Britain Rethinks….

Though Britain has for the last two decades been the home of the franchising model, there have been recent moves in that country to re-nationalise train services. This has come about because Britain’s trains are bedevilled by precisely the same problems the franchising model has brought about in Melbourne: excessive subsidies, late and cancelled trains, chronic overcrowding and exorbitant fares.

Thus, The Times reported in April 2007 that talks were underway between the government and private operator First ScotRail to buy back the Scottish network, as a prelude to bringing the entire British network back under public operation.

Bristow Muldoon, the chairman of Labour’s Scottish Policy Forum, said that bringing tracks and trains back under the control of a single body, serving in the public interest rather than generating profits for shareholders, could bring huge benefits. “I believe there is a high possibility that reintegrating tracks and trains would deliver better value for money,” he said. “The savings could be reinvested in improving the rail infrastructure or in reducing fares for passengers. There could also be benefits to the taxpayer in terms of reducing the amount of subsidy needed for services….”
Britain’s rail network will consume more than £5 billion in subsidies this year, more than three times what British Rail received. Public funding….has risen sharply in the past ten years, despite a doubling in the total amount paid in fares by passengers over the same period.
(“Secret talks open way to nationalise rail network”, The Times, 12 April 2007)

Meanwhile, a prominent British Labour MP has commented:

It is not as if the private sector has proved itself vastly more efficient than the public sector. Network Rail is not the only good example of the public sector running services more effectively. The experience of South Eastern Trains, which was awarded Connex’s contract in 2003 and outperformed its private sector counterparts with less public subsidy, demonstrates that the public sector can run passenger services more effectively and efficiently and provide better value for money than its private sector comparators.
(Jon Cruddas MP, “Waiting for a change of owner”, New Statesman, 14 June 2007)

Most recently, London Mayor Ken Livingstone has unveiled a plan by which public planning authority Transport for London (TfL) would take control of fares, timetables and quality standards for all rail services within London and the Home Counties. One of the biggest existing rail franchises, Southern, would be taken over by TfL under the plan. Other services would continue in private operation under ‘net cost’ contracts whereby they would receive a management fee and be subject to penalties or bonuses according to their success in achieving standards. All would operate under a common ‘London Overground’ brand, already in use on the three London suburban lines now operated by TfL. The Times on 20 November 2007 reported that while “the Government is committed publicly to maintaining the current franchising system…. ministers believe privately that Mr Livingstone’s model may deliver a better long-term structure for the rail industry.”

Criticism of the franchising model within the British Parliament itself is nothing new. The House of Commons Select Committee on Transport said in a 2006 report: “We agree wholeheartedly with the general objectives of improving passenger services and maximising the value for money achieved from government subsidies. But we do not believe that the current system of passenger rail franchising can achieve those aims in the long term” (House of Commons 2006). The same report concluded that “the objectives of the passenger rail franchising system are a self-contradictory muddle” and that franchising had not succeeded in transferring risk to the private sector. The Committee’s subsequent Annual Report added: “We can only re-emphasise our conclusion that the franchising system is wasteful and muddled, and recommend that the Government seriously re-think the way passenger rail services are provided for the long-term” (House of Commons 2007).

While it is not yet clear what the future holds for the governance of Britain’s regional transport network, the public’s long-held antagonism toward rail franchising has led to growing political momentum to abandon the franchising model there.

…and Brisbane Sets a New Course

While Britain has signalled a move away from the franchising model, Brisbane in Australia seems set to follow the example of Perth in embracing a version of the Transport Community model. One of the first actions of new Queensland Premier Anna Bligh has been to announce a single public transport authority for greater Brisbane.

Patrons of public transport will benefit from the creation of one new authority to manage all public transport services in south east Queensland, Premier Anna Bligh and Minister for Transport John Mickel, announced today.
Ms Bligh said the new authority would make it simpler and easier for customers offering a one stop shop for scheduling, customer needs and complaints. This will be a serious and significant shake up of public transport services in the south east, Ms Bligh said. The new authority will be more accountable to the needs of customers and have greater control over service delivery.
At the moment there is a lot of confusion from the customer’s point of view over who is responsible for public transport…. We are going to create one authority to coordinate the myriad of 17 different bus, ferry and public transport service providers that currently service the region….
(Queensland Government media release, 9 October 2007)

It is intended that the new authority will be in place by July 2008: about the time the Victorian Government will have to make its decision on the future governance arrangements for Melbourne’s public transport. Existing operators will be made contractors to the new authority, which is likely to be based on the Transport for London model and involve local government and operators in its governance structure. Importantly, the government explicitly intends that the new authority will have responsibility for tactical planning, with powers to match:

The new authority will have real grunt, Ms Bligh said. It will consolidate responsibility for public transport under one organisation, greatly improving accountability to the customer. For example, a transit authority will have greater freedom to redeploy resources, like buses, to different areas in South East Queensland as needed based on demand.
(Queensland Government media release, 9 October 2007)

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