Transport Committee House of Commons London SW1A OAA Tel 020 7219 3266 Tw itter @commonstrans Email transcom@parliament.ukWeb www.parliament.uk/transcom

Paul Maynard MP

Parliamentary Under Secretary of State

Department for Transport

Great Minster House

33 Horseferry Road

London SW1P 3JA

21 October 2016

Dear Paul,

At its meeting on 10 October, the Transport Committee agreed to publish our recent

exchange of correspondence—my letters of 23 August and 9 September and your replies

dated 6 and 23 September respectively—in relation to Govia Thameslink Railway’s (GTR)

contractual cancellations benchmarks, its performance against those benchmarks and the

situation regarding GTR’s force majeure claims.

As you know, the Committee was dismayed by the Department’s attitude to our requests

for information relating to GTR’s franchise agreement during our inquiry; I raised the issue

with the Secretary of State and Permanent Secretary when they gave evidence to the

Committee earlier this week. The Department had two opportunities in oral evidence to

provide clarity, but each time failed to do so. The follow-up written submission failed to

address adequately the questions we posed; the response was unacceptably opaque and

evasive.

I am grateful, particularly as the situation is very complex and you were new to your role,

that you engaged with us more productively in your letters of 6 and 23 September. The

Committee considered the Department’s request that it treat your letters and annexes in

confidence. The Committee did not see any evidence to support the claim that the contents

were commercially sensitive; we agreed that it was overwhelmingly in the public interest

to publish, and did so alongside our Report, Improving the rail passenger experience, on

Friday 14 October. The Committee has not published the Excel spreadsheet submitted with

your letter of 23 September.

We were disappointed that the Department chose to provide the crucial data on GTR’s

performance against its contractual obligations in a form that it must have known would be

problematic for us to publish. The spreadsheet you submitted is very large, containing

information beyond that which we requested, including financial information; is “locked”,

making it difficult to extract and analyse the data; and contains tracked comments,

presumably from departmental officials managing the contract.

The Committee was minded to publish the Excel spreadsheet in the interests of open

scrutiny. The Department did not make clear to us what the risks of doing so might be. We

reserve the right to publish, particularly if the Department continues to display a lack of

commitment to openness and transparency.

Openness and transparency are vital if train operating companies are to be held to account

for their performance, and if the Department is to be held to account for its management of

the contracts it has let. We therefore urge you, as recommended in our Report, to

“immediately require GTR to publicly report its performance against each of its

contractual performance measures in each Reporting Period since the commencement of

the current franchise and on an ongoing basis.” [para. 74] We consider that this

requirement to publish should apply to all franchises not just that operated by GTR and the

Department should reflect on how this can be achieved as we continue to scrutinise this

issue closely, in our ongoing, broader inquiry into rail franchising.

As with our previous correspondence, it is my intention to publish this letter with your

reply, which I look forward to receiving shortly.

Louise Ellman MP

Chair of the Transport Committee

• From the Parliamentary Department Under Secretary of State Paul Maynard MP for Transport Great Minster House 33 Horseferry Road LondonLouise Ellman MP SW1P4DR

Chair of the Transport Select Committee Tel: 0300 330 3000 House of Commons E-Mail: paul.maynard@dft.gsi.gov.uk

London SW1 A OAA Web site: www.gov.uk/dft

Date: 3 November 2016

Dear Louise

Thank you for your letter of 21 October 2016, following your Transport Committee meeting on 10 October 2016.

I appreciate the Committee's comments in respect of transparency and fully understand the concerns, which you have clearly outlined. This has provided the Department for Transport with a helpful focus in terms of how we need to change our approach.

In this regard, the Department intends to publish the actual performance against the contractual performance benchmarks for each rail franchise every four weeks. This is a new approach to franchise performance, and existing franchise agreements may need to be amended to account for this change. We will need to consider how we manage this shift in policy with existing franchises given commercial and market sensitivities, particularly as many are operated by stock market listed companies.

The latest performance figures for Govia Thameslink Railway (GTR), against each of its contractual performance measures, are provided in Table A below. As described in our letter to you of 23 September 2016, the cancellations benchmarks reflect the Remedial Plan position for this franchise. The delay and short formation of peak trains benchmarks are as published in the franchise agreement.

As can be seen, these figures show that performance is in excess of breach and default levels for cancellations and short formation of peak trains. However, you will be aware that GTR has submitted a force majeure claim for official and unofficial industrial action undertaken by drivers and conductors on Southern services. Under the franchise agreement force majeure is excluded from the calculation. GTR's performance level against each benchmark

therefore will be determined by the outcome of our assessment of their force majeure claim.

In order to grant force majeure, we need to be certain there is sufficient evidence that:

• such an event occurred • the operator has undertaken sufficient mitigations, and • the operator's claim is correct

GTR's force majeure claim represents over 10,000 train cancellations and associated disruption between the end of April and late July 2016. This is a considerable and complex task for the Department to undertake and no precedent has been set. The Department needs to be certain that GTR is not claiming for more disruption than can be accounted for by the unofficial and official industrial action. Acceptance or rejection often comes down to judgement of complex data provided at an individual train level.

However, I can assure you the team is in the process of concluding its assessment of the first three railway periods (12 weeks) of the claim, since the action began in late April. It is expected that this work will be completed by mid-November and I will write to you with the Department's conclusions at the earliest opportunity. If GTR is found in breach of its benchmarks, it would be at the Secretary of State's discretion to make a decision on next steps, according to the provisions set out in the franchise agreement.

We are content for you to publish the information contained in Annex A. However, I hope, given the potential implications following the force majeure assessment, that you and your committee will appreciate the sensitivity around communication and handling issues on this matter. Consequently, I am unable, at this time, to provide an early indication of the possible outcome.

Following your Committee's helpful comments on transparency, I trust my confirmation that the Department will be publishing the actual performance against the contractual benchmarks for each rail franchise every four weeks meets with your expectations.

PAUL MAYNARD

CC: Peter Wilkinson, Managing Director, Passenger Services, Department for Transport

Table A - Govia Thameslink Railway - Performance benchmarks

Cancellations(%) Delays (per 1,000 miles) Peak Short forms (%)

Remedial Plan Remedial Plan Period Dates Actual Breach Default Actual Breach Default Actual Breach Default 2014/15_P07 14 Sep to 11 Oct 2014 0.99 7.85 1.00 2014/15_P08 12 Oct to 08 Nov 2014 2.12 11 .80 1.16 2014/15_P09 09 Nov to 06 Dec 2014 1.03 11.45 0.90 2014/15_P10 07 Dec to 03 Jan 2015 4.00 12.84 0.97 2014/15_P11 04 Jan to 31 Jan 2015 0.75 7.26 0.29

...... 2014/15_P12 01 Feb to 28 Feb 2015 1.67 2.51 2.85 9.83 15.55 17.58 0.84 0.85 0.97 .... ro Cl) 2014/15_P13 01 Mar to 31 Mar 2015 1.67 2.46 2.79 9.79 15.32 17.33 0.80 0.83 0.94 >­ 2015/16_P01 01 Apr to 02 May 2015 1.67 2.44 2.75 9.61 15.04 17.00 0.76 0.82 0.92

2015/16_P02 03 May to 30 May 2015 1.64 2.42 2.74 9.46 14.94 16.89 0.74 0.81 0.91 2015/16_P03 31 May to 27 Jun 2015 1.66 2.42 2.72 9.42 14.76 16.69 0.73 0.80 0.91 2015/16_P04 28 Jun to 25 Jul 2015 1.72 2.42 2.74 9.74 14.70 16.61 0.73 0.80 0.91 2015/16_P05 26 Jul to 22 Aug 2015 1.75 2.33 2.64 11 .10 14.99 16.93 0.79 0.84 0.95 2015/16 P06 23 Aua to 19 Sep 2015 1.76 2.30 2.59 11 .98 15.16 17.15 0.81 0.87 0.99 2015/16_P07 20 Sep to 17 Oct 2015 1.82 2.27 2.56 13.31 16.07 18.16 0.80 0.92 1.04 2015/16_P08 18 Oct to 14 Nov 2015 1.79 2.29 2.60 14.20 17.57 19.86 0.77 0.98 1.11 2015/16_P09 15 Nov to 12 Dec 2015 1.88 2.31 2.64 15.02 18.94 21.40 0.77 1.04 1.18 2015/16_P10 13 Dec to 09 Jan 2016 1.81 2.40 2.71 16.17 20.21 22.85 0.82 1.13 1.28 2015/16_P11 10 Jan to 06 Feb 2016 1.85 2.40 2.70 16.75 21 .28 24.06 0.90 1.18 1.34

N 2015/16 _P12 07 Feb to 05 Mar 2016 1.92 2.40 2.71 17.09 21 .90 24.77 1.00 1.23 1.39 .... ro Cl) 2015/16_P13 06 Mar to 31 Mar 2016 1.96 2.41 2.71 17.48 22.58 25.54 1.05 1.28 1.44 >­ 2016/17 _P01 01 Apr to 30 Apr 2016 2.00 2.40 2.73 17.98 22.70 25.67 1.08 1.30 1.47

2016/17 _P02* 01 May to 28 May 2016 2.25 2.41 2.73 18.77 22.97 25.98 1.15 1.34 1.51 2016/17 _P03* 29 May to 25 Jun 2016 2.89 2.42 2.73 20.73 23.26 26.29 1.48 1.37 1.55 2016/17 _P04* 26 Jun to 23 Jul 2016 3.48 2.42 2.75 21 .60 23.38 26.43 1.76 1.40 1.59 2016/17 _P05* 24 Jul to 20 Aug 2016 4.19 2.42 2.75 22.42 23.37 26.42 1.84 1.40 1.58 2016/17 P06* 21 Aua to 17 Seo 2016 4.79 2.42 2.75 23.04 23.35 26.39 2.00 1.40 1.58

*periods where force majeure claims have been submitted by GTR. Actuals will be subject to change pending DfT assessment of claims