By Richard Scott
Some rail passengers could face higher fares as a result of the report into railway costs A wholesale reform of the UK’s railways is likely to be triggered when a government-commissioned study into their value for money is revealed.
The report by former Civil Aviation Authority chairman Sir Roy McNulty will review fares, with some potentially rising sharply whilst others fall.
He has already urged £1bn savings a year by 2018, which could put ministers on a collision course with the unions.
The RMT union blames the UK’s high rail operating costs on privatisation.
Mr McNulty’s report, commissioned by the previous government, will feed into a white paper expected in the autumn.
The reason for the report is that our railways are too expensive. In fact they are around 30% more expensive to run than their equivalents in other countries. That means both fare payers and taxpayers pay more than they need to.
His interim report, published in December 2010, found that £1bn worth of savings could be made by 2018 without cutting services. That has been accepted by the government.
Those savings are likely to come from several sources. The biggest, but least eye-catching, is probably by getting Network Rail – which manages the railway infrastructure – to work more closely with the train companies.
The idea is to give them both the same objective of moving people and freight as efficiently as possible.
There is also likely to be new revenue raising measures such as building extra car parking spaces at stations.
And the report, presented by Mr McNulty later, will also recommend a review of fares – which the government will accept.
That will focus on managing demand on the railways. Overall, the plan is to keep fares flat but some are likely to rise whilst others fall.
Peak-time commuters are already facing their fares going up by Retail Price Index (RPI)+3% over the next three years.
The government’s aim is that, after that, those fares will rise by inflation only. In addition, some quiet trains might see their fares cut and there will be a drive to simplify tickets.
But some off-peak services – those just outside the rush hour – could see fares rise sharply as the government looks for a more gradual managing of demand to spread passengers across trains more evenly.
Some off-peak services are packed as passengers wait to take advantage of cheaper fares.
Another key area for saving money is staff costs. But changing working practices, cutting wages and jobs are likely to put the government and train companies on a collision course with the RMT union – and raise the prospect of widespread train strikes.
The RMT believes it is the privatisation of the railways that is responsible for their higher operating costs.
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