Future of Rail Services in Scotland

FUTURE OF RAIL SERVICES IN SCOTLAND

(click here to read the RMT response to Rail 2014 Consultation)

(click here to sign the petition against proposed changes to Scotland's Railways)

EXECUTIVE SUMMARY

The Scottish Government are proposing increasing the fragmentation and the complexity of the railway in Scotland. One major part of this is viewing the Scottish railway as consisting of two separate railways – one economically viable and one socially necessary. It also intends to separate off the Caledonian Sleeper Services as a separate franchise.

RMT argues that Value for Money must include the cost and benefits to society as a whole. Scotland’s railway has clearly defined economic, social and environmental objectives which cannot be viewed in isolation. Scotland’s railway would be more efficient if it were re-nationalised, re-integrated and publicly accountable. In the interim, however passengers, workers and the very fabric of the industry should not be made to pay for the Banking crisis or indeed the avarice and short termism of the privatised rail industry. Instead revenues should be raised by a freeze on dividends and a windfall tax on profits previously enjoyed.

The Scottish Government wants to stop all cross-border services from running beyond Glasgow and Edinburgh – granting Scotrail a monopoly on Scotland’s railway. It also intends on reducing services and forcing more interchanges. It plans on shielding Scotrail’s profits from the wider economy, in order for dividends to shareholders to remain massive.
The Scottish Government intends to cut the numbers of ticket office staff, conductors, and catering staff. RMT believes that the industry’s most valuable asset is its workforce, which should be expanded not reduced. Staffing levels and morale are at breaking point whist directors remuneration (funded by the taxpayer) is excessive.
The consultation document also proposes a massive increase in fares moving from an RPI + 1% formula for regulated fares to an RPI + 3% formula. RMT argues that if passengers are forced to pay even more for fares and see capacity improvements delayed then the railways will be less successful in achieving their objectives and delivering Value for Money to society as a whole.
The Scottish Government intends on increasing the threshold against which overcrowding is measured as opposed to addressing the issue of capacity.
The consultation document also proposes station closures, more privatisation and fragmentation through introducing third party management of stations, and reducing facilities at stations such as toilets.
Scotrail paid dividends of £18 million in 2010, £18 million in 2009, £17million in 2008 and £21million in 2007. In two of these years Scotrail actually paid more in dividends than it made in profit leading to the obvious conclusion that because it does not contribute anything towards investment in the railway or rail infrastructure, and with the level government subsidy even covering its track access charges, it is simply asset stripping Scotland’s railway. The proposals from the Scottish Government allow for the intensification of this theft.
If dividends were not paid in 2010, RMT estimates rail fares could have been reduced by almost 7%.

FRAGMENTATION & COMPLEXITY

The Scottish Government are proposing increasing the fragmentation and the complexity of the railway in Scotland. They wish to subdivide the Scottish rail network in terms of routes, fares, what is economically viable (profitable) and what is socially necessary (not profitable) in addition to creating entirely separate franchises for services such as the Caledonian Sleeper Services.

In respect of the Caledonian Sleeper Services they intend to not only separate the service from the Scotrail franchise, but also to undermine the service by cutting the routes it serves and the regularity of its services. This is only being done to leave the only profitable elements of the routes available to the private sector.

The Scottish Government’s intention to take a dual focus approach to the main franchise will see the introduction of different levels of specification and regulation on what it considers to be economically viable (profitable) or socially necessary routes. Essentially this means shifting most of the responsibility for the socially necessary routes from the train operator onto the taxpayer and passenger, leaving the franchisee with the most profitable routes to exploit.

CUTTING SERVICES & STAFF

The Scottish Government is proposing cuts to the Scottish rail network by:

Closing some stations (it argues the number of stations will remain the same because others will open) but in reality this means a cut for those that use the station operational at present.
Cutting the length of services. It argues the same routes will be served but also greater use of interchanges. This means fewer trains and lower levels of frequency. This is true in the case of the Caledonian Sleeper Services with the announced intention to shorten or cancel some routes.
Demanding that all cross border services start or finish at Glasgow or Edinburgh. This ensures that services operated by, for example, East Coast or Cross Country must terminate at Glasgow or Edinburgh and the passengers travelling further into Scotland must change onto a Scotrail service. The Scottish Government claims that the current state of affairs disadvantages Scotrail due to the ORCATS system but in reality this is strengthening the position of Scotrail as a monopoly and will result in a worse service for passengers. The proposal is to ensure that rail passenger services operated by other companies do not continue to travel to other Scottish stations past Glasgow and Edinburgh, thereby negating the “competition” which is the sole argument used in defence of a privatised railway.
The Scottish Government also want to remove first class on some routes and potentially ban alcohol across the network. This is a cut in on-train services which will inevitably lead to a cut in on-train staff. There has been no consultation as to how this would be enforced.
Additionally there are concerns that the proposal to introduce live monitoring by CCTV on all trains may be used to reduce the numbers of on-train staff as opposed to enhancing the work done by on-train staff, and especially the conductor, in providing a safe and secure environment for those on-board.
The Scottish Government state that it is their “intention for the next franchise that a driver and another member of staff shall be present on every service”. RMT believes that falls far short of recognising the safety role of the conductor and may be an attempt remove conductors from the whole network and introduce Driver Only Operation.

INCREASED FARES

The Scottish Government is also proposing a massive increase in fares moving from an RPI + 1% formula for regulated fares to an RPI + 3% formula.

There will be no regulation of fares on inter-city routes as part of their “economically viable” strategy. The Scottish Government also wants to increase the difference in price between peak and off-peak fares. This can only be achieved my making peak fares even more expensive. They do not propose to use a “fares basket”, which analyses a number of different types of fares to establish some form of benchmark. They also want to promote greater use of smart ticketing, without providing assurances about maintaining the numbers of ticket office staff who provide advice on the quickest way to travel, the cheapest tickets and also provide extra security in the station through their presence.

MORE OVERCROWDING

In terms of capacity, the Scottish Government states that it is open to suggestions for increasing the levels above capacity at which Scotrail can run its services. The current limit is 105% - ie. for every 100 passengers who get the seat that they have paid for, an extra five passengers will not. In addition to this it also queries whether the 10 minute period after which a passenger should “expect” to get a seat should be increased.

STATION CLOSURES

The consultation document proposes further fragmentation and privatisation through third party management of some stations and in some cases transferring ownership of stations. They say they do not want to reduce the number of stations but will close some and open others. They also propose that stations do not need toilets or washrooms if the trains stopping at that station have those facilities. It is proposed to create 6 different categories of stations (not dependent on footfall like Network Rail classifies stations) and this will be an indicator as to who should manage or own the station.

FUNDING OF FRANCHISE

In terms of the franchise(s) they are considering whether or not to receive payment from the TOC by profit sharing (currently in place and standard across the network) or by taking a one-off fee (the standard management contract). There can be no doubt that a one-off fee will leave the service more susceptible to asset stripping by the private train operator.

Additionally the Scottish Government are consulting on whether a performance bond is necessary or a parental company guarantee should be used. A parental company guarantee would prevent a fiasco such as that which occurred with National Express East Coast in 2009, with National Express failing to provide the service it was contractually obliged on one franchise but retaining its other franchises with National Express itself not be punished for the failure.

The Scottish Government intend on granting the franchise for 7 years.

PROFIT BEFORE PASSENGERS

There are a number of proposals included in the consultation document which are clearly designed to benefit Scotrails’ shareholders as opposed to the passenger or taxpayer.

The Scottish Government intends to measure performance on outcomes, and argues that Scotrail could “self-monitor” its own performance. The outcome based approach means that the required level of performance is not fully specified in the contract, leaving Scotrail to perform as it sees fit.

In fact, the Scottish Government proposes specifying as little as possible in the contract. The Government says that service specification should be kept to a minimum, and that it is not necessary on economically viable services. It claims specification will only be necessary on socially necessary routes (non-profitable rural routes) but goes on to suggest that the number of services on these routes be cut and more interchanges introduced.

Measures of punctuality and reliability may be standardised as a result of this consultation (at present PPM, passenger charter commitments and actual performance figures all use different measures). Also measurement will apply to entire service groups or routes, not just to final destination stations. There is a clear danger of performance measurement differing on “economically viable” and “socially necessary” routes.

Additionally, there is also a proposal for a self-monitoring scheme by the TOCs. It is the view of RMT that this would lead to a clear conflict of interest, especially where financial penalties may be imposed, and which would make it highly unlikely for self-monitoring to work effectively.

The Scottish Government also suggests linking “risk support” to GDP.

There are two major issues with this proposal:

Firstly, that Scotrail does not actually take any risk. All of the external costs to the company (track access charges, all rail infrastructure, all rail investment, and even the performance bond) are in fact covered by taxpayer subsidy.
Secondly, linking “risk support to GDP” is intended to ensure that the level of profit made by Scotrail is not in any way affected by negative wider economic conditions. This means that despite the constant promotion of the “market” as being the only way to provide a value for money rail service, Scotrail will be cushioned against any negative impacts of the “market”. In fact, the move would make Scotrail probably the only privately run business in Scotland which would not be vulnerable to an economic downturn.

So whilst suggesting giving Scotrail a monopoly position and an almost free hand in deciding what services it provides, what level of performance it achieves, allowing it to squeeze as many passengers as possible onto each train, and protecting what is a dividend paying private business from the wider economy, the Scottish Government also proposes continuing to allow massive profits to be extracted from Scotland’s railway.

It is worth noting that all of these additional concessions are being proposed for a franchise that paid dividends of £18 million in 2010, £18 million in 2009, £17million in 2008 and £21million in 2007. In two of these years Scotrail actually paid more in dividends than it made in profit leading to the obvious conclusion that because it does not contribute anything towards investment in the railway or rail infrastructure, and with the level government subsidy even covering its track access charges, it is simply asset stripping Scotland’s railway. The proposals from the Scottish Government allow for the intensification of this theft.

How you can help

Contact RMT Scottish Office or RMT Helpline for campaign materials including postcards.
Write to your MSP to request them to oppose these proposals
Email Keith Brown, Scottish transport Minister at Keith.Brown.msp@scottish.parliament.uk to object to the proposals.
Visit www.rmt.org.uk to find out other ways you can help with the campaign to Save our Railways

RMT Scotland

180 Hope Street
Glasgow
Lanarkshire
G2 2UE

(click here to read the RMT response to Rail 2014 Consultation)

(click here to sign the petition against proposed changes to Scotland's Railways)