High Level Output Specification

These set out the Scottish Government's, and the British Government's, rail improvement requirements over the period April 2009 to March 2014 - known as Control Period 4 (CP4). I shall deal with them separately.

1   Scotland

The Scottish HLOS sets out three Tiers of rail requirement. Tier 1 restates the existing franchise commitment to fund First ScotRail to provide the contracted services already agreed to. It contains nothing new. Tier 2 sets out the outputs for which there is already legislation and funding. There are three schemes: the Glasgow Airport Rail Link (GARL), expected to be opened in the first Quarter of 2012; re-opening the line between Airdrie and Bathgate, expected in the fourth Quarter of 2010; and re-opening the Borders Railway to Tweedbank, expected in the fourth Quarter of 2011. The HLOS says "The Statement of Funds Available (SoFA) for Tier 2 is believed ... to be sufficient [for these outputs]. Should the funding ... be higher than that required, it is available to deliver outputs in Tier 3". Scottish Ministers expect that there will be funds available, and the Chief Executive of Network Rail, Iain Coucher, believes the HLOS to be "achievable".

Tier 3 outputs are "route-specific", and represent the outputs which "may [be implemented] in response to the ... National Transport Strategy". There are five headings:

• improve the reliability, attractiveness and journey time of the Edinburgh to Glasgow route including connectivity to Edinburgh Airport (this is the only mention of Edinburgh Airport, and the Edinburgh Airport Rail Link is nowhere mentioned)
• electrification of the core route between Edinburgh and Glasgow, plus two diversionary routes (with a further "infill" programme including Paisley Canal, Whifflet, Cumbernauld, Maryhill - all short non-electrified stretches of line in a largely electrified rail network, Stirling to Dunblane and Alloa - an extension into non-electrified land), "followed by further electrification including East Kilbride and Barrhead to Kilmarnock"
• Ayrshire (lengthening platforms and other work to accommodate 8-car trains)
• Highlands (infrastructure work to permit "an hourly faster service between Edinburgh and Glasgow and Inverness")
• general infrastructure and capacity enhancements to improve journey times and service frequencies for either passengers or freight (in other words, anything else we can afford which looks sensible)

It's ambitious, and almost certainly can't all be delivered. There will be some interesting politicking in the process of deciding which of the five schemes in Tier 3 gets top priority. Doubtless FoFNL will be getting its collective hands dirty in arguing the case for some rail spending north of Perth - an area noticeably lacking in big infrastructure schemes since privatisation (or, come to that, for a very long time before then). Transport economists will always argue that the best return on capital determines where the capital should be employed. This is, of course, an argument for spending every penny of rail money within the M25 where commuters and opinion-formers are thick on the ground. But it's also an argument for not replacing Trident and since it delivers the wrong answer in that context it ought to be possible to suggest a counter-argument. This states that realpolitik requires goodies to be doled out to all geographical areas of the body politic, and that It's Our Turn Now.

But for the moment the news in Scotland is good. Our railway remains a growing railway and our Government remains committed to funding its continued growth.

2 England & Wales

(Not that Wales gets much of a look in in the White Paper which cosily contains the DfT's HLOS and SoFA.) This is an exercise in muddying the waters. There is some undoubted good news, but there is also a lot of waffle and - worse - a lot of running away from difficult but vital decisions. Politicians are paid to make difficult decisions, but too many are being deferred yet again south of the Border. To the extent that the English transport system affects the economic well-being of the UK, this affects us too.

First the good news. £15 billion will be spent on the railway in the next 7 years. 1300 (not the earlier promise of 1000) new carriages will be ordered. Thameslink will be financed, with the northern section being done first and the London Bridge southward part starting after the Olympic Games and associated passenger demands have finished. Reading and Birmingham New Street will be substantially upgraded. 150 other stations will be upgraded, although none will be anything like as costly. No line closure will happen.

The White Paper regards Network Rail as still having a long way to go in reducing delays - hardly an original thought, but nonetheless welcome in such a policy-setting document. It also believes that enough is being done on the safety front - "the railway ... is past the point where big step change investments in safety are necessary". The clear view is that incremental improvement in safety is the way forward, permitting a case-by-case approach (unpopular with the industry until now as there has always been a fear that if we do one we'll have to do hundreds). Capacity constraints are likely to be dealt with by longer trains.

But ... there is a failure to extend electrification, even to strategic infills. There is a failure to say anything about upgrades for the East Coast Main Line or Great Western Line. There is a failure to start the planning process for any kind of High-Speed Line, or indeed to say that one is needed, although maglev is specifically rejected.

The biggest piece of bad news, however, is that fares are going to increase massively. It doesn't of course say this, but the conclusion is inescapable. The DfT wants to move from the current position, where fares amount to roughly 50% of the railway's income (with the taxpayer paying the other 50%), to one where the fares cover nearer 75% of the income by 2014. That means that "fares" will have to increase by up to 50% in real terms over the next 7 years - which my actuarial colleague tells me is 6% a year on top of inflation. But "fares" isn't a single item. Some fares are regulated - season tickets and Savers mainly - and may only increase by 1% over inflation. This means that unregulated fares have to make up the balance. Without knowing the mix of regulated and unregulated fares which go to make up "fares" it's not possible to calculate the increase in the latter. But a figure of something in excess of 10% - perhaps even 14% - would not seem unreasonable. Just step back - an unregulated fare - an ordinary single or an open return - the sort you buy at the ticket office to travel today - may cost you in 2014 double what it costs now.

Mercifully this all comes from the England & Wales White Paper. Increases of this magnitude will not apply to First ScotRail fares as these are largely determined by the existing franchise. But "English" TOCs operate here - Virgin and GNER at the moment, and Virgin, Arriva and National Express in a few months' time. Their Scottish fares will be squeezed upwards unless competition for journeys within Scotland from First ScotRail keep them under control. But journeys south will cost more.

All in all the news in Scotland is good, and the news south of the Border is good (excellent, even) in parts but disappointing (dreadful, even) in parts. I see work developing for FoFNL in three areas as a result of this. One, in persuading Transport Scotland (who will make the ultimate recommendation to Ministers) that the Highland part of Tier 3 should be first in the queue for any available funds, or first equal at worst. Two, in flagging concerns to Transport Scotland lest the "English" fares policy be adopted into the next Scottish franchise in 2011 (and, as a by-product, stiffening the resolve of First ScotRail to challenge the cross-border TOCs' fares policy in and from Scotland). Three, that some of that "incremental" safety-related work is carried out on level crossings and other speed restrictions north of Inverness. Life is not about to become dull.