Rail fares regulation and reform consultation goes live

• Rail industry, with independent watchdog Transport Focus, is running the consultation to inform proposals to update fares regulation and make things easier for customers
• An easier to use range of fares will aim to maximise the benefits of improvements in ticket-buying technology
• Alongside major upgrades to services, an easier-to-use range of fares is key to delivering the industry’s long-term plan for change and improvement launched in October
• Any proposals from the industry will be designed to be neutral in overall revenue terms and would require working with governments to implement

Britain’s rail companies, with independent passenger watchdog Transport Focus, have launched the first ever public consultation for customers, businesses, passenger groups, stakeholders, employees and the public to have their say about what the fares system should look like.

The consultation will be hosted on www.britainrunsonrail.co.uk and involve a questionnaire that can be completed online or posted by freepost. The industry will be engaging with governments throughout the consultation and will host a series of roundtables with consumer, business and technology groups.

Take part

Last month, rail companies announced that they were seeking ‘root and branch’ reform of fare regulations that dated back to the mid-1990s. The Rail Delivery Group commissioned an independent report by KPMG to identify key principles which are driven by what customers and the country need from the railway. These principles should underpin a fares offering that is fit for the future and include:

• Being transparent, predictable, fair, trusted, easier to use and value for money for customers;
• Offering integration with other modes of transport;
• Offering personalised, flexible fares which best serve customers in different markets;
• Enabling growth, innovation, efficiency and choice; and,
• Providing funding for investment and avoiding the need for additional taxpayer subsidy.

Responses to the consultation will inform proposals from the industry which aim to be revenue neutral overall with no change in average fares, meaning that taxpayers and passengers would not pay more towards the cost of running and improving the railway. A fares offering which is trusted though, has the potential to attract more people to travel by train which would support investment in rail or give governments an option to change the balance between taxpayers and farepayers for funding the railway.

For proposals to be revenue neutral, any changes in specific fares would need to be balanced out elsewhere. The consultation questionnaire therefore does not advocate options but asks those responding to give their preference for a range of options, which would feed in to industry proposals and ultimately need to be considered by governments. For example, this includes whether people and organisations would prefer certainty over the price of journeys, even if it means ‘early bird’ or last-minute deals are restricted.

Fare regulations have remained largely unchanged since they were introduced in 1995 and assume customers will buy their ticket by visiting a ticket office. Further layers of requirements have been added through individual franchise agreements, with little or nothing taken away. This means that long-standing anomalies are becoming locked in resulting in bigger problems for customers, and there are now around 55 million different fares.  Regulations have also failed to keep pace with the rise of smartphone technology or how people work and travel today, with part time working and self-employment having increased by over a third in 22 years.

The change the industry is working towards follows improvements that are already being made, where possible, to fares and by working with governments. These include cutting jargon, clearer information about peak and off-peak times and better information about how people can use their ticket, part of a fares action plan agreed between industry, passenger groups and governments. This is alongside the on-going roll-out of smart-ticketing, which will also help make it easier for people to buy the right ticket.

Paul Plummer, Chief Executive of the Rail Delivery Group, said:

“Today, as part of our long-term plan to change and improve, our consultation about how regulation can be updated to create an easier-to-use fares system goes live.

“This consultation will ensure the views of passengers, communities and businesses will be represented when we present our proposals to governments later this year. Reforming the rules about how tickets are sold and bought has the potential to transform the buying experience for customers, making it easier for people to be confident they are getting the right ticket. These reforms support what the industry is already doing to make improvements to fares alongside record investment in new train carriages, upgraded stations and extra services.”

Anthony Smith, Chief Executive of Transport Focus, said:

“Our research shows that rail passengers want a fares system that is simple to use, easy to understand and is flexible enough to cater to how people work and travel today. The rail industry has grasped the nettle and we will ensure the voice of the passenger is heard clearly as part of this consultation.”
The launch of the consultation is supported by business groups.

Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Businesspeople across the UK tell us that finding the best rail fare for their journey is as difficult as finding a needle in a haystack. This consultation is not before time but we are pleased that the rail industry is tackling the issue head on, and will encourage businesses in every sector and every region to make their voices heard.

“Businesses depend on rail to meet clients and suppliers, and to ensure many of their employees can get to work. A simple to use, easier fare system is needed, both for those who use the railway on an occasional basis and those whose livelihoods depend on rail journeys each and every day. More transparent fares and rules will also help boost confidence and trust amongst businesses.”

Mike Cherry, National Chairman at the Federation of Small Businesses, said:

“Moves to reform and update fare regulation will be welcomed by the many small businesses that are reliant on the rail network.

“The current ticketing and fares system needs to be brought into line with the more flexible way businesses work, allowing them to get the best deals when they travel, as well as encouraging better regional connectivity and increased productivity.”

The outcomes of the consultation will feed into a final report in the autumn which will make proposals to governments with options for fares reform and how to implement them.

Alongside major upgrades to stations and services, an easier-to-use range of fares is key to delivering the industry’s long-term plan to change and improve. This includes 6,400 extra services a week by 2021 and 7,000 new carriages across Britain.

Notes to editors

Consultation responses can be given by visiting www.britainrunsonrail.co.uk/fares. The hashtag for the consultation is #easierfares

1. Last October, the partnership railway of the public and private sectors published a long-term plan for change – In Partnership for Britain’s Prosperity. It included a commitment to increase customer satisfaction by developing practical proposals for the reform of fares.
    
2. The 1995 Ticketing and Settlement Agreement can be found here – chapters 4 and 6 set out how fares should be set and sold.
    
3. In addition to changes already underway as part of the fares action plan which will improve the buying experience for customers, over the next six months, the industry will be looking to run a number of trials to test options for a future fares structure.
   
   Also, train companies will be selling more advance fares on the day of travel and more train company websites and apps will display information about when advance fares are running out. The industry will also be continuing to simplify and improve the information printed on orange tickets.
    
4. The advent of digital ticketing and smartphones means there is potential to retail tickets in a way that lets more customers buy tickets where and when it suits them, and be confident they are paying the right fare. However, the inflexible nature of the current underlying fares structure and regulation limits the possibility to do this.
    
5. Data on self-employment and part-time working is based on ONS May 2018 labour market statistics.
    
6. Timeline of consultation process:
   • Public consultation opens – 4 June (today)
   • Public consultation closes – Monday 10 September
   • Final report – Late autumn
      
7. The proposed consultation is not about the overall balance between farepayers and taxpayers since this choice is rightly a matter for governments.