31 January 2019
On the 5th February, The Future of Wales’ Railways will be debated in Plenary. In advance of the debate, this blog post sets out some background and recent developments on rail infrastructure and franchising in Wales.
The funding and operation of rail services and infrastructure in Wales presents a complex picture. Legislative competence in relation to both British rail infrastructure and franchising are reserved to Westminster, so that neither the Scottish Parliament nor the Assembly can legislate to change the framework under which rail operates.
However, executive franchising powers are devolved to both Scotland and Wales, with some differences – for example a legal prohibition on public sector operators bidding for and running franchises applies in Wales but was repealed in Scotland. Infrastructure planning and funding of Network Rail in Wales remain the responsibility of the UK Government, unlike Scotland where this aspect is devolved. While the Commission on devolution in Wales recommended that infrastructure be devolved, this was ruled out in the St David’s Day Command Paper. While the Welsh Ministers have powers to invest in infrastructure, Wales receives no block grant allocation for this.
Passenger rail services in the UK are generally operated through franchise agreements.
Transport for Wales (TfW) was established by the Welsh Government in 2015 as a wholly owned subsidiary company limited by guarantee. Its initial purpose was to procure the new Welsh rail franchise and Metro services on the valley lines. The procurement process was accompanied by negotiations with the UK Government on the devolution of rail franchising powers to Wales. Devolution is accompanied by a range of agreements with the UK Government.
On 23 May 2018, the then Cabinet Secretary (now Minister) for Economy and Transport announced that KeolisAmey had been awarded the franchise contract. The Cabinet Secretary provided further details in a written statement followed by an oral statement to Plenary on the 4 and 5 of June respectively. In his 4 June written statement the Cabinet Secretary made clear that TfW and KeolisAmey are delivering the franchise through a “partnership”, branded as TfW. TfWRail began to operate services from 14 October 2018.
In subsequent statements the Cabinet Secretary considered wider issues, including how the new contract would maximise economic benefits for Wales, as well as investment in rolling stock depot facilities to support the new South Wales Metro.
The Welsh Government has publicised a £5 billion investment in the rail franchise over its 15 year lifetime. The Cabinet Secretary’s 2019-20 draft budget paper describes a total £4.7 billion public investment including: £3 billion for services; £793m for the South Wales Metro and Taff’s Well Depot; and £900m to operate and maintain the “core” South Wales Valleys once ownership transfers to the Welsh Government.
The early days of TfW
It’s safe to say that the early days of the new TfWRail franchise were somewhat rocky, with significant disruption to its services. On 19 November 2018 TfWRail tweeted and published a letter apologising for delays, cancellations and other issues with its services. The Economy, Infrastructure and Skills Committee took evidence on the disruption from TfW on 29 November , the Cabinet Secretary for Economy and Transport on 5 December, and Network Rail, Arriva Trains Wales and further evidence from TfW on 9 January.
The Williams Rail Review
In September 2018, following major disruption to services in England due to May 2018 timetable changes, the UK Government launched a ‘sweeping review to transform Britain’s railways’. The Williams Rail Review – led by independent Chair Keith Williams (former British Airways Chief Executive and Deputy Chair of the John Lewis Partnership) – aims to:
…build on the government’s franchising strategy – bringing track and train closer together to reduce disruption and improve accountability, and considering regional partnerships and how we can use innovation to improve services and value for money for passengers.
The UK Government will publish a White Paper on the review’s recommendations, with the implementation of reforms planned to start from 2020.
On 11 December, the Cabinet Secretary issued a written statement on the Williams Rail Review. He said that whilst he welcomed the review, the context for rail delivery in Wales is ‘complex, fragmented and under funded’. He said ‘this imperfect devolution settlement is the root of many of the problems with our railway’. He outlined a number of specific issues he would like the review to address, including:
- Transfer of ownership of Wales’ rail infrastructure;
- A fair funding settlement extending to enhancements;
- The ability to select from a range of railway passenger service delivery models in Wales;
- The removal of the prohibition on public sector operators bidding for, and operating, Welsh railway passenger services; and
- Arrangements for owning, allocating and managing rolling stock which serves Wales’ needs.
In July 2017, the UK Government published its High Level Output Specification (HLOS) and Statement of Funds Available .for the next rail Control Period (CP6 2019-24). These statutory statements set out what the Secretary of State for Transport wants the railway in England and Wales to achieve. On the same day it emerged that plans for electrification of the Great Western Mainline between Cardiff and Swansea had been dropped by the UK Government. Alongside this announcement, the Secretary of State also issued a press release indicating that Network Rail would “develop additional options to improve journeys for passengers in Wales” – listing five specific examples in north and south Wales.
In response, the Cabinet Secretary issued a written statement expressing his disappointment at the HLOS, stating that it makes:
No commitment from the UK Government to enhance our rail network in the 2019-2024 period, but also rolls back on the commitment to electrify the line between Cardiff and Swansea.
He went on to criticise the UK Government’s spending on infrastructure enhancements in Wales:
Although Wales and the Marches area has around 11 per cent of the railway track in England and Wales, since 2011 the areas has only benefitted from around 1.5 per cent of the money spent by the UK Government on rail enhancements.
A change in approach for major infrastructure projects
The way in which major rail enhancement projects are planned by the UK Government in England and Wales is changing. Where in the past the UK Government would identify major infrastructure projects to be delivered in each Control Period, the rail network enhancement pipeline (RNEP) represents a new approach for projects that require government funding.
The UK Government says the approach creates a rolling programme of investment, focused on outcomes that provide benefits for passengers, freight users and the economy and moves government investment away from the current five year cycle.
In December 2018, the Cabinet Secretary issued a written statement on Rail Infrastructure Enhancements. In it he set out his view that the DfT’s current enhancements pipeline process is ‘not serving Wales well’. He said that he agreed to engage with the new approach in order to secure investment in Wales’ rail network, but that this was contingent on the UK Government using the process to invest at pace. However, he said that ‘progress has been very slow’:
To date we have seen none of the business cases that the UK Government promised last year, no funding has been committed to further development, and no clarity on next steps and timescales has been given. This is unacceptable. We cannot engage in an endlessly bureaucratic process which appears to be designed to withhold the investment which is so urgently needed.
The case for investment
On 11 December, the Cabinet Secretary published the Case for investment in rail infrastructure prepared for the Welsh Government by Professor Mark Barry. The report includes detailed proposals for infrastructure investment in north and south Wales and presents an overarching vision for rail in Wales. Previously, on 8 May, the Cabinet Secretary made an oral statement in Plenary on Ambitions for Great Western and North Wales Mainlines. In it he referred to Professor Barry’s work, saying it will:
inform the individual scheme strategic outline business cases currently being developed by Transport Wales and the Department for Transport […] They will establish an overall vision for the future of the north and south Wales networks that meets the Welsh Government’s and, indeed, other key stakeholders’ aspirations.
Article by Chloe Corbyn, National Assembly for Wales Research Service