Future of the Wales & Borders Rail Franchise

Rail policy in Wales has significant cross-border impacts, and it's
not expected that the franchise map would change in 2018.
(Pic : Arriva Trains Wales)

Before I wrap up for the year, it's worth returning to my "favourite Assembly committee" – Business & Enterprise – which launched their report on the future of the Wales & Borders rail franchise on Wednesday (pdf).

Rail services in Wales recently come under criticism from the Campaign for Better Transport, who claim services were poorly used compared to the rest of the UK and that Welsh rail passengers have lower service satisfaction. The franchise to run rail services in Wales and the Marches is up for renewal in 2018.

The Committee didn't come up with any recommendations as such. Instead, they produced a draft Charter for the franchise, based on an assumption that powers over the Wales & Borders franchise would be devolved.

The Current Franchise

The Wales & Borders franchise is currently run by Arriva Trains Wales (ATW), a subsidiary of Arriva UK, who are in turn owned by Deutsche Bahn. ATW was awarded a 15-year franchise in 2003, with Westminster retaining powers to award rail franchises via the Department of Transport.

The committee say most of the evidence they received was critical of ATW's performance. This includes reasons like:

• Lack of demand forecasting, provision for passenger growth and investment (by ATW).
• A failure to reflect Welsh Government priorities.
• Inadequate rolling stock, poor service standards and complex fare structures.

The Association of Train Operating Companies (ATOC) said the franchise was awarded during a time of increasing austerity, while the SWWITCH transport consortium (covering south west Wales) said ATW had "performed well given the limitations of the franchise".

ATW said the current franchise was effective, with significant passenger growth, record levels of passenger satisfaction and improvements in punctuality.

The current franchise agreement (pdf) meant ATW only had to invest £400,000 over 15-years (what numpty drew that up!?). They say they invested £30million (p3 2.7).

Passenger Focus disagreed with ATW's assessment, saying that although some aspects were "good", there was no planning for future growth and the franchise contract was "flawed from the start".

The committee took evidence from Transport Scotland (the Scottish Government's transport agency). Railways are mostly (but not 100%) devolved to Scotland, and the ScotRail franchise is up for renewal in 2015, so they're going through the same process Wales is. They're including integrated transport provisions within their next franchise agreement, including linking rail services to active travel routes.

A New Franchise


Business Minister, Edwina Hart (Lab, Gower), told the committee that discussions over devolving further rail powers to Wales are "ongoing", while the Welsh and UK Governments have made it clear there should be further devolution of rail powers in both submissions to the Silk Commission. The UK Government are, in fact, actively pressing for devolution of railways, but it's unclear if that's to the same extent as Scotland.

The franchise map is unlikely to change as including English routes improves the franchise's "financial sustainability".

In terms of timescales; the procurement notice will be published in the EU in March 2017, tenders will be published in August 2017, the contract will be awarded in June 2018 and the franchise will come into effect in October 2018. The committee believes work needs to start now "to ensure deadlines are met".

In terms of the length of the franchise, the Department of Transport said long-term franchises were "not as attractive as they had once appeared". Edwina Hart said she would, however, prefer a "long-term relationship". Meanwhile, Railfuture suggested the current franchise should be extended so to enable a move towards a not-for-dividend business model.

Service Standards and Rolling Stock

Minimum service standards on board trains and in stations
should be part of any new franchise agreement.
(Pic : Wales Online)

Evidence suggested there needed to be minimum service standards as part of any new franchise in terms of facilities, rolling stock, integrated transport and dealing with complaints. Passenger Focus suggested there needed to be "hard measures" to tackle overcrowding and simplified fares, but "soft measures" when it comes to service quality.

In Scotland, stations are monitored every four weeks for things like as cleanliness, toilets, timetables and customer service. Inspectors are given laptops to instantly record reports. Respondents believe something similar should happen in Wales.

Passenger groups said there needed to be more regular contact between themselves and train operators, suggesting the creation of a "franchise panel" of rail users. ATW agreed that any new franchise needed to "ensure passengers views are at the forefront" of operations.

In terms of new routes, there was an emphasis on connectivity with England, in particular Liverpool and Manchester Aiports, Birmingham and London. Within Wales, there were calls for improved services on the Cambrian Line between Birmingham and Aberystwyth, and calls for a reopening of a "north-south" rail line between Carmarthen and Aberystwyth, electrification of the north Wales coast line and light rail in unspecified towns and cities.

I think most people using Welsh railways agree that current trains are barely suitable for modern transport. Most are 40 years old and nearing the end of their useful life. Evidence pointed to a need for Wi-Fi, improved disabled access, better refreshment and toilet facilities, and better facilities for bikes.

There's clear need for a long-term strategy on rolling stock
- whether "hand me downs" or brand new.
(Pic : David Burrell via Flickr)

As to where to get the trains from, there wasn't an agreement on whether rolling stock should be "cascaded" ("hand me downs") or bought new.

Transport expert, Prof. Stuart Cole, suggested the Welsh Government should become a "rolling stock company" in its own right, owning any Wales and Borders train fleet from 2018. Leasing company, Angel Trains (and ATW), said refurbishing old trains provided better value for money than completely new rolling stock.

Edwina Hart was open minded about either option, leaning towards refurbishment. While Plaid Cymru leader, Leanne Wood, has previously called for bespoke trains post-electrification.

It was generally agreed that the issue of rolling stock needed a "long-term strategy". However, Prof. Cole said any decision to lease or purchase new trains had to be in place by the end of 2014 as it takes up to 3 years for new trains to become available.

The Business Model

Three potential management models for a new franchise were offered.

• A standard model – Train operators receive revenues and accept risks, with subsidy paid by the Welsh Government or a premium paid by the franchise holder.
• A concession model – Operators are paid a fee to run services specified by a franchise authority. Revenues are then received by that authority (similar to MerseyRail and London Buses).
• A not-for-dividend model (aka "Glas Cymru model") – This could include a state-owned, not-for-profit company operating at arms length from the Welsh Government, or a co-operative franchise.

There was no clear consensus on which model would be best, though many respondents at a special "stakeholder event" believed the not-for-dividend model was worthy of further investigation. Railfuture outright supported it. Many though believed the business model itself wasn't as important as service delivery.

Prof. Cole believed that the traditional franchisee model would provide improvements to customers, but that the not-for-dividend model would be more popular. He also raised concerns there wasn't enough expertise within the Welsh Government to develop the franchise and procure things like rolling stock.

If the franchise moved to a not-for-dividend model, ATW say that there would be more management "by the Assembly", whereas if it's a for-profit business model, the operator takes on more of the management duties.They also believed that profit motive was essential to create economies of scale, saying that if the Welsh Government were considering a different business model, they should do so with their "eyes open to the risks".

ATOC produced evidence from KPMG that highlighted the benefits of competition between franchises, though its findings were questioned by a Leeds University study which said franchising has been "less successful, cost wise".

Edwina Hart said she was open-minded to a not-for-dividend company bidding to run the franchise, but would require the powers to enable that to happen. She did say though that "no substantial work" has been carried out by the Welsh Government to investigate a not-for-dividend model, which caused the committee concern.

There was also discussion on the benefits of integrating infrastructure (Network Rail functions) with train operations - dubbed a "deep alliance" - to help reduce costs overall. It means train operators and Network Rail could work together to improve efficiency and customer service in all aspects of rail operations.

The Draft Charter

The overriding aim of the Charter is to put passengers first.
Haven't we heard all that before though?
(Pic : BBC Wales)

The draft Charter (p34-36) had 10 key points, building on the committee's integrated transport inquiry, summarised as :

• Lobby the UK Government for devolution of powers and funding for railways so the Welsh Government is responsible for awarding the Wales & Borders franchise.
• Ensure the Welsh Government has the right expertise and funding in place to deliver an effective franchise and necessary rolling stock. This includes developing a rolling stock strategy "as a matter of urgency", factoring in electrification programmes.
• Base new routes on a detailed understanding of rail traffic flows in the franchise area, including cross-border routes.
• Take an early decision on the management model, clearly demonstrating how it would improve passenger satisfaction, service delivery and provide value for money.
• The Welsh Government, when drawing up the franchise, should clearly :
• Put passenger needs first and foremost.
• Require significant investment by the operator.
• Enhance performance monitoring based on the Scottish example, and enhance monitoring of services and environmental impacts.
• Simplify ticketing and fares, as well as provide high standards for station facilities and effective branding.
• Integrate with other modes of transport as well as walking and cycling routes.
• Develop a closer working relationship between the franchise holder and Network Rail.

All Aboard?

It looks like they've scored a hat trick.

In all honesty, from my own experience, rail services in Wales – while they could be significantly improved – aren't that bad. I have the luxury of living in an urban area though that's well served by routes, and it's clear rural Wales has serious problems. Rail services aren't as bad or as under pressure as bus services anyway. Following Scotland's lead when it comes to monitoring and maintaining standards of service is long overdue and a necessity.

You can't really argue with the Charter as outlined. It does seem a bit aspirational for now, and will need to be backed up with something concrete when it comes to awarding the franchise itself. That is however - in political terms - a long time away.

If there's one area you would point to a not-for-dividend/not-for-profit model working, it would be the railways. The former chair of the Assembly's Cross-Party Group on Rail, now Deputy Minister for Tackling Poverty, Vaughan Gething (Lab, Cardiff S. & Penarth), has led work on that before.

It's disappointing, but not surprising, that the Welsh Government have been lazy when it comes to investigating that model further. If Edwina Hart really wants to see that happen - I suspect that deep down, she might - she'll have to get her skates on. I suspect though that the next franchise will be awarded to an established company – simply because it's less risky. Typical Wales.

The overriding fact is that absolutely none of this matters without the devolution of prerequisite rail powers. That will have to happen by the end of 2014 at the latest judging by the timescales given in the report.

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A slice of frozen PISA

Climb into your bath, track your arteries with a razor blade and bring on The Smiths.

It's PISA time, and there's nothing the Welsh enjoy more than a good moan, revelling in the doom as we all – once again - rubber neck the slow motion car crash that is the Welsh education system.

PISA, as you know, is an OECD initiative. Since 2000, it's tested 15 year olds in 60+ nations and territories every three years in reading, mathematics and science.

Although Wales has been included as part of regional statistics before, Wales has only sat the PISA tests separately since 2006, so today's results are the third set where Wales has featured specifically.

They're important because PISA is the closest we have to a direct international comparison in terms of education, as all pupils sit the same test at near enough the same time. It's not perfect, but it's the best measure we have and its results shouldn't be dismissed out of hand.

2012's Results

How Wales has performed in the last three PISA tests.
(Click to enlarge)

You can find all the data here, but the specific part relevant to Wales is here (pdf).

One crumb of comfort is that reading performances have improved slightly - up 4 points from 476 in 2009 to 480 in 2012. However, this still lags behind England (500), Scotland (506) and Northern Ireland (498). Northern Ireland was the only Home Nation to have seen a decline.

The bad news is that performances in maths and science in Wales have again declined – though not as sharply as 2009. Maths scores dropped by 4 points from 472 to 468, while science scores dropped by 5 points from 496 to 491. Again, the other Home Nations outperform Wales, with a ~20 point gap between Wales and the rest of the UK that shows no signs of closing.

For want of comparison, 2009 saw a 12 point drop in maths and 9 point drop in science. So the latest figures are hardly as "alarming" as The Western Mail screamed today.

Wales also remains below average compared to the rest of the OECD, placing an equivalent of 41^st out of 65 for reading, 43^rd for maths and joint 36^th place for science.

The changes to the raw scores are barely significant enough to make a big difference - we're talking 1% falls compared to 2009 (or a 1% rise in case of reading) - so it's fair to conclude that Welsh results have stagnated or frozen.

Examining Welsh Performances

International Comparisons

The Welsh education system is roughly as "awful" as
Sweden's, based on the 2012 results.
(Pic : Aberdeen University)

This is the whole point of PISA, but it seems everyone's determined to compare pencils with England alone. Wales – while far from brilliant – isn't the worst by a long shot, though there's clear need for improvement.

• Wales' score in maths places us in the bottom half of the table alongside Israel (466) and Croatia (471) but well ahead of Greece (453), Malaysia (421), UAE (434) and Qatar (376).
• In reading, Wales scored similarly to Sweden (483), Israel (485), Iceland (483) and Slovenia (481).
• In science, Wales scored similarly to Croatia (491), Italy (494), Luxembourg (491) and Russia (486) and was just 10 points off the OECD average.

However, in addition to being behind the other Home Nations on the whole, Wales is light years behind many other similar nations like New Zealand, Finland, Ireland and Slovenia.

That's before mentioning far-east nations like Singapore, Taiwan and South Korea who are in a league of their own, due to very intensive, competitive education systems and heavy use of private tuition. Those bring their own problems - like high suicide rates.

So, internationally speaking, Wales is a "C student who needs to buck their ideas up" and needn't sport a dunce's cap, while the UK as as whole isn't doing that much better. There are plenty of developed nations in the same boat we are.

To make a significant jump up the rankings, Welsh performances would have to improve by up to 10% (~40points).
Judging the overall figures, Welsh education standards are directly comparable with Israel, Sweden and Croatia.

You know...."third world" Sweden. Where the UK Conservatives went to get ideas for their school policies.The same Sweden which has an education system that's near enough as "awful" as Wales', just to put things in much-needed perspective.

Economic Performance

This is the first thing people point to when they analyse the results, (somewhat) logically deducing that PISA influences international investors when deciding where to invest, or impacts the economy in some great way.

Is there a correlation between good PISA scores and higher economic productivity?

2012 mathematics scores for the 65 nations/territories plotted against GDP per capita.
(Click to enlarge)

Using the mathematics scores in isolation - no. There's no strong correlation at all. If there is one it's incredibly weak.

All PISA does is compares test results, giving you a good idea of the strength of respective education systems. As pointed out, Wales scored similarly to Sweden, and performed better than many nations we've lost foreign direct investment to over the years, including parts of eastern Europe.

There's a whole host of factors that determine whether businesses make an investment. Education and skills is one key part of that, but it's not the be all and end all.

There is, however, a clear correlation between socio-economic background and good PISA scores. According to Volume II of the report itself (p38), the difference in performance – on average - between the top advantaged quarter and bottom disadvantaged quarter is up to 90 points, with disadvantaged students twice as likely to wind up in the bottom quarter than advantaged students.

In economies where there is greater "resilience" (pupils who perform better than their socio-economic background suggests they would), the scores are higher. That means in order to improve performances, more chances need to be given to disadvantaged students.

If you are interested I suggest you read the whole report. However, it cements the link between individual motivation, deprivation (not money spent on schools) and poor educational performance.

The Welsh Education System

Time to invest more capital in the classroom, not on classrooms?
(Pic : Wales Cnline)

As ATL's Philip Dixon explained on Click on Wales, turning this around doesn't come down to selective schools, the Welsh language, not enough time teaching "the Three Rs" or whatever knee-jerk response the media and commentators want to come up with to explain things.

The report says higher performing nations "allocate school resources more equitably amongst advantaged and disadvantaged schools" and "grant more autonomy over curricula and assessments".

They also value teachers more. We see them as workhorses who can never do their job properly.

Policies outlined to improve educational equity include :

• Targeting low-performance schools, or low-performing students within schools - This could include a special curriculum, early prevention programmes or, in some circumstances, grade repetition ("holding students back a year").
• Targeting disadvantaged students – This includes, once again, a special curriculum, including disabled students in mainstream classes, and conditional financial incentives to make sure children regularly attend school. Technically, Wales is already doing some of this through the Flying Start scheme and Pupil Deprivation Grant.
• Raising standards for all students – Altering the curriculum, increasing class time, changing the length of the school day and improving teacher training.

I'm not convinced this is something you can "throw money at", as the Welsh Government and opposition parties might be minded to do. Clearly the answers don't lie in things like selective schools either.

The answer, in Wales' case, probably lies in the curriculum and how subjects are taught. It's no good just "teaching to the test", the curriculum itself is going to have to change fundamentally and teachers are going to have to be given the freedom, and trust, to innovate.

You can still do all that while setting down national guidelines and targets. The control freakery in Cathays Park needs to stop.

PISA puts theory in a practical, problem-solving context making it different from any other exam. Welsh schools generally just teach the theory and give straight-forward number/word-only questions, which are never placed in their practical, "real world" use. So when pupils come across a real world example, they might not fully understand the question or might miss key bits of information.
Successive Welsh Governments might well have pumped a lot of money into new schools, but they've clearly neglected the teachers and the curriculum itself. There's no point having lots of shiny new buildings if they're not properly equipped in terms of trained teachers who can deliver a meaningful curriculum.

So if there's one area I would expect more money and policy capital to be spent on, it would be professional development for teachers and developing a brand spanking new National Curriculum – not deprivation grants and school extensions.

And, of course, all the existing measures need to be given time to work too. Big changes take time to filter through though in education – perhaps up to a decade or more. Any measures taken in the last 5-10 years might not make a noticable impact until the 2020s.


Burnt by melted cheese? Let it cool first

The results are embarrassing. However, some of the the reaction to the results has been even more embarrassing. Everyone needs to CALM DOWN.

There's nothing in this worth getting excited about, and we're pretty much in exactly the same place we were last time around. Wailing and gnashing teeth without offering any practical solutions isn't going to help anyone. That's going to take time and thought.

Yes, it's disappointing news, and the Welsh Government/Welsh Labour deserve to be roundly criticised. The First Minister should be pretty red-faced right about now. I suspect if Leighton Andrews were still in his old role, when you add the tuition fee stuff to this, he would be looking at the sack.

However, the decline isn't as pronounced as 2009's and there's been a noticeable turnaround in reading. The worst of it might be over, and once various policies like the Literacy and Numeracy Framework begin to filter through, I suspect we might see modest improvements in scores (but not rankings) in 2015.

Luckily (or conveniently) for Welsh Labour, the results of 2015's tests won't be made public until after the 2016 National Assembly elections. Having said that, it also means there's no opportunity for an improvement between now and then to put on election leaflets.

The backdrop to that election campaign in terms of education is now boiling down to two areas - PISA and higher education funding.

It's all well and good that I can take a step back and look at it as part of the "big picture". Try telling parents that.
Everyone's going to have to take a deep breath, think rationally and think of long-term, transformative changes. Policy makers are going to have to look beyond England for inspiration, and I would recommend Finland and Estonia as the best places to start.

Unfortunately, as the media and political reaction to this has proven, there's plenty of knee-jerk politics out there, but precious little patience.

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