Are rail fare increases offering good value for money?
The Agenda article made two main observations.
- The evidence presented by the government that the RPI + 3 policy, when translated into fare rises in January, would lead to a relatively limited fall in rail journeys, was based on outdated research. The latest evidence, contained in both industry guidance and more recent Oxera research, suggested that passengers would be much more likely to react by changing their behaviour than the government suggested. However, the latest evidence suggested that the predicted shift from taxpayer- to user-funding of the railway might be less substantive than expected, and that this would be likely to be accompanied by a considerable reduction in rail patronage compared with what would be expected without the change in policy.
- Oxera’s research suggested that much better value for money would arise from changing how fares were regulated—moving away from the existing approach, and towards enabling train operators to make much more targeted fare changes as service levels change, and to provide incentives for customers to avoid the busiest trains.
How the government takes forward its ongoing fares and ticketing consultation could make a big difference to passenger and taxpayer perceptions of the fairness of their rail fares.