3.8 The Department has a number of objectives for its rail franchises:
• Meeting demand for the network: tackle capacity constraints, grow new markets and support wider housing and economic development plans.
• Growing an efficient railway: improve efficiency, spread demand, reduce costs and increase the long-term value of the railway.
• Providing a world-class passenger experience: increase standards in customer service, train performance and station facilities, and 'modal integration' between different forms of transport.
• Improving safety and environmental outcomes: maintaining rail as a safe, resilient and green mode of transport; promoting environmental sustainability; and improving safety and security.
• Improving social inclusion, accessibility and modal integration.
3.9 Of these objectives, the Department is particularly focused on improving passenger experience, and the franchise specifications reflect this. Passenger experience can be divided into two broad categories:
• Punctual, reliable services with sufficient capacity.
Transport Focus surveys show that train punctuality and reliability have the biggest impact on overall passenger satisfaction. The Department requires bidders to demonstrate how they will meet these objectives, including specifying the train fleet that they propose to use and how trains will be configured to meet demand.
• Other aspects of passengers' experience.
The Department introduced these objectives in response to the Brown Review. They include the quality of customer service and visibility of staff at stations, the look and feel of stations and trains, and the availability of Wi-Fi connections and power points on trains.
3.10 The Department varies the extent to which it incentivises different aspects of passenger experience depending on local factors.10 It carries out its own research into passenger priorities and consults with Transport Focus, the industry body that represents passenger interests, on the passenger service elements of franchise specifications and bid evaluations.
3.11 The Department has set customer performance targets in its franchise agreements which, as recommended by the Brown Review, are partly based on National Rail Passenger Surveys run by Transport Focus. Operators told us that they are concerned about being found in breach of contract as a result of people's opinions, which they consider to be an unreliable measure. Attempts to measure the impact of franchise incentives are complicated by wider changes in the operating environment. For example, important investments in rail infrastructure and new trains, such as the InterCity Express and Thameslink programmes, are expected to increase capacity and improve punctuality, and reduce overcrowding on some of the busiest routes.
3.12 The Department has recently started to assess the impact of the strengthened focus on passenger experience, but does not currently plan to look in detail at the costs of specific measures alongside benefits. Measures to improve service quality, such as increasing staff numbers may come at a cost. This could reduce premia received or increase subsidies paid by the Department.
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10 For example, the quality score for the InterCity East Coast franchise has a low weighting relative to the level of premium that bidders offer, because of the high level of discretionary travel and the close relationship between customer experience and demand. East Coast operators therefore have a natural incentive to improve the passenger experience, to attract more passengers and more revenue. On commuter routes such as East Anglia, on the other hand, where passengers have fewer options for their journeys, customer experience is given a higher weighting, in order to protect passengers from the operator being encouraged to cut costs to maximise revenue.