National Audit Office report on the Thameslink, Southern and Great Northern rail franchise

The Department for Transport (the Department) designed the Thameslink, Southern and Great Northern franchise to support the delivery of the major Thameslink upgrade programme and improve passengers’ experience of services. While our recent report on the Thameslink programme found that it had a realistic chance of being value for money, today’s report from the NAO finds that between September 2014 and September 2017, passengers on the franchise have experienced the worst service performance on the national rail network. Since Govia Thameslink Railway Ltd started operating the full franchise in July 2015, around 146,000 services (7.7% of planned services) have either been cancelled or have been delayed by over 30 minutes, compared to 2.8% 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% in November-December 2016 during industrial action. Based on data produced by Network Rail and Govia Thameslink about services cancelled, around 56,000 cancellations (38% of the total) were related to the availability of drivers and other train crew. The Department and Govia Thameslink consider that industrial action was the most important cause of train crew shortages. It would have been difficult to foresee industrial action on this scale. Other important causes of delays and cancellations (37%) include the reliability of some train fleets, Network Rail's management of the rail network, and failures of track and other infrastructure assets such as signalling. Since March 2017, the percentage of trains arriving within five minutes of their scheduled time has exceeded 80%, however this is still below the national average. 

The Department accepted Govia Thameslink’s 'driver only operation' plan and, recognising it would increase the risk of industrial action, contracted Govia Thameslink’s contingency arrangements. It noted that previous industrial action related to the introduction of 'driver only operation' on other rail services, had been limited. The Department did not fully evaluate the possible effects on passengers of different scenarios of industrial action before awarding the contract, nor did it ask Govia Thameslink to do so.

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 the previous operator of the Thameslink and Great Northern routes, 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.

The Department contracted Govia Thameslink to deliver a specific level of increased services despite concerns from Network Rail and Govia Thameslink that the network could not support the proposed timetables reliably. The Department expected its normal processes for agreeing train services to address these concerns. It is also possible that the demands placed on the network by the December 2015 timetable have contributed to the service disruption which passengers have experienced.

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. Between July 2015 and March 2017, 13% of all cancellations and delays to services of over 30 minutes have been due to failures of track and other Network Rail assets such as signalling systems. In 2016, Network Rail estimated that an investment of up to around £900 million (cash prices) 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.[1]

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 enforcing the contract was the most appropriate option. The Department and Govia Thameslink agreed a settlement where the operator will fund a £13.4 million spending programme for missing its targets to date. It is unclear how the Department will incentivise Govia Thameslink to deliver good services for passengers in the future, having removed its ability to use financial performance penalties up to September 2018. Negotiations on a second remedial plan, and interim performance measures, are ongoing.

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. The contract changes are needed because the Department has agreed to alter the train services required in the franchise contract, which it had anticipated at the start of the contract, and to reflect delays to the delivery of new trains for Thameslink services

Amyas Morse, head of the National Audit Office, said today:

“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.”

Key facts

Notes for Editors

1.     The Department for Transport is sponsoring the Thameslink Programme, a complex investment in rail infrastructure and rolling stock, and a significant change to services. The objectives of the programme are to increase passenger capacity on the Thameslink route by running higher frequency, more spacious trains on an expanded network. The NAO published its latest report on the Programme in November 2017.  

2.     As part of the Department's responsibility for providing passenger rail services, it is responsible for designing, letting and managing rail franchises. The Thameslink, Southern and Great Northern franchise was awarded to Govia Thameslink Railway Ltd in May 2014. Govia Thameslink started operating Thameslink and Great Northern services in September 2014, taking on Southern and Gatwick Express services from July 2015. The franchise is the largest of the 15 rail franchises managed by the Department, bringing together four rail services, Thameslink, Southern, Great Northern and Gatwick Express, connecting London with towns and cities across the south east and east of England. 

3.     In 2016-17, passengers took 321 million journeys on the franchise, which is an average of nearly 900,000 journeys a day. The Department awarded the contract, worth £8 billion over seven years, to Govia Thameslink after it scored the highest of five bidders for its proposals on service quality and put forward the lowest cost to run the franchise. 

4.     'Driver only operation' ('DOO') means that train guards are not required to operate the train doors, and services can therefore run without a second person (a guard or conductor, in addition to the driver) crewing the train. 'Driver controlled operation' (DCO) is an alternative term.