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«Rail Fares and Ticketing: Next Steps October 2013 The Department for Transport has actively considered the needs of blind and partially sighted ...»

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Rail Fares and Ticketing: Next Steps

October 2013

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Contents Foreword

Executive Summary

A better deal on fares

Improving current ticketing

Building the smart ticketing system for the future

1. Introduction

Government's wider strategy for Rail

What the review has sought to achieve and why

The key principles underpinning the review

The structure of this report

Further information about fares and ticketing

2. A better deal on fares


Ending extreme fare rises

A better deal for commuters

A better deal for longer-distance passengers

Balancing complexity and choice

Advance fares – a rail success story

3. Improving current ticketing


Government's role

Key ticketing principles

A changing landscape

What needs to change?

Rail ticketing in a modern consumer market

What Government is doing

Further improvements to ticketing

4. Building the smart ticketing system of the future


Future technologies

Our vision for the future

Delivering our vision

5. Conclusion

Annex 1. Terms of Reference

Annex 2. Summary of Consultation responses


Our railways are a vital part of our nation’s future. The Coalition Government is determined to build on the continued success of our railways and that is why we are providing over £16 billion over the next five years to support the network and make sure it can respond to increasing passenger demand, help economic growth and cut our carbon footprint.

But new track and trains are only part of the story for improving our railways.

We remain committed to rolling out smart ticketing across the network. We want the whole experience of travelling by rail to be modern, seamless and easy, starting with buying a ticket to travel. We also recognise that the cost and complexity of train fares is naturally a key concern for passengers.

That is why we have carried out a review of rail fares and ticketing and considered a range of options to address the many issues raised by passengers and others. Today I am setting out our vision for a modern, customer-focused fares and ticketing system that will support our objectives of allowing even more

people to travel by rail and ensure they have a better experience and which:

 supports a passenger-focused railway, meeting changing needs and travel patterns;

 promotes a vibrant future for our railways supporting economic growth and prosperity and helping to reduce the country’s carbon footprint;

 enjoys the trust of passengers and the commitment of the rail industry; and  maintains its current strengths whilst embracing sensible change in the interest of passengers and taxpayers who fund our railways.

We know that for many passengers it is the cost of some fares that remains the overriding concern. Responsible stewardship of the railways means bearing down on running costs and investing in a sustainable way and that is our priority. To help passengers, I can confirm that from January 2014 we will give rail passengers a better deal by capping the upper limit of any individual fare rise at 2% above the permitted average of inflation plus 1%, for all regulated fares. This will protect passengers from large fare increases which can have a significant impact on household budgets by taking 3% off the maximum increase for a regulated fare.

And while the above-inflation fare rises of recent years have been necessary to help fund our record investment in the network, it remains our firm ambition to cap fare rises at the level of inflation, just as soon as economic conditions allow and savings have been made to the cost of running our railways.

This rail fares and ticketing strategy sets out the other actions we will take to:

 give passengers a better, more modern and more flexible deal on fares;

 improve the current ticketing system while in parallel building the smart ticketing system of the future; and  encourage innovation and efficiency from train companies for the benefit of the passengers and taxpayers alike.

It explains how we will blend the best of regulation with the best of market forces to deliver a fares and ticketing system that puts passengers first and our railways on a sustainable footing for the future.

I would also like to thank stakeholders for their many contributions to this review, notably those from the Rail Delivery Group, the Association of Train Operating Companies, Passenger Focus and London TravelWatch.

The Right Honourable Patrick McLoughlin MP Secretary of State for Transport Executive Summary

1. The Coalition Government is committed to its vision of a high performing rail network that keeps cities moving and communities connected at an acceptable cost to the taxpayer and the passenger

2. To support this vision, we have pledged over £16 billion of support for the rail industry over the period to 2019 in order to improve the capacity and quality of a network which is seeing a vast growth in demand.

3. Our goal for rail fares and ticketing is to allow more passengers to travel and to have a better experience of rail, at the same time bringing down industry costs and costs to the taxpayer.

4. Following a consultation on rail fares and ticketing to inform this review we now set out our plans to secure passengers the best deals on fares, to improve current ticketing practices and to ensure that we build the smart ticketing system for the future for the benefit of passengers, whilst ensuring that the impact to the taxpayer is kept at a minimum A better deal on fares

5. We know that rail fares and the complexity of the fares structure are a concern to rail passengers.

6. To reduce the impact of fares increases on passengers and improve the

overall quality of the fares packages on offer to them, we will be:

 Reducing the current fares flex from 5% to 2%, thereby limiting the extent of the annual fares increases and putting money back into the hands of passengers.

 Trialling a scheme to regulate longer distance off peak tickets on a single leg basis to remove the confusing scenario where some single off-peak tickets cost nearly as much as return tickets, and to also to offer passengers increased choice and flexibility.

 Trialling more flexible tickets that can provide a more attractive offer for commuters travelling fewer than five days a week, or outside peak hours, that can better match more modern working patterns and potentially help to better manage capacity on the railways.

7. In doing the above, we are simplifying the fares package available to passengers to enable cheaper and more flexible journey choices. We are looking to cater to the variety and diversity of modern travel patterns, we are reducing the impacts of fares rises on passengers and are setting the groundwork for our future ambitions.

Improving current ticketing

8. Ticketing is an integral part of a passenger’s interaction with the rail network. The Coalition Government is committed to ensuring that passengers have access to the right information that will help them make the best decisions regarding which tickets best suit their needs and making sure they have access to the most relevant and up to date information regarding their journey.

9. Technological advances and a better understanding of rail passengers’ needs mean that we can now offer them an improved and more modern ticketing service akin to those that they are becoming accustomed to in other industries whilst, at the same time, making the railways more efficient and saving on current costs of operating the network.

10. We are keen to see more investment and innovation from train operating companies to reflect a shift towards more efficient forms of ticketing such as better “self-service” ticket machines, websites and mobile applications. However, we are clear that any such changes being proposed by operators must also have appropriate safeguards so that they are in the overall best interest of passengers.

11. We will be working closely with the Office of Rail Regulation, train operators and other stakeholders to bring about changes that will increase transparency, remove confusion and help passengers feel confident about their ticket purchases and to fully understand the terms of their use.

12. The actions arising from this review that will bring about such changes


 A Code of Practice on ticketing information that will ensure passengers can access the information they need to confidently select the most appropriate ticket for their journey;

 An improved approach to the way we manage approvals for changes to ticket offices with incentives for train companies to modernise ticketing facilities, while providing appropriate safeguards for passengers – including being able to get help and advice from a member of staff, where they can do so now;

 A stronger and more focused approach to quality and customer service in franchises including ticket retail;

 A market review by the Office of Rail Regulation to consider whether the current market for selling train tickets is operating as efficiently as possible;

 Publication of annual “mystery shopper” surveys of all retail channels to improve transparency for passengers;

 Supporting further steps by the rail industry to improve ticketing.

13. The measures above will significantly improve the ticketing experience, ensuring that the needs of rail passengers of all types continue to be catered for. It will also enable the network to operate more efficiently driving savings for train operators and taxpayers.

Building the smart ticketing system for the future

14. The Government wants to ensure that the benefits of new ticketing options now being made available through advances in technology are exploited and passed on to passengers at the same time as maximising opportunities to reduce costs and increase the productivity and efficiency of the railway. The proper application of technological advances can not only reduce costs to passengers and taxpayers but can also drive an improvement to the overall quality of passengers’ experience at all points of interaction between them and the rail system; right from when they buy their tickets through to completion of their journeys.

15. Smart ticketing presents a particular opportunity to provide passengers with faster, simpler and more flexible ticketing systems - we want to use smart ticketing technologies to introduce new ticket types currently unavailable due to limitations in current magnetic stripe systems. This will provide passengers with tickets better suited to their travelling patterns and save them money.

16. We have already seen the benefits of using smart ticketing in London through TfL’s Oyster system and have plans to roll out smart ticketing across the rail network. Our plans can be divided into three broad


–  –  –

Finally we will complete our plans with the withdrawal of magnetic tickets within the next 10-15 years and start to see the full potential and efficiencies possible from using smart technologies realised.

17. Throughout our programme of delivery we will be facilitating cooperation between Government, train operators, local authorities, and other stakeholders to make sure that we deliver a well integrated system that is consistent across the network without hampering innovation and ensuring the system is sustainable and sensitive to future technological developments.

1. Introduction

This chapter sets out:

 how this strategy fits into Government’s wider strategy for rail;

 what Government is seeking to achieve and why;

 the key principles underpinning it;

 the structure of this document.

Government's wider strategy for Rail

1.2 This Government’s vision is for a rail network that keeps cities moving and communities connected at an acceptable cost to the taxpayer, and ensures passengers benefit from a high-performing, affordable railway.

1.3 More passengers are now using our railways than at any time since the 1920s, on a network that is half the size. Passenger journeys have doubled over the last twenty years 1 and demand is forecast to grow by a further 16% between 2013/2014 and 2018/2019 2. In response to this success, Government seeks to accommodate an increase in rail travel where practical and affordable, by providing for extra capacity, and by adopting new technologies and more efficient operating practices.

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