finance

UK railway reforms lack urgency, says parliamentary watchdog


Reforms of the UK’s railways risk being undermined by a lack of urgency and a convincing plan to encourage passengers back after the pandemic, according to a report from the parliamentary spending watchdog.

The House of Commons public accounts committee said that while the Department for Transport was aware of the need for wholesale improvement of the rail industry, it was “concerned that the department has neither the necessary urgency nor appreciates the scale of the task ahead”.

The British railway sector is on the cusp of the biggest shake-up to its model since the 1990s, after ministers recognised the need for a complete overhaul of the franchise system.

The DfT unveiled plans in May for a new state-run rail body in a White Paper. The Great British Railways will oversee both trains and track infrastructure and will pay private companies to run services on tightly specified contracts.

The parliamentary report, released on Wednesday, said the White Paper was the first step towards much-needed change but warned its implementation “carries significant risks”. It questioned whether there was “over-optimism” in Whitehall over the capacity to deliver the “once in a generation” reform.

“There is everything to play for in delivering a rail system that delivers for passengers and encourages greener travel,” said Meg Hillier, chair of the committee and an opposition Labour MP.

“But there are still many moving parts and a huge challenge to balance costs. The government needs to show it can act with urgency and put passengers’ experience at the centre of its reforms,” she added.

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The committee’s report also questioned the new system of contracts on which train operating companies have been put on an interim basis, which largely pass fare and revenue risk to the taxpayer.

Ministers believe they had no option but to move rapidly to a new funding structure to keep trains running during the pandemic and have made changes to the model over the past year. But the committee said it was not clear whether the new system would “fairly distribute risk between government and operators”.

The evidence for the report was taken before the White Paper was released. The DfT said its plans would end “a fragmented, unsustainable system” and that contracts were subject to “rigorous scrutiny to protect taxpayers”.

“Our proposals will ensure greater value for money for taxpayers and a better deal for passengers — with affordable fares and the punctual, reliable services they deserve as people return to the railways,” the department said.

The committee also said a “targeted and timely intervention” is needed to get people back on to trains as part of the recovery from the pandemic, particularly as passengers are returning to cars faster than to public transport.

Ministers have unveiled more flexible ticketing to reflect new hybrid working patterns, but the committee also called for the railways to be better joined up with other modes of other public transport. Without that, there was a risk of a “car-led” recovery that would jeopardise net zero targets, the MPs said.

The committee also said it was “disappointed” with progress on electrification to help decarbonise the railways and questioned whether Network Rail would be able to meet its financial efficiency targets.

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