Government plans for rail franchising

The Government is consulting (40 pages, PDF) on its proposed reforms to rail franchising. Responses by Monday 18 October 2010.

At this stage, there is not a lot of detail on the exact nature of future reforms. Instead, there are several high-level aspirations being proposed, with some further details on possible future options. One of these aspirations is to increase the length of franchising agreements sold to operators, with between 12-15 years being the preferred option at this time. This could increase the level of private investment made by franchisees, although also have potential implications on the level of fares due to the increased risk borne by private investors. The proposals discuss several different options for introducing some flexibility into these longer term contracts. These options provide different levels of protection for franchisees from deteriorating conditions as well as passengers and taxpayers from unjustifiable profits. Clearly a balance must be struck between this flexibility and encouraging investment.

Another proposal is to place a stronger focus on performance measures involving passenger opinion surveys and service quality audits. These outputs, or outcomes, would form part of the Government's required service levels and would reportedly allow a less intensive influence from the public sector on the rail industry and the franchising process. There are no specific details about what would happen in the event that a franchisee does not deliver its proposed outputs, other than suggestions that there will be sanctions for poor performance.

Increased flexibility for rail franchisees is another proposed reform. This flexibility could allow operators more control over how they respond to demand and could potentially allow operators significant influence over timetables. This is a potentially worrying development to frequent users of 'low-demand' services, whose service may be deemed as not commercially viable by an operator. It is proposed that different levels of flexibility for different operators could be given, depending upon the level of unprofitable services they run that need to be protected.

For further information or advice please contact Richard May.

Filed under DfT, Public transport.

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