Train Operating Companies: Compensation

Department for Transport written question – answered at on 8 May 2018.

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Photo of Andy McDonald Andy McDonald Shadow Secretary of State for Transport

To ask the Secretary of State for Transport, what plans he has to review the rail passenger compensation arrangements to ensure train operating companies pass on the money they receive in compensation from Network Rail to passengers in (a) full and (b) a timely manner.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Transport), Minister of State (London)

Passenger compensation arrangements are distinct from the payments made by Network Rail to train operators for planned and unplanned disruption. They cover different issues and serve fundamentally different purposes, and therefore cannot be linked in this way:

  • Passenger compensation is paid by train operators to passengers for delays in line with the arrangements relevant to the particular franchise (e.g. delay repay).
  • The payments made by Network Rail, in contrast, compensate the train operator for the future long term loss of revenue as a result of reduced passenger journeys arising from planned and unplanned disruption. These can, in certain circumstances, involve payments from the train operator to Network Rail, where it outperforms expectations.

These significant differences means that there is no expectation that train operating companies pass on the money received from Network Rail in this manner.

However, the Government has, and continues to take steps to improve passenger awareness and uptake of compensation. The independent ORR has worked to improve the information provided to passengers, including via social media activity, and the claims process itself reporting on progress in the annual Measuring Up report. These steps have led to significant increases in passenger compensation, with over £73m paid out to successful claimants in 2016/17, an increase of 63.8% on the previous year.

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