Passenger Railway Services Bill - Committee Stage

[JonathanH]

This suggests to me they want to bring in foreign financing to put pressure on the (very) profitable ROSCOs, alternatively get some other parts of the railway off the Government balance sheet

Isn't that just another example of taking money out of the rail industry and even worse out of the UK economy?

 

[Magdalia]

This suggests to me they want to bring in foreign financing to put pressure on the (very) profitable ROSCOs

Angel and Eversholt are already predominantly foreign owned.

Isn't that just another example of taking money out of the rail industry and even worse out of the UK economy?

It is the opposite, bringing foreign money into the UK to invest in new trains.

 

[RT4038]

It is the opposite, bringing foreign money into the UK to invest in new trains.

However, the cost of the foreign money (interest payments or equivalent) will be going abroad.

 

[Krokodil]

Ideally there will be a single national brand, with a single set of literature, policy and everything else to match. It’d be an awful missed opportunity if not.

Why? BR's best years had multiple brands. Even if it was as little as painting a dragon on the front of a 116 and sign writing "Tren y cwm" on the side.

Many of Avanti’s Ts and Cs (eg spare weeks where rest days could be changed, 12 hour spare movements etc.) seemed to be the inspiration for last government’s wish list of changes to Ts and Cs. That rather implies that any suggestion that Avanti is failing because of agreements with ASLEF is completely untrue.

I presume that it was a reference to the "no double trips" thing. In practice I don't believe that it's as restrictive as the press might have one believe.

Im not sure how that could they could just be “bypassed”

Presumably it means sourcing new stock directly. On the plus side it can cost less, on the minus the government carries the risk.

 

[Horizon22]

Presumably it means sourcing new stock directly. On the plus side it can cost less, on the minus the government carries the risk.

Sure but that won't have a large impact until 15-20 years at least considering there's a lot of <10 year old stock out there right now.

 

[Simon75]

Whats the evidence that customers want one brand, and how will one brand make it simpler for passengers?
Are these the passengers who don’t realise that simpler means more expensive and/or more crowded, or do realise that but expect the taxpayer to cough up more?

If you look at this forum sub section on Disputes and Procecutions , plenty of confusion with tickets and operators,and people getting procecuted for the wrong ticket

 

[vuzzeho]

WMR and GA’s contracts expire on the 15th. Are we going to hear anything from SGBR on that?

 

[Tazi Hupefi]

WMR and GA’s contracts expire on the 15th. Are we going to hear anything from SGBR on that?

Nope. The first TOC(s) are likely to be others that are more 'concerning'. Both of these are actually fairly well ran.

 

[Clarence Yard]

How well they are run is irrelevant. Actually the well run ones gain more fees for their owners and Louise Haigh wants that money for her own budget!

Until the Bill becomes law, we won’t know the exact order of return. But it is strongly rumoured in the higher levels of the industry that it is now going to be a swift process.

 

[HerneHill]

How well they are run is irrelevant. Actually the well run ones gain more fees for their owners and Louise Haigh wants that money for her own budget!

Until the Bill becomes law, we won’t know the exact order of return. But it is strongly rumoured in the higher levels of the industry that it is now going to be a swift process.

Exactly!! Owning Groups just sit around extracting millions of £s in PBFs while contributing absolutely no value add to the system anyway.

It’s the TOC staff who do all the work (I’m counting senior-level strategy and decision making by TOC directors as well) - the very same TOC staff whose salaries are already being paid for by DfT, and will get TUPE’d over to the Successor Operator upon NRC confiscation.

The sooner we start with the best performing TOCs to demonstrate this point and save the taxpayer a pretty penny, the better!

 

[Clarence Yard]

It’s not confiscation, it’s contract end, using the existing mechanisms in each contract.

Quite apart from the (lack of) value argument of the current arrangements, TOC directors no longer set high level strategy - the DfT now do all that.

 

[Tazi Hupefi]

How well they are run is irrelevant. Actually the well run ones gain more fees for their owners and Louise Haigh wants that money for her own budget!

Until the Bill becomes law, we won’t know the exact order of return. But it is strongly rumoured in the higher levels of the industry that it is now going to be a swift process.

Either way, it's not going to be WMT or GA who go first.

That dubious honour is almost certainly going to an operator serving the south of London.

 

[HerneHill]

It’s not confiscation, it’s contract end, using the existing mechanisms in each contract.

Quite apart from the (lack of) value argument of the current arrangements, TOC directors no longer set high level strategy - the DfT now do all that.

Yes, of course - the standard 12-week notice period after CTED to be served at the discretion of the Secretary of State. Pardon my facetious word choice there!

While DfT technically has the final say-so about most things, in my experience they are more often than not happy to take onboard TOC director/exec recommendations - if only because they are out of their depth when it comes to the operational needs of how to run a railway well. But admittedly that dynamic may well vary from TOC to TOC…!

== Doublepost prevention - post automatically merged: 13 Sep 2024 ==

Either way, it's not going to be WMT or GA who go first.

That dubious honour is almost certainly going to an operator serving the south of London.

Just South of London, or South + North of London? (Genuine wonder - they both seem to be as poorly performing as each other!)

 

[LNW-GW Joint]

How well they are run is irrelevant. Actually the well run ones gain more fees for their owners and Louise Haigh wants that money for her own budget!
Until the Bill becomes law, we won’t know the exact order of return. But it is strongly rumoured in the higher levels of the industry that it is now going to be a swift process.

As these two are at contract expiry, there will have to be some sort of holding position until the Passenger Services Bill gets Royal Assent.
Maybe rolling six-month contract extension on current terms?
I also doubt the fees will make a difference either way, somebody has to fund the TOC management (and risks) whether it's inside GBR or not.

 

[HerneHill]

Maybe rolling six-month contract extension on current terms?

I think the NRC defaults to rolling into the extension term until a termination notice is served anyway! So SoS probably just has to “do nothing” for the time being (happy to be corrected by someone more familiar with specific NRC wording…)

I also doubt the fees will make a difference either way, somebody has to fund the TOC management (and risks) whether it's inside GBR or not.

Quite right - the PBFs being £5-15m per TOC are a rounding error compared to the hundreds of £ms of total operating costs per TOC.

Difference is just that PBFs currently flow straight to Owning Group despite showing up on the TOC’s books, whereas once taken back by DOHL the PBFs would effectively become the government paying itself - retaining the “commercial incentive” that people love talking about so much, but plugging the net leakage from the system.

 

[Clarence Yard]

WMR and GA are not at contract expiry. It is their CTED that comes up on 15/9/24 and the Government doesn’t have to do anything.

Under the terms of an NRC, the Government can give 3 periods notice for the contract to end at any time between the CTED and the final expiry date. There is no extension mechanism or any need for one. Note, it is 3 periods notice for the contract to end between the CTED and the ED so if you want the contract to end on the CTED, you can (& have to) give notice 84 days beforehand.

The only two TOCs that are on the old “term+” mechanism are SWR and C2C and both are well into their extension period so those contracts will presumably be transferring to DOHL on 25/5/25 and 20/7/25 respectively.

The fees do make a difference - they are not there to cover the TOC management costs. They go to the owning group, who don’t take risk in an NRC. It is a one way reward, designed to keep the private sector interested in running TOCs on behalf of the DfT.

 

[Dr Hoo]

So the 2% ‘fee’ (or whatever the rate is) has literally been a simple cash ‘bung’ to First Group or whoever for zero work for the past couple of years?
I have asked this question before and never had a clear answer. The ‘owning group’ (ha ha) owns nothing and does nothing? No staff to pay. Just a cash drop directly into director’s pockets or shareholder dividends?

 

[Bletchleyite]

So the 2% ‘fee’ (or whatever the rate is) has literally been a simple cash ‘bung’ to First Group or whoever for zero work for the past couple of years?
I have asked this question before and never had a clear answer. The ‘owning group’ (ha ha) owns nothing and does nothing? No staff to pay. Just a cash drop directly into director’s pockets or shareholder dividends?

Why should a commercial company do something without making a profit? That's how a cost plus contract works - you pay the cost of doing the stuff you want done plus a profit margin on top.

If you want no profit margin, you nationalise (which is happening).

 

[Dr Hoo]

Why should a commercial company do something without making a profit? That's how a cost plus contract works - you pay the cost of doing the stuff you want done plus a profit margin on top.

If you want no profit margin, you nationalise (which is happening).

Thank you. Perhaps I didn’t phrase my question as clearly as I could have done in response to earlier posts.
If the ‘TOC staff’ (including management) have been doing all the work the owning group has been doing ‘nothing’. OK.
So, the DfT micromanagers have been doing all the higher level (?) management for the ‘contracted’ TOCs and DOHL micromanagers have been doing the same for the ‘publicly owned’ TOCs with the, err, private consultants forming DOHL taking a ‘fee’ too.
Is the ‘government’ going to ‘nationalise’ DOHL immediately as well?

 

[HerneHill]

So the 2% ‘fee’ (or whatever the rate is) has literally been a simple cash ‘bung’ to First Group or whoever for zero work for the past couple of years?
I have asked this question before and never had a clear answer. The ‘owning group’ (ha ha) owns nothing and does nothing? No staff to pay. Just a cash drop directly into director’s pockets or shareholder dividends?

Well I guess the Owning Group directors do summon the TOC directors to attend board meetings every couple periods - so not strictly speaking “zero” work. But ask any TOC director whether these meetings influence or add value in any way to how they run their TOC, and you’ll mostly get very bemused responses

Equally I have asked an Owning Group director before what they think it is they do to earn their management fee if the TOC directors and DfT run the TOCs - and the answer was some waffle along the lines of “providing institutional expertise when things go wrong”.

 

[Krokodil]

Why should a commercial company do something without making a profit?

That cuts both ways. Why should the DfT be paying them to do nothing?

Equally I have asked an Owning Group director before what they think it is they do to earn their management fee if the TOC directors and DfT run the TOCs - and the answer was some waffle along the lines of “providing institutional expertise when things go wrong”.

Which went well...

 

[Goldfish62]

The, err, private consultants forming DOHL taking a ‘fee’ too.

They're not private consultants. This has been alleged a few times before on these forums. The DOHL is run by civil servants. A quick check of the names of senior staff on Companies House reveals this to be the case.

 

[Dr Hoo]

They're not private consultants. This has been alleged a few times before on these forums. The DOHL is run by civil servants. A quick check of the names of senior staff on Companies House reveals this to be the case.

Fair enough. I’m sure that it was started from companies like SNC Lavelin but was obviously ‘nationalised’ by the previous government.
Thank you.

 

[Goldfish62]

Fair enough. I’m sure that it was started from companies like SNC Lavelin but was obviously ‘nationalised’ by the previous government.
Thank you.

No worries. I think you're right that it started out like that, but it became untenable as it expanded.

 

[LNW-GW Joint]

No worries. I think you're right that it started out like that, but it became untenable as it expanded.

Even if now DfT employees, they won't come for free.
GBR is going to be very expensive to set up and run (starting with the large transition team).
Just like Network Rail and its very highly paid executives, already in the public sector.

 

[Snow1964]

The Bill (on Monday 21st & Wednesday 23rd) is at House of Lords Committee stage

Members of the House of Lords begin their detailed examination of Passenger Railway Services (Public Ownership) Bill, in committee stage on Monday 21 October.

The Passenger Railway Services (Public Ownership) Bill will nationalise passenger railway franchises through public sector companies when existing contracts with private sector operators come to an end.

Line by line examination ​

Committee stage is a thorough examination of the individual parts (clauses) of the bill.
Starting from the front of the bill, members work through the clauses in order, considering changes (amendments) to the wording or proposals for new clauses.
Two days of committee stage have been scheduled so far:

• Monday 21 October
• Wednesday 23 October

(*schedule is subject to change)

Proposed changes   ​

Members speaking on day one of committee stage have put forward amendments (changes) to the bill on subjects including:

• terminating contracts of worst performing operators
• plans for investment in railways
• accessibility of public railway services.

https://www.parliament.uk/business/news/2024/october/passenger-railway-services-public-ownership--bill-begins-committee-stage/

Avaliable live on Parliament TV,
or as Hansard transcript 3 hours later