The Mcnulty Report and saving 30%

[JamesTT]

The Mcnulty report said the rail industry needed to save 30% in costs.
As an alternative how could income be increased by 30% (Not increasing ticket prices etc)

 

[ComUtoR]

Increase passenger numbers.

 

[Xenophon PCDGS]

Does the McNulty report still carry the same weight with the current Conservative leadership under Theresa May as it did with of the previous one?

 

[thenorthern]

Removing all the taxes that train companies have to pay such as as fuel duty and corporation tax would raise quite a bit.

Removing one of the three Virgin Trains per hour that cart fresh air about from London to Manchester although if it wasn't for Stoke-on-Trent being en-route I think it would be two trains per hour to Manchester and one to would run to Stoke-on-Trent.

Reducing fare evasion would raise quite a bit.

Also when electrifying lines don't leave short gaps so that diesels have to run under the wires for long distances and only on unelectrified tracks for short distances. Some of which that come to mind are London to Sunderland, London to Chester, Newcastle to Chathill and London to Blackpool.

 

[Shaw S Hunter]

Unfortunately McNulty destroyed any credibility he might have had among many in the industry with his incredible suggestion that platform dispatchers are a complete waste of money and should be done away with asap. Even drivers of DOO trains fitted with cameras rely on such dispatchers at some locations, London Bridge through platforms being a good example. McNulty, in the context of his report, is a man who knows the cost of everything but the value of nothing.

Most in the industry will point to Network Rail as the biggest area for cost savings though many costs are inflated by the incredibly tight safety regime making it difficult to politically justify some potential savings/spending cuts. In particular the use of contractors at stations who will come nowhere near any running lines. First world problems...

 

[The Ham]

Removing all the taxes that train companies have to pay such as as fuel duty and corporation tax would raise quite a bit.

The problem is, that if you remove taxes it would still cost the government money. As, as I understand it, the purpose of saving the money is to reduce government costs.

However, the £4bn in taxes that the rail sector and their supply chassis pay in taxes mostly off sets the £4.8bn it costs the government in support to the railway.

Given that £1.1bn of the support is posting for Crossrail, then in reality there if a £300 million "profit" to the government.

As such if you cut taxes it wouldn't help the government's balance sheet and could even make it worse. Therefore the government isn't likely to do so.

 

[XDM]

These sums are more complicated than you realise. If the 'uneconomic' trains did not run people would use more buses,planes & cars/petrol. All producing income from taxes for the government. On the other side of the equation, if guards were removed & had to get jobs street cleaning the government would get less tax.

 

[cjmillsnun]

Unfortunately McNulty destroyed any credibility he might have had among many in the industry with his incredible suggestion that platform dispatchers are a complete waste of money and should be done away with asap. Even drivers of DOO trains fitted with cameras rely on such dispatchers at some locations, London Bridge through platforms being a good example. McNulty, in the context of his report, is a man who knows the cost of everything but the value of nothing.

That reminds me of someone else who had a great effect on the railways and the effects of his thoughts are still being felt on the railway to this day. Thankfully McNulty isn't in charge of the railways like Beeching was

 

[Agent_c]

Unfortunately McNulty destroyed any credibility he might have had among many in the industry with his incredible suggestion that platform dispatchers are a complete waste of money and should be done away with asap. Even drivers of DOO trains fitted with cameras rely on such dispatchers at some locations

Yes, I couldn't help but notice in London recently that even the Underground - that famed example of efficently that every pro-DOO poster brings up - had platform dispatch staff.

 

[northwichcat]

Also when electrifying lines don't leave short gaps so that diesels have to run under the wires for long distances and only on unelectrified tracks for short distances. Some of which that come to mind are London to Sunderland, London to Chester, Newcastle to Chathill and London to Blackpool.

How many of those ran at the time of electrification? Chester to Crewe would be a very expensive route to electrify using conventional methods due to having an average of over 1 bridge per mile going over the line and until 2008 there weren't regular Chester to London services - there were 5tpd between Holyhead and London via Chester.

 

[Domh245]

I guess one of the easiest ways to increase revenue would be through advertising. More advertising liveries perhaps and more prominent track side advertising, but whether that could raise income by 30%, it seems unlikely

 

[Mojo]

Yes, I couldn't help but notice in London recently that even the Underground - that famed example of efficently that every pro-DOO poster brings up - had platform dispatch staff.

LU doesn't have dispatch staff; the staff on the platforms are to assist with dwell time management and at certain locations are provided for risk mitigation against Platform Train Interface incidents. The responsibility for knowing when it's safe to close the doors and depart is down to the Train Operator.

 

[Gareth Marston]

Abolish Advance Purchase fares and reform the fare system making walk on long distance slightly cheaper.

 

[tbtc]

Wow - DOO, Beeching and the current Prime Minister referenced in the first few posts.. is this a record?

There are certainly a number of areas where costs could be cut (I saw a figure of £40 per passenger subsidy to use the Far North on a thread yesterday) or were fares could be increased to something more realistic (however much some enthusiasts love being able to go from Crewe to Euston for a few pence on London Midland...).

But (without starting an argument about Guards) I think that one way of increasing costs would be to have "hit squads" of revenue protection staff regularly riding services over short distances.

At the moment most of the arguments about fare dodging on here tends to be about the practicalities of lightly used stations without ticket offices (and the number of people who don't have a debit card in 2016) - both of which seem to be focussing disproportionately on small examples.

So, shuttling between Wolverhampton and Stafford. Or Reading and Didcot. Or Sheffield and Chesterfield. Or Stockport and Crewe. Trouble is, you'd have to share the costs and revenue raised between different TOCs in some examples, but I think there's some rich fruit to be picked there.

It may be less beneficial wholly in PTE areas (where fares are so low and local journeys on local trains fairly cheap).

Other than that... I think that surprisingly little is done to "up-sell" First Class tickets off-peak - TOCs don't want to offend those on full fares by allowing those on common or garden Standard tickets to upgrade (but will dump some bargain basement First Class advances on the market instead).

 

[ainsworth74]

Abolish Advance Purchase fares and reform the fare system making walk on long distance slightly cheaper.

Define slightly cheaper? Darlington to London can be done for potentially £16.50 with a Advance Purchase fare. The cheapest walk-up single is currently £62.35. Or, even worse, if you travel when the only the Anytime Return is valid that will set you back £267 but with APs you can potentially save in excess of £150 on that fare. So what is slightly cheaper?

 

[TheKnightWho]

Abolish Advance Purchase fares and reform the fare system making walk on long distance slightly cheaper.

Are you completely mad?

This is the same logic bad bean-counters use when they say "increasing tax by 10% will increase revenue by 10%", totally failing to take into account the resultant reduced demand.

 

[yorksrob]

Abolish Advance Purchase fares and reform the fare system making walk on long distance slightly cheaper.

I fear that he railway lose more revenue than it generates. I'm sceptical that there are enough potential punters who would be tempted by a slight decrease in walk-up fares to offset the reams of AP tickets currently sold.

Nevertheless, VTEC seems to have moved a small way in this direction so maybe they will prove the case one way or another.

 

[Railsigns]

Increase passenger numbers.

Increase passenger numbers to save costs? Apologists for privatisation usually cite the rise in passenger numbers as the reason why subsidies have trebled!
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I guess one of the easiest ways to increase revenue would be through advertising. More advertising liveries perhaps and more prominent track side advertising

Tacky and obtrusive. No thanks.

 

[yorksrob]

I believe Railfuture once calculated that introducing a National railcard available for all would increase revenue by increasing discretionary travel and generating an income stream from the sale of the cards themselves.

 

[ComUtoR]

Increase passenger numbers to save costs?

The questions posed was...

As an alternative how could income be increased by 30% (Not increasing ticket prices etc)

If you increase passenger numbers then you are increasing revenue. There are indeed many services that run about with barely any passengers on. How can we entice more people to use the train as a method of transport ?

If we are talking about generating revenue (as posed by James) then we need to find ways to generate income. Bums on seats is a good way to do that.

There is a decent 2-4-1 offer for leisure travel that does incentivise rail travel. I used it myself to save on Museum entry. That generated revenue for the TOC without increasing the fare.

I used our "Summer special" service last year as an alternative to taking the car. The train is typically packed so has very much increased passenger numbers; albeit for a short period.

I'd also like to see services provided for local events. There was a raft of complaints regarding the festival season and various sporting events. Maybe the TOC's could work with the event providers to run special services. Thes could also generate income.

 

[Railsigns]

If you increase passenger numbers then you are increasing revenue.

Of course. This shows the absurdity of trying to use a doubling of passenger numbers to justify a tripling of subsidies since privatisation.

 

[northwichcat]

Of course. This shows the absurdity of trying to use a doubling of passenger numbers to justify a tripling of subsidies since privatisation.

Subsided franchises are usually allowed to keep the majority of profits even if they perform much better than expected. While Northern Rail were on revenue share (having to refund some of their subsidy back to DfT) they kept the lion's share of their £30m a year profits.

 

[ComUtoR]

Of course. This shows the absurdity of trying to use a doubling of passenger numbers to justify a tripling of subsidies since privatisation.

I think I see where your going. Apologies as I don't tend to get pulled into the whole privatisation/subsidy/political debate. I'm thinking in a pure commercial sense.

I do see the point about increasing passengers numbers WILL also increase costs. No doubt that providing extra services for a sporting event will cost in terms of pathways, unit mileage, staffing, etc. Cost to implement various ideas will always have an associated cost. Again, thinking from a purelu commercial sense.

From what I've seen over the years is that there has been a reliance on subsidy and TOC's have been running the railway as a public service model and when being asked to increase services etc they rightfully have asked for more money to do so. (rightly or wrongly, that whole debate is open to others to argue and would need another thread)

What has been happening in recent years is that the railway has been moving to be more of a business model. It needs to generate income and needs to start thinking outside of the box to generate it. I attended a franchise meeting a few years ago and one of the other things that came up is revenue protection. Again (yeah probably) due to the TOCs over reliance on subsidy they have been lazy about protecting any revenue they have. Gatelines are wide open and quite often the railways is seen as free. At my TOC we are required under the franchise to make sure that the gates are manned and that we are doing everything we can to reduce and prevent ticket-less travel. It will be interesting to see what the impact of Management Contracts have because I see the TOC's not caring again because they are getting their fee regardless.

Either way, I totally agree that the railway must start generating income from other sources than just tickets.

Controversially. Could a reduction in the ticket price increase the footfall (off peak of course ) ?

 

[class26]

Increase passenger numbers.

But many trains are full to bursting now, where will all these extra pax go ?

 

[ComUtoR]

But many trains are full to bursting now, where will all these extra pax go ?

And many are empty :roll:

 

[Gareth Marston]

I fear that he railway lose more revenue than it generates. I'm sceptical that there are enough potential punters who would be tempted by a slight decrease in walk-up fares to offset the reams of AP tickets currently sold.

Nevertheless, VTEC seems to have moved a small way in this direction so maybe they will prove the case one way or another.

Flying a kite somewhat to see people reactions. Using my own station to London as an example the off peak return @ £66.80 to London Euston is actually quite a bargain at around 15p a mile and no peak hour restrictions , however many look for AP - I can usually get split AP tickets at Birmingham New St most people tend to be happy if they get around £50 or under admittedly 50 is a pyschlogical barrier type of figure. The market will take c £55 for the off peak based on what I see, we also have the option of going to Marylebone on Chiltern for £39.20 a Super off peak return or going slow on London Midland to Euston for those who want savings.
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I believe Railfuture once calculated that introducing a National railcard available for all would increase revenue by increasing discretionary travel and generating an income stream from the sale of the cards themselves.

How would you price it? £60?

I'd certainly sell quite a few.

 

[matt_world2004]

ATOC has many deals with tourist attractions it should expand on those deals to offer through ticketing. typically the wholesale price of Merlin attractions is about 30% off the online price. The people buying these tickets would be typically using the train at times of day when it is not crush loaded with commuters, so it will stimulate demand and also the level of discount can be set at higher or lower depending on available capacity

TFL Wise they could save money by merging revenue protection functions across all tfl Modes. Have the east anglia overground franchises as part of the Crossrail franchise, (They share rolling stock and will have very similar rolling stock when they are replaced)

 

[Gareth Marston]

Define slightly cheaper? Darlington to London can be done for potentially £16.50 with a Advance Purchase fare. The cheapest walk-up single is currently £62.35. Or, even worse, if you travel when the only the Anytime Return is valid that will set you back £267 but with APs you can potentially save in excess of £150 on that fare. So what is slightly cheaper?

Part of the problem is most people have no idea of the real cost of travel, I see some people who think they have the right to travel to London over 200 miles away for peanuts. The peak anytime pricing cliff is a deterrent to travel and needs to be capped.

I'd certainly not have AP for peak times in return for a more sensible anytime fare after all a lot of these trains are nowhere near full. I d like to see AP used to fill empty off peak trains not be an excuse for ever higher walk on fares.

 

[yorksrob]

Flying a kite somewhat to see people reactions. Using my own station to London as an example the off peak return @ £66.80 to London Euston is actually quite a bargain at around 15p a mile and no peak hour restrictions , however many look for AP - I can usually get split AP tickets at Birmingham New St most people tend to be happy if they get around £50 or under admittedly 50 is a pyschlogical barrier type of figure. The market will take c £55 for the off peak based on what I see, we also have the option of going to Marylebone on Chiltern for £39.20 a Super off peak return or going slow on London Midland to Euston for those who want savings.
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How would you price it? £60?

I'd certainly sell quite a few.

I'm open to suggestion as to how much it should cost. I'm guessing it would have to be quite pricey so perhaps the 50/60 pound might be right. It would certainly encourage people to recover the sunk cost.

 

[The Ham]

Personally, although I can see that the could be some advantages to changing ticket prices (especially the likes of LM who have very busy trains filled with lots of people, quite a few of whom would be traveling anyway, using very cheap advanced tickets), the way to "reduce" the costs of railways by increasing passenger numbers is to increase the profitability of NR by running services on lines that are running relatively few services.

For instance the double track lines that only have 2tph in each direction or less, then those lines could be looked at to see if there was a way to increase frequencies along the line. Note that may mean that to justify the increase in frequency that two different under used lines are linked to improve the attractiveness of rail. Some lines may not currently be linked, but even those that currently just require a change should be looked at.

The reason for doing so is that the cost of checking and maintaining lines are broadly similar with 1tph or 6tph, yet if you increase the number coaches that run over a line from 8 per hour to 12 per hour then the income to NR (assuming the same class of unit) would go up by 50%.

In the short term the cost of the extra rolling would be more, but if done carefully it could become cost neutral to the TOC relatively quickly.

Given where it is it wouldn't be likely to be practical, however travel from my home to work takes 45 on the train, but can take up to 75 minutes, but at least 60 minutes station to station because of the change time. That sort of reduction, especially as off peak it takes about 40 minutes to drive, could mean that more people would consider to take the train.

Yes it wouldn't ease congestion on trains into London, it could spread the load, so that getting on and off of trains was faster as those going between local stations could switch to the new service and not congesting the London bound trains.

The problem is to run an extra train service where it takes just under an hour requires a further two units, meaning on electrified lines that generally means a 4 coach train that it would require a lot of people (circa 500 to 1000 per day, assuming an average fare of £5-£10).