The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, with the leave of the House I shall now repeat the Answer to an Urgent Question in the other place given by my right honourable friend the Minister of State for Transport Decarbonisation. The Statement is as follows:
“Thank you, Mr Deputy Speaker. As you may be aware, the Minister of State continues to represent His Majesty’s Government in Poland to support UK train companies, among others, at a major international trade fair. I will be replying on his behalf.
The department has awarded a national rail contract, an RNC, to First Trenitalia, or FTI, to continue to operate the west coast partnership, providing west coast train services as Avanti West Coast, or AWC. The NRC will have a core term of three years and a maximum possible term of nine years. After three years, the department can terminate the contract at any point with three months’ notice.
In October 2022 and March 2023, the department approved the award of short-term contracts for First Trenitalia, operating as Avanti West Coast, to continue to operate services on the west coast main line. Awarding short-term contracts allowed the department to monitor progress by AWC in improving performance, following the withdrawal of rest day working, before considering whether it would be appropriate to award a long-term contract. Avanti’s performance has improved during this time significantly and, taking into account other relevant considerations, the Secretary of State has decided to award a longer-term contract, as announced in today’s Written Ministerial Statement.
Over recent months, Avanti has made significant progress in recovering from the poor reliability and punctuality delivered in the first half of last year. In line with its recovery plan, and since the introduction of its recovery timetable in December 2022, performance has steadily improved, with cancellations attributed to Avanti West Coast falling from 13% in early January 2023 to as low as 1.1% in July 2023. Over 90% of trains now arrive within 15 minutes of their scheduled time—an improvement from 75% in December 2022”.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the Minister for her very prompt letter, which she sent today, setting out the details of this contract. But I am sure that beleaguered passengers on the failing west coast rail services must have been baffled to see the companies that run them being rewarded for that failure with lucrative government contracts.
The latest ORR rail performance stats from August 2023—only a month ago—confirmed that Avanti West Coast is the second worst performing operator in the country for punctuality of rail services, with only 48% of its services on time. It also had the most complaints of any operator. CrossCountry, which has also seen its contract extended, was the fourth worst performing operator, with only 51.4% of its services on time in August 2023, compared with the national average of 70%. Can the Minister tell us what has been built into these new contracts to ensure that Avanti and CrossCountry do not continue to fail passengers and yet see themselves and their shareholders continue to be rewarded?
Baroness Vere of Norbiton (Con)
Of course, there will be various elements that are set out in the contract and are a commercial matter. I felt that the noble Baroness did not give quite enough credit to Avanti for the amount of improvement we have seen since the removal of rest day working with no notice back in July 2022. But let us not look at the industry performance scores; let us ask passengers. The net advocacy scores for Avanti have improved enormously, from minus 42 in January to plus 17 in April and plus 10 in August. Passengers and the Government are seeing the improvement in Avanti and that is why we awarded it this contract.
Baroness Randerson (LD)
My Lords, what is not a surprise about this is that the Urgent Question and announcements about train services have come on the last day the House of Commons is sitting before a recess; that is a pattern. My concern about these two contracts is that, although there has been an improvement with Avanti, as the Minister has said, there has been every incentive for it to improve in the short term in order to save its skin—if I can put it that way. Now it has this contract, there will be effectively no incentive for it to keep up that level of improvement, because Avanti has shown over many months that it finds it very difficult to deliver.
So what incentives are there within the contracts to these two companies, Arriva and Avanti, to maintain their improvements? These contracts seem to leave all the financial risk with the Department for Transport. Have the Government built in any additional safeguards for improvement, given the history behind this? Is there any chance that in future the Government will review the way in which they give contracts, so that we do not have this approach, which enables companies to underperform over such a long period?
Baroness Vere of Norbiton (Con)
I am content that the Avanti contract has gone through all the relevant processes. It has been structured such that there is an initial three-year period, which I think is right, to enable Avanti to provide the investment that is clearly needed. That investment is in driver training and rolling stock. I am sure many noble Lords have noticed the upgrade in Avanti trains when they have travelled on them recently; I find them very comfortable indeed. There is an ability after three years for the Government to give three months’ notice. Within that intervening period, senior officials from the Department for Transport will meet management on a weekly basis to make sure that the recovery plan and all the elements the new management has put in place are being followed.
There are also enormous incentives for Avanti to improve—£14.3 million-worth of incentives. That is what the performance-based fee is; if Avanti does not hit its targets, it will not get that fee. It is absolutely right that that is there, it will incentivise Avanti and we will work alongside it so that it can continue to improve its performance.
Lord Snape (Lab)
My Lords, would the Minister accept that I am one passenger on Avanti trains who is completely baffled by this decision? I do not wish to rain on the noble Baroness’s parade, but when you have been at the bottom of the league table for punctuality and cancellations for as long as Avanti trains has, the only way is up. Could the Minister tell the House which other train operating companies expressed an interest in this particular franchise? Is it the case—as I suspect—that none of them did, largely because most rail managers are fed up to the back teeth with the micromanagement by her department or, even more likely, by the Treasury?
Baroness Vere of Norbiton (Con)
Actually, this is exactly what this contract is trying to achieve. By giving a three-year horizon for Avanti management to properly plan, it will not be necessary to micromanage Avanti. The Department for Transport will continue to support it and, as I said in my opening Answer, the net advocacy scores show that customers are supportive of Avanti. I am sorry that the noble Lord is not, but the numbers speak for themselves—and these are customers speaking and not the Department for Transport.
Lord Wigley (PC)
My Lords, does the noble Baroness appreciate that Avanti avoided cancellations and late running on the north Wales coast to London line this summer by cancelling and changing the timetable and only running trains from Holyhead to Crewe? Will she ensure that Avanti’s performance is measured in future on a dual basis—between Holyhead and London on the one hand, and the rest of the service on the other?
Baroness Vere of Norbiton (Con)
I will certainly take that back to the department. I think the noble Lord will also be aware that Avanti made some timetable changes over the summer. They were very short-term and over a fixed period. That was due to industrial action—sadly—and the annual leave burden.
Lord Beith (LD)
My Lords, does the contract place any requirement on Avanti to close station booking offices or will it be expected to take proper account of the vast opposition raised in the consultation process?
Baroness Vere of Norbiton (Con)
Avanti, like all train operating companies, is working with its stakeholders and Transport Focus and London TravelWatch on the responses to the consultation to its proposals. The results of that will be forthcoming soon.
Lord Berkeley (Lab)
My Lords, there have been many reports of quite severe overcrowding on some of the CrossCountry services to the south-west in recent months. Can the noble Baroness explain whether any extra capacity is planned? I believe quite a few of the trains have been scrapped. What kind of new rolling stock will there be and will there be more capacity? This is a very important route. It is the only intercity route that does not go to London and one begins to suspect that, because Ministers do not take much notice of it, it gets the worst rolling stock. I hope the noble Baroness can give me some comfort.
Baroness Vere of Norbiton (Con)
The department is well aware that there is some overcrowding on CrossCountry routes. We are considering options, with CrossCountry, on the size of its future fleet. This will be balanced with the interests of taxpayers, given the financial pressures.
Lord Faulkner of Worcester (Lab)
My Lords, I declare my interest as chairman of the Great Western Railway stakeholder board. GWR is of course a FirstGroup member, so it is proper that I should declare it. I thank the Minister for the letter she sent earlier today. In that letter, there is no reference anywhere to Great British Railways. How does the new contract for Avanti fit in with the Government’s plans for Great British Railways, or is it the case that GBR is not going to happen?
Baroness Vere of Norbiton (Con)
Many national rail contracts are already in place. Eventually, in due course, the Government would like to move to a different sort of passenger service contract. There is nothing out of the ordinary with this contract. It compares well to those of other train operating companies.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, in response to questions from my noble friend Lady Taylor and other noble Lords, the Minister talked about passenger satisfaction statistics. Can she say a bit more about the datasets behind these? What is the dataset? Who collected it? What was the sample size? I find these are often very small. I appreciate that the Minister may not have the information with her, but perhaps she could write to me and to other Members of the House with these details.
Baroness Vere of Norbiton (Con)
I will happily write to the noble Lord and to all Members of the House with an interest in this to set out how the net advocacy scores are calculated. Unfortunately, I do not have the information to hand.
Baroness Bennett of Manor Castle (GP)
My Lords, in the other place, the Government were asked about the criteria for the contract decision. The response was that it was a commercial matter. Does the Minister acknowledge that this is a major problem with our privatised railways if we cannot know what is happening because it is all hidden behind commercial confidentiality? I have another question, which perhaps the Minister might be able to answer more positively. What consultations did the Government have with the Scottish Government, local councils and mayors of places along the routes affected? What input did they have into this decision? I should declare my position as a vice-president of the LGA.
Baroness Vere of Norbiton (Con)
At the end of the day, we have to be able to balance the need to get the best contract and the need for parliamentary scrutiny with the need to protect some elements of contracts because they are commercial matters. We try to publish as much as possible. We believe in transparency. Where we can, we make some information available without it being commercially sensitive. One of the best outcomes of scrutiny is performance. This has improved over time and will continue to do so. I believe this is the best way to hold the operator and the Government to account.