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Network Rail: Funding and Reliability

Volume 829: debated on Wednesday 26 April 2023

Question

Asked by

To ask His Majesty’s Government what assessment they have made of reports of analysis by Network Rail that the funding plans for the next five years are insufficient to maintain current levels of reliability.

My Lords, the Government published funding objectives for Network Rail for control period 7—2024 to 2029—on 1 December 2022, placing the highest priority on punctuality and reliability. The funding provided £44.1 billion—a real-terms increase of 4% above the current settlement. This demonstrates the Government’s continued commitment to the railway.

My Lords, from a leak from Network Rail itself, we now know that funding is so bad that basic infrastructure cannot be repaired and that we should expect more delays and more accidents. We need to know what the Government are planning to do to reverse this downward spiral in our railways. Can the Minister promise that no more train operators will be rewarded for failure with new contracts? Can she specifically guarantee that, at last, there will be legislation in the King’s Speech to create Great British Railways with the independent power to reform this ailing industry?

The noble Baroness referred to the source of her Question being a leak in the Independent. It was not really a leak, because we are not even half way through the process of the business planning, and, as I said, the real-terms increase in funding is up 4%. In fact, it was some slides prepared by a mid-level National Rail employee presenting the industry with some ideas for different funding scenarios for CP7—so never believe everything that you read in the newspaper. On contracts for TOCs, we look at each TOC on a case-by-case basis, and I am aware that another contract will be up for consideration in due course. Legislation for rail reform will arrive as soon as parliamentary time allows.

My Lords, I would like to know what the Minister considers to be the current levels of reliability. I commute from Oxford. The main line from Oxford to Paddington is closed until at least June, because of a broken bridge which should have been fixed ages ago. The main road from west Oxford to the station is closed at the end because another bridge is being repaired. Without any co-ordination, it is almost impossible to leave the city. Should it not be a human right to be able to get in and out of one’s own city?

The noble Baroness raises some very important points, which demonstrate exactly why we need this uplift in funding. However, it is not always about just funding; it is about how we make the necessary repairs and how we do maintenance. She mentioned bridges, which are incredibly important, as there is a bow wave of older assets which need to be maintained. However, by using box structure flyover bridges to replace old flyovers and bridges, one could do that at a vastly reduced cost. Those are the sorts of modernisations we need to get into our maintenance regime.

My Lords, does my noble friend the Minister agree that, if a list of the major projects awaiting attention were published, this might attract support from industrial sources and local areas? The additional station in Cambridge is a case in point.

My noble friend is absolutely right that there are many sources of funding for improving our transport sector. The discussion today around the £44.1 billion of funding does not even include enhancements—that would be in addition. Those projects will be set out in the RNEP, the pipeline of public sector projects, but there is also the opportunity for local government and the private sector to get involved.

The Minister cautions me not to believe everything I read in the paper. Recently, I read in the paper that Avanti West Coast was rewarded with over £4 million in taxpayer-funded bonuses and that the payout was awarded for a

“period in which Avanti was UK’s worst train operator for delays”.

Should I believe that?

Funnily enough, I do not wholly recognise those figures, but all the contracts and the rationale behind them are set out and published. All the performance information that goes into the award of any financial returns is assessed by an independent evaluator, and discussions are made on that basis. The contracts are prepared well in advance, and we must abide by them.

The Question refers to the maintaining of “current levels of reliability”, but is the Minister aware that the current levels of reliability on the Holyhead to London line are totally unacceptable? In the recent past, we have had trains going the other way, from Euston to Holyhead, turning round at Chester and leaving the passengers to their own devices to find connecting trains. Only this week, trains from Holyhead to London were advertised as fully booked and not available for that reason. Is not that totally unacceptable, and what are the Government going to do to improve the service?

I completely agree with the noble Lord. I am not content with current levels of reliability. That was obviously in the Question, and it would not have been in any response that I have given. We are aware that, despite 10% lower passenger demand on our trains at the moment, and slightly fewer trains running, performance is unacceptably low. The causes of that are many. Industrial action has had a huge impact on the performance of our railways, but we are working with the industry, and we would like to improve our relationship with the unions such that everybody can work together to give us the reliable and modern railway that we need.

My Lords, the Minister in responding to my noble friend Lady Randerson’s supplementary question said, “Don’t believe what you read in the press”, and that this was not a leak, simply some work-in-progress from a mid-ranking official. Could she then confirm to the House that it is the view of His Majesty’s Government that Network Rail has sufficient funding for the next five years to maintain the current levels of reliability? If not, what will it do to improve things—and, if it does, could it consider improving reliability?

If I may, I will explain to the noble Baroness what the process actually looks like. It is one that goes on for the whole of the year. The statement of funds available has been set and the Secretary of State has set out very high-level objectives. That is then given to Network Rail, which spends the process of the year doing the business planning. It does not do that in isolation; it does it under the scrutiny of the independent Office of Rail and Road. There are two determination periods—one that will happen in June and one that will happen by the end of the year, by when we will see how the £44.1 billion, which is quite a lot of money, will be spent, and what the performance outcomes will be.

Has Network Rail really run out of money, or have some of the new projects been paused—or has all the money been put into HS2, leaving nothing for the rest of the railway?

My Lords, over the past few months, passengers across England have continued to suffer from really unreliable services, as we have heard this afternoon. Fares have increased by 5.9%. Between October and December last year, 4.5% of all trains were cancelled—the highest rate since 2014. Can the Minister therefore explain why the FirstGroup franchise and Govia Thameslink have recently reported dividend payments of £65 million and £16.9 million respectively in their annual accounts for 2022, despite their continued failings? Does the Minister not agree that that would be better invested in the future of railways?

My Lords, once again we shall address the notion of dividend payments, because it is really important that we are clear about it. The dividend payments declared during the financial year 2022 related to periods far preceding that 2022 period, and therefore were earned by the train operating companies under contracts that were in existence at that time. One cannot retrospectively go back and take away money without completely tearing up the contracts and starting again. Maybe a Labour Government would do that, but we will not. We will stick to the contract and work with the industry, and we will get improvements to our rail system that way.

Can my noble friend reassure the House of the vast importance that the Government attach to the whole rail industry, and the fact that it is incredibly important to our economy? To get that investment, we also need to see levels of service, which is the responsibility of the train operators but the rail unions too. To make the case for investment, we have to have good services.

My noble friend is absolutely right. Sometimes it saddens me greatly how some of the unions are potentially undermining the long-term future of our rail sector. ASLEF train drivers withdrew, without warning, their rest-day working agreement. I now understand that a new rest-day working agreement was agreed, which would have vastly improved services on the TransPennine Express. However, within 24 hours, ASLEF then withdrew again on an entirely unconnected matter. Once again, we are left without rest-day working. There is a very easy way to improve services, which is to encourage the unions to reach an agreement with the TOCs, particularly on rest-day working.