Posted 4th December 2018 | 3 Comments

Thameslink profits confiscated as MPs publish scathing report

► Govia faces profits cap for remainder of franchise
► Committee criticises ‘astonishing complexity’ of rail industry
► Grayling should have been more proactive, says report
► Fresh calls for fares freeze in 2019

GOVIA will make no profits from its Thameslink franchise this year, but transport secretary Chris Grayling has stopped short of ending the franchise early.

The move is the government’s response to Govia Thameslink Railway’s share of responsibility for the timetable chaos in May, when plans to introduce 400 new services collapsed. There was also serious disruption on Northern at the same time, which has been attributed at least in part to overrunning electrification work being carried out by Network Rail.

The Commons Transport Committee has published its report into the problems since May, and has concluded that one cause was “the astonishing complexity” of a fragmented railway in which interrelated private train companies, operating on publicly-owned and managed infrastructure, have competing commercial interests. This complex system could not cope.’

Chris Grayling had the ‘ultimate authority’ to postpone the changes, but the Committee said he was not given enough information, adding that even so he ‘should have been more proactive and that it is not reasonable for him to absolve himself completely of all responsibility’.

Lilian Greenwood, who chairs the Committee, said: ‘It is extraordinary, and totally unacceptable, that no-one took charge of the situation and acted to avert the May timetabling crisis. Instead of experiencing the benefits of much-needed investment in our railways, around one in five passengers experienced intensely inconvenient and costly disruption to their daily lives. There was extraordinary complacency about protecting the interests of passengers, who were very badly let down.

‘The complex system by which we operate our rail services failed to cope with the scale of change planned for May 2018. The secretary of state has announced a year-long independent rail review, to be conducted by Keith Williams. While the need for fundamental reform is beyond doubt, passengers cannot wait until 2020 for key lessons to be learned and reforms implemented.’

This conclusion has unleashed a torrent of new criticism of Mr Grayling’s part in the affair. Labour’s shadow transport secretary Andy McDonald said: ‘The Committee is correct to say that Chris Grayling could have done more and should take greater responsibility for the chaos in May. Passengers have lost faith in rail and it’s only Labour’s plans for public ownership that can deliver a simpler and integrated rail network which the public can trust.’

The RMT was also deeply critical. The union’s general secretary Mick Cash said: ‘This bombshell report lays the blame clearly with the disastrous fragmentation of our railways and with the man at the controls, the transport secretary Chris Grayling. He was asleep at the wheel of a broken, fragmented, over complicated system that is solely of his party’s creation. He has presided over a collective, systemic failure and passengers deserve nothing less than his resignation.’ Mr Cash has also condemned the decision about the future of the GTR franchise as ‘a pathetic insult’.

Mr Grayling has agreed that performance from 20 May was ‘unacceptable’, but he has decided not to terminate the GTR contract. He said: ‘GTR will make no profit from its franchise in this financial year and, looking ahead, we have also capped the amount of profit that the operator is able to make for the remainder of its franchise, which is due to expire in September 2021.

‘Furthermore, GTR will be contributing £15 million towards tangible improvements for passengers. This is in addition to the £15 million the operator has already contributed towards compensation for passengers since the May timetable disruption. GTR has agreed to work with the rail user groups representing passengers of Thameslink, Southern and Great Northern, who will determine what improvements this package will fund.

‘The Department has concluded that a termination of the franchise would cause further and undue disruption for passengers and is not an appropriate course of action.’

GTR chief executive Patrick Verwer said: ‘We have made some significant improvements, particularly in providing information for passengers, following a preliminary investigation by the Office of Rail and Road.

‘We are very sorry for the disruption the May timetable caused and have already processed compensation claims for 68,000 season ticket holders, with the deadline for claims extended to 31 January 2019.

‘Since July, services on Thameslink and Great Northern have become more stable and reliable. Next week we will begin to introduce 200 mainly off-peak services to complete the phased roll-out of the May weekday timetable, bringing the total number of daily weekday services to 3,600.’

Rail Delivery Group regional director Robert Nisbet added: ‘We are learning the lessons from the unacceptable disruption in May and this report will be an important contribution. The industry has set up a dedicated timetable assurance team whose job is to assess future timetables and ensure they are introduced more smoothly, starting with Sunday.

’While we are truly sorry for what happened this summer, our ambition remains to deliver thousands of new trains and extra services, improving journeys for customers and helping grow the economy.’

The critical conclusion of the Transport Committee’s inquiry has also sparked fresh calls for January’s fare increases to be reviewed. They have been set at 3.2 per cent for season tickets and other regulated fares while the average rise for all fares will be 3.1 per cent, raising around £300 million in 2019.

Committee chair Lilian Greenwood added: ‘Friday’s announcement of fare rises averaging 3.1 per cent in 2019, which came after we had agreed our Report, adds insult to passengers’ injury. We recommend that 2018 season ticket holders most affected by the timetabling crisis receive a discount on their 2019 season tickets equivalent to the increase announced on 30 November.’

Consumer groups also say that the fares decision should be revisited.

Darren Shirley of the Campaign for Better Transport has repeated the CBT’s call for a fares freeze, saying: ‏‘We have a railway that is not focused on its passengers' needs, and that has to change. We have long called for a fares freeze for 2019, so are pleased MPs agree that this would help restore passengers' faith in the railways.’

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Greg Tingey, London

    None of any of this has anything to do with Mister-not-in-charge Grayling, oh dear noe!
    Let's blame everyone else, except the person supposedly in charge, shall we?

  • Sam Green, York

    They should not be able to make a huge profit any way! it should be ploughed back into the railway to improve the service.They should be given enough to cover their investments and give the managers a bonus IF they perform well and the staff a good wage.They should be made to open the ticket offices and have more on train staff!
    [It depends on your definition of 'huge', but the generally accepted margin for rail franchises is no more than 3 per cent. Any more and the DfT starts to take a slice, which can be 100% over a certain figure. Go-Ahead warned in June 2016 that its predicted profits from Thameslink until 2021 had been cut from 3 per cent to 1.5 per cent as a result of rising costs. (Govia takes the costs risk in this franchise, and draws a management fee rather than keeping the ticket revenue. It is this fee that Grayling is presumably cutting.)--Ed.]

  • Chris Jones-Bridger, Buckley Flintshire

    Another day, another report. But what a coincidence that on the day the latest Transport Select Committee's report is published that the government's response to GTR should also be released. A case of news management to try to deflect from yet more criticism of the DfT and specifically the Transport Secretary? Surely not?

    The causes of May's problematic timetable are now well established and it can no longer be avoided that the disintegrated structure of the industry is the defining fault line. That the Transport Secretary is awaiting the results of yet another enquiry just reflects on the policy vacuum that exists. The ultimate fate of the Transport Secretary will probably be decided by political events outside the scope of his brief. Unfortunately history will not reflect well on his tenure at the DfT as the rail policy reversals, particularly regarding electrification, have already set the industry back several years.