it has committed to, and that it will need to continue to increase savings.63 Network Rail estimated that 60% of remaining planned efficiencies would come from renewals activities (like for like replacements …
Government response. 6.2 Network Rail will write to the Committee in December 2021. Network Rail remain committed to delivering the committed efficiency improvements in Control Period 6, and Network Rail will continue to be held to account for doing so by the …
HM Treasury
26
Conclusion
Tenth Report - Overview of the English …
In 2020, the Office of Rail and Road reported inherent uncertainty in the value of some of the efficiency savings made by Network Rail in 2019–20.69 The Office of Rail and Road told us that it has now agreed a set of indicators with Network Rail which measure the likelihood …
Government response. 6.2 Network Rail will write to the Committee in December 2021. Network Rail remain committed to delivering the committed efficiency improvements in Control Period 6, and Network Rail will continue to be held to account for doing so by the …
HM Treasury