Press release

Fresh start for franchising

Railway plan puts new focus on passengers.

Transport Secretary Patrick McLoughlin today unveiled long-term plans designed to drive improvements to rail services, deliver on major infrastructure projects, and put passengers at the heart of a revitalised rail franchising system.

In addition to publishing for the first time ever a detailed transparent timetable for all rail franchises over the next 8 years, the Transport Secretary announced the immediate start of the competition for the East Coast franchise, currently directly operated, with the expectation the new franchisee will carry its first passengers by February 2015.

The new approach to franchising:

  • will provide long-term certainty to the market
  • support the Department for Transport’s massive programme of rail investment
  • deliver on the independent Brown review of rail reform ahead of the April deadline for implementation of its recommendations

In rolling out the programme the Department for Transport will work closely with the industry to negotiate further new services and more capacity in franchising contracts while delivering the best deal for both passengers and taxpayers. The new approach will see the interests of passengers strengthened within the franchising system, with passengers’ views on train company performance playing an enhanced role in deciding whether to continue an operator’s contract.

On the day before the 50th anniversary of the ‘Beeching report’, the Transport Secretary is also able to confirm the 3 stations most likely to be built with support from the government’s New Station Fund. These are Ilkeston in Erewash (Derbyshire), Pye Corner in Newport West (South Wales) and Lea Bridge in Walthamstow (East London). We will make a final announcement in May.

In order to oversee this ambitious programme the government is also establishing the Franchise Advisory Panel, headed by Richard Brown, which will provide independent advice to support the department’s work on rail franchising.

Transport Secretary Patrick McLoughlin said:

This programme is a major step in delivering tangible improvements to services, providing long-term certainty to the market and supporting our huge programme of rail investment. Above all, in future franchise competitions we are placing passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services.

Franchising has been a force for good in the story of Britain’s railways, transforming an industry that was in decline into one that today carries record numbers of passengers.

Richard Brown, Chairman of the newly formed Franchise Advisory Panel, said:

I am pleased to see that government has engaged with my recommendations. It is clear to me that this announcement represents an opportunity for government to seek competitive and innovative proposals from the existing Train Operating Companies and potential new market entrants to demonstrate how they will continue to improve services for passengers.

The clarity around the franchise programme will also allow fresh energy to be brought to the urgent task of developing closer partnerships with Network Rail to drive out costs from the industry and provide a better deal for passengers and taxpayers.

Graham Smith, Director-General of the Rail Delivery Group, said:

Britain’s railways have enjoyed significant growth and investment – restoring passenger, taxpayer and investor confidence in the franchising process will allow this growth to continue. A restart of the franchising programme, a transparent procurement process and clarity on what government wishes the passenger railway to provide will all help re-establish confidence and enable franchisees to deliver improved services for passengers.

Rail Delivery Group members will continue to work collaboratively with government to deliver the new programme, including franchise extensions where these are required, to get the best deal for passengers.

Sir David Higgins, Chief Executive of Network Rail, said:

Our goal is to work with the rest of the industry to provide a safer and more efficient railway which addresses the underlying issues of capacity and performance. The clarity provided in today’s statement is welcome in helping us achieve that goal.

Delivering on Brown review recommendations, the new programme will provide a more sustainable schedule for rail franchising by delivering no more than 3 to 4 competitions per year, and staggering the 2 principal Intercity franchises, West Coast and East Coast, so they will not be let at the same point in the economic cycle.

In order to stagger the franchise start dates the government will use a mixture of extensions to existing franchises and direct award contracts to ensure the realignment of the programme. During this process the department will look to negotiate further passenger benefits, which will ensure the best deal for taxpayers.

This process starts later today with the government serving notice on First Capital Connect and Southeastern to call contractual 6-month extensions.

The programme has been designed so that as it is rolled out the department and Network Rail can continue to deliver on the massive programme of rail investment which will bring more trains and services to the network. These include:

  • the completion of a £500 million package of enhancements that make up the Northern Hub programme - this will enable more services and greater capacity to be delivered between major cities including Manchester. Liverpool, Blackpool, Sheffield, Leeds and Bradford by the end of 2018
  • electrification of the network in the North West by December 2016 and across the Pennines by December 2018 which will allow franchise operators to run faster and more reliable electric trains
  • the electrification of the Great Western Main Line and the Cardiff Valley Lines which will transform train travel across the South West and South Wales, including faster and more reliable journeys to London
  • the delivery of new state-of-the-art British-built trains from 2017 as part of the government’s £4.9 billion Intercity Express Programme
  • the electrification of the Midland main line which will deliver more passengers to destinations across the East Midlands and Yorkshire including Sheffield, Derby and Nottingham
  • increased passenger services between Cambridge and Kings Lynn, and Cambridge and Norwich following work to improve Ely North Junction
  • the completion of the £14.5 billion Crossrail project, the biggest construction project in Europe, and the £6 billion Thameslink Programme, including the major redevelopment of London Bridge, which will provide massive benefits to passengers across London and the region
  • a major capacity enhancement programme across London and the south east, which together with Crossrail and Thameslink, will allow an extra 120,000 passengers to travel to Central London during the morning peak by 2019
  • the introduction of new services between Oxford and Marylebone and Oxford/Aylesbury and Milton Keynes/Bedford following investment in new and upgraded lines

Notes to editors

The government’s preference is to negotiate direct awards with current operators but Directly Operated Railways will be readied in case an agreement cannot be reached.

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