Q21 Chairman: Thank you very much. My last question is if we look at paragraph 1.7, it says here: "In setting service specification, there is always a balance between providing a clear statement of what is required, and leaving scope for bidders to innovate. In these eight franchises, there has been some industry criticism that the Department takes an overly prescriptive approach". Is that a fair criticism and are you being overly prescriptive?
Dr Mitchell: I do not believe we are. Inevitably there has to be a balance between protecting the public purse and making sure that the taxpayer receives what it has paid for in a franchise and preventing a franchise company from exercising its normal commercial activities. We try to seek to meet that balance but at the end of the day, as the difficulties with First Great Western showed, it is important that we do have early warning of any instances where the company is not delivering what it should be.
Q22 Keith Hill: Dr Mitchell, it seems to me that with regard to the process of letting the franchises this is a good report, but amongst other things there are some concerns raised in the report about the passenger experience and I would like to focus on one which is the question of overcrowding, a natural concern for a London Member. My presumption is that it would be your expectation with regard to passenger numbers that the volumes will pick up after the downturn.
Dr Mitchell: I assume so, yes.
Q23 Keith Hill: Could I draw your attention, first, to paragraph 2.4 where rail passenger growth for the eight franchises that we are looking at here are predicted to grow by between 47% and 62% over a period of five years. Then again, if you look at paragraph 3.5 there is a reference to the July 2007 White Paper predicting an overall growth of 20% in capacity by 2014.
Dr Mitchell: Yes.
Q24 Keith Hill: However, figure 11 indicates that the total increase in capacity on the eight franchises we are looking at here will grow by 22% by 2015-16, in other words we are looking at a rail passenger growth of between 47% and 62% over five years and an overall growth in capacity by 20% plus.
Dr Mitchell: Yes.
Q25 Keith Hill: Does this not mean, inevitably, more overcrowding?
Dr Mitchell: Not necessarily. These vehicle numbers in table 11 reflect the promises made by franchising companies when the franchises were let. In addition to that there are 1,300 vehicles which are part of the High Level Output specification which is in the process of being settled now.
Q26 Keith Hill: My reading of figure 11 is that the franchisees, the TOCS, are proposing to add 7% on capacity and then Network Rail will add 15% bringing it to 22%.
Dr Mitchell: If I can refer to that, the report is purely referring to the letting of franchises, it does not include, for example, the 1,300 vehicles which were promised as part of the High Level Output specification, nor does it include some of the vehicles over a slightly longer timescale for the Thameslink programme which allows for a total of 1,100 vehicles from Thameslink. The straight answer to your question is that we do not expect overcrowding to get worse over this period but it is probably our biggest challenge in how do we deal with what is a very successful and fast growing railway. I may add that the recent economic difficulties have not led me to believe at this point that any of these plans should be modified. I am assuming that any dip in demand will be a temporary one.
Q27 Keith Hill: It does look as though at the moment the problems of overcrowding on the peak are getting at worse. I you look at paragraph 3.2, in 2006 London services in the peak were in excess of capacity between 3.5 and 4.8%. If you look at paragraph 3.3 you will see that in the West Midlands the definition of standing capacity was raised from 110% to 130%. That is to say, for planning purposes it is now apparently acceptable for 191 people to stand on a 148 seat train instead of 163 under the earlier standards. Certainly at the moment there is no question that overcrowding is getting worse. I do not entirely understand your confidence that the railway can cope and reduce these problems of overcrowding.
Dr Mitchell: As I said, undoubtedly outside the economic position it is our biggest single challenge, how do we produce additional capacity given the lead times that it takes to produce vehicles and given the task of getting these additional vehicles in service with the train companies. You referred to the change in definition in the West Midlands. In fact, the West Midlands Passenger Transport Executive, Centro, had a different definition of overcrowding from the DfT standard one. We gave them the opportunity to keep that definition and obviously fund the additional vehicles that would be required, but they declined that opportunity. I am as confident as I can be, given the fast growing nature, certainly until very recently, of the railways that we have a credible plan to deal with this, but I am under no illusion that this problem will have gone away by the end of the next control period.
Q28 Keith Hill: Can you tell us a bit more about the basis of your optimism that you will be able to deal with it to some extent?
Dr Mitchell: We have modelled forward what we expect the passenger demand to be and also in detail what the crowding levels are likely to be at, for example, Central London stations. The modelling demonstrates that in every case, except one, which is Moorgate, the crowding level will not deteriorate from where it is now, in other words it will not become more overcrowded. However, I have to say that the difference is marginal so that what we will be doing is maintaining and slightly improving on the current situation and that is against a background of fast rising demand.
Q29 Keith Hill: So overcrowding at the moment is getting worse, there is not much doubt about that over the past couple of years, but you think that additional capacity will enable you to stabilise the situation at more or less present levels of overcrowding?
Dr Mitchell: That is probably correct, yes.
Q30 Keith Hill: So it is a future of overcrowding in London and possibly elsewhere really over the next ten years?
Dr Mitchell: No. Our estimates are that by 2014, which is the end of the next control period, which is the five years from this year until 2014, we will have stabilised the position at that point. It will take that length of time because it takes, broadly speaking, two years to obtain new vehicles. Out of the 1,300 vehicles, for example, we have ordered 423 and a further 150, or thereabouts, are in the process of being ordered, so we are not waiting until the start of the control period but manufacturers do normally take about two years to produce these vehicles.