Southern Rail is a mess and it’s about time someone did something about it. At tonight’s council meeting we will be debating a Labour motion calling upon the Government to sort out the management of the company. To understand what is happening and why it is the Government who need to act we need to look at the terms of the franchise which was awarded to Govia when they took control of Southern.
For past franchises the agreement tended to be that a railway company would take on both the costs and revenues of running their particular franchise, making rail users the customer and enabling the company to increase their profit margin by lowering their costs or increasing their revenue.
Not so with Southern. Under the new franchise the Government takes all the revenue and pays Govia a fixed amount for taking on the costs of running the railway. The difference here is passengers are no longer the customer, nothing they pay goes directly to the company, the Government is.
It’s not hard to see why this is bad for passengers. Firstly, you still cost the company money but you’re not really paying them anything, so it’s not in their interest to either spend money or avoid cuts which affect your use of the service.
Secondly, since they can’t do much to increase their revenue the only way to improve their profit margin is to lower their costs. Recent consultations have been held about closing ticket offices across a range of stations in the network and the dispute with conductors which is causing such chaos across the network comes as a result of steps to increase their profits by taking them out of the pockets of their workers, even where this will impact upon the safety of rail users and the accessibility of services for those with disabilities.
This is unacceptable. People are paying more and more for tickets while the franchise encourages the company to provide less and less in return. It’s time that the Government, as Southern’s only customer, takes action to safeguard the interests of its citizens.