Committee of Public Accounts


Press Notice No. 34 of Session 2003-04, dated 27 July 2004


THIRTY-FOURTH REPORT: STRATEGIC RAIL AUTHORITY: IMPROVING PASSENGER RAIL SERVICES THROUGH NEW TRAINS (HC 408)

Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today the difficulties faced in bringing new trains into service epitomised a fragmented rail industry lacking real leadership and, following the Government's rail review, it is the Department for Transport that must now take the lead and ensure that reliable new trains are introduced on time.

Mr Leigh was speaking as the Committee published its 34th Report of this Session, which examined the passenger benefits and reliability of new trains, the barriers to their successful introduction and the Strategic Rail Authority's leadership of the industry.

Since rail privatisation in 1996, the 25 Train Operating Companies (TOCs) that provide passenger rail services under franchise agreements with the Strategic Rail Authority (SRA) have ordered over 4,500 new vehicles worth some £4.2 billion to meet a statutory requirement to take all (some 2,000) of the oldest slam-door vehicles out of service by December 2004, meet their franchise commitments to improve the quality of passenger rail services, or for commercial reasons. Several organisations are involved in getting a new train into service and there is a range of contractual and quasi-contractual relationships between them. Three rolling stock leasing companies (ROSCOs), owned by banks, have funded the purchase of the new trains and own them. ROSCOs lease them to the TOCs, and receive lease charges from TOCs' passenger fares and from the £1 billion annual subsidies TOCs receive from the SRA. Under Directions and Guidance set for it by the Secretary of State for Transport, the SRA is required to ensure that rolling stock is available for passengers to travel in appropriate modern standards of comfort and safety.

The Committee found that the SRA should require TOCs and ROSCOs to work more closely with manufacturers and passenger representatives to take account of the features and facilities that passengers need in the design of new trains. New trains have not always met the needs of passengers, including providing full accessibility to those with disabilities.

To facilitate the more timely introduction of new trains, the SRA should require TOCs to agree with all the parties involved in introducing a new train fleet a realistic programme and timetable for bringing the trains into service. Protocols for sharing essential information and agreements on completing key stages within an agreed period of time would also support more timely introduction by ensuring that the various bodies' commercial interests are more closely aligned.

The SRA should specify in its franchise agreements with TOCs reliability levels that new trains must meet. The SRA does not have any enforceable reliability targets in its franchise agreements with TOCs, limiting its ability to secure passenger compensation for the poor reliability of many new trains. And, in turn, the SRA should require TOCs to include reliability targets in their agreements with the ROSCOs or other firms responsible for maintaining new trains.

The SRA should work with the rail industry to streamline the complex process for introducing new trains. The industry does not share a common understanding of the process and this, together with its complexity, brings delays and contributes to the poor reliability of new trains. The Government should use the opportunity of its review of the industry to reduce the number of organisations involved in introducing new trains. The industry should develop standard classifications of vehicles and route categorisations as the basis for vehicle and route acceptance procedures.

In conjunction with the Office of the Rail Regulator, the SRA should require Network Rail to compile complete, accurate and up to date information about the network to meet the needs of the industry. Railtrack and its successor, Network Rail, have not maintained or made available to manufacturers and TOCs the infrastructure information they need to allow them to design and introduce new trains in an economic and efficient manner. And, in order to sustain manufacturing and managerial expertise in the UK rail industry, the SRA should provide the industry with the information that it needs to help smooth out peaks and troughs in future train orders.

The SRA should take more concerted action with the Office of the Rail Regulator and Network Rail to tackle the difficulties in securing access for testing new trains on the live network. Action might include, for example, agreeing a testing programme between TOCs, ROSCOs, Network Rail and train manufacturers, providing Network Rail with financial incentives to make the network available for testing and agreeing with TOCs and freight operators temporary revisions to their services that would improve access for testing to secure more reliable new trains.

The Health and Safety Executive should reappraise the process by which TOCs are expected to show that the risks associated with their new trains are "as low as reasonably practicable", so that the process better conforms to the principles of good regulation. The current process and criteria are not transparent or easy to understand, it is not clear which bodies are accountable, and there is a lack of clarity about the standards to be met. Recognising the lead times involved in the design and manufacture of new trains, the revised process should define a cut-off point beyond which further changes to new vehicles would not be required.

The difficulties in bringing reliable new trains into service on time demonstrate the need for clear leadership in a fragmented industry. The Government should use the opportunity of its review to make clear who should take the lead in tackling the various problems affecting the introduction of new trains, and should provide them with the powers, sanctions and incentives that they require in order to drive through the improvements that are needed.

Mr Leigh said today:

"The difficulties faced in bringing new trains into service epitomised a fragmented rail industry lacking real leadership. The Government has since announced the results of its rail review. The Strategic Rail Authority will be abolished and its strategic functions moved to the Department for Transport. It is the Department that must now take the lead on implementing my Committee's recommendations, and take decisive action to ensure new trains are reliable, fully meet the needs of passengers, and are introduced on time."

Note for Editors

Rt Hon Alistair Darling MP, Secretary of State for Transport, announced the results of the rail review on 15 July after the Committee had finalised this report. The Secretary of State's announcement and the White Paper The Future of Rail, are available on the Department for Transport's website at http://www.dft.gov.uk/railways/whitepaper/


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