The Mcnulty Report and saving 30%

[Gareth Marston]

I so wish that they know when to keep their trap shut.

This kind of unrealistic talk (in this country at least) is exactly the kind of thing that loses them all credibility. :roll:
--- old post above --- --- new post below ---


The last thing we need is more complication. It you are going to offer it as another Railcard, keep it as 34% in line with all Railcards, perhaps with bonus offers like a similar discount for child fares (81%) on F&F.

It shouldn't be priced too low to start with as the occasional travellers were never going to be the intended market, so maybe pricing it at £150-£200 to start with, walk-on fares only and Standard only, and then adjust them accordingly depending on market reception. There is still a hefty market of people spending over £600 a year on leisure travel alone.

There can also be a version with discounts on First Class travel priced higher, perhaps £250-£300.

Peak travel should obviously be excluded, but only morning peaks.

What's your solution for the part time commuter problem?

 

[yorksrob]

I so wish that they know when to keep their trap shut.

This kind of unrealistic talk (in this country at least) is exactly the kind of thing that loses them all credibility. :roll:
--- old post above --- --- new post below ---


The last thing we need is more complication. It you are going to offer it as another Railcard, keep it as 34% in line with all Railcards, perhaps with bonus offers like a similar discount for child fares (81%) on F&F.

It shouldn't be priced too low to start with as the occasional travellers were never going to be the intended market, so maybe pricing it at £150-£200 to start with, walk-on fares only and Standard only, and then adjust them accordingly depending on market reception. There is still a hefty market of people spending over £600 a year on leisure travel alone.

There can also be a version with discounts on First Class travel priced higher, perhaps £250-£300.

Peak travel should obviously be excluded, but only morning peaks.

Isn't the main point of the railcard to promote more travel amongst occasional travellers ? I fear that a £100 card would be a niche product which wouldn't bring in the additional revenue stream.

 

[jon0844]

What's your solution for the part time commuter problem?

Weren't we supposed to get flexible season tickets on The Key? So you pay the season ticket rate but only pay the days you travel.

 

[HH]

How about stop paying consultants ...and do everything in house.

The people who mostly use consultants are DfT; and believe me they need them.

 

[bb21]

What's your solution for the part time commuter problem?

Flexi seasons, which is a big thing from the DfT from a few years back, and dare I say, Carnets.
--- old post above --- --- new post below ---

Isn't the main point of the railcard to promote more travel amongst occasional travellers ? I fear that a £100 card would be a niche product which wouldn't bring in the additional revenue stream.

You always have to balance the potential increase in revenue against potential losses in income due to business travellers taking advantage of these Railcards, however I doubt any such product would be priced below £100.

Where the balance is, I don't know. It is for market trials to find out. Regional Railcards (covering a wider area than current local Railcards) could also be a viable option.

The people who mostly use consultants are DfT; and believe me they need them.

Aww.

In fact, my contacts at the DfT are lovely people, although I have heard a thing or two being said about certain people there.

 

[WatcherZero]

Weren't we supposed to get flexible season tickets on The Key? So you pay the season ticket rate but only pay the days you travel.

Yes, still being developed.

 

[bb21]

Yes, still being developed.

Obviously much easier with smart ticketing.

 

[yorksrob]

You always have to balance the potential increase in revenue against potential losses in income due to business travellers taking advantage of these Railcards, however I doubt any such product would be priced below £100.

Where the balance is, I don't know. It is for market trials to find out. Regional Railcards (covering a wider area than current local Railcards) could also be a viable option.

Indeed, though I'd prefer to do this with a morning peak restriction, for example, than making the card itself very expensive.

 

[JamesTT]

How about half and half increase revenue by 15% cut costs by 15% would that be achievable?

 

[jayah]

And not follow through with the suggestion of the head of Aslef this weekend that all child, disabled and elderly travel completely free on all public transport.

He seemed to think if transport was publically owned it didnt cost anything to provide.

I would certainly support getting rid of the free tube and rail travel in London to over 60 Freedom Pass holders.

It is a bit like the £90m the DfT spent on free WiFi using money recovered from fining Network Rail for poor performance....

 

[Bald Rick]

How about half and half increase revenue by 15% cut costs by 15% would that be achievable?

15% of the cost base isn't the same as 15% of revenue

 

[Bletchleyite]

Flexi seasons, which is a big thing from the DfT from a few years back, and dare I say, Carnets.

Carnets would be fine if, like Switzerland, there were proper stamping machines, and if you screwed up stamping and went to a ticket office ASAP they'd issue you a replacement for the screwed-up one.

As it is, I wouldn't touch with a bargepole.

 

[physics34]

The people who mostly use consultants are DfT; and believe me they need them.

I had to deal with a few in the connex days. They were on huge sums of money..a massive hourly rate...for very little work.

 

[Starmill]

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

Record for... What? You making it seem like you're very clever and witty by mocking other people? If so this probably isn't your best performance.

... 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...).

If it's that easy, why not write to London Midland to complain that you're not happy that they offer such cheap fares? Or that Railway Enthusiasts might occasionally use their services, which you dislike? I'm sure you'll get a more diplomatic response from them than anyone here.

 

[Shaw S Hunter]

Record for... What? You making it seem like you're very clever and witty by mocking other people? If so this probably isn't your best performance.

If it's that easy, why not write to London Midland to complain that you're not happy that they offer such cheap fares? Or that Railway Enthusiasts might occasionally use their services, which you dislike? I'm sure you'll get a more diplomatic response from them than anyone here.

Sorry Starmill but you either can't recognise sarcasm or need to grow thicker skin. My join date may be quite recent but I have been reading this forum for years and tbtc's posts are invariably sensibly thought out and avoid any hyperbole, and as such he/she is a member whose postings I look forward to reading. Perhaps you need to add them to your Ignore List? It so happens that there are plenty of posts around the forum highlighting the undesirable side-effects of London Midland's pricing policy, which is also true of that of TPE, but as an obviously price-sensitive user of trains your over-riding concern is all about low fares rather than better managing capacity. We are all entitled to have different opinions after all!

 

[Julia]

It is a bit like the £90m the DfT spent on free WiFi using money recovered from fining Network Rail for poor performance....

But wi-fi is actually one of the differentiators where rail can start winning people over. OK, so I commute by coach now (until EWR happens, maybe) but I take a longer, possibly more expensive journey* with Stagecoach and in return get two hours of quality time doing work / reading this forum / derping around on some gaming site / having a post-G&T nap. Make the journey more enjoyable and productive, and people won't resent the fare so much.

* - until Cambridge City Deal brings in a workplace parking levy, at which point I'm quids in

 

[Philip]

Focusing on saving money on VT West Coast...get rid of the hourly London-Manchester that goes via Crewe and use the spare Pendolino sets to replace the Voyager workings - so in the case of Chester and Blackpool just put a loco on at Crewe and Preston respectively.

 

[Muzer]

Record for... What? You making it seem like you're very clever and witty by mocking other people? If so this probably isn't your best performance.

For cliche forum topics. Pointing out a cliche is not the same as mocking. I'm mocking you now for having no sense of humour and being willing to flaunt that fact in public.

 

[LNW-GW Joint]

One of the paradoxes which McNulty uncovered was the fact that unit costs on the railway were increasing, despite greater use.
You would expect the unit cost to go down as the same network carried more passengers.
The underlying reasons were the massive increase in NR costs on operating, maintenance and renewals (not upgrades), and the increased costs of access changes, train leasing and staff costs for the TOCs.
This wiped out the benefits of greater passenger numbers and higher fares.

So Network Rail got a 30% cut factored into its budget for CP5, and the spotlight also went on the TOCs and franchise renewals for greater efficiency.

It's 5 years on from the report, and some cost has been taken out of NR. The ROC programme is a big part of this.
I'm not sure how the franchise side is going, but it's one of the reasons behind the current staff disputes.
The balance between passenger fares and taxpayer subsidy is also now at the 2-1 level desired by the Treasury (all shades).
The next target is the removal of the NR direct grant, which keeps the railway in deficit now that the rest of the railway is pretty much in balance (franchise premiums from some TOCs just about match the subsidy provided to the rest).

But it's not as simple as more passengers/revenue, though that of course helps.
It's also about structure and the underlying cost base.

 

[yorksrob]

Train leasing and track access charges would be a TOC cost anyway. These were largely created by the privatisation model in the first place. Yes, there would have been a cost of maintaining trains and track without that model, but it's unclear whether those costs would have racked up in quite the same way. However, I don't believe McNulty investigated that point in detail.

 

[edwin_m]

Track access charges are NR costs passed on to TOCs, so their level is determined by what NR's operating costs are and how DfT splits the reimbursement between access charges and grants.

A consequence of getting rid of the grant to NR could be an increase in the marginal cost of extra services, as variable track access charges may be increased to cover some of the difference. I believe it's currently supposed to reflect the marginal cost of running an extra train, but I guess that could be changed.

 

[yorksrob]

A consequence of getting rid of the grant to NR could be an increase in the marginal cost of extra services, as variable track access charges may be increased to cover some of the difference. I believe it's currently supposed to reflect the marginal cost of running an extra train, but I guess that could be changed.

A change in this sense would have an entirely negative effect on the passenger experience. Whether passengers would be in much of a position to bring pressure to bear on central Government is doubtful.

In truth, it would probably be preferable to go the other way and just charge incumbent TOC's a flat rate.

 

[coppercapped]

A change in this sense would have an entirely negative effect on the passenger experience. Whether passengers would be in much of a position to bring pressure to bear on central Government is doubtful.

In truth, it would probably be preferable to go the other way and just charge incumbent TOC's a flat rate.

On a global level it doesn't matter one iota to the taxpayer whether it is the TOCs or Network Rail which require a cash injection every year - the total amount needed will still be the same.

One of the issues in managing Network Rail that has grown up over the last few years is that it was not clear which one of the DfT, ORR and the train operators was Network Rail's real customer. It received income from both the DfT and the operators; the size of the income was determined by the ORR. It received instructions on enhancements from the DfT every 5 years (the HLOS).

Any normal company receives its income and guidance on what to supply from only one source - its customers. In NR's case it faces three ways. By all reports the quantity of correspondence between NR and the ORR and DfT dwarfed that between it and the TOCs/FOCs.

By routing all of NR's income through the TOCs it makes it clearer who the actual customers are. Any increases in access charges to replace the Network Grant will be balanced by equivalent changes in the subsidy/premium profiles and will have no net effect on fare levels. This will most likely happen in the next Control Period when the prescriptive HLOS structure will be abandoned.

 

[LNW-GW Joint]

On a global level it doesn't matter one iota to the taxpayer whether it is the TOCs or Network Rail which require a cash injection every year - the total amount needed will still be the same.

One of the issues in managing Network Rail that has grown up over the last few years is that it was not clear which one of the DfT, ORR and the train operators was Network Rail's real customer. It received income from both the DfT and the operators; the size of the income was determined by the ORR. It received instructions on enhancements from the DfT every 5 years (the HLOS).

Any normal company receives its income and guidance on what to supply from only one source - its customers. In NR's case it faces three ways. By all reports the quantity of correspondence between NR and the ORR and DfT dwarfed that between it and the TOCs/FOCs.

By routing all of NR's income through the TOCs it makes it clearer who the actual customers are. Any increases in access charges to replace the Network Grant will be balanced by equivalent changes in the subsidy/premium profiles and will have no net effect on fare levels. This will most likely happen in the next Control Period when the prescriptive HLOS structure will be abandoned.

Wait till the NR Routes all have their individual budgets and have to negotiate with their TOCs...
That's getting close to vertical integration.

 

[yorksrob]

On a global level it doesn't matter one iota to the taxpayer whether it is the TOCs or Network Rail which require a cash injection every year - the total amount needed will still be the same.

One of the issues in managing Network Rail that has grown up over the last few years is that it was not clear which one of the DfT, ORR and the train operators was Network Rail's real customer. It received income from both the DfT and the operators; the size of the income was determined by the ORR. It received instructions on enhancements from the DfT every 5 years (the HLOS).

Any normal company receives its income and guidance on what to supply from only one source - its customers. In NR's case it faces three ways. By all reports the quantity of correspondence between NR and the ORR and DfT dwarfed that between it and the TOCs/FOCs.

By routing all of NR's income through the TOCs it makes it clearer who the actual customers are. Any increases in access charges to replace the Network Grant will be balanced by equivalent changes in the subsidy/premium profiles and will have no net effect on fare levels. This will most likely happen in the next Control Period when the prescriptive HLOS structure will be abandoned.

This is true - and I wasn't giving a stuff about the taxpayer with my previous post (although he/she is of course important) rather looking out for the passenger. For the passenger, a regime in which extra trains are accounted for as part of a non-descript block sum, is likely to result in more extra trains than one in which extra train mileage is 'metered'.

That said, I'm wary of tieing all of NR's expenditure to TOC's. I can't help feeling that this might end up discouraging strategic investment in areas that generate less revenue.

 

[coppercapped]

This is true - and I wasn't giving a stuff about the taxpayer with my previous post (although he/she is of course important) rather looking out for the passenger. For the passenger, a regime in which extra trains are accounted for as part of a non-descript block sum, is likely to result in more extra trains than one in which extra train mileage is 'metered'.

That said, I'm wary of tieing all of NR's expenditure to TOC's. I can't help feeling that this might end up discouraging strategic investment in areas that generate less revenue.

What's the difference between 'strategic investment' and investment where the TOCs, and by extension their passengers, need it?

 

[yorksrob]

What's the difference between 'strategic investment' and investment where the TOCs, and by extension their passengers, need it?

If you leave it to TOC returns, you will be beholden to whatever return trains on that route currently make. In the case of northern rail, you'd be limited to whatever income that TOC could generate, which in turn would be limited by the existing infrastructure. Central government should be able to invest directly where the need arises to overcome existing infrastructure problems.

 

[Bald Rick]

Wait till the NR Routes all have their individual budgets and have to negotiate with their TOCs...
That's getting close to vertical integration.

NR routes have always had to negotiate with their TOCs, and they have always had their own budgets. The scope of the budgets has changed of course.

What will change is the ORR may regulate at route level. They have been champing at the bit to do this to show that route A is much more efficient than route B, therefore route B must be squeezed harder.

Of course what is really needed is why route A is different to route B. For example if
A = Wales, relatively low traffic, very little overnight traffic, easy to maintenance, stable workforce, and

B = Wessex, high traffic, third rail, late and early trains causing difficult maintenance, high workforce turnover...

... You can see that the differences in cost quickly become apparent.

It will need an intelligent regulator to assess the differences to come up with a true picture.

 

[ChiefPlanner]

It will need an intelligent regulator to assess the differences to come up with a true picture

And an informed one , with excellent staff who really understand the railway , operations , engineering and commercial issues.....(as opposed to regulatory , theoretical theory)

Odd - how in BR sector days , so many years ago - we had the business / operational approach .....cerainly from the mid 1980's onwards - destroyed in 1994 ..

 

[Kettledrum]

On this front for travel to grow, rail needs to become more competitively priced for journeys to be increased. At the moment, my experience is that rail is not well priced for regional rail travel outside of PTE areas, particularly when you more than one person.

....... Even if we factor in running costs of the car (which we'd be incurring anyway if it were sat on the drive) and parking (though frankly I'm sure we'd find somewhere free and walk), only the cheapest Advances, with their associated loss of flexibility and the danger that we'll change our plans, are even slightly competitive.

I agree.

Sometimes I travel by rail, and sometimes I decide against it for a variety of reasons, such as:

1. The train times are inconvenient - or simply silly (e.g. East Midlands Parkway)
2. The trains are infrequent and slow (Derby to Stoke)
3. The car park is full after 8am in the morning (so please build more car parking and get more income at the same time)
4. Car parking is outrageously expensive
5. If travelling with a group, the car can be much cheaper
6. The trains will be uncomfortably full (peak trains into Birmingham New Street)
7. The rail fare is so high, that I think "I'm not paying that!" and make alternative arrangements.

I am sure I am not the only one who is put off travelling by rail from time to time. In some areas, on some routes, there is probably an awful lot of suppressed demand.

The rail industry could get more income (from people like me), but would need to invest in order to generate it.