Creating an integrated rail network
for London
National Rail conference 2012
5 July 2012
Geoff Hobbs, TfL Rail & Underground
1
Rail franchise reform and devolution are both
recommendations in the McNulty study
• Railways matter a lot to London
• McNulty asked how to get a
better railway for less so it can
“earn a licence to grow”
• Move towards longer
franchises and less
prescription by DfT, more
commercial freedom for TOCs
• Momentum for devolution in the
Northern cities
• Rail policy paper published and
extant consultation on ‘rail
decentralisation’ and ‘fares and
ticketing’
2
The Mayor agrees there is no one size franchise that
fits all
• The purpose of longer, less
prescriptive franchises is to
improve TOCs’ incentives to invest
and value for money
• For some London routes,
commercial incentives will always
be weak:
• Longer-distance services tend to
have much stronger incentives
• Inner suburban routes relatively
neglected
• Yet these 600+ million trips support
the wealth creating London
economy and are key to wider
transport objectives
3
Devolution helps both DfT and TfL achieve
objectives better
• Revenue in London is largely a function of
macroeconomic factors and fares policy
• Private sector takes these risks only at a price
• Gross cost contracts fit London market
conditions better, so offer better value
• Makes residual longer distance DfT franchises
more homogenous and more appropriate for a
less prescriptive franchising model
• Consistent with the broader localism agenda
• Reduces the perception of DfT micromanagement
4
Devolution addresses some of London’s systemic
rail problems
•
Ten London TOCs, wide variations in quality
– Fares and ticketing issues are hard to resolve
– National Passenger Survey scores in London
vary from 77% to 92% for overall satisfaction
– TfL and National Rail networks divergent too
•
The increment / decrement process hard to make
work well with less prescriptive franchises
•
The less prescriptive model risks reduction in offpeak frequencies, station services and facilities
•
Without a ‘single till for transport’, little incentive to
find synergies or cost savings between TfL and
National Rail networks
•
London Overground is just 15% of London journeys,
so devolution to date in London is niche
5
Look what devolution has achieved on the London
Overground
Ticket Irregularity Survey
Ticketless Travel Survey
National Passenger Survey
2007
2008
2009
2010
2004
2011
2006
2008
2010
250%
200%
Passenger journeys
150%
100%
Public Performance Measure
50%
2007
2008
2009
2010
2011
0%
Q4 07/08
Q4 08/09
LSE Rail
Q4 09/10
LSE Overground
Q4 10/11
Q4 11/12
LO no ELL
6
This five point devolution plan can be put in place
for relevant forthcoming franchises
1. The Mayor allocated a rail budget for
certain inner suburban passenger
services
2. When Anglia and Kent franchises
come up for renewal, inner suburban
services specified to Overground
standard with the same performance
indicators
3. TfL needs proper accountability for
contract management, such as
‘breach’ and ‘default’
4. At least regulated London fares would
be set by the Mayor
5. ...and with the above, inner suburban
services could be branded ‘London
Overground’
7
TfL has addressed the “frequently asked questions”
associated with devolution
1. Do users outside London and freight
operators lose out as London rail
capacity is scarce?
2. Is there a deficit in democratic
accountability for rail users living outside
of London (yet having to be users of the
Mayor’s rail services)?
3. Is TfL acceptance of revenue risk
credible?
4. Would a TfL concession abstract revenue
from a franchised TOC?
5. More fragmentation adds to costs?
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TfL welcomes the direction of travel for fares and
ticketing
•
Refresh regulation by loosening inflexible
distinction between regulated and unregulated fares
•
Regulate instead on the basis of fares yield per trip
•
Unify fares regulation within London
– Enables simplification, e.g. PAYG could have a
unified tariff
– Simplified concessions
•
Smart ticketing can enable change:
– The customer experience of ticket retailing
– Peak spreading, which reduces costs, though
the impact is unlikely to be large
– Better fit for part-time workers
•
Wave and pay ticketing with contactless bank cards
can extend this functionality
9
The DfT’s consultations closed on 28 June 2012
• The Mayor’s response on rail
decentralisation is available
at:
http://www.tfl.gov.uk/assets/d
ownloads/corporate/Part-1Item08-DfT-Paper-andConsultations.pdf
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