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‘Root and branch’ reform of UK rail fares proposed

08 May 2018

UK: The Rail Delivery Group is to undertake public consultation ahead of producing proposals for how it could work with government to implement a ‘root and branch reform’ of fare and ticket regulation. 

The current regulatory structure for ticketing in Great Britain was fixed at the time of privatisation in 1995. It includes requirements for all operators to sell most tickets, through ticketing between almost all stations and the availability of a standardised range of ticketing products.

Announcing the consultation on May 8, RDG said subsequent ‘decades of well-intentioned but outdated’ regulation had led to fare options ‘that have not kept pace with technology or how people work and travel today’, highlighting the introduction of smartphones and the growth in part-time working and self-employment.

RDG commissioned KPMG to identify ‘key principles’ for the proposed reform. These principles are to improve customer satisfaction, enable a sustainable long-term model and provide value for money for government expenditure.

KPMG notes that there is ‘merit’ in retaining a set of core products, but also opportunities for greater personalisation, such as more flexible season tickets and personal travel accounts. KPMG suggests a short-term push to digital products, with a longer term push to ‘open gating’ and biometric tokens. Pricing by time and day is needed to manage demand, while fare regulation protects passengers in markets with inelastic demand. A move to single-leg pricing for return journeys could improve transparency.

RDG is to undertake the consultation in conjunction with passenger watchdog Transport Focus between June and September. RDG aims to produce a ‘road-map’ for change in late autumn, which it would then need to work with the government to implement. The consultation will not look at the division of industry costs between rail users and general taxation, which is essentially set by government policy.

RDG said examples of ‘well-intentioned but ultimately counterproductive’ regulation include setting out how customers ‘must be able to buy a ticket from each of the 2 500 stations in Britain to every other station’. RDG said ‘long-standing anomalies’ include the need to buy a peak ticket for a whole trip when only part of the journey is during the peak, and ‘inflexible’ season tickets.

‘We want to develop proposals to reform fares and regulation to make it easier for our customers to get the right ticket, enhancing trust in the system and supporting continued investment to improve the service’, said RDG Chief Executive Paul Plummer. 'Unpicking the regulation of a £10bn-a-year fares system that underpins such a vital public service means there are no quick-and-easy solutions. The change that’s needed won’t be easy and the industry doesn’t have all the answers, which is why we want to hear views from passengers, communities and businesses in all parts of the country.’

Responding to the announcement of the consultation, Alex Hayman, Managing Director of Public Markets at consumer association Which?, said ‘passengers have struggled for far too long with a confusing ticketing system that can make it hard to pay the right fare, so passenger-focused reform of the fare system is long overdue’.

  • An interview with RDG Chief Executive Paul Plummer appears in the May 2018 issue of Railway Gazette International magazine, which subscribers can access in the digital archive.