Why fewer everyday commuters are using the railway in Britain

6pm on a winter weekday at London Bridge Station, several passengers wait for the departure platform of their train to be displayed. Some of these passengers aren’t looking on the display board though, they are looking at their phones and tablets on a website – not the Train operator or Network Rail (the company that manages the railway tracks, signalling and other infrastructure) but another website called Open Train Times [1]

When asked why they were looking so keenly on the website they explain that they have a 90 minute journey home and the train they take is always over crowded. The website let’s them know where the arriving train will arrive by showing the signalling outside the station. A 60 to 90 second advantage in knowing where their train will arrive and then depart from gives them that critical advantage of positioning themselves on the right platform so that they would get a seat on the train.

Crowded Trains, are more people using the railway?

Not really, there has barely been any overall growth (under 2% annually) in the total number of passengers on existing lines. And the number of journeys in Q2 2017-18 made using season tickets fell to its lowest since Q2 2010-11, with 15 million fewer journeys made compared to this time in Q2 2016-17. [2]

Season ticket holders abandoning trains, why would that be?

Firstly, fare rises have been higher than wage growth. Here are the fare rises in the last decade,

2008: 5.1%
2009: 6%
2010: 0%
2011: 6.4%
2012: 6.2%
2013: 4.2%
2014: 3%
2015: 2.4%
2016: 0.8%
2017: 1.9%
2018: 3.6%

Plus the quality of service is poor. The consumer group Which? [3] recently found that only 28% to 64% of customers were satisfied with the service their train operator provided. And the trains are not on time. The proportion of trains Cancelled or Significantly Late (CaSL) in the year ending 2017-18 Q2 was 3.5% (CaSL MAA) [4]. The London and South East sector recorded its second highest Q2 CaSL rate (3.9%) since the records began in 1997-98. Trains often run at double the capacity [5]. Further, sometimes, some trains are delayed every single day. [6]

But why wouldn’t everyone still take the train, it is subsidized, isn’t it?

Train Operating Companies Subsidy 2014-17

Yes, it is. And even though the government claims that passengers pay more than ever in terms of percentage of railway costs, total subsidy in absolute terms is still increasing.

And most of this subsidy goes to foreign state-run companies.

Train Operating Companies Subsidy (2016/17) and Ownership

The Germans, the Dutch, the French and all other state run companies just love Britain’s railways. It helps them subsidize fares in their own country. Fares in Britain are up to 5 times more [7] that of other nations in Europe.

Quoting the annual report from German state run Deutsche Bahn,
“In April, DB Arriva took over the Northern Rail transport contract in Great Britain, which has been operated by Arriva Rail North since then. The transport contract covers rail transport in Northern England with annual volume produced of about 50 million train kilometers. This equates to about one-third of all the transport contracts put out to tender in Germany in 2015 and is more than three times larger than the biggest German tenders to date. The contract has a nine-year term with the option of a one-year extension. Winning the Northern Rail tender increases DB Arriva’s share of the British rail transport market from 14% to 23%, making it one of the biggest providers in the British market”. Deutsche Bahn had an EBIT of €1.9 bn in 2016.

But for the real reason, let’s quote this from the annual report from Dutch state run Nederlandse Spoorwegen which owns Abellio.

All of Abellio’s franchises in the United Kingdom are expected to be profitable over their contract periods. Abellio UK is currently the fourth largest owning group in the UK, with an annual turnover of €1.9 billion in 2016 (including joint ventures).”

Nederlandse Spoorwegen had revenues of €3.2 bn in its home market, €1.9 bn in the UK and €180 mn in its only other market which is Germany in 2016.

Even railway concessions are foreign run and subsidized.

Rail Concessions Subsidy (2016/17) and Ownership

Here are how the upcoming Franchise bids look like

West Coast + Initial High Speed 2 Services (from 2026)

Current operator: Virgin Group (UK) and Stagecoach (UK)
Bidders:
1. First Group (UK) and Trenitalia (Italy)
2. MTR Corporation (Hong Kong) and Guangshen Railway (China)
3. Virgin Group (UK), Stagecoach (UK) and SNCF (France)

Southeastern

Current operator: Go-Ahead Group (UK) and Keolis (France)
Bidders:
1. Go-Ahead Group (UK) and Keolis (France)
2. Trenitalia (Italy)
2. Abellio (Netherlands)
4. Stagecoach (UK)

Bids won, operations yet to commence

Crossrail (Rail Concession)
Winning Operator: MTR Corporation (Hong Kong)

The bigger problem: Operators just don’t care – the Southern Rail saga

Those passengers we wrote about on London Bridge Station travel on a service of Southern Rail operated by the train operating company (TOC) Govia Thameslink (GTR). The operator itself is owned by the Go-Ahead Group (UK) and Keolis (70%-owned by the SNCF – French National Railways Corporation). The GTR contract was awarded in 2014 and Southern become part of the operator franchise in 2015. GTR is the biggest operator by passenger miles travelled in the UK.

The operator has suffered over 40 days of strike action since taking over with different strikes from train drivers and (former) train conductors. The impact was so severe that people lost their jobs, businesses had to close, property prices dropped in the areas served by the operator [8][9] and commuters missed seeing their children every evening for days [10].

The strike action began as the operator wanted to replace on board conductors with a new role called on board supervisors – the same people but without the safety critically part of the role. That meant that the trains could operate as Driver Only and the driver had to manage the closing and opening of the train doors. All well to call it progress but how did the saga end? Actually it hasn’t fully ended, we will tell you why. Firstly, the Railway Minister, Transport Secretary, the CEO of the company and the Passenger Service director all kept their job. What about the striking drivers and conductors? They were compensated by their union for loss of pay during strike days. The drivers held several ballots for calling off the strike action with the Union recommending a new deal but the drivers kept rejecting it. Eventually, with a 28.5% pay rise deal over 5 years merged with everything else (i.e. driver operated trains), a new agreement was agreed [11]. What about the conductors? They are technically still striking (on other routes as well – same union). But they had to agree to a small one time sign up financial incentive [12] and most agreed to the new role. Who lost out? Only the commuters lost out. Government spending watchdog the NAO said GTR had too few drivers when it was awarded the Thameslink, Southern and Great Northern franchise. They also said it was poor value for money. The GTR contract was tendered as a gross contract, meaning that passenger revenue risk is retained by the Government and any subsidy received is based on the gross costs of the contract.

And commuters continue to lose out. Southern increased daily and weekly parking charges (on top of fare rises) at its 140 stations by an average of 4.5% at the start of 2018. The same parent company runs South Eastern who also put up parking charges at the start of 2018 and introduced charging for car parking at some stations where it used to be free.

Southern now says passengers should ideally let them know 24 hours in advance if they need assistance while travelling on their trains. Speak to their managers and they say they are enhancing “facilities” at stations. What they have done is refurbished waiting rooms which is good, but these are only generally open while stations are staffed. Why not spend that money to introduce step free access instead? It would get more people to travel on trains. Step free access at all stations would help wheel chair users, buggy users and the elderly.

Commuters travelling to and from London have little option. They have to suffer the highest prices and most delays [14]. Whatever the government statistics say, the delays aren’t going away. Train timings are changed (extended) to make the numbers look better. For those who are really interested in seeing how trains in the UK are performing with regards to punctuality we recommend you have a look at the site Recent Train Times [15]. It is a brilliant site that gives you accurate statistics recorded by Network Rail.

Train operating firms paid out £74m in total to passengers in compensation for delays in 2016-17, a rise on the £45m for the year before. Only a small proportion of passengers claim compensation, we are sure passengers would rather have a better service than compensation for a poor service.

“The only way of catching a train I have ever discovered is to miss the train before.” – G.K. Chesterton

References

[1] http://www.opentraintimes.com/
[2] http://orr.gov.uk/__data/assets/pdf_file/0013/26212/passenger-freight-performance-2017-18-q2.pdf
[3] http://www.bbc.co.uk/news/uk-england-42707560
[4] http://orr.gov.uk/__data/assets/pdf_file/0013/26212/passenger-freight-performance-2017-18-q2.pdf
[5] www.bbc.co.uk/news/uk-england-sussex-40744856
[6] http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/11339623/Britains-worst-train-service-Southerns-7.29-Brighton-to-London-train-was-late-every-day-for-a-year.html
[7] https://www.theguardian.com/money/2018/jan/02/rail-unions-and-labour-condemn-staggering-annual-fare-increase
[8] https://www.mortgageintroducer.com/southern-rail-strikes-dampened-local-property-markets/
[9] http://uk.businessinsider.com/southern-rail-strike-chaos-slows-house-price-growth-across-network-2017-1
[10] http://www.bbc.co.uk/news/uk-england-38161935
[11] http://www.bbc.co.uk/news/uk-england-41912490
[12] http://www.theargus.co.uk/news/14779934.Accept___2k_or_risk_losing_your_jobs__Southern_Railway_conductors_are_told/
[13] https://www.southernrailway.com/travel-information/travel-help/assisted-travel
[14] https://www.standard.co.uk/news/transport/revealed-uk-s-five-leastvalue-rail-trips-are-all-to-or-from-london-a3625781.html
[15] http://recenttraintimes.co.uk/

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