THE Govia Thameslink Railway franchise has not yet delivered value for money, partly because the Department for Transport did not take enough care to consider passengers when designing the franchise. However, the franchise has a realistic chance of succeeding in the longer term.

Those are the conclusions in a new National Audit Office report published today.

The report has focused on the ‘high levels of disruption’ on GTR routes, which have recorded the worst levels of performance anywhere on National Rail since the franchise was launched in September 2014. The franchise did not include Southern originally, but this part of the network was merged with Thameslink Great Northern in July 2015, creating a ‘super franchise’.

The key objective of the contract was to complete the Thameslink Programme, which includes several fleets of new trains. The largest of these fleets is formed by Class 700 Siemens units for the core Thameslink routes. The 12-car versions of the Class 700s can carry 1,600 passengers.

The original objective under the revised Thameslink plan of running 24 trains an hour during peak periods through the central London section of Thameslink this year has been postponed until the end of 2019.

The franchise is unusual, because the DfT collects the revenues and pays Govia almost £1 billion a year to provide the service, while Govia takes the costs risk.

Since Govia started operating the full franchise in July 2015, around 146,000 services (7.7 per cent of planned services) have either been cancelled or delayed by over 30 minutes, compared to 2.8 per cent on the rest of the network.

The number of trains arriving at their destination within five minutes of their scheduled arrival time fell to 62 per cent in November and December 2016 during industrial action. Based on data produced by Network Rail and Govia Thameslink about services cancelled, around 56,000 cancellations (38 per cent of the total) were related to the non-availability of drivers and other train crew.

The Department and Govia Thameslink considered that industrial action was the most important cause of train crew shortages, but other important causes of delays and cancellations (37 per cent) include the reliability of some trains, Network Rail's management of the rail network, and failures of track and other equipment, such as signalling. Since March 2017, the percentage of trains arriving within five minutes of their scheduled time has exceeded 80 per cent, but this is still below the national average. 

The major industrial action on Southern in response to plans to introduce driver-controlled operation had not been expected, although the DfT had accepted that there was a risk of some opposition.

Even so, the DfT did not evaluate fully the possible effects on passengers of industrial action before awarding the contract, nor did it ask Govia Thameslink to do so.

The NAO also said the Department did not seek sufficient assurance that Govia Thameslink would have enough train drivers when it took on the franchise. Govia Thameslink received fewer drivers than it expected from FirstGroup – the previous operator of Thameslink Great Northern – and driver shortages have persisted on Great Northern services. Even if Govia Thameslink had received the number it expected, there would still have been some shortfall.

A further problem was that the Department and Network Rail did not have a good understanding of the underlying condition of the existing network at the point when the Department set the requirements of the franchise, the NAO has found. Between July 2015 and March 2017, 13 per cent of all cancellations and delays to services of over 30 minutes have been due to failures of track and other Network Rail equipment such as signalling. In 2016, Network Rail estimated that up to around £900 million of maintenance and renewal work was needed to achieve the resilience needed to run the new services on the Thameslink network reliably, in addition to infrastructure investments already planned.

The NAO report finds that while the Department has enforced the terms of its contract with Govia Thameslink, and that performance is improving, passengers continue to experience disruption. The Department considered its options for the future of the franchise including terminating the contract, but decided that enforcement was the more appropriate option. The Department and Govia Thameslink have agreed a settlement where the operator will fund a £13.4 million spending programme for missing its targets to date.

The Department also expects to pay Govia Thameslink for the additional costs, potentially amounting to tens of millions of pounds a year, resulting from changes to the Department's requirements.

Amyas Morse, head of the National Audit Office, said: “Over the last three years long-suffering passengers on the Thameslink franchise have experienced the worst performance on the rail network. Some of the problems could have been avoided if the Department had taken more care to consider passengers in its design of the franchise.”

Lilian Greenwood, who chairs the Commons Transport Committee, said: “In 2016 our predecessor Committee reported on the woeful situation faced by long-suffering customers on Govia Thameslink Railway’s TSGN franchise, particularly the troubled Southern Railway brand. It urged the Department for Transport to ‘get a grip’ on its monitoring and enforcement of GTR’s contract, improve services and compensate passengers, as a matter of urgency.

“Today’s report confirms much of the Committee’s analysis and demonstrates that the Department for Transport has a long way to go in rectifying the situation and learning the lessons for future rail franchises.”

GTR chief executive Charles Horton said: “The franchise is making good progress in delivering a major upgrade programme to improve reliability and boost capacity.
 
“Passengers will increasingly see the benefits of this modernisation project. We are glad that the National Audit Office has recognised these benefits and that they forecast Thameslink has a realistic chance of delivering value for money.
 
“TSGN is the UK’s largest franchise, and the report identifies numerous root causes for the challenges it has faced since its formation in 2014. These difficulties have sometimes been greater than expected and we regret the disruption caused.
 
“It is only right that a franchise of TSGN’s unprecedented scale and ambition receives scrutiny, and I am more confident than ever that its trailblazing achievements will be felt by rail travellers for generations to come.”