20 April 2017
RMT Press Office:
RMT responds to National Audit Office report on DFT’s botched South East flexible ticketing programme.
RAIL UNION RMT today slammed rail companies for wasting £120 million on a botched and unpopular ticketing system as the National Audit Office published the findings from its investigation into the Department for Transport’s progress in implementing the South East Flexible Ticketing Programme. Only 8% of travellers have taken up the scheme compared to a target of 95% while costs have trebled and the programme has been stopped and restarted three times – on each occasion with a fatter budget.
In January 2012, the Department set up the programme to supposedly improve coordination, speed up delivery and increase take up of smart ticketing. The Department was the sponsor and funder of the Programme; and the Rail Delivery Group, which represents the interests of Britain’s rip-off private rail companies, was the primary delivery agent working with train operating companies to develop and roll out the necessary infrastructure.
RMT General Secretary Mick Cash said:
“This report is yet another shocking indictment of the state of Britain’s privatised railways. A scheme supposed to be delivered by the organisation that represents the private rail companies has been delayed repeatedly and has soaked well over £100 million in taxpayers money. It is an absolute shambles which has cost us dear.
“The take up of the scheme has been simply pitiful as the travelling public simply do not trust the train operators and many would recognise that these automation plans are part of the racket to bring in a faceless railway and to axe station and platform staff under the cloak of “modernisation”.
“The solution to the crazy ticketing arrangements on Britain’s railways is not smashing up ticket offices and axing staff it is public ownership under one organisation to end the nonsense of fragmentation and division which have given the green-light to the great rail fares rip off.”
Key points from the NAO report:
• The Department has not delivered the original ambition of the Programme as set out in 2012, which was to improve the experience for passengers and reduce costs to train operating companies of selling tickets. An original aim, when the Department established the Programme in 2012, was to have flexible ticketing including discounted, part time season tickets to passengers in place on 11 franchises running services into London by 2014. By April 2017, the Programme has enabled 5 of the 11 train operating companies running services into London to offer season tickets on smartcards. Only one of the 5 train operating companies currently offers flexible, part time season tickets.
• The Department has now completed the Programme based on the reduced scope agreed in 2016. It has handed over responsibility for managing the central back office, which processes rail journeys by passengers using smartcards to the Rail Delivery Group. The central back office can now be used by other train operating companies, to operate their own smart ticketing schemes, and to process a wider range of ticket and fare types. The Rail Delivery Group has estimated that the central back office is currently using around 5% of its capacity and can handle more smart ticketing schemes. The Rail Delivery Group is promoting the capability of the central back office system to train operating companies across the country. By March 2017, two franchises outside the south-east of England are using the central back office.
• The Department had assumed high levels of take up of smart ticketing. Achieving the economic benefits of smart ticketing stated in the 2014 business case depended on eventually achieving 95% of take-up of smart season tickets The Department's latest data shows that 8% of all season ticket sales in the 12 months up to March 2017 on participating train operating companies were on smartcards. The Department attributes low levels of take-up to early problems with passenger experience and lack of promotional and marketing activity.
• The Department has spent £54 million on the Programme, compared to the original budget of £45 million. This was spent on developing a central back office to facilitate smart ticketing systems, installing or upgrading infrastructure such as ticket validators, ticket barriers and ticket vending machines, with £26 million (44%) spent on the Department and Rail Delivery Group's management of the delivery of the programme.
• In total, the Department has spent at least £120 million to achieve the current level of smart and flexible ticketing on the national rail network in the south east of England. The £54 million spent on the Programme builds on previous departmental expenditure. Before the Programme was initiated, the Department agreed to provide £60 million to Transport for London (TfL) to upgrade its ticket gates and back office systems to read train operating companies' smartcards, so that passengers could use smartcards provided by these operators at stations operated by TfL. This upgrade cost £66 million on completion in 2014 following changes to the scope of the work.
• In April 2016 the Department estimated that it would cost a total of £96 million including the £54 million already spent on the Programme, to deliver the full scope as set out in the 2014 business case. To deliver its original objectives for smart ticketing in the south east of England, such as providing part-time season tickets, the Department would need to either pay for the additional ticket barriers and validators needed to support smart tickets for more flexible fares, itself, or require train operating companies to do so through franchise agreements.
• Early in the Programme the Department identified concerns about the feasibility of the timetable and the Programme team's capacity to deliver the Programme. In 2013, the Department commissioned consultants to carry out a review of the Programme which found that the Rail Delivery Group had too few people managing the programme, which meant that timetables would have to be extended.
• The Programme was paused three times and reset twice, and each time the scope was reduced and the budget revised. It was first paused in December 2012, when train operating companies disagreed with proposals for the central back office and following concerns raised by the consultants' 2013 review the Department reset the Programme and increased its budget to £80 million, largely to cover the cost of increased programme management capability. In April 2016, the Department reset the Programme again, with £61 million to deliver a substantially reduced scope, following a ministerial decision that the rail industry should take the lead in innovating smart ticketing solutions.