Oyster Card style scheme for the North 'risks wasting £360m', Grant Shapps warned

In a report for the Centre for Policy Studies, rail industry analyst Tony Lodge said the Government is facing “the trap of spending money on yesterday’s technology”.

Ministers are looking to bring in pay-as-you-go systems similar to London Oyster card, with rail passengers tapping in and out of stations they pass through.

But Mr Lodge’s report warned that such a system is already being overtaken by cloud computing technology.

He highlighted what happens in Amazon Fresh supermarkets where customers with the relevant app can leave without any physical checkout process.

Transport Secretary Grant Shapps announced the plan for contactless tap-in and tap-out ticketing last November, which the Government says will be installed at more than 700 stations across the country – including 400 in the North – over the next three years.

Mr Shapps said at the time: “Passengers across the North and Midlands have waited far too long to see the same fast, easy and convenient ticketing as those in London. We’re determined to put that right.”

But Mr Lodge’s report questioned whether the move was an effective use of public money.

He said: “No two retail technologies are moving faster than mobile and remote payments.

“So, if we can already see a future where bank cards will be a virtual asset that sits on your mobile phone, which in turn is a powerful mini-computer that already has the ability to track you and pull a ticket from the cloud, why would we put a single spade in the ground developing a contactless system that has a dependency on vast arrays of new hardware such as expensive station barriers in thousands of unmanned and smaller railway stations across Britain?

“Consider what consumers can now enjoy in an Amazon Fresh store where shoppers download the app, collect their items and then leave without facing any physical payment checkout process.

“In other words, we must avoid the trap of spending money on yesterday’s technology.

“Current ambitions of bringing forward pay-as-you-go (PAYG) to the North and the Midlands, budgeted at a widely publicised £360m, are a real concern.

“The London Oyster programme was created at a time when physical hardware was the only option (2003), but a modern ‘ticket in the cloud’ solution would prove to be substantially cheaper.”

Changes 'first stage in improving journeys'

The Government has said it is “rolling out the biggest changes to rail in a generation” as part of its reform programme.

A Department for Transport spokesperson said it was working to deliver better services to passengers.

In November, the DfT said the new contactless ticketing systems were the “first stage of the Government’s commitment to roll out convenient and modern digital ticketing across the whole rail network, improving thousands of daily commutes, simplifying journeys and ensuring passengers are charged the best price”.

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