Ministers delay rail fare reform until at least 2023

The Department for Transport (DfT) will delay any major rail fare reforms until the introduction of Great British Railways in 2023.

In response to a series of recommendations from the Lords Built Environment Committee on rail fare reform, transport minister Chris Heaton-Harris gave responsibility to GBR to set out a specific vision 'for a simpler rail fare structure'.

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This is despite recommendations from the Lords that the vision needed to be in place before GBR was established.

However, the minister did suggest that the overall plan would be based on an ‘islands and bridges’ model, with contactless pay-as-you-go ticketing in urban areas across the country and digital (barcode) tickets rolled out across the network.

Mr Heaton-Harris also refused to agree to any reform of the current flexible season ticket, despite the Lords stating it was 'unsatisfactory' and the Government's own research suggesting that only a minority of part-time commuters would use it.

The DfT plans to conduct a 12-month review of the flexible season tickets to evaluate their impact' expected to report in the summer of 2022.

The minister also laid out the measures the department has underway, including a £360m investment fund to further roll-out contactless pay-as-you-go ticketing and support wider reform of fares, ticketing and retailing.

Committee’s chair, Baroness Neville-Rolfe, said: 'The Government has confirmed it will roll out digital ticketing across the whole network, extend contactless pay-as-you-go ticketing to 700 stations across the North and Midlands, which will be important for the levelling up agenda, and encourage ticketing innovation through independent retailers.

'We were also pleased to see that work is being carried out to integrate contactless payments with digital barcode tickets, improve mobile connectivity across the railways, and replace or upgrade 80% of ticket vending machines. We were clear that the Government needs to take these steps to improve fares and ticketing after the pandemic.

'The Government also agrees with the Committee that split ticketing can contribute to the ‘erosion of passenger trust’.

the Baroness concluded: 'Most of the Government’s response is good news for rail passengers. However, the Government fails to recognise that the current flexible season ticket provision is unsatisfactory.'

Other main recommendations and ministerial responses:

1. We recommend that the Government should develop a vision for a simpler rail fare structure and start to implement it before GBR is introduced in 2023.

The Government partially agrees with this recommendation. A transparent and predictable fares structure is a crucial prerequisite for successful pay-as-you-go schemes and a transparent fares structure makes online retailing more effective. A more flexible customer focused system will allow GBR to more easily bring forward reform to fares structures.

2. Our evidence suggests that introducing three simplified fare categories under the ‘anytime, off-peak and advance’ categories would offer consumers clarity. There should be greater consistency as to when the off-peak window begins and ends across the network.

The Government partially agrees with this recommendation. It will be for GBR to determine the best way to achieve this.

3. As part of the Government’s plan, it should be clear what the early wins for GBR will be, to build public trust and stimulate a modal shift to encourage passengers to use rail services.

The Government agrees with this recommendation.

4. The Government must develop plans to ensure that contactless payment options are available at all stations across the national rail network before the introduction of GBR in 2023.

Pay-as-you-go ticketing is most suitable for busy, suburban networks with high volumes of shorter journeys. For medium and longer distance journeys, we will complete the roll-out of digital ticketing across the network, to allow customers to buy tickets in advance online, from home or on the go, with the flexibility to either print their tickets at home or show the ticket on a mobile phone.

5. Technology should be introduced to integrate contactless payments with other forms of ticketing for longer journeys, so that consumers do not need multiple tickets for a single journey.

We agree that consumers should not need multiple tickets for a single journey. With contactless pay-as-you-go ticketing being rolled out in urban areas across the country and digital (barcode) tickets rolled out across the network, passengers will have a convenient ticketing option whether their journey is short or long-distance. 

6. Wi-Fi, phone and data connectivity on rail services should be improved so that passengers can work remotely while they travel, make uninterrupted phone calls and buy tickets on-the-go.

Network Rail awarded the Brighton Mainline Concession to Cellnex in March 2021. This arrangement has the potential to provide uninterrupted cellular internet and mobile voice call services across 51 miles of railway from London to Brighton, including tunnels and cuttings.

This is a model we are looking at closely to draw lessons learnt for future projects, with the aim of improving the experience for passengers. Network Rail is also progressing the Project Reach initiative which is seeking private sector investment to modernise rail telecoms infrastructure.

 Research undertaken to look at the negative effect that train carriage walls have on signal has recently been published by the Department, and additional research evaluating characteristics of different tunnels, how they block signals and what technical solutions could be implemented to extend mobile signal into tunnels, is expected to be published early next year.

The Government should consider how to increase the use of advance tickets for longer journeys, which could help increase non-peak revenues. To achieve this, the Government should adopt dynamic pricing for those able to plan in advance, as used in the airline industry. It should also consider extending the booking window for advance purchase tickets.

The Rail Delivery Group is also working with Network Rail on improving the ticket booking process, to allow passengers to book tickets up to 12 weeks in advance, even if the timetable has not been confirmed. A pilot for this project will go live in the first half of 2022. These measures should increase the use of Advance tickets, as the committee suggests.

The Government should clarify the interaction between GBR and open access operators on fares. This needs to be agreed before the creation of GBR, that is by 2023.

The Government agrees with this recommendation. As we move to the new industry structure, the Government will consider how open access operators interact with GBR in setting and presenting fares. In doing this the Government will engage closely with the industry, considering the needs of all relevant parties.

The Government should be clear about when it will meet its ambition to replace RPI with CPI as the basis to calculate fare rises.

We recognise many of the arguments made to justify changing the measure of inflation used and will continue to keep our policy under review. However, this will require a robust assessment and balancing the potential impacts on passengers, taxpayers and the railway.

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