Transport Secretary raises open access concerns in letter to ORR

Transport Secretary Heidi Alexander has raised concerns about the impact of open access operators on contracted train services.

In a letter to Declan Collier, Chair of the Office of Rail and Road (ORR), Alexander has said she wants the regulator to “ensure appropriate balance” between the benefits they provide and “impacts they have on taxpayers and the ability to operate the network efficiently”.

She wrote: “We need to be mindful of the impacts of Open Access such as the level of revenue they can abstract from contracted services and the associated implications for passengers and taxpayers. I am also aware of the additional pressures new services can create on already constrained network capacity and their impact on the value secured from public investment in infrastructure.

“While Open Access operators pay variable access charges to Network Rail to cover the direct costs incurred running their trains on the network, unlike government-contracted operators they do not fully cover the costs of fixed track access charges towards long-term maintenance of the network and central support costs.”

Alexander went on to say she wanted “appropriate balance between these elements” as part of her “expectations for how the Government’s vision for Open Access operates alongside a publicly owned railway”.

Alexander told Collier she wants to see the rail network “move to a financially sustainable model which maximises benefits and value for passengers and taxpayers while delivering improved performance as we move towards public ownership”.

“As such I would like to make clear my expectation that you give due consideration to the priorities I set out in this letter whilst respecting your statutory duties,” she continued.

“I wish to see the impacts on the taxpayer and on overall performance for passengers – such as potential congestion on the network – given primacy when considering open access applications.”

The letter marks a shift in tone from the Transport Secretary a month to the day after she and Primer Minister Keir Starmer visited the Hitachi factory at Newton Aycliffe to celebrate FirstGroup’s £500 million order for 14 Class 80x units as part of its open access plans. The sets will be split between the existing Lumo operations on the East Coast Main Line and the recently acquired rights to run between London Paddington and Carmarthen from December 2027.

In a post on X on December 6, Alexander wrote: “Great to visit Hitachi to celebrate a £500m deal with FirstGroup which will help secure the future of the Newton Aycliffe site. We’re determined to rebuild our railways, which includes creating stability for our critical UK rail manufacturers.”

The Prime Minister said on the same day: “I spoke to Hitachi staff in April. They were concerned about instability and uncertainty under the last government. I promised to fix things. Today I delivered on that promise — securing jobs and boosting rail services. “

In April last year, Labour’s Getting Britain Moving plan also said that open access operators could “continue to compete to improve the offer to passengers” if there was a case that added value and capacity.

In it, Labour said: “Open access has a proven track record in driving competition and better passenger outcomes in countries whose services are run predominantly by public operators.

“Such operators make the most of network capacity and can help lower emissions by contributing to mode shift. The ORR will continue to make approval decisions on open access applications on the basis of an updated framework and guidance issued by the Secretary of State.”

In her letter, Alexander said "only one Open Access operator contributes towards fixed costs via an Infrastructure Cost Charge".

It's understood that operator is Lumo, which runs between London King's Cross and Edinburgh.

Martijn Gilbert, Managing Director for Open Access at First Rail, said the operator welcomed that Alexander "recognises the benefits that open access brings in opening up new markets, driving innovation and providing customer choice".

"Open access operators have led the way in increasing passenger numbers following the pandemic, helping grow passenger journeys for all train operators on the routes they serve. The ORR plays an important role in assessing open access applications to ensure that these do not affect taxpayer revenue nor network capacity, and we are confident that our First Rail applications will have beneficial effects on the routes where they will be introduced.”

At present, existing track access applications with ORR include:

• London Euston-Wrexham via Walsall and Wolverhampton (Wrexham, Shropshire and Midlands Railway)
• London Euston-Rochdale (Lumo)
• Cardiff-Central-Edinburgh (Grand Union)
• Edinburgh Waverley-Glasgow (Lumo)
• London Euston-Birmingham New Street/Liverpool Lime Street/Preston/Rochdale/Glasgow Central (Virgin Trains)
• London King’s Cross-Sheffield via Worksop (Hull Trains)
• London Paddington-Paignton via Bristol (Lumo)

Meanwhile, ORR has approved plans for services from London Euston-Stirling and London Paddington-Carmarthen (both FirstGroup, previously Grand Union), and Taunton-Swindon via Westbury and Taunton-Weston-super-Mare (Go-op).

Alliance Rail (Southern) also wants to start services between Marchwood, on the Fawley branch, and Southampton Central and London Waterloo.