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‘…rail franchising a muddle’

Monday, July 27 2009

fares and franchises

Rail fares and franchises, Transport Select Committee report.
© Parliamentary Copyright.

(Click cover to download the report as a pdf file from the Transport Committee document download site.)

The UK’s peculiar passenger rail franchising system is deeply flawed. It manages to combine the worst aspects of a publicly-owned railway – micromanagement by the Ministry – with the worst aspects of rotating door private enterprise – milk the customer for what you can get and then get out quickly when the going gets tough. The Transport Select Committee expresses the same sentiment in more parliamentary language, the current system of rail franchising is a muddle.

The Department for Transport denied the Committee access to some of the basic information that it needed to do its work. We are concerned that there is a lack of information available to us regarding the financial stability of franchise operators. Yet the Committee’s report is a model of brevity and quickly cuts through to its main point. What on earth is the point in involving the private sector if it simply takes the profits in the good times, leaving the tax payer to pick up the tab in bad times?

These should be scope to try different solutions. The Government should be willing to attempt different forms of franchising. Now is an ideal opportunity to keep the lucrative East Coast franchise in the public sector. The service could then be used as a comparator for other types of franchises, both in terms of financial viability and passenger service quality.

The Committee (6 Labour, 5 Conservative including one Ulster Unionist, 1 Liberal Democrat) are quite right in recommending that it would be useful to keep the East Coast mainline as a benchmark against which the other franchising operators performance should be measured. But they have not gone far enough. The benchmark railway should have single entity in control of both track and trains.

There should be two such lines – one where the whole railway is run under a twenty five year contract by a private operator – another where it is run by the state. Returning to the vertically integrated railway is the only way to to achieve the savings that the Treasury wants and the service quality that the passenger rightly expects.

Earlier Transport Select Committee reports on rail fares and franchising (pdf downloads):

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One comment

  1. The franchising model, along with the privatisation of all essential utilities is a boon for big buisness. Put simply, there is no need to invest in infrastructure. Just run what you have into the ground and then walk away, the Government has no choice but to pick up the bill.



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