Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Risk of cutting passenger services due to cost focus, reducing revenue and customer experience.
Conclusion
Rail Partners highlighted to us the risk that the Department may look to cut passenger services to save costs which would make the railway less attractive for passengers, mean lower revenues flowing into HM Treasury, and add to cost pressures. It said that it is essential to reunite cost and revenue in the Department in the short-term, and in an arms- length body after that, to avoid a sole focus on cost reduction that is negatively impacting the customer experience and revenue generation.24 Improving accessibility
Government Response Summary
The government agrees with the Committee’s recommendation to reunite cost and revenue and is committed to delivering a unified and simplified governance structure for the railways, alongside passenger train services under public ownership. Implementation is targeted for Spring 2025.
Government Response
Accepted
HM Government
Accepted
2.4 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2025 2.5 The government is committed to delivering a unified and simplified governance structure for the railways, alongside passenger train services under public ownership, with the 51 objective of providing improved services for passengers and better value for money for taxpayers. This model will address current disincentives by ensuring costs and revenue across infrastructure and operations are aligned to optimize performance and drive efficiency. 2.6 The department expects to see these reforms delivered over the course of this parliamentary term, as new legislation is enacted, and private train operators move into public ownership. 2.7 During the transition to these new arrangements, the department will continue to use the annual business planning exercise with the train operating companies to ensure that costs are being closely managed, but also that opportunities for revenue growth are being considered. The department’s objective is to make the cost base as efficient as possible, increasing revenue and passenger numbers and reducing the net taxpayer subsidy. The department will work closely with HM Treasury to ensure costs and revenues are managed effectively.