Negotiating for extra capacity
5 The Department plans to provide additional passenger capacity through investing public funds itself or through Network Rail. The Government's July 2007 plans provide for 1,300 additional train carriages. Investment is also planned, for example, in lengthening railway station platforms. Securing this investment involves commercial negotiations about the cost of the additional rolling stock to train operators compared to the extra revenue they generate. If the Department does not adjust the contract revenue target, train operating companies may enjoy a windfall of extra revenue.
The Department should calculate the net incremental revenues that it expects the extra carriages to generate. It should then use this as a target in its commercial negotiations with train operators about contract revenues.
6 Adequate staffing is important given the strategic importance of rail franchising and the potential to reduce direct subsidies. The Department has difficulty in recruiting and retaining experienced and skilled staff particularly in its Rail Service Delivery Directorate. So there is a risk of insufficient capacity, or the wrong mix of skills, to operate effectively in future.
The Department should staff the National Networks Group adequately and not rely unduly on agency staff. This may require flexible recruitment practices to attract and retain staff of the right calibre with railway industry knowledge and commercial skills.