Following is the text of a letter which I have today sent to the Chairman of British Rail, setting new objectives to apply from 1 April 1993
The Government sets objectives for BR which supplement the statutory and financial duties of the Board. The current objectives, which applied for a 3-year period, expire on 31 March 1993. We are now moving into a period of major change for BR, in preparation for privatisation. I am therefore writing to set out one year interim objectives for the operation of the present railway business, appropriate to this period of transition. These objectives will apply from 1 April 1993. The aim is to maintain a safe, efficient railway supplying high standards of service to its customers.
I shall also be setting the Board some specific privatisation objectives updating those set in July 1992. These will be set out in a separate letter.
The Board has a statutory duty to have regard to safety of operation. I welcome the considerable progress on safety improvements which has been made over the last 3 years. Maintaining and further improving standards of safety on the railways will continue to be an objective of major importance for the Board. This should be accompanied by continuing development of increasingly effective means of appraisal of safety investment. The BR Safety Plans produced in 1991 and 1992 have proved valuable; a further annual Safety plan should be submitted during 1993.
Quality of Service
Quality of Service remains a very high priority for BR, as reflected in your Passenger's Charter. I do not propose, for
this transitional period, to make significant changes to the previously agreed quality of service objectives, as developed by the Passenger's Charter. For the future, the Franchising Director will wish to review with BR the current means of measuring quality of service, and consider whether any alternative measures should be developed which better reflect customer requirements and priorities.
BR's objectives for 1993–94 are therefore:
(i) Reliability and punctuality
Seek to achieve the agreed Passenger's Charter targets for 1993; these apply performance indicators for both reliability and punctuality on each of the service groups within Network SouthEast, InterCity and Regional Railways.
(ii) Train enquiry bureaux/ticket offices/carriage cleaning Maintain the current agreed objectives as follows:
Train Enquiry Bureaux
95 per cent. of calls to be answered within 30 seconds. Ticket Offices
Maximum queuing time of 3 minutes off-peak and 5 minutes peak.
||InterCity Per cent.
||NSE Per cent.
||Regional Per cent.
|Interior daily clean
|2 Every two days.
(iii) Customer Satisfaction
Measures of customer satisfaction can be more valuable and relevant for businesses in assessing the service they provide than the measures at (ii) above and (iv) below. I welcome the fact that the passenger businesses regularly carry out customer surveys and I would expect British Rail to place increasing emphasis on such measures of satisfaction. The Passenger's Charter commits British Rail to publishing the results of customer surveys and I look forward to such publication during 1993–94. In particular, I look to British Rail to measure and publish customers' satisfaction with the provision of customer information.
For Network SouthEast and Regional Railways urban and shorter rural routes you should continue to work towards the objective that the ratio of passengers to seats on individual trains should not be more than 135 per cent. on sliding-door trains and 110 per cent. on slam-door trains, with no standing for longer than 20 minutes except by choice. I recognise however that the appropriateness of this measure has been questioned and am sure that the Franchising Director will wish to consider alternatives which might reflect more fully the conditions experienced by passengers and the value they place on avoiding overcrowding.
Productivity and cost control
Improving productivity and making the most efficient use of resources continues to be of major importance across the whole of the railway business. The Board should continue to monitor unit cost trends and publish them in its annual report. I welcome the steps the Board is taking to reduce working expenses. This is particularly necessary bearing in mind the recent reductions in the Board's revenues, notably income from passengers. I look to the Board to reduce underlying working expenses for the passenger businesses by at least 5 per cent. in real terms compared to 1992–93.
Passenger Businesses—Operating Profit/Loss
In addition to the cost reductions set out above, I am sure that Network SouthEast, InterCity and Regional Railways will be exploring all possible means of increasing passenger numbers and income during 1993–94, thus improving their operating profits/losses.
I look to the businesses to achieve at least the following targets for total profit/(loss) on ordinary activities, before PSO grant:
I will be setting specific restructuring objectives for freight in the light of our joint consideration of the results of the study carried out by Mercer.
In addition, during this transitional period I expect both businesses to make every effort to improve their operating result. This means that management should persist in taking necessary action in respect of loss making services, and continue to reduce costs. It will also enable the Board to continue to retain traffic which can at least cover its avoidable costs.
In focussing on operating result, it will be important for the businesses not to lose sight of the need to earn a commercial return on new investment. The basis for decisions on new investment will therefore continue to be an 8 per cent. rate of return.
Red Star and Rail Express Systems
Red Star should be privatised during 1993, in accordance with agreed objectives.
Rail Express Services should be prepared for privatisation as soon as possible.
Channel Tunnel Services
Preparation of all the necessary infrastructure should be completed in time for the opening of the Channel Tunnel. Freight services should start operating from the opening of the Tunnel and scheduled commercial intercapitals services as soon as practicable in 1994. BR should make maximum use of the commercial opportunities, for freight and passenger services, resulting from the opening of the Channel Tunnel, and start to prepare Channel Tunnel services for privatisation.
Transmark should be privatised during 1993, in line with agreed objectives.
Progress in achieving these objectives should be published in BR's Annual Report and Accounts for 1993–94.