Response to Department for Transport consultation: A railway fit for Britain's future

Consumer Scotland is the statutory body for consumers in Scotland. Established by the Consumer Scotland Act 2020, we are accountable to the Scottish Parliament. The Act defines consumers as individuals and small businesses that purchase, use or receive in Scotland goods or services supplied by a business, profession, not for profit enterprise, or public body.

Our purpose is to improve outcomes for current and future consumers, and our strategic objectives are:

• to enhance understanding and awareness of consumer issues by strengthening the evidence base
• to serve the needs and aspirations of current and future consumers by inspiring and influencing the public, private and third sectors
• to enable the active participation of consumers in a fairer economy by improving access to information and support

Consumer Scotland uses data, research and analysis to inform our work on the key issues facing consumers in Scotland. In conjunction with that evidence base we seek a consumer perspective through the application of the consumer principles of access, choice, safety, information, fairness, representation, sustainability and redress.

The Consumer Principles are a set of principles developed by consumer organisations in the UK and overseas.

Consumer Scotland uses the Consumer Principles as a framework through which to analyse the evidence on markets and related issues from a consumer perspective.

The Consumer Principles are:

• Access: Can people get the goods or services they need or want?
• Choice: Is there any?
• Safety: Are the goods or services dangerous to health or welfare?
• Information: Is it available, accurate and useful?
• Fairness: Are some or all consumers unfairly discriminated against?
• Representation: Do consumers have a say in how goods or services are provided?
• Redress: If things go wrong, is there a system for making things right?
• Sustainability: Are consumers enabled to make sustainable choices?

We have identified choice, information, and representation as being particularly relevant to the consultation proposal that we are responding to.

Leadership for Britain’s Railways

Question 1: Do you agree that GBR should be empowered to deliver through reformed incentives and a simplified and streamlined regulatory framework?

Consumer Scotland is of the view that the creation of a single directing body, Great British Railways (GBR) has the potential to deliver improved clarity and consistency in regulatory arrangements for the sector. By streamlining operations and better integrating track and train management, GBR should be well positioned to focus on and improve outcomes for consumers across the railways in Great Britain. Whatever structure is eventually adopted, delivering improved key consumer outcomes must be a central ambition of the creation of GBR.

The six key objectives listed in the consultation - reliability, affordability, efficiency, quality, accessibility and safety - are appropriate. GBR’s success should be measured against these objectives, and ambitious, specific targets should be set for each objective as part of the proposed monitoring framework. Any incentives that are provided for should ultimately also be designed to serve these consumer objectives.

While we recognise the potential benefits offered by the removal of a number of complex legacy regulations, there may be a need for caution on the speed and process by which regulations are removed, to ensure the implications and potential consequences for the consumer experience are properly assessed. Before regulation is removed or adapted, it will be crucial for GBR to ensure that elements relating to consumer protection and safety are sufficiently embedded.

As a baseline, there are a number of specific, consumer-focused issues that GBR and operators must consider and address if consumer experiences and uptake of railway services are to improve. The key issues for consumers across both the UK[1] and Scotland[2][3] are reasonably consistent, but for consumers in Scotland, the issues that affect service and consumer experience are:

• The price of tickets and value for money, with consumers in Scotland facing some of the highest fares in Europe
• Ageing train and track infrastructure, especially in rural areas, affecting the reliability and comfort of services and leaving them less resilient in the face of the effects of climate change[4]
• Punctuality, with percentages of trains leaving less than one minute after the scheduled time falling year on year since 2020-21
• Cancellations rising year on year since 2020-21

As GBR becomes established, addressing these issues should be the focus of its streamlined processes.

Question 2: Do you agree that the Secretary of State should be responsible for issuing and modifying a simplified GBR licence enforced by the ORR, and that the ORR’s duties with respect to GBR should be streamlined to reflect the new sector model?

Implementing streamlined and simplified licencing has potential to bring about improvements for consumers. As with regulatory changes, changes to the licence should be instituted with care, and with a primary aim of improving the consumer experience. The proposals state that future licensing will be based on a “minimum viable set of conditions that are required for safety, performance (reliability and cancellations), efficiency, and passenger experience.” Each of these areas are important for consumers, though more detail would be helpful in relation to efficiency and passenger experience. There are some areas, such as accessibility, in which minimum standards may be part of ensuring an appropriate ‘passenger experience’ and these should be explicitly stipulated in any licence. This is also true for affordability measures for fares, in line with the key objectives listed for the future of the railways.

We welcome the proposal to monitor minimum viable conditions and the benchmarks for each of these should be ambitious, clear, and have clear responsibilities assigned for reporting purposes.

Regarding changes to the ORR’s role with drafting and enforcement of the licence, we note the intention that both the drafting of the licence and the ORR’s wider role will be consistent with the strategic direction of government, including in terms of encouraging growth. Building and maintaining consumer confidence in any market or service is essential to growth and therefore a focus on improving consumer outcomes in the use of the railway system is well aligned with this strategic direction. We would welcome further consideration being given as to how this strong focus on delivering positive consumer outcomes might be clearly articulated within the licence and the ORR’s wider role, to ensure that this key purpose is embedded for the longer-term.

Question 3: Do you agree that the Secretary of State should be responsible for setting a long-term strategy for GBR to align with government priorities?

We believe that establishing a long-term strategy for GBR will be beneficial, as it will help set clear and consistent expectations for consumers and operators.  

Audit Scotland recently published a report on progress in Scotland on sustainable transport targets, and a clear recommendation from the report was that future delivery plans must specify clear roles and responsibilities, timescales, costs, and evaluation methods.[5] Consumer Scotland agrees that these are all key requirements for the delivery of future transport strategies and we suggest a similar approach for GBR. Future GBR strategies should be accompanied by implementation plans which set out the responsibilities across GBR for the delivery of specific outputs that help to realise the strategy. This will allow consumers, consumer bodies, and the future Passenger Standards Authority to hold GBR to account for its progress.

Any strategy should clearly recognise the importance of strengthening consumer confidence in the railways and the central role that consumer confidence will play in supporting growth.

Consumer Scotland notes that Scottish Ministers will continue to set a separate strategy for railway in Scotland. The issues for consumers in Scotland may differ from those in the rest of Great Britain given Scotland’s particular geography, topography and population density. Meanwhile, the interaction between rail services and other transport infrastructure for which responsibility is devolved, means that there are clear consumer benefits to Scottish Ministers setting a railway strategy in Scotland. The Act should therefore provide appropriate opportunities for Scottish Ministers and bodies representing consumers in Scotland to be able to influence any GB wide strategy, especially in relation to those services which operate on a cross-border basis.

A New Voice for Passengers

Question 4: What are your views on the proposed functions of the new passenger watchdog?
Question 5: Which of the approaches would best enable the establishment of the new passenger watchdog?
Question 6: Which of the options to establish the Alternative Dispute Resolution function as part of the passenger watchdog would deliver the best outcome for passengers in your view?

We are providing a combined answer for questions 4, 5 and 6.

Consumer Scotland supports the proposals to establish a new, singular and independent body to act as a consumer “watchdog” for rail passengers. While different routes for complaints and redress already exist, these are shared between the Rail Ombudsman and Transport Focus. The establishment of a single body, together with the establishment of GBR, should improve consumer awareness of these new bodies and their functions.

The proposals set out the powers and responsibilities that the body will hold:

• to act as a statutory consultee for government and GBR policy, strategies and plans,
• to lead public campaigns and stakeholder management,
• safety regulation,
• the monitoring of passenger experience,
• advocating for service improvements,
• resolving unresolved complaints, and
• providing advice.

These increased powers and responsibilities should provide the new body with the means to be an effective consumer advocate and consistently help to drive up standards for consumers.

Consumer Scotland is keen to ensure that the new body has appropriate focus and responsibility on measuring and improving consumer experience on the railways. This function currently sits with Transport Focus in Scotland and this data provides valuable insight on the consumer experience. Establishing the new body alongside GBR presents an opportunity to gather further data and evidence on the issues that matter to consumers. Such data should be able to be broken down by operator, and by nation and region, to allow better understanding of consumer experiences.

We welcome the explicit commitment in the proposals to monitor the delivery of services for disabled consumers. As part of broader monitoring of the railways, data on the accessibility of trains and railway stations for disabled consumers should also be collected. We recommend that the new body should also have a specific statutory duty to promote and improve accessibility, as well as to monitor the consumer experience and advocate for service improvements more generally.

It is important that the new body is informed by the real-world experiences of consumers. Consumer Scotland recommends that as part of the establishment of the new body, consideration is given to creating a consumer panel to help inform its strategy and approach.  An ongoing consumer expert panel already advises the Office of Rail and Road (ORR), and similar panels are common in other sectors. For instance, the Communications Consumer Panel and the Consumer First Panel advise Ofcom and Ofgem, respectively. The Civil Aviation Authority also has a consumer panel. Any new railway consumer body could benefit from the expertise and insight delivered by such a panel—whether it be a repurposed version of the ORR’s Consumer Expert Panel or a newly-established body. Any new panel should have close working arrangements with other accessibility-focused groups such as DPTAC for the UK broadly, or MACS for Scottish consumers.

Transport Focus already have a statutory role for rail consumers across Great Britain and perform many of the proposed functions of the new watchdog. The consultation document suggests that the new body may in the future expand its focus to other modes of transport and we agree this should be explored, to identify the potential consumer benefits. It should be noted that there are some differences in consumer representation between Scotland and the rest of Great Britain, with different bodies holding different functions across different modes. Any plans to expand the scope of the watchdog should take account of this and consider the specific needs of and implications for consumers in Scotland. In addition, as the statutory consumer advocacy body in Scotland, we would welcome consideration of whether Consumer Scotland should be a statutory consultee in relation to key documents such as strategies or reviews put in place by the new body. We would be happy to discuss this further with officials.

Questions 5 and 6 focus on different options for specific functions and structures for the new body. Establishing the new body as a statutory advisor with regulatory functions would provide it with more effective powers and allow it to help shape key elements of the consumer experience, such as providing guidance on passenger-focused regulatory requirements, and monitoring how operators perform against a set of consumer-related service standards. Providing any new body with these regulatory powers presents an opportunity to help improve outcomes for consumers, and it is not clear where these powers would otherwise sit, if not with the new body.

If the new body is to have both regulatory and advocacy functions, it will be crucial that these are both adequately funded and delivered. We suggest that the model of providing an independent consumer panel within the regulatory body would help mitigate any risk of tension between regulatory and advocacy-based functions. This model is implemented successfully at bodies with both advocacy and regulatory functions such as the Financial Conduct Authority, Ofcom and the Civil Aviation Authority. These models should be considered when the structure of the body is being devised and consideration should also be given to how to ensure any Panel can reflect the needs and views of consumers across the nations and regions, including those consumers who rely on cross-border services.

We also note the continuation of the ORR’s role alongside the CMA as the competition authority while remaining the consumer law enforcement body. Consumer Scotland supports this arrangement continuing, as having the ORR and CMA acting concurrently, provides an important combination of expertise between the sector-specific knowledge of ORR and the wider competition and consumer law expertise of the CMA.[6]

Regarding the ADR function to be established as part of the new body, we favour the option of transferring the ORR’s sponsorship of the rail ombudsman, with the ombudsman retaining its current accreditations and functions. This would avoid the need for new legislation and the need to secure fresh accreditation as a competent authority from the Chartered Trading Standards Institute and the Ombudsman Association. This simplified process would allow for the faster establishment of the ADR function within the watchdog, causing the least disruption for consumers.

Making the Best Use of the Rail Network

Question 7: Does the proposed new access framework enable GBR to be an effective directing mind that can ensure best use of network capacity?

Though limited detail is provided on how the new access framework will operate, the guiding principles outlined are positive for consumers in terms of incorporating considerations around net zero targets.

The commitment to set a clear transparent remit in statute for GBR will provide confidence for passenger and freight operators seeking access to the network in order to provide services.

A renewed commitment to permitting open access operators to run services is welcome, given that this should add value and capacity to the network. We agree that allowing open access operators to provide services on the rail network is broadly good for consumers. This is because it provides extra competition among operators in a landscape that will otherwise become less competitive as the Passenger Railway Services (Public Ownership) Act continues to be implemented. Open access operators may offer cheaper fares on new and otherwise unavailable routes[7] and as passenger satisfaction with these services are broadly in line with satisfaction levels for contracted operators, or even higher,[8] they can clearly offer benefits for consumers. With open access applications increasing,[9] however, there will be a need for careful consideration of future applications to ensure access is only granted to the network when it is in the clear interest of the consumer.

Though rail freight operations do not have a direct impact on rail consumers, we welcome the intention to encourage fair access to the network for freight services. Support for rail freight as opposed to road freight can create positive impacts in terms of reducing road traffic and related emissions.[10] Encouraging a shift to rail freight therefore supports progress towards national net zero targets and contributes to increased wellbeing for future consumers. As transport remains a key sector in relation to reducing emissions, it would also be useful to consider whether GBR should have an explicit net zero remit, for example, objectives or functions in respect of promoting sustainable transport choices or having regard to the desirability of reducing emissions. 

Fares, Ticketing, and Retailing

Question 13: Do you agree with the legislative approach set out above to retain the Secretary of State’s role in securing the overall affordability of fares and continuing to safeguard certain railcard discount schemes?

Consumer Scotland welcomes the proposed reform of the current ticketing system and structures. Simplifying the ticketing system under a single framework will enhance consumer understanding and allow consumers to find the best fare possible for their journey.

We note, however, that simplified fare structures do not necessarily equate to more affordable fares. When LNER introduced a simplified range of tickets, for example, Transport Focus raised concerns that the change would make tickets more expensive and less flexible for some consumers[11] and it has been reported that cheaper off-peak options were replaced with more expensive options in some cases.[12] While simplification of ticketing offers may improve the consumer experience, this should not be achieved at the expense of affordability. In Consumer Scotland’s recent research on consumer attitudes and motivations around sustainable transport options, we found that the cost of travel was one of the primary barriers to choosing public transport travel.[13] Meanwhile, rail fares continue to rise in both Scotland[14] and the rest of Great Britain.[15]

We note that it is proposed that the Secretary of State sets out parameters and limits for the extent to which rail fares can change. Efforts should be made to avoid further increases to rail fares, and where they do increase, it should only be following a clear procedure which demonstrates the need for such a rise. Unless fares are affordable for consumers, there will continue to be barriers to consumers choosing more sustainable transport methods.

We support the proposed changes to online retail of fares, and the combining of individual train operator platforms into a single GBR online retail space as this will also simplify the consumer experience. The retention of third-party ticket sites, alongside open access operators setting their own fares, is a crucial addition to the proposals as, without this, there would be a significant concern about the effect such a loss of competition would have for consumers.

Some consumers still consider digital ticketing options to be inaccessible, including over 10% of those aged 66 and older.[16] As part of GBR’s focus on accessibility, therefore, Consumer Scotland also stress the need for the retention and safeguarding of physical ticketing as an option for consumers, and especially those in vulnerable circumstances.

In Scotland, Scotrail has a well-established retail app for consumers, and Transport Scotland has established a National Smart Ticketing Advisory Board to help drive progress towards smart and integrated ticketing.[17] While we broadly support the creation of a GBR online retail framework, we would encourage GBR to collaborate with Scotrail, Scottish Rail Holdings, and Transport Scotland to help encourage consistency of experience for consumers between Scotland and England and to share best practice on online retail issues.  

Finally, Consumer Scotland supports the safeguarding of existing discount schemes and railcards for consumers. Railcards can be an effective way for consumers to save money on rail travel[18] and provide clear benefits for those eligible. However, given the stated aim in the proposals to target such discount opportunities towards those for whom cost is most likely to be a barrier, over-arching changes to the fare structure may present an opportunity to explore whether existing discount schemes are appropriately targeted. There may be other groups, such as those on low incomes, who may benefit from a dedicated railcard or discount scheme, and this could be an opportunity to make rail travel more accessible for them.

Question 14: What, if any, safeguards are needed to ensure a thriving and competitive rail retail market while also ensuring GBR can deliver a high-quality offer to its customers?

Many of the factors that will contribute to a competitive rail market, which consistently delivers a high-quality service to consumers, are already addressed in the proposals.

While track and train being united under a ‘single directing mind’ has potential to improve consumer understanding and streamline service delivery, there is a risk that this could reduce competition and choice for consumers. A commitment to encouraging competition by, for example, ensuring a process for open access applications for operators, and by maintaining a third-party ticket sales market, will be important to help secure good consumer outcomes on key issues such as price and service quality.  

The monitoring of service standards and setting of minimum service conditions should combine to help maintain acceptable service levels. The minimum service conditions must be ambitious, the monitoring of services comprehensive and transparent, and there should be a clear line of accountability in place to address cases where standards are not met.

As noted above, we consider that Department for Transport should explore the possibility of establishing a consumer panel to advise the proposed new consumer watchdog. This would provide a clearer understanding of consumer issues while also improving the accountability and scrutiny on behalf of consumers.

Finally, in our recent briefing on consumer attitudes to net zero and transport choices,[19] we recommended that Scottish Government and Transport Scotland work with operators and other stakeholders to analyse where there may be gaps in public transport provision, and to target areas where there is opportunity for investment in services or underlying infrastructure. The same recommendation may be useful for GBR to consider. Network Rail has itself showcased examples of where targeted investment in new rail lines and stations across Britain can make rail travel more practical for consumers, but also contribute to the local economy and boost growth.[20] At a time of great change in the rail market, a commitment to targeted investment in new rail could encourage more people to undertake rail journeys more regularly.

Devolution

Question 15: The government intends that GBR’s statutory duty in relation to devolved leaders should strike a balance between enhancing their role whilst also ensuring that GBR has the appropriate flexibility to direct the national network. Do you agree with this approach?
Question 16: Do you agree with the proposed approach in Scotland on enabling further collaboration between track and train while preserving the devolved settlements?

We provide a combined answer for questions 15 and 16.

Consumer Scotland recognises the potential benefits of the ‘single directing mind’ that GBR can bring for rail policy, including improving the consistency of strategy and delivery across Great Britain. We also recognise that there are different geographical contexts, service delivery approaches, and consumer needs across the different nations and regions. As rail services within Scotland are already devolved, the major impact of these proposals for consumers in Scotland is in respect of those services which operate on a cross-border basis.

We note that, as currently, Scottish Ministers will issue their own high level output specification (HLOS) and statement of funds available (SoFA) (within the wider process) and sign off delivery of the business plan for the parts of the network they are responsible for funding.

We welcome the proposal that the Board of the new passenger services body will include members nominated by Scottish Ministers, as well as from other devolved nations and regions. Such a commitment, however, is not made for the Board of GBR itself. While the proposals state that the Secretary of State will seek the views of Scottish Ministers, as funders of rail infrastructure in Scotland, there is limited detail provided. Consumer Scotland suggests that the GBR Board should also include a member nominated by Scottish Ministers. This would help formalise input reflecting the perspective of consumers in Scotland and help GBR to deliver for consumers from across Great Britain.

We also suggest consideration of whether the new bodies should be required to lay strategic documents, such as their Annual Report, before the Scottish Parliament, in a similar manner to the Competition and Market Authority, with a view to accountability on behalf of consumers in Scotland.

In relation to promoting greater collaboration between track and train, following the transfer of Scotrail into public control under Scottish Rail Holdings, track and train are already well integrated in Scotland. As the consultation document notes, the Scottish Government is both the commissioning body for Scotrail and Caledonian Sleeper Services and the funder for rail infrastructure in Scotland. We welcome any measures to increase  collaboration between GBR and the Scottish Government in order to deliver improvements to the consumer experience. It is important, however, that the proposals in the consultation do not disrupt the relationship between track and train in Scotland and, conversely, create a greater separation between delivery.[21] Any proposals to extend the remit of the new Passenger Services Authority across modes would also require detailed consideration from a devolution perspective, given the devolved nature of these services and of consumer advocacy in general. We therefore note the need for close working between Governments and officials as these proposals progress.