News story

New franchises to provide better services for passengers

Major shake-up of the rail franchising system announced.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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Train operators are to be made more responsive to passenger needs while providing better value for taxpayers’ money, Rail Minister, Theresa Villiers, announced today (19 January 2011).

In a major shake-up of the rail franchising system, the government proposes to set tough outcomes for train operators to achieve but to give them more flexibility on how best to deliver them. Franchises will be individually tailored to fit the diversity of different parts of the rail network, but binding obligations on service quality and tackling overcrowding are likely to form part of the government’s new approach on commuter franchises. Franchises will also be longer - normally for around 15 years - to incentivise bidders to invest in the railways.

These reform plans have been published today after a public consultation.

Theresa Villiers said:

We are determined to ensure that the rail franchising process delivers better outcomes for passengers and better value for money for taxpayers. By granting longer franchises we will give the private sector a stronger incentive to invest in the improvements passengers want, such as new trains and better stations.

Recent years have seen too much emphasis on Whitehall trying to micromanage the detail of the way train services are run. We don’t believe that is the best way to improve services for passengers. We will protect the passenger by setting demanding outcomes for operators to achieve, but we will give more space to the professionals who run our railways to innovate and decide on the best way to achieve those outcomes. We believe that will ensure the rail industry is able to respond more quickly and flexibly to changing passenger concerns.

The reform will also replace the controversial cap and collar system with an alternative mechanism which will provide better incentives for operators to invest in service improvements.

Operators will get more flexibility over the services they run but the government will continue to mandate the provision of core levels of service. The Department for Transport is also exploring options for measuring operators’ performance against ‘service quality’ standards, based on passenger satisfaction data and ‘mystery shopper’ visits. More stations will be passed from Network Rail control to train operators as the customer-facing part of the rail industry with the strongest incentive to respond to passenger concerns.

Theresa Villiers has today also fired the starting gun on the competition to find a new operator for the intercity franchise on the West Coast Main Line, which expires in March 2012. A public consultation has been started on the shape of the replacement franchise, drawing on the new policy, but adapting it to match the specific characteristics of the West Coast operation. The franchise is proposed to last for at least 14 years. The end date is designed to align with the opening of the government’s proposed new high speed rail line - but with the option to extend by up to a year.

The new operator will be expected to put forward proposals for use of new 11-car Pendolino trains and will need to build on the successful programme of new services on the line - made possible by its recent £9 billion upgrade - improving them further while delivering good value for money for passengers and taxpayers. The new operator will also be expected to put forward ideas for improving the passenger experience on board trains, providing better service information for passengers and investing in station facilities.

The government will continue to refine its plans for the future of rail franchising alongside its work on Sir Roy McNulty’s proposals to improve railways’ value for money.

Further information

The government launched an industry-wide consultation on proposals for reforming rail franchising on 22 July 2010 in the document Reforming Rail Franchising.

The consultation, which closed on 18 October 2010, asked for responses to a range of proposals for reforming the rail franchising system.

The government has published the Reforming rail franchising: Government response to consultation and policy statement which sets out its future intentions on rail franchising.

The new InterCity west coast franchise is due to begin on 1 April 2012. Expressions of interest are now being sought and the Department for Transport plans to issue an invitation to tender to shortlisted applicants by summer 2011. The winning bid will be announced in late 2011. The government has today published the InterCity west coast consultation document setting out the options for the future of the franchise

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Published 19 January 2011