End of franchises and a new era for British railways

(Above: 465167 & 377408 at London Bridge, August 29th 2009 – photo Matt Taylor via license flickr)

05/24/2021 – By Frédéric de Kemmeter – Railway signalling
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(Version en français)

A new public sector body named Great British Railways as part of railway reforms will own and manage rail infrastructure, issue contracts to private firms to run trains, set most fares and timetables, and sell tickets.

Keith William’s famous white paper has finally been made public, although the main points were already known. This white paper expresses the idea to place the control of rail infrastructure and services under the new arm’s-length public body, with franchises replaced by contracts that will incentivise private firms on punctuality and efficiency rather than raising revenue. Filling the trains is no longer a priority and therefore there are no longer any risks to be taken on the revenues. The DNA of this document can be traced back to the review prompted by the 2018 UK rail timetable predicament. Much has since changed, and the extent of the re-editing has been formally acknowledged by the renaming of the review from the “Williams Review” to the “Williams-Shapps Plan for Rail”;

Great British Railways will run and plan the network, as well as providing online tickets, information and compensation for passengers nationwide. It will streamline and simplify fares, including extending contactless and pay-as-you-go systems to more parts of the country. A new national flexible season ticket will be introduced from late June to tempt back part-time commuters, with passenger numbers now only 39% of pre-pandemic levels.

Facilitating ticketing for better transfer from road to rail (photo Getty image)

However, realism must be maintained: the Treasury will be concerned with how significant cost savings can be achieved through the implementation of the William-Shapps’s Review.

Keith Williams explains that “the plan is built around the passenger, with new contracts which prioritise excellent performance and better services, better value fares, and creating clear leadership and real accountability when things go wrong.”

Reforming the rail franchising model was always a core part of the Review, since many time prior to the pandemic, the rail franchising model was already in trouble, with small numbers of bidders participating in franchise competitions and reports of various franchises in severe financial difficulty.

Since the pandemic, all operators have benefited from for Emergency Measures Agreements (EMAs) were subsequently replaced by the Emergency Recovery Measures Agreements (ERMAs). The EMAs and ERMAs will now be replaced by interim direct awards (National Rail Contracts, or NRCs), excepted for three franchises. In the future, the respective rail services are competitively tendered and replaced by concession agreements called “Passenger Service Contracts” (PSCs). So there is no return to the old British Rail that some young activists dreamed of, without really knowing what it was all about.

(photo Getty image)

The 40,000 workers of Network Rail will not become civil servants even if GBR will absorb the current infrastructure manager to provide « single, unified and accountable leadership », using « a single, familiar brand ». The reforms envisage that the government set the overall strategic direction for the industry, including infrastructure investment and fares policy, through a 30-year plan that is intended to ensure money is targeted and used efficiently. The Treasury will therefore watch over the proper use of public funds, a topic that opponents of the reform prefer to avoid talking about …

Andy Bagnall, the director general of the Rail Delivery Group, said train operators had called for many of the promised reforms: “Getting the detail right will be crucial to ensuring that the white paper fulfils its potential to improve journeys, offer independent oversight and clear accountability, and create a new set of fares which are simpler and more value for money.” In short, Great Britain is putting an end to its experience of franchises and risk on revenues – a principle unique in the world -, and takes the path explored with more success in Europe, i.e. public service contracts. The British rail freight sector, on the other hand, is not affected because it has successfully liberalized itself, even if it has to face its own problems.

(photo Roger Marks via license flickr)

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