Consultation outcome

Rail Penalty Fare value reform

Updated 3 November 2022

Applies to England and Wales

Introduction

Fare evasion costs train operators, rail passengers and taxpayers who ultimately subsidise the journeys of those who deliberately travel by train without paying the correct fare. The Rail Delivery Group (RDG) estimates that in a normal year around £240 million is lost through fare evasion on Great Britain’s railways. When set against the profound impact COVID-19 has had on passenger numbers and industry revenues, it’s never been more important to minimise the cost of fare evasion to the railways.

Before Penalty Fares were introduced, passengers found without a valid ticket were subject to costly criminal sanctions which did little to recover lost revenue. Train operating companies (TOCs) are responsible for the management and implementation of their Penalty Fares schemes, in line with The Railways (Penalty Fares) Regulations.

These regulations were made by government to deter fare evasion by establishing clear and immediate financial consequences for those travelling without a valid ticket.

The Penalty Fares regulations also introduced new rules that offered a greater level of protection for passengers who had been issued a Penalty Fare, including:

• an independent panel-led third stage appeals process
• new requirements ensuring that appeals bodies are wholly independent of TOCs and their owning groups
• simplified appeals rules that provide greater consideration to the circumstances of how and why the penalty was issued including suspending payment when an appeal is received by an appeals body

The Penalty Fare regulations allow TOCs to target fare evaders, and therefore reduce the costs of ticketless travel while ensuring that honest, fare-paying passengers are not unfairly penalised.

Under the Penalty Fares regulations, passengers who are found without a valid ticket for their journey must pay either:

• a Penalty Fare of £20
• twice the full applicable single fare to the next station at which the train calls, whichever is the greater

This is only the case if they’ve had the opportunity to buy a ticket and have passed signs stating the consequences of not having a valid ticket.

The £20 value has not increased since 2005. In real terms, this means that this penalty has decreased from £20 to around £14 (in 2005 prices).

In light of this real-terms reduction, the department believes that Penalty Fares are no longer fulfilling their deterrent function. We want to update the value of the Penalty Fare to ensure the system remains an effective deterrent and the primary method by which the majority of TOCs manage fare evasion across their networks.

By acting as an effective deterrent, more revenue will be generated by the railway, which can be re-invested to improve the quality of passenger services.

This consultation only proposes changes to Penalty Fares across the National Rail networks of England and Wales. The Railways Act 2005 devolved penalty fare regulation in Scotland to Scottish ministers.

TOCs are under no obligation to have a Penalty Fares scheme and, on some parts of Great Britain’s rail network, regional train operators run their own revenue protection schemes that are independent of the Penalty Fares regulations.

Focus of this consultation

This consultation seeks comments from stakeholders and members of the public on the proposed changes to the value of Penalty Fares in England and Wales. The department also welcomes wider views on the current Penalty Fares arrangements.

The department is consulting on the following proposals and inviting additional comments and suggestions to aid future policy formulation:

• changes to the Penalty Fare value and formula (with the effect that the final value of the Penalty Fare can be varied in line with the circumstances associated with the issuing of the penalty)
• considering whether the name of the ‘Penalty Fare’ remains appropriate

These proposals are still being developed. Your comments will be taken into consideration following the closure of the consultation.

How to respond

The easiest way to respond is to use the online response form. This form also allows you to:

• save your progress so you do not need to complete it all at once
• save or print a copy of your response for your records once you have submitted it

The consultation period began on 11 March 2021 and will run until 3 June 2021. Please make sure that your response reaches us before the closing date. Please contact the department if you need alternative formats (such as braille or CD). If you cannot respond using the online form, please send consultation responses to:

Department for Transport
Great Minster House
33 Horseferry Road
London
SW1P 4DR

Email: railpenaltyfares@dft.gov.uk

When responding, please state whether you are responding as an individual or representing the views of an organisation. We will not reply individually to those submitting a response.

Confidentiality and data protection

The Department for Transport (DfT) is carrying out this consultation to consult on possible changes to Penalty Fares.

It’s not our intention to collect personal information on individuals but if your answers contain any information that allows you to be identified, DfT will, under data protection law, be the controller for this information.

If you’re responding to this consultation on behalf of an organisation, we’re asking for your organisation email address for validation purposes only. You do not have to give us this personal information. If you’re responding as an individual, we’re not asking you to provide an email address.

Any personal information will be kept securely and destroyed within 12 months after the consultation has been completed.

The department’s privacy policy has more information about your rights in relation to your personal data, how to complain and how to contact the Data Protection Officer.

Freedom of Information

Information provided in response to this consultation, including personal information, may be subject to publication or disclosure under the Freedom of Information Act 2000 (FOIA) or the Environmental Information Regulations 2004.

If you want information that you provide to be treated as confidential, please be aware that, under the FOIA, there’s a statutory code of practice with which public authorities must comply and which deals, amongst other things, with obligations of confidence.

Given this, it would be helpful if you could explain to us why you regard the information you’ve provided as confidential. If we receive a request for disclosure of the information, we’ll take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on the DfT.

The DfT will process your personal data under the Data Protection Act (DPA) and, in most circumstances, this will mean that your personal data will not be disclosed to third parties.

Proposed changes to Penalty Fares

Penalty Fare value

Where Penalty Fares apply, rail passengers must buy their tickets before they start their journey wherever there are facilities such as an open ticket office or a working self-service ticket machine, that enable them to do so.

If a passenger boards a train without a ticket at a station where ticket facilities were available, they may be given a Penalty Fare Notice (PFN) and, subject to the outcome of the appeals process, may have to pay a Penalty Fare.

Penalty Fares can be issued if a passenger:

• travels without a valid ticket
• is unable to produce an appropriate Railcard on a discounted ticket
• travels in first-class accommodation with a standard-class ticket
• is aged 16 or over, travelling on a child rate ticket
• travels beyond the destination on their ticket

The current penalty is either:

• £20
• twice the appropriate fare from the station where you started your journey to either the next station at which the train stops or the station you leave the train, whichever is the greater amount

If the passenger wants to travel further than the next station, they must pay the relevant fare to that station. The £20 minimum value of the National Rail Penalty Fare was last increased in 2005, and so in real terms, its value has effectively reduced from £20 to £14 today (in 2005 prices).

The impact of this real-terms reduction is compounded by increases to the value of Penalty Fares issued by devolved administrations across Great Britain. For example, Transport for London’s (TfL) penalty fare increased to £50 in 2009 and £80 in 2012 (the amount is halved if paid within 21 days).

The inconsistency between the National Rail Penalty Fare and TFL’s Penalty Fare creates opportunities for fare evaders who travel to, from and within London and the South East, a region that accounts for 70% of all rail journeys in England and Wales.

Similarly, the cost of the National Rail Penalty Fare remains low by the standards of comparable Western European countries, for example:

• in Germany, a similar method of revenue protection is used but with a €60 (approximately £55 at current conversion rates) minimum payment
• in the Netherlands, a €45 (£41) surcharge is added to the price of the journey
• in Belgium, a €7 (£6) supplement to the price of any ticket bought whilst already on a train is charged, and a €75 (£68) Penalty Fare Notice is issued for anyone who fails to purchase an ‘On-board fare’
• in France, passengers travelling under 150km are liable to pay a €50 (£46) fine, with increased sanctions if the fine is not paid on the spot or if charged in relation to fare evasion over greater distances

An increased Penalty Fare value aims to increase the power of the scheme as a deterrent by making fare evasion a less economical option and by mitigating inconsistencies between Penalty Fares schemes across England and Wales.

An effective deterrent on the railway is essential to encouraging would-be fare evaders to obtain a valid ticket before they begin their journey like most of the travelling public. This, in turn, supports train operator farebox revenue which would otherwise be lost and ultimately reduces the cost of fare evasion for passengers and taxpayers.

The department’s preference is for the National Rail Penalty Fare to be brought more closely into line with TfL’s Penalty Fare, given the proportion of journeys that take place to, from and within London and the South East. But our final decision will be guided by the views put forward in response to this consultation.

Question 1

In your opinion, is the existing £20 minimum Penalty Fare value set at a sufficient level to act as an effective deterrent?

Yes, I believe the current value is an effective deterrent and should remain at the same amount.

No, I believe the value should be increased to a greater amount to be effective.

We want to ensure that the value we adopt is easy to apply and acts as an effective deterrent to those who wish to exploit the railway. Therefore, before we consider the appropriate value of the Penalty Fare in more detail, we are keen to hear your views on the current formula used to calculate Penalty Fares and if an alternative system might be more effective.

As set out under the Penalty Fares regulations, passengers found without a valid ticket for their journey must pay a penalty fare of either:

• £20
• twice the full single-fare to the next station at which the train calls, whichever is the greater

This is the current ‘Penalty Fare formula’.

A potential issue with the current formula is that it allows those travelling without a ticket to access the lower penalty of £20 by lying about the station they began their journey from.

The penalty of £20 also creates particular challenges in areas of the National Rail network where the average fare is low with some passengers deeming it to be more economical for them to pay the occasional £20 Penalty Fare than to regularly purchase tickets for their rail journeys.

There are several options which could mitigate the risk associated with the current process for calculating the final value of a Penalty Fare:

Option 1

Maintain the current formula but increase the minimum value of a Penalty Fare from £20 to a greater amount.

Option 2

Replace the current penalty of £20 or twice the full single fare to the next station at which the train calls, with a single charge that’s applicable in all circumstances regardless of the price of the ticket that should have been purchased.

Option 3

Replace the current penalty of £20 or twice the full single fare to the next station at which the train calls, with a surcharge that’s charged in addition to the value of the ticket that should have been purchased at the start of the journey.

Question 2

Your preferred rail Penalty Fare formula option is:

• option 1
• option 2
• option 3

Question 3

What do you think the value of the Penalty Fare should be set at for your preferred option (as indicated at question 2)?

The department is considering additional changes that could apply to any of the previously explored proposals to encourage the timely payment of Penalty Fares and to increase the value of the Penalty Fares that can be issued to more persistent fare evaders.

We are suggesting that the value of a Penalty Fare should be:

• reduced if paid within a set number of days (as happens on TFL)
• increased if there is a previous charge issued within the last 12 months

Question 4

Do you agree with the proposal that the value of a Penalty Fare should be reduced if the penalty is paid within a set number of days?

• yes
• no
• don’t know

Question 5

Do you agree that the value of a Penalty Fare should be increased if there’s a previous charge issued to the same individual within the preceding 12 months?

• yes
• no
• don’t know

Other potential changes to the Penalty Fares Scheme

Unlike the fares charged for normal tickets, a ‘Penalty Fare’ is only charged when a passenger is travelling without a valid ticket and is designed to act as a deterrent and encourage would-be fare evaders to purchase a ticket before they begin their journey.

Question 6

Do you think the name of the ‘Penalty Fare’ remains appropriate?

• yes
• no opinion
• no

Question 7

Do you have any suggestions for alternative scheme names?

Question 8

Please use the below section to make any other suggestions you have about Penalty Fares.

What happens next?

We’ll consider the arguments and evidence put to us, together with other evidence, such as the research we’ve already conducted with train operating companies, to decide the next steps.

This consultation launched on 11 March 2021 and will conclude on 3 June 2021. We’ll publish a summary of responses, along with a timescale for delivering any changes we may implement as a result of the consultation in the coming months.

Summary of questions

Question 1

Do you think the current £20 minimum Penalty Fare value is set at a sufficient level to act as an effective deterrent?

Yes, I believe the current value is an effective deterrent and should remain at the same amount No, I believe the value should be increased to a greater amount to be effective

Question 2

Your preferred rail Penalty Fare formula is:

• option 1
• option 2
• option 3

Option 1

Maintain the current formula but increase the minimum penalty from £20 to a greater amount.

Option 2

Replace the penalty of £20 or twice the full single fare to the next station at which the train calls, with a single charge that is applicable in all circumstances regardless of the price of the ticket that should have been purchased.

Option 3

Replace the penalty of £20 or twice the full single fare to the next station at which the train calls, with a surcharge that is charged in addition to the value of the ticket that should have been purchased at the start of the journey.

Question 3

What do you think the value of the Penalty Fare should be set at for your preferred option (as indicated at question 2)?

Question 4

Do you agree with the proposal that the value of a Penalty Fare should be reduced if the penalty is paid within a set number of days?

• yes
• no
• don’t know

Question 5

Do you agree that the value of a Penalty Fare should be increased if there’s a previous charge issued to the same individual within the preceding 12 months?

• yes
• no
• don’t know

Question 6

Do you think the name of the ‘Penalty Fare’ remains appropriate?

• yes
• no opinion
• no

Question 7

Do you have any suggestions for alternative scheme names?

Question 8

Please use the below section to make any other suggestions you have about Penalty Fares.

Annex A

Consultation principles

The consultation is being conducted in line with the government’s key consultation principles which are listed below. Further information is available at Consultation principles:guidance.

If you have any comments about the consultation process, please contact:

Consultation Co-ordinator
Department for Transport
Zone 1/29 Great Minster House
London SW1P 4DR
Email: consultation@dft.gov.uk