New research commissioned by Rail Partners reveals how competition among train companies is delivering results across Britain and Europe
Lumo introduced competition on the East Coast Main Line
A reinvigorated public-private partnership is urgently required to get Britain’s railways back on the track to growth. That was the plea this week from Rail Partners, which argues that the railway still needs the independent passenger owning groups that it represents.
While European railways are liberalising and seeing signs of a renaissance, Rail Partners warns that Britain’s railway could be left behind if it turns its back on the private sector. In a new report, Track to Growth: Creating a dynamic railway for passengers and the economy, Rail Partners reveals where competition among train companies is harnessed effectively across Britain and Europe there are more customers, more services, newer trains, cheaper fares and reduced subsidy.
What matters is what works for customers and the taxpayer, so we should put aside ideological debates. The evidence shows that a reinvigorated public-private partnership is the best way to revitalise the railway
“Today’s report is about getting back on track to growth,” said Rail Partners chief executive, Andy Bagnall. “What matters is what works for customers and the taxpayer, so we should put aside ideological debates. The evidence shows that a reinvigorated public-private partnership is the best way to revitalise the railway.
“Train companies, domestically in the past and across the continent right now, have shown the skills needed to grow passenger numbers and reduce costs for the taxpayer.
“If reform continues to stall, the railway faces stunted recovery from the pandemic and worst case, a permanently smaller network. But with the right reforms, the railway can return to growth and act as a catalyst for a stronger, greener economy.’
The challenges identified in the Rail Partners report include the blurring of responsibilities and accountabilities between different parts of the system, prescriptive and no-longer-fit-for-purpose contracts, an outdated fares system, changed travel patterns resulting in millions of pounds lost in revenue, and drawn-out industrial action.
A response, often making national headlines as a panacea to these issues, “is placing the blame exclusively on train companies and calling for public ownership”. But Rail Partners, the trade association for independent passenger owning groups, points out that public control is far greater today than under British Rail, with the government micro-managing even the smallest of commercial decisions.
It argues that reforms have been needed for several years and the pandemic compounded the problem and accelerated the need for drastic change.
The report sets out analysis by economic consultants Oxera, confirming the role the private sector played in stopping the decline of the railway post-British Rail. An operational deficit was closed, taxpayer subsidy reduced freeing up money for infrastructure, and ultimately, passengers returned in record numbers. Although it acknowledges that franchising in its latter days needed reform, it maintains that harnessing privately-owned train companies in the delivery of passenger services “was transformative for customers and the railway”.
As Westminster continues to debate how to meet the challenges the railway faces, Rail Partners commissioned research by Arup and Frontier Economics to examine the experiences of our European neighbours and how train companies on the continent have boosted passenger numbers and created better outcomes for customers.
It says the European Union has sought to tackle the inefficiency of public monopoly operators who have been slow to innovate and adapt. They have done this by allowing new operators to compete both ‘for the market’ through bidding for contracts and ‘on rail’ through direct competition on the same routes with open access competition.
The findings from the study reveal that where there is competition both for contracts and by operators on the same route, there are significant benefits (see panel).
This is one of the most wide-ranging studies on the emerging impacts of rail liberalisation in the EU to date
“This is one of the most wide-ranging studies on the emerging impacts of rail liberalisation in the EU to date,” said Rail Partners chief executive Andy Bagnall. “We can draw on the experience of managed competition across Europe to deliver benefits here in Britain.
“The evidence from European railways clearly shows that, if we get reform right, and train companies are harnessed in
the right way, competition will deliver significant benefits for the customer, and ultimately reduces subsidy, bringing public spending down.”
Rail Partners’ report offers a series of policy solutions based on the evidence. While accepting that greater public control through an arms-length body is needed to give the system greater coherence, operators need freedom within that system. Allowing decisions to be made closer to the customer in a public-private partnership “is the right answer”.
This is a welcome report with important priorities that focus on improving rail for passengers
Responding to the Rail Partners report, Michael Solomon Williams from Campaign for Better Transport, said: “This is a welcome report with important priorities that focus on improving rail for passengers.
“We must learn from examples of successful international public-private partnerships and ensure that the expertise of UK train companies is supported by government to achieve the best outcome for the public.”
He also expressed support for Great British Railways to be established, fares and ticketing reform and more open access operators across the country, “following the successful growth of passengers across operators on the East Coast main line”.
The full story appears inside the latest issue of Passenger Transport.
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