Devocalypse Now: Taking Control of South London’s Railways

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The topics of rail devolution and London Overground are closely entwined. Without devolution the former Silverlink services in North London would never have become TfL’s London Overground. The success of the Overground has, in turn, led to further devolution and calls for even more of it.

Those calls got even louder today with the publication of Devolving rail services to London, a report by the London Assembly’s Transport Committee, which advocates the devolution of huge swathes of South London rail to TfL.

That the Transport Committee are in favour of such a plan will come as a surprise to no-one familiar with their work. Nonetheless it is a report worth exploring in detail. Not just because of the evidence it lays out and the conclusions it draws, but also due to the wide level of support for such a plan that it contains – which includes several stakeholders who were previously hostile.

The problem

Before looking at the conclusions the report draws, however, it is worth looking in detail at the problem as it defines it.

As the report explains, the experience of the average traveller within London is far from satisfactory. As we’ve explored before, that dissatisfaction is also something that they have little ability to do anything about.

This is because the bulk of London’s suburban railways, especially in south London, are run under franchise by a number of Transport Operating Companies (TOCs). Often those franchises, let by the DfT, are comprised of a mix of suburban and long distance rail.

Whilst there are certain contractual expectations that need to be met, in theory the greatest incentive the TOCs have to meet the needs of their passengers is the ability of those passengers to “vote with their feet” where services are bad. Whilst this is true, broadly speaking, for long distance travel where the car or plane are viable alternatives it does not hold true on London rail, as the report explains:

Many of London’s rail passengers, particularly commuters, have no practical alternative transport options. They travel by train because they have to, rather than because they want to. Increases in usage have occurred despite evidence of consistently poor service performance in much of the city and rising ticket prices, as will be explored in this report. The trend is set to continue, with the Greater London Authority projecting that demand for rail services in London will increase 80 per cent by 2050.

passengernumbers

As the report repeatedly hammers home, suppressed demand and a captive audience have helped to contribute to the fact that rail passengers in London and surrounding areas are less satisfied with their journeys than those in the rest of the country. Not only that, but satisfaction levels have fallen year-on-year for the last five years.

Of course with all arguments like this it is always worth exploring the numbers a bit more. This we can do because, handily, the report provides them.

satisfaction

What people want

What then, the report asks, would make London’s travellers more satisfied?

Turning to passenger surveys, the report argues, provides the answer. 53% of respondents believe that the cost of tickets is too high. 43% want less delays and cancellations. 30% want more capacity on trains. 30% want those trains to be more frequent.

At first glance those numbers might seem slightly odd, because they add up to considerably more than 100%. This is less a problem with the data, however, and more with the way it has been presented. Looking through the report’s appendices it becomes clear that the numbers are based on people identifying their top three priorities, and in that context the numbers are thus perfectly valid. Interestingly, users of existing London Overground services have also been excluded from those figures, meaning they aren’t skewed by issues with the Overground itself.

An ever increasing cost

That cost features so highly on the list of perceived problems is hardly surprising. One could perhaps argue that the issue of overcrowding was perhaps of greater concern (as frequency and capacity are both often manifestations of that) but even so the fact that over half of one’s customers identified price as a key issue would be damning in any industry, let alone rail.

The numbers, certainly, are bleak. Since 2004, the report points out, average ticket prices have increased by almost 62%. Strictly speaking that’s about 16% once inflation is taken into account but it is significant nonetheless.

ticketprices

Nor is it just up front cost that is the issue. Theoretically delays mean compensation for passengers, but few in London feel adequately served as customers by the complaint and refund mechanisms already in place:

In recent months, we have highlighted serious flaws in the passenger compensation regime. Most rail operators use the ‘Delay Repay’ scheme, under which passengers can receive refunds if their journey is delayed by 30 minutes or longer. This rule disadvantages London rail users, as a large number of journeys starting or ending in London last less than 30 minutes in total. For instance, a passenger’s 25-minute journey could be regularly doubled in length due to delays without that passenger being eligible for compensation.

All the consequences with none of the oversight

What makes these problems worse is that, as the report points out, they are all things over which London has no direct oversight. This is because there are currently three different models of franchise management in use in the UK:

  • DfT managed franchises
  • Jointly awarded franchises
  • Concessions

We have explained in detail the differences between these models elsewhere. Broadly speaking though London currently has lots of the first type, none of the second and a few of the third (there is in fact a fourth – direct operation, as on the Underground, but this is not relevant here).

Starting back to front, Concessions operate on the Overground model – indeed the Overground pioneered it. Under this model, TfL set the requirements for railway (such as specific service levels) and appoint a company to run it. TfL also take the revenue risk, removing the need to plan for this from the operator.

In London this has proved a highly successful approach. It gives TfL direct control over the services that operate and the ability (within reason) to modify it. It also benefits the operator because they effectively make a known level of profit through delivering the services that TfL has demanded – whether passenger numbers match TfL’s forecasts or not.

Sadly, as the report points out, it is only the Overground (and TfL Rail, the proto-Crossrail concession) that currently operate on this model. The rest of London’s railways are pure franchises of the first type.

This is bad for London, the report highlights, because although TfL can suggest additions to rail franchise specifications to the DfT (known as “increments”) these are non-binding on the operator. TfL thus has no real power over the vast majority of London’s railways.

No oversight for TfL, of course, means no oversight for London’s political institutions either. London thus has no direct ability to influence the bulk of its own surface railway policy or operation.

As the report bluntly puts it:

There is currently no simple way for London’s rail users to hold someone to account for poor performance. In a devolved model, Londoners would directly elect the person ultimately responsible for the service, the Mayor of London. The London Assembly would scrutinise the performance of the service on behalf of Londoners.

What TfL want

One of the interesting things about this report is that it highlights just how open both TfL and the Mayor have become about their precise devolution desires. Their general desire for more control has not previously been a secret, of course. Indeed in Issue 1 of LR Magazine we looked at TfL’s current approach to devolution. This report, however, sees things get very explicit – South London is the target.

During this investigation, the Mayor’s Office and TfL have restated their ambition to secure the devolution of further rail franchises. Their focus remains South London, where the London Underground has relatively little coverage and Londoners are most reliant on rail services.

We even have a TfL-approved map.

devolutionmap

The map makes the desires of both the Mayor and TfL as plain as they can be. They want parts of:

  • South Eastern (Currently held by Govia. Expires 2018)
  • South Western (Stagecoach. Expires 2017)
  • Thameslink (Govia. 2021)
  • Southern (Govia. 2021)
  • Great Northern (Govia. 2021)

If these franchises are the target, then what specifically do TfL and the Mayor want from them?

Here the report is clear:

As with the Greater Anglia franchise, the Mayor’s specific proposal for the South Eastern franchise is for TfL to take over suburban services within London and the city’s immediate surroundings, rather than the entire franchise. This would mean routes as far as Dartford and Sevenoaks in Kent coming under the control of TfL, with longer-distance services and local Kent services being part of a separate franchise agreement. The routes devolved to TfL would become part of the London Overground network.

A proven track record

Given the heavy emphasis on a TfL takeover, one could be forgiven for assuming that this report was another one of their own rather than the London Assembly’s. The Transport Committee make it clear, however, why it’s not just the possibility of increased governance over franchises that makes them argue for TfL control.

They feel TfL control would deliver more benefits to travellers, the report argues, because TfL have a track record of already delivering those benefits on the Overground.

These benefits are based on the recent success of the London Overground network, which has demonstrated TfL’s strong will to improve services and its ability to manage operator performance. By and large, passengers on franchises overseen by the Department for Transport have not seen this happen on their services. TfL has also shown greater willingness to invest in services, for instance in extra train carriages and additional station staff, than DfT and the operators it has appointed.

It is here that we perhaps must suggest a little caution. Whilst it is demonstrably true that the Overground has been – and continues to be – a success, the recent takeover of West Anglia services demonstrated that they too can struggle when faced with more complex franchises. This the report does at least acknowledge, but it also, somewhat bizarrely, takes a rather rose-tinted view of passenger levels on Overground services.

The London Overground is unique among London and South East rail services in that, overall, it is the only operator whose services are not overcrowded. Furthermore, the Overground is the only operator to have reduced crowding in the past five years. While the average passengers in excess of capacity (PiXC) score for central London arrivals in the three-hour morning peak has nearly doubled from 2.9 per cent to 5.4 per cent, on the London Overground it has fallen from 2.7 per cent to zero. TfL has managed to achieve this while demand for services has increased by 136 per cent; the Overground carried 140 million passengers in 2014/15.

One suspects that passengers on the Gospel Oak – Barking and North London Lines in particular would take exception to the suggestion that their services aren’t hugely overcrowded. Nor can one imagine TfL particularly denying this to be the case – in fact they’ve done the exact opposite, publicly, on multiple occasions. Nonetheless the underlying point is true. No other TOC in London can claim to have increased capacity on its lines, relatively speaking, as much as TfL.

Keeping costs down

The report does admit that a TfL takeover in South London wouldn’t lead to an automatic cut in all fares. As it points out, however, what TfL do bring to the table is a much simpler fares system, as well as a variety of free travel concessions.

These aren’t the only potential savings that the report argues devolution could bring. Assuming TfL follow the same model of staffing stations and aggressively tackling fare evasion (primarily through more ticket barriers and a visible staff presence) then this too would yield income. The drastic levels of reduced evasion seen on the North London Line (13% pre-TfL, 2% today) are not likely to be seen again. Nonetheless £240m is currently estimated to be lost annually through fare evasion, and if further devolution occurred there can be no doubt that TfL would be looking to carve out a slice of that particular pie.

Staffing stations isn’t just about money, either. The report quotes Transport for All as highlighting that it is good for passengers with accessibility issues too.

Transport for All, which represents disabled transport users, said that it was strongly in favour of further devolution, citing London Overground’s station staffing, tactile paving and integrated customer information as key strengths of the service.

The barriers

If the report believes that devolution is so critical, then it as also happy to admit that barriers to this do exist. Indeed for those already familiar with the various issues and opinions about devolution, then this is perhaps one of the more interesting sections of the report.

In the past, it was certainly the case that the DfT themselves were decided lukewarm on the devolution concept. This report, however, makes it clear that this no longer seems to be the case:

We understand that there is no principled objection from the Department for Transport to devolving rail services: this has already happened in London to some extent with the Silverlink and Greater Anglia franchises.

It is not just the DfT, however, who have previously expressed reservations about devolution. As we have discussed before, various County Councils on the outskirts of London have traditionally opposed TfL taking control of London franchises as well.

The reasons for this are ultimately the same as those which have made TfL seek greater control over the network in the first place – local governance. TfL is accountable to London, not the counties, and there has traditionally been a fear that this would mean better services for Londoners to the detriment of the counties further out.

In the past, the most vocal of opposing counties was arguably Kent. Indeed it is generally accepted that Kent’s objections contributed to TfL’s failure to receive the South Eastern franchise when it was last let.

Interestingly, the report claims that this is no longer an issue:

Kent County Council now broadly supports rail devolution in principle. The Council told us it would be in favour of TfL taking over parts of the South Eastern franchise provided certain safeguards are in place to ensure Kent passengers are not disadvantaged

Rather handily, it also lays out what those safeguards are:

  • Fares for rail passengers in Kent must not be higher as a result of devolution
  • Existing rail paths for Kent’s mainline services must be protected.
  • Extra capacity on peak metro services must only be provided through train lengthening.

Hertfordshire County Council also indicate their broad approval for devolution within the report, with their condition being representation of some kind at a senior level:

We would support the devolution of additional suburban rail services if… There would be a process to give Hertfordshire residents a say in the governance of any devolved services to balance the fact that these matters would fall under the jurisdiction of a Mayor democratically accountable to the London electorate.

Both statements represent a huge step forward on the path to devolution. Of all the problems, getting political buy-in from outside the capital had arguably become the greatest. If opposition has begun to subside, then TfL and (clearly, from this report) the London Assembly will be very pleased indeed.

Practical problems

This is not to say that all the problems with devolution are political. Splitting franchises inevitably brings with it some serious logistical challenges and these, the report admits, will need to be addressed. It provides the example of rolling stock and depots:

Many train operators for operational and staffing reasons are dependent on railway sidings, and use depots some distance from the London area to serve their London ‘metro’ operations, for example Southeastern has a large depot and sidings at Gillingham in Kent; Thameslink similarly at Bedford, Three Bridges and Brighton; Southern at Brighton; South West Trains at Fratton near Portsmouth. Often trains and drivers have rosters which include these facilities. There could be costs of relocating staff and stock to locations closer to or within London, and of acquiring additional stock, and recruiting extra staff to meet the constraints that a new devolved settlement and consequent operational separation would create.

There would also likely be other, unforeseen costs for TfL. One can sense the slight bitterness lurking between the lines of TfL’s account of some of their issues with West Anglia:

Devolution may create unforeseen additional costs for TfL, some of which became apparent when Greater Anglia services were devolved. On the new London Overground lines, train carriages inherited by TfL had to be taken out of service for urgent repair, which led to a temporary reduction in capacity. On the new TfL Rail service between Liverpool Street and Shenfield, stations inherited by TfL were also found to be in need of significant improvements, an unanticipated cost which TfL had to meet.

Old railway hands would point out that dumping dodgy assets on your successor is practically a railway tradition and TfL probably should have anticipated it. The underlying point, however, remains true – one must expect the unexpected, and also expect it to cost money.

Moving into infrastructure

If the report is generally vociferous in its calls for greater TfL control over South London’s railway, then there is perhaps one area on which it is more lukewarm – infrastructure management.

Here it suggests that TfL could bring to the table a level of centralised planning and oversight that Network rail often appear to be lacking. Nonetheless, the arguments for devolution here are far weaker (as the report itself is prepared to admit). In the end, the report is happy to recommend simply that TfL should perhaps play a greater role in a wider strategy group from which all infrastructure work in London would ultimately spring.

A new public push

What, then, are the conclusions that this new report draws?

Ultimately, they are pretty much the same ones that TfL and others have made before. Devolution would bring all round improvement on London’s railways, well beyond the scale of anything the current approach can deliver. It is also, the report argues, the only way to ensure that London’s continued growth is adequately supported. This is an assessment that Sir Peter Hendy, the previous London Transport Commissioner, concurred with during our recent interview.

In terms of specific objectives, the report is clear:

Based on the findings of this investigation, we will be urging the Department for Transport to devolve control over London’s suburban rail services to the Mayor and Transport for London, working in partnership with other local authorities, as existing franchise agreements conclude.

This should begin with the suburban routes of the South Eastern franchise in 2018, followed by the Thameslink, Southern and Great Northern franchise in 2021 and the South Western franchise at a date to be confirmed.

The long-term ambition for the Mayor and TfL should be to use these powers to establish a genuine metro-style rail service in South London and beyond, one that is comparable in its capacity and reliability to the London Underground.

A full incorporation of key South London railways into the Overground is the ultimately goal then. To achieve this, the Transport Committee suggests that TfL should begin planning and pushing even harder for more control. A variety of more specific objectives can be found in the text, but ultimately they boil down to the same thing – establish what’s worth fighting for, engage with local councils to make sure they’re on-side and demonstrate to the DfT and – more importantly – the general public, that these lines are managed by the wrong people.

That last point is perhaps the most pertinent one. For without further exposure and more public pressure further devolution is unlikely to happen. It is into public opinion that TfL need to make inroads.

In that regard TfL will most certainly welcome this report. It is one thing to call for more control yourself, but few can argue that having it come from London’s democratically elected governing body is even better.

Written by John Bull