Oral evidence: Rail timetable changes, HC 1163

Oral evidence, 22 October 2018.

Witnesses

Chris Grayling, Ruth Hannant, Peter Wilkinson and Gary Bogan.

Chair

Welcome and thank you for coming along today. Please can you introduce yourselves for the record of proceedings?

Chris Grayling

I am Chris Grayling, the Secretary of State. I will ask the team to introduce themselves.

Gary Bogan

I am Gary Bogan, director of Rail North Partnership.

Peter Wilkinson

I am Peter Wilkinson, managing director of passenger services at the Department.

Ruth Hannant

I am Ruth Hannant. I am one of the directors general for rail in the DFT, with Polly Payne.

Chair

Yes, we met your job-share partner previously. Obviously this summer has been a really difficult time for passengers on quite a substantial chunk of the rail network. I am sure you have been looking at the other evidence we have received, particularly our last session when we heard from passenger representatives. The description that Stephen Brookes gave for his experiences was “Dante’s inferno”. Should passengers who were affected by timetable changes in May in a very negative way be expecting to see an increase in their fares come January next year?

Chris Grayling

We judged that the important thing was to get compensation to those passengers quickly. If you look at the package that has been provided to those affected, a month’s free travel plus delay repay is almost the equivalent of 10% of their annual travel. Our judgment was that, to make sure that those passengers were properly compensated for what had happened, it was a quicker and more straightforward way of making sure they received that compensation now as opposed to later.

Chair

So they should expect to see their fares go up by 3.2% in January.

Chris Grayling

I cannot comment yet on what the train companies will choose to do. There are broader issues around train fares, of which you will be aware, including the whole question of CPI and RPI. What is the appropriate response to what happened in a summer of disruption? Unfortunately, it was a summer of disruption that was a diversion from what was supposed to happen and is now happening; both Northern and GTR, for example, are now running more services than they were before May. There are longer trains on Northern and the new trains are being introduced; I saw the first one in Liverpool Lime Street last week. The planned improvement to service is now taking shape. It did not take shape nearly quickly enough, and that is why it was important to get them proper compensation sooner. The compensation is far bigger than any question of fare increases. It is almost 10% of their annual travel cost, if they took advantage of delay repay, as well as getting the month’s free travel.

Chair

What about the people who were not entitled to compensation? Unfortunately, the honourable Member for Cambridge is not here today, but I travelled on Great Northern one Sunday morning and a short-formed train arrived at the station. We all duly crammed on and stood for a whole hour on our way into London. We would not be compensated. It was not delayed or cancelled; it was just an extremely uncomfortable journey. Talking to other passengers, that was clearly representative of their Sunday service. How are they going to be compensated for the appalling services they have had to endure since May?

Chris Grayling

The answer to that is that there are systems to provide compensation when people are delayed, but frankly the compensation for an overcrowded network is to invest in it and deliver more capacity. Of course, what is happening on the Thameslink—

Chair

It was not about the network being overcrowded; it was about the train operator not providing the right-sized train. It was a short-formed train. We have heard from other witnesses that short-formed trains have been a feature on both GTR and Northern Rail. There is no compensation when someone’s train is short-formed, is there?

Chris Grayling

There is not, no. What we are doing is providing new trains for the Great Northern network with more capacity. The whole of the GTR network is seeing a substantial increase in capacity, and there is the whole Thameslink programme. Of course, the frustration this summer was the introduction of the new timetable going wrong. It was supposed to be a good-news story, with significant extra capacity and more trains to reduce the likelihood of short-formed trains, which can happen for a whole variety of reasons, including a broken-down train, previous delays and so forth. It is obviously difficult to comment about an individual circumstance. The best solution is to make sure that we have as much capacity as we can deliver. That is what the whole Thameslink programme is about.

Chair

I appreciate that it is jam tomorrow for rail passengers. Are you concerned that when people have had such a terrible experience, and I hope you would agree that it has been a terrible experience for those people, they will actually stop using or reduce their use of the railway? Of course, that has much wider implications. What do you say to passengers who are perhaps now thinking, “It’s better for me to drive, work from home or change jobs”?

Chris Grayling

My answer would be to take a look at the service as it improves. It is not actually jam tomorrow because GTR is now running more services than it was before 20 May. Northern is running more services, and, more particularly in Northern, the first of the new trains are now arriving. I was in Harrogate recently where the first of the wholly refurbished trains is operating. As I said, I saw the new train at Liverpool Lime Street last week that will be replacing the Pacer trains. It is a transformation. How do we address the issue of people not wanting to travel on the railways? We must make them better. The frustration this summer was that the change was supposed to be positive. Indeed, there are now longer trains. There are the new 12-car Thameslink trains with greater frequency through central London. There are thousands of extra seats with extra trains in the peak hours. That is providing a better service for passengers. It is a real shame, and I am really sorry that it started so badly.

Chair

What have you done to check that passengers feel that they are now getting a good service? Can you explain what monitoring you have done and what passengers are telling you?

Chris Grayling

Our experience, and I see it because I am in email conversation with passengers regularly, is that I get all the messages through, as does the Department when people have bad experiences. We look at the performance measures and I talk to Members of Parliament. It is better than it was. It is not perfect yet. We do not yet have all the services back on GTR that we were going to get as a result of the May timetable, but they are running more services today than they were before May. They will be running more services from Christmas time. This is all about taking a situation where there are massively crowded trains and trying to provide more capacity for passengers. Interestingly, I know people in my own Department who said that, on the days that the service was working, they were getting a seat for the first time in years. There are improvements, but it is a real shame, and I am really sorry, that it started so badly. This is about making the service better, not worse.

Chair

Coming back to the question about the potential for passengers more broadly to be compensated and not having to face another increase in the cost of their tickets, including their season tickets, has the Department looked at the financial implications of freezing fares? Is it something you have even considered?

Chris Grayling

We have looked very carefully at the implications of freezing fares. We have looked very carefully at a number of changes on the fares front. The real issue around freezing fares is this. You just have to look at what has happened to Transport for London with its partial freeze. Transport for London is in deep financial difficulties at the moment, and not simply because of the challenges over Crossrail. The problem with a fares freeze is that if your costs continue to go up every year, and you continue to pay more to your staff, you build a long-term and growing underlying problem within your own finances. Over a period of time, you are sucking a cumulatively larger and larger amount out of the money available to run the network. The only way of counteracting that is that people who do not travel on the railways have to pay more and more taxes to provide a counterbalance. We have to make some choices. Costs rise, staff get pay rises and fuel costs go up. Do you freeze fares and either accept service cuts or that the taxpayer has to pay more, or do you accept that there will be increases in fares but you will try to keep them down as far as possible? You know my view, Chair; I would like fare increases, for example, limited to CPI. When I proposed that in the summer, the unions threatened a national rail strike.

Chair

I do not think they were objecting to fare rises being restricted to CPI; they were objecting to your proposals around wage rates.

Chris Grayling

Absolutely. You cannot have one side of the industry’s costs on one measure and another side on a different measure. Of course, I do not see any reason why decent hard-working rail staff should be treated differently from decent hard-working staff in, for example, the health service, education or whatever. I was not suggesting that they had wage freezes. I was not suggesting they had wage cuts. I was simply suggesting that we use the same measure of inflation that everybody else did. The result was the threat of a national rail strike.

Chair

It is quite surprising really, for someone who does not run the railways, to be telling private train operators what their wage policy should be.

Chris Grayling

Of course, I have a say over pay in the public sector parts of the rail industry.

Chair

I come back to the question about the financial impacts of a fare freeze. The Committee would share your concerns that taxpayers should not have to pick up the cost for the poor performance of train companies. Have you considered ways in which the train companies should have to take the financial burden of a fares freeze? I am particularly thinking about GTR, who bought out their liabilities through to September and therefore do not seem to have suffered as a result of their appalling performance during the introduction of this new timetable.

Chris Grayling

I can assure you that we are looking very carefully at what we are going to do about GTR and their poor performance this summer. We are close to a resolution on that. I am not going to comment today because at the moment it is a commercial negotiation, but I have ruled out no options. It would not be true to say that we intend to take no action.

Chair

Is there a possibility that if you took action it would be shared with passengers?

Chris Grayling

That is clearly an option.

Chair

Is it something you are actively considering—there being some sort of fares freeze for passengers on GTR?

Chris Grayling

As I said, the problem with fares freezes is that they do not have a one-year effect. They have a permanent effect on the bottom line. It permanently sucks money out of the industry. You could take one year and say, “We will use this block of money to cut fares,” but then you have to find the same amount of money the following year, the year after that and the year after that, in perpetuity long after the end of the franchise; or at some point the taxpayer has to come up with extra money or there has to be a double fare increase.

Chair

Are you looking at some other way of paying passengers additionally?

Chris Grayling

We are looking at alternatives for making sure that passengers feel the benefit of any consequences that GTR faces. I will happily talk to the Committee about that when we have finished the process.

Chair

Does that only apply to GTR and not to Northern?

Chris Grayling

The issue about Northern is clearly different. As the ORR and the Glaister report highlighted, the issue was about the failure of Network Rail to deliver infrastructure. In the north, we have provided the same compensation package to travellers. In addition, there has been money provided to Transport for the North to promote rail in the north. The situation is different, as the Glaister review highlighted, between Northern and GTR.

Chair

There were obviously different causes, and perhaps Northern were less liable than GTR, but from a passenger perspective I do not think Northern passengers will be any more pleased about seeing an increase in their fares in January. Do you think their perception is different?

Chris Grayling

That is why it was important to provide them with a month’s free travel. It is also important to provide those Northern passengers with brand-new trains, and that is what we are doing right now.

Chair

We want to look at your responsibilities and those of the Department in relation to timetabling.

Ronnie Cowan

Secretary of State, you told us in July that you “do not run the railways” and are “not responsible for rail timetabling.” Presumably you do accept that, as Secretary of State, you are responsible for industry structures.

Chris Grayling

Yes, very much so. I am also responsible for the successes or failings of my Department. As Secretary of State, I clearly take responsibility for that. There is no secret about my views on industry structures. If I am guilty of anything, it is of not moving fast enough to deliver change. I have said to this Committee over the last couple of years that I believe we need a more integrated railway. I had started the process, as you will remember, to move towards greater alliancing and to look to create something deeper on the east coast main line. What this summer has convinced me is that we need to move much faster. There was a process of evolution that I judged to be the right one to avoid putting the industry through excessive change. I now think that it needs significant change, and that is what the process I have established since the timetable issues arose is designed to achieve.

Ronnie Cowan

I do not have your expertise in this area. I look at this and see ORR, IRB, GTR and DFT. Apart from looking like a really bad hand in Scrabble, I have no idea who is responsible for what. Coming to the timetable changes, where are the lines of demarcation?

Chris Grayling

This is what the Glaister review established. It is symptomatic of the industry as a whole. We have an industry that is in a very different place from 20 years ago. There are twice as many passengers, 50% more trains running and the network is bursting at the seams; and accountability—

Ronnie Cowan

But whose responsibility is it?

Chris Grayling

The ORR basically highlighted the fact that there was not enough clear accountability. The situation is, “Who should have been in charge?” Nominally, at the heart of the process sits the Network Rail system operator that has the job of shaping timetables and making the system work effectively. In my view, we have too much dilution of accountability, and that is what now needs to change. That is basically what the Glaister review said.

Ronnie Cowan

The ORR said that nobody took charge of the May timetable. Wasn’t it your Department’s job to ensure that someone did? There will be changes to the timetable in November and December, I believe. Are we looking at the same sort of chaos in December, or have we sorted out the problem and do we now know who is responsible?

Chris Grayling

As regards to that, I have tasked Andrew Haines, the new chief executive of Network Rail—in fact, I did it before he had even started—to take control of the December timetable process, and indeed next June. Andrew has put together a new senior project group in the industry to oversee that. We have downscaled ambitions for the December timetable change to make sure that we cannot get the same disruption again—I hope; fingers crossed, it should be fine. It is a less intensive timetable change. The industry does timetable changes every six months. That has been a routine for ever. The December timetable change is smaller than the routine ones that normally happen every six months, to make sure that we do not have the same issues in December. Next May, there is a plan to step up the Thameslink programme. We will need to make absolutely certain that the industry is ready for that. There is much more proactive engagement across the industry than took place before, from my Department, from the ORR and from the different parts of the industry. What we learned from what happened in May is that accountability in the industry is too diluted to deal with both the pressures on the industry and a major process of change. That is what the Glaister review said.

Ronnie Cowan

If we are changing timetables every six months, why did it go so wrong in May?

Chris Grayling

Because of the scale of it. It was the largest timetable change ever.

Ronnie Cowan

You just bit off too much to chew.

Chris Grayling

Yes. In the end, it was a bigger change than the industry could cope with. A number of factors, including particularly the infrastructure problems in the north, and those to do with the unexpected complexity of the Thameslink timetable change conspired to create something that should have worked well but did not.

Huw Merriman

The Department for Transport provided the Committee with an extract of the governance structure. It seems to show the train operators and Network Rail, who of course are responsible for delivery, confirming to the IRB, who then make a recommendation to you. You can only intervene in the event that you are advised of risks that mean the timetable change should be postponed. As you said before, you received no risk evidence at all. Indeed, as we can see, the IRB seemed to be a bit in the dark itself in terms of some of the issues. I would contend that that structure just does not work. If we were to start all over again, knowing what we know now—that if you trust the actual delivery partners to come up with a structure it can fail—what would be a better way of doing it so that there is independent verification from a sponsor holding those bodies to account?

Chris Grayling

In the short term, it would be tasking the chief executive of Network Rail with being the person at the core of it. Network Rail effectively designs the timetables. It manages the system. It is the system operator. We used to have the Strategic Rail Authority, which was abolished by the last Government in 2006. It previously had the role of co-ordination of services. That then passed to Network Rail. Network Rail has the job, through the system operator team, of co-ordinating all of it. That is still the place where the co-ordination comes, but we now have chief executive level accountability for making it happen—and chief executive level accountability with a much greater focus on the rail industry. In the short term, that is the best way of dealing with it. In the medium term, I want to see wholesale change in the industry. As you know, and as I have said in previous conversations, we need a much more joined-up industry. What will come out of the work that Keith Williams is doing is not some kind of dusty document that sits on a shelf; it is going to be an action plan for reform that will start immediately afterwards. I am very clear that in the short term it will sit on Andrew Haines’s desk. Indeed, I met Andrew earlier today to talk about December. Andrew is the person I trust to take a lead on this. He is a new appointment, and I think he is very good. I trust his judgment. Within the Department, we are overseeing this very carefully and very closely in a way that we would not have done normally, because it is not the job of Government to run train timetables and the rostering of train drivers. The Government now have to make sure, given what has happened, that those whose job it is are doing the job properly. Where there was criticism of my Department, and indeed self-criticism of the ORR in the Glaister report, it was that we took at face value assurances that it would be okay. On 2 May, I had the chief executive of GTR in my Department saying that it would be a slightly bumpy start, but it would be fine. On 4 May, we had the Industry Readiness Board giving the new timetable a rating of green, green, green and amber/green. Gary might like to say a little bit about the commitments that Northern has given.

Chair

Before you go on, let me ask about the holding to account. What challenge was there from the Department? When you were told that it was all going to be fine by the Industry Readiness Board or the programme board, how were you testing that? You cannot just take it at face value if they tell you that it is all going to be fine. Surely the Department has sufficient expertise, sitting at the centre, to test what you are being told?

Chris Grayling

The Industry Readiness Board was our test. What I did previously, in order to try to make sure that the timetable worked well, was to set up the Industry Readiness Board. It was chaired by Chris Gibb, who has been before this Committee. He was the person who did the work to try to streamline and improve performance on Southern. He is a respected senior rail figure. They established an independent assurance panel, chaired by Chris Green. That was our challenge. It is what you would expect us to do to make sure there was a process of assurance, to make sure that it would work. I am less than happy that it did not work. We have just seen something similar with Crossrail, where we were told it would be fine and then it was not. There is going to have to be a culture change in the industry and in the way these things are done. Clear assurances that things are on track from the people whose job it is to judge whether they are have not worked. Gary can say a bit about the Northern end.

Gary Bogan

The situation in Northern was slightly different. As you have heard previously in evidence, and in the initial Glaister review and outcomes, it was a case of the imposition on the franchisee of a timetable to be rewritten almost from scratch in around 16 weeks, rather than the usual year that the industry has. In the Rail North partnership, we work on behalf of both Transport for the North and the Department; we manage the two franchises, Northern and TPE, on their behalf. We were probably closer in among the problem-solving elements that Northern faced. The plan was to have an electrification route from Bolton to Manchester, and the trains that were going to do that were electric, and the diesel trains that the company ran were going to go across the network to strengthen services. Instead, there was, effectively, a missing train fleet; we did not have the electrification. We needed to understand what services could run, because it was not Northern’s old timetable that could run, but instead the empty spaces between all the other operators’ timetables. Was there sufficient rolling stock to operate those services and assist Northern both with loans of trains from TPE and other franchises? We needed to ensure that the rolling stock that was expected from ScotRail would come. We were quite hands-on in working through that with them.

Chair

In the north, it was probably pretty clear to people in Network Rail that there was a very high chance of them not completing the electrification through the Bolton corridor at the end of 2017. Why was the risk to the 20 May timetable not realised at an earlier point? Why was mitigation not put in place, given that it was known that it was a huge timetable change and it was contingent on a piece of infrastructure development that was already delayed by 12 months? Why did nobody spot that?

Gary Bogan

In a way, it is the very point you make. The timetable and all the work that had gone into preparing it, which by that point was 42-plus weeks, was contingent on finishing the infrastructure. Network Rail were extremely keen that they would be able to finish the infrastructure and report as much in January, but, to bring that about, they needed a whole lot of emergency access. The resource that would re-plan the timetable inside Northern is the same resource that needs to work to give Network Rail emergency access to let them complete the infrastructure works. On the basis of the evidence and the assurances, the advice was that the correct thing to do was to ensure that the infrastructure could be finished to let the May timetable go ahead. There was no plan B at that point for the new timetable.

Chair

Shouldn’t somebody have realised that they were being hopelessly optimistic at Network Rail in expecting to get it finished over Christmas?

Gary Bogan

I work in rail services rather than infrastructure. I attended the north of England programme boards throughout, and heard the level of confidence and commitment to be finished by the time we came back in early January, only to find that there had been a setback.

Ruth Hannant

Obviously in the early part of 2017, Network Rail had advised, as you say, that they thought they would not meet what was the earlier entry into service date of December. They were advising the Department at that point that they would not be able to do it, and all of the industry agreed that, which was why in July the date was put back from December to May. However, in the course of the autumn that is not what Network Rail were saying to us. They were saying that they thought they would be able to complete the works. A number of things had changed at that point. They had done more of the work, and in October they actually found an engineering solution to the problem that they had been experiencing over the earlier part of the year. Over the course of the autumn, they were considering in the programme board what access would be needed to enable them to deliver the works. There was a programme of work over Christmas that, as you know, actually only managed to achieve 75% of what they had hoped because of a number of issues. At that time, they said that the level of additional access they would need was five weeks. At that stage, because that level of access was far greater than anybody had understood before, and would have meant bussing 10,000 passengers along the Bolton corridor, it was felt not to be a tenable proposition. Importantly, over the course of the autumn, Network Rail had not been saying to us that we would not be able to rewrite the timetable. They had said we would not be able to rewrite the full national timetable, but while they recognised it would be a very significant challenge they thought they could rewrite the Northern timetable, and they managed to do the timetable rewriting with Northern. We then had the additional issues of delays to the Preston works because of the severe weather incident that we had in the early part of the year.

Chair

It is very clear that there were lots of contingent arrangements required. The Department knew that this was the biggest timetable change in a decade or more, at four or five times the normal level. Shouldn’t you have known that it needed somebody to be in control? I accept that, as the Secretary of State, you do not run the railways, but surely you should have known it was important to make sure that somebody did. Knowing that there was this huge timetable change and that it was contingent on a number of difficult infrastructure developments, weren’t you asleep on the job by not having that in place?

Chris Grayling

Absolutely not. In my judgment, what we had all the way through was a process of assurance in the south and a process of assurance in the north. Four days before the new timetable was introduced, Ruth and Peter had the managing director of Northern saying, “We’ll be fine; we’ll be ready.” Everybody was giving the same message all the way through: “It will be a slightly bumpy start, but it will be fine.” We have minute after minute saying that the industry would be ready. What assurance should Government put in place? It is not to say, “Right, I’m taking all of you guys away from the leadership of this and I’m putting someone in charge.” We should have trusted assurance processes to make sure that things are on track, and that we did, even though it transpired that they were not. We had that in the form of the Rail North partnership board with Gary. We had representations of both Government and all the combined authorities in the north as well. It was not just my Department. The Rail North partnership board has, for example, Transport for Greater Manchester represented on it. They were fully sighted in all of this. At no point did anyone involved in this come and say that it was going to create the kind of problems that we saw.

Chair

In the north they did, did they not? They asked for the timetable to be delayed.

Chris Grayling

Ruth, do you want to recount the meeting you had with the chief executive of Northern the week before the timetable was introduced?

Ruth Hannant

You are correct that Northern asked for the whole national December timetable to be rolled forward, but the industry took a decision, because it is an industry decision working with the system operator, that the impact of that for the industry as a whole would be too significant. Northern had to adjust its timetable to reflect the rolling stock issues.

Chair

But there was a recognition that they felt it was not deliverable at that point.

Ruth Hannant

I think they said they thought it would be very difficult and very challenging. I do not think they said at that point that they thought it would not be deliverable. They said it would be difficult.

Chair

Should that not have rung alarm bells that there should have been contingencies in place, given that they obviously felt it was high risk enough for them to say, “We think the national timetables should be rolled forward six months”?

Chris Grayling

But at every point through that process, when there were issues, there were solutions to those issues. They were carefully discussed in Gary’s board, and in the case of GTR with the Industry Readiness Board. In the end, those solutions proved not to work.

Huw Merriman

To come back to the answer you gave me, I am focused on the challenge for next time, which is where our Committee can make a recommendation. If you ask an organisation to mark their own homework, it does not always get the level of critique that an independent verifier would give. Looking at the structure, I take the point about you sitting at the top, or the Mayor of Manchester, who would have been in exactly the same situation as you from a northern perspective. You touched on the fact that in the short term it would still be Network Rail, and that is where I would still say they were marking their own homework. If they failed last time, they will fail again, we should assume. Can I push you a bit more as to who the independent verifier with the teeth to investigate and get sign-off should be?

Chris Grayling

My view is that we need to move back to an integrated railway where someone is in charge. I do not think there is any secret about my view. The rail review is designed to deliver a more integrated and more joined-up railway. There are not very many ways of doing that. We can return to a national model. We could follow the Transport for London approach. We can go for the Japanese approach of regional railways. I do not think it is any secret that I prefer the concept of regionalisation, where it comes down to one chief executive running the track and the trains, who takes an overview, understands the issues, provides the right balances and looks after customers. That does not happen at the moment. This is an industry that talks to itself through contracts rather than through partnership on too many occasions. That is what I think needs to change. You ask whether it should have rung alarm bells. The truth is that nobody saw it coming. In the Rail North partnership, we have Transport for Greater Manchester sitting on the board. We have other northern transport authorities sitting on the board. It is the same position for them. There were no alarm bells raised there either about the 20 May timetable. There was some dissatisfaction about performance in the run-up to 20 May. Northern had said, “There will, as we get ready, be some disruption as we get drivers trained,” but alarm bells were not raised everywhere because the assurances that we all collectively had from the industry were pretty robust, and proved to be illusory.

Grahame Morris

Following that answer, Secretary of State, and noting what you have said previously about not accepting responsibility for running the railways and for the subsequent service failure—

Chris Grayling

I do not think I have ever said that. I said that I do not run the operational railway.

Grahame Morris

Are there any circumstances when a Minister of the Crown would accept responsibility for a service failure within their Department? Are you not ultimately responsible? I am looking at page 172 of the ORR report. It is quite comprehensive as to the causes of the timetabling debacle. There are a number of tables. You sit as the Secretary of State very firmly in the centre of the web, yet you do not seem willing to take any responsibility for the decision-making process.

Chris Grayling

That is not true. We stepped in immediately we understood that there was a problem. Intense work took place in my Department to try to get the industry to sort it out and bring together the people who needed to resolve things and sort out compensation packages. We put in place the assurance processes that we judged were right. Clearly, those need to be more robust for the future. The role of the Department is to set an overall strategy for the network and to spend taxpayers’ money wisely. The responsibility for the operational railway lies with the chief executives of Network Rail, the train operating companies or the freight operators. Your party believes in renationalising the railways, so you will understand that the operational responsibility for running the railways lies with the organisations that run them. Our job is strategy, and in this particular case we stepped in immediately we understood that there was a problem, where we had thought there was none.

Grahame Morris

The story of the emperor’s new clothes keeps springing to mind about willingness to take responsibility when there is clearly a problem. Do you remember your previous evidence to the Committee before the summer recess? Earlier, you referred to the traffic light system. I am sure that you told the Committee that the indicators were green, green, green and amber. We have had some additional information that you furnished from the IRB minutes. It categorises nine particular categories, including timetabling, infrastructure and train crew. This was from 2 or 4 May. One in particular, on train crew, shows a red traffic light signal. A number of the others are not all green. There are a number, including on infrastructure, where they are showing three ambers. Is that not something where someone should be culpable, perhaps even a Minister?

Chris Grayling

When we met the readiness board on 2 May, and indeed GTR two days later and a week later Northern, they all said to me, “This timetable is ready to proceed.”

Grahame Morris

The minutes that were provided clearly indicated a problem with the availability of suitably trained crew. Was that just set aside? Was that something you thought—

Chris Grayling

I defer to my colleagues, but at that point not everything was ready, because it was two weeks before the timetable launch. The assessment of the Industry Readiness Board and the independent assurance panel, whose job it was to advise Government on whether it was ready or not, indicated that it was clearly a problem that they expected to be resolved in the following two weeks.

Ruth Hannant

Peter might say a bit more, but I think that, when the IRB was considering the issues, it was also considering a whole raft of mitigations that the operator was putting in place to address the risks. The IRB’s overall assessment, which it was giving us as the Department and giving the Secretary of State, was based on its view as to how the mitigations would work, and it thought that they would be successful. There was not fully trained train crew, but there were lots of things that they had planned to work around that in terms of piloting and various other things. As it turned out, because of factors that did not become clear to GTR until much closer to the timetable delivery date—I think it was two days before—those mitigation plans did not work. At the point when they were giving us assurances, they were based on the mitigation plans for those risks, which were considered in quite a lot of depth at the industry readiness boards.

Grahame Morris

Presumably, as senior advisers in the industry advising the Secretary of State, somebody must take responsibility. The terms of reference of our inquiry are to identify causes and suggest remedies. I hope we can identify the mistakes, and perhaps the individuals and organisations who were culpable, so that these things do not happen again.

Chris Grayling

I think that was the purpose of the Glaister review, which has been published. I hope the first stage will also help to inform the Committee’s review. The Glaister review said that everybody acted with the best intentions. It identified systemic failures around the interaction between the system operator and the rest of the industry, particularly the operational issues in GTR, and it indicated that my Department and the ORR itself had been too ready to accept the assurances of the industry that the things it had in place to get the timetable ready were actually bona fide.

Steve Double

My whole approach to this thing is that I have always viewed it as coming down to one of two possibilities, taking into account the fact that all the evidence suggests your Department was not at any point told that the major failure to introduce the new timetable was the risk it was. Quite simply, for me, it either means that people in the industry just did not understand the situation and therefore did not have a grasp of it, or that there were those who did have a grasp of it but basically were crossing their fingers and hoping that everything was going to be okay. I am interested to know which of those two options, with hindsight, you think it was.

Chris Grayling

Peter, you are closer to it. What do you think the answer to that is?

Peter Wilkinson

It is a very fair question. This was an enormous timetable change. The processes that the industry has relied upon, fairly safely, for very many years and that have stood the test failed the test at this timetable change. There was gross underestimation of the collision of two things. One was the scale of the change. The second was the amount of resource required to be ready for that scale of change, given that at the time of the May timetable, the intention was, obviously, to bring about many more services but also to lay the ground for the introduction of many different types of new rolling stock. The complexities of that were underestimated by all elements of the industry, very painfully. It is of great concern that that happened.

Steve Double

Do I take it that you are saying it is the first? People just did not understand the scale of the situation.

Peter Wilkinson

Yes. I think they underestimated the scale. Interestingly, the industry has a timetabling process, you will be glad to know. It is a fairly robust and rigorous process. It is a set of gateways you have to pass through, to assure yourselves as an industry that you are ready for that change. At every stage of the process—at every gateway—as has come out in the Glaister report, there was a sort of optimism: “We haven’t quite made it at this gateway but we’ve got some fixes.” There was a sort of optimism that the fixes would address the weaknesses. Thinking about the previous line of questions, in some ways, if we had actually forced ourselves to stick to the gateway, it would have exposed with starker clarity what the risks really were. It would have been impossible for the Department or Ministers, but there was probably an opportunity for the industry to have raised its hand just prior to Christmas, given the evidence it had.

Steve Double

What you are now saying leads me to think it is the second option; there were people who were aware of the challenge but just hoping for the best.

Peter Wilkinson

No, I don’t think you can pin it on people. This is very much a systemic process. It is a very complex industry with very many players that have to come together in different forums to look at and stare at these challenges. At the end of the day though, you rely on a complete system view, and the Secretary of State has made clear his view that he wants to see singularity about that system view.

Chris Grayling

The Glaister review highlights the fact that nobody identified the smoking gun of a memo from AN Other to someone else, either in my Department or elsewhere, saying, “This is all going to be a total fiasco and it must be stopped.” What you have is exactly what Peter has just described. I am afraid I do not think it is unique to this project. We have just seen something very similar with Crossrail, where everything appeared to be on track and suddenly it was not. What we have identified is a cultural issue of people not facing up to realities early enough. We have to make sure that does not happen again.

Chair

Let us not stray into that territory, because that is for another day.

Jack Brereton

The ORR’s report particularly identifies that the Network Rail system operator was best placed. Do you not think that the chief executive of Network Rail should have had a better handle on these things, and better understood the potential challenges that you suggested the industry did not conceive of?

Chris Grayling

I have to say that I think the answer to that is yes. Of course, we have had a change in chief executive since then. Andrew Haines is the person I have asked to oversee the next two timetable changes, to make sure this works. Ultimately, the system operator within Network Rail is the place where the glue is supposed to sit, to tie it all together. That did not happen, and at no point did anybody senior in Network Rail raise it as an issue with me. It is my view that the desk of the chief executive at Network Rail, if there is anybody who has oversight over something as operationally complex as a timetable change that affects multiple operators across the network, is the most immediate point to know what is happening.

Ronnie Cowan

I come from a background of 35 years of project and change management. If I get to a gateway and think, “We are not there yet, guys,” blind optimism is not going to take me through that gateway. I have to have a culture to work in such that I can go to my boss and say, “We’re not going to do it,” without fear of it falling back on me. It sounds to me as if that is the situation we have in those companies. Nobody wanted to report it further up the chain, so the guys at the top came to you and said, “Yeah, there’s a risk, yeah, there’s a challenge, but we’ll be okay.” If they had gone back to the guys at the grassroots and said, “Are we really going to make this?” I get the impression the answer would have been no. It is a part of the culture in those companies, and what I am worrying about between now and December is whether anybody can tell me that that culture has changed.

Chris Grayling

I think the answer to that is within Network Rail, where the issue in that respect might be biggest around the infrastructure issues. We have a chief executive who is delving right into the heart of this, talking to staff on the frontline and visiting projects. He is working to make sure that this does not happen. Of course, we have downscaled December substantially, for precisely that reason.

Chair

That was a really important question from Ronnie, and I would like to follow it up. Obviously you have frequent meetings with the new chief executive of Network Rail. You said that you met him today. I know that the timetable change in December is going to be on a much smaller scale than the one in May, but what will be different about the way the timetable change in December is approached? Presumably the work is ongoing, but what is different and what has changed?

Chris Grayling

What is different is that I asked him at the very start to de-risk it. We took out about three quarters of what was planned.

Chair

Apart from the size of the timetable change, what is different in the way it is being dealt with and approached?

Peter Wilkinson

It is the most important question, I think. One of the things that Glaister focuses a lot of light on, quite rightly, is risk in that timetable change. You have made the point yourself that it is a very large timetable change. Risk was being looked at in many different places. There was not a systemic look at the interactions between the risk and interdependencies, to go back to another point, and the planning and project management of this timetable change. You make a very powerful point. This time around, we have put in place what is called a programme management office—a PMO—charged with looking at the total system risk. It looks at the interactions between different timetables, the bids for different timetables from different operators and the way they work together. As you will certainly understand, in a very tightly wound railway system, which is what we have today, with very many more trains on it and running much closer together at higher speeds and carrying many more people, the margin for absorbing any programme error is very much reduced. You have to focus on where the interactions and interdependencies are.

Chair

Where does that team sit? Is it in DFT or in Network Rail?

Peter Wilkinson

It sits in Network Rail.

Ruth Hannant

It sits in Network Rail but people from the operators are on it as well. It has cross-industry expertise and it is bolstered by independent challenge and deep dives on particular issues. It is not just the industry marking its own homework, as you said in the past; there is independent challenge being put into the process.

Chair

We want to move on to look at what happened in the Industry Readiness Board, which was part of the process that was meant to make it happen. We want to focus particularly on the issues of Thameslink and GTR. Secretary of State, you met the IRB chair, or your officials were present at IRB meetings, on the risk register for the May Thameslink timetable. Is that right?

Chris Grayling

Yes.

Chair

Grahame has already alluded to the fact that the last risk assessment you received from Chris Gibb and GTR on 2 May was green, green, green and amber/green. But there was one red risk in the train crew category, so could you tell us what discussions you had with Chris Gibb about the GTR train crew red risk?

Chris Grayling

I met him on 2 May. I also met the chief executive of GTR on 4 May. The message from both was that there were likely to be some cancellations over the weekend of the introduction of the new system, but after that, although there might be some bumps here and there, it would work fine. That is the message I got from both of them. Peter, do you want to say a bit more about the readiness board and the recommendations they gave us?

Chair

Just specifically on train crew, otherwise we are not going to get through all our questions.

Peter Wilkinson

Given that they had only been able to get their timetable locked down in April, questions had been asked at the IRB about the readiness of train crew. That is my understanding from everything I have read and seen. It back-ended the consultation that had to take place with ASLEF. Getting through that process to a place where there were rosters and diagrams that worked was extremely late in the day. They did get there. The problem that unfolded was that, because the process was back-ended, the diagrams and rosters were what we in the industry call suboptimal. They were not fully optimised. That is when the problems started to unfold in the implementation of the timetable.

Chair

Secretary of State, you have appointed Mr Gibb to some important roles, including improving Southern and overseeing Thameslink implementation. Do you think that was a good decision? Would you have benefited from a broader and more diverse range of expert advice?

Chris Grayling

I appointed him to chair that panel. He was the person we placed in Southern when it was having operational difficulties. He was the person who honed the new working arrangements at Three Bridges between the Southern team and the Network Rail team, which appeared to make a difference to performance. He appeared to be ideally qualified to chair the readiness board. Indeed, he has previously appeared in front of this Committee and is a respected figure in the rail industry.

Chair

Do you regret appointing him to chair the Thameslink Industry Readiness Board?

Chris Grayling

I do not regret the decision I made at the time. I regret the fact that he and the board members got it wrong. If I turned the clock back, would I judge him less capable of doing it? He is somebody who has commanded respect across the House. When the Southern issues were happening, Members on both sides said they had been impressed by the approach he was taking to the problems and how much he understood the issues. He is a respected figure and there was nothing beforehand to lead us to believe that he was not capable of delivering the right skills. I still regard him as being a highly experienced rail figure, albeit he, and not just him but a lot of people, got this wrong.

Chair

The Industry Readiness Board’s minutes, which we have now had sight of, show that five months into its existence it was still unclear about its remit, its governance structures and its decision-making processes. Do you think you should have been clearer about its remit and powers from the outset?

Chris Grayling

At no point did anybody in that board come to me and say, “We are not able to get the job done.” At no point did anybody raise with me concerns about the workings of the board. I saw Chris Gibb from time to time, and he assured me that progress was being made towards the May timetable and towards implementing the Thameslink decision. Nothing ever crossed my desk that gave me reason to think that that body was not capable of doing its job.

Chair

Does it not give you pause for thought about whether it was a good appointment, given that those things could have happened? Why were they not clear, five months on, about what they were supposed to be doing or the processes by which they were going to operate?

Chris Grayling

I do not think it is unusual for a new body to take a bit of time to get itself sorted out. The reality is, if you are saying to me do I regret appointing Chris Gibb, no, I do not. Chris got it wrong, but so did a lot of people across the whole industry. This was a systemic problem. The Glaister review did not single out Chris for individual personal criticism. The fact is that this is a systemic problem and a lot of people across the whole transport world got it wrong. Do I regard Chris as somehow the personally culpable figure in this? No, I do not. I wish he had got it right and I wish a few other people had got it right as well. It is not just Chris; I had people in my office from GTR saying that it would be fine. We had assurances from Northern that it would be fine. This is not just about one person.

Chair

No. I am interested in the Industry Readiness Board itself, not specifically in Mr Gibb.

Chris Grayling

The assurance panel chaired by Chris Green, a separate body, came up with the same conclusion.

Chair

The ORR reported that the Industry Readiness Board had no powers to commission information from third parties and relied on what it was told by GTR and Network Rail. Do you accept responsibility for the fact that that was a weakness in the remit of the Industry Readiness Board?

Chris Grayling

At no point did anybody suggest that they were not able to access the information they needed. This is a collaborative venture. It is not some kind of regulatory watchdog. It is designed to make sure that we had sight over what was happening and that the people with the right expertise could judge whether or not things were going astray. There has never been any suggestion that they did not get access to what they needed.

Chair

I don’t think we are going to get further on that. In April 2017, the Industry Readiness Board recommended that you re-phase Thameslink service implementation over four six-monthly timetable changes instead of two. Why was that decision not confirmed until October?

Chris Grayling

I need to explain this process carefully. I got a formal request from Chris Gibb and the readiness board. Chris came to see me either at the end of July or the start of August last year. There was, and indeed still is, a basic 24 trains an hour Thameslink timetable. In a moment, I am going to ask Peter to explain that in a bit more detail. That timetable was due to be started with 20 of the 24 trains an hour running. Chris came to me and said, “We think it’s better to start with 18 and phase it in slightly more slowly.” I said yes straightaway. Everyone involved, including Network Rail doing the timetable, GTR and my Department, thought that it was a relatively straightforward process to take out two more trains: “We’re not running the 8.04, so you can catch the 8.02 or the 8.06.” The Department then went through the commercial process of sorting that out with GTR. What then transpired, which nobody had anticipated, was that the change was much more complicated than appeared to be the case at first glance. Nobody realised that taking two trains out of the timetable—taking out the 8.04 and leaving the 8.02 and the 8.06—had a much more disruptive effect. Peter can explain that a bit more.

Peter Wilkinson

That is correct. Nobody estimated that taking two trains out would be terribly high risk. It turned out to be very difficult to achieve, the reason being that the GTR timetable is interwoven with at least three of the major timetables on the east coast and the midland main line. Taking two trains out meant a lot more restructuring of rosters and diagrams that had interdependencies with other lines of route than had been estimated.

Chair

I am unclear. The information we have seen is that in April 2017 the Industry Readiness Board recommended that you decide to re-phase Thameslink service implementation over a longer period. I am trying to understand why that decision was not made until October. Are you saying that when they made the recommendation in April it required all that time to work out whether it was possible? I do not understand. What was delaying that decision?

Chris Grayling

Chris Gibb came to see me at the end of July and said—

Chair

What happened between April and July?

Chris Grayling

Chris Gibb came to see me in July and said, “I would like to do this,” and I said yes, at the same meeting.

Ruth Hannant

I think the IRB suggested that it was something that should happen in April. We then asked GTR to go away and work up proposals. GTR did that. They came up with initial proposals some time towards the end of May. Then, as the Secretary of State said, he had a conversation with Chris Gibb at the end of July or beginning of August to say, “It is my decision in principle to proceed with this.” There was then a contractual process that we had to go through with GTR to turn that decision in principle into something embedded in their contractual terms. They came to us with a final proposition in October, and it was agreed by Ministers in October. One of the key points within that, as the Secretary of State says, is that during that period nobody thought it was going to be materially more problematic to take out six trains than to take out four trains. At no time during that period did anybody say to us, “You need to accelerate the contractual discussions.” As was said in the Glaister report, there were proper processes that we had to go through to make sure that it was protecting taxpayers’ interests. While we were doing that, GTR and Network Rail were developing the base timetable that Network Rail fed back to them at the end of November.

Chris Grayling

The Glaister report is very clear that there is nothing to suggest that anything the Department did was outwith normal processes, or that anybody realised it would have any effect at all on the process.

Chair

But do you accept the ORR’s finding that, had you made the Thameslink phasing decision by the summer of 2017, the risks of the timetable failure on the scale that they were experienced would have been greatly reduced?

Chris Grayling

Clearly I accept all of their findings, yes. It comes back to the systemic issue. Nobody realised that the timing of the decision to take out two trains from the timetable would have had a material effect— nobody.

Chair

The point I put to you is that your Department did not realise the implications of making a timely decision.

Chris Grayling

Nor did GTR and nor did Network Rail; nor did anyone involved. Nor did the readiness board. When Chris Gibb came to see me in July, he did not say, “We’ve got to decide this now or it won’t work.” There was no understanding then, or otherwise, of the complexity of what was happening.

Chair

That is concerning of itself.

Chris Grayling

We operated on the advice we were given.

Chair

Ruth, perhaps you are best placed to answer this. The Industry Readiness Board minutes from January 2017 show that DFT officials were entirely amenable to re-phasing as early as January 2017 and were pushing for an early recommendation to allow time for “wicket-rolling” with politicians. Do you know what that phrase means?

Ruth Hannant

Wicket-rolling?

Chair

That is what was in the IRB minutes. It said that DFT officials were amenable to re-phasing as early as January 2017 and were pushing for an early recommendation to allow time for “wicket-rolling.”

Ruth Hannant

I imagine it would mean that if we were delaying the implementation of 20 trains per hour, and only bringing in 18 trains per hour, passengers would see a lower level of service improvement. Given that that was not necessarily what was promised at the time of the delivery of the franchise, we would need to test it with Ministers and other stakeholders. That is a proper thing that we would need to do. As soon as it was put in front of Ministers, they were very amenable to the suggestion—

Chris Grayling

There was no wicket-rolling. The decision was taken. I think I had a submission saying that we should do it a few days before I saw Chris Gibb. I said yes. I said yes when I saw the submission, and I said yes when I saw Chris Gibb.

Chair

If DFT officials were talking about that in January 2017, was that part of the reason for the delay? Was it part of those discussions?

Ruth Hannant

Peter may want to comment further, but I do not think so. It is quite a complicated set of decisions, as I understand it. It was mooted at the Industry Readiness Board, and it was then something that the board decided on in April, at which point we asked GTR for a proper proposal. At that stage, the precise nature of the phasing, and what it would mean, was not necessarily completely understood.

Chair

When were you first aware of the Industry Readiness Board’s view that there needed to be re-phasing?

Ruth Hannant

Me personally?

Chair

Yes.

Ruth Hannant

I am afraid I was not in the Department at the time, but Peter would be able to answer that.

Chair

Peter, when were you first aware that the Industry Readiness Board were pushing for re-phasing?

Peter Wilkinson

I was not directly involved, but my first awareness of it was at around April when we asked GTR, at that point, to begin the process of looking at the options for re-phasing.

Chair

Did that political wicket-rolling delay the decision in any way?

Chris Grayling

There was no political wicket-rolling.

Chair

When your Department officials made that reference, were they wrong?

Chris Grayling

They did not do it. They may have made the reference thinking it might be needed, but it was not; it did not happen. I took the decision immediately. Chris Gibb, whose judgment I trusted in appointing him, said, “We need to do this.” I said, “Fine.”

Huw Merriman

The rail regulator’s report found GTR’s role in this matter particularly wanting. Obviously there has been a long catalogue of failings from GTR. Has this performance led to the Department taking a view with regard to its future running of the franchise?

Chris Grayling

We have been through the issue very carefully. We have done what is called a hard review into GTR and its performance. It has clearly not met all its contractual requirements this summer, and we are now finalising the action that we will take on the back of that. For me, the most important thing is what is best for passengers. The options I have said we are actively considering involve penalising GTR. That could involve taking the franchise away. If I take the franchise away, I have to do so on a legally sound basis to protect the interests of the taxpayer; but I also have to know that what follows is going to work for passengers. Ultimately, it is the passengers that matter most in all this. I have not reached a final decision. We are working through options. I have to be sure that whatever action I take does not risk further disruption for passengers. It is worth saying to all the people who say, “Take back control of the franchise,” that I do not have a team of people sitting in an office down the corridor who can suddenly come in overnight and run Britain’s biggest franchise. Taking away any franchise is not a straightforward process, and I and we would have to be satisfied that in doing so we would make things better and not worse for passengers.

Huw Merriman

I appreciate the need to think about passengers. My constituents are those passengers as well. Have you received advice that gives you grounds to remove the franchise due to the performance of GTR in the timetabling fiasco?

Chris Grayling

The advice is not absolutely clear on that front. It is certainly an option that is still open to us to consider, but it is not straightforward. The contractual complexity does not automatically give you the right to withdraw a franchise because of poor performance over a short period of time. It has to be over a sustained period.

Huw Merriman

If one of the options, rather than to remove the franchise, was to fine them for their performance failings, has that option been lost? My understanding is that, when GTR was fined £13 million for poor performance issues from 2016-17, it effectively had any liability waived up to September 2018. If the franchise is not removed and that is the case, does that mean it gets off scot-free?

Chris Grayling

No, it does not. I still have plenty of levers that I and my team can use. There is no question of getting off scot-free.

Huw Merriman

In terms of the forward look to September 2018, does the Department regret giving that bandwidth? Effectively, there was no incentive for the company to perform from a financial perspective for that additional year.

Chris Grayling

I do not think that was the case. We still have plenty of performance levers. Peter will be able to say a bit about what is available, but we did not give carte blanche to underperform.

Peter Wilkinson

No, and we retained all our enforcement and breach powers under the remedial plan, which is what the company has been in. We have exercised some of those, so I do not accept that we have given away our enforcement rights.

Huw Merriman

It strikes me as very curious in that sense. Coming back to timing, when are you likely to make a decision with regard to GTR’s future based on the back of its failings?

Chris Grayling

Within a small number of weeks.

Chair

Let me clarify that GTR did not actually pay a fine; it reached a settlement about an amount it had to plough into improving services. Secretary of State, you said that your officials had plenty of levers. Can you tell us what they are?

Peter Wilkinson

As you know, GTR has been in a remedial plan. We retain enforcement powers in relation to its performance against that plan. If it were to breach a remedial plan, we retain a wide range of powers that we can bring to bear. It depends on the circumstances of the poor performance. We have a number of different powers in the contract according to different classes of performance failure.

Chair

Obviously there was a huge performance failure in May, June and part of July in providing the sort of service to passengers that they were promised. What is the outcome of that for GTR? How has it been held to account for that?

Peter Wilkinson

It is a fair question. As the Committee is aware, we are taking this very seriously indeed. It is not something we are taking lightly. You are quite right: the performance failures this summer were utterly unacceptable. We have, though, to look at the truths of GTR’s involvement in that relative to other players. They were dealt a number of quite difficult hands themselves. How they responded to those are matters we have to take into account. There are clearly things for which they were directly responsible, and we have to look at those in the scale of the course of events that took place and come to a view about that. At the moment, I cannot discuss where we have got to in those discussions for reasons of sensitivity, but I assure you that the discussions are taking place and they are very rigorous indeed.

Chair

Even though its liability was bought out through to September, you are saying that it may still face some kind of penalties as a result of its poor performance.

Peter Wilkinson

I am, yes.

Chris Grayling

Yes.

Chair

Grahame has a small question on this section, and then we are going to look at the treatment of disabled people in the periods of disruption.

Grahame Morris

I wonder if you might bear with me. Maybe I have missed the point, but there is something I would like to clarify in my own mind. I do not know whether the Secretary of State or Ruth can do that. It relates to the National Audit Office report of January this year, and the questions you were just asked about the fact that Govia Thameslink were allowed to buy out two years of their performance liability. My understanding is that that period also covered future liabilities for what effectively was poor performance until September this year. Obviously, that included the part that was the May timetable fiasco. On what basis was it considered to be a good deal for the taxpayer when that was agreed to?

Peter Wilkinson

To be clear, they have not been bought out, scot-free, in relation to any penalty for poor performance. If they do not execute their contract, and if they do not execute the regime we have in place with them in the contract at any given point in time, we retain quite a wide range of levers that we exercise. The reason that at the time it was a good deal for the taxpayers is because they had a performance schedule in place at that point that was frankly unreachable. It was unattainable given the performance of the infrastructure and the way the new Class 700 trains were performing. We knew that GTR could not reach the performance benchmarks that were originally assumed attainable in the contract. We bought them out of those benchmarks in exchange for them investing off their bottom line in the franchise through, effectively, a penalty payment. That was the £13 million you referred to.

Grahame Morris

Was that a decision of the Department? Who actually made that decision? Was it in consultation with the Secretary of State?

Peter Wilkinson

It was a Secretary of State decision.

Chris Grayling

An important thing to bear in mind is that at no point have we given up the ability to penalise GTR for underperformance, and we will make sure that there is a consequence to GTR of the underperformance this summer, but I am not going to say today what that consequence is going to be.

Chair

When can we expect to know?

Chris Grayling

Within a small number of weeks.

Grahame Morris

It is a statement of the obvious, but it looks terrible to allow them to buy out the poor performance liability just before the May timetable debacle.

Chris Grayling

We would not have done that if we had any reason to believe that we would not be able to deal with further underperformance. We did not, and we are able to deal with further underperformance.

Grahame Morris

We are all very concerned, as I am sure you are, Secretary of State, about the level of disruption, particularly for disabled people. The Chair mentioned some of the descriptions that we had from Stephen Brookes, who appeared in front of the Committee in a previous session. He described the experiences of disabled passengers as like “Dante’s inferno.” Do you recognise the loss of trust that disabled passengers have in the railway system? What proposals do you intend to bring forward to ensure that those concerns are addressed and that disabled people are able to use the train system with a degree of confidence?

Chris Grayling

The most immediate thing is that, disruption or no disruption, the rail system is not yet fit for purpose for disabled people.

Grahame Morris

It is absolutely terrible.

Chris Grayling

Jack and I know well that the train from Stoke-on-Trent to Derby is utterly unfit for people with disabilities. The Pacer trains in the north are the same. The most immediate thing we can do is what we are doing, which is a huge programme of replacement of rolling stock all around the network, both because it is necessary and because it needs to be disability compliant. We have challenges by 2020 to make sure that rolling stock is disability compliant. Older rolling stock that is not will be on its way to the scrapyard. From my experience last week with the new Northern train as a replacement for the Pacers, anyone who is a disabled passenger in the north can now say the world is about to change for the better. Those trains are fit for people with disabilities in a way that the old ones simply were not.

Grahame Morris

Not before time, if I might say, Minister, as one of the users of those terrible Pacer trains.

Chris Grayling

It was far too long before the Government got to grips with new trains in the north. I pay tribute to my predecessors for doing that. It was many years overdue.

Chair

Can you give us an assurance that all rolling stock on the network will be PRM compliant by 2020 as required?

Chris Grayling

I could not give you an absolute assurance for every single piece of rolling stock because there is bound to be something that I have not thought through, but it is our intention that right across the network, in virtually all circumstances, it is.

Chair

We look forward to seeing that, not least on East Midlands where half our intercity stock is not PRM compliant at present. We will move on to look at consultation and the impact assessment of timetable changes.

Graham Stringer

I want to follow up Grahame’s question about disabled passengers. You are absolutely right about the rolling stock. It seems to me, having talked to disabled people who were affected by the Northern problems in particular, that there was no awareness whatsoever from Northern, or anybody else in the rail system, of how the failure of trains to turn up impacted on deaf people. They could not hear the announcements. It affected people who could not walk very quickly when they were expected to run from platform 3 to platform 4 on Preston station. There was no awareness of how all that chaos might affect autistic people. Are you aware that that was a problem, and what will you be doing about it?

Chris Grayling

I am absolutely aware that lack of communication was a problem. You make a good point about communication for deaf people, which is why we continue to see on a rolling basis the improvement of electronic signage on the railways. Frankly, what went wrong, and the thing that made the biggest difference, was that trains were supposed to come but just did not turn up. Trains that appeared on the panel did not turn up. I have a meeting in the next few days with the leadership of the rail industry. One of the things I am absolutely focused on is that they make sure that communication gets better in a whole variety of different ways, and for people with disabilities as well. It is not just about information. It is also about when a train is short form and you cannot get on to it. If you are in a wheelchair, for example, it is much more difficult. That is why we must have more capacity, wider doors and more versatile trains. It is why the information provided and communication to passengers has to be much better.

Ruth Hannant

Some of the licence conditions that operators work under include the policies and processes that they have to have in place for their treatment of disabled customers and others with accessibility issues. They are regulated by the Office for Road and Rail. It is very clear that at times of disruption the industry is not necessarily in all cases doing its best at meeting those licence requirements, and it is something I understand the ORR is actively looking at.

Graham Stringer

Clearly there will be disruption in the future; there always is in a system this big. One of the groups of disabled people I did not mention are visually impaired people. You can put up brilliant signs, but if you cannot see very well it is no good. The rail operating companies and Network Rail, if they are operating the station, have to be aware that they need to communicate in many different ways.

Chris Grayling

That is one of the things I think the industry does not get right at the moment. Most announcements are now automated, and an automated announcement that just says, “Due to a late running earlier train,” or whatever, which is programmed into the system, does not provide the information people need. We need more of a return to somebody sitting behind a microphone—not for every station but across the network—saying, “There is a signal failure there. There is a team on its way to try to fix it, and we’ll let you know as soon as possible what is happening.” There is a lack of proactive information when something goes wrong, and that is something they have to address.

Grahame Morris

Could I point out how important it is to have the guard on the train, particularly for disabled people who require assistance, and indeed for people with pushchairs and so on? It is invaluable. I have witnessed this myself on the Pacer trains, which are absolutely crammed going into Newcastle.

Chris Grayling

Of course, one of the great ironies is that at the end of the Southern dispute there are more staff working on trains than there were before, even though the nature of the role has changed.

Grahame Morris

It is really important for people with disabilities, not just with wheelchairs but with scooters too.

Chris Grayling

One of the really tragic things about the current strike action is that my expectation, certainly around Northern, is that we will have more people working to support customers rather than fewer. The premise, though, that the RMT is arguing for is that, if a train is designed to be operated by the driver from the cab exclusively, there are no circumstances whatsoever in which that should happen; and if the second member of staff is not there, the passengers should be thrown off and the train cancelled. That does not help somebody with a disability either.

Grahame Morris

It is a separate subject, but there is an awful weight of evidence that suggests that passengers, disabled people and people travelling alone in the evening really value having a guard on a train in that circumstance.

Chris Grayling

Absolutely. If you look at the South Western strikes, for example, there are no plans to take the second person off the train, but simply to have a system that allows the driver to operate it if the second member of staff does not turn up, I find it deeply frustrating that the union is striking and striking, and will strike again tomorrow, purely to say there are no circumstances whatsoever in which a train that can be operated just by the driver should be operated just by the driver, and that passengers always have to be thrown off if the guard is taken ill or whatever.

Grahame Morris

There was a recent case where there was a landslip and the driver was incapacitated. The guard played an absolutely vital role in evacuating the passengers safely.

Chair

As much as I think this is a very important issue and we could spend a lot of time on it, perhaps it is for another occasion.

Graham Stringer

About two thirds of passengers who, we all agree, were badly affected by the disruption earlier this year were dissatisfied with the consultation. Do you accept that the consultation before the rail timetable changes were made was inadequate?

Chris Grayling

In terms of Transport for the North, Rail North and the operators, we went through the standard processes of consultation.

Graham Stringer

I am told, and we have had evidence, that some communities who lost their services, particularly on GTR—Harpenden is a good example—were not properly consulted. They were going to miss out on a number of trains to their station. It seems that the Department for Transport waived their obligation to consult in those circumstances.

Ruth Hannant

I do not think that is the case. In the case of GTR and Northern, the base timetable that was due to run in May was extensively consulted on. That was done by Northern in May 2017, and GTR ran one of the biggest consultation exercises an operator has ever carried out. They had over 25,000 responses over three consultation exercises and ran hundreds of events. That was for the base timetable. The issue you are alighting on is that due to the phasing decisions, and in Northern’s case due to the late changes to the timetable, there were changes to the timetable that had been heavily consulted on, and actually there were very few options available to the operators in those circumstances, because the timetables were very much driven by operational factors. Having a consultation at that point, given that options were not available, would have been a disingenuous thing for the operators to do. What they have done subsequently, however, in both situations is to listen very carefully to passenger concerns that have been raised, and they have acted to introduce extra services where they can. For example, in the case of Harpenden, on balance, even though there were fewer trains, they were longer trains, and in total I think they only lost four carriages in the peak, but, given the concerns that were raised, the operator is introducing two extra services via Harpenden from December. They have listened to concerns when they have been raised, but at the time, consultation on the specific operational changes, because of the issues we have been discussing, was not possible at that point.

Chris Grayling

On that particular route, an added complication around timetabling has been the modernisation of the midland main line, which has meant that there are slightly fewer services running up to 2020 while the work takes place.

Graham Stringer

The evidence we heard from passengers using Harpenden was that it was not just capacity in terms of extra carriages. It was trains at particular times that enabled them to get to work or wherever they were going. They were severely disadvantaged by that, and they stated, contrary to what you have just told us, that they were not properly consulted about that. There are always two parts to consultation, aren’t there? There is listening to what people think about your proposals and communicating what the proposals were. They felt that those consultations were inadequate.

Ruth Hannant

As I said, GTR did not consult on the changes as a result of the phasing decision. That is because they thought that consultation would have been disingenuous, because there weren’t any options, but they absolutely did communicate those changes to passengers. I appreciate that those are two slightly different things.

Chris Grayling

The truth is that there have had to be changes. There are decisions around Bedford, St Albans and Harpenden about trying to provide in the interim period, while the midland main line work is taking place, a timetable that will be more substantial when those works are completed in 2020.

Graham Stringer

Will you recommend changing the consultation process for any timetable changes in the future?

Chris Grayling

I think it was very comprehensive, so I see no particular reason to do that. As far as I can see, there has been very extensive consultation. People are not always happy with the outcome of the consultation, and people are not always happy with the outcome of the decisions you have to take. When you put in place infrastructure changes, there are disruptions to passengers. People are not always happy about that, and they are not always happy about the decisions you take between different pressures, but I do not think that the process is wrong.

Graham Stringer

People cannot always get what they want, and I think everybody would accept that. A consultation is not handing over the power to make the decisions to the consultees, but even when the train operating company feels that it does not have flexibility to alter what it is going to do, don’t you think there should be some sort of process of mainly communication but also consultation to say, “We are doing this because we have to,” and listening to what passengers say”? That did not happen, did it?

Peter Wilkinson

The points you are making are very reasonable. The Secretary of State is right that the consultation was conducted in accordance with the process attached to the timetable planning process. I think I made the point earlier that actually sticking to that timetable planning process is really important because it provides you with the capacity and time to consult properly. The wider point you are making is absolutely right. The rail industry today has, to put it politely, lost its touch with people. It has lost its way in being able to communicate properly with passengers. With modern media, it escapes reason that they cannot communicate much more proficiently. It is something we are very concerned about in the Department. In fact, I think the way that passengers are communicated with is the subject of another ORR review at the moment, particularly people who cannot receive information in conventional ways, for the reasons you pointed out. We are missing opportunities to engage and to work with the public, and to convey trust, through very poor communications in the industry.

Chair

East Midlands Trains told us that in one case the DFT waived the obligation to consult because East Midlands Trains said there was no option but to remove some services. There was absolutely no flexibility in the timetabling because of the precedence given to Thameslink. Do you think it was fair to waive that obligation to consult? That was not the train operator; it was the DFT’s decision.

Peter Wilkinson

I would have to come back to you on the specifics of that particular circumstance. Even if the Department had done that, there would surely still be an obligation on the operator to make clear to the public what was happening. Just to sit back and say, “Well, the Department have made a decision—“

Chair

They said it was a fait accompli.

Peter Wilkinson

We have to change that. It is utterly unacceptable.

Chair

I particularly wanted to ask about Sheffield services. My colleague Paul Blomfield wrote to us, raising concerns. Before the timetable changed, for services leaving St Pancras for Sheffield there were five departures between 16.57 and 18.25. In the current timetable, there are only three between 16.47 and 18.19. He says that neither the East Midlands Trains announcement nor the accompanying frequently asked questions mentioned the impact that the timetabling changes would have on Sheffield services. Why were Sheffield passengers not consulted about timetable changes?

Peter Wilkinson

I am really sorry but I cannot answer the question. We will come back to you on that in writing. If that is the case, it would again be an unacceptable failure and I would take it very seriously.

Chris Grayling

It is worth saying that the changes to the services on the midland main line are a temporary thing until 2020, while the works continue. You will be aware, as an East Midlands MP, that we have just completed the remodelling of Derby station. There is a huge amount of work now going up the line. Extra capacity will be generated with the additional line from Corby Southwood. This is a period of transition for that route.

Chair

I certainly recognise that. East Midlands Trains stated: “In order for Govia Thameslink Railway to increase the number of services on our shared lines into London, we have had to make changes to our timetable.” What consideration was given to the impact on East Midlands Trains passengers as a result of the introduction of the Thameslink timetable?

Chris Grayling

It will have been done by those involved, based on the demands on the different services and the demands on the route, to try to provide, in that interim period, the best possible balance between the competing pressures on a very full railway line.

Chair

It is quite clear that East Midlands Trains feels that consideration of their passengers was secondary to those of Govia Thameslink Railway. Whose decision was it to make Govia Thameslink Railway more important than those who use the midland main line?

Chris Grayling

I do not think it is a question of being more important. Peter can explain the process of reaching that conclusion.

Peter Wilkinson

I suspect this is born of the complexities at the southern end of the route, at Luton and Bedford, where, because we are introducing more Thameslink services, it reduces the capacity overall, particularly at a time when a major upgrade of the east midland main line is going on. That is a temporary situation. East Midlands passengers will see train services gradually restored; in fact, from the back end of this year, as some of the works start to complete, capacity will be restored and improved. Your point about the way this has been communicated to passengers is a very fair one. I will take it away and have a good look at it.

Chair

We now turn to the issue of compensation.

Huw Merriman

We have touched on compensation, but I would be interested in your view, Secretary of State, as to whether you think the compensation system is adequate right now, and whether it is fair that we have two operators on 15 minute delay repay and other passengers do not have that benefit.

Chris Grayling

We want to end that situation as soon as possible. We are transitioning as rapidly as we can to 15 minute delay repay. In terms of the compensation system, the first and most significant step is to try to automate it as far as possible. That requires us to have, in my view, proper electronic and smart ticketing facilities across the whole network. I have set the industry the goal of having smart ticketing available across virtually the entire network by the end of this year. We then need to spread pay-as-you-go ticketing around. Without an automated system, it is much more difficult to provide one-click compensation, which is what we want to achieve. Now that we are moving towards the end of our programme, we are going to move rapidly to introduce, and give people access to, smart ticketing through barcode and smartcards, and simple one-click systems for compensation. We are transitioning. For example, Greater Anglia will be getting 15 minute delay repay in the new year, and we are looking to move other areas to that as quickly as possible, but it requires amendments in the contract, otherwise we will be writing contracts halfway through.

Huw Merriman

Northern’s delay repay 15 was brought in during their franchise agreement. Could that be done for other franchise agreements as well?

Chris Grayling

We accelerated it by a few months because of what had happened.

Huw Merriman

I have a quick plug, if I may. Next month is the Second Reading of my Bill that would require train companies to segregate the money they receive from Network Rail that passengers do not claim and purchase technology that allows a passenger to tap on and then tap off at the end. The system would work out whether the customer was entitled to compensation and automatically pay it. Assuming that I do not get support from Government for the Bill, which I think is probably a fair assessment—

Chris Grayling

You should not be so pessimistic about your skills.

Huw Merriman

When do you think that future state will come into being? Is that the type of thing you will be looking to put into franchise agreements when they come up for renewal, or are we still halfway there in terms of one click?

Chris Grayling

It is something that becomes part of the future in a new structure for the rail industry. I do not want us to be in a situation where there is a Network Rail pot to compensate a train company. I want us to have a situation where things are much more carefully joined up. The first stage is to have automated ticketing all around the network, which then enables you to take the next step. My goal is to get pay-as-you-go ticketing available. It is only ever going to be for short distances. You are not going to tap in and tap out to go from London to Manchester; you will have to buy a barcode ticket on your mobile phone for that. When it comes to a shorter distance commute, we need the kind of benefits that passengers have in London to be available in other cities and on shorter distances elsewhere.

Huw Merriman

You talked earlier this month of stronger compensation obligations on future train operators. When do you think those will be applied across the whole of the network?

Chris Grayling

We want 15 minute delay repay, automated systems and one click, and we intend to push that forward as rapidly as we can with the contracting structures we have.

Huw Merriman

Effectively, it will be when the new franchises come up?

Chris Grayling

Yes, as quickly as we can with the new franchises.

Chair

Following up that specific question, am I right in thinking that one-click automated compensation has to be part of a franchise process?

Chris Grayling

It has to be either part of a franchise process or a reworking of a franchise contract. You cannot just do it mid-contract without a contractual change, because you are placing extra obligations on the operator.

Chair

With a franchise such as Essex Thameside, which potentially will not be refranchised until November 2029, is that how long passengers on Essex Thameside might have to wait?

Chris Grayling

They are actually doing quite a lot on smart ticketing, which opens up opportunities there.

Peter Wilkinson

We have an extensive programme in the Department to move the industry forward with smart ticketing by the end of this year. Most people in most parts of the country will have the opportunity of a barcode or smartcard. There is already a lot of smart technology and ticketing available on the railway. If you travel on East Coast, you can use their travel buddy system, which is a very simple smartphone app. We are putting a lot of pace behind the programme because at the moment, answering your question, we do not know who our customers are, frankly. A mag-stripe ticket tells us nothing about you. It does not even really tell us that you are on the train, believe it or not. Compensating people in the way the Secretary of State has outlined is very difficult for the industry. Moving people on to smart allows us to know that they are on the train; who they are; and something about their account details so that we can make the process of returning money to them much simpler. We can make those changes in the life of franchises. We do not have to wait for franchise competitions, but there is a process to go through. Taxpayers’ interests matter as well. There is a business case to be made around that kind of investment, so we have to make sure that the costs and revenues are fair and in the interest of taxpayers as well as fare payers.

Chair

I have a couple of questions about compensation. In terms of the compensation packages on both Northern and GTR that were introduced this summer after the timetable fiasco, who designed those compensation arrangements?

Chris Grayling

It was totally based on what was put in place for Southern when we had the extended dispute, and extended disruption on non-strike days as well.

Chair

Were they designed by the TOCs, or did the Department, essentially, set out what needed to be put in place?

Chris Grayling

The Department, originally with Southern—clearly, it was a franchise that we oversaw—said that there needed to be proper compensation. We decided that a month’s free travel was the appropriate way of doing it. We simply applied exactly the same principle to what happened this year.

Chair

I have a question about the delay repay that was available to people, particularly on the GTR network. When we heard from Emily Ketchin, who was a representative of the Harpenden commuters, she told us that in the first instance, initially after 20 May, people could claim delay repay on the basis of the 20 May timetable; if a service was cancelled and appeared in the 20 May timetable, they could claim compensation. After the 15 July timetable was implemented, they were no longer able to claim against the 20 May timetable, even though many of those commuters would of course have bought their season tickets in anticipation of being able to access the full range of services promised in the 20 May timetable. Do you think that is fair?

Chris Grayling

Yes, because ultimately the only benchmark for a delay repay claim is the actual performance of an individual train. That is why we did not depend entirely on delay repay to compensate passengers. We provided a broader package for them.

Chair

From your perspective, even though there was a published timetable on 20 May, it is not reasonable for those passengers to claim when a service is cancelled that appeared in the timetable on 20 May but no longer exists.

Chris Grayling

What I am saying is that you cannot practically do it, because delay repay is based around an individual service arriving late.

Chair

No, on cancellations. If a train is cancelled, you would have a right to compensation. Why should it be based on an emergency timetable rather than on the original 20 May timetable?

Chris Grayling

What you would be saying effectively is that every single passenger on a train—if the 8.15 was moved to 8.30—would be entitled to compensation, even though the train was running on time to a timetable advertised in advance. You would end up with a compensation system that was unbelievably onerous and not credible. We took a view that the best way of compensating passengers was to give them a month’s free travel.

Chair

You think that the month’s free travel should compensate all those people who see a loss of service because the 15 July timetable contains fewer services than the 20 May timetable.

Chris Grayling

But as of today GTR is running more trains than it was before 20 May.

Chair

But they are not running the trains they promised on 20 May.

Chris Grayling

But they are still running more trains than they were before 20 May to a timetable that is, touch wood, on most days reasonably accurate.

Chair

People who bought a season ticket believing that they were going to see a substantial improvement in their services on 20 May may have seen an improvement, but it is not substantial improvement, and the Department’s view is that they will just have to put up with that.

Chris Grayling

We have provided a compensation package for those affected that I think is fair and reasonable.

Chair

A final question on compensation is about how ensuring that all those who are eligible to claim are able to claim. We talked about automation. Mr Wilkinson, what discussions were held in the Department about publicising the compensation scheme, particularly with the operator?

Peter Wilkinson

The operator has obligations in its contract to do just that, and that is something we take a keen interest in. The operator is obligated to make it very clear to its passengers that compensation is available. In the wake of the fallout of the May timetable change, I was on daily phone calls with the whole industry—not just GTR and Northern—and one of the things I was ensuring in those calls was that there was a raising of awareness about the compensation procedures being put in place for passengers.

Chair

Would that involve the Department publicising that more broadly, or was it entirely the responsibility of the train operator direct to passengers?

Peter Wilkinson

The Department would not publicise it directly itself because it is an obligation on the operators in their contract, and it is something we expect them to execute. We observe it for ourselves and we expect feedback through mystery shopping and waves of customer satisfaction surveys where questions are asked about that area. We get a sense of how well that kind of communication is landing. I come back to the point I made earlier. Generally, the industry has to raise its game in the way it communicates with passengers. It is slow at best.

Chair

It has been reported in the FT this afternoon that a freedom of information request has revealed an email dated 5 July from a DFT official noting that GTR has published its additional compensation scheme. The email is sent to Tim Rees, who I believe works in your team. It says, “My advice would be to keep this low key and targeted at passengers and stakeholders, not media.” Can you explain why there would be a suggestion that details of the compensation scheme should not be publicised through the media, if you want to maximise opportunities for people to know that it exists and how to claim it?

Peter Wilkinson

No, I cannot explain that.

Chris Grayling

Since Ministers talked about it in the media regularly across the summer period, in the Commons and to Members of Parliament, there was no attempt to make it low key.

Chair

I wonder why a member of DFT staff would have made that suggestion.

Chris Grayling

I have no idea. It may have been a suggestion that was made, but it is certainly not what happened.

Gary Bogan

It may be worth elaborating something in respect of the north and the compensation scheme for Northern and TPE. TfN were also involved and took the lead on the design of each of the elements in turn: the season ticket compensation that was available; the regular traveller compensation; and the direct compensation to local authorities whose economies were impacted by the delay. I know that TfN have, on their website and probably in interaction with the media, highlighted the fact that the compensation scheme is available. I know from first-hand feedback that Northern and TPE have been out on the circuit of local authority representatives and council bodies, and have had quite robust feedback in places where local representatives thought that people in their area were not able to access the scheme or understand how it worked. They have both been plugged in and had the benefit of a good amount of unsolicited feedback on how it is going, to ensure that it reaches all the eligible folks.

Chair

This is not on compensation, but I am aware that after the timetable was introduced in the north on 20 May and resulted in huge disruption, there was a lot of concern that representatives of Northern did not make themselves available to appear on the media to explain the situation to passengers. Is that something you discussed with them?

Gary Bogan

They are aware of everyone’s view of when they could have taken more opportunities than they did to make their point.

Chair

Finally, we would like to ask some questions about the broader rail review.

Jack Brereton

Secretary of State, as you said, your view is that there needs to be wholesale review and reform of the rail industry. How do you feel that those changes will address the issues that we saw develop with the timetable?

Chris Grayling

My view is that this is an industry that today is under a huge amount of pressure, and that within it accountability is too diluted to meet those pressures adequately. It is a very fragmented industry, and as a result it is not well placed to deal with either major changes or the scale of pressure on it. My view is that that now needs to change. It is no great secret that there are pressures on franchising. We have had Virgin Trains East Coast fail. We have had TransPennine making a substantial write-off against projected losses. We have a franchise model that is shaky. We have an industry where accountability is too diluted. Too many conversations in the industry take place around contractual requirements rather than getting the job done in the right way for passengers and freight users. That now has to change. I have argued for a while that we needed a direction of travel that created a more joined-up railway. That was very much the view of the McNulty report, reinforced by some of the things that Nicola Shaw said in her report. We have started a step-by-step journey towards a more joined-up railway. I no longer believe that a process of evolution not revolution, which is where I had aimed to go, is sufficient. There needs to be much more comprehensive change. This is not, “Hey, let’s have another Shaw review or another McNulty review.” The purpose is to deliver an action plan for change that we can put in place after the publication of a White Paper next year. It is kicking the tyres on a relatively small number of options. There are only a certain number of ways you can run a railway. This has to change. We need to identify the best way of doing it and have a deliverable action plan to move to a new world.

Jack Brereton

As you suggested, hopefully the review will go further than those previously identified. There is clearly a need for more urgent change to address some particular issues with timetabling, so will actions be taken prior to the review? It has been suggested that the fundamental reforms will not be until 2020. Will it be possible for action to be taken more urgently than that to address some of the issues with timetabling?

Chris Grayling

There are two areas. We talked earlier about what we are doing on the timetabling front. In terms of the working of the railway, we thought long and hard about whether we should stop the process of new franchises now. We have south-eastern, midland main line and west coast in the system now. I judged in the end, after much agonising, that we should let those go forward. Whatever the change is after 2020, it will have to be done in steps. You cannot just do the whole thing in one go overnight. There are passenger benefits that will come with the new franchise—for example, brand new trains on the midland main line that are needed now. My judgment is that we should let those improvements happen, but we should continue with where we were going, which is actually not just to take the conventional approach and have the fragmentation we have at the moment. All those are designed to create much greater degrees of integration. The midland main line and south-eastern, for example, are let on the basis that they will be run by alliances between Network Rail and the train operator. There will be much more unification between the two teams and much more joined-up thinking and planning on those routes. That will happen anyway. Beyond the White Paper next autumn, we need to start moving towards the new world.

Jack Brereton

Do you feel that Keith Williams, whom you have chosen to conduct the review, and the panel that will oversee it, have enough operational experience to be able to do that?

Chris Grayling

We deliberately tried to pick a mix of experience. They are really there to play devil’s advocate. We have a core team of people who are working on detailed support of the review team and the review panel. The review panel’s job is to kick the tyres on the different options, to play devil’s advocate for different options and to make sure that we listen properly to the outside world about how this should be done, but most particularly to help us shape a strategy that is deliverable quickly. The reason for picking Keith is that he has very good experience in managing a complex, passenger-focused logistical transport organisation. He also has very good workforce experience. One of the issues we clearly have at the moment is how we create a better relationship between the leadership and the workforce in the industry for the future. I think we have a good mix of experience; on the panel we have a mix of rail experience and consumer experience. We have those with an understanding of disability issues, and so on and so forth.

Chair

Was anybody invited to take part as an expert but declined the option?

Chris Grayling

No, not that I am aware of.

Chair

Are there any plans for that rail review to look at best practice from other countries, particularly other European countries that are tackling these issues?

Chris Grayling

Yes, they are doing some work on that at the moment.

Chair

Thank you. That concludes our questions to the first panel of witnesses today. Examination of witnesses

Witnesses

Professor Glaister, Ian Prosser and Dan Brown.

Chair

I thank our second panel for waiting so patiently. I know you were listening to the first session. For the benefit of our proceedings, would you like to introduce yourselves?

Professor Glaister

I am Stephen Glaister, chair of the Office of Rail and Road.

Dan Brown

I am Daniel Brown, director of policy and strategy at the Office of Rail and Road. I led the day-to-day work on the inquiry.

Ian Prosser

I am Ian Prosser, Her Majesty’s chief inspector of railways and director of railway safety at the ORR. I did the Prior Role Review of ORR for the inquiry.

Chair

Thank you. First of all, we want to consider the ORR’s own role in the timetabling issues. This year’s timetable change involved over 40,000 service changes. We know it was four times more than a typical six-monthly change. Did the ORR offer advice at any stage to the Department or the industry about the achievability of the timetable and about the level of systemic risk to the rail network? If it did not, why not?

Professor Glaister

I would like to start by saying, like everybody else in the industry, how sorry we were about the disruption to passengers and that the hoped-for improvements did not occur. There are things that the ORR could have done better, and we are in the process of thinking about that. It might be helpful if I say a word to clarify our responsibilities in this matter. Of course we, the ORR, do not run the railway, as you heard in the previous session. It is the responsibility of Network Rail and the train operators to put together a timetable and to deliver that. What we do is administer the licences under which that is done, and they seek to achieve economy, efficiency and fairness in the public interest. In my view—my colleagues can speak for themselves, but they may well agree—the issue was not the size of the timetable change. It was a big one, as you have said. The question for us was always whether a proper process was in place under the licence to deliver that change. To a point Mr Cowan made earlier, there was a very complicated and interrelated set of processes. Was there something to achieve that? The answer to that question was always yes. Technically, it is schedule D of the network code. It is a well-established set of procedures with dates, deadlines and gateways that are supposed to be met when timetables are changed, as they are every six months. The schedule included a requirement that there should be an agreed timetable in November 2017 in relation to 20 May 2018. The fact that the change was very big meant that it was more important than it otherwise would have been that those deadlines were met. In fact, the industry generally and we in particular were complacent about the obvious development that those deadlines were being missed in a big way. Major changes were being made long after November 2017. There was a timetable in November 2017, but important changes were made later than that. We were complacent in not pointing that out and doing something about the fact that it was a breach of the schedule D process. We started to intervene in January when we spotted that Network Rail would be unable to meet their licence obligation to tell the world what was going to happen exactly on 20 May. They are supposed to do that at least 12 weeks ahead of time. It was apparent that they were not going to be able to do that. We started conversations to mitigate that and to use best endeavours to find an alternative that caused the least damage to passengers’ interests. What we did not spot, and nor did anybody else, as you have heard, was that that was a signal that things were very much behind schedule, and that it would cause the compression of the timetable planning process that that implied and would create unsurmountable risks to the delivery of the timetable. As it turned out, the industry, in those two areas, was overwhelmed, and we have the outcome that we are familiar with. The major conclusion of our inquiry was that it was the failure to stick to an agreed timetable that ultimately led to the chaos on 20 May.

Chair

Would you agree that the regulator failed to do its job sufficiently?

Professor Glaister

Yes, I agree that we should have looked to ways of being sharper on enforcing those licence conditions, and in future we will. That is part of the recommendations we will be looking for, both for ourselves and in our advice to the Secretary of State about what should be done. I am not saying that one can never miss a deadline, but if one is going to miss a deadline, one has to do it in a very considered and controlled way, with good reasons and good mitigation.

Chair

Do you feel that you have proper understanding, and, if so, can you explain it to us? Given that you were aware that the industry was not meeting its deadlines, and you knew that T minus 12 was not being hit, why did you not foresee that the May timetable was going to result in chaos? Knowing that there were problems with hitting the deadlines, why weren’t the consequences of that for the whole system caught by the regulator?

Professor Glaister

That understanding has become much clearer to us with hindsight. You heard from the Secretary of State that there was a spirit, which is common in the rail industry and in a way is a commendable thing, of, “We will be able to fix it. We are in the business of fixing problems on a daily basis when we run the railway. We’ll fix this and find a way.” Assurances were given that that would be the case. We did not question that at the time, and nor did anybody else.

Chair

Do you think the regulator is fit for purpose?

Professor Glaister

I think there are many ways in which we could improve what we do. It will be part of our own second stage to think about what we can do differently; it will also of course be part of the Department’s own longer-term view, with Mr Williams, to see whether that is the case. In longer-term changes, which will involve legislation, the logic will be that the Government of the day will need to decide what they want to do about changing the structure. Then they will have to think about what regulatory structure is appropriate for that, which may be different from what we have today.

Chair

One area I want to touch on is the Thameslink phasing and the Industry Readiness Board. How would you rate the job that was done in relation to timetabling by the Thameslink Industry Readiness Board?

Dan Brown

We looked very closely at the role of the IRB throughout the preparations for the 20 May timetable. I am pleased that the minutes of the IRB meetings have subsequently been released to the public. We spoke to many of the members of the IRB, and for the most part the work that the IRB did was immensely valuable. The IRB was a very necessary forum for the introduction of a complex programme that brought together multiple new technologies, multiple systems, new rolling stock, new infrastructure and the implementation of the franchise. It was a necessary forum. What we found, on the basis of our review, was that it was not a sufficient forum. It clearly did not adequately test GTR’s plans. The advice that it received from the independent advisory panel was not, in our view, robust enough. As you explored with the Secretary of State, the IRB was a relatively informal structure. It was an add-on to the formal programme management structures that had been in place for several years for the Thameslink programme. We feel that it would have had more effect had it been built into the Thameslink programme structure from the start, had it had executive authority and had it had the resources that it needed to gain expert third-party advice throughout its process. I certainly do not think that the IRB was all bad. It was very substantially and mostly good, but it was not constituted in a form that allowed it to conduct its responsibilities with full effectiveness.

Chair

If it had been clearer about its remit and governance, that could have made a difference. Is that your assessment?

Dan Brown

That is exactly it. I expect that we will be making recommendations in our final report about that.