Press Release - Shadow Strategic Rail Authority: Action to
improve passenger rail services
3 August 2000
Sir John Bourn, head of the National Audit Office, told
Parliament today that the Shadow Strategic Rail Authority (SSRA)
and its predecessor organisation, the Office of Passenger Rail
Franchising (OPRAF), had taken action where possible to remedy
underperformance by passenger train operators but that the present
franchise arrangements could be improved to secure better
performance. The current process of franchise replacement provides
an ideal opportunity to implement these improvements.
OPRAF had used the powers available to it in the franchise
agreements but these were, on the whole, not designed to raise
standards significantly beyond those achieved by British Rail. The
National Audit Office identified the following weaknesses in the
current franchises which were agreed in 1996 and 1997:
- incentive regimes, which provide financial rewards or penalties
for achievement against standards set for punctuality and
short-forming trains, are not very effective because the payment
rates are too low. In 1999-00, SSRA received £25.6 million in
penalties from train operators and paid £22.3 million in
incentives. The SSRA intends to double the payment rates in
replacement franchises;
- the enforcement regime, which gives powers to the SSRA to
demand remedial action in the event of operational performance
below a certain standard, works to bring performance back to that
standard but only applies to the number of cancellations
(reliability) and seats provided (capacity) each month. Train
operating companies cannot be forced to take action to improve
punctuality. The National Audit Office recommends that the SSRA
should be able to take enforcement action for poor
punctuality;
- the performance standards for reliability and capacity were set
at the levels achieved by British Rail and the current franchise
agreements contain no provision for the standards to be raised.
Those standards are now too low in the case of some train
operators. The National Audit Office recommends that new franchises
should allow the SSRA to raise all performance benchmarks through
the life of the franchise;
- there is some evidence that the deterrent effect of enforcement
action can influence train operators to act in ways which are not
in the best interests of passengers. The SSRA needs to do more work
to establish the nature and extent of such perverse
incentives;
- passenger numbers are growing fast in all areas of Great
Britain but the information currently available to the SSRA on
overcrowding is not very accurate. Moreover, franchise agreements
only require overcrowding to be measured on London and Edinburgh
commuter routes. The SSRA is seeking to encourage train operators
to adopt more accurate and flexible electronic systems to replace
the current manual counting system; and
- OPRAF relied on passenger satisfaction surveys and
self-certification by train operating companies to monitor the
quality of service delivered by train operators. By Summer 1999
passenger satisfaction was, on the whole, lower than on
franchising. In January 2000, the SSRA launched a new national
survey of passengers to take place twice a year. It intends, in the
new franchises, to link satisfaction levels to an incentive regime
as a new way to try to raise passenger satisfaction. The National
Audit Office recommends that it also institute a programme of
station inspections, considers whether the current standards for
stations are adequate, and whether a 'mystery shopping' approach it
is currently piloting could be brought within the terms of
franchise agreements.
The NAO found that punctuality and reliability had changed
little in the period since franchising, although more train
services are now run. Currently, around 87 per cent of trains
arrive within 5 minutes of schedule and 1.2 per cent are
cancelled. Average standard class fares have been held below
inflation but overcrowding is likely to become a growing problem as
passenger numbers increase faster than service capacity.
Sir John commented:
"OPRAF did what it could to improve passenger rail
services within the powers available to it. Although overall
performance has been marginally better than British Rail there is
not yet evidence of sustained improvement over time. The SSRA must
ensure that it has both the information and the powers it needs to
deliver the further improvements in punctuality, reliability,
capacity and quality of service that we all want to
see."
Notes for Editors
The Franchising Director, the head of the Office of Passenger
Rail Franchising (OPRAF), a non-ministerial department, awarded the
franchises to run passenger rail services by March 1997. In July
1999, pending legislation to create a Strategic Rail Authority,
OPRAF became part of the Shadow Strategic Rail Authority (SSRA).
Mike Grant, the Franchising Director since May 1999, was appointed
Chief Executive of the SSRA and Sir Alastair Morton was appointed
to be its Chairman.
Net subsidies paid by OPRAF (and now the SSRA) to the 25 train
operating companies fell from £1.4 billion in 1997-98 to £1
billion in 1999-00.
In 1999, the SSRA began a process to replace the existing
franchises most of which have at least three more years to run.
Bids have been invited for 6 franchises so far but no successor
franchisees have yet been announced.
The National Audit Office looked at the performance of passenger
rail services since franchising began in 1996; examined the record
of OPRAF in managing the franchises; and considered whether there
was more that OPRAF, and now the SSRA, could do to try to improve
performance.
Press notices and reports are available from the date of
publication on the NAO website at http://www.nao.org.uk/ Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
The Comptroller and Auditor General, Sir John Bourn, is the head of
the National Audit Office employing some 750 staff. He and the NAO
are totally independent of Government. He certifies the accounts of
all Government departments and a wide range of other public sector
bodies; and he has statutory authority to report to Parliament on
the economy, efficiency and effectiveness with which departments
and other bodies have used their resources.
Press Notice 53/00
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