TOC contract expiry dates

[KNN]

Nothing clear seems to have been said, but there aren't 3 months between now and the first of those dates, so unless they've told WMR/LNR and GA already that timetable will be off.

My speculation would be that they'll leave it be till after the legislation is through, which won't be for 6 months as parliament will be on summer holiday in a few weeks.

 

[LNW-GW Joint]

Nothing clear seems to have been said, but there aren't 3 months between now and the first of those dates, so unless they've told WMR/LNR and GA already that timetable will be off.
My speculation would be that they'll leave it be till after the legislation is through, which won't be for 6 months as parliament will be on summer holiday in a few weeks.

They haven't even drafted the GBR legislation yet, unless they pick up the Tory version that just began its way through parliament.
I think they'll have to extend some contracts into next year unless there are grounds to call them in (eg on Avanti).
If they kill Avanti they would also lose Trenitalia as the high speed partner for HS2 services.

 

[HamworthyGoods]

And?

First TPE were barred by the DfT to offer the same deal so wasn’t exactly a level playing field.

 

[JonathanH]

Northern are clear evidence that being under DOLR is no guarantee of any better performance.

Is performance the reason the operators are being brought back into public hands? I thought it was more to try and reduce the amount of money leaving the industry in private profits and because public operation of the railways is considered a vote winner.

Out of all the TOCs, GA is the one to leave well alone, top of the TOCs in service reliability and paying money into the treasury for the privilege.

When it moves to public ownership, surely the idea is that it will be able to pay an even greater amount to the Treasury without a private company taking a cut?

The fact that the money goes into the Treasury is a good reason for change - it needs to stay in the industry.

Given the railway is a net drain on the exchequer, that money already effectively stays in the industry. It just effectively goes elsewhere for subsidy.

 

[Adrian1980uk]

If they kill Avanti they would also lose Trenitalia as the high speed partner for HS2 services.

I'm not sure there's anything mystical about running high speed services, I mean what's the difference between HS2 and conventional railway that requires specialist knowledge

 

[Haywain]

Given the railway is a net drain on the exchequer, that money already effectively stays in the industry. It just effectively goes elsewhere for subsidy.

It doesn't really, because DfT are responsible for costs. The overall figures need to be consolidated.

 

[KNN]

They haven't even drafted the GBR legislation yet, unless they pick up the Tory version that just began its way through parliament.
I think they'll have to extend some contracts into next year unless there are grounds to call them in (eg on Avanti).
If they kill Avanti they would also lose Trenitalia as the high speed partner for HS2 services.

Unless they do a separate deal with Trenitalia. Though I never really understood the need for a high speed partner business, it doesn't seem that different to regular rail and you can always headhunt the staff you need.

 

[DanNCL]

Yes, I know all that. But it doesn't make a case for extending current contracts that are expiring soon. As you'll be aware some of the contracts held "temporarily" by OLR have been held by them for years.

Also, politically, extending any current contracts wouldn't be a good move. The public simply wouldn't understand and there'd be uproar.

Irrelevant. OLR is for if the incumbent operator cannot continue (ie performance or financial issues) or if they hand it back. Not for if the government wants to take it off them as a precursor for full renationalisation.

As for contract extension, it isn’t really an extension is it? Core Term Expiry and final expiry are different dates and it’s only Core Term dates that are coming up imminently.

 

[Goldfish62]

I think they'll have to extend some contracts into next year unless there are grounds to call them in (eg on Avanti).

There's nothing requiring them to give notice or to extend a contract beyond its natural end date. When a contract ends it ends. The contractual relationship is over. All parties are aware of the end date when they sign the contract. There should be no assumption by the contractor that a contract will be automatically renewed or extended.

Break clauses are of course different. In that case notice is required, so as pointed out if there's a break clause point in, eg two months time and three months notice of exercising the break is required and that notice hasn't been given then the contract naturally continues on to its end date. That's not the same as extending a contract.

== Doublepost prevention - post automatically merged: 7 Jul 2024 ==

Irrelevant. OLR is for if the incumbent operator cannot continue (ie performance or financial issues) or if they hand it back. Not for if the government wants to take it off them as a precursor for full renationalisation

That's incorrect. The government is not obliged to retender a contract when it expires. It can pass it "temporarily" to the OLR. The government has already made clear that is what is going to happen. Absolutely no one involved in the industry has said that can't be done. This is all covered by s30 of the Railways Act.

In this case "temporarily" means until the whole current shambolic system can be legislated out of existence. That can't come soon enough.

 

[Belperpete]

Presumably things like a national rationalisation/simplification of train fares would have to wait until all the TOCs were back under central control? And might need some negotiating with TfW and ScotRail, and their masters.

Or could they do it LNER style, by rationalising those fares that are set by each specific TOC, as each TOC comes back under control. Although I am dreading the LNER model being rolled out nationally.

 

[Goldfish62]

Presumably things like a national rationalisation/simplification of train fares would have to wait until all the TOCs were back under central control? And might need some negotiating with TfW and ScotRail, and their masters.

Or could they do it LNER style, by rationalising those fares that are set by each specific TOC, as each TOC comes back under control. Although I am dreading the LNER model being rolled out nationally.

That process is going to take years and I certainly wouldn't welcome a knee-jerk approach in order to rush things through.

We shall have to see...

 

[LNW-GW Joint]

Unless they do a separate deal with Trenitalia. Though I never really understood the need for a high speed partner business, it doesn't seem that different to regular rail and you can always headhunt the staff you need.

Time has moved on since the ICWC franchise was let on the basis of preparing for HS2 services by the same operator (by 2027!).
The issues now are more about integrating HS2 trains with 390s on the WCML from 2030, as much as raw high speed on the rump of HS2.
But GBR will need a high speed focus.
There's already been time (and money) wasted with pursuing a "pure" HS2 rolling stock programme with little regard for WCML operation.
That's another little conundrum for Louise Haigh to worry about.

 

[JonathanH]

Presumably things like a national rationalisation/simplification of train fares would have to wait until all the TOCs were back under central control? And might need some negotiating with TfW and ScotRail, and their masters.

Or could they do it LNER style, by rationalising those fares that are set by each specific TOC, as each TOC comes back under control. Although I am dreading the LNER model being rolled out nationally.

It is happening anyway. Project Oval is clearly policy for the area immediately around London that won't be reversed. The metropolitan mayors will want to copy that in their local areas. PAYG trials are happening in other areas as well. The LNER trials show what might happen on longer routes. That just leaves regional flows not priced by the InterCity operators outside the large metropolitan regions.

The industry will clearly lead fares reform and present their case to government for approval. It is somewhat unlikely that the incoming government have some completely different worked out plan for what fares should be.

 

[Clarence Yard]

You can’t extend any contract (that does not have an extension clause) without a procurement exercise. That costs money that the Government will want to avoid.

There is nothing in legislation that prohibits taking contracts into DOHL and keeping them there if there is going to be an industry restructuring. Then you just bring those elements into GBR, once you have passed the necessary legislation.

DOHL can also start the process of bringing activities together by joint activity working or contracting another DOHL entity to do that activity for it. That should start realising some savings before GBR gets going.

The immediate pressure will be to reduce overall industry costs so something will have to be done quickly. This process can’t be strung out for years.

 

[Nicholas Lewis]

Is performance the reason the operators are being brought back into public hands? I thought it was more to try and reduce the amount of money leaving the industry in private profits and because public operation of the railways is considered a vote winner.

For sure but the previous poster had suggested AWC would be taken back for poor performance as was TPE but OLR have yet to fix Northern's poor performance. In the case of TPE moving to OLR allowed them to have a fundamental reset which i suspect FTPE wanted to do but DfT wouldn't let them so they soldiered on. LNER was already performing well as was SE. The remaining operators are performing reasonable well (we can have a view about each one I accept) so a transfer to OLR won't necessarily overload them if the incumbent management's are left in place. In the longer run we will have to wait and see what Labours long term vision is to know how we move from the intermediary position of OLR to something that delivers high reliability and adequate capacity where its needed.

 

[Snow1964]

Technically the suspending of franchises, and move to management contracts, was done on a temporary basis.

Most have been extended as management contracts, but as far as I can see, because the franchises were suspended rather than permanently ended, could in theory revert to remainder of franchise term, by restarting (reverse the suspension)

 

[thedbdiboy]

Out of all the TOCs, GA is the one to leave well alone, top of the TOCs in service reliability and paying money into the treasury for the privilege.

If it reverts to DOHL the same managements structure and people running it remain in place. Nothing gets 'disrupted' at the sharp end.

Nothing clear seems to have been said, but there aren't 3 months between now and the first of those dates, so unless they've told WMR/LNR and GA already that timetable will be off.

My speculation would be that they'll leave it be till after the legislation is through, which won't be for 6 months as parliament will be on summer holiday in a few weeks.

That doesn't matter - the TOC operation continues as now without the need to 'plan' anything

They haven't even drafted the GBR legislation yet, unless they pick up the Tory version that just began its way through parliament.
I think they'll have to extend some contracts into next year unless there are grounds to call them in (eg on Avanti).
If they kill Avanti they would also lose Trenitalia as the high speed partner for HS2 services.

I think there is some confusion between the current legal structure and what may follow. The self-contained legal structure of TOCs functions under an 'owning group' which can be a private sector organisation or DOHL. In practice, the cost and revenue management by DfT/Treasury already manage the detailed interfaces, so there's no need to 'extend' anything whilst a TOC reverts to state ownership.

What is required is legislative change to make state ownership an open ended arrangement, and to then start evolving the (currently) completely self contained nature of the TOC structure so that those decisions best made at sector or national level can be taken by a corporate entity rather than via TOCs and the ATOC voting structure which still provides the machinery for legal decision making.

 

[duffield]

Northern are clear evidence that being under DOLR is no guarantee of any better performance.

It's certainly evidence that being under DOLR under a DfT run by a government wedded to privatisation, micromanaging every detail to death, unwilling to settle the ASLEF dispute and focusing on infighting and gestures rather than governing or competence is no guarantee of any better performance, yes.

But it's not really evidence for anything one way or another in relation to the new government. We will find out in the next few years if they can shape the DfT into a department that can improve performance and efficiency. But just having some sort of stability and consistency for a few years should help.

 

[Nicholas Lewis]

It's certainly evidence that being under DOLR under a DfT run by a government wedded to privatisation, micromanaging every detail to death, unwilling to settle the ASLEF dispute and focusing on infighting and gestures rather than governing or competence is no guarantee of any better performance, yes.

For sure eliminating DfT micromanaging has to got to be the end game even though it will take a few years to get there but as long as thats the outcome.

 

[Goldfish62]

But it's not really evidence for anything one way or another in relation to the new government. We will find out in the next few years if they can shape the DfT into a department that can improve performance and efficiency. But just having some sort of stability and consistency for a few years should help.

It's generally acknowledged that the OLR operators don't have the same degree of interference and micromanagement from DfT civil servants, so the absurd current situation of civil servants trying to run the railways should gradually diminish anyway.

 

[Clarence Yard]

Technically the suspending of franchises, and move to management contracts, was done on a temporary basis.

Most have been extended as management contracts, but as far as I can see, because the franchises were suspended rather than permanently ended, could in theory revert to remainder of franchise term, by restarting (reverse the suspension)

That is totally incorrect. The franchises were all terminated and they have all been replaced by management contracts through the direct award process.

Apart from the two TOCs who are under the old term + extension terms (which presumably will go DOHL when they end in 2025), the rest can be rolled up when Labour want to bring them into DOHL because with a CTED, there is no requirement to extend, they can just give three periods notice when they are ready.

 

[thedbdiboy]

It's certainly evidence that being under DOLR under a DfT run by a government wedded to privatisation, micromanaging every detail to death, unwilling to settle the ASLEF dispute and focusing on infighting and gestures rather than governing or competence is no guarantee of any better performance, yes.

But it's not really evidence for anything one way or another in relation to the new government. We will find out in the next few years if they can shape the DfT into a department that can improve performance and efficiency. But just having some sort of stability and consistency for a few years should help.

It's also worth remembering that DfT rail was cobbled together in the wake of winding up the SRA and includes quite a lot of roles that should sit outside a Whitehall department. If you don't have franchising, that's a whole area of activity no longer needed, and without it you don't have contracts to specify. It then becomes a whole lot more logical to sit timetables etc on the industry side, with funding and policy set by Government. Without franchising, you don't need the complex mechanisms of detailed regulation because there is a straightforward relationship from operations > funding and policy > Government/voters. This is how it used to work.

I am aware that bureaucracy breeds bureaucracy and having created thousands of pages of regulatory and contract processes it will be hard to wind back. But (eventually) what will be the point of fares regulation set by Government designed to control how independent private operators could set fares, when those private operators no longer exist and Governments in England Wales and Scotland simply have to ensure their direction is enacted?

 

[Nicholas Lewis]

It's generally acknowledged that the OLR operators don't have the same degree of interference and micromanagement from DfT civil servants, so the absurd current situation of civil servants trying to run the railways should gradually diminish anyway.

GA is by far and away the most successful of all the operators but is DfT micromanged so I would suggest its more about how well each operator is running things and where thats poor DfT are likely meddling more.

 

[Goldfish62]

GA is by far and away the most successful of all the operators but is DfT micromanged so I would suggest its more about how well each operator is running things and where thats poor DfT are likely meddling more.

I agree that GA is excellent.

 

[Clarence Yard]

It has more to do with the style of the DfT TOC “minders” and how they are meeting their financial and other targets. Even the DOHL ones are now not immune from it, now that they are on NRC type contracts.

One advantage with GBR is that they will operate as a BR style arms length body so this type of micro managing will cease.

 

[43096]

One advantage with GBR is that they will operate as a BR style arms length body so this type of micro managing will cease.

That's the biggest change that the new administration needs to make on the railway. Ownership is something of a sideshow compared with civil service meddling in operational aspects. DfT should be setting the outputs it wants from the railway and then let the railway get on with delivering them - that should mean a severe cull of the TOC minder roles.

 

[Nicholas Lewis]

It has more to do with the style of the DfT TOC “minders” and how they are meeting their financial and other targets. Even the DOHL ones are now not immune from it, now that they are on NRC type contracts.

Argh that makes sense GA doing well financially and delivering reliability so no need for minders to meddle too much vs operator needing high levels of support and fragile performance has a lot of questioning every decision challenged or called in.

One advantage with GBR is that they will operate as a BR style arms length body so this type of micro managing will cease.

Yes but possible the micro managing just moves into GBR if many of the DfT civil servants get transferred across. What it really needs is for the DfT to be clear about what sort of service it wants (or can afford i suspect) then leave GBR to deliver it and be held accountable for that delivery.

 

[HLE]

Andrew Haines stated a while ago on a podcast that the civil servants currently working within rail at the DFT won't 'automatically transfer across'. He went on to explain that it's likely many would probably remain elsewhere within the civil service.
He closed it out with saying 'they're welcome to apply' for roles within GBR, which I took to be a tongue in cheek way of saying 'no thank you'.

 

[bramling]

Is performance the reason the operators are being brought back into public hands? I thought it was more to try and reduce the amount of money leaving the industry in private profits and because public operation of the railways is considered a vote winner.

I’ve always assumed Labour’s plans are more ideological than for any particular practical reasons, though to be fair I think their plans are reflective of the mood in terms of how the population wants things to go.

I’d agree that performance can’t really be the main motivator as there’s significant variations between the operators. GA for example seems to be a pretty good performer overall, whilst Northern certainly isn’t and doesn’t seem to be showing much improvement.

When it moves to public ownership, surely the idea is that it will be able to pay an even greater amount to the Treasury without a private company taking a cut?

It does seem quite counter-intuitive to have private companies involved when they are being so tightly controlled by the DFT. Indeed elements of the private-sector innovation we’ve seen since the 90s has withered away, just look at Chiltern for evidence of that (albeit the route is still left with the infrastructure legacy).

From an end-user point of view the various OLR franchises seem no worse than the rest, indeed probably on the contrary.

 

[thedbdiboy]

Andrew Haines stated a while ago on a podcast that the civil servants currently working within rail at the DFT won't 'automatically transfer across'. He went on to explain that it's likely many would probably remain elsewhere within the civil service.
He closed it out with saying 'they're welcome to apply' for roles within GBR, which I took to be a tongue in cheek way of saying 'no thank you'.

The ones most likely to want to consider moving across are the ones who get involved in the operational stuff - having people from that area move into the 'industry' side will be healthier all round as the Whitehall/civil service structure is not really suited to making the kind of business decisions that they get involve in

I’ve always assumed Labour’s plans are more ideological than for any particular practical reasons, though to be fair I think their plans are reflective of the mood in terms of how the population wants things to go.

Politically, it is ideological - but a joined-up unified leadership structure also just so happens to be what the industry desperately needs, so in this case it could work out well. Remember that was also what the last lot were pivoting towards but in their case it foundered on coming into contact with the opposite ideology which is why it made no progress - GBR being too 'statist' for the free marketeers