Recommendation 2

There has been too little focus on passengers and taxpayers and how to get them a better deal. The Department claims that improving passenger experience is at the heart of its reform plans, but poor performance persists across the rail network. In 2022–23, 13.7% of trains were delayed and 3.8% were cancelled. While the Department is fully aware of what is important to passengers, it has not delivered on the basic things that matter most. Taxpayers also continue to subsidise passenger rail services at a level that the Department considers unsustainable (£3.1 billion in 2022–23). It is disappointing to hear that it took a pandemic to make the Department seriously focus on making efficiency savings and changes to improve services. The Department know it needs to increase revenues and reduce costs to get to a more sustainable position, but its focus is on managing costs, while revenue goes directly to HM Treasury, along with responsibility for making up any shortfalls. This means that the Department, train operating companies and HM Treasury have different priorities when making decisions which impact revenue, and the current set up does not create the right incentives to get the best value for money for taxpayers. Recommendation 2 a) The Department should commit to producing a specific passenger-focused plan that is clear to passengers what they should expect from travelling on trains following rail reform, including clear targets that train operators are expected to achieve. b) The Department should work with HM Treasury to resolve the disincentives in the system so that it can bring the level of government subsidy on passenger services to a sustainable level and improve value for money for taxpayers. The Department should set out in its Treasury Minute how it is addressing the disincentives ahead of the next Parliament and full rail reform.