Leading article: The cost of the railways has to be controlled

The gulf between the expense of trains, and the service provided, is a disgrace

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The Department for Transport's conclusion that Britain's railways are "unacceptably inefficient" will come as little surprise to those who travel on them; nor, indeed, to those with even half an eye on the public purse. The need to make up for decades of under-investment may, in part, explain why expenditure has ballooned in the years since privatisation. But the trend is nonetheless unacceptable and unsustainable.

The British rail network currently costs around 40 per cent more than its continental equivalents. Not only do passengers pay nearly a third more for their tickets, but the taxpayer also forks out nearly a third more in subsidies, around £4bn in total last year.

It is commendable, then, that the Transport Secretary is keen to remedy the situation. Armed with the insights of Sir Roy McNulty – who was commissioned to review value for money in rail – Justine Greening yesterday set out high-level plans designed to slash up to £3.5bn out of the industry's annual costs by 2019. Not a moment too soon. For all the recent improvements, the yawning gulf between the expense of Britain's railway network and the experience of using it is a disgrace.

Passengers already face unacceptably high prices for services too often overcrowded and unreliable. And even with the Government's tweak to take the edge off the hikes due in 2012, average ticket prices will still go up by 3 per cent above inflation next year and the year after. Not only do such increases make a mockery of efforts to persuade drivers out of their cars. In the context of squeezed incomes and rising household costs, they are unaffordable.

If all goes according to Ms Greening's plans, these inflation-busting fare rises can be phased out, albeit not for another five years. There is certainly some good sense in the proposed reforms. It is widely accepted that the franchises held by train companies are cumbersome, inefficient, and militate against the kind of long-term planning the railways need. Efforts to remedy the situation are welcome. Measures to improve co-operation across the motley and discordant industry are also long overdue. As is the proposal to appoint a Network Rail director to represent the interests of taxpayers at board level.

But it is the commitment to review ticketing that will strike the loudest chord with travellers. The nigh-unfathomable system with which tickets are now administered is almost as troublesome as their high cost. Commuters are commonly locked into travelling on overcrowded peak-time trains, even on days when they might be more flexible. And for every one person who has picked up a bargain by booking online six weeks ahead, there is another forced by circumstance to buy at the station, at several times the cost. If the Government is serious about rail as an alternative to road, spontaneous journeys cannot continue to be penalised. Equally, the eye-catching plan for more smart cards must not become a distraction.

Taken together, the Transport Secretary's proposals do not lack ambition. But the breadth and, in many cases, breathtaking obviousness of her reforms tell a tale about the parlous state of the industry. Neither will the competing interests of Britain's highly fragmented industry prove easy to balance. Meanwhile, trade unions are already warning darkly of up to 12,000 jobs under threat.

Ms Greening is absolutely correct that "the time is right for reform". With both consumer and government spending sorely pinched, she also has the force of brute economics on her side. Even so. Only sustained attention at the highest levels of Government can hope to force through changes in one of Britain's more intractably problematic industries. With a 21st-century transport infrastructure at stake, it is an attention which is deserved.

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