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Not for profit – a fairer, improved transport system for Wales

When I travel across Wales talking to businesses, organisations and individuals about our economy, there is one issue that consistently gets raised with me – rail services.
Thursday 13 October 2016
This article first appeared in the Western Mail on Thursday, 13 October 2016

From the small company looking to expand to the individual looking for work; having a high quality, reliable railway network that is part of a genuinely integrated public transport system across Wales is central to helping them get on. It is critical to helping our economy to grow.

As we approach the end of the current Wales and Borders Franchise and take forward our plans for the next franchise and Metro, we have a once in a generation opportunity to build a world class transport system that can support the transformation of our economy and our communities.

As the current arrangements come to an end in 2018 and we begin to build a new one, capacity is crucial. Over the current franchise 18 million annual passenger journeys on the network in 2003 has turned into 29 million journeys by 2013. Those numbers are forecast to grow a further 74% by 2030 and so we need to make sure that we plan for that growth in a more integrated and responsive way than it does currently.

I'm also struck that people want a rail network that genuinely embodies the principles of cooperation, fairness and value that underpins the other public services they cherish - like the NHS.

That is why we are working hard to develop a new not for profit rail model for the Wales and Borders network that we committed to in our Programme for Government. Done correctly, it will allow us to prioritise service over profit, drive up standards and improve the passenger experience. At the same time it will ensure any additional funds are spent exclusively here in Wales.

That task isn’t easy as many of the powers in this area have still not been fully devolved to Wales, as is the case in other parts of the UK.

We have lobbied the UK Government for the greater devolution of transport powers, for instance to deliver a change to legislation to allow public sector bodies to act as franchisees and place us on a similar footing to Scotland. The UK Government have continued to oppose this and in addition to this other legal restrictions mean we cannot bar for profit operators coming forward to run some elements.

But these restraints won’t stop us acting creatively. We have created Transport for Wales as a not for profit company initially tasked with designing and letting the next franchise and Metro. Once the franchise has been let we expect Transport for Wales to then oversee the management and join up of services including items such as marketing and integrated ticketing.

Over time our aspiration is to secure the necessary powers to enable Transport for Wales to take on a wider range of transport functions similar in nature to that Transport for London manage the public transport network in London.

There will be mechanisms in the new approach, that will operate similar to a concession, to ensure that excess profit is reinvested back into the transport system here in Wales, incentivising choice and driving down costs for the passenger. Our plan is that Transport for Wales will only let those contracts that it has to on a commercial basis. Where they do, the profits from those services will be at a capped margin with excess profits reinvested back into the wider transport system.

Those services that can be run through a directly not for profit model will be run that way. We hope to see many more services, such as ticketing, marketing, station management and car parking operating in new and innovative ways under that new approach. That model, which is used by Transport for London, will allow the flexibility to incorporate further devolved powers as they come.

This agenda brings with it undoubted challenges but also fantastic opportunities to deliver on our wider aspirations for a bigger better multimodal integrated network serving the needs of public transport passengers, walkers and cyclists all over Wales.

By reinvesting funds into the services that need it most and delivering a fairer, improved transport system we can help support economic growth and build the stronger communities and stronger Wales we all want to see.

 

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Author:

Ken Skates AM

Cabinet Secretary for Economy and Infrastructure
 

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