Friday 30 October 2020

 

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rail unveiled

::: Government under fire as TfL countdown continues








what was the ‘flex’?







Regulated fares usually rise at the start of January, and the Government decides how much the rise ought to be. Until recently train operators had some choices about regulated fares.

The relevant mechanism, known as the ‘flex’, attracted a good deal of criticism.






Why was the flex criticised?



It worked like this. Let us say that the regulated rise one year was to be the Retail Price Index +1%, and that the previous July’s RPI (July is used as the benchmark) had been 4%.

That meant – in principle – that regulated fares would rise by 5%. Therefore, if your annual season ticket (a regulated fare) had cost £3,000 for the previous year, you might expect that the new price would be £3,150 (unless it was due to run out in January and you had cunningly renewed it in December, which is permitted).

Well, not always – at least while the flex was allowed to lurk in the background. The amount of the flex was also regulated, and it was customarily set at 5%.

This meant, in practice, that some regulated fares could rise by as much as RPI (4%) plus 1%, PLUS another 5% – a total of 10%. The train operators had to play fair, theoretically, by only increasing certain other fares by the regulated amount (5%) MINUS the flex (wholly or in part), which at best could mean no increase at all.

This was of little comfort to someone who had to tolerate the full 10%, while a near-neighbour, who made a different journey each day, was benefiting from the minus arrangement and paying nothing extra.

The official description was that the flex was applied across a ‘basket’ of fares (unspecified) so that the average rise was still the regulated 5%. Train operators were not supposed to play the flex game by choosing all the most popular fares for the maximum increase, but it was supposed to be possible to use the flex to even out the loadings on some of the busiest routes or journeys. Whether this made much difference is uncertain. All the figures were confidential, but few commuters can change their journey patterns very much, even if this would save them money.

Although the flex had been 5% for quite a while, on 9 October 2013 the Transport Secretary said it would be cut to 2% for the January 2014 rise. The flex was then ‘suspended’ indefinitely in January 2015.






how fair are fares?
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