Department for Transport

Great Minster House

33 Horseferry Road
London
SW1P 4DR
Tel: 0300 330 3000
Web Site: www.gov.uk/dft

Mr Nicholas Parkin

Our Ref: 119010

Your Ref:
14 November 2014

Dear Mr Parkin,
Thank you for your email of 22 October to the Rt Hon Patrick McLoughlin MP, Secretary of
State for Transport, regarding the performance of Thameslink train services; I have been
asked to respond.
I am sorry not to have responded sooner. We have deadlines to meet with regard to
correspondence, and whilst this reply is within those deadlines, we do aim to respond
more promptly than we have managed to on this occasion
I would also like to state my disappointment that the service being provided by Govia
Thameslink Railway (GTR) is not meeting your expectations.
The franchise agreement between the Government and each individual train operator
includes key performance benchmarks. The Department monitors each train operators
overall performance against these levels, and this includes regular meetings with their
senior management where performance figures are scrutinised and challenged. There are
a range of enforcement mechanisms available to the Department in the event of noncompliance.
With regard to fares, we do understand your concern about the cost of some rail fares and
the impact that this can have on budgets. In September, the Chancellor announced that for
2015, the cost of regulated rail fares will be capped at inflation, removing the previously
planned increase of rail fares of RPI plus 1%. This extends the Chancellors 2013
announcement to cap regulated rail fares at inflation for 2014. This is the second time in a
decade that the Government has capped rail fares at inflation.
Train operating companies will also no longer be able to increase individual fares by up to
2% more than the permitted increase. The government has therefore protected
passengers by taking 3% off the maximum increase for a regulated fare. This has put
money back into the pockets of hundreds of thousands of passengers and shows how
serious we are about this issue. We are also looking at other ideas, such as more flexible
tickets, which could save passengers even more money by allowing for modern working
patterns.
I do appreciate that, at face value, the payments made by Network Rail to train operators
under their Track Access Agreements, and those made by the operator to passengers for
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delays, may appear similar in intent. However, it is important to note that they serve very
different purposes and therefore are not comparable.
The Delay/Repay passenger compensation system in operation applies to individual
journeys delayed by more than 30 minutes, regardless of which party was at fault.
The train operator pays compensation to passengers in recognition of the inconvenience
likely to be caused by delays of this sort. The compensation is related to the fare paid by
that passenger for the affected journey, and the amount increases with the duration of the
delay.
The requirement to pay compensation for delayed journeys in this way provides an
additional incentive to the train operator to address any issues that affect the smooth
running of its services.
Turning to the relationship between the train operator and Network Rail, this is governed
by the Track Access Agreement between the two parties. The specific arrangements for
compensation for delays are set out in this agreement, and are standard industry
arrangements which have been in place since the very start of this franchise.
The purpose of the compensation regime in the Track Access Agreements is to incentivise
Network Rail and the train operator to achieve an acceptable level of performance, and for
Network Rail to compensate the operator if performance drops below an acceptable level.
Payments under this regime are also designed to compensate for the effect of delays on
an operators future business which, if unaddressed, could ultimately have an impact on
public finances.
This compensation regime uses a different measure of performance to that of Delay
Repay as it relates to wider performance rather than that of an individual service. It looks
at the average lateness of trains per day across groups of services at various locations on
each trains journey. It then splits the responsibility for this average lateness between
Network Rail and the train operator, depending on the percentage share of responsibility
for delays suffered by the operator. There is a benchmark level for average lateness for
these groups of services for both Network Rail and the operator, and money can flow to or
from the operator depending on actual performance compared with this benchmark over a
four week period.
As can be seen, the two compensation regimes are quite different in nature and purpose
and, as such, it is not possible to make a direct correlation or comparison between the
payments.
However, the new GTR Franchise Agreement includes a challenging financial pain/gain
incentive regime linked to quality, performance and passenger satisfaction (as measured
in the National Rail Passenger Survey). This includes, for example, incentives to improve
station and train cleanliness standards and reduce train cancellations and delays. GTR will
lose money where targets are not met, but gain where they are exceeded.
Regarding the new train fleet, our 6.5billion investment in the Thameslink Programme will
significantly improve journeys. Passengers are already benefiting from some longer, 12car services and new stations at Blackfriars and Farringdon. From early 2016 passengers
will begin to see benefits from the new trains as the older trains are gradually replaced.
As well as being designed to modern standards for safety and accessibility, the new trains
have been designed to meet the specific requirements of the Thameslink route through
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central London which in broad terms serves two types of traveller on the same train
journey: the short distance London metro traveller; and the longer distance regional
commuter or leisure traveller.
In response to feedback from passengers when the trains were being designed and to
meet the demands of the different passenger groups, the trains have been designed with
the more comfortable 2+2 seating rather than to 2+3 seating seen on many of the trains
that the Class 700 will replace. Alongside the 2+2 seating, the trains have wide aisles,
vestibules and doors to allow more people to board and alight quickly in the typically busy
metro areas and in particular the Thameslink core.
This does mean that in a direct comparison, a new 8-car Siemens train has fewer seats
that an 8-car class 319 it is replacing however, as the four and eight car 319 trains are
replaced by 8 and 12 car Siemens trains you will benefit from more peak-time seats on the
route. With many more 12-car trains on the route when the Thameslink Programme is
complete in 2018, the morning peak service (trains arriving at St Pancras between 07:00
and 10:00), will provide more seats than is available today for example this will see
approximately 15% more seats from Bedford and 45% more seats from Luton.
Unfortunately, it is not possible to be precise about capacity changes until Govia
Thameslink Railway (GTR) and Network Rail have developed and tested the new
timetable this is a very intricate process that will take several years and will include a
public consultation. In addition to the extra capacity, the Thameslink Programme will
improve reliability of the trains and the infrastructure to provide faster and more frequent
journeys to key destinations.
Thank you for taking the time to write to the Department, and again, I am sorry that the
response was not provided more promptly.
Kind regards
Alistair Hobbs
Rail Commercial Correspondence Manager | Rail Executive

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