On Friday it was made public that the current Isle of Wight MP, Bob Seely, and the Isle of Wight council had made a seven-page joint submission that draws Westminster’s attention to the providers of Cross-Solent transport services to the Island.
As those of us who live here know, the ferries / Hover service impacts the lives of everyone on the Island, be that in personal travel of yourself to the Mainland, or friends/relatives visiting. Beyond that, the vast majority of the food and goods people consume here arrive over the Solent. Businesses that make things here, also need to ship them over the water.
Given this, News OnTheWight thought it would be worth taking a thorough look through the underlying document, the submission that the authors sent on behalf of the Island.
Here’s a quick preview of what’s below (the TL;DR, if you like) – The submission is pretty radical and goes as far as using the word ‘Nationalisation’.
On 16th November 2019 Sir Peter Hendy (current chairman of Network Rail and was formerly the Commissioner of Transport for London) put out a ‘call for evidence’ for a review he was heading up, titled the Union Connectivity Review (UCR).
Hendy had been asked by the Prime Minister to, “undertake an independent review into the connectivity of the United Kingdom (UK)”.
To “provide an overview of how connectivity between the nations of the United Kingdom can support economic growth and improve quality of life,” and “focus on transport’s ability to maximise economic potential and to improve quality of life, and will outline a series of specific recommendations that will individually and collectively contribute to this outcome”.
The seven-page joint submission by Bob Seely and the Isle of Wight council was submitted on 30th December 2020, the last day the call was open.
The submitted doc has two parts – Cross-Solent service and what appears to be a re-pitch that the Isle of Wight council should get more money for having to deliver services, due to the higher costs of providing services.
Here we’ll focus on the Cross-Solent service portion.
Ferry companies serve their shareholders, not the public
One central point made is that all three providers of cross-Solent transport – Wightlink, Red Funnel and Hovertravel – currently have zero obligation to provide the service. As they are free-standing, private companies, the only obligation they have is to their shareholders.
The companies could, if they liked, for example, just say, “We’re not running any services this week”. Of course there’d be a huge outcry. Everyone would get really upset, but presently they’d be perfectly entitled to do this.
The paper goes as far as saying, “we consider this to be an unacceptable model”.
It’s pointed out that Wightlink used to be under public ownership – with the obligations that brought. It was part of British Rail for many years, then was sold (as part of Sealink UK Ltd) to the private company Sea Containers in 1984. They renamed their Isle of Wight operations to Wightlink in 1990.
The sale was done in the heady days of Thatcherism, when public assets were sold off and, at that time, long term issues like this weren’t considered important.
The doc pitches for some public obligation to be brought back. Beyond bringing back these obligations, the prices of using the Cross-Solent services features prominently.
Changes to ferry charges
The Scottish Isles are often referred to by those who want to improve the deal Islanders get from the ferry companies that service the Isle of Wight.
Why’s that? Two reasons: 1) the prices are subsidised by the (Scottish) government and 2) the prices that are charged to residents of Scottish Isles are regulated.
The Scottish approach to ticket pricing uses in part a RET – a Road Equivalent Tariff. Part of the cost is a fixed fee to contribute towards paying for the overhead of the ferry companies operating the ferries, such as maintaining harbour infrastructure and vessels.
This is supplemented by a cost-per-mile charge, reached by using research by the RAC.
The Scottish RET is reviewed on a yearly basis.
How much cheaper could this be?
No specific claims are made in the Seely/IWC doc as to how much cheaper ferries could get, but to try and get some guidance on it, News OnTheWight went to the Scottish documents.
Looking at the September 2019 Impact report, “Transport Scotland’s ferry services” by Audit Scotland, we found a mention of a price reduction on one of the routes, “fares for passengers and cars were reduced by 20 per cent for travel to and from Aberdeen and Lerwick”.
The Seely/IWC doc points out the current ownerships of IW ferry companies (they’re privately-held) doesn’t allow for a RET pricing model, but gives a ray of light by pointing out that, as the Gov intervened in Cross-Solent transport in 2019 (giving public money to the companies), a precedent for intervention on the Cross-Solent routes has been set.
It’s uncertain that the Cross-Solent operators realised at the time that by taking the public money, a door to a more wide-reaching reform was being opened.
Explicitly the doc says, “We would like the UCR to look specifically at what could be done in this regard,” suggesting a transition to a RET pricing model be explored.
Speaking of the Coronavirus pandemic, it does feature further, as it’s an explicit part of the Union Connectivity Review.
A couple of things stood out:
The doc says the actions that were taken by Government – Financial support for the cross-Solent operators and the lifting of the law which had previously stopped them from collaborating (to ensure they weren’t commercially collaborating, to the detriment of the public) – “For the first time, the Government has acknowledged, through its interventions, the essential / lifeline nature of these services to the Isle of Wight community”.
Furlough money reduced ferry services claim
There are also claims that the Coronavirus Job Retention Scheme (CJRS) effectively disincentivised ferry operators from running services: “furloughing salaried staff was more financially attractive than having them come into work to operate services”.
“So, effectively, public money was being used to support the cessation / reduction of services, thereby resulting in diminished provision for the travelling public.”
Re-classify the routes
Another idea in the doc is that the car ferry services would become an extension of the road network and the foot passenger services would become extensions of the rail network.
The reasons for these suggestions are not explicitly laid out in the doc (beyond the mention of integrated ticketing for foot passengers), so we asked Bob, who told News OnTheWight:
“Our overriding policy objective must be to aspire to seeing the routes being treated, as closely as is practically possible, as if they were part of the wider transport networks to which they connect.
“By taking that approach, we can seek to minimise the disadvantage and inconvenience in having that part of those journeys being out of kilter any more than the practicalities of a ferry crossing require them to be.”
The fixed link is discussed, indeed the doc says it should be considered as part of the UCR, but with the line, “The impact aspect would assess the potential impact of such a link on the Island’s environment, character and public service provision”.
The overall feeling was that this option appears to not be given much credence – “Our own views regarding a fixed link are a matter of public record“ – with their conclusion being that the money would be better spent on the authors’ more favoured solutions.
How to bring change
In the recommendation section, the doc says,
“We must work towards a more sustainable and public-orientated approach in the future, which has proper regard for the essential / lifeline nature of these crossings.”
“With the railways now transitioning – post-pandemic – to a new, more accountable operational model, we should look to do the same with our ferry services.”
Their wish isn’t simply short term. They say:
“We are asking the UCR to consider what might be achievable / desirable in the short to medium term, and then as a long-term solution which could be transitioned to.”
The proposed changes could be achieved in collaboration with the companies, with their cooperation, via “voluntary / opt-in regulation (where the existing operators agree to provide minimum service levels on their routes, and ideally with some controls over pricing)”.
At the other end of the scale, the doc also goes as far suggesting the companies could be fully Nationalised – if taken out of private ownership and the routes become state-owned.
While this has been proposed by other IW political parties, this is clearly radical for a paper that’s written by a Conservative MP and a Conservative-led council – a party that has been ideologically opposed to Nationalisation.
This appears to be an attempt at a radical reset to the relationship between the Isle of Wight and its Cross-Solent providers, not only in the way the fares are calculated – leading to the potential for Government financial support and regulated prices for ferry users – but in the desire to make a public-service provision part of the requirements on the companies.
All eyes will be on the UCR to see if they take up the challenge and how far they take it.