TOC contract expiry dates

[Clarence Yard]

Precisely. The Owning Groups were not at all happy as they (rightly) thought that the civil servants had done a number on Shapps and set the industry up for an easy and quick takeover, should Labour win.

The rush of late (in the electoral cycle) OA applications was encouraged by the last Government as they too woke up to the situation and it will be interesting to see how many, if any, get approved by the ORR.

 

[Nicholas Lewis]

Its pretty clear that the key to sorting the industry lies in what relationship Labour want between the managers and the workers represented by the unions as that is key to moving forward and solving the underlying issues in the short term. Longer term probably wont come clear until Reeves has completed her comprehensive spending review and determined what level of capital expenditure is supportable. That said I've heard plenty of economists and capitalists saying its good to borrow for national infrastructure projects so things may start going the way of the railways now.

 

[Haywain]

That said I've heard plenty of economists and capitalists saying its good to borrow for national infrastructure projects so things may start going the way of the railways now.

The thing is that much of the spending on such projects is future spending and is capital expenditure, meaning it's written off over a very long period of time. That's why the previous government cancelling HS2 to repair potholes was such a nonsense.

 

[Topological]

The thing is that much of the spending on such projects is future spending and is capital expenditure, meaning it's written off over a very long period of time. That's why the previous government cancelling HS2 to repair potholes was such a nonsense.

Investment expenditure does have potential, and certainly fits with the economic models that traditionally Labour would have employed.

The previous government cancelling HS2 was a nonsense. Repairing potholes less so. Of course they should have repaired the pot holes earlier in the cycle (to avoid repair costs being too high), but that is a different topic.

Bringing the TOCs in house is an ideological change, but given that we are already a long way from the privatised model, the transition is one which now makes sense as well as being ideological.

I do worry that the types of expenditure of in house TOCs will not be investment expenditure and therefore will be the equivalent of fixing the pot holes. If that happens with cash that could have been invested then again the country pays the ideological price.

 

[HSTEd]

I do worry that the types of expenditure of in house TOCs will not be investment expenditure and therefore will be the equivalent of fixing the pot holes. If that happens with cash that could have been invested then again the country pays the ideological price.

If the same amount is spent as was spent before this partial deprivatisation, then society is neither better or worse off.
Where do you think "private" operator's money comes from?

Something like 60% of the money the industry is provided by the state in either case, it just depends how many steps it is passed through on the way.

EDIT:
Industry expenditure of ~£25.4bn versus passenger income of ~£9.2bn and freight income of ~£0.9bn.

 

[Topological]

If the same amount is spent as was spent before this partial deprivatisation, then society is neither better or worse off.
Where do you think "private" operator's money comes from?

60% of the money the industry is provided by the state in either case, it just depends how many steps it is passed through on the way.

Assuming that there is no problem with the employees transferring across then the costs are purely the physical change to the operational side of the office. Even if there are still no employment costs associated, there is still the process of changing all of the systems over, the new promotional materials, the need for all communication to meet government standards etc.

Changing the name of a company is not free. For every additional requirement of ownership transfer imposed the cost goes up.

It may well be the total cost associated with the transfer is negligible, but that remains to be seen. Any cost on the operational side is a cost that would otherwise not have been there.

Then there is any potential for legal challenge from those whose private interests cease to be served post "nationalisation". Preventing those challenges having a leg to stand on is another cost that would not be born if the transfer was not happening.

Any expenditure on the process of taking over from TOCs is not an investment in the sense economists would define.

 

[LNW-GW Joint]

In the franchise world, the bids would be for a level of service and investment over usually 7 years (sometimes more), with contractual benefits.
Network Rail had its separate 5-year funding settlements, CP7 just starting (2024-29).
This gave each franchise a forward look with a delivery plan, matched (or not) to Network Rail spend on the TOC's network.
GBR will have to be careful not to fall back into the hand-to-mouth situation that BR found itself in, with annual budgets and no forward view.
Under National Rail Contracts we are almost back to hand-to-mouth now, with each TOC having to beg for approval for its next project.
Will Labour allow longer term plans, TOC by TOC? We'll soon see.
How many TOCs will there be? More than BR's 3 (passenger sectors) and less than the current 20 (non-OA passenger TOCs*), I expect.

* that includes Wales' and Scotland's TOCs, also TfL's (LO, EL) and Merseyrail.

 

[Djgr]

Assuming that there is no problem with the employees transferring across then the costs are purely the physical change to the operational side of the office. Even if there are still no employment costs associated, there is still the process of changing all of the systems over, the new promotional materials, the need for all communication to meet government standards etc.

Changing the name of a company is not free. For every additional requirement of ownership transfer imposed the cost goes up.

It may well be the total cost associated with the transfer is negligible, but that remains to be seen. Any cost on the operational side is a cost that would otherwise not have been there.

Then there is any potential for legal challenge from those whose private interests cease to be served post "nationalisation". Preventing those challenges having a leg to stand on is another cost that would not be born if the transfer was not happening.

Any expenditure on the process of taking over from TOCs is not an investment in the sense economists would define.

The big prize is having ALL the TOCS in order to release the network benefits to society.

 

[LNW-GW Joint]

The big prize is having ALL the TOCS in order to release the network benefits to society.

Too late: devolution has seen to that (nations and regions).
BR also fragmented itself over time (sectors etc).

 

[HamworthyGoods]

The big prize is having ALL the TOCS in order to release the network benefits to society.

Whilst there are still private passenger (open access) and freight operators on the network these companies will still expect commercial behaviours from the system operator in line with their current contracts rather than just what benefits society.

A private company such as a freight operator will be far more fussed about the commercial element as required to compete with say DHL than the wider good of the rail industry.

 

[Nicholas Lewis]

Whilst there are still private passenger (open access) and freight operators on the network these companies will still expect commercial behaviours from the system operator in line with their current contracts rather than just what benefits society.

A private company such as a freight operator will be far more fussed about the commercial element as required to compete with say DHL than the wider good of the rail industry.

Thats fine but they need to pay the going rate for track access then not the ICC rate which is discounted and zero for first two years. The reality is with the exception of Lumo the OAO were serving destinations that should have been with the original franchises. So if Labour truly believe in Levelling up cities like Hull should be treated the same as any other city in the UK.

 

[Invincible]

A much tidied up version of the DfTs war and peace courtesy of the Bring Back British Rail website...

DfT rail contract expiry dates:

15/09/2024 – Greater Anglia
15/09/2024 – West Midlands / LNR
13/10/2024 – South Eastern*
01/03/2025 – Northern*
01/04/2025 – Govia Thameslink
01/04/2025 – Chiltern
25/05/2025 – TransPennine Express*
25/05/2025 – SWR
22/06/2025 – GWR
23/06/2025 – LNER*
20/07/2025 – c2c
18/10/2026 – Avanti
18/10/2026 – EMR
15/10/2027 – XC

*denotes DfT-OLR operator

Although it should be noted Louise Haigh has already mentioned booting Avanti out first.

Source

News - Bring Back British Rail

www.bringbackbritishrail.org

2 items of news which are not good for First group:

First Group boss wins £800,000 bonus after hitting 'diversity' targets

Graham Sutherland, chief executive of First Group, landed the performance-related payout despite its three rail companies cancelling tens of thousands of trains over the last year.

www.dailymail.co.uk

Graham Sutherland, the chief executive has a £800,000 bonus on top of his salary of £567,000, not for running services well as 61,000 trains were cancelled or partially cancelled, but for environmental and diversity targets which First should have been doing anyway.
The profits now come from buses and "rail financial performance was ‘driven’ by open access companies Hull Trains and Lumo rather than those operating under Government contracts".
Then

https://www.itv.com/news/granada/2024-07-08/new-mps-criticise-rail-operator-as-train-journeys-to-london-disrupted

Newly-elected MPs have criticised rail services after train trips to London for their first day in Parliament were disrupted.
Can see there will not be much sympathy for First Group if Louise Haigh ends Avanti, GWR and SWR contracts early, and be run direct by the Government.

 

[thedbdiboy]

The big prize is having ALL the TOCS in order to release the network benefits to society.

Too late: devolution has seen to that (nations and regions).
BR also fragmented itself over time (sectors etc).

It's not binary 'all or nothing' choice. Even in a country with devolved railways there are numerous economies of scale and benefits to grouping the English based TOCs. There is a lot of wasteful non-standardisation and duplication in the current model.

To call BR sectorisation 'fragmentation' fundamentally misunderstands how that model worked - it finally provided accountability for overheads that previously got lost in generalised expenditure - had there been a proper basis for cost accounting in the 50s and 60s it is likely that better choices would have been made in terms of rationalisation by the BTC and later the BRB.

 

[Nicholas Lewis]

2 items of news which are not good for First group:

First Group boss wins £800,000 bonus after hitting 'diversity' targets

Graham Sutherland, chief executive of First Group, landed the performance-related payout despite its three rail companies cancelling tens of thousands of trains over the last year.

www.dailymail.co.uk

Graham Sutherland, the chief executive has a £800,000 bonus on top of his salary of £567,000, not for running services well as 61,000 trains were cancelled or partially cancelled, but for environmental and diversity targets which First should have been doing anyway.
The profits now come from buses and "rail financial performance was ‘driven’ by open access companies Hull Trains and Lumo rather than those operating under Government contracts".
Then

https://www.itv.com/news/granada/2024-07-08/new-mps-criticise-rail-operator-as-train-journeys-to-london-disrupted

Newly-elected MPs have criticised rail services after train trips to London for their first day in Parliament were disrupted.
Can see there will not be much sympathy for First Group if Louise Haigh ends Avanti, GWR and SWR contracts early, and be run direct by the Government.

Its a joke but that atypical of boards of directors in this country agreeing easy remuneration packages so they keep their jobs and get fee increases.

 

[LNW-GW Joint]

To call BR sectorisation 'fragmentation' fundamentally misunderstands how that model worked - it finally provided accountability for overheads that previously got lost in generalised expenditure - had there been a proper basis for cost accounting in the 50s and 60s it is likely that better choices would have been made in terms of rationalisation by the BTC and later the BRB.

I well remember trying to find where the once-a-day ICXC service from Reading to Folkestone was (at Folkestone), as it wasn't on the departure board.
The locals told me that Intercity was a separate company, so nothing to do with them (NSE).
That was in sectorisation before privatisation, around 1990.
There was no Real Time Trains in those days.

Others have said that the full sectorisation model, following the abolition of the BR Regions, was not welcomed.
It only lasted a year I think, before privatisation hove into view.

 

[185]

https://www.itv.com/news/granada/2024-07-08/new-mps-criticise-rail-operator-as-train-journeys-to-london-disrupted

Newly-elected MPs have criticised rail services after train trips to London for their first day in Parliament were disrupted.
Can see there will not be much sympathy for First Group if Louise Haigh ends Avanti, GWR and SWR contracts early, and be run direct by the Government.

Mr Foster, the new Ribble Valley MPs train 0535 1R14 from Blackpool to Euston was cancelled, no Train Manager and ran empty as 5R14 for the three hour journey probably so that Avanti could reduce their cancellation penalty by 50% ...the same Avanti who (99.9% of the time) won't hire external or external qualified TM applicants only internals from catering / stations "so that they can be trained within the brand".

 

[HamworthyGoods]

Mr Foster, the new Ribble Valley MPs train 0535 1R14 from Blackpool to Euston was cancelled, no Train Manager and ran empty as 5R14 for the three hour journey probably so that Avanti could reduce their cancellation penalty by 50% ...the same Avanti who (99.9% of the time) won't hire external or external qualified TM applicants only internals from catering / stations "so that they can be trained within the brand".

The train would have run ECS as happens on every TOC when no guard/train manager to form the next working.

 

[Sleepy]

Mr Foster, the new Ribble Valley MPs train 0535 1R14 from Blackpool to Euston was cancelled, no Train Manager and ran empty as 5R14 for the three hour journey probably so that Avanti could reduce their cancellation penalty by 50% ...the same Avanti who (99.9% of the time) won't hire external or external qualified TM applicants only internals from catering / stations "so that they can be trained within the brand".

So basically Avanti is an even bigger shambles than we thought, with big management competency problems !

 

[Djgr]

Too late: devolution has seen to that (nations and regions).
BR also fragmented itself over time (sectors etc).

Quite happy to have separate networks for separate countries

 

[thedbdiboy]

I well remember trying to find where the once-a-day ICXC service from Reading to Folkestone was (at Folkestone), as it wasn't on the departure board.
The locals told me that Intercity was a separate company, so nothing to do with them (NSE).
That was in sectorisation before privatisation, around 1990.
There was no Real Time Trains in those days.

Others have said that the full sectorisation model, following the abolition of the BR Regions, was not welcomed.
It only lasted a year I think, before privatisation hove into view.

Sectorisation was change, and change ruffles feathers so was not universally popular, especially amongst the 'old school'. And some people did hide behind it to indulge in customer-unfriendly behaviour. But behind the scenes it provided an extremely robust financial model that was just beginning to bed in. Interestingly, the poor behaviours by some under sectorisation (getting petty about marginal resources or precious about who owned what) were magnified a hundred fold under privatisation. But with time and good management, sectorisation was (and remains) the best way to deliver services focused on customers in a financially robust way - an essential requirement for an industry so reliant on public funding.

 

[Clarence Yard]

So basically Avanti is an even bigger shambles than we thought, with big management competency problems !

Getting the DfT out of deciding individual TOC recruitment and training plans will be a big step forward for the industry. It’s not just a problem in Avanti - several TOCs are now “running on empty” when it comes to covering staff rosters, especially now we are in the summer leave period.

I don’t think the Government should waste time and money in taking on Owning Groups whose contracts are going to end very soon anyway. The OGs can all deploy better lawyers than the DfT can so would welcome the chance to take more money off the Government if they were daft enough to try it.

The problem with the present contractual regime is that the DfT are influencing TOC performance issues to such an extent that proving true liability for contractual breaches becomes more complicated. Having said that, the TOC can’t get away with everything.

 

[Thirteen]

The Elizabeth Line concession is being awarded soon so it won't be available for at least 5 to 7 years. London Overground is up for renewal is 2026 but TfL could bring in inhouse but not sure it's likely. Transport UK and Serco's contract with Merseytravel runs out in 2028 so it'll be if Merseytravel takes it inhouse as well.

 

[HSTEd]

The Elizabeth Line concession is being awarded soon so it won't be available for at least 5 to 7 years. London Overground is up for renewal is 2026 but TfL could bring in inhouse but not sure it's likely. Transport UK and Serco's contract with Merseytravel runs out in 2028 so it'll be if Merseytravel takes it inhouse as well.

The government could simply instruct TfL/mayor not to award the contract for the Elizabeth Line, if it hasn't been signed yet it isn't binding on the government.
The government could simply TUPE the staff directly to an operating company instead of awarding an extension beyond the end of March 2025.

 

[Invincible]

The government could simply instruct TfL/mayor not to award the contract for the Elizabeth Line, if it hasn't been signed yet it isn't binding on the government.
The government could simply TUPE the staff directly to an operating company instead of awarding an extension beyond the end of March 2025.

Although from Rachel Reeves speech yesterday the new Government will work with private partnerships which are currently working well.
It's companies, like First's rail contracts (especially Avanti), which are not working well are priority.

 

[LNW-GW Joint]

Sectorisation was change, and change ruffles feathers so was not universally popular, especially amongst the 'old school'. And some people did hide behind it to indulge in customer-unfriendly behaviour. But behind the scenes it provided an extremely robust financial model that was just beginning to bed in. Interestingly, the poor behaviours by some under sectorisation (getting petty about marginal resources or precious about who owned what) were magnified a hundred fold under privatisation. But with time and good management, sectorisation was (and remains) the best way to deliver services focused on customers in a financially robust way - an essential requirement for an industry so reliant on public funding.

I agree with all that, and the sectors were the best of BR.
But many on here seem to want/expect GBR to roll back to the monolithic BR of the 1970s - with everything probably painted in "rail blue".
Labour (any more than the Tories up to last week) hasn't given many clues as to the business model it intends to use.
The nearest we got, when GBR was announced by Shapps, was an intention to align the TOCs with the NR Regions, which are nothing like the BR sectors.
All will become clear soon, hopefully.

 

[Clarence Yard]

The incoming Government wants to work with private companies to deliver infrastructure - they are not so committed to having them involved in day to day operations, where there is currently a tendency to “leech”, given the poor construction of the contracts.

Sectors were not the “best of BR”. The commercial side was good but the balkanisation of the production side heralded a “begger thy neighbour” approach, which wasn’t helpful, especially in efficient multi-sector parts of BR, which tended to get torn apart to be replaced by smaller, less efficient units.

If GBR take the best part of sectors (the commercial side) and combine it with the efficiency savings of regional production units, they will be onto a winner but if they go one way or the other, they risk repeating some of the mistakes of the past.

But first we have to get the DfT out of micromanaging the TOCs. It isn’t only FG TOCs that are suffering with poor delivery and several DfT decision chickens are now coming home to roost. There are other ways to save serious money without putting the squeeze on train crew staff numbers and training, which takes years to put right again.

 

[DJ_K666]

Labour's plan is to take passenger operations into public ownership when contracts with the TOCs expire, when will this be? Wikipedia lists "Core Term Expiry Dates" and "End Dates" - I'm not sure of the difference between the two.

== Doublepost prevention - post automatically merged: 9 Jul 2024 ==

I agree with all that, and the sectors were the best of BR.
But many on here seem to want/expect GBR to roll back to the monolithic BR of the 1970s - with everything probably painted in "rail blue".

How did you know???

Seriously though it worked well when sectorised. Even Regional Railways showed a profit when it was expected to lose money. Network SouthEast worked well and Inter City had the Express routes including the Gatwick Express. I do think GBR should just drop the pretense and just be BR, with a reawakened* BRB at its helm.

*I consider it to be Dormant rather than gone.

 

[HamworthyGoods]

Network SouthEast worked well and Inter City had the Express routes including the Gatwick Express. I do think GBR should just drop the pretense and just be BR, with a reawakened* BRB at its helm.

Network SouthEast worked well financially in part because it sold the land above Victoria, Charing Cross, Cannon Street and Fenchurch Street stations.

 

[thedbdiboy]

I agree with all that, and the sectors were the best of BR.
But many on here seem to want/expect GBR to roll back to the monolithic BR of the 1970s - with everything probably painted in "rail blue".
Labour (any more than the Tories up to last week) hasn't given many clues as to the business model it intends to use.
The nearest we got, when GBR was announced by Shapps, was an intention to align the TOCs with the NR Regions, which are nothing like the BR sectors.
All will become clear soon, hopefully.

I think there will be a steep learning curve but hopefully not the four decades BR needed to work out a financially stable structure! The sector model, which in the end had too little time to prove itself, would be a good basis to develop a structure from.

 

[Djgr]

Can I just highlight the really useful attachment several posts up.

For those of you on the Bring Back British Rail mailing list, you probably already have this by email.