Rail devolution and rail reform: options for the future

Before the pandemic struck, one in three rail journeys in Britain were being made on services for which responsibility was devolved in full or in part to city regions, regions and administrations in Wales, Scotland, London, the north of England, Liverpool City Region and the West Midlands.

This devolution of responsibilities for rail has been one of the big success stories on rail in recent years. One only has to look at networks such as London Overground and Merseyrail – neglected when run from the centre or as part of larger franchises, but transformed under local control and now regularly shortlisted or winners of National Rail Awards.

In fact, the Williams-Shapps reforms have paid them the ultimate compliment of seeking to emulate these contracts in the future.

Devolution has (by and large) led to more investment, higher levels of passenger satisfaction, and more reliable services. It has also helped to embed heavy rail services within wider public transport networks and within broader plans for housing, economic development and decarbonisation.

Rail is critical to so much of what city regions and devolved administrations are trying to achieve – from meeting ambitious air quality and decarbonisation targets to giving the public the public transport they want and need (one network, one ticket, one identity). All this has been well set out in reports from the Urban Transport Group – Rail Devolution Works and Rail Cities UK.

However, too often in the past, local rail services have sat outside the wider local public transport – remote and unresponsive to local need. Devolved authorities and administrations have often struggled with the complexities and high costs that have been associated with the format of the rail industry since privatisation.

For example, on station development, it can be argued that the current industry structures have inhibited any major investment and upgrades (car parking aside). And on fares and ticketing, everyone recognises the success of the London system and the inclusion of rail services in it, but it has proved difficult to emulate this elsewhere.

The reforms being ushered in by the Williams-Shapps Plan for Rail offer the opportunity to change all this – simplifying the structure of the industry and having Great British Railways with strong regional structures should help.

However, there is a risk that debates about the future shape of the railways will be inward looking, and will forget or ignore the benefits of involving devolved authorities and administrations in rail services and infrastructure.

Therefore, it is vital that devolved authorities have a seat at the table when big decisions are being taken about how Williams-Shapps will be implemented in practice.

How might devolution work in practice? Different areas will have different ambitions for the role they wish to play, depending on local aspirations and capabilities. The reforms and supporting legislation should support and facilitate a wide range of options for extending and deepening local control and accountability for both rail services and rail assets and investment.

On services, the options are:

Full control of local rail services: In this option, the contract or concession for running local rail services would be let by the local/devolved transport authority, rather than by Great British Railways.

The service levels, timetable, station staffing, and service quality standards and incentives regime would be set as part of this concession, subject to agreement on track capacity with the system operator.

The services and stations would be branded as part of the region’s integrated transport system, and fares integrated within wider local public transport fares structures. Revenue risk would be borne by the authority and operator as agreed within the concession contract.

This is essentially the system by which London Overground and Merseyrail services are provided.

Full control and direct provision of local rail services: This is like the first option, but an operating subsidiary of the transport authority would run train services (rather than operation being contracted out to a private sector provider).

This is the system now operating in Wales, and it will be applied in Scotland this year. Light rail systems such as the Tyne and Wear Metro and the West Midlands Metro are also operated (and owned) by the city region transport authority.

Joint control of local rail services: In this scenario, the concession for local rail services will be let jointly by GBR and the transport authority.

The transport authority and GBR will jointly decide service levels, branding, and oversee quality standards. Revenue risk will be shared. There could be separate point-to-point rail fares as well as zonal multi-modal fares, with revenue apportionment arrangements.

Joint management responsibility for local rail services between GBR and the transport authority: This scenario is similar to the previous option, with joint management responsibility by GBR and the transport authority, but revenue risk will stay with GBR.

This is essentially the arrangement that governs West Midlands Trains, with the West Midlands Rail Executive involved in management of the franchise, as well as for the Northern and TransPennine Express franchises, which are overseen by a DfT and Transport for the North joint board.

Buying additional services: In this scenario, GBR will let the concession for local rail services, but the transport authority will be able to buy additional services on top of the baseline that GBR has determined.

This is essentially the system that existed before privatisation between Passenger Transport Executives and British Rail.

Consultation and partnerships on local rail services: In this scenario, GBR will let concessions or agree contracts to run the local rail services, and transport authorities would be consulted on the service levels, station staffing and facilities, service quality standards, arrangements for integration with other modes, and the fares to be included in these concessions. This could also include the ability to trigger performance reviews if quality standards fall below agreed levels.

In addition, in all cases, transport authorities will want to be involved in the concession agreements for longer-distance services in their areas and on timetabling proposals generally.

On rail assets, the options for devolution are:

Devolving control and ownership of rail infrastructure: In this scenario, the transport authority would take over ownership of rail infrastructure (stations, tracks and signalling) from what is now Network Rail and will be GBR.

This scenario is being pursued by the Liverpool City Region in relation to the Merseyrail network, and has taken place in Wales where the Core Valley lines network has transferred to Transport for Wales.

It has also occurred in the past where former heavy rail routes have been converted to light rail (such as in Greater Manchester). This scenario would also allow a transport authority to let a concession for both the infrastructure and operations.

The ownership of rail infrastructure stays with GBR but management is transferred to the transport authority: Whereas the previous option entails the transport authority taking over the freehold of rail infrastructure, this scenario would be a leasehold for the infrastructure.

For example, this would allow transport authorities to take over the leasehold of local stations from private operators so that they can invest in their future, while longer[1]term asset management and protection responsibilities remain with GBR.

Rail infrastructure stays with GBR, but the transport authority invests in upgrading it: Transport authorities would use their own resources (or source other public and private funding) to pay for upgrading of rail infrastructure, the contracts for which would be let and managed by GBR.

An example is the Cornwall main line upgrade of track and signalling, with European and other funding brought in by Cornwall Council. There would be an agreement between the transport authority and GBR specifying outputs and delivery dates, with penalty clauses if these were not met.

Most rail infrastructure stays with GBR, but stations transfer to the transport authority: This scenario was proposed by Transport for Greater Manchester, which argued that it could make better use of stations and the surrounding estate than would be the case if they stayed with Network Rail. Development rights would transfer to the LTA, although some gainsharing arrangements with GBR could be agreed.

Bespoke station investment/ upgrade deals: In this scenario, investment packages for individual stations would be agreed under bespoke arrangements.

In some cases, the LTA might take ownership of the station to more easily facilitate additional funding. In other cases, GBR might retain ownership but would have a joint investment agreement with the LTA which would bring in funding to upgrade it.

Agreed long-term investment strategies for local rail: In this option, transport authorities would agree with GBR a long-term investment programme for lines and networks in their area.

This could be used to shape rail programmes for transport authority-controlled funding streams, as well as the decarbonisation targets to be set in Local Transport Plans. Such strategies should also form part of the 30-year Whole Industry Strategic Plan.

Where transport authorities are taking on responsibilities for rail provision formerly undertaken by national government, that funding would also need to be devolved.

More widely for all of these options, there will need to be financial transparency by GBR, so that transport authorities have a clear view of the costs allocated to their local rail services. This will also provide transport authorities with a robust basis for sourcing any additional local public or private funding to support enhancements and improvements.

City region authorities and devolved administrations are keen to play their part in making rail reform a success and in supporting the rail industry. The options set out here are intended to help discussion on how they can be involved.

Stephen Joseph is a transport policy consultant and adviser to the Rail Devolution Network. This article is adapted from Making rail reform work for people and places in the city regions, a statement from the Urban Transport Group

This article originally appeared in Rail Magazine.

Click below for a PDF of the article.

Bus cuts close doors onto the world

‘It’s like a forgotten world. It makes you feel depressed…we’ve got bus passes – that’s brilliant – I feel like framing mine…But no bus services to use them on. We’re on an estate surrounded by main roads. The whole of life is out there but we can’t access it.’

COVID may have changed the context for bus services but bus cuts still aren’t victimless or without consequences. It’s just that (as with past waves of bus cuts) those who are most affected by them don’t have much clout or visibility. They were marginalised already and bus cuts marginalise them even further. A few years back we worked with CBT and the Ecorys consultancy to look at the affects on two sample places (the Burbank Estate in Hartlepool and Marchwood in Hampshire) of losing their bus services. Re-reading the reports now the overall sense you get is the way that bus cuts close down both specific opportunities and how, more widely, they wall people into living more lonely, restricted and stigmatised lives. There’s a dimming of the lights. A closing of doors onto the world. Which all comes at a cost – in poorer physical and mental health. In missed life chances.

‘Needed the bus to travel into town and often caught connecting bus to daughters and vice versa so don’t see as much of each other now. Feel totally isolated – I have problems walking, get short of breath and use a stick.’

“I want to be independent and it’s not allowing me to be independent. If you put yourself in my shoes, I’m not able to drive and I have health reasons as well…it’s not a very nice situation to be in when you know your children want to go and do something and you have to say ‘no I’m sorry I can’t get you there because there isn’t a bus service.’

These are the voices that remind us that buses are a key public service relied upon by those with the least. They remind us that whilst buses should be in the aspirational business of getting modal shift from the car for ‘people like us’, they are also there so that millions of people on low incomes, who don’t have access to a car in the first place, can get out of the house. And without a new funding deal for bus there will be many more people whose lives will be narrowed by the loss of their bus service.

Our latest report on bus funding (produced for us by Steer, and using our Metropolitan Bus Model) found that the number of bus passengers in city regions outside London could be up to 30% lower than before the pandemic. A hit of “similar magnitude” to the direct impact which COVID-19 itself has had on demand. The report also found that over a quarter of city region bus services could be lost. The report concluded: ‘Around half of all bus users are dependent on bus for their travel. The young and the elderly have the highest propensity to use bus, as do people in the lowest income quintile. A reduced bus service means that some of these people will have no viable travel alternative. A smaller public transport network means that remaining bus users will have reduced access to jobs, education, health and leisure activities, which will have knock-on negative impacts to the economy. Higher fares will make them worse off financially at a time when people are also facing higher gas and electricity bills and food price inflation.’

The report was picked up in The Times – part of the wider and welcome traction that bus cuts now has in the national and mainstream media. A level of interest that is probably greater than buses have had for many years. However, there’s a danger that we are now getting locked into a narrative which in effect about pushing back the point (measured in months) at which additional COVID funding will end and we get back to ‘normal’ on funding. The problem with that is we need to get real about the order of magnitude increase in subsidy that will be needed if COVID’s legacy isn’t going to be more than a particularly savage episode of the normal pattern of bus network and patronage contraction. Because if we go back to what level of revenue support we had for bus pre-COVID then that pretty much guarantees more decline of bus networks (given that’s what it bought us before).

To even return to pre-COVID levels of patronage will require a substantial uplift in pre-COVID levels of subsidy – and to get to Bus Back Better nirvana you are looking at a further substantial uplift again. You want high quality bus services everywhere then take a look at the subsidy levels that those European countries that have them are providing. It’s based on something entirely different to the low subsidy and high fare model we have in the UK.

You want to find the money to do this – then there are some magic money trees available. For example DfT could ask National Highways to give back the one they gave them for the zombie national road programme. But a long term higher subsidy model for bus doesn’t suit incumbent monopolies – as it would lead to more expectations of public influence. And it doesn’t suit the Treasury – because they don’t like revenue subsidies (especially much bigger ones). So instead an emerging narrative is that if we are going to career over the end of COVID funding cliff edge at some stage anyway then we might as well be grown up about it, face up to reality (in a sorrowful but professional way) and get on with the cuts now.

And for those who are squeamish about the thought of another round of bus network cuts, or uncomfortable with the dissonance with Bus Back Better, then don’t worry. Once the ship has steadied after COVID buses will get a shot in the arm from spending that flows from Bus Service Improvement Plans and City Region Sustainable Transport Settlements which will drive up patronage. So look on the bright side – these cuts might only be temporary. They might. But somehow I doubt it. After all it’s much more difficult to build back services and patronange after its’s been trashed than if it had been sheltered from the storm in the first place.

A more rational and credible approach would be to maintain networks for a longer period whilst firstly it becomes clearer what the fall out from COVID is for travel patterns (at present we are still at the guessing rather than knowing stage). And secondly to give time to move to a reformed and long term funding settlement for bus. This would also allow more time for the benefits of upcoming capital investment in bus to take effect.

But whatever happens next it should be based on a recognition that cuts have consequences for those with the least. That the people who use bus services matter.

‘It does make you think that you are reliant [on buses] and you could get quite down about it… I feel frustrated and a bit sort of left out. People like me in my situation or the elderly…don’t really matter… I know that one person doesn’t matter to them but really that one person does matter, everyone matters.’

Jonathan Bray is Director at the Urban Transport Group

This blog originally appeared in Passenger Transport magazine

Waters isn’t willing to go with the flow

Small countries can do big things on transport – look at the public transport paradise of Switzerland. And when Rhodri Morgan was in his pomp in the early years of the Welsh Assembly it felt like Wales was about to forge its own path. But without that drive from the top, there was a sense that there had been a retreat into the governmental comfort zone of caution and ‘responsible’ inertia. Not any longer. A freeze on road building, modal shift targets, talk of road user charging; whilst other parts of the UK are studiously deferring and avoiding the tough decisions dictated by the climate crisis – Wales is starting to take them on.

The man leading the charge on transport is Lee Waters – the deputy minister for climate change in Wales – who I recently interviewed as part of our series of lunchtime Urban Transport Next events and on who this article is based.

The first indication that something significant was changing in Wales was the Welsh Government defying the UK Government to cancel the M4 Relief Road. Lee said: “Just as important is what happened next. The South East Wales Transport Commission, led by Lord Terry Burns, former permanent secretary of the Treasury, produced a report that looked at alternatives to tackling congestion without building a motorway and that has just been endorsed by Sir Peter Hendy and his Union Connectivity Review.”

The M4 Relief Road decision has been followed by a wider moratorium and review of road building in Wales. Lee says this doesn’t mean there will never be another road built in Wales again but it’s sending a signal to the system that Wales is not doing what has always been done – and that road building shouldn’t be the default or the easy option. It’s also part of a wider ‘new path for Wales’ transport strategy which aims to walk the walk as well as talk the talk on decarbonisation: “The strategy says the right things but what are we going to do about it? And that’s why we have instituted the roads review, freezing all road building programmes, because unless the handbrake is applied the system will keep doing what the system did.”

The transport strategy has some other eye catching elements – including targets for a reduction in car use and for increased modal share for public transport and active travel. Achieving this will require a public transport system that can respond to this opportunity.

On rail, Lee is unhappy that although the Welsh Government now controls rail services in Wales, they don’t control spending on the majority of rail infrastructure. Lee says the UK Government is not giving Wales its fair share of spending on rail: “We have something like 12% of the track in the UK, 5% of the population and about 2% of the rail spend.”

However, the South Wales Metro is an exception where a remarkable transformation is now underway on both trains and tracks: “I think what is really innovative for us is the tram-combination. It will be on road in bits of Cardiff. It will start to really shift perceptions as to what public service is, what it looks like, how attractive it is.”

It has always struck me that the Valleys are a prime example of the case for fully integrated public transport where bus services could feed into railheads which can provide rapid linear services into the heart of the cities in South Wales. Lee agrees. “To get truly joined up, integrated transport we need franchising. We don’t yet have that. We will be introducing a white paper next year. And a Bill to pass Welsh legislation to create a franchising system in Wales so we can move towards one timetable, one ticket, one fare. That is a crucial part of making sure the Metro achieves its potential.”

He goes on: “I do think the commercial bus industry has been very effective at kicking sand in our eyes in developing these various different partnership models which essentially are designed to buy time and to keep the status quo. But the status quo is broken. So, having seen the difficulties Manchester have been having in implementing this, and how long they have taken, and that they have more resource than most of our authorities, it has made us realise we need to take a different path. So, before the election we were going down the partnership model route and now we are changing direction… we are now co-producing with Welsh local authorities a different model where we use Transport for Wales as a centre for strategic expertise… but we co-produce, genuinely, with local authorities how that works in practice.”

He continues: “Through that different approach hopefully we can get action faster than some of us have been able to do through the current legislation.”

There’s more to come on roads too – including a default 20mph speed limit for residential roads, a big shift to active travel and, intriguingly, the strategy also talks of establishing a framework for equitable road user charging. On active travel he says that progress so far has been a ‘curate’s egg’. He namechecks Cardiff as somewhere that “has showed bold leadership, reallocating space from cars into active travel, putting resources of their own in”.

He continues: “We are going to reward boldness so if Cardiff has got ambition… then we will overfund Cardiff and defund somebody else… and I hope that will show an example to others.”

On road user charging, he says: “I am bold, not stupid, so what I am not going to do is something that is counterproductive, so it is all about the timing. So, my feeling is we need to put in place first some of the changes which show there is a practical alternative to the car.”

Lee is a student of politics and of how things get done. He’s seen it from all angles. “I viewed the ring from different seats in the auditorium as a political speech writer, political journalist, campaigner, as a policy wonk, as a back bench member of the parliament and now as a minister. It is fascinating comparing those different points of view and understanding how to make the system move.”

He quotes Nye Bevan on how the coattails of power are always disappearing round the corner. He says: “Having chased the coattails of power constantly I am privileged to have the chance to be the transport minister in Wales but clearly I don’t hold all the levers.”

He’s well aware of the potential for backlash. “We have seen through the anti-vax movement there are going to be at least 20% of people who are going to be obdurately opposed to this, as there always is. I was struck by some clip I saw on YouTube the other day – vox pops about when seatbelts were introduced in America. The stuff people were coming up with, was exactly what people are saying on vaccinations today. We are getting it about 20 mile an hour speed limits as well. This feeling of authority taking away their liberties and freedoms and telling them what to do. That cannot be dismissed or minimised as a political force or be capitulated to, but we cannot ignore it.”

Alongside that, there’s the capability, capacity and enthusiasm of officialdom throughout Wales to pursue such a radical agenda, and the attitude and influence of a UK Government which Lee says is stuck in the road building past.

He says he finds the job “exhausting” but “having just come back from COP, the science is terrifying. Transport accounts for 17% of emissions. Transport has been given a free ride for too long in playing its part in bringing those emissions down. That has got to change”.

At the end of the interview, I ask Lee whether he really can change the way Wales travels? “I don’t know but I am going to give it a bloody good try.”

Jonathan Bray is Director of the Urban Transport Group

This article originally appeared in Passenger Transport magazine

Listen to the Urban Transport Next podcast with Lee Waters, or watch back on YouTube