Rail Franchises: Govia Thameslink

Baroness Sugg Excerpts

Tuesday 16th January 2018 Lords Chamber

[Baroness Randerson]

To ask Her Majesty’s Government what action they are taking to ensure improvements in the performance of rail franchises run by Govia Thameslink Railway.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, passengers on this route have not had the level of service they expect or deserve, and we are sorry to them for the disruption that has been caused. We are working closely with Govia Thameslink Railway and Network Rail to deliver a better service to passengers through a range of actions. We have invested £300 million for Network Rail to improve infrastructure resilience, and agreed a £13.4 million package with GTR to pay for key passenger improvements.

[Baroness Randerson (LD)]

Last week’s NAO report is a woeful catalogue of government errors, including the failure to assess the impact of potential industrial action, the failure to ensure enough drivers and a contract structure with no incentive to avoid strike action. The £13.4 million financial settlement the Minister just mentioned is judged by the NAO to remove the incentive for Govia Thameslink to improve. In the light of that judgment, can the Minister explain how and why things will now improve? Can she promise us that passengers’ interests will be put absolutely at the centre in future franchises?

[Baroness Sugg]

My Lords, we broadly accept the recommendations of the NAO report. We accept we have made mistakes and are learning lessons. I assure the noble Baroness that we will put passengers at the forefront in our future franchising decisions. We are listening to passengers and acting on what they tell us. We are opening public consultations as part of the franchising process and will use the responses to inform our decisions.

[Lord Berkeley (Lab)]

My Lords, could the Minister explain one thing in the National Audit Office report? It said that the timetable that the Department for Transport agreed could not, according to Network Rail, be operated and that it was trying to put too many trains on the line. I understand there is the same problem on the east coast main line, which is why things have gone wrong there. When will the Government look at the timetables, with Network Rail, before they let franchises?

[Baroness Sugg]

My Lords, the department did take National Rail’s views on feasibility into account. As part of the evaluation of the bids for this franchise, and indeed all franchises, we look at National Rail’s concerns. It had concerns about all of the bidders’ timetables propositions in this instance, although Govia’s proposition had a lower risk rating than other bidders. Network Rail said that the proposed timetable needed more development at the beginning of the franchise, and we agreed with that. The Thameslink timetable was some years off, and the project, as the noble Lord knows, was a complex one. We always accepted that more work would need to be done, and we have been working with Network Rail to finalise the timetable. I agree with the noble Lord that we need to work more closely with Network Rail to make sure that the timetables can be delivered in the future.

[Lord Clark of Windermere (Lab)]

My Lords, in light of the Carillion fiasco that we are facing now, it seems to me that the Government changed their strategy in the last round of franchises, in that they encouraged a smaller number of companies, with subsidiary companies running the actual franchises, as highlighted in the NAO report, whereas Govia Thameslink covers a number of companies. It also applies to Arriva in the north. We had a situation with the Lakes line where there were no trains over five years old, whereas with Northern Rail there are no trains under 30 years old.

[Baroness Sugg]

My Lords, we are investing heavily in rolling stock, and passengers in the north will see new trains rolled out across all the lines. We have set out changes in our rail strategy on how we will approach rail franchises to ensure that we get the best of both worlds. The new model will keep the benefits of privatisation while maintaining vital infrastructure in public hands and preparing our railways to meet the challenges of the future. This large franchise was designed to deliver Thameslink. We are actively looking at the size of that franchise and expect in future to split it up into smaller franchises that can better deliver what passengers need.

[Lord Vinson (Con)]

My Lords, all over the world railways run at a loss, largely to do with the fact that track maintenance costs are inherently high and very difficult to manage. High Speed 2, if it is ever built, will run at an enormous loss. Does the Minister agree that, without the profit motive, any nationalised railway would run at even greater losses?

[Baroness Sugg]

I agree with my noble friend. The privatisation of passenger services has helped to transform our railways, with private sector competition delivering innovation and private investment. As I said, the changes in the rail strategy that we have announced will improve the franchising process.

[Lord Bradshaw (LD)]

Would the Minister go back to the answer to the previous question that she was asked? The splitting of this franchise into two is probably not a good idea. I worked on the original Thameslink franchise, and the idea was to connect north and south London under one management with one railway. Any splitting of the franchise would waste money on management and undermine the productivity of train crews. I ask her to think very carefully about what she has just said.

[Baroness Sugg]

I reassure the noble Lord that we will be considering this very carefully. I will certainly feed his comments back to our new Rail Minister.

[Lord Tunnicliffe (Lab)]

Does the Minister accept that it is the duty of the Department for Transport to assure itself that bidders are capable of delivering? If the answer is yes, why has it failed on so many occasions?

[Baroness Sugg]

I agree with the noble Lord that it is indeed the DfT’s responsibility to ensure that bidders can deliver. As I say, we have looked carefully at the NAO report and will be learning lessons from it. There are a number of reasons why passengers have suffered disruption on Southern, such as infrastructure works and the process of introducing new trains. However, I want to be clear that the main cause of the widespread disruption in this case was union action. We have seen an unprecedented 39 days of strikes by the RMT, which have directly led to the terrible time that passengers have experienced. Until the RMT calls off its strikes, passengers will continue to suffer.