National Audit Office report on GTR Franchise

[plcd1]

The National Audit Office have released their report on the performance and management of the Thameslink, Southern and Great Northern franchise.

https://www.nao.org.uk/report/the-thameslink-southern-and-great-northern-rail-franchise/

Reports are accessible via the above link. I have only read the summary report but there are some interesting points to note about who specified what in terms of DOO / DCO and the financial issues around the franchise.

Brief quote

“Over the last three years long-suffering passengers on the Thameslink franchise have experienced the worst performance on the rail network. Some of the problems could have been avoided if the Department had taken more care to consider passengers in its design of the franchise.”

Amyas Morse, head of the National Audit Office, 10 January 2018

The National Audit Office has today concluded that high levels of disruption for passengers mean that, to date, the Thameslink, Southern and Great Northern rail franchise has not delivered value for money.

 

[Failed Unit]

I suspect the only reason we have still got to put up with them is because DFT are just as accountable as GTR. Although I just don’t see what incentive GTR have to improve. This report must have got written before performance fell off a cliff in December.

What have we got to look forward to in May? less seats and slower journeys and the promise of services through the Thameslink core in 2020. Well worth an inflation busting fare increase.

 

[Minilad]

Maybe XDM would like to give us his thoughts on this

 

[sefton]

What have we got to look forward to in May? less seats and slower journeys and the promise of services through the Thameslink core in 2020.

You forgot to mention the journey will be on nasty trains with horribly uncomfortable seats.

 

[LNW-GW Joint]

Well, from the summary, it seems:
- the 5 bidders all proposed more DOO than DfT specified in the ITT. So the DOO proposals contracted by GTR were not "dictated by DfT".
- the franchise to August 2017 was performing to expectations financially, and was therefore not a "basket case".
So that's two urban myths out of the window.

Continuing to read with interest...

 

[PHILIPE]

I'm never quite sure that when "Value for money" is mentioned if it applies to value for the taxpayer/Government/DFT or value for the bloated fares that passengers are paying.

 

[Tetchytyke]

From the summary report:

the rail unions RMT and ASLEF issued a joint statement opposing DOO, which would have been difficult for the Department or bidders to foresee

The RMT, taking an active stand to protect their members' interests and prevent the loss of their jobs. Well, I'd agree with the NAO there: nobody could ever foresee strike action from the RMT

Interesting, too, that GoVia tendered more DOO than was specified in the ITT. So it's isn't (just) government ideology: GoVia undercut other bidders by vowing to sack more staff. So it turns out the RMT's argument it was all about sacking staff for fat cat profits wasn't so very far off the mark after all.

 

[Taunton]

I bet Chris Grayling is glad this report only came out one day after the Cabinet reshuffle.

 

[LNW-GW Joint]

Interesting, too, that GoVia tendered more DOO than was specified in the ITT. So it's isn't (just) government ideology: GoVia undercut other bidders by vowing to sack more staff. So it turns out the RMT's argument it was all about sacking staff for fat cat profits wasn't so very far off the mark after all.

Not really.
The DfT contracted the level of DOO offered by GTR, so the "fat cat profits" go to the DfT (taxpayer), as they were priced in the bid.

 

[Tetchytyke]

The DfT contracted the level of DOO offered by GTR, so the "fat cat profits" go to the DfT (taxpayer), as they were priced in the bid.

The ITT didn't include that level of DOO. That was GoVia cutting costs in order to win the tender, which the NAO says was won because they were cheapest. If they hadn't so aggressively vowed to sack staff, they'd not have won the tender.

DfT keep the revenue, agreed. But GoVia are paid a fixed sum by the DfT for running the trains. If they can cut staffing costs further, then more of that fixed fee is retained by the fat cats.

 

[tsr]

Interesting that the multi-million investment (which GTR was required to make) includes 50 OBSs - but the NAO clearly says that this is only until next year...

Now that does sound like poor value - seven figures down the drain for a nominal onboard staff presence, which somebody will no doubt kick off about when it disappears shortly!

 

[OxtedSignaller]

I would be interested to see what level of DOO was required in the ITT. Could it have just been retaining DOO on Thameslink and Great Northern and also the routes they take over using 700 traction?

 

[BR67]

I would be interested to see what level of DOO was required in the ITT. Could it have just been retaining DOO on Thameslink and Great Northern and also the routes they take over using 700 traction?

It's on page 74 of the TSGN ITT.

• maintain the current level of Driver Only Operation (“DOO”) from the Start Date (in respect of services currently operated by First Capital Connect), from December 2014 (in respect of services transferring from the Southeastern franchise) and from July 2015 (in respect of services currently operated by Southern);
• following appropriate consultation, implement DOO on all services that operate on the Core Thameslink Route throughout the Franchise Term;

 

[infobleep]

Maybe XDM would like to give us his thoughts on this

That won't happen as XDM is not probably aware of this thread and if they were, they probably still wouldn't respond. They rarely respond to much, preferring mostly just to offer their views it seems. Not sure if this report aligns to their agenda and what they would prefer the public to know.

Personally I think whist the giving views is good, debating them is just as good if not better because if people on here only ever offered their views and never debated them further, the site would be boring. Save for people helping with fares queries. However even those can turn into interesting debates.

 

[infobleep]

They may have gone beyond what was required but then so did South Western Railway, in that they specified toilets on every train, when not mandatory. So it's not unheard of for companies to go beyond.

Whilst no every service needed to be DOO, all services through the core do and some of the Southern services are transferring to Thameslink so would need to be DOO because Thameslink is.

 

[hwl]

Well, from the summary, it seems:
- the 5 bidders all proposed more DOO than DfT specified in the ITT. So the DOO proposals contracted by GTR were not "dictated by DfT".
- the franchise to August 2017 was performing to expectations financially, and was therefore not a "basket case".
So that's two urban myths out of the window.

Continuing to read with interest...

Given that DfT made £200m from GTR in the year to August 2017 it most certainly isn't a basketcase!

 

[IanXC]

I'm never quite sure that when "Value for money" is mentioned if it applies to value for the taxpayer/Government/DFT or value for the bloated fares that passengers are paying.

I've not read the report in this case, however the NAO's use of 'value for money' is always from the view of the Exchequer in my experience.

 

[LNW-GW Joint]

I've not read the report in this case, however the NAO's use of 'value for money' is always from the view of the Exchequer in my experience.

Well, this is its considered view in conclusion:

The Department intended that this franchise should take a lead role in enabling successful delivery of the Thameslink programme, improve passenger experience and deliver services cost-effectively. The Thameslink programme has a realistic chance of achieving value for money and the return to the Department from the franchise has broadly met its expectations. However, passengers have suffered periods of significant disruption during the first three out of seven years of the franchise. While industrial action has been a major contributor to disruption, on a scale which would have been difficult for the Department to foresee, the Department did make decisions on this franchise, the cumulative effects of which have negatively impacted on passengers. We cannot therefore conclude that the Department has to date achieved value for money from this franchise

The "not value for money" headline considerably overstates their conclusion.
It's a lot less critical than most of their reports on rail matters, and DfT cops more blame than GTR.

 

[IanXC]

Well, this is its considered view in conclusion:


The "not value for money" headline considerably overstates their conclusion.
It's a lot less critical than most of their reports on rail matters, and DfT cops more blame than GTR.

Erm, exactly?

We cannot therefore conclude that the Department has to date achieved value for money from this franchise

Exactly what I said, VfM in NAO terms is for the Exchequer.

 

[DarloRich]

I'm never quite sure that when "Value for money" is mentioned if it applies to value for the taxpayer/Government/DFT or value for the bloated fares that passengers are paying.

if it is the NAO then it is value for money to the exchequer.

 

[infobleep]

Well, this is its considered view in conclusion:


The "not value for money" headline considerably overstates their conclusion.
It's a lot less critical than most of their reports on rail matters, and DfT cops more blame than GTR.

I read the conclusion as follows:

• Some positive things happened
• Some negative things happened
• The negative outweighed the positive
• Thus it didn't deliver best value for money

It could also be thought of as a weighted negative and positive impact assessment.

Lets say hypothetically slightly more good issues occur than bad. However let's say some of the bad issues were given a higher weighting than some of the positive ones, as they were considered more important. It maybe that the final score tipped the balance to not giving good value for money. It may even be a close thing.

Look at Britexit vote, just 4% difference. If around a further 2% had voted yes, it would have tipped the balance to remain.

When one does a competitive tendor, different requirements will be weight differently. Sometimes the cost of the system or software being purchased has to be given a much higher rating.

One might not agree with the way assessments are carried out but regardless this is how I read things in this case. I don't know of course how the assessment was carried out and what criteria they were rating on and in addition to that the importance placed on each criteria. Once I read the report it might be more clear.

 

[infobleep]

I wonder what percentage of the 60% of the delays of 30 minutes or more, as mentioned in the report, was caused by industrial action and strikes and what percentage was caused by lack of drivers?

 

[Chrisgr31]

The ITT didn't include that level of DOO. That was GoVia cutting costs in order to win the tender, which the NAO says was won because they were cheapest. If they hadn't so aggressively vowed to sack staff, they'd not have won the tender.

DfT keep the revenue, agreed. But GoVia are paid a fixed sum by the DfT for running the trains. If they can cut staffing costs further, then more of that fixed fee is retained by the fat cats.

Yes, effectively the bidders had to go beyond the requirements for DOO set out in the bid documentation as this enabled them to save money and therefore earn more from the franchise whilst aiming to win the bid by being the cheapest.

 

[Olaf]

I'm never quite sure that when "Value for money" is mentioned if it applies to value for the taxpayer/Government/DFT or value for the bloated fares that passengers are paying.

For passengers in the context that the phrase was used - though it is later used in the context of the Tax Payer.

 

[Olaf]

It is staggering that a figure of GBP 900 Million to provide an adequate level of resilience did not raise a red flag on the entire project, though there is no mention of the timing of this determination by Network Rail. Staggering.

That should be looked into by the DfT to see if the information was deliberately withheld prior to project go-ahead.