Almost 20 years on from the botched privatisation of the railways, it is clear that our rail system isn’t delivering a fair deal for the taxpayer or for passengers. They’ve been left footing the bill for a system that is 40% more costly than in other European countries.
The costs of building and maintaining the tracks are too high. The costs of leasing trains from monopoly providers, who have enjoyed profits margins of over 30%, are far too expensive. A flawed franchising system has failed to get the best deal from private operators for much of this period. The privatised structure created unnecessary costs which, if tackled, could produce savings of between £450m and £1bn by 2020.
Yet, despite all the additional complexity, there is no strategic body responsible for setting the goals of the railways, planning investment and ensuring good outcomes for passengers. It’s no wonder that more than half of passengers believe they’re not getting value for money from the price of their ticket.
Against the backdrop of tough financial times and a cost of living crisis for many passengers, the rail system needs urgent reform. There are four key changes required to get a better deal for taxpayers and passengers.
First, a new strategic body for the railways which will have a strong passenger voice at its heart.
Secondly, we need to replace the existing franchising system, which is simply not fit for purpose.
Third, learning the lessons of the East Coast Mainline - where we saw the benefits of a not-for-dividend operator running rail lines – we need to change the law to allow a public sector operator to take on and challenge for new lines.
And, fourth, there must be a new legal right for the passenger to the offered the cheapest possible ticket. With all the ticket complexities, it is extraordinary that the rail companies are not obliged to do so, now.
If we do these things by 2020, we can get start to get our railways back on track.