UK: The government’s rail reforms are facing delays and there are long-standing issues that need to be addressed including financial sustainability, according to a National Audit Office report published on March 8.
After the white paper on rail reform was published in May 2021, the Department for Transport set up a transformation programme focused on changing the rail system. This envisaged replacing the existing passenger operating contracts, improving the passenger experience and reforming the workforce.
It also set up the Great British Railways Transition Team to prepare for the establishment of GBR which was planned for October 2021.
NAO’s Rail Reform: The Rail Transformation Programme report says DfT has since made limited progress, with most of its work and savings delayed.
The NAO’s key findings are that:
- the way the rail system works needs to change, with performance not good enough for passengers and the cost to the taxpayer too high;
- DfT had committed to a reform timetable that it had identified as high-risk, reflecting ministerial ambition, but without a clear plan for what it needed to implement;
- governance arrangements for the programme have been complex and ineffective;
- DfT has made limited progress against its plans, with most of its work and expected savings now delayed until at least the next parliament. As of December 2023, DfT assessed that of the 12 high level benefits it aimed to achieve with rail reform, five were rated red and seven amber;
- delays to reform have added pressure to DfT’s finances and higher costs to the taxpayer for longer;
- DfT is putting in place interim arrangements ahead of resetting how it delivers rail reform in the next parliament, but it is too soon to say if these will be effective;
- DfT’s plans for improving rail are now focused on a shorter list of activities that it can achieve by March 2025, but there are challenges to aligning the sector around these efforts.
DfT agreed with HM Treasury to deliver total savings of £2·6bn by 2024-25, with most of this coming from workforce reforms, but DfT forecasts it will achieve around three-quarters of this. DfT also expected rail reform to result in annual savings of £1·5bn from 2026-27 but these savings have been delayed with Great British Railways not yet established.
Recommendations
NAO recommends that DfT should develop its understanding of how it can successfully deliver reform, so that it is well placed to advise ministers early in the next parliament. This should include a ‘lessons learned’ exercise.
DfT and GBRTT should work closely with the rail sector to continue building culture change and support a ‘whole systems’ approach ahead of any legislation being implemented.
When DfT comes to fully resetting rail reform, it should ensure it has secured full commitment across government, has agreed the scope and overall delivery approach with key stakeholders, and has in place a full delivery plan, including a realistic timetable.
If DfT aims to deliver reform at speed in the future, it should fully assess the benefits and the risks to implementation and ensure there are contingencies in place.
Responses
Comptroller & Auditor General Gareth Davies said ‘the speed at which DfT intended to move on a complex set of reforms gave it too little time to plan, build agreement and deliver. DfT should work more closely with organisations across the rail sector to help improve collaboration and culture ahead of any structural changes; clearly understand what it wants to deliver and then set out realistic plans for achieving its objectives.’
Chair of the Committee of Public Accounts Meg Hillier said ’DfT must be realistic about what it can achieve and how quickly it can do that and deliver a workable plan in the next parliament which stops passengers being only an afterthought’.
DfT said it would carefully consider the recommendations and formally respond in due course. It said the £3·1bn figure for government subsidies quoted in the report referred to the net subsidy to franchised train operators from DfT only, and was a result of external pressures including post-Covid passenger usage recovery, inflation and industrial action.
Labour’s Shadow Rail Minister Stephen Morgan said ‘despite promising rail reforms for a half decade, the government’s refusal to act this side of an election means no improvements for passengers and higher costs for taxpayers. The next Labour government won’t sit back as our railways are run into the ground. We will bring our railways back into public ownership as contracts expire and will put passengers at the heart of the system.’
