Climate Change, Environment, and Infrastructure Committee

Can you give me more information about the T network? I believe that is replacing, or is a new way forward, to embrace one network, one timetable, one ticket. Will it integrate active travel? Are you looking at the branding of your trains, the bus network, bus stops, active travel routes, maybe, in urban areas? And I understand that there is going to be a wider company launch in, it says here, January 2025, so where are you up to with that?

Okay. Very happy to do that. Before I answer that question, if I could just make one comment on the Talerddig incident, just to start with. I think it might be helpful, if that's okay, and then I'll go straight into that.

Yes, of course.

Yes, that's fine.

So, all I wanted to do, just really so it's on record, and I think it's the right thing to do, is to point out the fact that we have very much not forgotten that incident. It's an incident around which my thoughts and our thoughts are still very much with all of those who were affected. It's still impacting lots of people. It's still impacting lots of people in the team. We are continuing to work hard to assist in the investigation. It was good to have the opportunity to brief Members on the Taff's Well visit. There's not much to add yet to what I said then, but should the committee want, or any individual Members want, I would be very happy to provide a confidential briefing at a time to suit you on that. I just thought it was useful to say that at the beginning, if that's okay.

Thank you for that. We appreciate that very much.

To go straight into the T network question, I guess I'd start with talking about, really, what the T network is meant to be, which is not so much of a brand, albeit it could have a brand consequence, but a way of planning and a way of operation. So, the T network is something that we have adopted to try and describe our approach to a multimodal network based on a one network, one timetable, one ticket, one team approach.

And if you were to say, 'Well, what do you mean by that, James?', what we're trying to do, particularly as we move towards bus franchising, is to build a network that works effectively together, rather than a series of networks that might not integrate very well with each other, which we've probably had in the past. We've called that the T network. The theory behind that is that, in the future, potentially parts of the transport network that we might want to have within that ethos of one network, one timetable, one ticket, one team might not be necessarily always owned and delivered by Transport for Wales, but, for the people of Wales, we would want to have that integrated network and that integrated ethos.

I guess, potentially, a good example of that might be for people who regularly visit London—I don't know what they're called now, but what were clipper boats or MBNA boats, or I think they're now called Uber boats—the fast boat services that run as part of the Transport for London network. They are not operated by Transport for London, but they are integrated within that wider journey offer and you can use the same products as you do on the network, and they have the same quality standard applied to them.

So if, under franchising, some operators—. So, they will still operate their own buses, for example, but they will have subsidies through Transport for Wales, or the local authorities through Transport for Wales, and if we want to have—'one guiding mind', it was called, wasn't it—one network, one timetable, will they have that T badge on it as well as their own livery, or whatever? And on those bus stops. This is what I'm trying to get across—

So, my central answer to that would be that, at the minute, we would absolutely assume that they would have that T on them, because the T is the brand that says that, if you have a T card, which we don't have yet, you can use it on all of the T services. And that would be a national integrating brand mark, I guess, but that doesn't stop, as we work with local authorities on the bus front, or the corporate joint committees, there also being, for example, a regional identity that's also part of that.

Which leads me to that question—. So, in north Wales, we're looking at the north Wales metro. So, we're going to have an integrated network under Transport for Wales. And I think that we need that clarity, so that people understand that there's continuity of transport, et cetera, and also timetabling, to give confidence to people to go on that bus as well. Because we've got confidence in people to go back onto rail; we need that confidence to go back on the bus and to see that it's under that one guiding principle and mind, working together. That's why I asked about the branding.

That's exactly what we're trying to do, but not exclusively, I guess, to the extent that, if the region also feels strongly that they need a regional identity as part of that, maybe—I'm making this up now—a bus could be coloured green for west Wales, but also have a very clear T logo on it.

So, in north Wales, we're having the north Wales metro, so would that have metro branding, rather than the T branding, or—

It would have both. It would have both. So, the metro would be a sub-part of the T network, the same as it is in London. You get on the tube, which is part of Transport for London, you know you're on the tube, but you also know that you're part of the Transport for London network.

Okay. Active travel—we're looking at active travel. We should be walking, cycling—or cycling, walking—to that bus stop, to that train station. We've had a lot of cycle routes put in in urban areas, which look like just widened pavements, and people don't realise they're cycle routes or they're not connecting up to the buses, to the train. So, again, would you look at maybe, where you can in urban areas—I know we don't want to have signs everywhere—branding it as part of that—

You're giving a better answer to that than I have given, but that is exactly what we would want to do, yes, and on maps. The question that we haven't completely answered yet is what quality standard would we want and, I guess, would society want, before the T is applied to it. Because if we're talking about it being something that you can trust, it couldn't just be applied to everything, it would have to be applied to a certain standard of things. It could be gained and, I suppose, it could be lost. So, on your cycle route or walking route, if there was a walking route that was very good for five years, very well lit, and then it was not maintained and all the lights were switched off and it became not considered safe, potentially the T sign would be taken off it.

Okay. Did you want to come in, Lee, and then we really need to move on?

It's just, I guess, to build on what James has said and bring it to life a little bit. One of the activities we're running at the moment is a task and finish group with partners from across the local authorities looking at bus infrastructure, so that, partly to what you were saying, if you are at a rural bus stop in Gwynedd or a rural bus stop in Pembrokeshire, it has the same look and feel, the same level of passenger information, and the quality of the routes to get to that feel safe and all those sorts of things. So, it's starting to build in that standardisation across the piece, to build on that T network—

That confidence back.

And that confidence, yes.

Okay, thank you.

Okay, so, I think my second question was covered, wasn't it, really: how is Transport for Wales embedding the approach in its work? So, I think we've heard that, haven't we?

I could talk a little bit more just on one aspect, if you wanted to—

Well, I'm interested in the cultural change—

That's kind of where I was going.

Okay, fine, yes.

Yes, within the company.

So, we’ve got, I guess, external cultural change and internal cultural change. So, I’ll focus on the internal one, if that’s okay—

Yes.

—which is that we're bringing together, I guess, quite a large number of different organisations into one team, and quite a large number of different groups of people who have focused quite a significant proportion of their lives on focusing on one mode and becoming truly excellent on one mode, and sometimes actively competing with another mode, because that's what they were taught to do and that’s how people make money.

So, we have a series of programmes that are trying to break that down in a positive way, because we don't want anyone losing the expertise for an individual mode—as in, running an excellent rail service, running a good bus service, et cetera, et cetera—but we mustn’t have competition and we also want to drive efficiencies, so that we don't have to have a number of different engineering teams, et cetera, et cetera. And on that, we already have one finance team that covers everything, led by Heather. We have one sales and marketing function that covers everything. We have one people function that covers everything, and I'm sure I've left out quite a few things.

So, we are on a journey to do that. I think, over the next couple of years, we will step that up even further, as we move towards franchising, and franchising is the opportunity to really make it real. So, the challenge to us is to build something that both really works and is very efficient, recognising the pressures on the public purse.

Okay, thank you. Shall we go on? Janet, do you want to come in?

Yes. What progress have you made in increasing the proportion of women employed by TfW and reducing the gender pay gap since our last scrutiny session?

Okay, so, I will start to answer that, but then I will also bring Heather in. So, if I start by saying that I think we are making reasonable, steady progress, and it genuinely feels to me that both the board and the senior leadership team are really committed to this and are spending proper time on it.

I’d like to just provide a slight commentary on the figures in the note that I sent to you, because the headline figure might indicate that we’re not making progress at all and that we’ve gone backwards. If you look at the figures in the table, and I apologise for not providing a better narrative on this, you will see that, for the two components of TfW, good progress has been made. You could question whether we should go faster, and I’d like us to go faster. If you look at the aggregate figure, it looks like we’ve gone backwards, and that is a trick of maths, basically, because the rail part of the business has grown faster than the non-rail part of the business, and the rail part of the business, because of the historic nature of rail, is more male dominated. Therefore, when you aggregate all the figures up into one, the aggregate figure looks like it’s gone backwards, but every single team within it has gone in the right direction. So, I’m very happy to talk offline about that or provide a note, but I thought it was useful just to point that out. Having said that, if you said to me, ‘Are you happy with the speed that you’re moving at?’, the answer would be ‘no’, and I would want to go—

And there has to be merit in it, you know—

Yes.

With this gender balance, I’m a great believer in, yes, but it’s a tough gig, really, isn’t it, finding the right skills—

It is.

—and the people coming forward, and how we can encourage more women to get involved in this industry.

So, if you look at the parts of TfW that we have grown from scratch, we are pretty close to gender balance, and, equally, if you look at the senior management team, and things like the graduate training schemes or the intern schemes, they are actually slightly skewed towards female rather than male. The difficulty we have faced, particularly in rail, particularly in the median and medium grades, and I think that is partly an arithmetical problem, is that we have got quite low turnover rates of team members, and we inherit an organisation and an industry that is very male dominated.

Of course, yes.

But it is actually that area that we would probably gain the most by being more diverse, because we’re customer facing, and as anyone knows, having a team that more accurately reflects the people that you are serving leads to you being a better team. So, that’s the journey we want to be on. Heather, is there anything you want to add?

If I could. There are a number of items I could just call out that are in flight and in progress. So, we’ve delivered the positive steps recruitment event, so what does that actually mean? James talked about individuals coming into rail in particular, so we’ve now got some really great role models that sit in those roles—conductors, drivers, engineers and suchlike—so we are asking them to support us to be advocates, essentially, out in the recruitment market, to an extent. I’m really proud of the graduates, the apprentices and the interns. As James mentioned, 55 per cent are women and that’s fantastic, because that’s across the whole of TfW. And that’s not just in finance; that’s across many other areas as well—engineers and suchlike, the science, technology, engineering and mathematics subjects. That’s really very positive.

In addition to that, there are a number of other partnerships that we’ve grown, so we’ve got a partnership with Oasis—that’s a charity working with refugees—to encourage women as well to join us, and, of course, we’re going into schools to encourage young people to consider their future, and with that future, whether it could it be with TfW, especially under the T network, with the multimodal approach as well. So, I could go on—I won’t—but those are examples that are in flight.

Yes, you've given us a flavour, so that's fine. Joyce wants to come in and then we’ll come back to Janet.

It’s great listening to what you’re saying, and it's really good, and, of course, we do need more women, but you need more diversity too, so we need to know about both of those things, and since we haven’t asked you the question, I’d like to see the answer somewhere to us. And you talk about really good role models. It always worries me about the expectation of role models to do far more than their job, whereas you wouldn’t be asking a male train driver, perhaps, to go around the schools et cetera. So, I want to know—this is my question—the expectations on those role models, the support for them to be role models, and that their pay is in line with their duty when they’re going out advocating, if that's what they're doing.

That’s a challenging question—

Well, it is meant to be.

—but it’s meant to be a challenging question, I know. Challenging questions are always the best ones, because they make you really, really think. So, we will have to write to you on the detail of more general diversity in the workforce. What I can absolutely say today is two things, and they’re opposite. The first is we are not succeeding at the rate I would like us to be succeeding in always reflecting the customer base that we’re saving, and that would be the test for me. So, do the teams on the train look like the teams that they are serving? That's particularly the case when we think about people from different ethnic groups, for example. But we are working really hard to try and address that, and we have similar campaigns to the ones that Heather talked about based on that, and based on quite micro levels of geography as well, for example really targeting Cardiff Bay and Butetown, as one example. I think it's always difficult, and it's always difficult for white people of a certain age to understand how to attract someone who's potentially very different, and we need to remember that, which is why we're engaging with groups to help us do that.

In terms of the point around asking a lot of potential role models, I think that is a very fair question and one that I haven't considered for a while, if I'm being honest. It used to really bother me when I felt that, in previous organisations I'd worked for, people had been leant on to do stuff that they weren't happy to do. I am pretty confident, having met quite a lot of these people, that no-one is doing anything that they do not want to do, as in the individuals who are being role models want to be a role model. But I will absolutely take that challenge back into the business to make sure that is what we do and we don't set unfair expectations. We'll also consider the other point you made around reward for the activities that people—

One final—

Very briefly, then.

—quick question, and you can, again, write to me. I take your point about multicultural understanding, but that just leads me straight to another question, and this is the other question: your policies. I would like to see them in terms of the expectation of those employed by you, because it's an area I'm always keen on. If those policies were strong, I would expect those challenges to be lessened. So, I'd be very keen to see your equality employment policies and how they feed into what we're talking about.

Okay. I'm very happy to write on that. I think we've made quite a bit of progress, but, as with everything, we can always go further and go faster.

Sure. Okay, thank you. Very briefly now, then, one more question and then we—.

Yes, well, I've got to just give a shout out to the young lady at 3.20 p.m. from Colwyn Bay on Monday. She was exceptional. The information, because sometimes North Wales Members have moaned about—. She was on the loudspeaker—

Can we—?

I just want to—. Twenty past three.

There we are. Shout out given.

And other people will have noted that as well. [Laughter.]

Yes, but absolutely fantastic. How does the gender balance in recruitment and pay gap, though, vary at different levels of seniority in the organisation? Maybe your paper—

Maybe that's another note for you.

If we write—

It's more details.

And then, to save me asking the next two, in your paper, could you cover the gender pay gap table and also the trend? And also, how do you evaluate the effectiveness of the monitoring and leadership programmes listed in your paper? If your paper covers that, I don't need to—.

Okay, we will do that, absolutely. Can I just make one interesting comment that we struggle to do a lot about, which is, as everyone will know, the two front-line roles in rail, that of a guard and that of a driver, are paid higher than, arguably, equivalent roles in other parts of the business? That's as a result of history and a whole series of other things. Traditionally, those roles are very heavily male dominated, and that is the thing that is always skewing the data set.

Leaning heavily on the stats.

Yes, of course.

But we'll cover that in a note.

Okay. Just very, very briefly—10 seconds—the table that you've provided references 'TfW', 'Rail' and 'Group'. Just differentiate for us—

Yes, so 'TfW' is the whole lot. 'Rail' is obviously—well, I say 'obviously', but it is the rail subset. And then 'group', broadly speaking, is the people who are doing multimodal activities as described earlier—ticketing, finance, HR, bus now as well—

Which doesn't include rail.

That's right, yes.

Okay, fine. Thank you for that. Right, Joyce.

Money, budget setting, that's what I'm interested in. You have outlined, and it's in front of me, how your budget is developed. Has it become more streamlined and more effective in recent years? That's my question.

Okay. So, I will definitely hand over to Heather quite quickly. Just first a couple of comments from me. I think it has become more streamlined in the way that we work ourselves and the way that we work with the Welsh Government, and that is evidenced by the fact that we have, quite often, near-settled figures months earlier than we would have done, say, a year ago, and significantly earlier than we would have two years ago. I think the only other comment that I would want to make as a sort of opener is that TfW does not have a TfW budget—it's something that I always talk about—which is a bit unusual in an arm's-length body. And therefore our budget, as such, is made up of a whole number of different budget lines and the corporate centre is funded via a percentage charge on those individual budget lines. So, it is quite a different model and therefore it is more complex than, maybe, a different arm's-length body.

I think you articulated to us in the last annual scrutiny, maybe, that you had about 20-something—

Yes. Heather will be able to give you the number, but, yes.

—meetings or touch points in relation to your budget. Has that been streamlined somewhat? Is that what you're saying, effectively?

We're streamlining it in the way that we work. I don't think we have yet streamlined the number of individual budget lines, but if I can hand over to Heather.

Okay. Right.

Thank you. There's been real progress in the last few years. If I go back to February 2021, that’s when rail joined us, so it became a far more complex organisation and very dominant in terms of expenditure related to rail. Since then, and certainly in the last year or 15 months since we've spoken, we have ensured that the first budget has been presented in July to ensure that Welsh Government sponsors have an understanding and have been able to scrutinise that budget in time for when they have to provide their returns and their responses, in around the September or autumn mark. So, they've got that information and we've obviously gone through that with them. Now, naturally, there are parts of TfW that are quite variable, so rail passenger revenue, for example. If you're setting a budget 10 months ahead of the new financial year, that's quite tough, because things change. So, we go through a second budget process and that's through the autumn period, and we delivered that, with Welsh Government sponsors, in November. So, that gave detail, insight and it responded to challenge from the first budget session.

That sits alongside a number of scrutiny sessions where we work with Welsh Government sponsors, so they're able to scrutinise, challenge us et cetera. So, there's the right level of scrutiny. But also there's our business planning process, so what we're going to deliver versus the cost of it, essentially. So, we have had a number of sessions where we work very closely with sponsors in terms of what the needs, what the priorities are for TfW. That has benefited, because Welsh Government colleagues now understand a certain level of detail and they can deep-dive into further detail, should they wish, so it gives them the confidence associated with the numbers. I believe in transparency, so if there's a request for more information, that is available, and there's always a trade-off of too much information and losing yourself in that. But we have a very good working relationship now. We're able to both scrutinise the budget process, provide the deep-dive information, be challenged and respond to that in a timely manner. And we're providing a third version of the budget after that challenge and now that we have an understanding of the funding, which was released in December, to match.

I might add regarding the touch points—we meet on a monthly basis with Welsh Government finance colleagues and sponsors, and we provide a monthly report regarding both the financial outturn position and also actuals, and also explained variables. So, that's a challenge session, but it's also an information flow, so that really helps to ensure that they're able to understand both our numbers, but also be able to respond and create change if it's needed within the year. So, that's a really key touch point. We also have a steering board where we talk about the more strategic, but finance is naturally considered during that discussion. And then, of course, we have our performance board, which doesn’t only look at our KPIs, but also our milestone deliverables within the business plan, but also the financial elements of that as well. So, it brings it all together. Those are our really important three key touchpoints. There are many other more operational discussions and meetings that take place, but they’re really important. During the budget process, we always set aside time with our Welsh Government sponsors, who drive that discussion. Each budget presentation is usually a two-day event, where we deep dive, scrutinise, ask questions et cetera, but it’s in a very open and transparent way, it’s a debate: what’s the priority, what is the information telling us, where can we direct the spend that is most appropriate and gives us value for money.

When we were last discussing the budget, there was a challenge being put in by the Welsh Government for you to move to a multi-year forward-look budget process. I understand what you’re saying about actuals and variables making that a bigger challenge, maybe, but it does say that you are already on that road.

We are. I omitted that, apologies for that. Thank you for the prompt. We provided multi-year last year, and we’re providing the multi-year view in February this year, ahead of the norm, because of the need for the Welsh Government to have the spending review information. It’s really important for us to be able to forward plan, understand our rolling stock costs, for example, and how we might match that with the future opportunity around passenger revenue, particularly in rail, but thinking multimodally and understanding the bus network reform. This is a key time to understand that multi-year view. So, we’ll be delivering that in early February to our Welsh Government sponsors. Of course, the discussion continues throughout the year as things change and we update.

Can I just add one thing to that? There are two significant challenges to make that real. One of those challenges would be on Transport for Wales and the other challenge would be on government. I use the term ‘government’ on purpose, because I think it includes the UK Government as well as the Welsh Government. The challenge on TfW is to get to a place where those numbers, plus or minus a certain percentage, can be very much relied upon. The big area of uncertainty on that is going to be ticket sales and ticket income, predicting five years out how much we can sell. Any commercial business would not be able to put a number on the product they’re going to sell, probably, even two years out, let alone five years out. And that’s a positive challenge, and the positive challenge to government would be, once we’ve reached that point, not just to have it as a planning exercise, but potentially to allocate budgets on more than a one-year basis, and then to hold us to account to deliver against them. But the reason I say that’s a government challenge, rather than just a Welsh Government challenge, is obviously, for the Welsh Government to be able to do that, they would need to have three to five-year budget certainty.

Otherwise, we’ll never get away from the annual budget cycle that everybody has to support.

I hadn’t answered the question around the number of budget lines—I'm very aware of that. We support Welsh Government colleagues by mapping all our costs to budget expenditure lines, and then there are sublines, and we can’t vire without agreement. There are approximately 10 under revenue expenditure and approximately 13 under capital right now. So, we are in the twenties in terms of the mapping and not being able to vire. And, as James said earlier, there isn’t a budget for TfW corporate—let’s call it—so we reallocate cost according to where the activity is taking place.

Talking about one-year budgets, my next question is this: will the budget that you have for 2025-26 be sufficient for you to deliver the remit that you have? Are there any areas of concern?

Can I start with that and then hand it to Heather? Please feel free to correct me. At the minute, I don’t think it would be fair for me to use the statement of the budget that we have, because we haven’t actually got a confirmed budget. I’m looking at Heather quite carefully as I’m saying this.

We’ve got indicative funding lines at the moment, but they are still—

But that’s not the same as a confirmed budget, so it would be wrong of me to sit here and say I’ve got a budget, because I don’t. But we’re working closely with the Welsh Government to try and understand that. If we break it down between revenue and capital, the revenue line—as we’re talking, we might use the term ‘opex’ occasionally, which is the same as revenue—is the one that, historically, I think has caused concern and issues for the Welsh Government and for this committee. That’s basically how much is the annual operational cost of running the railway. That was the line that there was narrative about us having to have extra funding in-year for.

On that, I think the good news is that our income figures have been really very good. Broadly speaking, we grew from £130 million to £150 million. We’re expecting to achieve around £175 million this year, and then we’re targeting £200 million next year. The figures that we are talking to the Welsh Government about, with some significant stretch on those figures, which I can’t guarantee we can achieve, and some significant stretch on squeezing costs, which, again, I can’t at the minute guarantee we can achieve, feel much, much more close together than they have before.

I think it would be unreasonable, potentially, for me to ever think I would be fully funded going into a financial year, because of two things: firstly, the Welsh Government will always want to keep—I don’t know what the right word is—some pressure on me, and I would do that if I were them, and secondly, because of the way the budgets move around across the whole of Government, they may choose to have a very small amount of underfunding in-year, because they know that, in the whole round, some other spending will become available, and then they can top up. So, that’s revenue.

I think we’ve made real progress on capital. We are further apart, but equally, on capital, there are many more opportunities for things to move around in-year, because capital projects typically move around a lot, and the Welsh Government has got a lot of capital projects across the whole spectrum, and the amount that we might be moving around on is probably a couple of tens of millions, which is very small in comparison to the Welsh Government’s total capital budget. Did you want to—?

Just a couple of points.

Very, very briefly then, please, because we are up against it.

The £200 million that James is referring to is the rail passenger revenue—it’s a significant growth over the years. I completely concur that the revenue expenditure funding gap is very marginal now, and that is a very positive move moving into 2025-26. James is correct around capital. That’s a greater challenge, but it is still lower than previous years.

Lovely. Diolch yn fawr iawn. Thank you. We’ll move on to Julie.

Diolch. Bore da. Thank you very much, to begin with, for the visit to Taff’s Well. It’s very close to my constituency, next door. I thoroughly enjoyed that—very exciting. I wanted to ask you how you think you've performed as an organisation over the last 12 months, and what do you feel has gone well, and what not so well.

Where to start? That's a very broad question, but that makes it more difficult, actually. Can I start with delivery of services to people and to customers, and then move on to the organisation as a whole? On delivery of services to people and customers, I guess there are three core areas of activity. The first is, obviously, rail services; the second is the bus services that we are either working with local authorities on, or that we are running ourselves; and the third one would include things like active travel, again where we work with local authorities. I think, on all of those, the teams that lead those areas could be rightly pleased with what they have achieved. But please don't hear me wrong, I am not sat here saying that we have done excellently across all of those areas. I think there's room for improvement, and I think we can do better.

Just to give you a feel for rail, broadly speaking, over the last 12 months, we've seen an 8 per cent improvement in punctuality. We've seen the number of trains that are planned in service, as a result of timetable increases, up by over a quarter. We've seen satisfaction increased by 16 per cent. If you look at bus, we've seen the services on Traws that we've replaced with electric services have a 65 per cent increase in passenger numbers. We've had the first pay-as-you-go—which is something I'm particularly pleased about—service outside of London, 95 stations, and we have continued to introduce new train services. This is a bit gratuitous, potentially, but as a result of this committee—and it genuinely was as a result of this committee challenging me in the last session around major events, particularly football—we had a bit of a team reset, and I think we have taken all the lessons we used to apply to rugby, made them a bit better, and then applied them to all major events.

So, across service delivery in general, we have made significant improvements. I say ‘in general’ because there are parts of service delivery that I am really not happy about. I don't really want to call them out in committee, because it will discourage people from using those particular services, and we are working hard to improve those services, and I expect to see that, but you can push me on it, that's fine. My intention over the next 12 months is to try and take the average improvement we have achieved, and make sure that we apply it to every single service group that we are offering, and not have the kind of cinderella service that occasionally we see. I can talk a bit if you want later about why that's happening. At a headline level it happens because it is below management visibility, and it's always easy for someone to cancel out a service if it's not being seen in statistics.

In terms of the organisation more generally, we have worked really hard to avoid any industrial action. We've worked really hard around trying to build a positive and inclusive culture, and tried to work really hard to get the balance between a culture that is both driving high performance, but also one where people care for each other. My view is that an organisation where people care for each other does not have to be an organisation that does not perform, and that is what we're trying to do. And on that again, I think there's quite a lot of evidence to support that that is going okay, but we would like to take it further, and we would like to take it faster. I guess the cultural part of the team network that we talked about earlier is what that's all about.

Thank you very much. I don't know whether you could comment on, for example, bringing in electrification. Obviously there have been quite a lot of issues with the communities, and I'm particularly aware of that because of where my constituency is. How do you feel that that was dealt with overall?

I have to say I think it could have been dealt with better, given the response that we have had from the community. I guess that comes back to the adage of when you think you've communicated enough, you need to communicate some more. The real risk, I think, for anyone who's providing a service who writes lines to take, who writes things to the community, is they've written it, therefore they understand it, therefore they've internalised it, and we assume that everyone who's had a letter drop has read them all and understands everything. And of course—well, I say ‘of course’; I put a lot of letter drops in the bin, personally, and I'm assuming lots of other people do the same thing. [Interruption.] Sorry, yes, that is what I do. I do recycle it. I live in RCT, for what it's worth, and as a result of the recent bin changes, I am forced even more to recycle, which is the point of those changes.

I'm just thinking, if you have to go through that exercise again elsewhere—

I think we would start earlier with a wider set of communications. The only risk in doing that is that we will annoy people earlier, because they will know what's coming, I suppose. But we shouldn't be hiding things from people. And I guess the one area where I think we need to do some better engagement is around, as you said, electrification and—. Taking trees down. I was going to say ‘devegetation’, but it's taking trees down, typically, to allow for the safety standards that are needed for electrification. It's ironic, isn't it, that in doing something that's good for the environment, we damage a micro part of the environment. I absolutely understand the frustration of people who are living lineside who had a very nice tree, and now they have a wire behind them. And I honestly don't know the right answer for that, but I think I would start earlier—I'd start earlier.

Just to remind Members, we're woefully behind in terms of where we want to be in terms of questions.

I'll try and speed up as well.

Well, it applies to everyone not just to yourself.

Okay, I will go on to—. In terms of the TfW board meetings, and participation by Welsh Government officials, how does that work out?

So, we've gone through several stages of the TfW board as, I guess, the civil service general advice has changed. So, over time, the civil service advice on what civil servants should do on external public bodies has definitely changed, and I'm of an age now where I can talk about quite a few decades of this advice. And it's oscillated between civil servants should sit on the board and partake in a board, civil servants should observe the board but not partake in it, and civil servants should not be anywhere near the board but should give objective targets and let the board get on with it.

At the minute, we are at the stage of civil servants being on the board and being what I would call participant observers i.e. they can talk, they can provide comment, but they do not vote and they do not steer the operational part of the business. When I say 'civil servants', it's always only one, and typically it is the director of transport who would do that. And I think it's actually quite helpful, because it allows the board to hear from the Government of the day reasonably directly on a pretty frequent basis what it feels like is going well, what it feels like isn't going well and wider Government challenges. So, I think that's good.

In addition to that, we also I'd guess you could call it innovated by bringing a trade union representative on to the board, again as a participant observer. Personally, I, and I think the whole board, would have been happy to have them as a full member of the board, but that provides a difficult set of fiduciary duties for a trade union representative, who might need to lead action being taken against Transport for Wales, and then being on the board would be quite difficult. And then we also have the leader of the Welsh Local Government Association, who is currently Andrew Morgan, the leader of Rhondda Cynon Taf County Borough Council, who sits in the same capacity.

And I think all of those things have really helped and they do the same as I described of the civil service with their different spheres of influence. I certainly find it really helpful. I don't find that it infringes conversation. I speak very openly and very honestly and everyone has respected that, and we have had absolutely—. We've been doing this for three years now with different people, and no-one has abused the system; it's been really good.

Okay. Does it work the other way, where yourself or the chair attend departmental directors' meetings?

So, we do not attend departmental directors' meetings, partly because—

You used to.

We did for a time, but there's a bit of context. To my colleagues, I need to probably explain this. In a way, transport is its own main expenditure group; there are no departmental directors' meetings, because there's only one director, and I meet with that individual quite regularly. So, I think, in effect, we do.

It's like for like, in a sense.

Yes.

Okay, thank you for that. Right, we'll move on to Janet.

Can I just ask: do you often have a vote on the board?

No, not really.

Never had one.

No. We would never do a vote—[Interruption.]—because we've never had to. As Heather said, we will have a debate and sometimes it'll be very clear that if it were to be put it to a vote what direction we were going in, so we'd just go in that direction.

Yes, that's fine. I was just interested.

Culturally, we don't, no.

No, right. Janet.

Your paper describes the corporate key performance indicators now published on your website. Can you outline how you have ensured these capture and will report on the full range of TfW activity, and in particular the T network approach?

Okay. So, I will bring Heather in, and Lee, if you want to come in, feel free on this. The KPIs—and I'm going to try and speed up—have been through several iterations. I don't think we've got it entirely right yet, for what it's worth, and some of the KPIs are used much more intensively than others. So, for me, the rail performance KPIs are used really intensively. In the rail board that I chair, those are the headlines that we look at all the time, and we focus the entire business around them, basically. Within the business, we have a traffic light system on the KPIs, and the ones that are working really well will flash between red and green, because that's what you're trying to do: you're trying to stretch people all the time, and stretch yourself, to make them green. But, if they never went red, there would be no stretch.

We are going to do a further review of the KPIs to try and make sure that they are genuinely useful in driving the right behaviour, which is what they are for. The only ones that we use at the minute that I would call out that are not very useful are the ones around workforce injuries and passenger injuries, because they're basically static; they don't move and therefore they don't really help us drive behaviour, and we're going to look at that. Heather, is there anything you want to add to that?

Please. At the last committee we were here, we provided the commitment to publish, and we did, as you've noted. We published in I think it was March last year the 2023-24 KPIs, both from a Q4 and a full-year position, and we compared that to 2022-23, so you could start to see a trend. We have subsequently published every quarter since: so, Q1, Q2, and we're about to publish Q3—they're under review at the moment with Welsh Government colleagues—and, of course, we'll continue to do that. So, that's the positive. We've been consistent in terms of providing a trend. It will start to help us understand the direction of travel.

They cover both the health of the business but also performance in SPI mode. So, our plans are to not only, obviously, focus upon rail, but we're starting to provide KPIs associated with bus, on which I'll pass over to Lee, shortly. We also cover other items, and we are splitting them by mode as needed: customer satisfaction, passenger journey. Rail KPIs are published monthly as well, every four weeks. We also focus on what have we achieved on our milestones against our business plans—so, that's, again, how are we delivering throughout the year—equality, diversity and inclusion, procurement, major projects, Welsh language, and also our people. So, it's trying to look at the whole health of the organisation as well. But, as James said, we've had good challenge recently within our TfW board to progress.

Okay. And very briefly from Lee, and then we'll move on then.

Okay. Fine.

Just really briefly, and not the KPIs, but, as part of the bus franchising and working with local authorities to establish bus networks, we're looking at three really simple measures around access, opportunity and connectivity, which feed into that team network and integration piece.

Okay. So, rather than launch into buses, which is where we're going next, I think we might as well have a break now rather than break halfway through our discussion on buses. So, maybe if we break for five minutes, and then we'll reconvene, ready to kick off at 11:30, if that's okay. Thank you. Thanks.

Croeso nôl i'r pwyllgor.

Welcome back. We're continuing with our annual scrutiny of Transport for Wales. Janet, you're going to take us into a few questions on buses.

Thank you. Wales has seen the slowest post-pandemic recovery in bus passenger numbers in Great Britain, and the reasons don't appear to be well understood. Why do you think recovery is so slow? How do you respond to the suggestion that it will be essential to understand that if franchising is to be effective?

Okay. So, I will bring Lee in on this, but, again, if I can just make a couple of opening comments, if that's okay. So, two stylised facts. The first one is that Wales has recovered very slowly from COVID, you're quite right, and it got quite badly hit through COVID as well compared to other parts of the UK. The second point is that the growth in the last 12 months has been actually quite strong compared to other parts of the UK, but that's from a very low base because of the impact previously. I can't statistically prove this, but I think a combination of the concessionary card scheme in Wales driving a higher proportion of older people to use the bus network at all times of the day, in comparison with schemes in other parts of the UK, particularly England, that have not been open at all points of the day, combined with the societal impact of COVID, both putting certain older people off using public transport, which has been a permanent thing, and also—and I can speak to this personally, and I’m sure lots of people in the room can—COVID driving a certain proportion of older people to online services that, potentially, they didn’t use before, so, therefore, they don’t need to go out as much. I think those combinations—and I’m almost certain I could prove that—will have led to Wales being more hit, because, traditionally, a big proportion of bus users were concessionary card holders.

But the COVID point was relevant to other parts of the UK, as well, wasn’t it, and they’re way ahead of us in terms of—

It was, but I think we started by having a higher proportion of older bus users—

In the first place.

—in the first place. Therefore, we have been proportionally harder hit.

So the impact has been felt more.

Yes. And then, when you add to that, I guess, the average rurality of Wales, compared to quite large parts of England, or we have fewer urban areas, I think that is, broadly speaking, what has been going on. And, of course, Wales, as yet, hasn’t really ever engaged, partly because of lack of legislation, in any form of aggressive bus planning—

Fare caps and that kind of thing.

Yes, and that’s why we’re waiting for the legislation to move into bus franchising. As we move towards bus franchising, to the extent that what we have seen on rail is any prediction of the future on that, I would suggest that we could look forward to a period of sustained passenger growth, provided that we can provide services that are reliable, turn up when they say they will do, are easy to use, and included in that would be that they have a fare system and a ticket system that is easy to engage with.

And, I think, if you look at some of the stuff we’ve done on Traws, you can evidence that that is the case. With that, if I can hand over to Lee.

Very briefly then, Lee, sorry.

Yes, I suppose, just to set it in context, on that concessionary number, it is around 50 per cent less than it was at its peak pre COVID. And just to support what James has said really, why we see, I think, the growth on some of the services like T1 and Sherpa'r Wyddfa is around what we would refer to, as we move into franchising, as a whole-product approach, so things like service directness, clock-face departures, reliability, punctuality, fairer fares, all of those things that make up a package that makes that journey attractive to a passenger.

Okay, thank you. Janet.

Thanks. Can you update the committee on your work to prepare for the introduction of bus franchising in Wales? Which areas are progressing well, and are there any that are dragging behind or are areas of concern?

So, I do want to give Lee time—

He'll blame you, come on.

I do want to give Lee time to answer this, but at a headline level, what is working well, I think, is the way that we are working with local authorities and CJCs to understand their distinct needs. Increasingly, the way we are working with bus operators, although the average bus operator would probably wish for franchising not to be happening—

Yes, I get that.

I think that’s just a fact. There’s a lot of progress we can talk about in south-west Wales on that, but, I think, probably, if I just hand over to you now.

Yes, okay. So, I think the starting point, which was important, is that we agreed a methodology in terms of how we’d work with the local authorities, and that was codified by the cabinet members across all 22 authorities. So, we’re following that methodology in each of the regions, and, as you know, I think, from previous conversations, the plan is to roll-out on the CJC footprints, so in four tranches.

I think James has touched on it already, and that methodology is going well. The local authorities like it, and we can bespoke it according to the different regions. And, in the south-west, which is where we plan to start in 2027, we’ve had significant engagement with elected members there. And I have to say here that the engagement of the local authorities and officials has been fantastic—

Good.

—and their support has been really, really good.

I think one of the things that is going well, again which James touched on, is the engagement. So, we have a bus industry panel, which has representatives from operators, customers, trade unions, the WLGA, local government, Welsh Government—I’ve probably missed some—community transport. And then we have individual focused meetings beneath that. So, we’ve got regional meetings with the CJCs. We have meetings with the trade unions, with community transport, and with operators, and we’re able to really focus in on some of the key issues that they're interested in. So, for example, this week we were talking to operators, talking about some of the procurement principles and things like that.

I think the thing that we need to do more of is to get more and more into the detail, which people want to see and people want to understand, so that we can (a) make people comfortable and (b) make sure that we make the progress that we need to make in the time that we've got.

Okay.

A quick one. My bus operators in Aberconwy, there was a lot of uncertainty previously and they were worrying about funding, cutting routes and things. And what I don't want to happen is, due to uncertainty and doubt, that they decide to just pack it in. How are you keeping the current bus operators, who do an amazing job, feeling part of this and that they are an integral part of this new—

Could I just come in very quickly, and then straight back to Lee? So, very quickly, it's partly through the engagement that Lee is talking about, and then actually to get into that, it's necessary to get into the detail of the local area that we're talking about, because quite a significant proportion of bus services in Wales, certainly in more rural areas of Wales, are already tendered for by local authorities, and we will have an upgraded version of that in the future that's integrated as part of franchising, so therefore the risk on that is quite low. So long as the bus operators are making money out of a service, they should not want to be dropping it. I think the risk we've got to watch is if people try to ramp the price up of tendered services to take advantage, just before franchising comes in. But, Lee.

A couple of things. I mentioned the sessions we've had with operators. The two that we had this week had over 50 operators attend, which is again—

Fantastic. So, it's open to all operators?

It's open to all operators.

That's good.

And then in the south-west again, to be specific, because we're doing more work there because it's the first place we'll franchise, there is a series of workshops, if you want, with operators for the south-west, to get their feedback on networks, so they're engaged in that, and then we're doing wider conversations with operators about the same. And then within the south-west as well, and this will be the same with all regions, we've worked with local authority colleagues to develop two networks—one is a base network and one is an aspirational network—and again operators are involved in those conversations.

Fantastic.

Okay. Thank you. Did you want to pick up on depots?

Yes, please. I welcome the engagement with the local authorities. That's really good. Regarding depots and the purchasing of buses, possibly, going forward, would the assets of the franchised bus services, if you're looking to purchase depots and buses, be publicly owned going forward? And in what circumstances do you think it would make commercial sense for Transport for Wales to own a depot?

I'll pick that up straight away. So, the direct answer to the question is that we think it will be a mixed economy, and there are areas where we would want to encourage competition, and areas across Wales where we think owning a depot will help drive decarbonisation. So, if I use the south-west again as an example, we think that owning a depot in the south-west—. So, it's not universally true that we would want to own our depots, and in fact, because of the market in Wales with a lot of SME operators, that just wouldn't be feasible. So, what we have looked at is three separate elements.

We've looked at what are the parameters that would help us define whether we think we should own a depot in a region, and that's things about encouraging new entrants and things like that. Then, the second is: where should that be located within the region? And that will look at factors like dead mileage, access to drivers—all that sort of stuff. And then the third part of it is if we were on a brownfield site, what does a minimum viable product depot look like in relation to that? So, we have had conversations with other people, particularly TfGM, and obviously when they went out to—. Again, I say 'obviously', but when they went out to tender, they made the bid process depot agnostic, and we want to be in a process where we can say that we have access to depot facilities, again, that doesn't get us into a position where we're potentially having to go to an operator at some point to say, 'We'd like to buy your depot because someone else has won the franchise.'

I read somewhere that you're looking to start in a certain area first—south-east Wales in 2027.

The south-west.

South-west Wales, okay, and then roll it out.

Then north Wales, yes.

Really interesting. Okay. Shall I move on to the next question?

Yes. We'll move on then to supporting the development and delivery of regional transport plans.

So, the Cabinet Secretary told us that Transport for Wales is supporting the development of a monitoring and evaluation plan for regional transport plans. Can you outline the intended approach on that?

So, can I start on this, again, I guess with a bit of historical context? Because, again, this has been something that has oscillated over decades, and I don't think that there's anything wrong in that. So, pulling stuff in tighter when there's been a feeling that, maybe, things at a local authority level haven't been delivered as tightly as wished for, and then being much looser and pushing it out at other times. And we're definitely in an era at the minute where the Government wishes to delegate more to local authorities. In fact, at a planning level, they want to delegate more to CJCs, as you're well aware. That is something that, obviously, we support, and our two functions as part of that are to, firstly, try to provide the technical expertise and guidance that is necessary for CJCs to build really well-evidenced, thought-through and integrated regional transport plans; and, secondly, to help CJCs and help the Welsh Government make sure that the money that is being spent is being spent wisely and that we are delivering together that integrated plan. Potentially, one of the reasons why it has oscillated before is that we've never really got the evaluation framework set up correctly, therefore it hasn't consistently driven the right behaviours and therefore there has been an oscillation of policy. Lee, you're much more closely involved.

So, again, to build on what James is saying, and respecting that each CJC wants to do things slightly differently, so they are, to an extent, setting their own approach to monitoring and evaluation, our role has been key in providing data to help them set measures that measure the right outcomes against their regional transport plans, but also recommending targets to support the CJCs in setting their approach.

Okay. There is talk as well about devolving more to CJCs, on the resilient roads fund and other grants. It's been raised previously here about ensuring that money is actually spent on those things that it's intended to be spent on, if it's not ring-fenced as well. So, will there be monitoring and will they have to produce outcomes from the—

That's a really strong, specific question that gets to the heart of all of this, I think. Part of the answer to that depends on what you're expecting them to do. My interpretation of where we've got to, and the current Government policy, is that strategic guidance will be given as to the broad range of outcomes that people want to see. The regional transport plan ought to be the regional approach to delivering those outcomes, tested partly by TfW evidence and approved or not approved by the Welsh Government, and then it will be for the individual local authorities who make up that CJC to deliver those schemes. So, it would be moving away from saying, 'This proportion must be spent on x, y and z', and it is allowing more autonomous decision making—that's my interpretation—at the regional level. And that is the point, and that is why evaluation is really important, otherwise you could end up in a wishy-washy world where you weren't sure what you were actually getting.

And it will still be spent on highways and not go into the corporate pot. That's what I was concerned about.

Yes, so it would still be hypothecated to transport.

Transport. Okay.

And I think it's incumbent on Transport for Wales to be adaptable, to provide the support to the CJCs that they're looking for. So, our role will start to morph into the future around things like, as James has said, assurance and advice and some delivery, particularly around one network, one timetable, one ticket, and doing, as and when required, independent assessments on behalf of the CJCs.

The loss of expertise was an issue as well. So, will the expertise go to the regional level, or can they retain some locally? How does that work?

I think it's down to individual—

It's up to them, isn't it?

It's down to individual CJCs.

Okay. Thank you.

Thank you. Julie, we'll come to you.

Thank you. How do you see the pace of moving towards integrated ticketing, and where are we going with tap on, tap off? What's the projection for the future?

I can’t entirely give a road map of exactly where that will go right now, because there are some moving parts around us, including technology and including things like Great British Railways and exactly where does that end up. But what I can talk about for certain is what our strategic intent is and, broadly speaking, where we are going. We believe that, at a minimum, for shorter distances—commuting and urban journeys—tap in, tap out is the solution for the future. That is why, in the first instance, we’ve introduced that to all of the south-east Wales metro area. But that would equally be introducible across other geographies in Wales where it made sense to do so.

In terms of how we take that further, my personal view is that, once we get to bus franchising, that tap in, tap out system should be extended to the parts of the bus network that it makes sense to do it for, which probably, again, would be relatively urban, relatively short-distance repeat services, a bit like a London or a Manchester. That is not to say, for what it’s worth, that I’m ruling out or suggesting that it’s a bad idea to use it on longer distance or rural journeys. But our experience at the minute is that, if more rural journeys typically equate to less frequent users—because they’re typically not being used for daily commuting but might be being used on a weekly basis—then a different product offer that offers different pricing at different times of the day, if that makes sense—so, you could choose to travel in the middle of the day and get a cheaper price, or later in the evening and get a cheaper price—is the way to go. We can introduce it on bus, and we are working on that now, but really only when we’ve reached franchising, because of the commercial costs of trying to do it otherwise.

So, tapping doesn't take into account the time of day. You can't—

Not at the minute.

Because it does in London, doesn't it?

Not in the core of the London product, no. It's a sort of standardised product set. The other thing tap in, tap out can't currently do anywhere in the UK, actually, but we're working on it, is deal with concessionary cards.

Thank you.

Thank you very much. Joyce, we'll come on to you.

Here's a timely question for you: climate adaptation and how you're embedding that in light of all the challenges within your new infrastructure projects and also current ongoing maintenance schemes.

I’ll offer to either of my colleagues to jump in on this one as well. Obviously, it’s something we focus quite a lot on. I don’t believe that UK infrastructure, if there is such a thing—and when I say that, I mean all the rules and regulations that we have to operate in—is sufficiently focused on climate change adaption, for what it’s worth. Many of the standards that we have to adhere to are standards of the past, rather than standards of the future.

However, having said all of that, everywhere we can, we are trying to look at future trends and build and maintain our own infrastructure and our own services in a way that should be resilient, or as resilient as they can be for the future. Probably the best example of that at the moment on our own infrastructure—and apologies for a south-east Wales example, but south-east Wales is the only part of rail infrastructure that we own and operate ourselves—is that we have put a real focus around flood prevention on that. And broadly speaking, at the minute, it is working.

The core Valleys lines have been very resilient to the storms we have had over the last 12 months. What we need to make sure is that that resilience continues into the future. I think the bigger challenge we have got is on some stretches of Network Rail infrastructure—and this is no criticism of Network Rail—where we’ve got coastal railways that were built over 100 years ago, and you wouldn’t build them again there now. It's certainly very expensive to do anything sensible about them, but if we're thinking about the future, these are the things we need to think about.

Yes, and also, of course, the Heart of Wales, which floods every single time and probably will do tomorrow, if not today.

If I may just add a couple of things as well. I think equally in the development work that we do, we take opportunities to look at climate resilience, but also, in our role discussing with CJCs their regional transport plans, we take the opportunity to feed in conversations about climate resilience, both in the short term and the long term for things like land use planning, which of course they're responsible for as well.

The thing is, there are supposed to be some resilience plans, action plans, and I take it on board what you're saying, they're outdated, perhaps, in what they're asking you to do, if I understood you right. If that's the case, what conversations are you having to bring them up to date, or the thinking behind them up to date?

We have got our own resilience plans and we do quite a lot of planning around climate change adaption, and we could write to you in quite some detail on that, if that's useful.

That would be useful, yes.

When I was referencing the system that holds us back, I wasn't referencing a climate change adaption plan, I was referencing the equivalent in the transport sector of building regulations. It's not building regulations, but in rail, for example, you have to buy a certain type of rail; a certain type of rail is expected to deal with certain types of temperatures. The temperatures it deals with are not very fit for the future, if you look at it, but to go outside of the British standard rail system, you wouldn't get approval to operate it. So, it was that type of thing I was referring to, rather than anything that is in Wales. I think that's a wider regulatory problem or challenge, and of course UK Government at the minute is challenging the regulators to think about all of those types of things.

That would be really interesting for us. And we'll have a paper—

And a note would be really useful, if that's okay.

I'm keen to move on to active travel next. Janet, are you going to take this point?

I am, yes. Your climate adaptation and resilience plan includes—

No, we're moving on to active travel now. We've spoken about climate change.

Oh, I thought we weren't doing that one.

I think active travel is important. Do you want to do active travel, then, Carolyn?

No, it's all right, I'm here. Given Transport for Wales now has a greater role in supporting local authorities, how do you respond to the Cabinet Secretary's concerns that considerable amounts of active travel funding is being spent on consultancy fees to develop bids, and what steps are you taking to address these concerns?

I will bring Lee in on this in a minute. I guess historically, that's a fair challenge. To be clear, Transport for Wales has not spent large amounts of money on consultancy around active travel, but you could argue that the general Government process in the past, which Transport for Wales has been part of, has driven more consultancy expenditure for quite simple projects than is necessary. And I often joke—anyone who's worked with me for any period of time would say that I don't want to see another report that tells me that Wales is in the UK, the UK is on a planet, and climate change happens, and anyone who's read the report can see the first third of the document is guff, basically, which is paid for using the public purse. We've been on a journey to try and get rid of all of that. The key thing that we are doing as part of that is to build expertise within TfW that is able to provide the services to local government that are necessary to deliver their scheme, so they don't have to do that. Lee, if you could talk about that, or anything else.

I think probably you can usefully link into the T network here. We have had an active travel hub; that's now become a design hub, so it's a group of expertise who can help in a much wider multimodal design facility. And then perhaps the example I gave earlier around the safer streets concept of access to public transport infrastructure—lighting, footways, all that sort of stuff—and starting to think of it in a much broader multimodal sense. James has articulated where we are now; where we're headed is different.

Thank you. Carolyn.

Audit Wales were saying about monitoring and reporting of the active travel Act. I know there's a lack of technical officers in local authorities, so it was welcome, this change, which will help streamline it, really. But they've also mentioned having Sustrans officers on alongside your own officers. Is that something that you've thought about, going forward? They might be able to help with the appraisal of active travel fund bids.

If I just touch on the Sustrans point, which potentially we should write to you on rather than me getting myself tied up in knots on it. This, again, has been the type of thing that has oscillated, and people have taken different views. There's a value-for-money argument for and against. The argument for is you bring charities who have got expertise in the subject very close to you, which makes sense, you take advantage of their expertise, they help to shape policy, they help to shape delivery. The argument against is, potentially, those same charities then benefit from Government funding. Personally, I err towards the first, rather than the latter, because they're not making profit, but it needs to be safeguarded, and I think we've got a good answer on that that we could write to you on.

Okay, that's fine. It was just that it was picked up by Audit Wales, so I wanted to ask that—

It was a concern, obviously, the conflict of interest, wasn't it?

I wanted to ask that question here, so I'd be glad if you could write in. Thank you, that's it.

Thank you. Okay, we'll come on to Delyth, then.

Diolch, Cadeirydd. Prynhawn da, bawb. I wanted to ask you firstly about rail performance, please. Data has suggested that performance has declined in recent rail periods, although it had improved at the beginning of the year. What are the main reasons for that, please?

You are correct—well, obviously, you're correct—in your statement about rail performance. I wouldn't necessarily say 'declining', but it has certainly plateaued, and that would certainly be the case on Wales and cross-borders, whereas on CVL, we've pretty much kept a good service going.

I'll talk a bit more widely about this, if it's okay, but on WCB the main issue we have had has been linked to storms—that's the first thing. So, we have had three significant storm events that have impacted each of the three last periods, either in the rail period, or the clean-up has been in the rail period. Therefore, for our colleagues at Network Rail, removing flooding, dealing with wash-outs, dealing with points that have failed as a result, dealing with significant power cuts, which they have also had, has been largely what has driven that.

The other thing, though, that we are dealing with at the minute is a slightly lower number of CAF units, new train units, coming out of the maintenance facility per day than we would like to see. So, we are roughly four units short a day. That does not mean we are cancelling in the way that we were in the past. What it does mean is that, occasionally, we are short-forming a service with fewer carriages than we would want to have on there, which I think has led to a plateauing, as I said, rather than going backwards.

It's an area we're very focused on. It's an area, though, that we ourselves cannot sort, and we need CAF to come to the table. In essence, what I need to do is to get CAF, who are a very competent international rolling stock provider, to provide rolling stock in Wales to the same level of excellence that they provide in their best plants around the world. That's the journey that we are on.

If I might continue, just briefly, on core Valleys lines, core Valleys lines are, as I said, performing relatively well, but we are facing a strategic challenge that, maybe, at another time, it would be good to discuss with the committee. That is around what is the right metric to measure ourselves against. So, if I can just explain that a little bit, certainly on the core of the core Valleys lines, you will see now a service between every four and six minutes. Therefore, if we cancel a service—we would rarely cancel the full service, but you might see a train running fast through a number of stops to catch up—the impact of cancelling the service on the individual, me included, quite often, can be quite minor, because people are only waiting four to six minutes for the next train. That's on core Valleys lines. If you did that approach in rural Wales, where you've got four services a day, you'd have a horrendous problem.

The difficulty we have got at the minute is that we are measuring the performance of all of our networks on the same set of metrics, and, increasingly, as we've got better overall—and this was an example of one of the things I said I want to get into the detail of—it can drive perverse behaviours in our managers, because our managers will look to hit the performance targets, and if we say, 'Hit passenger time lost, but don't bother about cancellations,' they'll cancel lots of stuff off. If you say it the other way, they'll go the other way, and we need to get into the detail of what's important for different lines. And that, alongside better availability of CAF, continuing to work with Network Rail to get climate change resilience and the introduction of electric trains, we'll see the performance improve—I'm pretty confident of that—or improve again.

That's really useful. Thank you very much. You've alluded already to some of the problems with rolling stock, and, in your paper, you talk about the need to hold the manufacturers to account for delays in every way possible. Could you talk us through what actions you have taken? And also, if these delays do continue and we're not getting the same service that, in other parts of the world, would be the case, what actions would be available to you to be able to take against them? Well, not against them, but, you know, to ensure they—

No, I think that's exactly the right question. We are using all available levers in our contract, and our contract has in it all of the levers that any normal contract would have. So, that's the first thing to say. There does not appear to be any systemic problem that we have in Wales—point 1. Point 2: in the UK, the slow delivery of trains at the back end of the production line—and that's what we're now seeing; it's the final 25 per cent of trains—this is, apparently, quite a usual problem as manufacturers switch to their next new order and focus all of their effort on the next new order. The unfortunate thing is that even levying all of the financial penalties we can do against the suppliers does not drive exactly the right behaviour, and if we cut up incredibly rough, because they provide the maintenance of the units as well, we could see—. If we ended up falling out, we could see almost retaliatory action taken against us. Just to be clear, that is not where we are—

No, but you don't want to get there.

—and, at a senior level, we get on well with CAF, but we do not want to get there. So, when I say 'using all available means', I mean using all the contractual means, all soft means that we have available to us as well. And I think we can do more on that, and that's why I went to meet, in effect, the owners of CAF recently in Spain.

And then, the final bit that we haven't done yet, but I want to, is to bring political and societal pressure, in a sensible way, to bear against CAF so that CAF—and Stadler, sorry—feel that they need to do the right thing by the population. Because what you note, particularly with European suppliers, is that they do care what their reputation is and I don't think I have yet properly demonstrated to them the positive impact of getting four more trains out of date, or the negative impact of them not doing that and the potential brand enhancement or brand damage that could occur. My personal preference is all around brand enhancement and I want a long-term partnership that works, rather than the opposite, because I think the opposite would just destroy everybody.

No, of course. That's useful, I think, because people who are travelling on the trains just think of it as being down to TfW, and maybe there isn't that recognition of further up the supply chain. So, it's useful that you've got that lever available to you should you need to use it, as you say, either way.

Moving on, then, you've talked about how, sometimes, services are cancelled. In the previous session, we talked about how perhaps there would be a need to look into whether there should be different criteria for determining when services are cancelled whether it is dark or daylight, and about the winter/summer challenge, and whether there should be different criteria in the winter months, when there are longer hours of darkness and people could be made more vulnerable in certain situations. You said you’d take that away. Could you provide an update to us?

Yes. So, we have worked quite hard on that and we’ve done a number of things. In the main, I would say this references services that are not on the core Valleys lines, and this is Wales and cross-border services, where we run through some quite isolated areas and some quite rural areas, which have very few people around if you get stuck in the wrong place. So, in essence, what we’ve done so far is to give our control centre, which are the people who make these decisions in real time—it’s not the train driver or the guard who decides what they’re going to do; they are instructed by signallers and control what to do—we have given them greater instruction about caring for the customer and greater latitude to do that. Alongside that, we have also tried, in the latest timetable change, to alter the places that we use, should we need to stop a service short or should we need to skip stop. So, for example, Llandrindod Wells is now a place that we would drop people, if we had to, to be picked up by a coach, rather than—I’ve forgotten the name of the stop—rather than the stop a couple of stops south, where we used to. The benefit of Llandrindod Wells is, obviously, it’s much closer to a town centre, many more facilities, taxis, hotels, shops, police et cetera, et cetera. I think we’ve got further to go. I don’t really like the term, ‘I’m quite excited’ but, actually, I am quite interested to get into that in the next 12 months, building on a relatively stable base, to see how we can improve that further.

Well, I think that is quite exciting, actually, so, thank you. And would you—? I agree with your approach that the emphasis here should absolutely be on those areas, the places, that are more remote. Would your intention be to see if some of those changes in culture, then, could be introduced into the core Valleys lines?

Yes, absolutely. It does take us back, though, to our targets and a slightly wider political conversation than just with Government, because obviously one of the things that everybody within an organisation wants to do is get their organisation to the top of the league table, and, gradually, we’re working the way up the league table. The problem is if the league table drives behaviours that are not very good for the customer, and, I think, at times, that is what we are now seeing. So, I don’t think that means we shouldn’t measure ourselves, because we would probably gradually drift to the bottom. What I think it does mean is that we need to develop, as I said earlier, measures and mechanisms that measure the things that are really important and then be very transparent around the publication of that data.

Thank you. That's really helpful. Finally, from me, if I have time, Cadeirydd, on fares, could you talk us through, please, how you are balancing the need to increase revenue from the farebox with affordability and if there's any detail on the fare simplification strategy that you could give us, please?

Very happy to attempt to do that, yes. So, very simply, our instruction from Government at the minute is to minimise the subsidy and to grow the farebox. At a high level, I think, our strategy is to charge those who can and will pay more, particularly where the service is more discretionary, and to simplify and reduce fares where it is absolutely societally necessary for people to travel. As part of that, we are also gradually trying to, for similar service groups, end up in a position where people are paying a similar amount of money per mile travelled, but the inherited system that we have is a long, long way away from that, and we can’t move very fast on that, because obviously we’re impacting lots and lots of people in potentially a very significant way, but we are gradually trying to level the system. As I said earlier, the strategy would be for frequent and repeat services to use a tap-in, tap-out capped price system, similar to London, the same as we have in south-east Wales at the minute. For long distance, what you might call inter-city or inter-urban services, we are adopting a societally friendly version of aircraft pricing, and what I mean when I say 'societally friendly' is never ripping people off, probably never offering stupid £1 fares that are only available for two people as a marketing ploy, but, within, say, £10 to £40, varying the fares in advance such that we encourage all services to be full, but not over full. And then, for the rural product, it's a different ticketing product that we're working on that is relatively consistent.

We could quite easily, if you want, write a two-page summary of what our strategy is on that. I think it should be watched over time, and, I think, personally, at the minute, it is the right strategy to minimise the subsidy. Our subsidy went quite up significantly; it's beginning to come down now. But there will come a point, maybe in three years' time, when you might say, 'Actually, it's gone too far'. It is a public good and we need to make sure that we're not overcharging people. But we're a long way away from that now, I think.

I can save £10 by splitting my ticket when I travel from Chirk to Cardiff. Is that a rip off, if I pay the full price?

So, what we are doing on the split ticketing is to try and remove it as a requirement, basically. So, in the future, you should, in essence, be able to get the same price without split ticketing. Under the current system, we will never get to a place where that is completely removed, because the engines that are run by people like Trainline are constantly using artificial intelligence, hunting the system to find new ways out, if that makes sense.

Yes. Okay. Thank you. Thank you very much. Julie.

Thank you. I want to ask you about the UK Government's plans for rail reform—really, to ask what are your views. And have you had any discussions at all about Transport for Wales's role in this reform?

So, we are pretty engaged at the minute, I would say. In fact, straight after this committee, hopefully after I've had a chance to have a sandwich, we are meeting with GBR representatives and Network Rail representatives in the Wales Millennium Centre, just across the way, to discuss just that. And we met for two hours last week to discuss the same thing.

What my personal and professional view on this is is that we need to try and get the benefits of a more vertically integrated railway, not forgetting that we already a completely vertically integrated railway on the CVL lines, where we own and operate them, without giving up any of the benefits of the devolution that we already have. And there are certainly models that we are exploring with GBR, with Welsh Government and with the UK Government that allow us to do that. In essence, that is through TfW retaining operation of all of its services, Network Rail rebranded GBR Cymru continuing to have the responsibility for running infrastructure, but by partnering much more closely in the middle, and probably sharing budget lines and profit and loss lines so that we can absolutely see the system as a whole, and plan the system as a whole.

So, for example, when maintenance is being planned, we plan it such that it has the lowest possible cost to the taxpayer and the highest possible benefit to the user of the service. That was never really possible when you had a whole number of different private sector companies involved who were all, obviously, trying to game the system. In theory, it ought to be possible now—it is public sector—but the one thing I think we do need to do is recognise that it is highly likely, if this is going to be set up for the long term, which is what it should be, that there will be different colours of Government in different parts of the UK, and at a local level and at a corporate joint committee level, and whatever we set up needs to be capable of withstanding the obvious political tensions that will happen as part of that. But, I think we're working on a model that absolutely can do that, for what it's worth, and, again, I think it's something that it would be good to talk to the committee about, potentially in relatively short order because this could move relatively quickly.

I think that's quite encouraging, your response, because, obviously, there are worries about losing some of the impetus that has been gained by devolution. So, I would certainly welcome it if we could have a more in-depth discussion on that.

So, how do you respond to reports this week that Rachel Reeves is saying that she's going to freeze all spend on any major rail projects until after the next general election? What kind of impact is that going to have, potentially, on services in Wales?

I think the first thing I would say is probably not for me to comment on that, in a way. But I will. And why do I say that? Why I say that is, I think, for me—and this is what we're trying to do—the GBR conversation should be the people who are operationally involved in running the service, because those are the people who know what they're doing. The Government-to-Government conversation should be about setting the strategic direction and holding to account the people who are running the service, i.e. TfW and GBR in the future. However, we obviously have an interest in how much funding is available and what we can do. And on that, the Welsh Government and the UK Government have been working quite closely and we have been involved in briefing and helping that to get to a position where, for the first time ever, the UK Government has said on record that Wales has been underfunded in the past, and also pointed to the future, subject to the spending review, that more money could be freed up. So, my interpretation—but I know nothing—is that a statement that broadly says, 'Money's tight, we can't spend anything on rail', can on aggregate be true alongside a statement that says, 'Wales has been historically underfunded and we need to find some funding', because, actually, even if Wales was fully funded, that would only ever be 5 per cent of the total. So, I think it's quite easy, in the round, for both statements to be true, and that's why I'm hoping, if that makes sense.

It does, yes. Thank you. Okay, there we are. We got there in the end. Can I thank you, unless Members have any other burning issues that they wish to raise?

I'd like to come back, if that's okay—

Yes, we've got five minutes.

—to the resilience of the network. Every week, I plan when I'm going up and down on the train, and I look at the weather and I think, 'I'll have to go now. I can't wait till tomorrow because it's going to flood', or it's freezing temperatures and I'm really worried about it. And, you know, on the north Wales main line as well, we nearly have the sea going over the top, and going down through Hereford, all that flooding all the time. Are you able to do anything regarding working with landowners to help with flooding going onto the railway line?

Just two thoughts on that. The first is it takes you straight back into the GBR conversation we were having before. In my preferred model, GBR, as in the people who do the maintenance of the track, in the future would be accountable to Transport for Wales for their day-to-day delivery, who then would be accountable to you and to the UK Government, so it's all through one place. And then you could actually hold one system to account.

The second thought, which we would need to be very careful on, is if you look at the way the railway operates in different parts of Europe, and even in different parts of the UK, they have different appetites for running services in poor weather. And it is true that we, for obvious reasons, sometimes look at what can happen if you get it wrong, with Talerddig. The system has become more risk averse in Wales than, say, it has in east Anglia, as an example. So, I think it would be a fair set of political challenges to say, 'Are we getting that balance right?', because if you cancel everything, you will certainly run a 100 per cent safe system, but if you're forcing people then to walk, take a bus or drive, and then you don't account for any accidents that happen there, maybe the aggregate system is not as safe as it can be. So, I think that would be worthy of wider conversation and wider challenge.

Okay, there we are. Well, can I thank the three of you for your attendance this morning. It has been quite a long session but a very, very valuable one for us, and, clearly, we'll be considering the evidence that you've given us and reporting in due course. Diolch yn fawr iawn. Thank you.