Government set to scrap rail franchising model

Time looks to be running out for the UK’s rail franchising system according to weekend newspaper reports. The Sunday Telegraph reported that plans will be announced in today’s Queen’s speech to scrap the current model – where contracts are awarded to private companies to run commercial rail services – and replace it with a new system based on “performance and reliability”.

It is widely expected that the government will publish a white paper that will include recommendations from the ongoing rail review by former British Airways chief executive Keith Williams. Definite proposals for a new model will not be outlined by the government until the conclusions of the Williams review are announced but giving an update on his work in July, Williams dropped some heavy hints about where he was going with his deliberations.

Williams suggested that the government should “take a step back” from the UK railway, in favour of a new arm’s length body or bodies to run it. A fresh structure to run the railways was required, he said, and warned that “simply tinkering at the edges” would not be credible. He added that rail franchising had “had its day” and said that “today’s railway is not set up to be flexible, to lead, or adapt to major change”.

“I have been frank with the Department for Transport about the scale of change required, including a different role for DfT, to create a genuinely customer-focused industry,” said Williams. “The government will have to step back from the railway. A wide range of organisations have argued in favour of a new arm’s length body or bodies to act as a ‘guiding mind.' It is an idea we’re looking at closely. In principle, it could have clear merit, working to solve some of the challenges the industry faces around accountability and fragmentation.”

Commenting on the rumoured changes, Mike Brown, commercial director of Geo-Environmental Services Ltd and chair of the ACE’s rail sector interest group, said: “It has become clear that rail franchising does not help collaboration across the network and this has prevented the railway from working as the strategically run system that we need it to be.  We will, of course, have to wait for more details on the replacement model before we can assess whether the proposed alternative is likely to address these issues but if it flows from the proposals of the Williams’ review then it will have considerable industry support.  

“It is easy to forget that when franchising was first introduced that it did improve the passenger experience, with the introduction of a lot of new rolling stock.   However, the last few years have seen a deterioration in trust of passengers, with train operator companies being accused of placing commercial concerns ahead of passengers.  So, while franchising was not a total failure, it is not the model for the future of our rail network.”

The Labour Party backs an arms-length body, “removed from government interference and micromanagement”, but says the Williams review “misses the point”, arguing instead for the running of rail to be in public ownership. “Continuing with private train operators subject to performance-related payments means sticking with a failed, unaccountable and disjointed railway,” said shadow transport secretary Andy McDonald.