Who pays for delay repay?

26 November 2019

This year Transport Focus is campaigning to ‘Make Delay Pay’. We are working to encourage more passengers to claim and to press the rail industry to make the process easier and simpler for them. So, how might Delay Repay evolve?

Almost all train companies now offer ‘Delay Repay’, where passengers can claim a set proportion of their ticket cost if they arrive at their destination 30 (or in many cases now 15) or more minutes late.

This compensation for passengers is separate to a complex industry ‘money-go-round’ where compensation for delays is paid to train companies by Network Rail or whichever other train company caused the delay. This system requires teams of people working on ‘delay attribution’ to first trace the root causes of delays to trains and then resolve any disputes about which company is at fault.

There’s a perennial story comparing the amount of compensation paid to train companies with the amount paid to passengers. There are good reasons why these figures don’t match, but it’s fair to say it’s not very clear to passengers this system is working in their interests. Could a better system incentivise improvement and give passengers more confidence in the railway?

Some train company franchise agreements contain a mechanism that requires them to ring-fence an amount of money for delay compensation. If this isn’t all claimed by passengers the remaining amount should get reinvested into initiatives to improve customer service. This is good, but have you heard about this? I fear not…

It also rather depends on the amount of money set aside in the first place. If there are more delays than expected and a lot of Delay Repay claims, then there may not be any money left to invest when improvement is most needed.

In 2017 an independent report by Chris Gibb looked at how to deliver improvements on the Southern Rail network. He also looked at Delay Repay. As well as recommending automating claims he proposed:

“Govia Thameslink Railway should pay out the total amount arising from all eligible passengers to a new Community Fund, from which DR claims can be drawn by passengers…. the railway would therefore be seen to pay for all delays of over 15 minutes, and not to benefit from low claim rates… the Community Fund should be earmarked for railway improvements in the region, and so passengers experiencing delay can see that all penalties associated with DR are either going to passengers directly through claims or to future passenger benefits; governance of the funds will need to be independent and will require careful definition.”

So, passengers take their own individual share as Delay Repay and any remainder is invested in projects to improve the service and reduce future delays. This seems sensible. We know that passengers want it to be easier to claim the compensation, with one-click, automated compensation a realistic expectation.

However, rebuilding passengers’ trust isn’t only about more passengers getting some of their fare back in their own pocket, but also giving them confidence the railway is really serious about reducing delays and can’t profit when problems occur. Greater transparency and communication around compensation and funding of improvements to passengers’ journeys can only help.