Transport and Growth News

Rail White Paper Briefing Note

27 May 2021

EMC/TfEM have produced a short Member Briefing Note on the Government’s recent Rail White Paper (Williams-Shapps Plan for Rail)

1. Introduction

1.1  In September 2018 the Government announced a major review of the rail industry chaired by Keith Williams in the wake of problems introducing new timetables in the north of England and parts of the South East.  

1.2  The Review has been significantly delayed by the impact of the Covid 19 pandemic, which effectively brought an end to rail franchising due to a sustained drop in passenger revenue.  The outcome of the Williams Review was published 19th May 2021 as a Rail White Paper: Williams-Shapps Rail Plan, available on the DfT web-site.

2. Key Points

A New Structure

2.1 Network Rail along with parts of the DfT and the Rail Delivery Group (the collective body for train operators) will be subsumed into a new arms-length public body called ‘Great British Railways’ (GBR), which will maintain and enhance the infrastructure, specify rail services and manage contracts with train operating companies (TOCs).  Establishing GBR will require primary legislation but the Government expects the new body to be up and running by 2023.  

A New Commercial Model

2.2  Due to the impact of Covid 19 Government had to assume full revenue responsibility for rail services through a series of emergency contracts.  As the result, the rail franchise system established at privatisation has already come to an end. The White Paper formalises this situation with the establishment of a ‘concession’ model, similar to that operated by Transport for London (TfL). Under this system, TOCs will be paid to deliver services specified by GBR, plus a performance related management fee. Performance metrics will include punctuality and customer satisfaction as well as passenger numbers.  

Rolling Stock

2.3 Rolling Stock will remain in the private sector.  GBR will lease trains from rolling stock companies (ROSCOs) in the same way that TOCs do under the current system.

Infrastructure Enhancements & HS2

2.4 It is likely that infrastructure enhancements will continue to be developed through the Rail Network Enhancement Pipeline (RNEP) and subject to funding approval on a ‘project by project’ basis.   HS2 will continue to be developed and delivered by HS2 Ltd, with proposals for Phase 2b subject to the forthcoming Integrated Rail Plan.

Fares and Ticketing

2.5  GBR will seek to simplify fares and ticketing.  There will be a single ticketing system and ‘app’ to replace the current plethora of arrangements administered TOCs (which can mean at tickets for the same journey are often not valid on another company’s trains).  From June this year, a new flexible season ticket offer will be introduced to reflect the likely impact of changing work patterns on commuting.  At a local level there will be scope to integrate rail ticketing with other forms of public transport.  

Railway Planning

2.6 GBR will work within a framework of a 30 year strategic plan and 5 year business plans.  Work in the first Whole Industry Strategic Plan (WISP) has already started under the auspices of Network Rail.  Planning for track train together over a 30 year time horizon is intended to provide more certainty to rail supply chain and secure better collective outcomes for public and private investment.  

Engagement with Places

2.7  GBR will be structured on a regional basis, likely to be based on the regions and routes recently introduced by Network Rail (the East Midlands Route forms part of the Eastern Region under this arrangement).   Local managers will be appointed to provide local accountability for rail services for localities.  There is provision for collaborative arrangements with local leaders and politicians – similar to the current TfEM/DfT Collaboration Agreement (see below).

Reducing Industry Costs

2.8 The Government expects the new structure to reduce the costs of running the railway and the level of public subsidy required.  Press reports suggest that the Treasury is looking for savings of between 5% and 10%.  GBR will simplify the complex contractual arrangements that characterise the existing structure and centralise the marketing and timetable planning functions undertaken by each TOC.  Competing services run by different TOCs on the same route will also be removed, and it is likely that some peak urban commuter services removed during the pandemic will not be reinstated.  In addition, Government is proposing to review staff terms and conditions (starting with Network Rail).  However, some big industry costs remain untouched, such as train leasing (see above) and power supply.  

 3. Implications for the East Midlands

Investment

3.1  As part of the new franchise EMR promised to invest £600m in new services and trains, including replacing all existing rolling stock with new or refurbished trains by 2024.   The first phase of this upgrade came into effect in May 2021, with additional inter-city and regional services and electric trains serving Corby. Completing this commitment will fall to GBR, and it will be crucial that the original plans are delivered in full, including deployment new inter-city bi-mode trains and refurbished 170 (regional) and 360 (electric commuter) trains.   

TfEM/DfT Collaboration Agreement

3.2  The TfEM/DfT Collaboration Agreement (CA) was signed in September 2020 but appears to be very consistent with the proposals for working with local leaders set out in the White Paper.  Migrating the CA to the new arrangements would appear to be straight forward, and the White Paper proposed to establish a number of ‘pilot areas’ to test approaches. However, the role of local MPs may also need to be considered.

TfEM Response & Next Steps

3.3 The Chair and Vice Chair of TfEM issued an initial ‘on the day ‘ response to the White Paper reflecting the points above, available on the EMC web-site. The TfEM Board will discuss the implications of the White Paper in more detail on the 14th June 2021.

Andrew Pritchard & Kyle Butterworth

26th May 2021